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waagner biro——report Annual Report 2011


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waagner-biro Annual report 2011

— Perspectives.— — Many building blocks are needed to realise a highly complex project – many processes within a company must interact flawlessly. However, perfection alone is not enough to guarantee development. The innovative flair of Waagner-Biro is based on one fundamental standpoint: a willingness to view things from a different, fresh perspective. After all, an unusual new angle may well be the one that showcases our concept of expertise.—


Key figures 2007—2011 

(1)

Income in EUR million Sales revenues thereof national, % thereof international, % EBITDA Profit on ordinary activities 1, 4) Consolidated result ROS EGT, % ROE EGT, % 5)

2007

2008

2009

2010

2011

176.6 6.5 93.5 10.2 4.3 5.1 2.4 % 21.8 %

151.6 8.8 91.2 10.9 7.4 17.5 4.9 % 24.3 %

192.4 4.8 95.2 16.7 12.1 8.6 6.3 % 34.6 %

140.8 7.7 92.3 15.1 11.0 7.9 7.8 % 27.5 %

172.0 8.9 91.1 12.5 8.7 7.0 5.1 % 19.9 %

Assets in EUR million Total assets 5) Non-current assets 5) Ratio of equity capital to non-current assets 2, 5), % Equity 3, 5) Equity ratio5), % Investments Depreciation and amortisation Gross cash flow Cash flow from operating activities

2007

2008

2009

2010

2011

161.2 55.0

137.4 38.7

139.1 45.3

138.3 48.4

149.2 48.1

94.0 % 41.7 25.9 % 2.9 2.5 4.3 4.5

94.1 % 30.4 22.1 % 2.3 2.6 9.4 – 2.3

91.2 % 35.0 25.2 % 9.9 3.3 16.6 19.0

95.0 % 40.0 28.9 % 6.0 3.4 13.8 7.4

103.5 % 43.7 29.3 % 2.9 3.2 10.7 11.4

2007

2008

2009

2010

2011

814 182.7 138.7

930 206.3 190.0

1,079 172.7 175.9

1,074 218.3 249.9

1,283 146.6 198.6

Other key figures in EUR million Employees as at December 31 (number) Order intake Order backlog 4) 1) Before goodwill amortisation

2) Equity + social capital (provisions for

severance, pension and long-service bonus payments) / non-current assets

3) Including mezzanine capital

Transition of profit on ordinary activities (EUR m) Earnings before tax +/– Result from non-recurring items + Goodwill amortisation = Profit on ordinary activities before goodwill amortisation

5) Key figures regarding assets have not been adapted

2007

2008

2009

2010

2011

10.7 –6.4 – 4.3

7.4 – – 7.4

12.1 – – 12.1

11.0 – – 11.0

8.7 – – 8.7


Sales revenues

Gross cash flow

in EUR million

in EUR million

176.6

151.6

192.4 140.8

172.0

16.6

13.8

9.4

10.7

4.3 2007

2008

2009

2010

2011

2007

2008

EBITDA

Order intake

in EUR million

in EUR million

16.7 10.2

10.9

2007

2008

2009

15.1

2010

182.7

206.3

2011

2007

2008

Order backlog

in EUR million

in EUR million

2011

218.13 172.7

146.6

2009

2010

2011

249.9

11.0 8.7

7.4

2010

12.5

Profit on ordinary activities

12.1

2009

190.0

175.9

2008

2009

138.7

198.6

4.3

2007

2008

2009

2010

2011

2007

2010

2011


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— Perspectives

172.0 — Sales revenues of EUR

million send a signal in turbulent times.—

— The general reluctance to invest is making the markets tighter and competition more intense: in such a climate, only those who perform exceptionally can hope to prosper. In 2011, we expanded across all business areas and achieved a respectable profit on ordinary activities of EUR 8.7 million in spite of postponements to projects. The swing bridge across the River Prai in Malaysia is just one example of Waagner-Biro’s expertise, which remains vital and ­impervious to crisis.— For more information on the Prai River Bridge, see page 55.


waagner-biro Annual report 2011

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— Perspectives

— Consistent specialisation produces substantial order backlog of EUR

198.6 million.­—

— To us, specialisation means developing strongly innovative know-how in specific fields rather than attempting to cover the entire market. In 2011, the Stage Systems division successfully secured some of the world’s most ambitious projects thanks to references that include the Linz Music Theatre – and one of the largest and most complex ­revolving stages on the planet. Waagner-Biro can now face the new year with a very healthy order backlog.— For more information on Stage Systems, see page 44.


waagner-biro Annual report 2011

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— Perspectives


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waagner-biro Annual report 2011

— We enter promising new markets, and are now realising projects in

62 countries.—

— W hen you can recognise regional needs and produce user-focused concepts, the world offers plenty of opportunities. Our system of lightweight, modular panel bridges remains our ticket to new markets in places that need to expand their infrastructure rapidly. In 2011, these regions included the Democratic Republic of Congo, Senegal and Laos; another new market is Azerbaijan, where WaagnerBiro Stahlbau is responsible for the high-profile expansion of Baku Airport.— For more information on bridges, see page 33.


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Opera Copenhagen


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waagner-biro Annual report 2011

—Contents— Foreword by the Management Board Interview with the Management Board

15 17

The company Company profile  Strategy  Group structure  Governing bodies

22 23 24 24

The Year 2011 Economic environment 28 Business development  30 Key figures by business area 30 Business areas in detail 33 Innovation54 Human Resources 57 Sustainability59 Corporate Governance 62 CSR64 Integrated management system 67 Risk report 68 Outlook75

Consolidated financial ­statements

Key figures (inside flap, page 04)

Consolidated balance sheet Consolidated income statement Consolidated comprehensive income statement Consolidated cash flow statement Consolidated equity schedule Notes  Auditors’ report Supervisory Board report

78 80 81 82 83 84 132 134


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waagner-biro Annual report 2011

—A step

ahead

through sales growth— Ladies and gentlemen, The 2011 financial year was an exciting one. Against an ever-present background of economic uncertainty and debt crisis, we took steps to distance ourselves from the negative trend – and succeeded in doing so. Our efforts are reflected most clearly in our sales revenues, which increased by 22 % from EUR 140.8 million to EUR 172 million. All of our business areas played a part in this achievement; none of them saw their sales figures fall. However, even Waagner-Biro is not immune from the economic crisis. Pressure on our margins increased, and we became aware of a general reluctance to invest that led to the postponement of a number of projects with high margins. Both of these factors were reflected in a reduced profit on ordinary activities (which, at EUR 8.7 million, was still highly acceptable given the economic situation). The rise in sales revenues was driven by a series of prestigious projects: the Steel and Glass Engineering division launched a major project on the emerging market of Azerbaijan (Baku Airport) along with two large-scale

Rudolf Estermann

undertakings in the United Kingdom. The roof that we are constructing for an inner courtyard of the Louvre Museum in Paris will stand as another global architectural landmark to captivate millions of visitors from 2012 onwards. The success of our bridge building activity in 2011 was mainly down to positive developments in our regions of Indonesia and Africa, where the company established a foothold on several new markets. Demand for system bridges to promote infrastructure improvement continues to grow in both regions. The highlights for Stage Systems were the successful completion of the Harpa concert hall in Reykjavik and the award of a significant contract for the Berlin State Opera at the turn of the year. With an order backlog approaching EUR 200 million and many project-related opportunities in all segments, we are well prepared for 2012. We are working on the assumption that the investment climate will at least match that of 2011, and we expect sales revenues to increase again, producing a double-digit profit. We would like to take this opportunity to thank our 1,000 and more employees who are committed to the WaagnerBiro cause every day.

Gerhard Klambauer


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— Perspectives

—Our expertise is a protective shield in times of turbulence.— Rudolf Estermann


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waagner-biro Annual report 2011

—Interview with the Management Board—

In 2011, Waagner-Biro’s sales revenues rose by more than 20 %. Is that something to celebrate? Klambauer: We’re always happy to see the figures go up. Particularly at a time when there’s a mood of crisis around the world, it’s great to see the sales pattern buck the trend. Having said that, any euphoria would be misguided. We’re on course in terms of our medium-term plans, but we’ve still got some way to go. You must have been less happy about the lower profit on ordinary activities, though. Did sales revenues rise at the expense of profits? If not, how do you explain the differing trend? Klambauer: The link between sales revenues and income implied in your question is wide of the mark. In the project business, individual projects tend to have a major influence on the overall result. Unfortunately, a number of high-yield projects were postponed in 2011. Estermann: Planning was difficult last year because of the volatility of markets, but the result is definitely positive – although the result can be improved, we’re not dissatisfied with it. What was the reason for the postponements, and can you explain why planning was difficult in 2011? Estermann: Even though the financial and economic crisis hasn’t affected us too severely on the whole, we are still encountering a level of uncertainty on our markets. Rather than invest, people are waiting to see how things develop. That means decisions are delayed, and clients don’t always know exactly when they will be able to realise their projects. This kind of uncertainty is affecting not just us but many other companies involved in project business. Under these conditions, planning and looking ahead is more difficult.

A number of projects that would have boosted our profits were delayed as a result, but we can look ahead to 2012 with confidence. Wouldn’t you have expected the economic crisis to have a much greater impact? After all, many of the company’s contracts come from the public sector, and governments are obliged to make savings wherever possible. Klambauer: It’s true that the investment climate is feeling the chill, and there’s clearly a general reluctance to commit. That’s why we’re satisfied with the sales increase and the good result. Don’t forget that the project business has its own laws. You have to think long term in our sector, and success has different perspectives in that context. The bare annual figures are one thing, but a market reputation earned over many years is just as important. The reputation that we enjoy around the world helps us attract orders even during the tough times. We are a reliable partner to those who award us contracts, and that brings its own rewards. Estermann: Another advantage that we have is our portfolio, which is intentionally broad-based. On some markets there are financial incentives for high-profile architectural projects, while on others expansion of infrastructure is the priority. We are involved in both scenarios, which is why the performance of the various Waagner-Biro segments differs from one year to the next. It’s part of the business we’re in and we are accustomed to that. Our expertise is also a protective shield in times of turbulence – the fittest will always survive. In the stage equipment area, for example, we come into our own with large-scale and complicated projects. Not many players on the market can say the same. We are also pleased to win contracts on new


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— Perspectives

markets – that shows the growth strategy we adopted is bearing fruit. Which new markets are you referring to in particular, and how have established markets performed? Estermann: To give you some examples, we have accepted our first bridge projects in the Democratic Republic of Congo, Senegal and Laos, all of which are new markets. Because of elections, 2010 was a slow year in Indonesia, our main market for bridges, but now the activity level is rising again and business here has been good. In Azerbaijan, a market we entered just recently with the Baku Airport tollgate, the Steel and Glass Engineering division is involved in a remarkable project in every sense – the new terminal for the same airport. We believe this is a market with a great deal of potential. Elsewhere, the Stage Systems division has performed well in the German-speaking region especially. The Berlin State Opera contract is the largest order for stage equipment in the company’s recent history, and the Linz Music Theatre has also been a breakthrough on our domestic market of Austria. We also have other large-scale European projects in Iceland, Poland and Spain. Klambauer: I think we have to bear in mind one very important point here – Waagner-Biro has certain core markets, but ultimately we are an international organisation that pursues and executes projects all over the world. For example, of ten or so contracts for large movable bridges tendered around the world, we won three. We have now started to realise a bridge in Malaysia, one in Turkey and one in Germany. It’s the same situation for Steel and Glass Engineering and Stage Systems. Projects may stack up in one country from time to time, but we are actually an established partner to leading international architects and planners and we implement projects wherever they happen to be. The company is also active in North Africa. How has the Arab Spring impacted on business? Estermann: It’s had very little impact. We are not active at present in Tunisia, Egypt or Libya, the three countries most affected, and in places like Morocco, Algeria and Congo as I mentioned before, we have been able to acquire and implement bridge projects without any problems. The only place we have been affected was Syria – we were making

preparations for Massar Rose in Damascus, an excellent steel and glass engineering project that would have been our first job in Syria. Because of the political situation, though, we weren’t able to follow it up. You mentioned the growth strategy. Is Waagner-Biro on track? Estermann: Yes. Although we fell just short of the targets we set ourselves for 2011, we are well on schedule in terms of our five-year timeframe. Which is? Estermann: The aim is to achieve sales turnover of EUR 300 million by around 2015, and we want to do that through organic growth alone rather than acquisitions. It’s an ambitious goal, but a feasible one from the current standpoint. Several projects have only been postponed, so we have high hopes for this year. Looking at the orders that came in towards the end of 2011, we are right to be confident. We believe in our strengths, and our product mix has proved its worth on the market – even in 2011, which was a difficult year to make plans. How about the British holdings and the new business area of environmental engineering? Estermann: As ever, Qualter, Hall & Co Ltd. achieved a highly satisfactory result, increasing sales revenues by around 10 %. Looking at the trend in raw material costs, investment in mining is likely to increase. Qualter Hall took advantage of this in 2011, and we think that will continue. It’s early days for environmental engineering, the division is carrying out a few small-scale projects in places like the UAE. However, there is growth potential here and we plan to expand the area in the future. One final question: the trend analyst Matthias Horx doesn’t buy into the general mood of crisis and has called for a coalition of the cautious. How do you see the future, and especially 2012? Klambauer: We don’t intend to be intimidated either. With so many promising projects in the pipeline, we are optimistic about 2012. We are also looking beyond this year – we are like a long-distance runner focused on medium-term goals. Thank you for the interview.


waagner-biro Annual report 2011

—We are optimistic about 2012.— Gerhard Klambauer

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— Perspectives

Donaustadt bridge Vienna


waagner-biro Annual report 2011

— The company The year 2011 Consolidated financial statements

—The company—

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— Perspectives

—Company

profile— The success of Waagner-Biro AG, an international corporate group based in Vienna, is founded on engineering expertise at the highest level and nearly 160 years of experience in steel and mechanical engineering. The company holds participating interests in mid-market steel and mechanical engineering companies at home and abroad. These include Waagner-Biro Stahlbau AG (active in the field of steel and glass architecture), the WaagnerBiro Bridge Systems Group (covering the business areas of bridge construction, infrastructure, maintenance and environmental engineering), Waagner-Biro Stage Systems (one of the world’s leading suppliers of stage equipment) and Qualter, Hall & Co Ltd. in the United Kingdom, which specialises in special machinery, bridge building and contract manufacturing. The Waagner-Biro Group has more than 1,000 employees based at 16 sites in Europe, Asia and the Middle East.


— The company The year 2011 Consolidated financial statements

waagner-biro Annual report 2011

— Strategy— All of the Waagner-Biro Group’s divisions have established themselves as key players in their particular sectors. The main emphasis is on regional niches. For example, there is a focus on primary steel and glass engineering markets (in Germany, the UK and the UAE) as well as bridge construction in Africa. All of these areas hold out the possibility of expansion into new regions where demand for our products was previously non-existent or is only just emerging (Azerbaijan, for example). This raises the appealing prospect of achieving further growth without having to pursue an aggressive competitive strategy aimed at eliminating competitors and seizing market share. It is generally accepted that such an aggressive policy can lead to a price war and reduce the earnings potential of the entire sector over the medium term – something that is contrary to our interests.

Furthermore, Waagner-Biro has taken control of valuable product niches: examples include the extremely complicated free-formed surfaces of the Steel and Glass Engineering division (which act as a substantial barrier to entry for most competitors), movable bridges and the entire portfolio of Qualter Hall. We can create opportunities by integrating these core fields of expertise into our portfolio, thereby focusing clearly on customer benefit and putting in place an appropriate pricing policy. As we expand we aim to spread risk as thinly as possible, thus preventing specific risks from jeopardising overall development. Our growth strategy depends on efficient internal organisation upheld by qualified staff. To maximise customer benefit and synergy from the interaction of the various segments, sites and departments, Waagner-Biro organises its highly trained staff members into strongly motivated teams.

The Waagner-Biro Group’s growth strategy also incorporates clear strategic financial principles: Asset cover

— Assets should be covered by equity and social capital. Profitability

— Return on equity should be at least 25 %.

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— Group

structure — Governing bodies SUPERVISORY BOARD

Herbert W. Liaunig Chairman Hellmut Longin First Vice Chairman Gerhard Heldmann Second Vice Chairman

The Group’s legal structure

Waagner-Biro AG is the holding company for the WaagnerBiro Group. Its functions include central responsibility for strategy, finance and human resources, policy-making authority and Group consolidation. With retrospective effect to 1st January 2011, the bridge construction department, formerly part of Waagner-Biro Stahlbau AG, was re-structured as a separate company (Waagner-Biro Bridge Systems AG). This has clarified the structure of the various business areas and produced the corporate structure shown in the diagram opposite as at 31st December 2011.

Kurt Berger Wolfgang Gauster Günther Mörtl (to 28th April 2011) Alexander Liaunig (since 28th April 2011) Herbert Donnersbichler *) Franz Toth *) Stanislaus Schmid *) *) Employee representatives

MANAGEMENT BOARD

Gerhard Klambauer Rudolf Estermann


waagner-biro Annual report 2011

— The company The year 2011 Consolidated financial statements

P.T. Waagner-Biro Indonesia RI /100 %

Waagner-Biro Bridge Systems AG A /100 %

Waagner Biro Philippines, Inc. RP/100 % Waagner Biro Gulf L.L.C. VAE /100 % 2)

Waagner Biro Qatar WLL QATAR / 100 % 2)

Waagner-Biro Bin Butti Engineering L.L.C. VAE /100 % 2)

Waagner Biro Limited GB /100 %

Waagner-Biro Stahlbau AG A /100 %

Waagner-Biro Emirates Contracting L.L.C. VAE /100 % 2) Waagner Biro Spólka z o.o. PL /100 %

WaagnerBiro Aktiengesellschaft, Austria 1)

Waagner-Biro Bavaria Stage Systems GMBH D /100 % Waagner-Biro SPAIN Stage Systems S.A. E /100 %

Waagner-Biro Austria Stage Systems AG A /100 %

Qualter, Hall & Co Ltd. GB /100 % 1) The shareholdings of Waagner-Biro AG in Jenbacher Holdings (UK) plc (percentage share 100%) and WaagnerBiro Beteiligungsverwaltungs GmbH (percentage share 100%) are not shown here due to immateriality. 2) This diagram is based on business ownership (legal ownership amounts to 49%).

As at 31st December 2011

Waagner-Biro UK  Stage Systems LTD. GB /100 % Waagner-Biro Luxembourg Stage Systems S.A. L /51 %

Waagner-Biro Stage Systems (Shanghai) Co., Ltd. CHN / 100 %

94.99 % OOO „Waagner-Biro Sankt Petersburg Stage Systems“ RUS / 100 % 5.01 %

Waagner-Biro ImmobilienVerwaltungs GmbH A / 100 % WBB Stahl- und Maschinenbau AG i.A. A / 100 %

WBB Fassadentechnik GmbH. i.A. A / 100 %

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— Perspectives

Harpa concert hall Reykjavik


waagner-biro Annual report 2011

The company —The year 2011 Consolidated financial statements

year —The

2011—

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— Perspectives

—Economic

environment — Economic conditions varied greatly on Waagner-Biro’s main markets in 2011 as the global economic picture remained generally gloomy. Amid the financial and debt crisis, Europe was relatively stable. The economy of the EU expanded by 1.9 % in 2010 but slowed somewhat to just 1.5 % in 2011 according to current evaluations. This trend is expected to continue in 2012, with gross national product generally expected to grow by 1 %. However, certain indicators give grounds for hope. Away from the market insecurity, investment in Europe increased by a considerable 1.9 % (compared to the previous year’s value of 0.3 %). Encouragingly, the unemployment rate also fell by 0.9 percentage points to 8.7 % in 2011 according to current estimates (against 9.6 % in 2010). At the same time, however, industrial production rose by just 3.8 % (compared to the much higher rise of 7.1 % in the year before). The inflation rate of 2.8 % was well above the 1.9 % rate of price increases in 2010. In 2011, the economies of Waagner-Biro’s core EU markets appeared fragmented. Expansion of gross domestic product in Germany over the past financial year was once again above average at 2.9 %; by contrast, growth on the core market of the United Kingdom was relatively modest at 0.7 % (compared to 1.7 % in 2010). Although the Middle East is slowly emerging from the severe crisis of recent years, dynamism across the region is nowhere near the levels of 2007 to 2009; in common with North Africa, the economy is clearly experiencing a renewed upturn driven by the oil price, which remains

high. In the oil exporting nations, GDP rose from 4.4 % in 2010 to a predicted 4.9 % last year (although GDP is forecast to slow somewhat to 3.9 % in 2012). The United Arab Emirates, which bounced back from the dramatic downturn of 2009 (–2.5 %) to post growth of 2.4 % in 2010, corroborated the upward trend with a figure of 3.3 % in 2011. Africa, a key growth market for the Bridge Systems segment, has maintained its positive development: GDP in the region expanded from 4.9 % in 2010 to 5.5 % in 2011. This year, contrary to the general global trend, GDP is forecast to rise to 5.9 %. The economic climate is also encouraging in Azerbaijan, where the government’s strategy of modernisation is spurring construction activity. In Indonesia and the Philippines – traditionally core markets for the Bridge Systems segment – real-terms GDP rose steeply in 2011: the Indonesian economy expanded by 6.4 % in the past financial year and growth is likely to remain at 6.3 % in 2012, whereas GDP in the Philippines rose by 4.7 % in 2011 (slightly less impressive than the 7.0 % achieved in 2010). China maintained its outstanding development in 2011, falling just short of doubledigit growth at 9.5 %. Forecasts for 2012 vary widely at present (between 7 % and 9 % depending on the source); developments in Europe and the USA will be critical to progress in China.


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

Generally speaking, growth in Waagner-Biro’s markets has been substantial. However, this fact cannot conceal indecision over project awards which has caused orders to be postponed in some markets. Moreover, developments in Europe are producing uncertainty that is difficult to quantify: as well as impacting on project awards in Europe itself, this is affecting other markets too.

Main EU economic indicators

in % Change over the preceding

2008

2009

2010

2011(E)

2012 (P)

GDP Private consumption Investments Industrial production Inflation rate Unemployment rate

0.5 0.3 –0.7 –1.4 3.3 7.5

–4.3 –1.7 –11.8 –13.8 0.7 9.1

1.9 0.9 0.3 7.1 1.9 9.6

1.5 0.4 1.9 3.8 2.8 8.7

1.0 0.7 2.3 2.3 2.0 8.7

Note: (E) = Expected, (P) = Forecast Source: Figures according to Eurofer as at January 2012; IMF forecast as at January 2012

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— Business development in

2011 —

The Bridge Systems and Steel and Glass Engineering segments contributed most to the profit in 2011.

Sales revenues sharply up, acceptable profit level

In spite of the problems afflicting the global economy, the Waagner-Biro Group achieved sales revenues of EUR 172.0 million in 2011, 22 % above the previous year’s figure of EUR 140.8 million. One reason for the positive development was the high order backlog at the start of the year, which yielded several large-scale, high earning projects. The Bridge Systems area was particularly successful in sales terms; however the Stahlbau, Stage Systems and Qualter Hall divisions also raised their sales revenues accordingly. Profit on ordinary activities stood at EUR 8.7 million, down on the 2010 figure of EUR 11 million on account of delays to high-earning projects but still a healthy level.

In line with the development of sales revenues and profit on ordinary activities, the profit margin (ROS) fell from 7.8 % in the previous year to 5.1 %. The return on equity (ROE) was 19.9 % (compared to 27.5 % in 2010) with the equity ratio currently at 29.3 % (28.9 % in 2010). Improved project financing and professional claims management produced a gross cash flow of EUR 10.7 million (compared to EUR 13.8 million in 2010). Cash flow from operating activities increased from EUR 7.4 million to EUR 11.4 million. Market insecurity over the economic situation and delays to order placements suppressed the order intake from

Sales revenues by business area

in EUR million Stahlbau Steel and Glass Engineering Bridge Systems Stage Systems Qualter, Hall & Co Intercompany sales/miscellaneous Waagner-Biro Group

2007

2008

2009

2010

2011

122.8 – – 33.9 18.2 1.7 176.6

104.1 – – 34.8 13.8 –1.1 151.6

141.9 – – 28.0 19.9 2.6 192.4

– 32.4 53.4 35.8 16.5 2.7 140.8

– 53.5 59.6 39.7 18.1 1.1 172.0


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

EUR 218.3 million in 2010 to EUR 146.6 million in 2011. By contrast, the order backlog of EUR 198.6 million reached its second highest value for many years, falling short of the record level of 2010 (EUR 249.9 million). This cushion of orders, together with the high number of delayed projects, provides a sound basis for 2012; for example, Waagner-Biro perceives a strong chance that several large-scale projects postponed last year in the Middle East will be confirmed.

Restructuring

Minor changes had been made to the structure of the Waagner-Biro Group by the end of 2011: specifically, the Bridge Systems segment was re-structured from WaagnerBiro Stahlbau AG to form a separate operational entity. In order to improve comparability, the previous year’s figures for the Stahlbau area were also extracted and shown separately for the Steel and Glass Engineering segment in this report; the same applies for Bridge Systems.

Equity increased from EUR 40.0 million in the previous year to EUR 43.7 million; at the same time, the equity ratio rose marginally (from 28.9 % to 29.3 %). Working capital rose by EUR 6.0 million from the prior year’s figure of EUR 3.4 million to EUR 9.4 million.

Profit on ordinary activities1) by business area

in EUR million Stahlbau Steel and Glass Engineering Bridge Systems Stage Systems Qualter, Hall & Co Intercompany sales/miscellaneous Waagner-Biro Group 1) Before goodwill amortisation pursuant to IFRS 3

2007

2008

2009

2010

2011

5.3 – – 1.1 1.4 –3.5 4.3

5.1 – – 1.6 1.4 –0.7 7.4

9.9 – – 1.9 1.7 –1.4 12.1

– 3.3 5.2 1.6 1.8 –0.9 11.0

– 4.4 4.0 – 0.1 1.8 –1.4 8.7

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— Perspectives

ROEEGT by business area

in %

Stahlbau Steel and Glass Engineering Bridge Systems Stage Systems Qualter, Hall & Co Waagner-Biro Group

2007

2008

2009

2010

2011

20.0 – – 14.3 17.3 21.8

22.0 – – 18.6 20.3 24.3

36.1 – – 21.1 21.5 34.6

– 45.8 23.9 17.6 22.5 27.5

– 40.4 21.4 – 1.2 22.5 19.9

Order intake by business area

in EUR million Stahlbau Steel and Glass Engineering Bridge Systems Stage Systems Qualter, Hall & Co Intercompany sales/miscellaneous Waagner-Biro Group

2007

2008

2009

2010

2011

129.4 – – 38.3 19.8 – 4.8 182.7

145.7 – – 34.3 28.9 – 2.6 206.3

104.3 – – 33.0 35.2 0.2 172.7

– 93.2 66.7 44.2 16.3 – 2.1 218.3

– 22.6 58.2 47.9 18.4 – 0.5 146.6

2007

2008

2009

2010

2011

99.5 – – 30.9 11.3 –3.0 138.7

139.9 – – 30.4 21.1 –1.4 190.0

103.1 – – 34.9 37.9 0.0 175.9

– 111.4 57.8 43.3 39.1 –1.7 249.9

– 83.3 49.2 51.5 14.9 –0.3 198.6

Order backlog at year end by business area

in EUR million Stahlbau Steel and Glass Engineering Bridge Systems Stage Systems Qualter, Hall & Co Intercompany sales/miscellaneous Waagner-Biro Group


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

— BRIDGE SYSTEMS —

Business areas in detail

The operational entities of the Waagner-Biro Group are active on various markets that are subject to various standards and regulations; this can lead to variable business development. Sales revenues increased for all operational business areas. With conditions varying between markets, the key earnings figures for the various segments were disparate. Developments for the different areas may be outlined as follows:

Creating infrastructure “Bridge building projects are about infrastructure – but what exactly do we mean by infrastructure? Countries that are highly technically developed define infrastructure very differently to emerging nations, for example. In many African states and areas of Southeast Asia, thousands of small and medium-sized bridges are still needed just to upgrade the infrastructure to a basic level. We are supplying around 100 bridges a year to Indonesia alone. Unfortunately, these often fall victim to natural disasters and have to be rebuilt from scratch. By contrast, our task in Europe is to deliver technically complex bridge solutions to make the traffic flow even smoother, such as bascule bridges or swing bridges across water. Alongside the range of bridge solutions that we offer as a full-service supplier, we achieve business success through efficient system bridges and remarkable movable bridge systems – depending on the kind of infrastructure we are asked to provide.” Peter Hackl Chief Executive, Waagner-Biro Bridge Systems AG

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— Perspectives

Service portfolio Bridge Systems is an internationally active, full-service supplier of steel bridges and one of the world’s leading providers of system bridges. The company’s broad range of services covers all the main bridge types, from system bridges and movable bridges to special bridges (cablestayed, suspension, steel composite and architectural bridges, etc.). Its portfolio comprises design construction and installation as well as service, maintenance and repair. Waagner-Biro has more than 150 years’ experience in the field of bridge building. The company’s core markets are in Southeast Asia (Indonesia and the Philippines), Africa, South America, Europe and the United Arab Emirates. Business development in 2011 The Bridge Systems segment maintained its solid performance of 2010 into 2011, increasing sales revenues by 11.6 % from EUR 53.4 million to EUR 59.6 million. Profit on ordinary activities stood at EUR 4.0 million in 2011, 23.1 % below the figure for 2010 (EUR 5.2 million). This performance was mainly due to positive levels of capacity utilisation on core markets. In the Philippines, where Waagner-Biro has a branch office, the company reported particularly strong demand for system bridges intended for infrastructure improvement. Last year, for example, Waagner-Biro completed a large-scale project involving the handover of 19 bridges. Orders on hand also picked up again in Indonesia, one of the key markets of Bridge Systems. Although investors had

been reluctant in recent years on account of political and economic insecurity, the investment climate for infrastructure projects was once again highly positive in 2011 – and Waagner-Biro took full advantage of the encouraging trend by carrying out numerous bridge projects in the period under review. Africa is a relatively new market for Bridge Systems: here, as in Southeast Asia, the emphasis is on rapid infrastructure development. Waagner-Biro is thus establishing itself on the market with system bridges in particular, i.e. panel and modular bridges. The company has already supplied bridges to Algeria, Morocco, Burkina Faso, Ghana and Uganda; in 2011, it completed its first orders in the Democratic Republic of Congo as well thanks to a purposeful programme of market expansion. Waagner-Biro has also concluded an initial contract in Senegal. Away from these core markets, the company is working on a number of large-scale projects around the world that were still in progress at the end of last financial year. In Peru, the Puente Continental (or ‘Puente Billinghurst’), the longest suspension bridge in the country, was completed in July 2011, roughly 18 months after the order had been placed. However, three movable bridge systems remain under construction: firstly, the Rethe Bridge – the world’s largest bascule railway bridge in the port of Hamburg – is scheduled for completion in 2013. Waagner-Biro is also erecting a swing bridge at the Golden Horn in Istanbul; again, the project will be finalised next year. Equally demanding as these two orders from a technical viewpoint is the ongoing railway swing bridge across the River Prai in Malaysia.


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

— The Calaba Bridge: helping people through

infra­ structure

— Measuring 900 metres and spanning the River Alba, the Calaba Bridge in the Philippines is the longest modular bridge ever built by Waagner-Biro. For people living in the area, the Calaba Bridge has made life immeasurably easier. To cross the river in the past, they had to rely on a ferry that stopped operating when the water level was high for safety reasons.—

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— Perspectives

— Puente

Continental Peru’s longest suspension bridge.—


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

— Spanning 528 metres, the Puente Continental is the longest bridge in Peru. It is part of the Interoceanic Highway, a major infrastructure project aimed at strengthening the Peru-Brazil-Bolivia axis. Emerging from the Peruvian jungle, the bridge is an imposing demonstration of ­Waagner-Biro’s engineering skill – and one that has improved mobility across the entire region.—

37


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— Perspectives

— STAHLBAU —

Located on the famous railway route between Singapore and Thailand, the bridge links the port of Butterworth to the main rail route. Waagner-Biro built the original bridge back in 1964; now the company is working on the new, ultra-modern swing bridge that will replace the ageing structure.

Flourishing partnerships „When a striking building becomes a landmark because of the way it looks, the limelight tends to shine on one person: with their vision, the architect is the driving force behind a project. However, no architect works alone: they need partners they can rely on. Partnership is also a key factor for Waagner-Biro Stahlbau AG, involving relationships not only with the leading architects of our time but also global planning agencies. We invest a great deal of time and creativity in supporting the work of architects. Thanks to our wealth of experience, we understand the needs of our business partners very well; often it is our innovative solutions that are critical in enabling them to realise their visions. Most of our partnerships have developed over a number of years, making them a cornerstone in our continuing success.“ Johann Sischka Chief Executive, Waagner-Biro Stahlbau AG


waagner-biro Annual report 2011

Service portfolio Waagner-Biro’s Stahlbau segment specialises in steel and glass construction, turning the geometrically complex designs of reputable architects into reality. In common with the Bridge Systems and Stage Systems areas, the segment performs planning and development activities and also offers a comprehensive range of maintenance, renovation and modification services. The core markets for Steel and Glass Engineering are generally Europe and the Middle East; however, the company’s business activity is determined by attractive projects implemented by leading architects and planners around the world.

The company — The year 2011 Consolidated financial statements

Business development in 2011 Steel and Glass Engineering generated sales revenues of EUR 53.5 million, 65.1 % up on the figure for 2010 (EUR 32.4 million). The steep increase was driven by a number of large and high-yielding projects in Azerbaijan and the United Kingdom. Profit on ordinary activities also increased by 33.3 %, from EUR 3.3 million in 2010 to EUR 4.4 million. Order intake of EUR 22.6 million was below the previous year’s value of EUR 93.2 million owing to the postponement of a major project that represented a good opportunity for Waagner-Biro. In line with the development of sales revenues and order intake, the order backlog fell from EUR 111.4 million to EUR 83.3 million at the end of the year (a figure still high enough to provide a sound basis for 2012). Business for Steel and Glass Engineering on the new market of Azerbaijan was particularly encouraging; around the airport in Baku, construction activity is booming. The new tollgate, an architecturally impressive arch at the airport’s entrance, has already been completed. Waagner-Biro is now realising a large-scale project that will be a landmark for the aspiring nation: a new international terminal that will expand the airport by 2013. Services rendered by WaagnerBiro will include not only the 53,000-square-metre building envelope, but also the steel supporting structure to support the facade and the roof. The project is critically important to the company in terms of strategy as it will enhance the reputation of Waagner-Biro across the region. Already, follow-up contracts for a second tollgate and a complex roof shell for the separate Business Aviation Canopy have been received.

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— Perspectives

In the United Kingdom, a core market of Waagner-Biro, the company embarked on a particularly large and prestigious project in 2011: the Co-operative Group has commissioned Waagner-Biro to construct its new headquarters in Manchester. The 15-level building will accommodate around 3,000 employees. Waagner-Biro will provide an intricate roof for the atrium as well as the double facade. Ensuring the flow of light into the atrium is a high priority; meanwhile, the double facade forms an integral part of a sophisticated heating and cooling system created using state-of-the-art planning tools and technologies. Completion is scheduled for the summer of 2012. Construction of a roof for the Cour Visconti, an inner courtyard of the Louvre Museum in Paris, is also nearing completion. Designed to resemble a magic carpet, the construction will house a new department of Islamic art. Like the Reichstag dome in Berlin and the roofed courtyard of the British Museum in London, the structure – which showcases the engineering skill of WaagnerBiro – will be seen by millions of visitors. Another highprofile architectural masterpiece will thus be added to an impressive array of Steel and Glass Engineering reference projects. Unfortunately, another high-profile project – the Massar Rose Children’s Discovery Centre in Damascus – has had to be abandoned: the scheme will not be pursued because of political unrest.

European Steel Design Award The Baku Airport tollgate project earned Waagner-Biro another European Steel Design Award in 2011. The most impressive features of the tollgate are its resonant symbolism and its sculpted lines; thanks to its arching form, the entrance to the airport is recognisable for miles around.


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

— Azerbaijan:

take-off for a new era.—

— First impressions count. In future, passengers touching down in Baku, the capital of Azerbaijan, will be greeted by a remarkable spectacle: from 2013 onwards, around three million people every year will see stretching out before them a futuristic new steel and glass international terminal realised by ­Waagner-Biro. From the air, the

building resembles a three-cornered hat; but behind the structure, highly contemporary design processes were used to pinpoint the ideal 3D layout for the terminal. In all, the new building will be an iconic structure ushering in a new era for the country – and it’s just one of three current projects for ­Waagner-Biro in Azerbaijan.—

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— Perspectives

— The Cour Visconti,

Louvre a work of art in steel and glass.—


waagner-biro Annual report 2011

—Like a magic carpet, Waagner-Biro’s dramatic steel and glass construction floats above the Cour Visconti courtyard at the Louvre in Paris (not yet open to the public). In future, the structure will be the roof of the museum’s new department of Islamic art: comprising some 8,000 steel pipes, the steel and glass edifice will provide a worthy setting for around 18,000 artworks.

The company — The year 2011 Consolidated financial statements

The architectural masterpiece will take shape according to one strict guideline: the Cour Visconti courtyard must remain visible and not be eclipsed. In this 1,700-square-metre free-form structure, Waagner-Biro is dramatically embodying the vision of architect Rudy Ricciotti and star Italian designer Mario Bellini: to seamlessly incorporate contemporary architecture into an historic setting.—

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— Perspectives

— STAGE SYSTEMS —

Technological superiority: the secret of success “Aside from the actors, the staging is critical to the success of an opera performance or a play. To make sure the right effect is projected to the audience, technically sophisticated machinery is working in the background. These days, the demands on stage equipment are so high that very few companies around the world can offer full solutions at the necessary level; this is especially true in the case of large-scale, wide-ranging orders where key issues include safety and the acoustic level. Waagner-Biro is one of the few firms that can handle such complexity; the larger and more complicated the task, the more likely it is that we will be the choice of clients.”

Service portfolio Waagner-Biro Stage Systems delivers the full range in the fields of stage equipment, flexible building equipment and service and maintenance. In the core area of stage equipment, Waagner-Biro provides a wide range of technical facilities for opera houses, drama theatres and multi-purpose venues. Away from the central business of equipping theatres and opera houses, the company’s main field of growth is delivering stage and event technology to venues and cruise ships. Waagner-Biro’s intelligent building engineering activity involves supplying and installing flexible stands and seating systems for sports stadia and multi-functional buildings.

Wolfgang Staufer Chief Executive, Waagner-Biro Austria Stage Systems AG

In the service and maintenance segment, more than 200 theatres, opera houses and event venues world-wide rely on experienced Waagner-Biro Stage Systems staff to service their stage equipment. Since 2008, Stage Systems has also been servicing and modernising crane installations formerly supplied by the Waagner-Biro Group. Business development in 2011 In 2011, the Stage Systems segment came close to achieving its targets, raising sales revenues by 10.9 % from EUR 35.8 million to EUR 39.9 million. However, profit on ordinary activities fell from EUR 1.6 million to EUR – 0.1 million due to greater pressure on margins linked to the global economic climate in 2011. For this reason, the rise in sales revenues – achieved in spite of the general reluctance to invest in large-scale projects – was all the more gratifying. Overall, these key figures reflect the positive development of Stage Systems, underlining the company’s position as a


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

Manifesto for the new Iceland.—

— The opening of the Harpa concert hall and conference centre in the Icelandic capital had been long awaited. When the moment arrived in August 2011, visitors were equally impressed by the design of leading international architect Henning Larsen, and the building’s acoustics – in which ­Waagner-Biro played a major role

through the implementation of innovative technologies. The sophisticated stage machinery included 267 acoustic curtains up to 18 metres in length, 78 acoustic doors, 35-ton mobile acoustic ceilings and a chorus wagon system. This will ensure a flexible, controllable and flawless sound experience for everything from small stage plays to major operatic productions. The Harpa concert hall is not only a new landmark for the city – it is a manifesto for the new Iceland.—

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— Perspectives

—Northern Spain: multi-purpose arena with

attitude.—


waagner-biro Annual report 2011

— The construction of the Reyno de Navarra, a multipurpose arena in the Spanish city of Pamplona, challenged the engineers of Waagner-Biro to facilitate a wide range of uses for the available space. The solution was discovered under the ground: the central stand lifts up

The company — The year 2011 Consolidated financial statements

at the push of a button, dividing the sizeable hall into a main arena and a separate, secondary space. One special feature is the control system that can rotate the central tribunes in one direction or the other according to the type of event.—

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— Perspectives

world-leading supplier of stage equipment solutions. This strong market position has also ensured success in acquisitions: the number of new orders has increased again, with order intake growing by 8.4 % from EUR 44.2 million to EUR 47.9 million. The order backlog of EUR 51.5 million was also a significant 18.9 % up on the already high figure of the previous year (EUR 43.3 million). The order situation at the end of the year thus amounted to a solid basis for 2012. This business development was mainly the result of several major projects that highlighted the technological expertise of Waagner-Biro Stage Systems. The market has clearly acknowledged the reliability and solution-finding ability of Waagner-Biro in particular; the larger and more complex the project tendered, the greater the chance of WaagnerBiro’s involvement. One such reference project was the Harpa concert hall and conference centre in Reykjavik. In addition to the general stage equipment, Stage Systems provided special acoustic solutions such as automatically retractable acoustic doors and curtains and that can be opened and closed as required. The field of acoustic-related services has developed into an attractive new business area for Waagner-Biro Stage Systems. Waagner-Biro also progressed in the area of multi-purpose halls in 2011, continuing to supply equipment to the Reyno de Navarra arena in Pamplona. The project, which was tendered internationally in 2009, is due for completion in 2012. Waagner-Biro’s scope of performance includes flexible, adjustable telescopic stands that can be fully retracted into the ground, ensuring the available space can be used with maximum flexibility. A three-year maintenance

contract has also been signed. The Reyno de Navarra arena ranks as another reference project on an already long list that includes the O2 World in Berlin, BMW Welt in Munich, the Arena Madrid and the Arena Zagreb; as such, it consolidates the market position of Waagner-Biro Stage Systems in the field of multi-purpose halls. Stage Systems was also involved in an opera project in East Europe during 2011: in the Polish city of Bialystok, the company supplied all of the stage machinery to a newly completed opera house. The Bialystok project gave Stage Systems its entry into the Polish market. The acquisition of the Berlin State Opera project towards the end of 2011 was particularly gratifying. In terms of sales revenues and technical references, this contract – the largest gained by the company in many years – will be another milestone in the history of Waagner-Biro.


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

— QUALTER HALL —

Sustainable business strategy “There are many special aspects to our business. In the field of mechanical engineering, no two orders are the same: every challenge requires us to take a different approach to think up a new answer. We decided that the best way to achieve this would be to establish ourselves in promising niche markets where we can apply our lengthy experience most effectively. Within these niches, we refuse to compromise on quality and we insist on complete solutions. Concentrating on a single area, however, would dramatically increase our reliance on factors we cannot control. For this reason, we set out to develop a tenable market position in several business areas over time – from mining machinery and bridge building to shipbuilding equipment, conveyors and contract manufacturing. In this way, we compensate for fluctuations in different sectors and ensure business development over the long term.” George Orton Chief Executive, Qualter, Hall & Co Ltd.

Service portfolio Qualter, Hall & Co Ltd. is involved in special machinery, mining machinery, conveyors, movable bridges and contract manufacturing. Business development in 2011 Despite facing a tough environment on its domestic ­market, the British subsidiary Qualter, Hall & Co Ltd. developed extremely well in 2011; sales revenues climbed from EUR 16.5 million in 2010 to EUR 18.1 million in the reporting year. With profit on ordinary activities ­unchanged at EUR 1.8 million, another outstanding result was achieved. Several significant projects were concluded in 2011; these included the port of Dover, where Qualter Hall supplied protection systems for roll-on/roll-off ramps that allow vehicles to drive onto and off seagoing vessels. In addition, the company renovated three roll-on/rolloff berths that will also be used by visitors to the 2012 Olympic Games in London. Another project already completed by the firm was the complete overhaul of water control gates at the Dog-in-a-Doublet lock on the River Nene near Peterborough. Later in the year, Qualter Hall delivered a double drum hoist to the Imiter silver mine in Morocco. The orders situation for 2012 was boosted by intensive ­acquisition activity; order intake in 2011 stood at EUR 18.4 million, up from EUR 16.3 million in the previous year. Performance in 2012 is thus likely to be strong. The order backlog of EUR 14.9 million

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— Perspectives

contrasted with the prior year’s value of EUR 39.1 million; this large discrepancy is explained by the Hatfield mine project that was cancelled by the client, reducing the order balance by EUR 24.8 million.

Segment reporting

Segment reporting is by business segments (primary segmentation) and geographical segments (secondary segmentation). Business segmentation corresponds to the Group’s internal reporting structure. Assets and liabilities as well as income and expenses are only allocated to specific segments where they can be assigned directly or using some other reasonable method. Items that cannot be allocated in this way are indicated as ‘Other’; these are generally assets and expenses of the Group’s management and administration. As a rule, clearing between segments is carried out on an arm’s length basis. The demerger of Bridge Systems has brought about a change to primary segmentation, which now comprises the following business areas: 2010

2011

Stahlbau – Stage Systems Qualter, Hall & Co WBB old Other

Stahlbau Bridge Systems Stage Systems Qualter, Hall & Co WBB old Other


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

Segmentation by business area 2011*)

in EUR K

External sales revenues Internal sales revenues Total Segment operating result before non-recurring

Bridge Systems

Stahlbau

56,310 3,314 59,624

53,345 154 53,499

4,340

3,866

Stage Systems

Qualter, Hall & Co

39,672 39,672

16,790 1,304 18,094

48

1,756

WBB old

Other

Elimi­ nation

Total

0 0

3,085 7,094 10,179

0 – 9,092 – 9,092

169,202 2,774 171,976

– 164

– 527

– 18

9,301

Result from non-recurring items Financial result Taxes on income Net profit for the year Investments in tangible and intangible assets Investments in financial assets Total investments Depreciation and amortisation of tangible and intangible assets Write-downs on financial assets Total depreciation, amortisation and write-downs Segment assets Segment liabilities

0 – 625 – 1,346 7,330 695

167

675

612

1 696

167

675

612

969

71

617

379

2,863

714 0

714

0

1 2,864

3,224

1,188

0 969

71

617

379

0

1,188

0

3,224

59,345 40,670

42,067 31,153

29,684 21,227

13,216 5,206

5,205 3,844

67,473 29,991

– 67,800 – 26,603

149,190 105,138

*) For reasons of comparability the Bridge Systems area, which was hived off in 2011, is shown separately.

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— Perspectives

Segmentation by business area 2010 *)

in EUR K

External sales revenues Internal sales revenues Total Segment operating result before non-recurring

Bridge Systems

Stahlbau

Stage Systems

Qualter, Hall & Co

WBB old

Other

Elimi­ nation

Total

52,594 760 53,354

32,359 40 32,399

35,808 1 35,809

16,455

0

16,455

0

3,132 6,219 9,351

0 – 6,612 – 6,612

140,348 408 140,756

5,508

3,003

1,648

1,786

– 255

– 76

86

11,700

Result from non-recurring items Financial result Taxes on income Net profit for the year Investments in tangible and intangible assets Investments in financial assets Total investments Depreciation and amortisation of tangible and intangible assets Write-downs on financial assets Total depreciation, amortisation and write-downs Segment assets Segment liabilities

0 – 665 – 2,885 8,150 370

33

715

378

370

33

715

378

1,115

44

515

352

6,392

4,896 0

4,896

0

0 6,392

3,352

1,326

0 1,115

44

515

352

0

1,326

0

3,352

59,705 37,876

29,597 22,360

23,644 14,501

12,669 4,674

5,518 4,054

65,627 32,085

– 58,483 – 17,298

138,277 98,252

*) For reasons of comparability the Bridge Systems area, which was hived off in 2011, is shown separately.


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

For sales revenues, segmentation by region is performed according to the client’s head office; for assets and investments, it is performed in line with the subsidiary headquarters. Segmentation by region 2011

in EUR K

Sales revenues Total assets Investments

Austria

EU

Rest of Europe

Asia

Gulf region

Other

Total

15,307 74,082 1,132

64,625 31,168 1,050

9,477 0 0

28,765 15,116 432

37,444 28,824 250

16,358 0 0

171,976 149,190 2,864

Austria

EU

Rest of Europe

Asia

Gulf region

Other

Total

10,890 69,249 5,300

52,163 26,386 739

10,527 0 0

20,812 14,507 118

33,279 28,135 235

13,085 0 0

140,756 138,277 6,392

Segmentation by region 2010

in EUR K

Sales revenues Total assets Investments

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— Perspectives

— Innovation— The Group owes its healthy market position to the ­constant development of technological solutions; inno­ vations are tailored precisely to the specific needs of clients. Waagner-Biro draws on a wealth of experience in continually enhancing its portfolio of products and services.

Bridge Systems

Collaboration on research with outside institutions such as universities is part of innovation management, assisting in the development of specific solutions and thereby consolidating the technological pre-eminence of Waagner-Biro.

Waagner-Biro is constantly enhancing existing solutions in the area of bridge construction as well. In the case of system bridges, the focus is on the development of bridge structures that promise maximum functionality and ease of installation. Meanwhile, speed and reliability are the priorities for movable bridges (bascule, swing and vertical lift bridges); the opening and closing process must be fast and dependable to avoid interruptions to traffic. The innovative drive systems of Waagner-Biro that make this possible are highly regarded.

Stahlbau

Stage Systems

In the field of architectural steel engineering, the company utilises its innovative flair by realising architectural visions that are sometimes audacious and consistently push the boundaries of what is technically possible. Geometrically complex free-formed surfaces, often with no two steel or glass elements the same, demand fresh technological approaches. Continually developing expertise in the 3D planning of constructions is thus essential.

Raising customer benefit and usability are central to on­ going product innovation at Waagner-Biro Stage Systems. Innovation is driven by the demand for very quiet, safe and flexible stage equipment systems. In the long term, developing drive systems, new winches and computer control units are the priorities. One relatively new field of research is acoustic-related elements, which include acoustic banners with special reflective and absorption properties and flexible reverberation gates that can make a resonance chamber larger or smaller as required. These technologies were deployed for the first time at the National Concert and Conference Centre in Reykjavik.


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

— Austrian

ingenuity spans the River Prai.—

—Movable bridge systems are one of the most impressive achievements of the bridge construction division. The new swing bridge across the River Prai in Malaysia rotates no less than 1,100 tons of steel on its axis in 120 seconds, thereby opening the route for shipping in the shortest

possible time. This is the second time that the client, Malaysian rail operator KTMB, has put its faith in the engineering ingenuity of WaagnerBiro: the original swing bridge dating from the 1960s was also built by the Austrian bridge construction specialist.—

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— Perspectives

Lilyan Tannous, senior QA/QC engineer at Waagner Biro Gulf, on site in Dubai.


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

—Human

Resources— As of 31st December 2011, the companies of the WaagnerBiro Group had a total of 1,283 employees; the Group thus remains a stable employer.

The education and training of staff is a critical factor in ensuring corporate success over the long term. Once again, nearly 600 training days were held in Vienna alone during 2011, equivalent to 2–3 days of training per employee (an above average figure). To sharpen the international focus of the Waagner-Biro Group, the acquisition of foreign language skills was a particular priority. Another key emphasis was on consolidating technical expertise and project management skills.

Workforce numbers

Stahlbau Steel and Glass Enginieering Bridge Systems Stage Systems Qualter, Hall & Co Waagner-Biro AG (Holding) Total

2007

2008

2009

2010

2011

579 – – 111 121 3 814

673 – – 123 131 3 930

788 – – 124 133 34 1,079

– 91 688 133 131 31 1,074

– 105 876 141 128 33 1,283

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— Perspectives

For cultural, historical and sector-specific reasons, the vast majority of Waagner-Biro’s employees are male. However, far-sighted efforts are being made to increase the proportion of women; in the recruiting process, for example, female applications for technical positions are being encouraged. The proportion of female employees (even in technical departments such as steel and glass construction) has been raised in recent years through participation in the Wiener Töchtertag initiative, various corporate presentations at higher technical colleges and technical universities and the active recruitment of graduates of these institutions. Wiener Töchtertag, an initiative of the Vienna Chamber of Commerce to interest girls in technical careers. The educational levels of the workforce stand up well in international comparison: around 40 % of Waagner-Biro Group staff based in Austria graduated from a university (or university of applied sciences) and 99 % of employees in Austria attended an academic or vocational secondary school.


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

— SUSTAINABILITY— As an organisation that is aware of its responsibilities, Waagner-Biro is committed to a sustainable business model; for the company, it goes without saying that success is inextricably linked to sustainability.

Environmental protection

Environmental protection has a high standing in the Waagner-Biro concept of quality. To ensure this concern is codified and integrated into working processes, the company implements an environmental management system based on ISO 14001. The Group also expects its suppliers to demonstrate an environmental awareness in line with Waagner-Biro’s own guidelines. All suppliers entering into agreements with Waagner-Biro are obliged to notify the company in writing where supplied products contain hazardous substances. In 2011, the company’s commitment to environmental protection was acknowledged by another party: as part of its Eco Business Plan Vienna initiative, the city of Vienna awarded Waagner-Biro Stahlbau AG its Environmental Award in recognition of the company’s ISO 14001 activities. Sustainability measures such as the multi-site installation of video conferences, responsible sourcing and various ecological alternatives in the company were presented.

Compliance

Transparent and fair conduct on the market is of primary importance to Waagner-Biro. In all its business dealings, therefore, Waagner-Biro strictly observes the applicable laws, regulations, guidelines, standards and practices of the countries in which the company is active. Restrictions on free competition and violation of competitive and antitrust laws are counter to the corporate philosophy, culture and identity of Waagner-Biro. WaagnerBiro opposes all forms of corruption, bribery and gift acceptance. All staff are strictly prohibited from offering and accepting benefits, both directly and indirectly, where this could unduly influence business transactions. Waagner-Biro’s sustainability activities promise substantial advantages not only to the environment and society, but also to customers. The security of working with a reputable and reliable partner in Waagner-Biro gives the traditionconscious Austrian company a considerable competitive advantage on the market.

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— Perspectives

— Siemens Urban Sustainability Center:

Sustainable architecture in East London.—


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

— Sustainability falls under the spotlight on this project: situated in the heart of a new Green Enterprise District, the Siemens USC will aim to attract around 100,000 visitors per year as a centre of science, technology and sustainability. The building itself, designed as a best practice model of sustainable construction, meets the most stringent ecological and energy management requirements. Waagner-Biro is responsible for the technically complex, 3,600-squaremetre steel and glass facade.—

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— Perspectives

— Corporate

Governance — As a modern, market-focused and transparent organisation, Waagner-Biro feels obliged to comply with the principles of corporate governance; even though the company is not currently listed, it observes the spirit and provisions of the Austrian Corporate Governance Code as amended in January 2010 (the Code came into force in September 2002). Waagner-Biro is thus helping to fulfil the wish of the wider business community for a generally recognised framework of company management and supervision.

Waagner-Biro is committed to the standards defined in the Austrian Corporate Governance Code. The company thus accepts the Code’s objective of aligning its corporate management and control towards long-term, sustainable value creation whilst ensuring high levels of transparency for all stakeholders. However, given the specific circumstances of the company, which is relatively small and only has a small number of shares in free float, it is not always possible or practical to meet every precise requirement of the Code, which is based on self-imposed commitment. Specifically, the situation at Waagner-Biro is as follows:

COMMITMENT TO THE AUSTRIAN CORPORATE GOVERNANCE CODE L RULES

The standards of Austrian Corporate Governance Code are classified into three groups: — Legal requirements (L Rules) — Comply-or-explain (C Rules) — Recommendations (R Rules) Only the first category of rules (L Rules), which are based entirely on binding legal statutes, must be applied by Austrian companies on a compulsory basis. As regards the C Rules, companies that observe the Code are expected to publish regular statements on compliance as well as explanations of any deviations. Conversely, companies may deviate from the R Rules, which are purely recommendations, without being obliged to give reasons.

Waagner-Biro complies with all legal requirements, including those that apply to non-listed companies. Since the company is not listed, Waagner-Biro does not adhere to Rule 4 (no online announcement of the convening of a general shareholders’ meeting), Rule 5 (no online announcement of candidates for election to the Supervisory Board), Rule 6 (no online announcement of results of voting at shareholders’ meetings), Rule 19 (no reporting of directors’ dealings to the Financial Market Authority), Rule 20 (no remittal of rules for avoiding insider trading), Rule 40 (no audit committee set up), Rule 60 (the corporate governance report is limited to presenting deviations from the Code), Rule 63 (investment publicity neither manageable nor applicable owing to non-listing), Rule 65 (the Group does not publish a semi-annual report) and Rule 71 (no obligation for ad hoc publications). Rule 29 is not observed either as no stock option plan exists.


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

C RULES

R RULES

Waagner-Biro also complies with the vast majority of the C Rules in the Austrian Corporate Governance Code. Those regulations which are not inexpedient for a relatively small non-listed company with low free float to observe comprise the main exceptions. This is the case for Rules 16 and 58 (non-publication of details concerning the members of the Management and Supervisory Boards), Rule 18 (due to the limited size of the company, there is no need to create an internal auditing unit attached to the Management Board; Controlling performs the relevant tasks), Rule 28 (no stock option plan exists), Rules 30, 31 and 51 (details of the remuneration of Management and Supervisory Board members are not revealed for reasons of privacy protection), Rules 34 and 39 (due to the limited size of the company, only a personnel committee has been set up, which is not subject to detailed reporting), Rule 43 (no remuneration committee exists), Rule 49 (is not applied), Rule 54 (since the company is not listed and the level of free float is low, the Supervisory Board has no free float representative), Rule 64 (the ownership structure is not made public via the website), Rules 66 and 68 (the company does not publish quarterly reports and so does not issue these online) and Rule 74 (the financial calendar is not published online).

Waagner-Biro also complies with all the recommendations contained in the Austrian Corporate Governance Code, with the exception of Rule 28a (no separate remuneration system exists for senior managers), Rule 62 (external evaluation of compliance with the C and R Rules of the Austrian Corporate Governance Code) and Rule 75 (conference calls, including events for analysts and investors).

63


64

— Perspectives

— CORPORATE SOCIAL

RESPONSIBILITY— The management and staff of Waagner-Biro acknowledge their responsibility to society. Mindful of this self-imposed duty, the company is committed to large and small CSR activities with the emphasis on straightforward, direct help.

DIRECT ASSISTANCE

In 2011, Waagner-Biro decided to support the Wiener Lerntafel for at least three years. This non-profit organisation provides assistance to schoolchildren between the ages of 6 and 14 from financially or socially disadvantaged families. In addition to financial support, Waagner-Biro employees with the right training can make a voluntary personal contribution towards equal educational opportunities for these children in Vienna. The company’s support of Sozialmarkt Ternitz is well established: aside from donating food to people living on low incomes, the charity offers them the chance to meet other people socially. Waagner-Biro has a great deal of respect for this organisation’s work, and has been providing financial assistance for many years. Several internal campaigns are also in place aimed at motivating employees to involve themselves personally. These have included charity punch, all proceeds of which go to people in need; the Edelhof children’s home was a beneficiary in 2011.

Employees have also been offered the chance to obtain decommissioned company mobile phones; funds raised in this way were donated to the St. Anna children’s hospital in 2011. Since their company was founded, staff at the UK subsidiary Qualter, Hall & Co. have voluntarily foregone a small percentage of their salaries which is automatically routed to charitable organisations. Since children are very close to the company’s heart, it has for years contributed to Barnado’s, the leading British children’s charity, as well as local schools and the Blind Association.


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

EQUAL OPPORTUNITY

ART AND CULTURE

Waagner-Biro, as a company active in the technology ­sector, believes strongly in equal opportunities for women; this is reflected in a strict policy of non-discrimination in salaries and job roles. In the field of steel engineering, for example, Waagner-Biro employs many female staff members in the areas of structural engineering, facade engineering and project management (an area headed by a female employee).

In the eyes of Waagner-Biro, every construction – be it a panel bridge, lifting platform or a steel and glass building – is an artwork that plays an important part in representing the company. As an organisation that appreciates art, Waagner-Biro was a supporting partner to the Biennale 2011 in Venice. Waagner-Biro Austria Stage Systems AG also produced and built the supporting structure for the pavilion as a sponsoring service. Waagner-Biro is proud to have received recognition in the form of Maecenas, the Austrian Arts Sponsorship Award, in the ‘Concept/large enterprises’ category. The company cooperates with many cultural institutions, including the Burgtheater, Theater an der Wien, Raimund Theatre, the Ronacher and the Akademietheater. For Waagner-Biro, these collaborations are not just an expression of its appreciation of Viennese theatre; they also provide a chance for employees to engage with the city’s cultural life.

To attract more technically minded female employees, Waagner-Biro turned its focus to young people in 2011 by participating in the Wiener Töchtertag. In this campaign, girls aged 11–16 were invited to visit companies in Vienna to gain insights into the working lives of their parents. The aim of the event was to inspire them to take up a technical profession. As a global business, Waagner-Biro regards diversity management as a means of enhancing equal opportunity in the company and creating the conditions for a bright corporate future. For this reason, Waagner-Biro employs staff of numerous nations, cultures and ages. At head office in Vienna alone, employees are from Australia, Bosnia, Bulgaria, Denmark, Germany, Croatia, Austria, Poland, Portugal, Russia, Serbia, Spain, Hungary and the USA.

65


66

— Perspectives

— Barrier-free engineering for

children’s hospital in Kuwait.—

— In the Middle East, it’s unusual to find a special hospital for children only: the Bayt Abdullah Children’s Hospice in Kuwait is the first facility of its kind in the region. In building a number of covered pedestrian footbridges around the site together with an observation tower, WaagnerBiro will play its part in making time away from home as pleasant as possible for the children. Barrier-free access and child-friendly design are the top priorities.—


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

—QUALITY

management, ENVIRONMENTAL MANAGEMENT AND OCCUPATIONAL SAFETY—

Quality management, which is part of Waagner-Biro’s integrated management system, has always been used as a means of monitoring business processes; this serves to ensure the efficiency of internal processes as well as the quality of products. The Vienna site was certified under ISO 9001 in 1995, and in recent years all operational subsidiaries have also gained certification.

Utilising the quality management system as a tool for planning and monitoring product implementation contributes substantially to customer satisfaction as product requirements are systematically examined and realised; this approach also underpins the economic success of the company by establishing a framework for process control, particularly in product development and project management. In response to societal attitudes towards environmental protection and the demands of the market, Waagner-Biro has opened up its environmental conservation activities to independent scrutiny, introducing an environmental management system under ISO 14001 to this end. Certification of the system began in 2010 and was completed in 2011. The integrated management system also contains a system for managing occupational safety. Health and safety systems were first introduced when the company entered the British market; central activities in this area include improving working practices on building sites and raising awareness. To comply with market requirements, the service and maintenance department of Waagner-Biro Bridge Systems AG has certified its system under the oil industry’s SCC++ standard. Enhancement of the integrated management system is driven by internal and external audits and a process of continuous improvement, but also by changing social attitudes towards sustainability and Waagner-Biro’s own sense of responsibility to society and the general public.

67


68

— Perspectives

—RISK

REPORT— REPORT ON GENERAL RISKS

RISK MANAGEMENT

Technically complex projects are subject to the risks inherent to plant engineering; and in this business area, the risks associated with service performance are generally greater than in other sectors. For this reason, the identification and management of risks is a major element in the business procedures of Waagner-Biro. Both order intake and sales depend on a relatively small number of individual decisions, and major fluctuation is the rule. Forecasts – including those made in this report – are thus exposed to the uncertainty typical of the sector.

The structure of the risk system used by individual business areas of the Waagner-Biro Group is set out below. It should be noted that members of the Waagner-Biro AG Management Board also perform managerial and Supervisory Board functions in operational Group companies and are therefore directly involved in operational business as well as business that is subject to approval.

Amongst other things, Waagner-Biro designs and builds complex structures that call for high levels of engineering expertise. The associated technical risks are therefore greater than average. Equally, the complexity of the projects produces higher than normal management, legal and financial risks. Waagner-Biro makes every effort to identify and manage known risks through internal and external audits, reviews and the involvement of experts. Waagner-Biro staff are among the leading specialists in their fields, and the ability to manage the risks intrinsically linked to its business activity is one of the company’s strengths. However, the fundamental level of risk remains high in comparison with other sectors.

Key features of the internal monitoring and risk management system in respect of the accounting process: The Management Board is responsible for establishing a suitable internal monitoring and risk management system in respect of the accounting and financial reporting process. To this end, the Management and Supervisory Boards have addressed major business risks within the Group as well as the process of financial reporting by passing regulations and guidelines that must be applied throughout the Group. The accounting department (which incorporates the financial accounting division) reports directly to the Management Board. Appropriate organisational measures are in place to ensure compliance with the legal requirement to make complete, correct, timely and orderly entries in the books and other records. The entire process from procurement to payment is subject to strict rules and guidelines designed to circumvent any risks these processes may entail. These measures and rules include separation of functions, signature authorisation rules, signatory powers for authorising payments restricted to a small number of persons and system-supported checks by the software in use.


waagner-biro Annual report 2011

Thanks to a standardised, Group-wide financial reporting system together with ad hoc reporting on major events, the Management Board is kept informed on all relevant issues. At Supervisory Board meetings held at least quarterly, the Supervisory Board is informed about current business developments, including operational planning and the Group’s medium-term strategy; in special cases, information is passed to the Board directly and immediately.

Financial risks

The monitoring and management of financial risks is an integral part of accounting and controlling throughout the Waagner-Biro Group. Continuous controlling and regular reporting increase the likelihood of identifying major risks at an early stage, enabling countermeasures to be enacted as necessary. However, there is no guarantee that the monitoring and risk control systems are sufficiently effective. The main risks to the business development of the Waagner-Biro Group in 2011 were dependence on general economic conditions, the procurement of largescale orders and the conversion of a large order backlog into the required level of sales revenues with the relevant contribution margin. Moreover, unexpected cost increases and difficulties in delivering the guaranteed performance parameters in structures supplied by Waagner-Biro pose substantial risks to the processing of projects. The financial problems of various eurozone countries and the continuing macroeconomic difficulties also present a risk to the financial development of the Waagner-Biro Group.

The company — The year 2011 Consolidated financial statements

Another threat is posed by the possibility of an economic slowdown in developing countries. The current economic malaise could result in more projects (either current or in the process of acquisition) being delayed or discontinued. The cancellation of existing orders could impact negatively on the order backlog of the Waagner-Biro Group, which in turn could adversely affect capacity utilisation at the Group’s production centres. Full or partial depreciation of goodwill derived from acquisitions could also affect the earnings performance of the Waagner-Biro Group where these companies fall short of their business targets. In addition, there is always a risk that the value of trade receivables will have to be adjusted in full or in part. For most projects, the risk of payment default by customers is reduced by securing payment guarantees from banks as well as credit insurance; however, even isolated failures to pay can have a major impact on the earnings of the Group. Generally, the company takes out insurance sufficient to cover much of the risk associated with deliveries to countries classified as having an average level of political instability or being severely politically hazardous. Interest rate and exchange rate risks are minimised and controlled via derivative financial instruments (and in particular forward exchange transactions and swaps). In the case of orders invoiced in a foreign currency (especially in UAE dirhams and British pounds), the net currency position is hedged by taking out forward contracts. Cash flow risks are monitored through monthly cash flow reports. The Waagner-Biro Group is constantly upgrading its treasury guidelines and information systems with a view to minimising financial risks and ensuring more effective monitoring, control and evaluation of the financial and liquidity situation.

69


70

— Perspectives

—Where

cultures collide.—


waagner-biro Annual report 2011

— In the middle of Poland – where east meets west – an impressive cultural complex has been created in the city of Bialystok. The new Opera Podlaska is another stepping stone on the road to establishing Bialystok as the commercial, intellectual and cultural hub of the region. The opera house will play a key part in this objective, ­acting as a melting pot for eastern and western culture.

The company — The year 2011 Consolidated financial statements

The ambitious nature of the plan is reflected in the stage equipment provided by Waagner-Biro: the company was responsible for installing all of the under-stage machinery and key winches for the over-stage machinery as well as a CAT V4 computer control system, thereby contributing significantly towards the project’s aim of creating an important cultural establishment.—

71


72

— Perspectives

Waagner-Biro avoids being dependent on a single bank. To ensure independence, the company processes only a specified volume of its main financial products (cash and cash equivalents, financial liabilities, financial assets, guarantees and derivatives) through a particular bank. Despite this, the insolvency of one or more banks would have a serious impact on the earnings performance and equity of the Waagner-Biro Group.

Non-financial risks

In the personnel area, good career development prospects, performance-related pay and focused training programmes are essential in attracting highly trained and qualified staff to Waagner-Biro. The high standards of quality applied in the selection process ensure only the most suitable candidates are appointed. Within the scope of succession planning, standardised processes of evaluating performance and potential identify internal succession candidates for all key positions. This ensures the right applicants are available to fill vacancies in the short to medium term. The company compensates for fluctuations in capacity utilisation across the Group by assigning orders to specific global sites and deploying temporary staff locally. Tendering process Quotations are prepared in the light of technical, commercial and legal considerations. Risk analysis is carried out for all major tenders and appropriate measures are defined. Project realisation process Projects are realised by teams headed by a project manager. At regular team meetings and technical and commercial reviews, existing risks are analysed, measures are developed and reports are made to the Management Board. The Management Board is informed immediately of risks that potentially pose a major threat.


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

Material risks

SPECIAL RISK REPORT

Reports on material risks are also presented at regular Management Board meetings. A standard reporting model is available for the topics of liquidity, financing and ongoing legal disputes.

Country-specific

Measures

Decisions are reached either during project discussions or at Management Board meetings; minutes are taken.

Priorities in 2012

The company’s high exposure to risk will mean that development of risk monitoring remains necessary in 2012. Once again, the focus will be on the tendering process and the internal monitoring system. Given the current financial crisis, however, there will also be a greater emphasis on the financial risks associated with projects. Country-specific risks will form a major risk category to be observed in 2012.

In 2011, the political events referred to as the Arab Spring led to the cancellation of a Waagner-Biro project in Syria; the company’s Management Board was unable to carry on with the project in the circumstances. Waagner-Biro will continue to monitor political developments closely in 2012, taking risk potential into consideration in its tendering process.

73


74

— Perspectives

Pavilion designed by Markus Schinwald at the Venice Biennale. Waagner-Biro produced and built the supporting structure for the pavilion and assisted the project financially.


waagner-biro Annual report 2011

The company — The year 2011 Consolidated financial statements

—OUTLOOK — The global economy will continue to be plagued by uncertainty in 2012, with austerity measures suppressing the general willingness to invest. On the other hand, not all companies are prepared to bow to the negative mood; more and more success stories are appearing amongst the negative headlines. Developments in the global economy can only be evaluated up to a point, so the outlook for the 2012 financial year as a whole is difficult to ascertain. In the case of Waagner-Biro, many relevant projects are planned years in advance and are therefore not greatly affected by short-term economic trends. The company remains on course for growth. Unfortunately, several projects that were not realised were removed from the order backlog at the end of 2010; although the order balance for 2011 did not match the previous year’s level for this reason, it still constitutes a sounds basis for 2012. Several promising projects are also due to be awarded in the near future. With a number of confirmed projects and good prospects of new contracts, Waagner-Biro can look ahead to 2012 with confidence. The management team is thus abiding by its mediumterm strategy of steadily raising sales revenues to the EUR 300 million level by 2015, thereby aiming to ensure growth is organic (rather that driven by acquisitions, for example). Sales revenues in excess of EUR 200 million and double-digit earnings are the targets for 2012.

To achieve these goals, Waagner-Biro will need to consistently strengthen its position on core markets while developing new markets. In the Bridge Systems area, Africa in particular continues to display a strong demand for infrastructure measures. For the Steel and Glass Engineering segment, the focus is on the existing core markets of Europe and the Middle East as well as Azerbaijan, an emerging market that the company entered recently which offers further potential for architectural steel engineering. Meanwhile, Waagner-Biro Stage Systems is now looking to expand its portfolio of services and increase its market penetration through new products such as acoustic solutions and grandstand systems. Qualter, Hall & Co Ltd., which continues to trade on its technical expertise in the field of special machinery, expects to increase its sales revenues and earnings significantly. All business areas are obliged to maintain a non-negoti­able focus on maximum quality: in difficult times especially, it is Waagner-Biro’s excellent reputation that will ensure its success on the market.

Special events after the balance sheet date

No events of major significance with a material influence on the company occurred between the end of the financial year and the time of this report going to press.

75


76

— Perspectives

Yas Marina Hotel Abu Dhabi


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

— ­­Consolidated

financial statements 2011—

77


78

— Perspectives

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF DECEMBER 31, 2011 – IFRS ASSETS Note

A. Equity and liabilities I. Intangible assets 1. Intangible assets 2. Capitalised development costs 3. Industrial property rights 4. Goodwill

(1) (1) (1) (1)

II. Property, plant and equipment 1. Land and buildings, including buildings on land owned by others Land Buildings

(2)

(2) (2) (2)

III.

2. Technical plant and machinery 3. Other equipment, fixtures and furnishings 4. Prepayments and assets under construction Financial assets 1. Interests in Group companies 2. Securities (book-entry securities) held as non-current assets 3. Other loans

iV. Receivables and other assets 1. Trade receivables 2. Other receivables and assets

V. Deferred taxes

EUR

EUR

EUR

31.12.2011 EUR

1,440,000 3,510,000 30,592,000 77,000 35,619,000

1,278 3,798 30,330 77 35,483

11,046,000

720 4,241 4,961 3,789 2,358 205 11,313

1,387,000

224 863 482 1,569

4,028,000

2,439 220 2,659

722,000 4,091,000

(3) (3) (3)

(6) (6)

4,813,000 3,412,000 2,380,000 441,000

227,000 871,000 289,000

3,862,000 166,000

(4)

3,616,000 55,696,000

B. Current assets I. Inventories 1. Raw materials and consumables 2. Finished goods 3. Prepayments 4. Less prepayments received

(5) (5) (5) (5)

II. Receivables and other assets 1. Trade receivables

(6)

III.

(6) (6) (8)

Other receivables and assets 1. Receivables from Group companies 2. Other receivables and assets 3. Other prepaid expenses

IV. Cash and cash equivalents

Total assets

(7)

31.12.2010 EUR K

5,455,000 7,905,000 3,248,000 – 3,248,000

3,976 55,000

13,360,000

3,890 8,822 1,834 – 1,834 12,712

66,955,000

58,281

5,964,000

390 3,934 1,050 5,374

2,009,000 3,149,000 806,000 7,215,000 93,494,000

6,910 83,277

149,190,000

138,277


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

79

EQUITY AND LIABILITIES Note

EUR

EUR

31.12.2011 EUR

31.12.2010 EUR K

A. Capital and reserves I. Share capital

(9)

7,000,000

7,000

II. Reserves

(9)

35,749,000

32,291

(10)

953,000

III. Minority interests

43,702,000

B. Non-current debt I. Provisions 1. Provisions for severance payments 2. Provisions for pensions Deferred taxes 3. Other non-current provisions

(11) (11) (11), (12)

4,662,000 1,084,000 0 4,611,000

4,410 1,120 8 6,434 11,972

10,357,000

II. Liabilities 1. Liabilities to banks 2. Prepayments received 3. Trade payables 4. Other liabilities

(13) (14) (16)

2,001,000 8,667,000 25,000 0 10,693,000 21,050,000

C. Current debt I. Provisions 1. Tax provisions 2. Other current provisions

II. Liabilities 1. Liabilities to banks 2. Prepayments received on account of orders 3. Trade payables 4. Liabilities to Group companies 5. Other liabilities 6. Deferred income

Total equity and liabilities

(12) (12)

(13)

(14) (15) (16) (16)

734 40,025

426,000 10,301,000

5,383 0 735 310 6,428 18,400

468 15,848 10,727,000

16,316

73,711,000

29,572 9,452 17,134 62 6,588 728 63,536

29,814,000 13,884,000 21,897,000 51,000 6,339,000 1,726,000

84,438,000

79,852

149,190,000

138,277


80

— Perspectives

CONSOLIDATED INCOME STATEMENT for the period from January 1 until December 31, 2011 – ifrs

Note

1. Sales revenues

EUR

(17)

6. Personnel expenses 7. Depreciation and amortisation 8. Other operating expenses

– 899,000

5,549

824,000

559

(18)

3,384,000 175,285,000

1,662 148,526

(5)

– 95,053,000

– 71,192

(20)

– 42,083,000

– 37,628

(1), (2)

– 3,224,000

– 3,352

(19)

– 25,624,000 – 165,984,000

– 24,654 – 136,826

9,301,000

11,700

– 625,000

– 660

8,676,000

11,040

9. Operating result (EBIT) 10. Financial result

(21), (22)

11. Earnings before tax (EBT) 12. Taxes on income a) Current taxes on income b) Deferred taxes on income 13. Net income

2010 EUR K

140,756

3. Other own work capitalised

5. Materials and other purchased services

EUR K

171,976,000

2. Changes in inventories of finished goods, work in progress and unbilled services

4. Other operating income

2011 EUR

(4) – 974,000 – 372,000

– 1,346,000

– 1,478 – 1,407

– 2,885

7,330,000

8,155

– 377,000

– 233

15. Profit after minorities

6,953,000

7,922

16. Consolidated result

6,953,000

7,922

14. Minority interests in profit/loss


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the period from January 1 until December 31, 2011 – ifrs

2011 EUR

2010 EUR K

1. Net income

7,330,000

8,155

2. Exchange rate differences

1,081,000

1,263

3. Actuarial gains (losses)

0

0

4. Change in IAS 39 reserve

0

– 5

5. Net income recognised directly in equity

0

– 46

8,411,000

9,367

– 377,000

– 233

8,034,000

9,134

6. Consolidated comprehensive income before minorities 7. Minority interests in profit/loss 8. Consolidated comprehensive income

81


82

— Perspectives

Consolidated statement of cash flows ifrs

Cash flow from operations

2011 EUR K

2010 EUR K

(+/–) (+/–) (+/–) (+/–) (+/–) (+/–)

8,676 – 377 625 127 3,224 – 1,615

11,040 – 233 660 8 3,352 – 1,013

Gross cash flow

10,660

13,814

(+/–) (+/–) (+/–) (+/–) (+/–) (–) (+/–) (+/–)

– 648 – 10,273 17,580 – 5,589 – 372 – 974 1,461 – 461

– 5,502 7,559 – 979 – 5,349 – 1,407 – 1,478 1,450 – 683

Net cash flow from operating activities (OCF)

11,384

7,425

(–) (–) (+) (+) (+)

– 2,863 – 1 94 193 335

– 5,953 0 46 193 220

Net cash flow from investing activities (ICF)

– 2,242

– 5,494

(+/–) (–) (–) (–)

– 3,140 – 960 – 4,576 – 161

1,535 – 880 – 4,004 – 367

Net cash flow from financing activities (FCF)

– 8,837

– 3,716

Net change in cash and cash equivalents

305

– 1,785

6,910 7,215

8,695 6,910

305

– 1,785

(+) (–)

Change

Earnings before tax (EBT) Minority shareholders’ share in profit/loss Interest income Profit/loss on disposal of non-current assets Depreciation/write-ups of non-current assets Changes in non-current provisions

Changes in inventories including prepayments Changes in trade receivables, other receivables and prepaid expenses Changes in trade payables, other liabilities and deferred income Changes in current provisions Non-cash changes in deferred taxes Tax payments Changes recognised directly in equity Exchange rate differences

Investments in property, plant and equipment and intangible assets Investments in financial assets Proceeds from disposals of property, plant and equipment and intangible assets Proceeds from disposals of financial assets Interest received

Borrowing and repayment of financial liabilities Interest paid Distributions to shareholders Distributions to minority shareholders

Cash and cash equivalents at start of year Cash and cash equivalents at end of year


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

83

Consolidated statement of changes in equity ifrs

IAS 39 reserve EUR K

Net ­profit for the year EUR K

Currency translation EUR K

Total EUR K

Minority interests EUR K

Total equity EUR K

Share capital EUR K

Capital reserves EUR K

Retained earnings EUR K

7,000

2,897

2,190

0

20,676

– 3,838

28,925

1,484

30,409

0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0

0 0 0 3 0 0 0 235

0 0 0 0 0 0 0 0

0 – 3,432 0 8,569 0 0 0 – 270

0 0 0 0 0 0 131 0

0 – 3,432 0 8,572 0 0 131 – 35

0 – 567 0 228 – 277 0 0 0

0 – 3,999 0 8,800 – 277 0 131 – 35

7,000

2,897

2,428

– 147

25,690

– 3,707

34,161

868

35,029

0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0

0 0 0 11 0 0 0 2,440

0 0 0 0 – 5 0 0 0

0 – 4,004 0 7,911 0 0 0 – 2,486

0 0 0 0 0 0 1,263 0

0 – 4,004 0 7,922 – 5 0 1,263 – 46

0 – 367 0 233 0 0 0 0

0 – 4,371 0 8,155 – 5 0 1,263 – 46

7,000

2,897

4,879

– 152

27,111

– 2,444

39,291

734

40,025

0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0

0 0 0 5 0 0 0 4,050

0 0 0 0 0 0 0 0

0 – 4,576 0 6,948 0 0 0 – 4,050

0 0 0 0 0 0 1,081 0

0 – 4,576 0 6,953 0 0 1,081 0

0 – 161 0 377 0 0 0 3

0 – 4,737 0 7,330 0 0 1,081 3

As of December 31, 2011

7,000

2,897

8,934

– 152

25,433

– 1,363

42,749

953

43,702

Net equity as of December 31, 2011

7,000

0

35,749

0

0

0

42,749

953

43,702

As of December 31, 2008 Changes in accounting policies Dividends Capital increase Consolidated result Changes in scope of consolidation Correction of prior year errors Exchange rate changes Other changes As of December 31, 2009 Changes in accounting policies Dividends Capital increase Consolidated result Changes from acquisitions Correction of prior year errors Exchange rate changes Other changes As of December 31, 2010 Changes in accounting policies Dividends Capital increase Consolidated result Changes from acquisitions Correction of prior year errors Exchange rate changes Other changes


84

— Perspectives

—Notes to the consolidated financial statements as of December 31, 2011—

1. The company

Waagner-Biro Aktiengesellschaft is an Austrian stock corporation registered in Vienna. Its principal object is to hold investments in national and international mediumsized steel construction, mechanical engineering, and plant engineering companies. Waagner-Biro Aktiengesellschaft, together with its subsidiaries (hereinafter the “Waagner-Biro Group”), is a leading construction company operating in the steel engineering sector. Its four strategic business segments are Bridge Systems, Stahlbau, Stage Systems, and Qualter, Hall & Co. Its main sales markets are in central, southern and eastern Europe, the Gulf region, Africa and the Asian countries. The company is the ultimate parent of the WaagnerBiro Group, which is registered in Austria at the address 1220 ­Vienna, Leonard-Bernstein-Strasse 10. The average number of employees in the Group was 1,215 in 2011 and 1,055 in 2010. The consolidated financial statements are prepared by the Management Board and given consideration by the ­Supervisory Board.


waagner-biro Annual report 2011

2. Accounting and valuation principles

The company The year 2011 —­­Consolidated financial statements

The application of these standards and interpretations does not have a material effect on the consolidated financial statements.

Accounting principles

Pursuant to Section 245a UGB (Austrian Commercial Code), the consolidated financial statements of the ­Waagner-Biro Group as of December 31, 2011 were prepared in compliance with the International Financial Reporting Standards (IFRS and IAS) published by the International Accounting Standards Board (IASB), as applicable in the European Union. The mandatory interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and applicable for 2011 were also observed.

Application of new standards

The consolidated financial statements were prepared according to the historical cost method, excepting plan assets pursuant to IAS 19, and derivative financial instruments and available-for-sale financial assets pursuant to IAS 39, which are measured at fair value as of the reporting date. The figures in the consolidated financial statements are commercially rounded to the nearest one thousand euros (EUR K). The totals of rounded amounts and percentages may be subject to rounding differences caused by automatic data processing.

Methods and scope of consolidation

Since January 1, 2011, Waagner-Biro has been applying the following revised or amended standards and interpretations:

The consolidated financial statements encompass WaagnerBiro AG and all the principal wholly or majority-owned subsidiaries.

IAS 24 (revised) Related Party Disclosures IAS 32 (amended) Financial Instruments: Presentation (amendment about Classification of Rights Issues) IFRIC 14: Amendments

All companies whose financial and business policies are controlled by the Group are classified as subsidiaries. As a general rule, such control is deemed to exist if WaagnerBiro AG holds more than 50% of the voting rights in a company either directly or indirectly. Subsidiaries that are not consolidated for reasons of immateriality, and other investments, are recognised at cost

85


86

— Perspectives

or fair value according to the provisions concerning the measurement of available-for-sale financial assets (IAS 39). The variances from full consolidation and measurement at equity are insignificant. All business combinations are recognised by applying the purchase method. This entails netting the acquisition cost of the shares in the consolidated subsidiaries against the pro rata net assets, based on the fair values of the acquired subsidiaries’ assets and liabilities at the time of the acquisition or assumption of control. Since January 1, 2010, transaction costs that are directly related to business combinations are recognised in profit or loss. Remaining goodwill is allocated to the relevant cashgenerating unit, and that unit is tested for impairment. Negative goodwill is immediately recognised in profit or loss in compliance with the provisions of IFRS 3. The minority interests in the equity and profit or loss are recognised separately in both the consolidated statement of financial position and the consolidated income statement. Companies that are acquired or sold during the year are recognised in the consolidated financial statements from the effective date of the purchase or until the disposal date.

The subsidiaries’ financial statements are prepared by applying uniform accounting methods and for the same reporting period as the financial statements of the parent company. All intragroup receivables, liabilities and cost allocations, including profits and losses resulting from intragroup transactions, if material, are eliminated in full. The deferred taxes prescribed by IAS 12 are recognised for temporary differences arising from consolidation.


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

As of December 31, 2011, the scope of consolidation encompassed the following companies: Parent

Waagner-Biro Aktiengesellschaft, Vienna Subsidiaries

Austria Waagner-Biro Bridge Systems AG, Vienna Waagner-Biro Stahlbau AG, Vienna Waagner-Biro Austria Stage Systems AG, Vienna Waagner-Biro Immobilienverwaltungs GmbH, Linz WBB Stahl- und Maschinenbau AG i.A., Linz WBB Fassadentechnik GmbH i.A., Vienna

100 % 100 % 100 % 100 % 100 % 100 %

International P. T. Waagner-Biro, Indonesia, RI Waagner Biro Philippines, Inc., RP Waagner Biro Limited, GB Waagner Biro Gulf L.L.C., UAE Waagner-Biro Emirates Contracting L.L.C., UAE Waagner Biro Qatar WLL, Qatar Qualter, Hall & Co Ltd., GB Waagner-Biro Bavaria Stage Systems GmbH, D Waagner-Biro Luxembourg Stage Systems S.A., L Waagner-Biro Spain Stage Systems S.A., E Waagner-Biro UK Stage Systems Ltd., GB Jenbacher Holdings (UK) plc, GB

100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 51 % 100 % 100 % 100 %

87


88

— Perspectives

In the 2011 financial year, Waagner-Biro Emirates Contracting L.L.C., UAE, was established and included in the consolidated financial statements for the first time.

Waagner-Biro Beteiligungsverwaltungs GmbH, Vienna Waagner-Biro SpÓlka z o.o., PL Waagner-Biro Bin Butti Engineering L.L.C., UAE Waagner-Biro Stage Systems (Shanghai) Co., Ltd., CHN 000 „Waagner-Biro St. Petersburg Stage Systems“, RUS

The following companies were not consolidated for reasons of immateriality:

100 % 100 % 100 % 100 % 100 %

Currency translation

Transactions in foreign currencies In the individual financial statements of the consolidated Group companies, transactions in foreign currencies are translated into the relevant functional currency of the company at the exchange rate on the date of the transaction. Foreign exchange gains and losses arising from translation on the transaction and reporting dates are recognised in profit or loss in the consolidated income statement. If possible, currency risks are hedged by means of forward exchange and swap contracts. Offsetting of exchange rate differences In the current annual financial statements, the expenses and income arising from exchange rate differences have been offset and only the surplus is recognised. In the relevant currencies, the amounts of the claims and obligations are balanced (closed foreign exchange positions from eligible asset and liability items). The amount of the

foreign exchange gains recognised in profit or loss in the financial year is EUR 438K (2010: loss of EUR 744K). Translation of individual foreign currency financial statements The Group currency is the euro. Pursuant to IAS 21, the annual financial statements incorporated in the consolidated financial statements and prepared in foreign currencies are translated into euros by applying the functional currency concept. The functional currency of all the companies is the relevant national currency because the companies conduct the financial, economic and organisational aspects of their businesses autonomously. Assets and liabilities are translated at the mean exchange rate on the reporting date, and income statement items are translated using the average rate for the financial year. Equity is translated at the historical exchange rate on the date of first consolidation.


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

Since 2005, goodwill from the acquisition of foreign subsidiaries has been recognised at the exchange rate on the acquisition date, allocated to the acquired company, and translated at the exchange rate on the reporting date. Resulting foreign exchange differences are recognised directly in equity.

Currencies

British pound US dollar UAE dirham Qatari riyal Philippine peso

The table below contains the euro exchange rates used for translation purposes:

ISO code

Rate on reporting date Dec 31, 2011

Rate on reporting date Dec 31, 2010

Average rate 2011

Average rate 2010

GBP USD AED QAR PHP

0.8398 1.2955 4.7450 4.7050 56.7540

0.8647 1.3390 4.9140 4.8709 58.1395

0.8689 1.3920 5.1065 5.0674 60.2795

0.8583 1.3270 4.8685 4.8709 59.8802

Accounting and valuation methods

Goodwill from business combinations

Insofar as they were published in the Official Journal of the European Union and had entered force by December 31, 2011, revised and amended versions of existing IAS/IFRS and interpretations, and new standards and interpretations were applied when the consolidated financial statements were being prepared.

Goodwill is recognised pursuant to IFRS 3 and tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired. Negative goodwill is immediately recognised in profit or loss pursuant to IFRS 3 after a reassessment of the identifiable assets and liabilities. Negative goodwill arising before March 31, 2004 from consolidation or another form of business combination is offset against retained earnings.

89


90

— Perspectives

Intangible and tangible assets

Intangible assets acquired for a consideration are recognised in the statement of financial position at cost less amortisation and write-downs. For internally generated intangible assets, a distinction is made between the research and development phases of the production period. Costs incurred In the research phase are immediately recognised in profit or loss. Development costs likewise qualify as an expense in the current period. Recognition takes place only when future inflows of cash are expected that will cover not only the normal costs, but also the relevant development costs. In addition, all the conditions of IAS 38 must be satisfied. Internally generated intangible assets are measured at production cost less amortisation and write-downs. Tangible assets (property, plant and equipment) are measured at cost less accumulated depreciation and impairment losses. The production cost of internally generated intangible and tangible assets contains all direct costs and reasonable portions of the overheads incurred during production. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are recognised as a part of the cost of that asset. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

Costs incurred for an asset in subsequent periods are capitalised only if giving rise to a substantial increase in the future utility of the asset (e.g. through extended application options or a significant extension of the useful life). Intangible assets and depreciable tangible assets are amortised (depreciated) by the straight-line method over the relevant asset’s expected useful economic life. As in the previous year, the depreciation rates were calculated on the basis of the following useful lives:


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

from

Useful life in years to

Intangible assets Capitalised development costs Industrial property rights

5 3

7 20

Tangible assets Land and buildings, including buildings on land owned by others Technical plant and machinery Other equipment, fixtures and furnishings

5 3 3

50 15 15

The remaining carrying amounts and useful economic lives are regularly reviewed and adjusted if appropriate.

Lease payments under an operating lease are recognised as an expense on a straight-line basis over the lease term.

Rented or leased assets

Impairment

If substantially all the risks and rewards incidental to ownership of an asset that is rented or leased are transferred to the Waagner-Biro Group (finance leases), the asset is recognised as such. The property, plant and equipment underlying the leases are recognised at the present value of the minimum lease payments and depreciated over the expected useful life. At the same time, the liabilities arising from the future lease payments are recognised at the present value of the outstanding liabilities as of the reporting date. As of December 31, 2011, finance lease liabilities amounted to EUR 0K (2010: EUR 0K).

Tangible and intangible assets are tested for impairment as soon as events or changes in circumstances indicate that the carrying amount of the relevant asset might be higher than the recoverable amount (the higher of the asset’s or cash-generating unit’s net selling price and its value in use). As soon as the carrying amount of an asset exceeds the recoverable amount, an impairment loss is recognised. The recoverable amount is estimated for the individual assets. If this is not possible, the cash generating unit to which the asset belongs is assessed. If the cause of an impairment loss recognised in the past for an asset other than goodwill ceases to exist, the impairment is reversed and the amortised cost is reinstated.

91


92

— Perspectives

Goodwill was tested for impairment pursuant to IFRS 36; an impairment loss was not recognised in the 2011 financial year (2010: EUR 0K).

Non-current financial assets

All the financial assets held by the Waagner-Biro Group are classified either as available for sale, or as loans and receivables. The non-current financial assets contain shares in non-consolidated subsidiaries, securities held as non-current assets, and loans. Although shares in non-consolidated subsidiaries also qualify as available-for-sale financial instruments, they are measured at acquisition cost because an active market for the companies does not exist and the fair values cannot be reliably determined without undue expense. A lower fair value is recognised if there is any indication that such a value exists. Loans are grouped with receivables for measurement purposes. They are measured at amortised cost. Noninterest bearing and low-interest loans are recognised at present value.

Deferred taxes

Deferred taxes are calculated by the balance sheet liability method for all temporary differences between the tax bases and the IFRS carrying amounts for assets and liabilities. The probable tax benefits from unused tax loss carryforwards are also taken into account. Excluded from this extensive deferred taxation are taxable temporary differences arising from the first-time recognition of goodwill. Deferred tax assets are recognised only if the tax benefit received is sufficiently likely to be realised. The amount is calculated at the regular rate of income tax for the country concerned at the time the difference is likely to be reversed; for Austrian companies, the tax rate is 25 %. Deferred taxes relating to items recognised directly in equity are likewise taken directly to equity. The deferrals are presented in the other result according to the relevant underlying transaction. Deferred tax claims and liabilities are offset if the deferrals relate to a single tax authority.


waagner-biro Annual report 2011

Inventories

Inventories are recognised either at acquisition or production cost, or at the net realisable value on the reporting date. The net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Acquisition cost is generally calculated by the sliding average price method. Work in progress and finished goods are measured at production cost. The production cost contains all direct costs and reasonable portions of the overheads incurred during production. General administration and selling costs are not included in the production cost.

Trade receivables

Trade receivables are recognised at nominal value less impairments for recognisable individual risks. In addition, an allowance was formed for country risks. Non-interest bearing and low-interest receivables are discounted. Receivables in foreign currency are measured at the exchange rate on the reporting date or, if the exchange rate is hedged, at the hedged rate.

The company The year 2011 —­­Consolidated financial statements

Customer retentions in connection with building contracts that have not been completed (retentions to secure warranty claims) are generally replaced by bank guarantees.

Construction contracts

If the preconditions of IAS 11 are satisfied, construction contracts are measured by the percentage of completion method. Under this method, the expected contract revenues are recognised as sales revenues according to the proportion of work completed. The stage of completion is determined according to the ratio of costs incurred to the estimated total costs (cost to cost method). Additions are recognised if they will probably be accepted by the customer and can be reliably measured. When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only in the amount of the incurred contract costs. When it is probable that total contract costs will exceed contract revenue, the entire expected loss is recognised as an expense immediately. Prepayments received are deducted from the receivables from construction contracts. Any negative balance arising from this practice is recognised as a liability.

93


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— Perspectives

Other receivables

Obligations to employees

and assets

The other receivables are recognised at nominal value less allowances for possible bad debts. The other assets contain only derivative financial instruments with a positive fair value that are used to hedge against foreign exchange risks. Derivative financial instruments classified as held for trading are measured at fair value pursuant to IAS 39.

Pension obligations The Waagner-Biro Group has obligations to pay retirement pensions under three individual agreements. These defined benefit obligations are not matched by assets specifically earmarked for this purpose. The full amount of the obligations is therefore recognised as a provision. The pensions relate exclusively to employees who have already taken retirement, or their widows. The required provision is determined as of the relevant reporting date according to an actuary’s report.

Cash and cash equivalents

Cash and cash equivalents consist of cash and bank credit balances.

Any difference between the amount of the provision calculated in advance on the basis of the underlying assumptions and the amount actually payable (actuarial gains/losses) is recognised fully in profit or loss.

The valuations as of December 31, 2011 and 2010 are based on the following assumptions:

Interest rate Pension increase Life expectancy

2011

2010

6 % 3.80 % AVÖ 2008-P

6 % 2.30 % AVÖ 2008-P


waagner-biro Annual report 2011

Defined contribution pension commitments also exist for certain employees. The associated costs are recognised as an expense at the time they are incurred. During the 2011 financial year, the regular contributions to the domestic and foreign employee pension funds totalled EUR 577K (2010: EUR 478K).

Severance obligations

Under Austrian labour law, the company is obliged to pay employees who entered service before January 1, 2003 defined severance benefits when they cease to work for the company because of termination of retirement. Employees who resign or are dismissed for good cause are not entitled to such severance benefits. The amount of the severance payment depends on the number of years’ service and the qualifying amount of remuneration at the time of departure. It is between two and twelve months’ remuneration. These obligations are the subject of a provision.

The company The year 2011 —­­Consolidated financial statements

The amount of the provision is determined by the projected unit credit method. An actuarial model is applied to calculate the present value of future payments accruing over the employees’ estimated period of service. The provision is determined as of the relevant reporting date according to an actuary’s report. For employment contracts beginning after December 31, 2002, the provisions of the “new” regulations for severance benefits are to be applied. Under the new system, for every qualifying month of employment and certain other qualifying periods, the employee acquires a vested right to a severance payment irrespective of the length of service and the manner in which the employment is terminated. This is a defined contribution scheme, in which the assets are transferred to an employee benefit fund to cover the obligation. The regular contributions to the employee benefit fund in 2011 totalled EUR 155K (2010: EUR 130K) and are recognised as expenses for severance payments. The valuations as of December 31, 2011 and 2010 are based on the following assumptions:

Interest rate Salary increase Retirement age for women Retirement age for men Life expectancy *) Taking into account the interim provisions of the 2003 pension reform

2011

2010

5.00 % 2.75 % 60 *) 65 *) AVÖ 2008-P

5.00 % 2.75 % 60 *) 65 *) AVÖ 2008-P

95


96

— Perspectives

Other non-current obligations

Taxes

to employees

Under collective agreements, the Waagner-Biro Group has obligations to pay long-service bonuses to employees who reach a certain number of years’ service (from 25 years). A provision has been formed to meet this obligation. It is calculated as a general rule by applying the methods and assumptions that are used to determine the severance payment obligations. At variance with the provision for severance payments, however, a fluctuation deduction of 25 % is made.

Other provisions

Other provisions are recognised when the company has a legal or actual obligation to a third party arising from a past event and it is probable that such obligation will give rise to an outflow of funds. The provisions are based on the best available estimates of the amounts required as of the reporting date. If a reasonable estimate is not possible, a provision is not formed. If the present value of a provision based on a market rate of interest is materially different from the nominal value, the present value is recognised.

The income tax expense recognised for the financial year encompasses the income tax of the individual companies, calculated according to taxable income and the tax rates applicable in the relevant countries (actual taxes), and the change in deferred taxes. In Austria, Waagner-Biro Aktiengesellschaft is the parent company of the Waagner-Biro consolidated tax group. The group members have undertaken to pay the corporate income tax on their profits to the parent. Losses of the group members are treated as internal loss carryforwards and offset against subsequent profits. A member leaving the group receives compensation for losses transferred to the parent that have yet to be offset against profits. In compliance with the tax apportionment agreement, Waagner-Biro Aktiengesellschaft recognises the corporate income tax of the group members as income.

Financial liabilities

Excepting derivative financial instruments as defined by IAS 39, the Waagner-Biro Group classifies financial liabilities as “other financial liabilities”; they are measured first at fair value less directly attributable transaction costs and thereafter at amortised cost. If the amount repayable is lower or higher, the recognised amount is written down or up by the effective interest method.


waagner-biro Annual report 2011

Derivative financial instruments are recognised in profit or loss at fair value (financial liabilities at fair value through profit or loss). The financial liabilities of the Waagner-Biro Group encompass finance loans, trade payables, other liabilities and derivative financial instruments with a negative fair value.

Contingent liabilities

Contingent liabilities are possible or existing obligations for which an outflow of resources is not probable. They are not recognised in the financial statements, but indicated in the notes.

The company The year 2011 —­­Consolidated financial statements

Finance expenses and income from financial investments

Finance expenses encompass the interest and interestrelated expenses incurred for borrowings and finance leases, as well as losses from the disposal or write-down of financial assets. Income from financial investments includes realised interest, dividends and similar income from investments in cash and cash equivalents, and income from the retirement and write-up of financial assets. Interest is apportioned on an accrual basis by applying the effective interest method. Dividends are recognised when the resolution authorising the dividend distribution is adopted.

Revenue recognition Use of estimates

Revenue from the sale of goods is recognised when all the significant risks and rewards of ownership of the supplied goods have been transferred to the buyer (completed contract method). Income from services not associated with a project is recognised according to the extent of services performed by the reporting date. As regards revenue recognition in connection with construction contracts, refer to the relevant explanatory notes.

In compliance with generally accepted accounting and valuation methods pursuant to IFRS, the management has to make estimates and assumptions when preparing the consolidated financial statements which influence both the amount and recognition of assets and liabilities as of the reporting date, and the income and expenses recorded during the reporting period. Actual figures can ultimately differ from such estimates and assumptions.

97


98

— Perspectives

Impairment of intangible

Provisions for warranties

and tangible assets

Impairment tests performed on goodwill, other intangible assets and tangible assets are chiefly based on the estimated future discounted net cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Factors such as lower sales revenues and therefore lower net cash flows, as well as changes in the applied discount rates, can give rise to an impairment.

The Waagner-Biro Group remains legally or contractually liable for defects and damage arising from completed projects. For specifically named warranty cases, a provision is formed in the amount of the expected claims. The provision is an estimate of the future expenses, the actual amount of which can differ, depending on the rehabilitation requirements.

Provisions for litigation Construction contracts

Both the assessment of construction contracts until project completion, in particular as regards accounting for additions and concerning the amount of contract revenues to be deferred by the POC method, on the one hand, and the estimate of the likely contract outcome, on the other, are based on expectations concerning the future development of such contracts. The revision of such estimates can give rise to adjustments to assets and materially influence the results of subsequent periods.

The outcome of lawsuits cannot be forecast with any certainty. Insofar as estimates were possible, appropriate provisions have been formed in the consolidated financial statements. The actual results of lawsuits can differ from these assessments.

Obligations to employees

The actuarial measurement of pensions, severance payments and long-service bonuses is based on assumptions concerning discount rates, salary increases and mortality tables. Changes in the parameters triggered by shifts in the economic climate can give rise to higher or lower provisions and personnel expenses.


waagner-biro Annual report 2011

Deferred taxes

Deferred taxes are calculated on the basis of the tax rates that will apply, according to current legislation, at the time the temporary differences are settled. Tax rate changes can give rise to a reassessment of the recognised deferred taxes.

The company The year 2011 —­­Consolidated financial statements

99


100

— Perspectives

3. Explanatory notes to the statement of financial position and income statement

1. Intangible assets and goodwill

Acquisition costs As of December 31, 2010 Additions Disposals Exchange rate differences As of December 31, 2011 Accumulated depreciation As of December 31, 2010 Additions Disposals Exchange rate differences As of December 31, 2011 Carrying amount as of December 31, 2010 Carrying amount as of December 31, 2011

Capitalised development costs EUR K

Industrial property rights EUR K

2,353 723 –259

Goodwill EUR K

Prepayments EUR K

9,714 451 –935 8

36,474

77

48,618 1,174 –1,194 270

2,817

9,238

36,736

77

48,868

1,075 561 –259

5,916 742 –935 5

6,144

0

13,135 1,303 –1,194 5

1,377

5,728

6,144

0

13,249

1,278

3,798

30,330

77

35,483

1,440

3,510

30,592

77

35,619

262

Total EUR K


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

2. Tangible assets

Technical plant and machinery EUR K

Other equipment, fixtures and furnishings EUR K

Prepayments and assets under construction EUR K

5,420 24 629 –506 81

205

97

13,481 –9 591 –36 435

417 –205 24

25,469 0 1,689 –747 637

6,497

14,462

5,648

441

27,048

1,402 –5 241

3,062 14 641 –505 56

0

46

9,692 –9 1,039 –21 349

14,156 0 1,921 –526 451

1,684

11,050

3,268

0

16,002

4,961

3,789

2,358

205

11,313

4,813

3,412

2,380

441

11,046

Land and buildings EUR K

Acquisition costs As of December 31, 2010 Transfers Additions Disposals Exchange rate differences As of December 31, 2011 Accumulated depreciation As of December 31, 2010 Transfers Additions Disposals Exchange rate differences As of December 31, 2011 Carrying amount as of December 31, 2010 Carrying amount as of December 31, 2011

6,363 –15 52

Total EUR K

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— Perspectives

3. Financial assets

Interests in Group companies EUR K

Acquisition costs As of December 31, 2010 Additions Disposals Exchange rate differences As of December 31, 2011 Accumulated depreciation As of December 31, 2010 Additions Disposals Exchange rate differences As of December 31, 2011 Carrying amount as of December 31, 2010 Carrying amount as of December 31, 2011

Interests in Group companies relate to shares in subsidiaries that are not included in the consolidated financial statements for reasons of immateriality.

Securities EUR K

Other loans EUR K

Total EUR K

224

1,267 1

482

3 227

7 1,275

289

1,973 1 –193 10 1,791

–193

404

0

404

0

404 0 0 0 404

224

863

482

1,569

227

871

289

1,387

The securities consist of shares in diverse investment funds. They cover the provisions for pensions in compliance with Sections 14 and 116 of the Austrian Income Tax Act, and severance payment claims at foreign subsidiaries.


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

4. Deferred taxes

Temporary differences between the carrying amounts in the IFRS consolidated financial statements and the relevant tax

Deferred tax assets Non-current assets Current assets Provisions for severance payments and pensions Other provisions Liabilities Loss carryforwards thereof unrecognised Netting of deferred tax assets and liabilities Deferred tax assets Deferred tax liabilities Non-current assets Current assets Other provisions Liabilities Netting of deferred tax assets and liabilities Deferred tax liabilities Deferred taxes (net)

bases affect the deferred tax items recognised in the statement of financial position as follows:

31.12.2011 EUR K

31.12.2010 EUR K

322 72 146 249 13 13,109 13,911 –6,193 –4,102 3,616

562 0 139 141 6 13,518 14,366 –6,825 –3,565 3,976

293 2,652 1,157 0 4,102 –4,102 0

207 1,847 1,512 7 3,573 –3,565 8

3,616

3,968

103


104

— Perspectives

On the basis of current tax regulations, it can be assumed that the differences between the carrying amount for tax purposes and the proportionate share in the equity of the consolidated subsidiaries, arising from retained earnings, will largely remain untaxed. For this reason, no deferred taxes were recognised in this connection.

Current taxes on income Change in deferred tax assets/liabilities Total

Deferred tax assets for loss carryforwards were recognised to the extent that they can probably be netted against future taxable profits. According to current legislation, the use of tax loss carryforwards is not subject to any time limits. The income taxes item contains the following:

2011 EUR K

2010 EUR K

–974 –372 –1,346

–1,478 –1,407 –2,885


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

The reasons for the difference between the anticipated tax burden (notional tax expense) and the recognised income tax expense are illustrated in the table below:

Profit before tax Notional tax expense Tax expense as per income statement Difference to be reconciled Reasons for the difference Reduction in the tax burden because of: Effect of different tax rates Group taxation Tax income from prior periods Sundry allowances and other permanent differences Increase in the tax burden because of: Change in recognised deferred taxes on loss carryforwards Non-deductible expenses Withholding taxes Miscellaneous Reconciled difference

2011 EUR K

2010 EUR K

8,676 2,169 1,346 – 823

11,040 2,760 2,885 125

335 808 265 507

281 628 0 34

– 512 – 46 – 519 – 15 823

– 393 – 86 – 589 0 – 125

105


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— Perspectives

5. Inventories

The inventories item contains raw materials and consumables, as well as finished goods and merchandise. The inventories item contains the following:

Raw materials and consumables Finished goods and merchandise Inventory prepayments less: prepayments received Total

Dec 31, 2011 EUR K

Dec 31, 2010 EUR K

5,455 7,905 3,248 –3,248 13,360

3,890 8,822 1,834 –1,834 12,712

2011 EUR K

2010 EUR K

61,547 33,506 95,053

37,968 33,224 71,192

The cost of materials recognised in the income statement consists of the following:

Materials Services Total


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

6. Receivables and other assets

Dec 31, 2011 EUR K

Dec 31, 2010 EUR K

70,817 2,009 3,315 806 76,947

60,720 390 4,154 1,050 66,314

Current EUR K

Non-current EUR K

Dec 31, 2011 Total EUR K

66,955 2,009 3,149 806 72,919

3,862 0 166 0 4,028

70,817 2,009 3,315 806 76,947

Current EUR K

Non-current EUR K

Dec 31, 2010 Total EUR K

58,281 390 3,934 1,050 63,655

2,439 0 220 0 2,659

60,720 390 4,154 1,050 66,314

Trade receivables Receivables from Group companies Other receivables Other prepaid expenses Total

The receivables recognised in the statement of financial position have the following maturities of the reporting date:

Trade receivables Receivables from non-consolidated subsidiaries Other receivables and assets Other prepaid expenses Total

Trade receivables Receivables from non-consolidated subsidiaries Other receivables and assets Other prepaid expenses Total

107


108

— Perspectives

When testing trade receivables for impairment, consideration is given to any change in the creditworthiness of the relevant customer between the setting of the time allowed for payment and the reporting date. Impairment losses were calculated paying due regard to both the provision by banks

Allowances as of January 1 Exchange rate changes Addition Use Reversal Allowances as of December 31

Allowances for country risks in the amount of EUR 1,275K (2010: EUR 2,000K) were deducted from the trade receivables. The allowances for doubtful accounts totalled EUR 0K (2010: EUR 11K).

Contract costs incurred as of reporting date plus recognised profits/less recognised losses less prepayments and instalments received Total

of security for payments and the concluded export insurance policies. The changes in the allowances for trade receivables were as follows:

2011 EUR K

2010 EUR K

16,709 13 1,257 –431 –793 16,755

18,629 108 812 –2,429 –411 16,709

The receivables from construction contracts (trade receivables) contain the following amounts:

31.12.2011 EUR K

31.12.2010 EUR K

111,481 –80,851 30,630

64,683 –44,443 20,240


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

The table below classifies the trade receivables according to due dates:

Not due 1–90 days past due 91–180 days past due More than 180 days past due Total

31.12.2011 EUR K

31.12.2010 EUR K

58,805 5,910 747 5,355 70,817

45,010 4,878 2,847 7,985 60,720

31.12.2011 EUR K

31.12.2010 EUR K

2,009 0 0 2,009

349 29 12 390

The receivables from Group companies relate to the following companies:

Waagner-Biro Bin Butti Engineering L.L.C., UAE Hunslet-Barclay Ltd., GB Waagner Biro Spólka z o.o., PL Total

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The other receivables consist of:

Prepaid expenses Credit balances with tax authorities Retentions to secure against excess payment Guarantee deposits Claims Loans Miscellaneous Total

Dec 31, 2011 EUR K

Dec 31, 2010 EUR K

790 667 133 498 302 173 752 3,315

1,606 474 214 209 201 198 1,252 4,154

Dec 31, 2011 EUR K

Dec 31, 2010 EUR K

7,215

6,910

Dec 31, 2011 EUR K

Dec 31, 2010 EUR K

806

1,050

7. Cash and cash equivalents

Bank balances

8. Prepaid expenses

Prepaid expenses


waagner-biro Annual report 2011

9. Equity

The recognised share capital of Waagner-Biro Aktiengesellschaft remains unchanged year on year at EUR 7,000K. It is divided into 2,860,000 no par bearer shares. Pursuant to GesRÄG 2011 (Company Law Amendment Act 2011), non-listed stock corporations must divide their share capital into registered shares by no later than December 31, 2013. Shareholders enjoy the usual rights and benefits conferred under the Austrian Stock Corporations Act, including the right to payment of dividends, as determined by the shareholders’ meeting on the basis of the parent company’s individual financial statements prepared according to UGB (Austrian Commercial Code), and the right to vote at the shareholders’ meeting.

Waagner-Biro Luxembourg Stage Systems S.A., LUX Jenbacher Holdings (UK) plc., GB

The company The year 2011 —­­Consolidated financial statements

The reserves comprise capital reserves, retained earnings including the net profit for the year, and the accumulated translation reserves. For 2011, the Management Board proposes a dividend of 1.60 euros per share in issue. The distribution for 2010, in the amount of EUR 4,576K, which corresponds to a dividend of 1.60 per share, was proposed by the Management Board and adopted by the 12th annual shareholders’ meeting on April 28, 2011. The dividend was paid out to the shareholders on May 9, 2011.

10. Minority interests

The minority interests item contains shares in the equity of subsidiaries held by outside shareholders. In 2011, dividends of EUR 161K (2010: EUR 367K) were paid to outside shareholders. The following companies have minority shareholders:

2011

2010

49.00 % 0.00 %

49.00 % 3.00 %

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Liabilities 11. Obligations to employees

Provisions for severance payments Provisions for pensions Provisions for long-service bonuses Total

Dec 31, 2011 EUR K

Dec 31, 2010 EUR K

4,662 1,084 438 6,184

4,410 1,120 432 5,962

2011 EUR K

2010 EUR K

1,120 –36 1,084

1,169 –49 1,120

2011 EUR K

2010 EUR K

4,410 152 153 – 161 – 127 235 4,662

4,642 160 174 – 565 – 127 126 4,410

Provisions for pensions

Present value of pension obligations (DBO) as of January 1 Change Present value of pension obligations (DBO) as of December 31

Provisions for severance payments

Present value of severance payment obligations (DBO) as of January 1 Service cost Interest cost Severance payments made Actuarial gains/losses Change in foreign companies Present value of severance payment obligations (DBO) as of December 31


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

Provisions for long-service bonuses

Present value of long-service bonus obligations (DBO) as of January 1 Service cost Interest cost Long-service bonuses paid Actuarial gains/losses Present value of long-service bonus obligations (DBO) as of December 31

2011 EUR K

2010 EUR K

432 32 21 –59 12 438

444 32 23 –61 –6 432

12. Provisions

Current taxes EUR K

As of January 1, 2011 Consumption Reversal Creation Exchange rate differences As of December 31, 2011 thereof non-current thereof current Total

Personnel EUR K

468 – 129 – 243 330 – 426

3,916 – 1,037

– 426 426

438 3,648 4,086

1,187 20 4,086

Order processing EUR K

Other EUR K

Total EUR K

6,464

5,152 – 1,624 – 406 1,219 21 4,362

22,750 – 11,501 – 1,116 5,170 35 15,338

1,697 4,767 6,464

2,476 1,886 4,362

4,611 10,727 15,338

13,214 – 8,711 – 467 2,434 – 6

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13. Financial liabilities

Liabilities to banks Current account overdrafts/ cash advances Financing loans Total

Dec 31, 2011

Noncurrent EUR K

Current EUR K

Total EUR K

0 2,001 2,001

26,245 3,569 29,814

26,245 5,570

The fair values of the financial liabilities correspond to the carrying amounts. The fair values are calculated by discounting future payments, based on an assumed current market interest rate.

31,815

Dec 31, 2010

Noncurrent EUR K

Current EUR K

Total EUR K

0 5,383 5,383

26,064 3,508 29,572

26,064 8,891 34,955


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

14. Trade payables

Creditors

Dec 31, 2011 EUR K

Dec 31, 2010 EUR K

21,922

17,869

Dec 31, 2011 EUR K

Dec 31, 2010 EUR K

31 20 51

32 30 62

The trade payables include a non-current amount of EUR 25K (2010: EUR 735K).

15. Liabilities to Group companies

The liabilities to Group companies relate to the following companies:

Waagner-Biro Beteiligungsverwaltungs GmbH, Wien Waagner-Biro Stage Systems (Shanghai) Co., Ltd., CHN Total

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16. Other liabilities and deferred income

Dec 31, 2011

Noncurrent EUR K

Current EUR K

Total EUR K

0 0 0

6,339 1,726 8,065

6,339 1,726

Other liabilities Deferred income Total

8,065

Dec 31, 2010

Noncurrent EUR K

Current EUR K

Total EUR K

310 0 310

6,588 728 7,316

6,898 728 7,626

The other liabilities and deferred income item contains:

Outstanding accounts for project-related costs Tax office Profit-sharing Deferred rent grant Health insurance funds Debtors with credit balances Financial instruments Personnel expenses and similar obligations Other Total

Dec 31, 2011 EUR K

Dec 31, 2010 EUR K

2,088 1,957 1,152 720 557 339 289 239 724 8,065

1,466 1,467 577 810 494 357 0 628 1,827 7,626


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

17. Sales revenues

The sales revenues consist of the following:

Austria EU Rest of Europe Asia Gulf region Rest of world

Detailed segment reporting is contained in the Group management report.

2011 EUR K

2010 EUR K

15,307 64,625 9,477 28,765 37,444 16,358 171,976

10,890 52,163 10,527 20,812 33,279 13,085 140,756

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18. Other operating income

Income from the disposal and write-up of non-current assets Income from the reversal of provisions Other Total

2011 EUR K

2010 EUR K

9 873 2,502 3,384

12 706 944 1,662

2011 EUR K

2010 EUR K

879 438 365 274 546 2,502

292 0 0 400 252 944

Other income contains:

Non-repayable grants Exchange rate gains Income from the reversal of warranty obligations Compensation claims Other Total


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

19. Other operating expenses

Other operating expenses contain:

Rental and leasing expenses Travel expenses and disbursements Freight and transport costs Maintenance and repair costs Insurances Commission paid Legal and consulting fees Services received Office expenses (telephone/postage/supplies) Warranty and guarantee fees Risk provisions and allowances Other Total

2011 EUR K

2010 EUR K

4,446 3,618 2,107 2,082 1,903 1,753 1,470 1,415 1,027 935 718 4,150 25,624

3,342 3,031 1,576 1,890 1,497 2,288 1,705 1,301 885 928 1,114 5,097 24,654

2011 EUR K

2010 EUR K

132 57 189

110 5 115

The auditing expenses attributable to the financial year total:

Fees for auditing annual financial statements (individual and consolidated) Fees for other services Total

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20. Personnel expenses

Wages and salaries Statutory social security contributions Expenses for severance payments Expenses for pensions Other social security expenses Total

2011 EUR K

2010 EUR K

34,779 5,226 858 767 453 42,083

31,203 4,583 782 649 411 37,628

2011

2010

649 563 3 1,215

496 556 3 1,055

Average employee numbers were as follows:

Non-salaried staff Salaried staff Apprentices Total


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

21. Finance expenses

Interest and similar expenses

2011 EUR K

2010 EUR K

960

880

2011 EUR K

2010 EUR K

313 22 335

196 24 220

22. Income from financial investments

Interest and similar income Income from other securities and loans held as financial assets Total

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4. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets include, in particular, cash and cash equivalents, trade receivables, and other receivables and derivatives. Financial liabilities are obligations to deliver cash or another financial asset to another entity. In particular, these include liabilities to banks, finance lease liabilities and trade payables.


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

As of the reporting date, the financial instruments consist of the following (measured pursuant to IAS 39):

in EUR K

Measurement category pursuant to IAS 39

Carrying amount as of Dec 31, 2011

(Amortised) cost

227

ASSETS Interests in Group companies Securities (book-entry securities) held as non-current assets Other loans Trade receivables Other receivables and assets Derivative financial instruments Cash and cash equivalents

AfS

227

AfS L&R L&R L&R Hf T L&R

871 289 70,817 6,113 17 7,215

EQUITY AND LIABILITIES Liabilities to banks Trade payables Liabilities to Group companies Derivative financial instruments Other liabilities and deferred income

FLaC FLaC FLaC Hf T FLaC

– 31,815 – 21,922 –51 –289 –7,776

–31,815 –21,922 –51

BY CATEGORY Loans and receivables Available for sale Financial liabilities at amortised cost Held for trading

L&R AfS FLaC Hf T

84,434 1,098 –61,564 –272

84,434 227 –61,564 0

289 70,817 6,113

Fair value recognised directly in equity

Fair value through profit or loss

Fair value as of Dec 31, 2011

227 *) 871

17

7,215

–289

–7,776 0 871 0 0

0 0 0 –272

871 289 70,817 6,113 17 7,215 –31,815 **) –21,922 – 51 –289 –7,776 84,434 1,098 –61,564 –272

*) In the absence of a reliable fair value, interests in Group companies are recognised at amortised cost less impairments. **) In the absence of a market price, the fair values were measured at the present value of the associated payments, giving consideration to the market parameters existing as of the reporting date.

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in EUR K

Measurement category pursuant to IAS 39

Carrying amount as of Dec 31, 2010

(Amortised) cost

224

ASSETS Interests in Group companies Securities (book-entry securities) held as non-current assets Other loans Trade receivables Other receivables and assets Derivative financial instruments Cash and cash equivalents

AfS

224

AfS L&R L&R L&R Hf T L&R

863 482 60,720 5,594 0 6,910

EQUITY AND LIABILITIES Liabilities to banks Trade payables Liabilities to Group companies Derivative financial instruments Other liabilities and deferred income

FLaC FLaC FLaC Hf T FLaC

–34,955 –17,869 –62 0 –7,626

–34,955 –17,869 –62

BY CATEGORY Loans and receivables Available for sale Financial liabilities at amortised cost Held for trading

L&R AfS FLaC Hf T

73,706 1,087 – 60,512 0

73,706 224 – 60,512 0

482 60,720 5,594

Fair value recognised directly in equity

Fair value through profit or loss

Fair value as of Dec 31, 2010

224 *) 863

0

6,910

0

–7,626 0 863 0 0

0 0 0 0

863 482 60,720 5,594 0 6,910 –34,955 **) –17,869 –62 0 –7,626 73,706 1,087 – 60,512 0

*) In the absence of a reliable fair value, interests in Group companies are recognised at amortised cost less impairments. **) In the absence of a market price, the fair values were measured at the present value of the associated payments, giving consideration to the market parameters existing as of the reporting date.


waagner-biro Annual report 2011

The cash and cash equivalents, trade receivables and other financial receivables have predominantly short remaining terms. For this reason, the carrying amounts as of the reporting date more or less correspond to the fair values. If market prices are not available, the fair values of noncurrent financial assets correspond to the present values of the associated payments, giving consideration to the market parameters prevailing at the time. Trade payables and other financial liabilities generally have short maturities. The recognised values more or less correspond to the fair values. If market prices are not available, the fair values of liabilities to banks and finance lease liabilities correspond to the present values of the associated payments, giving consideration to the market parameters prevailing at the time. The Waagner-Biro Group applies the following hierarchy to measure and recognise the fair values of financial instruments: — Level 1: Listed (unadjusted) prices on active markets for similar assets or liabilities. — Level 2: Techniques in which all input parameters exerting a material influence on the recognised fair value are either directly or indirectly observable. — Level 3: Techniques using input parameters that exert a material influence on the recognised fair value and are not based on observable market data

The company The year 2011 —­­Consolidated financial statements

Financial risks

Monitoring and managing financial risks are integral constituents of the accounting and controlling activities performed throughout the Waagner Biro Group. Continuous controlling and regular reporting take place to increase the probability of major risks being identified promptly, so that counter-measures can be taken if necessary. Nonetheless, the effectiveness of the monitoring and risk control system cannot be guaranteed. The principal risks to the business of the Waagner-Biro Group in 2011 arose in particular from the Group’s dependence on the general economic climate, the award of large orders, and its ability to generate appropriate sales revenues, with a corresponding profit margin, from a healthy order book. Unexpected cost increases and difficulties in achieving the guaranteed performance parameters of the construction works delivered by Waagner-Biro also constitute significant risks. The financial difficulties of individual eurozone countries and the persistent strain on the general economy likewise pose a risk to the Waagner-Biro Group’s financial development. A further risk arises from the possible weakening of economic activity in the developing world. Economic weakness could trigger additional delays or the suspension of existing or prospective projects. The cancellation of existing contracts could have a negative impact on the order book of the Waagner-Biro Group. Such an effect could, in turn, exert a detrimental influence on the capacity utilisation of the Group’s production facilities. A complete or partial write-down of goodwill resulting from acquisitions could also affect the Waagner-Biro Group’s results if the business targets for the relevant companies cannot be

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achieved. Apart from this danger, the risk of allowances being required for wholly or partially uncollectable trade receivables is ever-present. For a large portion of the orders, the risk of non-payment by customers is reduced by the provision by banks of security for payments and the conclusion of export insurance policies. Individual bad debts can nonetheless have a substantial negative influence on the Group’s results. Extensive insurance cover is generally obtained as well for supplies to countries in which the extent of political risk is classified as average or very high. Interest and exchange rate risks are minimised and controlled through the use of derivative financial instruments, in particular forward exchange contracts and swaps. For orders billed in a foreign currency (primarily those in the UAE dirham and Azerbaijani manat), the net currency position is hedged by concluding forward contracts. Cash flow risks are monitored by way of monthly cash flow reports. With a view to further reducing financial risk and enhancing the monitoring, control and measurement of the financial and liquidity positions, the Waagner-Biro Group is continuously improving its treasury guidelines and information systems.

Waagner-Biro avoids dependence on a single bank. In order to safeguard this independence, only a certain volume of all key financial products (cash and cash equivalents, financial liabilities, non-current financial assets, guarantees and derivatives) is procured from an individual bank. The insolvency of one or several banks would nevertheless exert a significant negative influence on the results and equity of the Waagner-Biro Group.


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

5. Other information

Other obligations and contingent liabilities

Rent and lease agreements The Waagner-Biro Group has concluded rent and operating lease agreements with several parties. The agreements

Rent agreements Lease agreements Total

Pending litigation As of December 31, 2011, no litigation of material significance to the financial statements was pending.

Liabilities

Contingent liabilities consist exclusively of obligations to third parties.

concern land, buildings, office space, plant and equipment. The minimum future payments under the existing agreements are as follows:

in 2012 EUR K

in 2012–2016 EUR K

from 2017 EUR K

2,938 313 3,251

13,203 733 13,936

3,180 0 3,180

Contingent liabilities Contingent liabilities which, for lack of certainty, are not to be recognised in the balance sheet consist of the following:

31.12.2011 EUR K

31.12.2010 EUR K

240

549

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Related party disclosures

The executive bodies of the Waagner-Biro Group are as follows: Management Board of Waagner-Biro Aktiengesellschaft, Vienna Gerhard Klambauer Rudolf Estermann Supervisory Board of Waagner-Biro Aktiengesellschaft, Vienna Herbert W. Liaunig, Chairman Hellmut Longin, First Vice-chairman Gerhard Heldmann, Second Vice-chairman Kurt Berger Wolfgang Gauster Alexander Liaunig (from April 28, 2011) Günther Mörtl (until April 28, 2011) Employee representatives: Thomas Freudensprung (from January 18, 2012) Herbert Donnersbichler Stanislaus Schmid (until January 18, 2012) Franz Toth

Regular annual remuneration of the members of the Management Board in 2011 totalled EUR 612K (2010: EUR 361K). In the year under review, the Supervisory Board received emoluments of EUR 93K (2010: EUR 93K). Only transactions of a negligible amount were concluded with non-consolidated companies. Since the Group’s transfer price policy envisages arm’s length transfer prices, no transactions take place that do not comply with customary market conditions. The expenses for legal advice provided by the Berger/Ettel practice totalled EUR 85K (2010: EUR 34K) in the year under review. Services are charged at arm’s length.


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

Earnings per share

The undiluted earnings per share are calculated by dividing the consolidated profit by the weighted average number of ordinary shares in issue during the year.

Consolidated profit in EUR K Weighted number of shares in issue Earnings per share in EUR

The diluted earnings per share are equal to the undiluted earnings per share because no financial instruments with a dilutive effect were issued.

2011

2010

6,953 2,860,000 2.43

7,922 2,860,000 2.77

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6. Events after the reporting date

No material events of special significance capable of influencing the presentation of the financial position, financial performance and cash flows in the consolidated financial statements as of December 31, 2011 occurred between

the reporting date and the release of the statements by the Management Board of Waagner-Biro Aktiengesellschaft on March 19, 2012.

Vienna, March 19, 2012 The Management Board

Rudolf Estermann

Gerhard Klambauer


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

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—Auditors’ report—

Report on the consolidated financial statements

We have audited the attached consolidated financial statements of Waagner-Biro Aktiengesellschaft, Vienna

having equity of EUR 43,702,000.00, for the financial year from January 1, 2011 until December 31, 2011. These consolidated financial statements incorporate the consolidated statement of financial position as of December 31, 2011, the consolidated income statement, the consolidated statement of cash flows, the consolidated statement of changes in equity for the financial year ended December 31, 2011, and the notes to the consolidated financial statements. Legal representatives’ responsibility for the consolidated financial statements and bookkeeping records The legal representatives of the company are responsible for the Group’s bookkeeping records and for preparing consolidated financial statements that present as true and fair a view as possible of the Group’s financial position, financial performance and cash flows in compliance with the International Financial Reporting Standards (IFRS) as applicable in the EU. This responsibility includes the design, implementation and maintenance of an internal control system, insofar as required for the preparation of the consolidated financial statements and the presentation of as true and fair a view as possible of the Group’s financial position, financial performance and cash flows, in order to avoid material misstatements arising from either intentional or unintentional errors; the selection and application of appropriate accounting and valuation methods; and the

making of estimates that appear reasonable in the given circumstances. Auditors’ responsibility and description of the type and scope of the statutory audit Our responsibility is to express an opinion concerning these consolidated financial statements on the basis of our audit. We conducted our audit in compliance with the statutory provisions and generally accepted standards for the audit of financial statements applicable in Austria. These standards require that we comply with the rules of the profession, and plan and perform the audit in a manner that allows us to state with sufficient certainty whether the consolidated financial statements are free of material misstatements. An audit involves the performance of auditing procedures in order to obtain evidence supporting the amounts and other disclosures in the consolidated financial statements. The choice of auditing procedures lies within the discretion of the auditor, exercised after a due assessment of the circumstances and giving consideration to the risk of material misstatements arising from either intentional or unintentional errors. When assessing this risk, the auditor pays due regard to the internal control system, insofar as required for the preparation of the consolidated financial statements and the presentation of as true and fair a view as possible of the Group’s financial position, financial performance and cash flows, in order to define suitable auditing procedures, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal controls. The audit also includes an appraisal of the appropriateness of both the applied accounting and valuation methods and the material estimates made by the legal


The company The year 2011 —­­Consolidated financial statements

waagner-biro Annual report 2011

representatives, as well as an appraisal of the overall view presented by the consolidated financial statements.

2011, consistent with the International Financial Reporting Standards (IFRS) as applicable in the EU.

We believe that we have obtained sufficient and suitable audit evidence, so that our audit provides an adequately reliable basis for our audit opinion.

Comments on the Group management report

Audit opinion Our audit has not given rise to any objections. Based on the knowledge gained during the audit, the consolidated financial statements of Waagner-Biro Aktiengesellschaft, Vienna, having equity of EUR 43,702,000.00, for the financial year from January 1, 2011 until December 31, 2011, in our opinion comply with the statutory provisions and present as fair a view as possible of the Group’s financial and income position as of December 31, 2011, and of the Group’s earnings position and cash flows for the financial year from January 1, 2011 until December 31,

The statutory provisions require that the Group manage­ ment report be examined to establish whether it is consistent with the consolidated financial statements, and whether or not the information it contains presents a misleading view of the Group’s position. The audit opinion must also indicate whether the Group management report is consistent with the consolidated financial statements. In our opinion, the Group management report is consistent with the consolidated financial statements.

SOT Wirtschaftsprüfung GmbH

Friedrich Spritzey m.p.     Markus Brünner m.p. Auditors

Graz, March 19, 2012

Only the version approved by us of the consolidated financial statements bearing our audit certificate can be published or disclosed. This audit certificate refers exclusively to the complete consolidated financial statements in German, together with the Group management report. For any other versions, the provisions of Section 281 Para. 2 UGB (Austrian Commercial Code) must be observed.

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—SUPERVISORY BOARD

REPORT—

Dear Shareholders,

During the 2011 financial year, the Supervisory Board regularly monitored the work of the Management Board and provided consultative support. Its activities were based on the detailed written and oral reports of the Management Board. In addition, both the Supervisory Board chairman and his deputies frequently shared information and views with the Management Board. The Supervisory Board remained informed at all times of the — business policy, — company’s plans, including the financial, investment and personnel aspects, — company’s profitability, and — overall business situation. When approval was required for management decisions or action, the members of the Supervisory Board examined the documented proposals that were submitted in advance, and took the relevant decisions in meetings. The Supervisory Board was involved in all decisions of major significance to the company. The economic situation and the company’s development prospects, as described in the reports furnished by the Management Board, were the subject of in-depth discussion.

In 2011, the Supervisory Board held five meetings. One member of the Supervisory Board was absent from one meeting.

Annual financial statements and audit

The annual financial statements were prepared in compliance with the Austrian Commercial Code (UGB), and the consolidated financial statements were prepared in compliance with the International Financial Reporting Standards (IFRS). Both sets of statements were audited by SOT Wirtschaftsprüfung GmbH, Graz, and awarded unqualified audit certificates. In its audit report, the auditor explained the auditing principles. The annual financial statements, consolidated financial statements, management report, and auditor’s reports were presented to all the members of the Supervisory Board. The Supervisory Board discussed the documentation relating to the financial statements in detail, both in the presence of the auditor and following a report delivered by same. The Supervisory Board has approved both the annual financial statements prepared by the Management Board, and the consolidated financial statements. The annual financial statements are thus adopted pursuant to


waagner-biro Annual report 2011

The company The year 2011 —­­Consolidated financial statements

Section 125 (2) Austrian Stock Corporations Act. The Supervisory Board also endorses the management report and, in particular, the assessment of the company’s further development. The endorsement also applies to the dividend policy. The Supervisory Board concurs with the proposal of the Management Board concerning the distribution of profits, which envisages a dividend of EUR 1.60 per share.

Pursuant to Section 270 (1) of the Austrian Commercial Code (UGB), the Supervisory Board proposes that SOT Wirtschaftsprüfung GmbH, Graz, be appointed to audit the financial statements (parent company’s individual financial statements and consolidated financial statements) for the 2012 financial year. The Supervisory Board thanks the company’s management and the entire workforce for their commitment during the 2011 financial year.

Vienna, March 2012

For the Supervisory Board Herbert W. Liaunig Chairman

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—waagner-biro —

Waagner-Biro Aktiengesellschaft

Waagner-Biro Bridge Systems AG

Leonard-Bernstein-Strasse 10 1220 Vienna, Austria T: +43/1/288 44 0 F: +43/1/288 44 333 E: group@waagner-biro.at www.waagner-biro.com

Leonard-Bernstein-Strasse 10 1220 Vienna, Austria T: +43/1/288 44 0 F: +43/1/288 44 333 E: bridge@waagner-biro.at www.waagner-biro.com

Waagner-Biro Austria Stage Systems AG

Leonard-Bernstein-Strasse 10 1220 Vienna, Austria T: +43/1/288 44 0 F: +43/1/288 44 7811 E: stagesystems.austria@waagner-biro.com www.waagner-biro.com

Waagner-Biro Stahlbau AG

Leonard-Bernstein-Strasse 10 1220 Vienna, Austria T: +43/1/288 44 0 F: +43/1/288 44 333 E: sgt@waagner-biro.at www.waagner-biro.com

This Annual Report has been prepared with the greatest possible care and every effort has been made to ensure the accuracy of the data that it contains. Nevertheless, rounding, typographical and printing errors cannot be excluded. The use of automatic calculating devices can result in rounding-related differences during the addition of rounded amounts and percentages. This Annual Report contains assessments and assertions relating to the future made on the basis of all the information currently available. Such future-related statements are usually introduced with terms such as “expect”, “estimate”, “plan”, “anticipate”, etc. We would draw your attention to the fact that various factors could cause actual conditions and results to deviate from the expectations outlined in this report. Statements referring to people are valid for both men and women. This Annual Report is published in German and English. In cases of doubt, the German version shall take precedence. Editorial closing date: March 28, 2012

Qualter, Hall & Co Ltd.

8, Johnson Street Barnsley S75 2BY, Great Britain T: +44/1226/205 761 F: +44/1226/244 031 E: admin@qualterhall.co.uk www.qualterhall.co.uk


imprint Waagner-Biro AG, Leonard-Bernstein-Strasse 10, 1220 Vienna, Austria. Responsible for the content: Gerhard Klambauer and Rudolf Estermann. Concept and layout: Wien Nord advertising agency. Text: asoluto public + interactive relations. Photos: Archiv Waagner-Biro AG, Adammork (Copenhagen Opera House), Gregor Ecker (portraits), David Haschny (Donaustadt bridge), Geir Olafsson (Harpa concert hall), Klienne Eco (Calaba bridge), getty images (Puente Continental, Yas Marina hotel), Olivier Ouadah (Louvre), Wilkinson Eyre Architects (Siemens Urban Sustainability Center), Andreas Balon (Biennale Venedig). Print: Hans Jentzsch & Co GmbH.


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Annual report 2011