Notes on the items in the consolidated balance sheet

Consolidated statement of changes in fixed assets as at 31 December 2023

Impairment losses totalling T€ 13,338 and reversal of impairment losses of T€ 18,500 were recognised in 2023.

Consolidated statement of changes in fixed assets as at 31 December 2022

Impairment losses totalling T€ 16,849 were recognised in 2022.

The composition of and changes in goodwill is shown under item (12) consolidated statement of changes in fixed assets.

The goodwill at the balance sheet date is composed as follows:

The comparison of the carrying amounts with the recoverable amounts of the cash-generating units determined by the annual impairment testing showed a need to recognise an impairment loss of T€ 7,454 (2022: T€ 6,700) on goodwill. This figure is shown under depreciation and amortisation. The depreciation and amortisation in the financial year related to two companies in the North + West segment, one of which is active in the refractory business, the other in the energy and systems technology sector. The recoverable amount of the impaired cash-generating units amounts to T€ 13,724 (2022: T€ 11,581).

The recoverable amount of these cash-generating units (CGUs) corresponds to their fair value less cost to sell. The necessary impairments of the cash-generating units exclusively affected goodwill; impairment was not necessary for other assets of the CGUs.

The methods of measurement are explained in the section “Accounting policies” (Impairment of non-financial assets). The method applied here is a Level 3 measurement.

Regarding the sensitivity analysis of goodwill, we refer to our notes under “Estimates - (a) Recoverability of goodwill”.

The following table presents the key assumptions used in calculating the recoverable amount for significant goodwill.

There were no intangible assets with indefinite useful lives allocated to the CGUs listed below.

The method used is a discounted cash flow model based on recognised valuation techniques, with the forecast of the cash flows calculated by the management on the basis of experience. The key assumptions used to determine the recoverable amount were future cash flows and the cost of capital. Management does not consider that any reasonably possible change in the key assumptions would cause the carrying amount of the CGU which contains the above-mentioned goodwill to exceed its recoverable amount.

The sensitivity analyses described in the section “Estimates – (a) Recoverability of goodwill” did not lead to an impairment loss of the above-mentioned significant goodwill in any of the analysed cases.

STRABAG has held 100% of PANSUEVIA GmbH & Co. KG, Jettingen-Scheppach, since 28 September 2018.

The company concluded a concession arrangement with the Federal Republic of Germany to design, build and finance a section of the A8 motorway and to maintain and operate a section of the A8 motorway between Ulm and Augsburg.

In exchange, PANSUEVIA receives the right to charge trucks an uniform toll rate per kilometre on an approx. 57 km long concession section. The toll may be adapted annually. The term of the concession arrangement is set at 30 years and ends on 30 June 2041.

The development of the concession right can be found under item (12) Consolidated statement of changes in fixed assets. The concession right is amortised over the term of 30 years on the basis of the use of the concession section. The annual income from the toll collections is recognised as revenue.

The right from the concession arrangement is offset by variable and fixed interest rate non-recourse financing in the amount of T€ 339,847 (2022: T€ 353,412) classified either as a current or non-current liability depending on the term to maturity. The resulting interest expense is recognised under other operating expense. The interest risk based on variable interest was hedged through the conclusion of interest rate swap agreements that satisfy the requirements for presentation as a cash flow hedge. The changes in the value of the interest rate swap are therefore recognised in the other comprehensive income.

The composition of and changes in other intangible assets are shown under item (12) Consolidated statement of changes in fixed assets.

No borrowing costs were capitalised for other intangible assets in the reporting period.

A total of T€ 17,135 (2022: T€ 15,769) in research and development costs incurred in the 2023 financial year were recorded as expenses.

The composition of and changes in property, plant and equipment are shown under item (12) Consolidated statement of changes in fixed assets.

No borrowing costs were capitalised for property, plant and equipment in the reporting period.

Leases

Lessee

The development of right-of-use assets from leases is shown under item (12) Consolidated statement of changes in fixed assets.

The cash outflows from leases in the 2023 financial year break down as follows:

Additionally, expenses for short-term equipment rentals that do not meet the leasing criteria in the amount of T€ 203,805 (2022: T€ 207,529) were incurred in the financial year.

To a minor extent, the STRABAG SE Group also rents office space to third parties and thus acts as a lessor. This particularly involves the TECH GATE VIENNA in Vienna. The annual rental income amounts to T€ 2,445 (2022: T€ 2,363) and is shown in other operating income.

The carrying amount of this building as at 31 December 2023 is T€ 62,088 (2022: T€ 64,230) and is recorded under property, plant and equipment (properties and buildings). Rental income in the next year and the following five years will remain roughly constant. All leases are classified as operating leases.

Restrictions on property, plant and equipment/purchase obligations

As at the balance sheet date there was T€ 85,769 (2022: T€ 106,684) in contractual commitments for acquisition of property, plant and equipment which were not considered in the consolidated financial statements.

Restrictions exist for non-current assets in the amount of T€ 0 (2022: T€ 0).

Investment property

The development of investment property is shown under item (12) Consolidated statement of changes in fixed assets.

In the 2023 financial year, the decision was made to implement a real estate hold investment strategy. This will close a gap in the value chain by holding properties while covering the full life cycle of buildings. The plan is to build up a property portfolio that retains or increases in value in an attractive market environment.

A project previously reported under inventories was therefore reclassified to investment property at the end of 2023. Initial recognition was carried at cost.

The fair value of investment property as at 31 December 2023 amounts to T€ 45,467 (2022: T€ 2,833). The fair value was determined using internal valuation reports or by employing the fair value of development land at market prices.

The internal valuations are considered Level 3 measurements as they are not based on observable market data.

The rental income from investment property in the 2023 financial year amounted to T€ 10,700 (2022: T€ 6,573) and direct operating expenses totalled T€ 8,491 (2022: T€ 8,267). Due to implementation of the real estate hold investment strategy, rental income will increase in the next year and in the following five years; rental income from existing projects will remain more or less constant.

In the financial year, as in the year before, no direct expenses were incurred from unlet investment property. Additionally, gains from asset disposals and payments from contract extensions in the amount of T€ 0 (2022: T€ 991) and losses from asset disposals in the amount of T€ 0 (2022: T€ 9) were achieved.

A reversal of impairment losses in the amount of T€ 18,500 was made in the 2023 financial year (2022: T€ 0).

As at 31 December 2023, provisions for equity-accounted investments amounting to T€ 9,044 (2022: T€ 11,244) are reported under other current provisions. Changes in provisions recognised in profit or loss are reported under income or expenses from equity-accounted investments.

Notes on associates

Holcim Cement CE Holding GmbH, Vienna, is a significant associate. The group’s share of the capital and voting rights amounts to 30%. The company is accounted for using the equity method. We also refer to item (38) Notes on related parties.

The following financial information concerns the consolidated financial statements prepared in accordance with IFRS.

The financial information presented here can be transferred to the equity carrying amount of the Holcim Cement CE Holding GmbH in the consolidated financial statements as follows:

Another significant associate is CMBlu Energy AG, Alzenau. The STRABAG SE Group acquired 14.71% of the company in the 2023 financial year. The shares are classified as those of an associate because STRABAG has the right to appoint a member to the company’s Supervisory Board.

The following financial information concerns the consolidated financial statements prepared in accordance with IFRS.

The financial information presented here can be transferred to the equity carrying amount of CMBlu Energy AG in the consolidated financial statements as follows:

The following table arranges in aggregate form the carrying amount and the group’s share of the profit and other comprehensive income from associates that would be immaterial by themselves:

Notes on joint ventures

The following table arranges in aggregate form the carrying amount and the group’s share of the profit and other comprehensive income from joint ventures that would be immaterial by themselves:

Notes on accumulated losses from equity-accounted investments

Proportionate losses from equity-accounted investments in the amount of T€ 4,845 (2022: T€ 7,801) were not recognised in profit or loss, as the carrying amounts of these investments already are T€ 0.

Notes on consortia

The group classifies construction consortia as joint ventures and records their earnings under share of profit or loss of equity-accounted investments. The following table shows the group’s ten most important consortia with regard to the output volume in the 2023 financial year.

The financial information in the 2023 financial year on these consortia is presented 100% and before consolidation and valuation approaches deviating from the consortia balance sheet if applicable.

In the 2023 financial year, the share of profit or loss of equity-accounted investments recorded for the above-mentioned consortia included T€ 41,862 in profits from consortia and T€ 37,623 in losses from consortia including impending losses.

The financial information in the 2022 financial year on these consortia is presented 100% and before consolidation and valuation approaches deviating from the consortia balance sheet if applicable.

In the 2022 financial year, the share of profit or loss of equity-accounted investments recorded for the above-mentioned consortia included T€ 27,700 in profits from consortia and T€ 55,591 in losses from consortia including impending losses.

The business transactions with the consortia in the financial year can be presented as follows:

The other investments in companies include investments in subsidiaries, associated companies, joint ventures and other investments which, being immaterial, are reported as not consolidated and are not included at equity in the consolidated financial statements. Detailed information on the group’s investments (shares of more than 20%) can be found in the list of investments, which is included in the annual financial report.

The development of the other investments in the financial year was as follows:

The development of the other investments in the previous financial year was as follows:

Tax accruals and deferrals recognised in the balance sheet on temporary differences between the amounts stated in the IFRS financial statements and the respective tax amounts as well as on losses carried forward developed as follows:

Deferred tax on losses carried forward was capitalised as these can probably be offset with future taxable profits. The planning period is limited to five years.

For the STRABAG SE tax group, Austria, deferred tax was capitalised despite tax losses in the previous years as well as in the reporting period. The recognised deferred tax for losses carried forward amounted to T€ 52,469 (2022: T€ 62,691) for the STRABAG SE tax group. This contains deferred tax assets on open amortisation over seven years in the amount of T€ 52,469 (2022: T€ 62,691). The Austrian Corporate Income Tax Act (Körperschaftsteuergesetz) requires a tax-effective impairment of investments to be claimed over a period of seven years.

The losses of the ongoing year and of the past were strongly influenced by negative special items. To avoid such negative projects, the Group has continuously expanded and improved its opportunity and risk management and implemented organisational and strategic improvements. The tax planning for the STRABAG SE tax group for the next five years documents the usability of the tax loss carryforwards.

As at 31 December 2023, there were differences of T€ 1,086,560 (2022: T€ 1,135,051) between the carrying amount and the equity of subsidiaries recognised in the Group. No deferred taxes were recognised as STRABAG determines the disposal and dividend policy of the subsidiaries. STRABAG can therefore control the timing of the reversal of the temporary differences. The Management Board assumes that there will be no reversals in the foreseeable future.

In January 2022, a gradual reduction of the corporate income tax rate from 25% to 23% was decided in Austria. The tax rate was lowered to 24% in 2023 and will be lowered to 23% in 2024. An adjustment of the existing deferred taxes to the tax rate of the reversal was already made in 2022. The resulting tax expense in the amount of T€ 4,213 was recognised in profit or loss. The existing deferred taxes in Austria as at 31 December 2023 are recognised at 23%.

Based on the rules developed by the OECD for the introduction of a global minimum tax, the EU on 22 December 2022 adopted a directive on a global minimum level of taxation. The individual member states had until 31 December 2023 to transpose the directive into national legislation. As a result, the OECD’s so-called Pillar II rules become applicable for accounting periods starting with the 2024 financial year. The basic idea of the rather complex rules is that in jurisdictions in which the effective tax rate determined in accordance with Pillar II is below 15%, additional taxes must be levied either in that jurisdiction itself or at the level of the highest parent company.

With Hungary, Bulgaria, Montenegro, Bosnia and the United Arab Emirates, the STRABAG SE Group operates in countries with a nominal tax rate below 15%, meaning that additional tax expense is to be expected for the 2024 financial year as a result of the Pillar II rules. As the majority of the operating business is conducted in countries with higher tax rates (in particular Germany and Austria), however, the additional tax expense will not be of any material significance. In accordance with the provisions of IAS 12, the exemption from recognising deferred taxes due to Pillar II is applied.

With regard to deferred taxes, these can only be taken into account for Pillar II purposes provided that the deferred tax assets and liabilities in the financial accounts of all business entities in a tax jurisdiction for the transition year have been demonstrably recognised or disclosed in financial statements. 

The following table therefore shows all unrecognised deferred taxes on losses carried forward and temporary differences. In the absence of a reversal of deferred taxes in the next five years, an impairment was made with regard to these losses carried forward and temporary differences in the consolidated financial statements. Determination of the impairment took into account the fact that losses carried forward exist in project companies with only limited business activities in subsequent years and that losses carried forward are recognised multiple times in the investment chain due to tax-effective investment write-downs and that their use would lead to tax-effective write-ups.

Of the non-capitalised losses carried forward, T€ 3,004,650 (2022: T€ 3,144,913) have unrestricted use. Non-capitalised losses carried forward in the amount of T€ 260,625 (2022: T€ 117,980) can theoretically be used for up to 20 years (2022: 20 years).

The unrecognised deferred taxes are as follows:

For qualifying assets, interest on borrowings was recognised in the amount of T€ 694 (2022: T€ 121).

STRABAG has a 100% interest in the Hungarian M5 motorway concession company, AKA Alföld Koncessziós Autópálya Zrt., Budapest (AKA).

In the concession arrangement with the Hungarian state, AKA committed to develop, plan and finance and to build and operate the M5 motorway. The motorway itself is the property of the state; all vehicles and equipment necessary for motorway operation are to be transferred to the state free of charge following the end of the concession period.

In exchange, AKA will regularly receive an availability fee, independent of transit volume, from the Hungarian state for making the motorway available to the public. AKA bears the operator’s risk of motorway closure and non-compliance of contractually agreed roadway criteria.

The route totals 156.5 km and was built in three phases. The concession period runs until 2031. A one-time extension for up to 17.5 years is possible.

All services provided under this concession arrangement are accounted for under the separate balance sheet item receivables from concession arrangements. The receivables are carried at the present value of the payment to be made by the state. The annual accumulation amount is recognised in revenue.

The contract also includes interest adjustment payments to be made by the Hungarian state. As a result, the state bears the interest risk from the financing of AKA. These interest adjustment payments represent a separate hedging transaction. Presentation is made as a cash flow hedge; as a result, changes in the fair value of the interest rate swap are recognised in other comprehensive income.

The market value of the interest rate swap in the amount of T€ 174 (2022: T€ 377) is recognised under short-term receivables (2022: long-term receivables) from concession arrangements.

Recognisable receivables from concession arrangements are offset by non-recourse financing in the amount of T€ 32,933 (2022: T€ 98,489), which are included in current liabilities according to their term to maturity. The resulting interest expense is recognised in other operating expense.

The contract assets comprise the right to payment from construction contracts with customers as well as from project developments for the work performed by the reporting date. If the advances received exceed the payment rights, presentation is made under contract liabilities.

The contractual balances are comprised as follows:

In the 2023 financial year, revenue was recognised in the amount of T€ 1,101,805 (2022: T€ 1,053,684) that had been included under contract liabilities at the beginning of the financial year.

As at 31 December 2023, there are unsatisfied performance obligations from construction contracts with customers and project developments (order backlog) in the amount of T€ 18,938,369 (2022: T€ 19,814,930). The recognition of revenue from these performance obligations is expected with T€ 9,968,076 (2022: T€ 11,080,832) in the following financial year and with T€ 8,970,293 (2022: T€ 8,734,098) in the next four financial years.

In the reporting period, no costs of contract initiation or contract satisfaction were capitalised as separate assets.

As is customary in the industry, the customer has the contractual right to retain part of the total amount of the invoice. As a rule, however, these retentions are redeemed by collateral (bank or group guarantees).

With regard to the contract assets and liabilities, we refer to our notes in the section “Estimates - (c) Recognition of revenue from construction contracts with customers and project developments”.

Trade receivables are comprised as follows:

Other financial assets are comprised as follows:

Details as to the development of the equity of STRABAG SE are represented in the statement of changes in equity.

The fully paid-in share capital as at 31 December 2023 amounts to € 102,600,000.00 and is divided into 102,599,997 no-par bearer shares and three registered shares.

Mandatory offer by core shareholders

On 18 August 2022 Haselsteiner Familien-Privatstiftung, RAIFFEISEN-HOLDING NIEDERÖSTERREICH-WIEN registrierte Genossenschaft mit beschränkter Haftung and UNIQA Österreich Versicherungen AG informed STRABAG SE of their intention, as bidders, to make a mandatory (anticipatory) public offer pursuant to Section 22 et seq of the Austrian Takeover Act (ÜbG) for the acquisition of all outstanding no-par value bearer shares of STRABAG SE (ISIN AT0000STR1) not held by the bidders or by legal entities acting in concert with the bidders, with an offer price of € 38.94 per STRABAG share.

The offer was also intended to remove the restriction on voting rights of the bidders (and the legal entities acting jointly with them) that existed at the time to a total of 26%, which arose due to a passive acquisition of control because of the European sanction restrictions on MKAO “Rasperia Trading Limited”.

STRABAG SE agreed with the bidders of the mandatory offer to acquire, as own shares, up to 10,260,000 of the shares tendered into the offer, representing up to 10% of the share capital, at the same price as the offer price (€ 38.94). This required a current financial liability in the amount of the maximum theoretical purchase obligation of T€ 399,524 to be deducted directly from retained earnings effective 31 December 2022.

With the share purchase agreement dated 9 February 2023, STRABAG SE acquired 2,779,006 own shares (2.7% of the share capital) in the amount of T€ 108,214 on the basis of this arrangement. The theoretical purchase obligation of T€ 291,310 deducted directly from equity effective 31 December 2022 was therefore reversed with no effect on profit or loss.

Various capital measures were approved at the Annual General Meeting of STRABAG SE held on 16 June 2023. These resolutions are summarised as follows:

a) Resolution concerning the capital adjustment from company funds

The share capital of the Company of currently € 102,600,000.00 shall be increased by € 1,900,000,000.00 to € 2,002,600,000.00 from company funds through conversion of the corresponding portion of the committed capital reserves reported in the annual financial statements for the year ending 31 December 2022 pursuant to Section 1 et seq. KapBG with retroactive effect to the beginning of the current financial year without the issue of new shares.

b) Resolution concerning the ordinary reduction of the share capital of the Company for the purpose of allocation to non-committed reserves

The share capital of the Company shall be reduced in accordance with the provisions on ordinary capital reductions pursuant to Section 175 et seq. AktG from the amount of the share capital after the capital adjustment of € 2,002,600,000.00 by € 996,620,004.30 to € 1,005,979,995.70 for the purpose of allocation to non-committed reserves of the Company, whereby the reduction of the share capital of the Company shall be effected by reducing the pro-rata amount of the share capital of the Company attributable to the individual no-par share without reverse stock split (“capital reduction for allocation to non-committed reserves”).

c) Resolution concerning the ordinary reduction of the share capital of the Company for the purpose of distribution to the shareholders

The share capital of the Company shall be reduced in accordance with the provisions on ordinary capital reductions pursuant to Section 175 et seq. AktG from the amount of the share capital after the ordinary capital reduction for allocation to non-committed reserves in the amount of € 1,005,979,995.70 by € 903,379,995.70 to € 102,600,000.00 for the purpose of repaying the reduction amount to the shareholders of the Company (“capital reduction for the purpose of distribution”) according to the following specifications and under the following conditions:

(i) The reduction of the share capital of the Company shall be effected by reducing the pro-rata amount of the share capital attributable to each no-par share to the minimum amount of € 1.00 pursuant to Section 8 Para 3 AktG without reverse stock split.

(ii) The distribution entitlement resulting from the capital reduction in accordance with the conditions set out in this resolution in the amount of € 9.05 per no-par share entitled to distribution (“distribution entitlement”) shall be paid in cash or, at the option of each shareholder, in new shares of the Company issued in connection with the non-cash capital increase to be resolved under item d).

(iii) For the distribution entitlement and its payment, the following conditions apply:

a. The condition precedent of the fulfilment of the legal payment requirements pursuant to Section 178 Para 2 AktG.

b. The condition precedent that shareholders of the Company, in respect of shares entitled to distribution that together represent at least approximately 57.78% of the share capital of the Company, have elected the payment of the distribution from the capital reduction in new shares of the Company and the contribution in kind determined in the resolution concerning the ordinary capital increase (item d)) is raised through waiver of the distribution entitlements for these shares within the determined implementation period.

c. The resolutory condition if the implementation of the non-cash increase of the share capital (item d)) is not entered in the commercial register pursuant to Section 156 AktG by 31 March 2024 at the latest.

If one of the conditions precedent (a. or b.) does not occur, no distribution entitlement arises and no payment can be made and, accordingly, the distribution entitlement cannot be used to raise the non-cash contribution of the ordinary capital increase (item d)). In these cases, the alternative purpose of the ordinary capital reduction shall be to transfer the amount of the capital reduction to non-committed reserves of the Company.

If the resolutory condition (c.) occurs, the distribution entitlement from the capital reduction shall lapse accordingly and no payment can be made and the alternative purpose of the ordinary capital reduction shall be to transfer the amount of the capital reduction to non-committed reserves of the Company. This purpose shall then also apply to that amount of distribution entitlements already waived to raise the non-cash contribution of the ordinary capital increase (item d)).

d) Resolution concerning the ordinary non-cash increase of the share capital of the Company

The share capital of the Company shall be increased by up to € 24,955,248.00 through the issue of up to 24,955,248 new no-par bearer shares (ordinary shares), each with a pro-rata amount of the share capital of € 1.00 (hereinafter “new shares”), against non-cash contributions through the waiver of distribution entitlements from the ordinary capital reduction for the purpose of distribution (item c)) according to the following specifications and under the following conditions:

(i) The new shares shall be issued at an issue price of € 1.00 per share (minimum issue price pursuant to Section 8 Para 3 AktG), thus at a total issue price of up to € 24,955,248.00.

(ii) The new shares shall participate in the profits from the beginning of the financial year, for which, at the time of the issue of the new shares, no resolution has yet been passed on the appropriation of the balance sheet profit.

(iii) The shareholders shall be granted the legal subscription rights. The subscription ratio shall be set at 1:4 (1 new share for 4 existing shares) (“subscription ratio”) and the subscription price per new share at € 36.20 (“subscription price”). The contribution in kind to be made for the subscription of each new share will therefore comprise 4 distribution entitlements in the nominal amount of € 9.05 per share entitled to distribution. The subscription price and the subscription ratio are based on an business value of the Company with a valuation date of 16 June 2023 (date of the Annual General Meeting of the Company), from which a pro-rata business value per share of the Company of € 36.22 is derived as of 16 June 2023 (“reference price”), taking into account the distribution entitlement from the ordinary capital reduction for the purpose of the distribution of € 9.05. The subscription ratio is calculated as the ratio of the result of dividing the reference price by the nominal amount of a distribution entitlement (€ 9.05) rounded down to two decimal places after the decimal point. The subscription price shall correspond to the subscription ratio multiplied by the nominal amount of a distribution entitlement (€ 9.05).

The minority shareholder MKAO “Rasperia Trading Limited” is controlled by Russian businessman Oleg Deripaska, who was added to the sanctions lists in the following jurisdictions: Canada (on 6 March 2022), United Kingdom (on 10 March 2022), Australia (on 18 March 2022), European Union (on 8 April 2022), Switzerland (on 13 April 2022) and Poland (on 26 April 2022). Due to the EU sanctions against Oleg Deripaska, the shares of MKAO “Rasperia Trading Limited” in STRABAG SE and all rights associated with these shares, including voting rights and dividend entitlements, are frozen. Consequently, MKAO “Rasperia Trading Limited” is not entitled to a rights offer for new shares in respect of its 28,500,001 ordinary shares.

The aim of the capital measures was to reduce the stake of minority shareholder MKAO “Rasperia Trading Limited” from 27.8% to below 25%.

The full text of the resolutions is available on the website of STRABAG SE at www.strabag.com.

The subscription period for choosing the share option ended on 29 September 2023. As contractually agreed in advance, the core shareholders – the Haselsteiner family, UNIQA and Raiffeisen – chose to exercise the share-based option. Additionally, 26.4% of STRABAG SE’s free float shareholders also opted to receive new shares, thereby supporting the goal of the ongoing capital measures to reduce the shareholding interest held by MKAO “Rasperia Trading Limited”.

As a result, shareholders representing 87.6% of the eligible shares chose the share-based option. This corresponds to 60.9% of the company’s share capital and therefore met the acceptance quota as one of the conditions precedent for the distribution.

15,621,982 new shares were therefore issued as part of the ordinary non-cash capital increase in March 2024, increasing the share capital by 15.2% from € 102,600,000.00 to € 118,221,982.00. The share capital increase was entered into the commercial register on 21 March 2024. The stake held by minority shareholder MKAO “Rasperia Trading Limited” was thus reduced from 27.8% to 24.1%.

Consequently, only the capital reduction amount of T€ 337,864 attributable to the distribution option is represented as a decrease in equity and other current financial liabilities in the consolidated financial statements as at 31 December 2023. The first payment of the dividend from the capital decrease to the free float will be made on 15 April 2024; the amount attributable to the minority shareholder MKAO “Rasperia Trading Limited” has been frozen due to the sanctions provisions.

MKAO “Rasperia Trading Limited” contested the resolutions passed by the Annual General Meeting, although the action was dismissed by the Regional Court of Klagenfurt. The ruling is not yet final, however.

Other Notes

Long-term economic success, within the context of responsibility to our shareholders, customers, employees, suppliers, sub-contractors and the company itself, is the primary entrepreneurial objective of the STRABAG SE Group. Working to pursue these goals, recognising opportunities and risks before and as they arise, and responsibly taking these into consideration safeguards the continuity of the Group and protects the interests of the shareholders.

To guarantee the continuity of the company, the management and responsible employees assure that there is a balanced relationship between opportunities and risks during the selection of projects and assess the individual risks against the background of the overall company risk.

The group equity ratio target was defined at between 20% and 25% during the IPO of STRABAG SE in October 2007. The equity ratio is calculated from the carrying amount of the equity as at 31 December divided by the balance sheet total as at 31 December. The equity contains all parts of the equity according to the balance sheet: share capital, capital reserves, retained earnings and other reserves and non-controlling interests.

The group equity ratio as at 31 December 2023 amounted to 32.2% (2022: 31.7%). With this equity base, the STRABAG SE Group will be able to participate increasingly in tenders for Public-Private Partnership (PPP) projects. This means that the necessary funds for a participation in equity capital are available and that the related change in the balance sheet total will be manageable.

If the Group is awarded the tender for large-scale projects, or if a strategically suitable acquisition is made, the equity ratio could briefly fall below the set minimum. In this case, the company reserves the right to adjust the dividend payments to the shareholders or to issue new shares.

The actuarial assumptions as at 31 December 2023 used to calculate provisions for severance payments and pensions are represented as follows:

Sensitivity analysis

All other parameters remaining equal, a change in the discount rate by +/- 0.5 percentage points, a change in the salary increase by + 1.0 percentage points as well as a change in the pension increase by + 1.0 percentage points would have the following impact on the amount of the provisions for severance payments and pension obligations as at 31 December 2023:

Provisions for severance payments show the following development:

The development of the provisions for pensions is shown below:

The plan assets for pension provisions developed as follows in the reporting period:

The plan assets consist of the following risk groups:

The plan assets involve almost exclusively the assets of the pension foundation of STRABAG AG, Switzerland. Any investments in this regard are subject to the applicable laws and regulations governing the supervision of foundations. Capital investments are to be chosen by trained experts in such a way as to guarantee the investment goal of revenue-generating and risk-minimising asset management while taking into consideration security, risk distribution, returns and the liquidity to fulfil the pension purposes. The investment strategy can be adjusted on an annual basis in order to reflect market changes. Currently the split is 50% in nominal value assets and 50% in tangible assets.

In the 2023 financial year, STRABAG AG, Switzerland, had a surplus of plan assets over the pension liability in the amount of T€ 21,527 (2022: T€ 0). This surplus is reported under other non-current financial assets.

The expected contributions to pension foundations in the following year will amount to T€ 3,767 (2022: T€ 3,218).

Asset-liability matching strategy

Pension payments in Switzerland are provided by pension foundations with funds dedicated to this purpose, while payments in Austria and in Germany are covered by readily available cash and cash equivalents as well as securities.

The actual income from plan assets amounted to T€ 9,471 in the 2023 financial year (2022: expenses of T€ 11,644).

The following amounts for pension and severance provisions were recognised in the income statement:

The development of the net defined benefit obligation for pension and severance provisions was as follows:

The maturity profile of the benefit payments from the net defined benefit liability as at 31 December 2023 was as follows:

The maturity profile of the benefit payments from the net defined benefit liability as at 31 December 2022 was as follows:

The durations (weighted average term) are shown in the following table.

Other provisions

The construction-related provisions include warranty obligations, costs of the contract execution and subsequent costs of invoiced contracts, as well as impending losses from projects pending which are not accounted for elsewhere. The personnel-related provisions essentially include bonus obligations and premiums, service anniversary bonuses, contributions to occupational funds as well as costs of the old age part-time scheme and expenses for personnel downsizing measures. Other provisions especially include provisions for damages and litigations.

Physical securities (mainly mortgages) were established to cover liabilities to banks in the amount of T€ 18,042 (2022: T€ 7,087).

The bank borrowings involve non-recourse liabilities in the amount of T€ 509,668 (thereof non-current: T€ 325,628). This value amounted to T€ 607,974 (thereof non-current: T€ 372,859) in the previous year.

The lease liabilities are presented less the rental deposits of T€ 23,970 (2022: T€ 27,861).

The other current financial liabilities include the capital reduction amount of T€ 337,864 attributable to the distribution option. As at 31 December 2022, the liability from the existing purchase obligation for treasury shares was included in the amount of T€ 399,524. See also the comments under item (26) Equity.

The dividend entitlements of MKAO “Rasperia Trading Limited” in the amount of T€ 82,650 (2022: T€ 41,325), which are frozen due to the sanctions imposed on Oleg Deripaska, are also recognised in other current financial liabilities.

On 29 June 2020, the tribunal in STRABAG SE v Libya (ICSID Case No. ARB (AF)/15/1) issued its award holding Libya in breach of the agreement between the Republic of Austria and the State of Libya for the promotion and protection of investments. The tribunal consequently awarded STRABAG SE damages of € 75 million plus interest, and ordered Libya to reimburse STRABAG 75% of its legal costs and expenses, and to bear 75% of the costs of the arbitration.

STRABAG commenced its activities in Libya – the construction of infrastructure – in 2006. The operations were interrupted in 2011 by the conflict in the country. In the arbitration proceedings, STRABAG claimed compensation for losses and damages suffered during the conflict and for work it had already performed on the various construction projects.

A motion filed by Libya with the competent courts in the United States to set aside the arbitration award was dismissed by final decision after passing through several instances.

It remains uncertain whether Libya will honour the award. STRABAG is examining all possibilities of enforcing the arbitration award and has initiated recognition and enforcement proceedings. These proceedings are moving along very slowly and have not yet led to any additional findings. Because of the existing uncertainties no receivable was recognised.

The company has accepted the following guarantees:

In the construction industry, it is customary and necessary to provide various types of guarantees to secure the contractual obligations. These guarantees are usually issued by banks or credit insurers and most commonly comprise bid, contract performance, prepayment and warranty guarantees. In the event these guarantees are called upon, the relevant banks have a contractual right of recourse against the Group. The risk that such guarantees are utilised and that a right of recourse arises materialises only if the primary contractual obligations are not properly performed.

Obligations and possible risks from such guarantees are recognised in the balance sheet as liabilities or provisions.

Not included in the balance sheet or the contingent liabilities as at 31 December 2023 are performance bonds in the amount of € 2.8 billion (2022: € 3.0 billion) of which an outflow of resources is unlikely.

Contract fulfilment guarantees issued by the Group for nonconsolidated subsidiaries or investees are to be classified as insurance contracts in accordance with IFRS 17. No fee is charged for these guarantees. As at 31 December 2023, guarantees amounting to T€ 9,945 (2022: T€ 474) had been issued for which an outflow of resources is unlikely.

As is customary in the industry, STRABAG SE shares liability with the other partners of consortia in which companies of the STRABAG SE Group hold a share interest.

The representation of the cash flow statement was made according to the indirect method and separated into the cash flows classified by operating, investing and financing activities. The cash and cash equivalents include exclusively cash on hand, bank deposits and short-term securities. Any effects from changes in the consolidated group were eliminated and represented in the cash flow from investing activities.

The cash and cash equivalents are composed as follows: