• No results found

Boeer Group - A Report For 2014

N/A
N/A
Protected

Academic year: 2021

Share "Boeer Group - A Report For 2014"

Copied!
28
0
0

Loading.... (view fulltext now)

Full text

(1)

Half-Year Interim Report

as at June 30, 2015

(2)

2

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.

Percentages are calculated on the basis of unrounded starting values (EUR thousand).

GROUP KEY FIGURES JANUARY – JUNE 2015

IFRS in EUR million 6M/2014 * 6M/2015 Change 12M/2014 *

Total Group revenues 749.2 780.4 4.2 % 1,560.2

of which Germany 234.6 217.0 -7.5 % 440.2 International 514.6 563.4 9.5 % 1,120.0 International in % 68.7 72.2 n/a 71.8 of which Construction 355.6 369.9 4.0 % 725.6 Equipment 317.1 333.4 5.1 % 639.2 Resources 101.0 102.1 1.1 % 252.8 Other/Consolidation -24.5 -25.0 n/a -57.4 Consolidated revenues 732.1 740.7 1.2 % 1,506.0 Sales revenues 645.5 642.0 -0.6 % 1,375.7 Orders received 757.6 899.2 18.7 % 1,557.7 Orders in hand 773.7 881.5 13.9 % 762.7 EBITDA 57.6 63.0 9.4 % 171.0

EBITDA margin in % (of sales revenues) 8.9 9.8 n/a 12.4

EBIT 13.6 16.0 17.6 % 76.4

EBIT margin in % (of sales revenues) 2.1 2.5 n/a 5.6

Net profit or loss -11.0 -6.8 n/a 15.7

Capital investment in property, plant and equipment 22.8 37.3 63.8 % 64.1

Shareholders’ equity 400.6 425.2 6.1 % 418.9

Equity ratio in % 24.2 25.2 n/a 26.6

Net assets 1,652.9 1,688.7 2.2 % 1,575.1

Earnings per share -0.66 -0.44 n/a 0.85

Return on equity after tax in % n/a n/a n/a 3.7

Employees (on average over the year) 10,406 10,642 2.3 % 10,405

of which Germany 4,154 4,166 0.3 % 4,158

International 6,252 6,476 3.6 % 6,247

(3)

3

Summary

Total revenues of the BAUER Group at the end of the fi rst half of 2015 were EUR 780.4 million, 4.2 percent above the previous year comparative (EUR 749.2 million). The Group's net loss for the period was EUR -6.8 million (previous year: EUR -11.0 million). In our business, the year normally begins with a loss. The quarterly fi gures meet our expectations and total Group revenues fall within our budget. The realized and unrealized foreign currency gains and gains from foreign exchange forward contracts increased by EUR 29.5 million and were the main reason for the steep rise in other income. Negative exchange rate effects offset this fi gure and also signifi cantly increased the other operating expenses. These fi gures are the result of currency management, which is of utmost importance in periods of large exchange rate fl uctuations. Total Group revenues would be roughly on par with the previous year if it were not for these effects.

We were satisfi ed with the fi rst half of 2015 in the Construction segment. In the Equipment segment we received a positive number of orders in the fi rst two quarters. However, many orders will only be delivered in the second half of the year, meaning that sales fi gures fell slightly short of expectations but were up on the previous year. Our Resources segment falls slightly short of target. We once again have an overall positive outlook for our company.

The Group's order in hand amounted to EUR 881.5 million, 13.9 percent up on the previous year, thus reaching a new high. Although we are currently not processing any major construction projects, orders in hand in the Construction segment have increased signifi cantly on account of numerous small and medium-sized projects across all of our regions. Orders for deep drilling rigs received by the Equipment segment in December particularly increased orders in hand year-on-year. The order situation for specialist foundation engineering equipment has remained almost unchanged with orders still having very short terms. Orders in hand in the Resources segment are on par with the previous year. At the end of July, the segment was awarded a remediation project in Germany for the former landfi ll Kesslergrube in Grenzach-Wyhlen, which is the single largest order in the history of the BAUER Group with a volume of more than EUR 100 million. This signifi cantly boosted the segment's and Group's orders in hand after the reporting period.

As set forth in the 2014 Annual Report, we forecast total Group revenues for the full year 2015 of around EUR 1.6 billion and EBIT of around EUR 75 million. We continue to forecast profi t after tax of around EUR 18 to 23 million.

Course of Business and Background Conditions

GENERAL ECONOMIC CLIMATE

The overall global economy continued to develop positively, as did the German economy. However, the events in recent months have shown that the global economic position is highly vulnerable.

In recent weeks, the events concerning the possibility of Greece’s exit from the euro dominated the media and public debate. Although Greece’s exit from the monetary union would not have been able to shake the foundations of the global economy, the psychological effect on the markets would have caused great uncertainties. The situation remains unstable despite the present solution.

(4)

4 COURSE OF BUSINESS AND BACKGROUND CONDITIONS

Even though Greece is making all the headlines, there are numerous other issues that also impact our company, some of them severely.

• The Russia/Ukraine confl ict remains unresolved. Battles in the crisis-hit region keep fl aring up and diplomatic efforts are getting rather less. If no solution is found, this would have a sustained impact in the global economy, and therefore also Germany.

• The economic developments in China are showing signifi cant distortions. In recent months, several areas of concern have come to light that may have a serious impact on future growth. In the construction equipment sector, the huge overcapacities built up in recent years have caused many Chinese construction machinery manufacturers to reduce both personnel and capacities on a grand scale. It would be astounding if our sector were to remain a single case. Other in-dustry sectors may therefore feel the effects yet. The signifi cant losses on the Chinese stock markets in recent weeks fi t this picture. The distortions will also affect consumption and the purchasing of foreign luxury goods. As China is a keyfactor for the development of the overall global economy, serious consequences are to be expected.

• The crises in the Arab world are still ongoing. The Islamic State remains active in large parts of Iraq, thus adding to the great uncertainty in this region. The West is not suffi ciently involved to be able to improve the situation. One positive aspect is that the economies of numerous countries within the region remain unimpressed and continue to thrive. The Egyptian construction sector has been experiencing a surprising upturn as the local government is strongly supporting construction activities. The economy of the countries on the Arabian peninsula continues to develop positively. Unfortunately, the low oil price is posing a risk to future economic developments in this region.

• It is very good news that it was possible to come to an agreement with Iran in the nuclear confl ict. This country, which is so important to the region, can now resume its international trade activities. This provides numerous opportunities.

The International Monetary Fund currently expects 3.3 percent growth in 2015. Growth in numerous regions such as the European Union is weak and might even recede signifi cantly in some others such as Russia. However, growth in the Far East, Middle East, and especially the USA will be able to overcompensate for this development.

A growing global economy will also strengthen the construction market as a whole as economic growth requires construction investments. Growth in the specialist foundation engineering sector continues to remain slightly stronger as an increasing lack of space means that construction projects have to be realized underground or on very small parcels of land. Urbanization, the increasing mobility of both humans and products, the problem sectors water and environmental protection, and the change in the energy sector are further driving construction.

Germany's construction sector is thriving at present, even though the construction statistics since the beginning of the year fall slightly short of the previous year, thus making it impossible for Germany to fully maintain its high standard. Apartments and private homes are regarded as an attractive investment at present as interest rates are low. The commercial construction sector developed positively on account of the strong economy and public-sector construction benefi ted from the fact that the political sector recognized the urgent need to reduce the backlog of remediation and expansion projects.

Overall, we forecast growth in the construction market that will be impacted by numerous disruptions. It therefore is a large challenge for us to continuously adapt the company's structure in this respect to enable our segments to fully utilize their diverse opportunities in the future.

At present, large projects are increasingly returning to the markets. We will apply for their contracts in order to strengthen the stability of our business in the coming years.

(5)

5

COURSE OF BUSINESS AND BACKGROUND CONDITIONS

OVERVIEW OF INTERNATIONAL MARKETS

Germany

The German construction market will continue to see positive growth over the coming years. Residential construction is being buoyed up, above all because of the low interest rates. Public-sector construction is benefi ting from an enormous backlog of infrastructure work, something which governments now have much more money at their disposal to pay for. The commercial construction sector profi ts from the continuing upward trend in the industrial sector.

The widely anticipated positive effects of the shift in energy policy in Germany to favor renewable energies have been real-ized at least partially after a long time. A general agreement at government coalition level has now been reached regarding the power lines in the south of Germany and these projects will now enter the fi nal planning phase. Long stretches of the lines will be laid underground, which will provide additional work for the construction sector. Additional conventional power plants will also be constructed in Bavaria to compensate peak loads.

Europe

We predict that growth on construction markets in Western Europe will be modest over the coming years. Many countries have had to impose strict budget constraints which will hamper the further development of their infrastructure. There are nonetheless a number of opportunities for us in Europe, especially in Switzerland. In France, a new circular metro line is being built around Paris, and is requiring extensive construction activities. Other cities are also planning to upgrade their in-frastructure. The European Union is currently planning a large economic program for developing the European inin-frastructure. It is doubtful, however, that these ambitious targets can actually be realized.

At least a slight upturn has been noticed again in Eastern Europe after many years. The crisis embroiling Russia and Ukraine, however, is currently imposing a serious burden on these countries’ development. Ukraine is practically no longer capable of maintaining a construction sector – due to lack of funds. Although Russia is attempting to keep fi nance fl owing into its building sector, the fi nancial defi cits brought about by sanctions and the low oil price are forcing the country to pursue a policy offrugality. Commercial construction has almost shut down entirely. It can be assumed that Russia will suffer from the consequences of the crisis for years to come. As a result, the equipment sales business will also decline signifi cantly.

Middle East & Central Asia

The oil-rich and gas-rich countries of the Middle East, such as Abu Dhabi, Saudi Arabia and Qatar, have lots of large-scale construction projects in the pipeline and being carried out. Metro systems are being constructed in Doha and in Riyadh, while intensive extensions to railway lines are in progress throughout the entire region. Construction has also bounced back in Dubai in a big way.

Jordan and Lebanon are hamstrung by the situation in Iraq and Syria and the problem that is the Islamic State, as a result of which economic development has signifi cantly abated there. Many confl icts are still taking place in Libya and Egypt, with repeated incidents of rioting. Nevertheless, the construction sector in Egypt is currently experiencing an astonishing upturn. The expansion of the Suez canal began as quickly as possible and much of the project has already been completed. This re-quired and continues to require signifi cant construction work. In Cairo, work is getting underway to expand the metro network. Our subsidiary has already landed considerable orders, and will be able to increase its sales signifi cantly given this market situation.

Asia-Pacifi c, Far East & Australia

Construction markets in the Far East remain pleasingly stable. Almost every country in the region is undertaking major infrastructure projects. In Hong Kong, construction sector capacities are being well utilized by extensive rail and road con-struction works. The planned airport expansion further drives development. The same is true in Singapore and Malaysia. For example, new underground railway lines and urban motorways are being constructed in Singapore. The port – one

(6)

6 COURSE OF BUSINESS AND BACKGROUND CONDITIONS

of the most important and biggest in the world – is being relocated. Economies such as Indonesia and the Philippines are also seeing healthy growth. The Australian economy has slowed down somewhat.

Americas

The USA’s economy is returning to its role as the driver of global growth. A very high level of backlog demand has arisen in many infrastructure areas, due to a lack of adequate investment over recent decades. Great efforts will be made in the coming years to reduce this defi cit. Overall, we regard the situation as stable, and offering good opportunities for further growth in both our Construction and Equipment segments. Trends in the Canadian construction market are likewise positive. Interesting projects are regularly seen in Central America.

Africa

In Africa, it will be worthwhile actively pursuing new business, even though the economic weakness of the countries concerned means the business generated will not make a major contribution to our total Group revenues. Some countries have very good chances of improving their prosperity based on their enormous raw material resources.

In general terms, our Equipment segment has similar opportunities to those of the Construction segment, as demand for machinery is dependent on construction markets.

At the end of July, the Resources segment was awarded a large order in its environmental sector in Germany and there are further interesting opportunities regarding large projects. Demand from the mining sector remains weak as the commodity markets are barely recovering. Demand for water-related products and services is increasing worldwide.

PERFORMANCE OF THE BAUER GROUP

In the fi rst half of 2015, the total Group revenues of the BAUER Group increased by 4.2 percent relative to the same period last year, from EUR 749.2 million to EUR 780.4 million. This is mainly due to exchange rate effects (EUR +29.5 million), which increased other income year-on-year. The Group's net loss for the period was EUR -6.8 million (previous year: EUR -11.0 million). Whereas the Construction segment's result increased by a satisfying amount, the Equipment segment's result was still lag-ging signifi cantly behind, mainly due to the fact that the equipment delivered was less complex and therefore had less of a profi t margin. The result of the Resources segment was slightly down year-on-year.

Group orders in hand for the period increased by 13.9 percent year-on-year to a new high of EUR 881.5 million. Construction orders in hand currently do not contain any major projects. It is pleasing that the number of orders in hand has risen regard-less by 15.5 percent due to numerous small and medium-sized projects being acquired in all regions. Orders in hand in the Equipment segment are 23.1 percent up year-on-year. The deep drilling rigs ordered in December 2014 and numerous small equipment orders were behind this positive rise recorded by the subsidiaries of BAUER Maschinen GmbH. The orders in hand for large specialist foundation engineering equipment were roughly on par with the previous year, refl ecting how diffi cult it still is to fi ll production capacity in advance. Orders in the environmental technology, underground mining and materials business in the Resources segment are in line with our projections, though in the exploration and mining companies the order backlog is insuffi cient. The large environmental project described at the beginning of this report once again signifi cantly boosted orders in hand in July. On the positive side, there are further interesting large-scale projects on the market, especially in the environ-mental sector, which we are energetically pursuing.

All in all, the levels of orders in hand and the opportunities offered by the market provide a suitable foundation for further business growth.

(7)

7

BREAKDOWN OF TOTAL GROUP REVENUES BY SUBSEGMENT

in EUR million 6M/2014 *

Revenues Revenues6M/2015 Share2015 Change against previous year in handOrders

Construction BAUER Spezialtiefbau GmbH (BST) BST, Germany 71.9 62.6 8.0 % -12.9 % + Subsidiaries, Germany 5.0 8.1 1.0 % 62.0 % + BST, international 35.9 52.0 6.7 % 44.8 % • Subsidiaries, international 252.9 266.4 34.1 % 5.3 % + BST Group total 365.7 389.1 49.8 % 6.4 % + SCHACHTBAU NORDHAUSEN GmbH including subsidiaries (SBN) 33.5 24.7 3.2 % -26.3 % •

less intra-Group revenues and IFRS adjustments -43.6 -43.9 -5.6 %

Construction total 355.6 369.9 47.4 % 4.0 % +

Equipment

BAUER Maschinen GmbH (BMA) 195.6 188.5 24.2 % -3.6 % •

Equipment subsidiaries 205.7 231.1 29.6 % 12.3 % •

BMA Group total 401.3 419.6 53.8 % 4.6 % •

SBN 26.3 23.0 2.9 % -12.5 % •

less intra-Group revenues and IFRS adjustments -110.5 -109.2 -14.0 %

Equipment total 317.1 333.4 42.7 % 5.1 % •

Resour

ces

BAUER Resources GmbH (BRE) 9.4 7.3 0.9 % -22.3 % ++

Resources subsidiaries 96.3 85.8 11.0 % -10.9 % •

BRE Group total 105.7 93.1 11.9 % -11.9 % •

SBN 15.0 21.2 2.7 % 41.3 % +

less intra-Group revenues and IFRS adjustments -19.7 -12.2 -1.5 %

Resources total 101.0 102.1 13.1 % 1.1 % +

Other

BAUER Aktiengesellschaft (BAG) 15.0 17.4 2.2 % 16.0 %

Other subsidiaries 1.1 1.3 0.2 % 18.2 %

Total Other/services 16.1 18.7 2.4 % 16.1 %

less intra-Group revenues and IFRS adjustments -40.6 -43.7 -5.6 %

Group total (including minority interests) 749.2 780.4 100.0 % 4.2 % +

of which: Germany 234.6 217.0 27.8 % -7.5 %

International 514.6 563.4 72.2 % 9.5 %

Notes on the table:

List also includes non-consolidated holdings Valuation of orders in hand relative to budgeted sales:

-- 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. * See footnote on page 2

(8)

8

Total Group revenues of the Construction segment amounting to EUR 369.9 million were 4.0 percent up on the previous year.

EBIT increased by EUR 2.9 million year-on-year to EUR 10.4 million for the period. The net result for the period increased from EUR -1.7 million in the previous year to EUR 1.5 million. Almost all regions of the world experienced an upturn in business. Delays in the approval process for the dam project in the USA unfortunately impeded further earnings growth compared with the fi rst quarter. The equipment capacities could not be utilized elsewhere as a result.

Despite several large-scale projects being completed, orders in hand in our Construction segment increased by 15.5 percent to EUR 550.8 million (previous year: EUR 477.1 million). Order backlog is evenly distributed geographically across the world, providing a fi rm foundation for us to achieve this year's performance targets. In addition to this positive development, we once again see numerous opportunities for large-scale projects, which we are pursuing at present.

Year-on-year developments in Germany were satisfactory, despite the bad weather conditions at the start of the year. In Russia, on the other hand, performance dropped signifi cantly. We also processed fewer projects in Switzerland and Indonesia in recent months, resulting in a performance drop in these countries. We recorded a positive performance in the fi rst half of the year in the USA, Central America, Egypt, the United Arab Emirates, Saudi Arabia, Qatar, Malaysia, Thailand, and the Philippines.

The other German construction companies in the Group have solid order backlog.

An appraisal of ongoing market trends in the construction sector was presented in the “Overview of international markets” section above.

Full-year outlook

We are expecting our revenues to be slightly higher than those of the previous year in 2015. As far as EBIT is concerned, we are expecting a slight improvement, while the improvement in profi t after tax should be considerable.

Trends in our Business Segments

CONSTRUCTION SEGMENT

CONSTRUCTION KEY FIGURES

in EUR ’000 6M/2014 * 6M/2015 Change 12M/2014 *

Total Group revenues 355,657 369,907 4.0 % 725,626

Sales revenues 333,757 319,959 -4.1 % 646,628

Orders received 334,010 469,733 40.6 % 677,865

Orders in hand 477,054 550,766 15.5 % 450,940

EBIT 7,459 10,397 39.4 % 26,033

Net profit or loss -1,742 1,542 n/a 2,524

Employees (on average over the year) 5,777 6,129 6.1 % 5,675

* Previous year figures adjusted; Structural Steel Engineering division of SCHACHTBAU NORDHAUSEN GmbH was reclassified from the Equipment segment to the Construction segment

(9)

9

TRENDS IN OUR BUSINESS SEGMENTS

EQUIPMENT SEGMENT

EQUIPMENT KEY FIGURES

Total Group revenues in the Equipment segment in the fi rst half of the year rose by 5.1 percent against the previous year comparative to EUR 333.4 million. Sales revenues rose 8.9 percent to EUR 237.9 million. EBIT decreased year-on-year from EUR 13.1 million to EUR 8.4 million. The net loss for the period decreased from EUR 0.0 million in the previous year to EUR -2.9 million in the current year. In the fi rst half of the year, the number of large and complex equipment with higher contribution margins delivered decreased year-on-year. The weak exploration market also negatively affected our well drilling rig sales, creating losses in this area. At the same time, the number of orders received increased slightly. Numerous orders will only be delivered to customers in the second half of the year. We therefore expect for developments to pick up in the second half of the year.

Orders in hand in the Equipment segment increased signifi cantly from EUR 127.6 million to EUR 157.0 million. The main growth was generated by our deep drilling rigs and small equipment. The orders in hand for large specialist foundation engineer-ing equipment are roughly on par with the previous year. Orders received remain highly variable. Some markets are continually seeing new factors appear contributing to political uncertainty, which reduces customer willingness to invest. Business therefore remains very short-term in nature. Specialist foundation engineering machinery customers expect immediate delivery after order-ing. Demand is nevertheless lively, thus we are forecasting sales growth to remain steady.

For many years, we have had to put a particularly great effort into the equipment business in order to react to the uncertainties in the markets. The extreme developments in the Chinese construction machinery market and the events in Russia are the main issues in this respect. Our strategy is to maintain an increasingly perfect, state-of-the-art product portfolio that meets the highest quality standards. A dynamic development team that is closely aligned with the markets ensures that we are very suc-cessful in our efforts. We have added new products such as deep drilling technology to our portfolio, thus expanding it by new growth markets. We see further good opportunities in this particular fi eld. The Chinese market looks like it is going to normalize soon. Our business profi ts from the growing global markets overall.

Full-year outlook

We expect revenues in 2015 to be up year-on-year and for the EBIT and profi t after tax to remain roughly on par with the previous year's fi gures.

in EUR ’000 6M/2014 * 6M/2015 Change 12M/2014 *

Total Group revenues 317,131 333,386 5.1 % 639,151

Sales revenues 218,419 237,930 8.9 % 532,691

Orders received 328,157 331,645 1.1 % 681,346

Orders in hand 127,551 156,979 23.1 % 158,720

EBIT 13,133 8,426 -35.8 % 35,952

Net profit or loss -12 -2,891 n/a 8,847

Employees (on average over the year) 2,957 2,919 -1.3 % 3,038

(10)

10

In the Resources segment, total Group revenues in the fi rst half of the year amounted to EUR 102.1 million, a fi gure roughly on par with the previous year (EUR 101.0 million). EBIT came to EUR -3.2 million (previous year: EUR -3.3 million). The net loss

for the period was EUR -7.1 million (previous year: EUR -6.7 million).

We still have to expend the most effort on our Resources segment. The developments in the environmental and water business are pleasing. The sales of materials for the engineering of drilling have also increased slightly. In contrast, we are still struggling to secure suffi cient orders for the execution of deep drillings to utilize our capacities in this area.

The segment has healthy levels of orders in hand totaling EUR 173,8 million, though that fi gure in the core business is somewhat down against the peaks seen in the past. The Mining division of SCHACHTBAU NORDHAUSEN GmbH holds much of this total, with orders valued at EUR 34.9 million. Operations in this fi eld include numerous projects in Germany and a shaft driving for a mine in Kazakhstan. The large environmental project described at the beginning with a volume of more than EUR 100 million signifi cantly boosted the segment's orders in hand in July.

The Resources segment has the largest opportunities within the Group. Our product range is aimed directly at the large future markets water, environment, and mineral deposits. These markets contain many extraordinary projects that will be tendered globally in the near future.

Full-year outlook

For 2015, we are assuming that revenues will be down on the previous year. The absence of the one-off income for 2014 deriving from the sale of shares as well as charges incurred during the reorganization mean that the EBIT should be slightly in the positive area, whereas it is currently expected that the profi t after tax will be negative.

RESOURCES KEY FIGURES

RESOURCES SEGMENT

in EUR ’000 6M/2014 6M/2015 Change 12M/2014

Total Group revenues 100,956 102,081 1.1 % 252,830

Sales revenues 93,166 83,769 -10.1 % 195,860

Orders received 120,006 122,864 2.4 % 255,837

Orders in hand 169,070 173,810 2.8 % 153,027

EBIT -3,281 -3,216 n/a 15,932

Net profit or loss -6,653 -7,100 n/a 4,347

Employees (on average over the year) 1,383 1,297 -6.2 % 1,400

(11)

11

Our consolidated balance sheet and income statement continue to bear the marks of the years following the fi nancial crisis, which entailed the need for signifi cantly higher funding of our business. Up-front fi nancing of our works additionally rose substantially in relation to a number of major construction projects for which the fi nal invoices have not yet been issued. The Equipment segment too is still clearly showing the impact of increased up-front fi nancing requirements, resulting from the need to hold greater inventories due to shortened delivery lead times. The loss recorded in 2013 and adjustments to provisions for defi ned benefi t plans necessitated by IFRS have had a negative impact on our balance sheet – especially on the equity ratio. These changes will continue to affect us, though we will be working to improve the equity ratio in the years ahead.

It is normal in the specialist foundation engineering and related equipment business that the fi nancing needs of the companies concerned increase substantially early in the year, then decline towards the end of the year. This effect is attributable in part to customer payment practices, but also refl ects the seasonal nature of the business which necessitates boosting production at the start of the year in order to make deliveries in the summer when sales rise. This results in a signifi cant in-year rise in

working capital. The same factors have a converse effect at year-end.

The high exchange rate effect in the fi rst half of 2015 should be taken into consideration when reading all of the disclosures below. The depreciation of the EUR/USD exchange rate had the most profound effect. It was 1.2166 at the end of 2014 and 1.1141 at the end of the second quarter. Exchange rate effects have increased shareholders' equity by 2.9 percent. This and other comparisons show that almost all balance sheet and income statement items increased by around 3 percent due to exchange rate fl uctuations.

EARNINGS

The consolidated revenues shown in the Group’s income statement increased by 1.2 percent against the previous year comparative period to EUR 740.7 million. The changes in inventories decreased by 30.5 percent to EUR 48.2 million. The other capitalized goods and services for own account item, which mainly relates to the equipment required for our own in-house construction operations as well as development costs, amounted to EUR 10.2 million in the fi rst six months of the year (previous year: EUR 6.0 million). Other income rose signifi cantly by EUR 29.0 million to EUR 40.3 million. In this item, the realized and unrealized currency gains and gains from foreign exchange forward contracts increased from EUR 4.2 million in the previous year to EUR 33.7 million. This is primarily due to exchange rate fl uctuations in the fi rst quarter.

Sales revenues fell 0.6 percent year-on-year to EUR 642.0 million.

The cost of materials, staff costs, depreciation and amortization and other operating expenses items on the income statement increased somewhat less overall than revenues, contributing to a modest improvement in EBIT.

At 8.4 percent, the cost of materials decreased considerably more than the consolidated revenues after exchange rate effects. In the service business in the Construction segment, year-to-year cost distribution often varies considerably due to order structure. Staff costs increased by 5.7 percent, once again partially due to exchange rate effects.

Depreciation of fi xed assets increased by 9.4 percent, while write-downs of inventories due to use decreased by EUR 0.5 million as fewer machines were rented out than in the previous-year period. The other operating expenses increased mainly by the previously described exchange rate losses, which amounted to EUR 31.6 million in the fi rst half of the year and were related to exchange rate hedging measures.

(12)

12

The fi nancial expenses decreased by EUR 2.0 million year-on-year to EUR 19.5 million. The fi nancial income increased to EUR 2.9 million (previous year: EUR 2.6 million).

Income tax expense came in EUR 1.3 million higher versus the previous-year period at EUR 7.1 million. Despite the loss posted in the fi rst half of the year, income taxes were created by group companies that posted profi t. We expect that full-year income tax expense will ultimately be slightly above 30 percent.

The net loss for the period was EUR -6.8 million (previous year: EUR -11.0 million).

FINANCIAL POSITION

Our fi nancial position is developing in line with plans.

NET ASSET POSITIONS

The net assets shown on the balance sheet increased by 7.2 percent against the 2014 year-end and by 2.2 percent relative to June of the previous year. An in-year increase is normal in our business, for the reasons outlined above. When disregarding the exchange rate effects, however, net assets even decreased slightly year-on-year. Net assets development was slightly up on the rise in consolidated revenues. Our medium-term target is a substantial reduction in net assets relative to total Group revenues. According to our planning, the increase in net assets at the year-end will be less than the rate of rise in revenues.

In total, intangible assets and property, plant and equipment and investment property increased by 1.9 percent year-on-year, primarily due to the exchange rate fl uctuations. Without this effect, our fi xed assets would have decreased slightly as we are continuing to invest very carefully. Property, plant and equipment increased by 2.4 percent. The deferred tax

assets decreased from EUR 31.0 million since year-end to EUR 27.8 million. The exchange rate differences and valuations of provisions for defi ned benefi t plans had a particular impact in this case (EUR -2.1 million). Total non-current assets increased by 4.9 percent versus the previous-year period. Inventories (particularly fi nished goods, work in progress and stock for trade) and receivables refl ect the currency effect described above and the annually recurring seasonal effect. The level of up-front fi nancing for our projects and inventories has thus risen accordingly. Inventories decreased by 0.7 percent and receivables

and other assets increased by 3.5 percent year-on-year. Cash and cash equivalents remained unchanged compared with the previous year. Current assets increased by 0.7 percent versus the previous-year period.

On the Equity and Liabilities side, shareholders’ equity increased by EUR 6.3 million against the end of last year. The key changes, alongside the loss made (EUR -6.8 million), are exchange rate changes (EUR +12.2 million), effects of interest rate changes on the valuation of defi ned benefi t plans after deduction of deferred taxes (EUR +5.5 million), changes in the scope of consolidation (EUR -1.2 million), and the dividend payment (EUR -2.9 million). The defi ned benefi t plans decreased by EUR 6.1 million compared with the end of the year, primarily due to a rise in the actuarial interest rate. The usual seasonal additional fi nancing requirement was mainly covered by borrowings. Non-current liabilities to banks increased by EUR 5.4 million compared with the fi rst six months of the previous year, and increased by EUR 2.8 million compared with year-end.

Current liabilities to banks decreased by EUR 28.6 million year-on-year, and increased by EUR 112.0 million compared with year-end due to their seasonal nature. Deferred tax liabilities dropped slightly by EUR 0.3 million.

(13)

13

EARNINGS, FINANCIAL AND NET ASSET POSITION

DEVELOPMENT OF THE BAUER AG SHARE

The Bauer share fl uctuated but developed positively overall in the fi rst half of the year. In a very positive stock market environ-ment, it climbed from its opening at EUR 13.38 to the current annual high at EUR 18.00 by mid-March. The share closed the fi rst quarter at EUR 17.91. It dropped in April and continued to fall back to EUR 15.54 by the end of the month.Following a short recovery back to EUR 17.22 by mid-May, the share dropped once again to EUR 14.85 by mid-June. It closed the fi rst half of the year at EUR 15.37. In July, the share went up steeply once more in a positive stock market environment, outperformed the benchmark indices DAX and SDAX, and closed the month at EUR 17.36.

HUMAN RESOURCES

The number of company employees increased slightly since June 30, 2014 (10,406) to an average 10,642 for the year. Changes occurred solely in lower-wage countries in relation to specifi c projects. The total number of employees in the Construction segment increased by 352, and decreased slightly in the other segments.

FOLLOW-UP REPORT

At the end of July, BAUER Resources GmbH was awarded a contract for the remediation of perimeter 1/3 NW of the former Kesslergrube landfi ll, in the city of Grenzach-Wyhlen located at the border triangle of Germany, France, Switzerland . Worth over EUR 100 million, this is the BAUER Group’s largest single contract to date. The project signifi cantly increased orders in hand of the Resources segment and the entire BAUER Group even further.

No further matters of special note which we would expect to have a material infl uence on the BAUER Group's balance sheet or earnings occurred after December 31, 2014.

OPPORTUNITIES AND RISKS

Material opportunities and risks are outlined in the individual sections of this Interim Report. There has been no material change in risks since the Annual Report dated December 31, 2014. Consequently, we refer back to the Combined Manage-ment Report for fi nancial 2014.

FULL-YEAR OUTLOOK

The global changes that affect our business remain signifi cant. We are confi dent that after some tough years for us, our companies will be able to increase their performance once again in future. We are conducting good business in the construc-tion sector in most of the regions around the world. We are also currently bidding on major projects, which will give us the opportunity to continue improving our development. The undesirable developments in the Equipment segment in recent years are starting to improve as the Chinese competitors have now started to reduce their overcapacities. It is also good to see that customers are showing an interest in our deep drilling rigs. The Resources segment now has a positive number of orders in hand, which helps us to realize the remaining necessary corrections. We are convinced that we have created great opportunities for the future with this segment.

We forecast a positive trend for our business overall. Although 2015 has continued to provide us with numerous challenges overall, we are very optimistic that we will be able to return to our growth path, which will also be clearly refl ected in the results over the coming years.

(14)

14 EARNINGS, FINANCIAL AND NET ASSET POSITION

For full-year 2015 we predict:

• Total Group revenues of around EUR 1.6 billion.

• We forecast profi t after tax of around EUR 18 to 23 million. In accounting terms, this will mean EBIT of around EUR 75 million.

As in previous years, we must again point out that BAUER Group revenue and earnings estimates are subject to consider-ably uncertainty in these turbulent times.

All of our employees and managers are working hard to translate the discernible opportunities into a return to an improved business performance.

(15)

15

Interim consolidated financial statements

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

in EUR ’000 Q2/2014 Q2/2015 6M/2014 6M/2015

1. Sales revenues 332,190 342,430 645,541 641,990

2. Changes in inventories 20,702 -2,332 69,304 48,194

3. Other capitalized goods and services for own account 2,515 7,651 5,961 10,200

4. Other income 5,518 1,470 11,266 40,290

CONSOLIDATED REVENUES 360,925 349,219 732,072 740,674

5. Cost of materials -196,062 -167,109 -395,371 -362,195

6. Staff costs -89,098 -93,510 -174,856 -184,836

7. Depreciation and amortization

a) Depreciation of fixed assets -18,243 -20,353 -37,300 -40,819

b) Write-downs of inventories due to use -3,180 -3,715 -6,716 -6,218

8. Other operating expenses -45,657 -49,774 -104,226 -130,615

OPERATING RESULT 8,685 14,758 13,603 15,991

9. Financial income 1,670 1,121 2,641 2,940

10. Financial expenses -8,888 -9,265 -21,519 -19,531

11. Share of the profit or loss of associated companies

accounted for using the equity method 64 625 66 933

PROFIT BEFORE TAX 1,531 7,239 -5,209 333

12. Income tax expense -5,145 -5,386 -5,755 -7,093

NET PROFIT OR LOSS -3,614 1,853 -10,964 -6,760

of which attributable to shareholders of BAUER AG -3,571 1,352 -11,346 -7,484

of which attributable to non-controlling interests -43 501 382 724

in EUR/share Q2/2014 Q2/2015 6M/2014 6M/2015

Basic earnings per share -0.21 0.08 -0.66 -0.44

Diluted earnings per share -0.21 0.08 -0.66 -0.44

Average number of shares in circulation (basic) 17,131,000 17,131,000 17,131,000 17,131,000 Average number of shares in circulation (diluted) 17,131,000 17,131,000 17,131,000 17,131,000

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

in EUR ’000 Q2/2014 Q2/2015 6M/2014 6M/2015

Net profit or loss -3,614 1,853 -10,964 -6,760

Income and expenses which will not be subsequently reclassified to profit and loss

Revaluation of commitments arising from employee benefi ts after termination of employment

Deferred taxes on that revaluation with no effect on profit and loss -6,259 1,757 21,571 -6,057 -12,060 3,387 7,681 -2,156 Income and expenses which will be subsequently reclassified

to profit and loss

Market valuation of derivative fi nancial instruments Included in profi t and loss

Deferred taxes on fi nancial instruments with no effect on profi t and loss

Differences from currency translation

-70 566 6 1,993 -2,526 3,240 -201 -7,397 82 573 -37 1,268 -4,535 3,769 215 12,165

Other comprehensive income after tax -2,007 8,630 -6,787 17,139

Total comprehensive income -5,621 10,483 -17,751 10,379

of which attributable to shareholders of BAUER AG -5,302 10,395 -17,715 9,292

(16)

16 INTERIM CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEET

ASSETS in EUR ’000 Jun. 30, 2014 * Dec. 31, 2014 Jun. 30, 2015

A. NON-CURRENT ASSETS

I. Intangible assets 34,656 34,440 33,013

II. Property, plant and equipment and investment property 442,415 446,909 457,660

III. Investments accounted for using the equity method 13,077 42,906 42,426

IV. Participations 3,613 3,613 3,613

V. Deferred tax assets 28,456 30,973 27,780

VI. Receivables from concession arrangements 36,964 0 0

VII. Other non-current assets 7,859 7,492 7,423

VIII. Other non-current financial assets 5,382 28,420 28,567

572,422 594,753 600,482 B. CURRENT ASSETS

I. Inventories 479,333 439,184 476,146

II. Receivables and other assets 549,674 496,650 568,640

III. Effective income tax refund claims 4,245 2,661 2,464

IV. Cash and cash equivalents 47,219 41,835 41,004

1,080,471 980,330 1,088,254 1,652,893 1,575,083 1,688,736

EQUITY AND LIABILITIES in EUR ’000 Jun. 30, 2014 * Dec. 31, 2014 Jun. 30, 2015

A. SHAREHOLDERS’ EQUITY

I. Equity of BAUER AG shareholders 379,340 399,308 404,831

II. Non-controlling interests 21,299 19,617 20,395

400,639 418,925 425,226 B. NON-CURRENT LIABILITIES

I. Defi ned benefi t plans 95,110 116,358 110,229

II. Financial liabilities 394,255 387,816 389,301

III. Other liabilities 5,701 5,959 6,112

IV. Deferred tax liabilities 13,384 13,123 12,853

508,450 523,256 518,495 C. CURRENT LIABILITIES

I. Financial liabilities 428,793 299,698 403,300

II. Other liabilities 291,906 305,861 313,924

III. Effective income tax obligations 6,166 9,317 9,362

IV. Provisions 16,939 18,026 18,429

743,804 632,902 745,015 1,652,893 1,575,083 1,688,736

(17)

17

GROUP INTERIM FINANCIAL STATEMENTS

in EUR ’000 6M/2014 6M/2015

Cash flows from operational activity:

Profit before tax -5,209 333

Depreciation of fixed assets 37,300 40,819

Write-downs of inventories due to use 6,716 6,218

Financial income received -2,052 -2,020

Financial expenses paid 20,013 17,069

Other non-cash transactions 9,560 -20,060

Dividends received 0 100

Result from the disposal of fixed assets -1,522 -674

Change in provisions 3,850 630

Change in trade receivables 6,267 20,271

Change in receivables from construction contracts -16,939 -40,595

Change in other assets and in prepayments and deferred charges -15,665 -22,111

Change in inventories -70,458 -35,960

Change in trade payables -5,689 7,910

Change in liabilities from construction contracts -2,976 -7,436

Change in other current and non-current liabilities -14,033 -15,970

Cash and cash equivalents generated from day-to-day business operations -50,837 -51,476

Income tax paid -10,760 -6,997

Net cash from operating activities -61,597 -58,473 Cash flows from investment activity:

Acquisition of property, plant and equipment and intangible assets -24,681 -35,031

Proceeds from sale of fixed assets 8,342 7,778

Consolidation scope-related change in financial resources 0 96

Net cash used in investing activities -16,339 -27,157 Cash flows from financing activity:

Raising of loans and liabilities to banks 141,415 128,970

Repayment of loans and liabilities to banks -48,561 -23,743

Repayment of liabilities from finance lease agreements -5,693 -4,331

Dividends paid -2,325 -2,879

Interest paid -19,382 -16,530

Interest received 2,442 1,685

Net cash used in financing activities 67,896 83,172 Changes in liquid funds affecting payments -10,040 -2,458

Influence of exchange rate movements on cash 42 1,627

Total change in liquid funds -9,998 -831 Cash and cash equivalents at beginning of reporting period 57,217 41,835 Cash and cash equivalents at end of reporting period 47,219 41,004 Change in cash and cash equivalents -9,998 -831

(18)

18

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

in EUR '000 Other revenue reserves and net earnings

available for distribution Subscribed

capital reserveCapital Revenue reserves

Foreign currency

translation Reconciling item, IFRS

Hedging transactions reserve Non-controlling interests Total As at Jan. 1, 2014 * 73,001 38,404 284,299 -6,492 10,387 -2,593 22,809 419,815

Net profit or loss 0 0 -11,346 0 0 0 382 -10,964

Differences from currency

translation 0 0 0 1,620 0 0 -352 1,268

Revaluation of commitments arising from employee benefits after termination

of employment 0 0 -11,955 0 0 0 -105 -12,060

Market valuation of

deriva-tive financial instruments 0 0 0 0 0 644 11 655

Deferred taxes with no

effect on profit and loss 0 0 3,357 0 0 -35 28 3,350

Total comprehensive income 0 0 -19,944 1,620 0 609 -36 -17,751

Changes in scope of consolidation 0 0 0 0 0 0 0 0 Dividend payments 0 0 0 0 0 0 -2,325 -2,325 Other changes 0 0 49 0 0 0 851 900 As at Jun. 30, 2014 * 73,001 38,404 264,404 -4,872 10,387 -1,984 21,299 400,639 As at Jan. 1, 2015 73,001 38,404 275,725 3,149 10,387 -1,358 19,617 418,925

Net profit or loss 0 0 -7,484 0 0 0 724 -6,760

Differences from currency

translation 0 0 0 11,853 0 0 312 12,165

Revaluation of commitments arising from employee benefits after termination

of employment 0 0 7,614 0 0 0 67 7,681

Market valuation of

deriva-tive financial instruments 0 0 0 0 0 -771 5 -766

Deferred taxes with no

effect on profit and loss 0 0 -2,137 0 0 217 -21 -1,941

Total comprehensive income 0 0 -2,007 11,853 0 -554 1,087 10,379

Changes in scope

of consolidation 0 0 -1,199 0 0 0 0 -1,199

Dividend payments 0 0 -2,570 0 0 0 -309 -2,879

Other changes 0 0 0 0 0 0 0 0

As at Jun. 30, 2015 73,001 38,404 269,949 15,002 10,387 -1,912 20,395 425,226

* See footnote on page 2

(19)

19

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED SEGMENT REPORTING

in EUR '000 Construction Equipment Resources

January - June 2014 * 2015 2014 * 2015 2014 2015

Total revenues (Group) 355,657 369,907 317,131 333,386 100,956 102,081

Sales revenues with third parties 333,757 319,959 218,419 237,930 93,166 83,769

Sales revenues between

business segments 6,944 6,905 18,353 24,275 1,326 1,440

Changes in inventories -67 0 67,584 48,562 1,787 -368

Other capitalized goods and services

for own account 80 118 2,316 2,211 98 265

Other income 4,691 20,157 4,667 15,086 1,826 3,739

CONSOLIDATED REVENUES 345,405 347,139 311,339 328,064 98,203 88,845

OPERATING RESULT 7,459 10,397 13,133 8,426 -3,281 -3,216

Financial income 1,154 1,075 703 1,223 996 586

Financial expenses -7,058 -6,412 -11,018 -10,051 -4,928 -5,046

Share of the profit or loss of associated companies accounted for using the

equity method -140 -325 -57 6 263 1,252

Income tax expense -3,157 -3,193 -2,773 -2,495 297 -676

NET PROFIT OR LOSS -1,742 1,542 -12 -2,891 -6,653 -7,100

ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS Depreciation and amortization

Depreciation of fixed assets -22,161 -25,071 -9,177 -9,659 -4,675 -4,995

Write-downs of inventories due to use 0 0 -6,716 -6,218 0 0

in EUR ’000 Other Consolidation Group

January - June 2014 2015 2014 2015 2014 2015

Total revenues (Group) 16,105 18,662 -40,634 -43,677 749,215 780,359

Sales revenues with third parties 199 332 645,541 641,990

Sales revenues between

business segments 15,086 16,069 -41,709 -48,689 0 0

Changes in inventories 0 0 0 0 69,304 48,194

Other capitalized goods and services

for own account 0 0 3,467 7,606 5,961 10,200

Other income 309 1,681 -227 -373 11,266 40,290

CONSOLIDATED REVENUES 15,594 18,082 -38,469 -41,456 732,072 740,674

OPERATING RESULT -4,065 193 357 191 13,603 15,991

Financial income 3,526 5,017 -3,738 -4,961 2,641 2,940

Financial expenses -2,253 -2,983 3,738 4,961 -21,519 -19,531

Share of the profit or loss of associated companies accounted for using the

equity method 0 0 0 0 66 933

Income tax expense -43 -670 -79 -59 -5,755 -7,093

NET PROFIT OR LOSS -2,835 1,557 278 132 -10,964 -6,760

ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS Depreciation and amortization

Depreciation of fixed assets -1,529 -1,397 242 303 -37,300 -40,819

Write-downs of inventories due to use 0 0 0 0 -6,716 -6,218

Dec. 31, 2014 Jun. 30, 2015 Dec. 31, 2014 Jun. 30, 2015 Dec. 31, 2014 Jun. 30, 2015 SEGMENT ASSETS 338,993 337,173 -374,074 -362,706 1,575,083 1,688,736

* See footnote on page 2

Dec. 31, 2014 * Jun. 30, 2015 Dec. 31, 2014 * Jun. 30, 2015 Dec. 31, 2014 Jun. 30, 2015 SEGMENT ASSETS 586,378 637,577 759,510 792.883 264,276 283,809

(20)

1. GENERAL INFORMATION RELATING TO THE GROUP

BAUER Aktiengesellschaft, Schrobenhausen (referred to in the following as BAUER AG) is a stock corporation under German law. Its registered offi ce is at BAUER-Strasse in Schrobenhausen, and the company is entered in the Register of Companies of Ingolstadt (HRB 101375).

The BAUER Group is a provider of services, equipment and products dealing with ground and groundwater. The Group markets its products and services all over the world. The operations of the Group are divided into three segments: Construction, Equipment and Resources.

These condensed consolidated fi nancial statements were released for publication on August 10, 2015.

Auditing

These condensed interim consolidated fi nancial statements and the interim Group Management Report have not been audited in accordance with section 317 of the German Commercial Code (HGB), nor have they been subjected to any review by an auditor.

2. BASIS FOR COMPILING THE CONSOLIDATED FINANCIAL STATEMENTS

BAUER AG compiles its condensed interim consolidated fi nancial statements in accordance with International Financial Report-ing Standards (IFRS), the requirements of the International AccountReport-ing Standards Board (IASB), London, and the Interpretations of the International Financial Reporting Interpretations Committee (IFRIC), as applicable on the accounting reference date and recognized by the European Union. Only IASB Standards and Interpretations adopted by the Commission and duly published in the Offi cial Journal of the EU by the accounting reference date are applied.

The Half-Year Interim Report to August 14, 2015 was prepared in condensed form on the basis of IAS 34, “Interim Financial Reporting”, and as such does not include all the disclosures mandatory for full-year consolidated fi nancial statements. These condensed interim consolidated fi nancial statements are based on the Group's consolidated fi nancial statements to December 31, 2014, and as such should be read in conjunction with the consolidated fi nancial statements of BAUER AG to December 31, 2014.

3. 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 fi nancial and corporate policy. This is routinely accompanied by a voting share of over 50 per-cent. When assessing whether control is exerted, the existence and effect of potential voting rights currently exercisable or convertible are considered.

In a small number of cases, companies are fully consolidated into the fi nancial statements of BAUER AG even though that company holds less than 50 percent of their voting rights. This is the result of state restrictions which stipulate that foreign investors may not hold more than 50 percent of the voting rights in domestic companies. In such cases BAUER AG makes use of so-called agency constructions, whereby more than 50 percent of the voting rights are commercially held in the com-pany concerned, thus allowing for full consolidation.

Subsidiaries are included in the consolidated fi nancial statements (fully consolidated) from the point at which control is trans-ferred 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 signifi cant infl uence on the said companies’ fi nancial and operating policy decisions (associated companies) are consolidated according to the equity method.

Notes to the interim consolidated

financial statement

(21)

21

Changes at subsidiaries: Resources segment:

On March 20, 2015, BAUER Resources Australia Pty. Ltd., Sydney, Australia, was dissolved and thus deconsolidated.

In the fi rst quarter of fi nancial year 2015, BAUER Resources Maroc S.A.R.L, Kenitra, Morocco, was included in the Group fi nancial statements for the fi rst time. The company was previously not consolidated owing to its minor importance.

Equipment segment:

In the second quarter of the 2015 fi nancial year, 100 percent of the shares in BAUER Mexico S.A. de C.V., Mexico were transferred to BAUER Resources GmbH, Schrobenhausen, Germany (97.5 percent) and to PURE Umwelttechnik GmbH (2.5 percent). These companies are allocated to the Resources segment. The transfer has no effect on the interim consoli-dated fi nancial statements of BAUER AG.

No changes have otherwise occurred to the scope of consolidation since December 31, 2014.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS In this context we refer to our 2014 Annual Report, page 105.

5. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied as from January 1, 2015 correspond to those applied to the consolidated fi nancial state-ments to December 31, 2014, with the following exceptions:

On June 30, 2015, the BAUER Group increased the discount interest rate for measuring its defi ned benefi t plan commit-ments in Germany to 2.36 percent (previous year: 2.0 percent).

The changes to IFRS 1, IFRS 3, IFRS 13 and IAS 40 which came into effect on January 1, 2015 as part of the Annual Improvement Project 2013 of the International Financial Reporting Standards 2013 do not have any signifi cant effects on the interim consolidated fi nancial statements of BAUER AG.

Furthermore, IFRIC 21 has been applicable since January 1, 2015. This regulates accounting for government levies not covered by IAS 12 “Income tax”. This interpretation does not have any signifi cant effects on the interim consolidated fi nancial statements of BAUER AG.

6. DISCLOSURES REGARDING FINANCIAL INSTRUMENTS

6.1 Financial risk factors

In its business operations and fi nancing activities, the BAUER Group is subject to a wide range of market risks (foreign exchange rate, interest rate, raw material and liquidity risks, risk of default).

These condensed interim consolidated fi nancial statements do not include all disclosures and information relating to fi nancial risk management, so they should be read in conjunction with the consolidated fi nancial statements to December 31, 2014. No changes to the management of fi nancial risks have been made since the end of the fi nancial year.

(22)

6.2 Carrying amounts and fair values

The fair values of fi nancial 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)

The fi nancial instruments measured at fair value are assignable to the following levels:

In the fi rst six months of the year, no reclassifi cation was undertaken between level 1 and 2 fi nancial instruments measured at fair value.

6.3 Methods for determining level 2 fair values

Level 2 derivatives comprise foreign exchange forward contracts, foreign exchange forward options, interest rate swaps and cross-currency swaps. The fair values of foreign exchange forward contracts and cross-currency swaps are measured sepa-rately 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 price models.

ASSETS in EUR '000 IAS 39 category Jun. 30, 2015 Level 1 Level 2

Securities AfS 0 0 0

Derivatives not in hedge accounting FAHfT 3,119 0 3,119

Derivatives in hedge accounting n/a 922 0 922

Total 4,041 0 4,041

EQUITY AND LIABILITIES in EUR ’000 IAS 39 category Jun. 30, 2015 Level 1 Level 2

Derivatives not in hedge accounting FLHfT 4,687 0 4,687

Derivatives in hedge accounting n/a 6,919 0 6,919

Total 11,606 0 11,606

ASSETS in EUR '000 IAS 39 category Dec. 31, 2014 Level 1 Level 2

Securities AfS 0 0 0

Derivatives not in hedge accounting FAHfT 485 0 485

Derivatives in hedge accounting n/a 1,058 0 1,058

Total 1,543 0 1,543

EQUITY AND LIABILITIES in EUR '000 IAS 39 category Dec. 31, 2014 Level 1 Level 2

Derivatives not in hedge accounting FLHfT 9,108 0 9,108

Derivatives in hedge accounting n/a 8,994 0 8,994

Total 18,102 0 18,102

(23)

23

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENT

The fair values of the interest rate swaps correspond to the respective market value as determined by appropriate fi nancial valuation methods, such as by discounting expected future cash fl ows.

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 assets and non-current fi nancial assets and of non-current liabilities and non-current fi nancial liabilities correspond to the cash values of the payment fl ows linked to the assets, taking into account the applicable interest rate parameters, which refl ect changes in the terms and expectations of the market and of the respective parties. Investments are valued at cost, as no fair value can be reliably determined owing to the lack of an active market.

6.4 Fair value disclosures

The principles and methods of calculating fair value have essentially remained unchanged from the previous year. Detailed explanatory notes on the measurement principles and methods are set out in the 2014 Annual Report.

The fi nancial assets and liabilities of which the fair values differ from their carrying amounts are as follows:

The carrying amounts of all other fi nancial assets and liabilities correspond to their fair value.

In other respects we refer to pages 158 et seq. of the 2014 Annual Report.

7. SEASONALITY

Our Construction segment undertakes many projects in regions where winter and other hostile weather conditions impact severely on site results in the fi rst quarter of the year and at the start of the second quarter. The fi rst quarter is also weak in terms of the performance of our Equipment segment, because customers only buy machines when they actually need them to carry out their construction works. For our Resources segment, wintry conditions at the start of the year mean that sales of well engineering materials are very weak.

Since most costs are fi xed, signifi cant losses are made in the fi rst quarter of each year. Beginning with the second quarter, those losses are balanced out as contribution margins improve. Break-even has normally not yet been achieved by the end of the second quarter. Most profi t is generated in the third and fourth quarters. This annually recurring business cycle allows performance, sales and earnings in the various quarters to be compared against the corresponding reference periods, ignoring special factors.

in EUR ’000 Dec. 31, 2014 Jun. 30, 2015

Carrying amount Fair value Carrying amount Fair value

Other non-current financial assets 28,420 27,973 28,567 28,126

Trade receivables 311,417 310,972 308,396 307,945

Liabilities to banks 364,771 378,016 367,596 379,924

Other non-current financial liabilities 10,013 9,904 6,963 6,876

(24)

24

8. NOTES ON SEGMENT REPORTING

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.

Construction

The core business of the Construction segment is specialist foundation engineering. Complete excavation pits and founda-tion works, often in diffi cult subgrade condifounda-tions, 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 a major specialist foundation engineering element. Examples of this include bridges, environmental engineering, remediation and building renovation projects. The Construction segment is founded on the close interlinking of all construction activities.

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 manu-factured. 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 remedia-tion and extracremedia-tion 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, specifi cally for wells and geothermal energy sources.

The Othersegment 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.

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.

Total Group revenues, consolidated revenues and sales revenues with third parties

The consolidated revenues refl ect 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 consoli-dated revenues and the total Group revenues is derived from the revenues of the associated companies, from our subcon-tractor shares in joint ventures, and from the revenues of non-consolidated companies.

(25)

25

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 percent 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.

9. EVENTS AFTER JUNE 30, 2015

At the end of July, BAUER Resources GmbH was awarded a contract for the remediation of perimeter 1/3 NW of the former Kesslergrube landfi ll. Worth over EUR 100 million, this is the BAUER Group's largest single contract to date. The project signifi cantly increased orders in hand of the Resources segment and the entire BAUER Group even further.

No events of special note which we would expect to have a material infl uence on the BAUER Group’s balance sheet or earnings occurred after the balance sheet date.

10. MATERIAL TRANSACTIONS WITH RELATED PARTIES

The relationships between fully consolidated Group companies and related companies and persons relate mainly to associated and joint-venture companies. Transactions with the said companies are transacted at standard market terms. In the period under review no material transactions were undertaken with related parties.

11. CONTINGENT LIABILITIES

Contingent liabilities arising from guarantees to third parties exist in an amount of EUR 3,295 thousand (December 31, 2014: EUR 5,112 thousand). In addition, we are subject to joint and several liability in respect of all joint ventures in which we participate.

ASSURANCE BY THE LEGAL REPRESENTATIVES

We hereby assure that, to the best of our knowledge, the condensed interim consolidated fi nancial statements give a true and fair view of the net assets, fi nancial position and earnings of the company in accordance with the accounting principles applicable to interim reporting, and that the interim Group 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 over the remaining course of the fi nancial year are set out.

Schrobenhausen, August 14, 2015

The Management Board

Prof. Thomas Bauer Dipl.-Betriebswirt (FH) Hartmut Beutler Dipl.-Ing. Heinz Kaltenecker Chairman of the Management Board

(26)

26

FUTURE-RELATED STATEMENTS

This Interim Report contains future-related statements. Future-related statements are any statements which do not relate to historical facts and events, such as forecasts of future fi nancial earning power and indications of plans and expectations with regard to the development of the business of the BAUER Group and relating to the general economic climate or other factors to which the BAUER Group is subject. The use of words such as “believe”, “expect”, “predict”, “forecast”, “intend”, “plan”, “estimate”, “aim”, “likely”, “assume” and similar formulations indicates that the statements in question are future-related. Future-related statements are subject to risks and many uncertainties which may mean that actual developments, earnings or levels of performance differ widely from those explicitly or implicitly assumed in the future-related statements.

Readers are advised that, in view of the said risks and uncertainties, no inappropriately high degree of confi dence should be placed in the likelihood of such statements proving to be accurate in the future. BAUER Aktiengesellschaft does not intend to, and assumes no obligation to, publish updates of such future-related statements in order to incorporate events or circumstances beyond the date of publication of this Interim Report.

(27)
(28)

DATES 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

You will fi nd more information on the BAUER Group on the Internet at www.bauer.de.

PUBLISHED BY BAUER Aktiengesellschaft BAUER-Strasse 1

86529 Schrobenhausen, Germany

Offi ce of the Management Board: Phone: 08252 97-1215

Fax: 08252 97-2900 E-mail: BAG@bauer.de

Registered place of business 86529 Schrobenhausen, Germany Registered at the District Court of Ingolstadt under HRB 101375

® Registered trademark of Deutsche Börse AG

References

Related documents

Therefore, the objectives of this study are to determine if the high-fit CSR (conducting CSR activities which relate closely to the core activity or core competencies of

African American students majoring in the Associates of Arts program in the Humanities & Sciences Division, Marketing Technology in the Business and Technologies Division

In this paper a low-cost wireless sEMG digital sensor based on ez430-RF2500 Development Tool version of the MSP430 microcontroller has been implemented and tested, to trans- mit

Consolidated sales revenues of the PVA TePla Group amounted to EUR 60.2 million in the first half of 2012 (previous year: EUR 46.3 million), up considerably on the previous

As the input signal frequency varies over a wide range, and for all these signals amplification and impedance matching have to be achieved, coupling of the output of

The ROCKWOOL Group generated sales in first quarter 2014 of EUR 484.5 million which is an increase of 15% compared to the same period last year.. Included is a negative exchange

Jovanova svetost osigurana. To je istovremeno test mrzovoljnog gospodara. Što je on mrzo- voljniji, manje će priznavati uspeh učenika, manje će ga hvaliti i manje će

Wkh ghvljq ri prqhwdu| srolf| qhhgv wr wdnh lqwr dffrxqw wkh srvvlelolw| wkdw wkh hfrqrp| pd| qrw dozd|v eh lq d ixoo lqwhuwhpsrudo/ lh udwlrqdo h{shfwdwlrqv/ htxloleulxp1 Li