BAUER AG increases revenue and earnings in the first half of the year despite the effects of the COVID-19 pandemic

Total Group revenues increased by 5.8% compared to the previous year, from EUR 725.0 million to EUR 767.4 million
EBIT of EUR 15.3 million is significantly above the previous year's value (EUR 11.0 million)
Order backlog remains high
Forecast 2021 confirmed

Schrobenhausen, Germany – Despite significant regional effects of the COVID-19 pandemic, the BAUER Group increased revenue and earnings in the first half of 2021. The total Group revenues increased by 5.8% from EUR 725.0 million to EUR 767.4 million, compared to the same period of the previous year. At EUR 15.3 million, EBIT was also significantly above the previous year's value of EUR 11.0 million. The Group's earnings after taxes improved considerably to EUR -5.6 million (previous year: EUR -16.0 million).

"The COVID-19 pandemic continues to significantly affect our markets, particularly in the Far East. Nevertheless, we are seeing better business development than last year," explains the CEO of BAUER AG, Michael Stomberg.

At EUR 1,279.4 million, the order backlog in the Group remained high and virtually unchanged compared to the reference period in the previous year. The company also significantly increased the equity from EUR 366.8 million to EUR 450.4 million, which is primarily attributable to the capital increase from authorized capital (EUR +16.0 million) carried out in December 2020 as well as the larger capital increase with subscription rights (EUR +76.1 million). As a result, the equity ratio grew from 22.2% to 27.3% compared to the previous year. The capital increase with subscription rights was successfully concluded at the end of June 2021, with large demand on the part of institutional and private investors.

Income from the capital increase was used for the repayment of bank loans, which means that the liabilities to banks reduced by a total of EUR 85.7 million compared to the same period of the previous year. Even without taking into account the capital increase with subscription rights, this would have decreased by EUR 21.9 million compared to the previous year. Overall, the Group’s balance sheet structure has thus significantly improved once again.

The company is currently working on the early extension of the syndicated loan agreement that expires in June 2022. Discussions in this regard are already well advanced and should be concluded over the course of the third quarter.

Business segments

With its three segments – Construction, Equipment and Resources – and a broadly diversified business model, Bauer address major global trends such as rapidly progressing urbanization, infrastructure expansion, water extraction and treatment or climate change as well as increasing environmental awareness.

At EUR 358.6 million, total Group revenues in the Construction segment were up significantly by 14.8% compared to the previous year at EUR 312.2 million. EBIT increased compared to the same period in the previous year, from EUR -0.01 million to EUR 2.5 million. Earnings after taxes amounted to EUR -5.5 million (previous year: EUR -11.5 million).

Overall, the Construction segment continued to be influenced by the effects of the COVID-19 pandemic. Although work was able to proceed well in the markets of Europe, USA and the Middle East, the business in the Far East was burdened by renewed exit restrictions and travel restrictions due to the once again increasing spread of the COVID-19 pandemic, which caused project delays and construction suspensions. In this region, the company is still working hard on the adjustment of capacities, which presents an additional financial burden in addition to insufficient capacity utilization.

Order backlog in the Construction segment grew slightly by 1.1% from EUR 783.3 million in the previous year to EUR 791.9 million. This includes major projects in Europe, Jordan, India and Egypt. The order intake was EUR 429.2 million, representing a significant decrease of 11.4% from the previous year’s value of EUR 484.5 million, as the same period in the previous year included a very large individual order.

At the end of the first half of the year, total Group revenues in the Equipment segment increased by 5.9%, from EUR 296.9 million to EUR 314.4 million, when compared to the same period of the previous year. EBIT increased compared to the previous year, from EUR 4.2 million to EUR 8.4 million, as did earnings after taxes, which improved from EUR -3.8 million to EUR 1.3 million.

In the first quarter of the previous year, the key figures still showed only minimal effects of the COVID-19 pandemic. In this respect, the increase in revenue and earnings in the first half of the year represents an improvement in comparison. Overall, however, the Equipment segment continues to be affected by customer reluctance to invest due to uncertainty caused by the COVID-19 pandemic, particularly in the Far East.

Order backlog increased significantly by 32.9%, from EUR 126.1 million in the previous year to EUR 167.6 million. The order intake rose by 15.4% to EUR 363.2 million, compared to EUR 314.8 million in the previous year.

At EUR 138.2 million, total Group revenues in the Resources segment were down by 9.0% after the first half of the year, compared to the previous year’s EUR 151.8 million. This was mainly because the previous year’s figures included the major Kesslergrube project, where the client has been responsible for continuation of works since July 2020. On the other hand, EBIT increased from EUR 4.1 million to EUR 4.8 million, and earnings after taxes went from EUR 1.1 million to EUR 2.9 million.

The restructuring carried out in recent years is now being increasingly reflected in the key figures of the Resources segment. In the first half of the year, in particular the areas of water well construction, environmental services and mining performed well. The segment continues to not be significantly influenced by the COVID-19 pandemic.

At the end of the first half of the year, the order backlog decreased by 12.7%, from EUR 366.2 million to EUR 319.9 million. The order intake fell by 35.3%, from EUR 209.8 million to EUR 135.7 million.

Outlook

The effects of the COVID-19 pandemic are still being felt worldwide and are particularly impacting the Construction and Equipment segments. In Europe, the USA and the Middle East, work on the construction sites was able to proceed well overall. However, exit restrictions that were reintroduced in some regions led to significant project delays or suspension of construction on the sites in those locations.

As a consequence, equipment sales in the Far East were also inappropriately low. Although the demand situation has revived significantly, an overall reluctance to invest is still being felt. Nevertheless, the company continues to anticipate a better second half of the year for the Equipment segment.

“Overall, we are optimistic that we will make it through this year in good shape. With a view to 2021, we anticipated an ongoing pandemic and further effects on our business that remain difficult to forecast,” says Michael Stomberg. “In this regard, we are particularly pleased with the positive development of the Resources segment."

Given the background of the ongoing pandemic, the Executive Board continues to anticipate total Group revenues of between EUR 1,550 million and EUR 1,650 million, and EBIT of between EUR 75 million and EUR 85 million for the Group in the 2021 financial year.