Segment Reporting
Synergies boost sales and earnings
HOCHTIEF’s product and service offering spans the entire life cycle of infrastructure projects, real estate and facilities. On every project, we set ourselves the highest quality standards and aim to impress clients by delivering innovative solutions at fair prices.
Our method of fulfilling these exacting requirements is one of networking and collaboration among our companies. In line with our motto “One roof—all solutions,” we pool our capabilities, create networks and cooperate within the Group. In doing so, we transfer knowledge both nationally and internationally. On this basis, we create groundbreaking, efficient solutions that are always tailored to our clients. For our shareholders, employees and the company, we leverage additional earnings potential.
Examples of cooperation within the Group
Concessions projects are a particularly important element of Group-wide cooperation. Together with other divisions, HOCHTIEF Concessions is currently implementing projects worth EUR 1.86 billion. Under contract to sister company HOCHTIEF PPP Solutions, HOCHTIEF Construction, for example, is working on concessions projects totaling EUR 1.45 billion in the roads and social infrastructure segments. Of these, contracts worth just over EUR 615 million are still at the construction stage, which in December 2009 equated to roughly 17 percent of the order backlog at HOCHTIEF Europe. The HOCHTIEF Services companies also contribute their specialist expertise to concessions projects. In this division, cooperation projects amount to roughly EUR 413 million in total. Of these, contracts worth some EUR 235 million were still in hand at the end of 2009, representing roughly 16 percent of the order backlog at HOCHTIEF Services.
The companies also work closely together at an international level. For example, sister companies HOCHTIEF PPP Solutions UK and HOCHTIEF Facility Management UK are collaborating on several projects in Great Britain and Ireland, such as at the Cork School of Music. In addition, HOCHTIEF PPP Solutions North America has further expanded cooperation with our American subsidiaries.
In the HOCHTIEF Americas division, our strategy of complementing Turner’s building construction capabilities with Flatiron’s civil engineering expertise in the US market is paying off. We are now also a one-stop shop for projects requiring both building construction and civil engineering 癢now-how. By way of example, our US subsidiaries Turner and Flatiron are working together on the expansion of Sacramento and San Diego airports. The construction work on these projects is worth a total of EUR 557 million to HOCHTIEF.
In the HOCHTIEF Real Estate division too, there are numerous projects on which the Group units are cooperating. For instance, HOCHTIEF Projektentwicklung developed a bus station in Munich, which is now being operated by HOCHTIEF Facility Management and managed by HOCHTIEF Property Management. HOCHTIEF Facility Management had advised the project developers during the project’s design phase, which meant that the subsequent operating costs could be analyzed as early as the construction phase and used to precisely calculate the rent.
The HOCHTIEF Services division also generated numerous cooperation projects. For example, HOCHTIEF Facility Management and sister company HOCHTIEF Energy Management will together supply the heat for a business park in Munich for a period of 15 years. HOCHTIEF Projektentwicklung awarded HOCHTIEF Facility Management several contracts to operate properties.
In the reporting period, the divisions handled cooperation projects worth a total of EUR 2.2 billion.
Internal cooperation is an approach we successfully deploy in the area of sustainable construction, too. Here, the individual expertise of each HOCHTIEF company involved is channeled into the projects in hand.