Financial Review
- Strong operating performance produces substantial growth
- New sales record of EUR 19.1 billion
- Consolidated net profit up 24.4 percent on prior year
Earnings
HOCHTIEF significantly expanded the volume of its business activities in the year under review, raising sales by EUR 2.65 billion to EUR 19.1 billion. This represents 16.1 percent growth on the prior-year sales of EUR 16.45 billion. Almost all divisions contributed to this result despite the economic slowdown that began to take hold in 2008. The growth was achieved both in international markets and in HOCHTIEF's home market of Germany.On the international front, our HOCHTIEF Americas and HOCHTIEF Asia Pacific divisions sustained their successful performance trend. HOCHTIEF Americas generated sales of EUR 8.05 billion (2007: EUR 6.95 billion). Most of this sales growth was accounted for by our subsidiary Flatiron, which was acquired late in 2007. Flatiron was only included in the 2007 consolidated financial statements for a short fiscal year consisting of a single month with sales of EUR 58.3 million. In 2008, Flatiron was included for the full year and contributed EUR 854.2 million toward Group sales. Our US subsidiary Turner likewise boosted sales, by 5.2 percent to EUR 7.1 billion (2007: EUR 6.75 billion). The falling US dollar once again diminished the subsidiary"s sales growth after translation into euros by 6.3 percent over the year. In local currency, Turner broke the USD 10 billion barrier with total sales of USD 10.45 billion representing a 12.2 percent rise on the prior year (2007: EUR 9.31 billion). The upward trend also continued in the Asia- Pacific region. Sales at the HOCHTIEF Asia Pacific division were up 14.9 percent to EUR 6.88 billion (2007: EUR 5.99 billion). A falling exchange rate also made itself felt here, with a 6.4 percent drop in the year's average rate for the Australian dollar pulling down divisional sales by nearly half a billion euros. On the Eastern European market, which is becoming increasingly important to HOCHTIEF, the Group further expanded its activities and generated sales of almost EUR 1 billion.
Operational Statement of Earnings
| (EUR million) | 2008 | 2007 |
|---|---|---|
| Profit from operating activities | 310.5 | 122.9 |
| + Net income from participating interests | 306.0 | 354.3 |
| - Non-operating earnings | (+) 15.0 | (+) 22.6 |
| + Interest credited | 44.6 | 39.7 |
| Operational earnings (EBITA) | 676.1 | 539.5 |
| Net investment and interest income | (141,0) | (15,6) |
| Non-operating earnings | (15,0) | (22,6) |
| Profit before taxes | 520.1 | 501.3 |
| Income taxes | (177,9) | (160,3) |
| Profit after taxes | 342.2 | 341.0 |
| Of which: Consolidated net profit | 175.1 | 140.7 |
| Of which: Minority interest | 167.1 | 200.3 |
The international share of Group sales was held constant from the prior year at 86.5 percent, underscoring the strongly international character of the Group and the importance of foreign markets to HOCHTIEF.
Business was also very strong in our German home market in the past year. With sales of EUR 2.58 billion, HOCHTIEF achieved 16.2 percent sales growth in Germany compared with the prior year (2007: EUR 2.22 billion). In the process, we developed our activities away from the difficult German building construction market and toward project development, service and operating business focusing on infrastructure projects, real estate and facilities.
