Today BAUER AG published its full year results 2013

Schrobenhausen/Munich - The BAUER Group has had a difficult year. One-off effects and project-specific factors, as well as sharper competition, impacted on the earnings of the international construction and machinery manufacturing concern s three business segments.

Total Group revenues rose by 4.9 percent from EUR 1,435.8 million to EUR 1,506.2 million. However, some significant special factors meant that the company returned a loss for the first time in 14 years. The net loss for the period was EUR -19.4 million (previous year: EUR 25.8 million net profit). EBIT (earnings before interest and taxes) declined to EUR 32.1 million (previous year: EUR 72.0 million). These results are in line with the Group`s most recent forecast issued in October 2013.

The Management Board and Supervisory Board will propose to the Annual General Meeting that no dividend be paid (previous year: EUR 0.30). "After a year such as 2013, it is urgently necessary that funds should be retained within the business," commented Prof. Thomas Bauer, Chairman of the Management Board of BAUER Aktiengesellschaft. "We intend fundamentally in future to hold on to a dividend policy whereby our shareholders have an appropriate share in the company's success."

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

The major undertakings of the Construction segment were large-scale projects in Russia, Saudi Arabia, Hong Kong and the USA. They were key factors in the 13.4 percent rise in total Group revenues to EUR 742.7 million (previous year: EUR 655.2 million). A number of large-scale projects were delayed, for a wide variety of reasons, in the first half of the year. Weather conditions in the first quarter, weakness on some markets as well as political events additionally impacted on earnings. While EBIT of EUR 22.8 million was slightly up on the previous year (EUR 22.0 million), the planned net profit for the period was not achieved. It fell from EUR 8.6 million to EUR 5.5 million.

Orders in hand at the year-end were spread evenly around the world. Totalling EUR 498.7 million, they were only just below the high levels of the previous year (EUR 513.1 million).

The Equipment segment was able to sell more machines in total. Sharper competition, weak markets in India, China and South America and low levels of order receipts for large machines and special-purpose equipment impacted on segment earnings. Total Group revenues rose by 6.7 percent from EUR 589.1 million to EUR 628.6 million. Segment EBIT declined slightly, falling by 5.2 percent from EUR 34.0 million to EUR 32.2 million. Net profit for the period fell from EUR 8.9 million to EUR 5.1 million.

Orders in hand were higher than in the previous year, with a rising trend through the four quarters. As most equipment ordered was shipped in December, orders in hand at the year-end totalling EUR 116.5 million were at virtually the same level as the previous year (EUR 113.1 million).

The Resources segment faced a wide range of problems and difficult market conditions in the past financial year, all of which had an impact on the Group as a whole. A particular negative effect originated from a large-scale well construction project in Jordan. On completion of the project, the original earnings forecast had to be cut by around EUR 20 million. The adjustment was made necessary owing to the complex conditions under which the project was operated, which substantially increased the costs of the construction companies involved. Moreover, the financial difficulties being experienced by Jordan meant that no mutually agreeable final settlement could be obtained. Total Group revenues fell by 27.8 percent from EUR 262.8 million to EUR 189.9 million. Segment EBIT totalled EUR -23.6 million (previous year: EUR 15.2 million). The net result for the period deteriorated correspondingly from EUR 5.7 million to EUR -31.4 million. The segment was reorganized, with the existing three competence areas being replaced by a regional structure. In the course of this reorganization, some companies were merged, some locations closed, and cost structures improved.

Orders in hand decreased slightly, falling by 5.5 percent from EUR 158.8 million to EUR 150.0 million.

The full-year loss meant that the covenants regarding net debt to EBITDA agreed with banks in respect of promissory notes and some long-term loans could not be met. In order to safeguard its financing for the years ahead, the company will agree a syndicated loan with its bankers. Negotiations on the matter are expected to be concluded shortly.

The Group launched an extensive cost-saving programme during 2013, aimed at saving some EUR 20 million, so as to compensate for the additional financial burdens incurred and enable earnings targets to be met.

The Group had high overall levels of orders in hand at the end of the financial year. The total of EUR 765.2 million is only slightly below the previous year s figure of EUR 785.0 million.

Prof. Thomas Bauer comments: "The past year saw a number of individual issues which together produced an unsatisfactory overall result. That does not, however, change the fact that the BAUER Group is fundamentally sound, and capable of generating income on a sustained basis. We have increased our revenues slightly, and we have acquired enough new orders to turn our performance around in the current year."

The Group forecasts total revenues of around EUR 1.55 billion for 2014. It expects profit after tax of around EUR 20 to 25 million and EBIT of around EUR 75 million. As is customary, however, the first quarter will make a loss, which will then be balanced out over the subsequent quarters.