HOCHTIEF AG Interim Report
January to September 2022
Financial Highlights
- Nominal net profit EUR 355 million, +21% year on year; operational net profit EUR 381 million, +18% year on year
- Underlying net cash from operating activities up EUR 43 million year on year at EUR 122 million, last twelve months EUR 802 million
- Net debt of EUR 226 million, after net EUR 534 million CIMIC minority buy-out
- Order backlog of EUR 52.8 billion up EUR 5.9 billion or 13% year on year like for like
- Guidance FY 2022 confirmed at an operational net profit of EUR 475-520 million (+5% to +15% year on year)
We are building the world of tomorrow.
INTERIM FINANCIAL STATEMENTS | FURTHER INFORMATION |
HOCHTIEF Group
9M 2022 Financial Highlights
Nominal net profit EUR 355 million, +21% year on year; operational net profit EUR 381 million, +18% year on year
- Solid performance with sales up 23% year on year at EUR 19.1 billion (+11% f/x-adj.), driven by Americas and Asia Pacific
- Resilient operational NPAT margin of 2.0%, operational PBT margin of 2.9% with year-on-year variation partly driven by divisional sales mix
- Abertis earnings contribution EUR 10 million higher year on year at EUR 53 million
Underlying net cash from operating activities* up EUR 43 million year on year at EUR 122 million, LTM EUR 802 million
- Net cash from operating activities* up EUR 60 million year on year in Q3 2022
- Solid free cash flow from operations* LTM EUR 679 million
- 9M 2022 figures are adjusted for settlement one-offs at CIMIC (CCPP, Q2) and Europe division (Chile, Q3)
Net debt of EUR 226 million, after net EUR 534 million
CIMIC minority buy-out
- Adjusted for CIMIC investment and other non-operational effects year-on-year underlying improvement in net cash/debt
- Long-termrefinancing of CIMIC transaction completed in October 2022
Order backlog of EUR 52.8 billion up EUR 5.9 billion or 13% year on year like for like
- Order backlog stable year on year f/x-adjusted like for like (adjusting for Ventia reclassification)
- New orders of EUR 20.9 billion; 1.0x work done LTM
- Geographically diversified order book with 55% in Americas, 37% Asia Pacific, 8% Europe
- Proportion of lower-risk order book has significantly increased over last 4 years to >80%
Guidance FY 2022 confirmed at an operational net profit of EUR 475-520 million (+5% to +15% year on year)
- EUR 940 million CIMIC minorities buy-out completed
- AUD 372 million MACA acquisition by Thiess to be completed in Q4 2022
- Applying risk mitigation tools across the Group to manage inflationary and supply-chain pressures
LTM = last twelve months
*Cash flow figures pre-factoring, and underlying, i.e. excluding extraordinary payments
HOCHTIEF Interim Report | January to September 2022 | 2 |
INTERIM FINANCIAL STATEMENTS | FURTHER INFORMATION |
Dear Shareholders,
Juan Santamaría Cases
Chairman of the Executive Board
HOCHTIEF delivered a solid performance during the first nine months of 2022 with further profit growth and increasing operating cash flows accompanied by a firm order book, notwithstanding the challenges of the current environment.
Sales increased by 23% to EUR 19.1 billion and were 11% higher in f/x-adjusted terms. Nominal net profit rose by 21% year on year, or EUR 61 million, to EUR 355 million with operational net profit up EUR 58 million to EUR 381 million, an increase of 18% year on year.
Operational PBT rose by 11%, to EUR 546 million with all divisions contributing to this positive development. The profit contribution from our 20% stake in toll road operator Abertis increased by EUR 10 million year on year to EUR 53 million.
Underlying net cash from operating activities of EUR 122 million was up by EUR 43 million year on year driven by a solid Q3 per- formance. Looking at the last twelve months, to eliminate seasonality, a robust EUR 802 million was achieved.
At the end of September 2022, HOCHTIEF had a net debt position of EUR 226 million, after Group dividend payments of EUR 148 million over the last twelve months. Adjusting for the EUR 534 million investment in CIMIC shares (net of the HOCHTIEF capital increase) as well as other non-operational items, the balance sheet would show a significant net cash position.
The Group's order book stands at EUR 52.8 billion and is up by around EUR 4.4 billion, since December 2021. Over half of our backlog (55%) is located in North America with a further 37% in the Asia-Pacific region and 8% in Europe. New orders of EUR 21 billion are stable on a year-on-year comparable basis and represent 1.0x work done in the period.
On June 10, HOCHTIEF achieved 100% ownership of CIMIC Group Limited as a result of the takeover offer launched on February 23 for the 21.4% free-float minority shares of CIMIC at 22 AUD per share. The EUR 940 million investment in CIMIC shares was partly financed via a EUR 406 million, 10% capital increase. The balance of the investment in CIMIC has now been fully refinanced, longterm, with debt and existing available cash.
In September our main shareholder, ACS, acquired the 14.5% stake in HOCHTIEF held by Atlantia, thus increasing its shareholding to 68.0% or 70.3% adjusted for treasury stock.
During the third quarter, an AUD 372 million offer was made by Thiess, a CIMIC joint venture, for 100% of Australian resources company MACA: The transaction will be successfully completed in Q4 2022. The acquisition of MACA, with its strong presence in gold and iron ore, supports Thiess' strategy to diversify its operations across commodities and services as well as geographies given MACA's strong presence in Western Australia.
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INTERIM FINANCIAL STATEMENTS | FURTHER INFORMATION |
HOCHTIEF is pursuing the implementation of ESG principles with its Sustainability Plan 2025. The most recent examples are bio- diversity and ecosystems. We have just published a commitment on protecting, conserving and contributing to the restoration of biodiversity and ecosystems. HOCHTIEF will proactively offer sustainable solutions to its clients and involve partners and suppliers in developing these solutions. As of 2023, we will implement new biodiversity management action plans for all projects in environmentally sensitive areas.
Group Outlook
The global economy is currently facing significant macroeconomic challenges. HOCHTIEF is actively managing these challenges and is well positioned for the future based on its solid, long-standing local positions in its key developed markets, its geographical and currency diversification, a significantly de-risked and growing order book and the identified tender pipeline of relevant projects worth over EUR 600 billion for 2022 and beyond.
Our guidance for 2022 is that we expect to achieve an operational net profit in the range of EUR 475−520 million, an increase of between 5% and 15% year on year, subject to market conditions.
Juan Santamaría Cases
Chairman of the Executive Board
HOCHTIEF Interim Report | January to September 2022 | 4 |
INTERIM FINANCIAL STATEMENTS | FURTHER INFORMATION |
Interim Management Report
Financial review
Summary assessment of the business situation
HOCHTIEF delivered a solid performance during the first nine months of 2022. Nominal consolidated net profit improved by 21% over the prior year (EUR 294 million) to EUR 355 million and operational net profit rose by 18% to EUR 381 million. Net cash from operating activities pre-factoring reached EUR 802 million (LTM) on an underlying basis. The order backlog stood at EUR 52.8 billion as of September 30, 2022.
On February 23, 2022, through HOCHTIEF Australia, HOCHTIEF submitted an unconditional and final off-market takeover offer to acquire all CIMIC shares for AUD 22 cash per CIMIC share. At the conclusion of the takeover offer, HOCHTIEF held over 96% of CIMIC Group Limited at the beginning of May 2022. HOCHTIEF then launched a squeeze-out of all CIMIC shares not yet held by HOCHTIEF at that time. Trading in CIMIC shares on the Australian Stock Exchange ceased on May 6, 2022. Following successful completion of the squeeze-out on June 10, 2022, the shareholding in CIMIC is now 100%. The total actual cash consideration for acquisition of the CIMIC shares amounted to around EUR 940 million (on the basis of the average hedging rate).
In June 2022, HOCHTIEF Aktiengesellschaft carried out a capital increase against cash contribution with simplified exclusion of shareholders' subscription rights. The net proceeds of that capital increase, amounting to approximately EUR 406 million, were used to strengthen the equity base by repaying part of the transaction facility arranged with a banking syndicate for the complete takeover of CIMIC.
Sales and earnings
HOCHTIEF generated sales of EUR 19.1 billion in the first nine months of 2022. This represents a 23% increase on the prior-year figure (EUR 15.6 billion). Adjusted for exchange rates, the sales growth was 11%.
Sales
9M | 9M | Change | Change | ||||||
(EUR million) | 2022 | 2021 | f/x-adjusted | ||||||
HOCHTIEF Americas | 12,790.0 | 10,090.7 | 26.8% | 12.1% | |||||
HOCHTIEF Asia Pacific | 5,292.2 | 4,462.0 | 18.6% | 12.6% | |||||
HOCHTIEF Europe | 924.1 | 936.3 | -1.3% | -1.5% | |||||
Corporate | 117.3 | 99.6 | 17.8% | 5.2% | |||||
HOCHTIEF Group | 19,123.6 | 15,588.6 | 22.7% | 11.4% |
Sales in the HOCHTIEF Americas division came to EUR 12.8 billion in the first nine months of 2022 with continued strong momentum in the third quarter. Sales growth amounted to 27% year on year or 12% on an exchange rate adjusted basis.
CIMIC sales increased to AUD 8.0 billion in the first nine months of 2022 (9M 2021: AUD 7.1 billion) with growth in Australian construction and services. At the level of the HOCHTIEF Asia Pacific division, this translated into sales of EUR 5.3 billion, an increase of 19% on the prior-year figure including the benefit of a stronger Australian dollar versus the Euro.
The HOCHTIEF Europe division generated sales of EUR 924 million in the first nine months of this year, representing a level comparable to the previous year.
The sales volume generated on markets outside Germany amounted to EUR 18.5 billion in the first nine months of 2022. At 97%, the proportion of HOCHTIEF Group sales generated internationally was on a level similar to the prior year.
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Hochtief AG published this content on 03 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 November 2022 14:42:03 UTC.
