BAUER AG looks back on a challenging year in 2022

At EUR 1,748.1 million, total Group revenues were up 13.7%, significantly above the previous year’s figure of EUR 1,537.6 million
At EUR -68.0 million, EBIT was significantly in the negative range (previous year: EUR 36.0 million); earnings after taxes amounted to
EUR -94.0 million (previous year: EUR 4.0 million)
At EUR 1,445.0 million, the order backlog of the Group at the end of the year was up 5.9%, significantly more than the previous year's already high figure of EUR 1,364.4 million
Cautious forecast for 2023: A slight decrease in total Group revenues and EBIT between EUR 35 and 60 million is expected

Schrobenhausen, Germany – At today's annual press conference, the BAUER Group looks back on a challenging year.

“We had to cope with some significant effects on earnings in 2022, which led to a significant loss," said Peter Hingott, Member of the Executive Board of BAUER AG. “Nevertheless, there were also glimmers of hope last year. The international construction markets in Europe and the USA developed well, and the Middle East, particularly Saudi Arabia, again recorded significant growth rates. In Asia, we were able to increasingly leave the consequences of the pandemic behind towards the end of the year.”

The Group’s earnings figures were impacted by numerous influencing factors. This included a negative contribution to earnings in the amount of EUR 17.3 million due to unscheduled depreciations and effects of deconsolidation, which were carried out for companies in the Construction and Equipment segments based in Russia.

Due to the changed interest rate environment and the resulting significant increase in the Weighted Average Costs of Capital (WACC), as well as the modified assessment of country risks, the Group also had to recognize considerable devaluations on the fixed assets and current assets at the end of 2022. This leads to a considerable negative influence on the earnings figures of EUR 61.3 million.

In addition, the decision to sell or wind up other subsidiaries in connection with the portfolio streamlining that has been ongoing for some time now as part of efforts to focus on the core business and the improvement in profitability, led to further negative effects on the earnings amounting to EUR 24.6 million.

As a consequence, EBIT was markedly in the negative range at EUR -68.0 million (previous year: EUR 36.0 million), as were earnings after taxes which amounted to EUR -94.0 million (previous year: EUR 4.0 million). In contrast, the total Group revenues of the BAUER Group rose by 13.7% to EUR 1,748.1 million, significantly above the previous year's figure of EUR 1,537.6 million.

At EUR 1,445.0 million, the order backlog of the Group at the end of 2022 was up 5.9%, significantly more than the previous year's already high figure of EUR 1,364.4 million. In the Construction segment, the order backlog remained nearly at the same high level, while this was significantly increased in the Equipment and Resources segments. At EUR 1,828.6 million, the order intake rose by 5.1% compared to the previous year’s EUR 1,739.5 million.

Due to the consolidated loss, the equity ratio fell significantly from 29.3% to 24.8%. The capital increase successfully completed in March 2023, which generated net proceeds of roughly EUR 100.8 million, will again significantly increase equity at the end of the first quarter of 2023. In addition, the funds will directly be used for the repayment of financial liabilities.

Business segments

With its three segments Construction, Equipment and Resources, the Group operates on all continents.

The Construction segment achieved total Group revenues of EUR 787.4 million in the 2022 financial year, representing an increase of 15.4%, significantly above the previous year’s EUR 682.4 million. At EUR -65.5 million, EBIT was considerably negative (previous year: EUR -8.6 million).

The segment’s earnings figures include significant negative contribution to earnings due to the deconsolidation described above with regard to the Russian company in the Construction segment, as well as devaluations on the fixed assets and current assets. Moreover, the operative earnings of individual subsidiaries were negative.

In the past year, the measures to optimize the international positioning and earnings growth in the Construction segment were advanced consistently. Overall, the permanent presence with subsidiaries in international markets has already been significantly reduced. Additional individual companies will follow in 2023.

Order backlog increased slightly by 0.8%, from EUR 845.5 million in the previous year to EUR 852.6 million and remains very high. This mainly includes projects in Europe, the Middle East and Asia as well as several major projects. At EUR 794.5 million, the order intake was just 1.5% below the previous year’s value of EUR 806.6 million. Overall, the segment recorded a very good order intake in the financial year just past. Even though the markets continued to be very volatile, we were successful in winning very large orders.

In the Equipment segment, total Group revenues increased significantly by 9.7% from EUR 681.5 million in the previous financial year to EUR 747.8 million. EBIT, on the other hand, increased only slightly from EUR 36.9 million to EUR 39.9 million, and earnings after taxes went from EUR 19.1 million to EUR 19.7 million.

Overall, the markets in Germany, Europe and America, particularly in the USA, and the Middle East, again recorded considerable increases in sales figures in some areas. In China, these were at a very low level due to the collapse of the sales market there.

The only slight increase in the earnings figures for 2022 in the Equipment segment compared with the significant revenue increase is mainly due to the depreciation losses described in relation to the Russian companies and the sale of a subsidiary in connection with the Group's portfolio streamlining.

At Bauma in Munich, the world’s largest construction equipment exhibition, numerous equipment innovations were presented to visitors in October. For example, the fully electric eBG 33 all electric and the RG 19 T hybrid, the first hybrid model to be presented in the telescoping leader segment.

Accordingly, at EUR 792.1 million, the order intake increased significantly by 7.0% compared to the previous year’s EUR 740.4 million. At EUR 222.1 million at the end of 2022, the order backlog was significantly above the previous year’s figure of EUR 177.8 million.

The Resources segment delivers innovative products and services in the areas of drilling services and water wells, environmental services, constructed wetlands, mining and rehabilitation. Total Group revenues significantly increased by 9.8%, from EUR 272.5 million in the previous year to EUR 299.2 million. However, EBIT was significantly in the negative range at EUR -37.3 million compared to the previous year at EUR 9.5 million.

The significant decline in the segment's key earnings figures is mainly attributable to the decision to wind up the subsidiary in Jordan and a devaluation of the participation on the investment in Oman.

Environmental services and the areas of water well construction, mining and constructed wetlands again performed positively in the financial year. The business segment of rehabilitation was newly created in the previous year by merging two companies. At the end of 2022, revenue was significantly higher than the previous year.

At EUR 328.3 million, the order intake rose significantly in 2022 by 12.7% compared to the previous year’s EUR 291.3 million. At EUR 370.3 million, the order backlog at the end of the year rose by 8.6%, considerably higher than the previous year's EUR 341.2 million.

The majority of the order backlog was generated by the mining division with a volume of EUR 196.2 million. Compared to the previous year, this area recorded another considerable increase. The constructed wetland in Oman contributes another significant share of the order backlog due to its long operating time.

Florian Bauer and Peter Hingott continue to lead BAUER AG

At its most recent meeting this week, the Supervisory Board of BAUER AG agreed with the two members of the Executive Board that BAUER AG will continue to be managed by two Executive Board members.

Following the withdrawal of Mr. Michael Stomberg as CEO, Florian Bauer and Peter Hingott have already divided up the various functions. Mr. Hingott will continue to be responsible for the Finance function, and also take over communication and coordination with investors, shareholders and the Supervisory Board.

SD Thesaurus GmbH has announced mandatory offer

Last Friday BAUER AG was informed by SD Thesaurus GmbH that SD Thesaurus GmbH and Doblinger Beteiligung GmbH have coordinated their conduct and thereby gained control over BAUER AG. With the directly held shares and the attribution SD Thesaurus GmbH directly and indirectly holds 52.81% of the voting rights. SD Thesaurus GmbH will publish a mandatory offer due to the acquisition of control after the approval by BaFin.

In addition, BAUER AG has been informed that SD Thesaurus GmbH also seeks a delisting of the shares of BAUER AG from the Regulated Market of the Frankfurt Stock Exchange. It is therefore prepared to structure the mandatory offer procedure now initiated as a delisting offer at the same time.

The Executive Board of BAUER AG then announced that it would deal with this matter in consultation with the Supervisory Board in due course.

Outlook

For 2023, the BAUER Group anticipates a stable development of the economic environment overall. In total, the construction and equipment markets recorded growth in the year gone by that is expected to continue. Nevertheless, there were numerous negative factors, such as Russia’s war against Ukraine, high inflation and interest rate hikes, as well as higher raw material and energy prices, which already influenced the economy last year. These remain the largest uncertainty factors for the Group in 2023.

The forecast is also carefully defined given this background and the associated ongoing difficulty of predicting the further effects in the current financial year. For the 2023 financial year, the BAUER Group expects a slight decrease in total Group revenues and EBIT between EUR 35 and 60 million.

"We started the fiscal year with a very good order backlog and were able to use the past year to adjust our balance sheet, to terminate loss-generating subsidiaries and to make the Group's position even more stable overall. We can now concentrate more on the operating business again," says Peter Hingott. "Nevertheless, we also see the numerous uncertainties in the world. Therefore, after a year that was not easy for us, and which also meant major upheaval, we are cautiously optimistic about the new financial year."