DGAP-News: BAUER Aktiengesellschaft: BAUER AG confirms earnings forecast; Michael Stomberg starts work as Chairman of the Management Board

- Total Group revenues of EUR 1,235.8 million were below the previous year's level (EUR 1,378.9 million); sales revenues decreased to EUR 1,122.2 million (previous year: 1,265.6).
- EBIT amounts to EUR 56.8 million (previous year: EUR 66.4 million); arnings after tax improve from EUR 6.9 million to EUR 13.1 million.
- Full-year earnings forecast confirmed.
- Planned change in the management board completed: Michael Stomberg is the new Chairman of the Management Board, Prof. Thomas Bauer has taken on his role as head of the Supervisory Board

Schrobenhausen, Germany - The BAUER Group continues its course after the third quarter of 2018 and confirms its earnings forecast. The key figures of the international construction and machinery concern and in particular the order situation provide a good basis for the further development of the business.

Michael Stomberg started work in November as the new Chairman of the Management Board of BAUER AG. He has replaced Prof. Thomas Bauer as planned. This is the first time that an outside leader who is not a member of the founding family is at the helm. Stomberg previously worked for the international mid-sized company EagleBurgmann from Wolfratshausen, a provider of industrial sealing technology. This belongs to the Freudenberg family group. Stomberg served as Chief Operating Officer (COO) and was responsible for production, product development and the execution of the project business as part of the corporate management team. In the four-member management board team of BAUER AG, Stomberg will be primarily responsible for the areas of Participations, Process and Quality Management, Health Safety Environment (HSE) and IT. Former Chairman of the Management Board Prof. Thomas Bauer has meanwhile been appointed to the Supervisory Board and has been elected Chairman by the board.

At the end of the third quarter, the total Group revenues of the BAUER Group were EUR 1,235.8 million, 10.4% below the previous year's figure of EUR 1,378.9 million. This was unusually high due to numerous major projects in the Construction segment. Sales revenues fell by 11.3% to EUR 1,122.2 million after the third quarter. EBIT fell from EUR 66.4 million to EUR 56.8 million. Earnings after tax improved significantly, rising from EUR 6.9 million in the previous year to EUR 13.1 million. This is mainly attributable to the fact that currency effects did not have such a negative impact as in 2017. The order backlog increased slightly compared to the same period of the previous year (EUR 977.3 million) to EUR 979.2 million and is therefore still at a high level. Order intake fell by 8.2% from EUR 1,348.1 million to EUR 1,237.2 million.

Business segments

With its three segments - Construction, Equipment and Resources - and its broadly diversified business model, the Group operates in more than 110 subsidiaries in some 70 countries around the world.

The key figures for the Construction segment are well below the levels of the previous year, which had been extremely positive due to major projects. Total Group revenues at the end of the third quarter of 2018 fell to EUR 537.1 million (previous year: EUR 658.4 million). Reasons for the decline of 18.4% are the previously weaker capacity utilization, shifts in project awards and a generally weaker market situation in the Middle East. EBIT fell from EUR 21.4 million to EUR 12.7 million. As some larger projects continue over the next few months, earnings are expected to improve further by the end of the year. Although the order backlog fell by 2.6% to EUR 503.2 million (previous year: EUR 516.5 million), it remains a good basis for the future. Order intake of EUR 547.6 million was 7.1% below the previous year's figure of EUR 589.6 million.

The Equipment segment continues to show a very satisfactory development of earnings and margins, which is expected to continue until the end of the financial year. At the end of the first nine months, total Group revenues for the segment fell slightly by 2.5% from EUR 568.6 million to EUR 554.7 million. Sales revenues declined by 7.2% from EUR 480.8 million to EUR 446.3 million. In 2017, the sale of two deep drilling rigs was included, meaning there is only a slight decline in core business. EBIT increased from EUR 48.8 million to EUR 52.1 million year-on-year. The order backlog of EUR 151.8 million is at the previous year's level (EUR 153.1 million). Order intake fell by 3.6% to EUR 557.1 million (previous year: EUR 577.7 million).

At EUR 189.1 million, the total Group revenues in the Resources segment after nine months were only 1.9% below the level of the previous year (EUR 192.8 million). The segment is still in a phase of reorganization, causing a decrease in EBIT from EUR -4.5 million to EUR -7.8 million. However, it has a good order backlog of EUR 324.1 million. This is 5.3% above the previous year (EUR 307.7 million). This is mainly attributable to the major project for the expansion of the reed bed treatment plant in Oman. This contract is worth about EUR 160 million and is not fully included in the order backlog due to the long duration of the project. At EUR 177.5 million, order intake is significantly lower than in the previous year (EUR 221.7 million).

Outlook

The BAUER Group has been satisfied with the development of the financial year so far, and the key earnings figures are as planned. The total Group revenues have been lower than expectations so far, which is why the forecast is now for about EUR 1.7 billion (previously: about 1.8 billion) at the end of the year. EBIT should remain unchanged at around EUR 90 million, and earnings after tax should be significantly higher than in the previous year.

"This result is a solid basis and underscores the positive trend of recent years, which we will now build on," says the new Chairman of the Management Board Michael Stomberg. He looks forward to the upcoming tasks at BAUER AG. "The success story that has been written here in seven generations is more than impressive. By developing from a small mid-sized company to a global concern, it has managed to preserve the values and corporate culture that set the company apart. I see continuing this as one of my key tasks."

The full quarterly statement is available online at www.bauer.de.
About Bauer

The BAUER Group is a leading provider of services, equipment and products related to ground and groundwater. With over 110 subsidiaries, Bauer operates a worldwide network on all continents.

The operations of the Group are divided into three future-oriented segments with a high potential for synergy: Construction, Equipment and Resources. The Construction segment offers new and innovative specialist foundation engineering services alongside the established ones, and carries out foundation and excavation work, cut-off walls and ground improvements worldwide. Bauer is a world market leader in the Equipment segment and provides a full range of equipment for specialist foundation engineering as well as for the exploration, mining and extraction of natural resources. In the Resources segment, Bauer focuses on highly innovative products and services in the areas of water, environment and mineral deposit reserves.

Bauer profits greatly from the collaboration between its three separate business divisions, enabling the Group to position itself as an innovative and highly specialized provider of products and services for demanding projects in specialist foundation engineering and related markets. Bauer therefore offers appropriate solutions for the world's major challenges, such as urbanization, growing infrastructure needs, the environment, and water, oil and gas.

The BAUER Group was founded in 1790 and is based in Schrobenhausen, Bavaria. In 2017 it employed some 11,000 people in around 70 countries and achieved total Group revenues of EUR 1.8 billion. BAUER Aktiengesellschaft is listed in the Prime Standard of the German stock market.

More information can be found at http://www.bauer.de.

GROUP KEY FIGURES January - September 2018 (IFRS)

* The previous year's figures were adjusted; see 2017 Annual Report, page 93 ff.