Release Date: August 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- STRABAG SE (WBO:STR, Financial) reported the highest net income ever achieved in the first half of the year, driven by strong net interest income and a robust liquidity position.
- The company achieved a record order backlog exceeding EUR25 billion, providing good visibility towards 2026.
- There was a dynamic development in order intake, particularly in infrastructure, energy transition, and refurbishment projects across Europe and the Americas.
- The company's balance sheet and cash position remain very robust, with a healthy net cash position of EUR1.6 billion.
- STRABAG SE's strategy to become a general contractor for decarbonization is progressing, with acquisitions in MEP and energy management companies to support this goal.
Negative Points
- The residential construction market remains challenging, particularly in Austria and Germany, with no significant turnaround expected before 2025.
- EBIT was slightly lower than the previous year due to higher depreciation and amortization expenses.
- The output volume in Austria declined significantly due to stricter lending guidelines for mortgage loans and a lack of major industrial projects.
- The order backlog decreased in Austria, Hungary, and the UK, with ongoing completion of major projects in the UK contributing to the decline.
- Cash flow from operating activities returned to negative, primarily due to an increase in inventories and receivables.
Q & A Highlights
Q: Can you elaborate on the challenges faced in the residential construction market, particularly in Austria and Germany?
A: Klemens Haselsteiner, CEO, explained that the residential construction market remains challenging, especially in Austria and Germany, due to stricter lending guidelines for mortgage loans and a lack of major industrial projects to offset declines. The Austrian government's housing package is expected to have a delayed impact, with no significant turnaround anticipated before 2025.
Q: How is STRABAG SE addressing the shift from private to public sector contracts?
A: The CEO noted a significant shift towards public sector contracts, now at 70% compared to 60% previously. This shift is helping balance out diversified developments, and with lower interest rates, the trend is expected to ease, supporting a more balanced customer structure.
Q: What are the key drivers behind the record order backlog exceeding EUR25 billion?
A: The CEO highlighted successful project acquisitions in infrastructure, energy transition, and refurbishment projects, particularly in Europe and the Americas. This growth reflects a dynamic development in order intake and provides good visibility towards 2026.
Q: Can you discuss the impact of acquisitions on STRABAG's strategy, particularly in decarbonization?
A: STRABAG is focusing on becoming a general contractor for decarbonization, acquiring specialist MEP and energy management companies in Austria, Germany, and Luxembourg. These acquisitions complement existing expertise and aim to create a full-service solution for customers, aligning with their Strategy 2030.
Q: What is the outlook for STRABAG's international and special divisions segment?
A: The CEO expects significant output growth for the full year 2024, supported by a strong order backlog in tunneling and opportunities in mining in Chile. The segment is also focusing on decarbonization and energy transition projects, with new tenders expected in core markets and South America.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
