The consolidated group

The consolidated financial statements as at 31 December 2023 include STRABAG SE as well as all major domestic and foreign subsidiaries over which STRABAG SE either directly or indirectly has control. Associates and joint ventures are reported in the balance sheet using the equity method (equity-accounted investments).

Group companies which are of minor importance for the purpose of giving a true and fair view of the financial position, financial performance and cash flows of the Group are not consolidated. The decision to include an entity in the consolidated group is based on quantitative and qualitative considerations.

Subsidiaries and equity-accounted investments included in the 2023 consolidated financial statements are given in the list of investments.

The financial year for all consolidated and associated companies, with the exception of the following companies that are included in the consolidated group on the basis of an interim report effective 31 December 2023, is identical with the calendar year.

The number of consolidated companies changed in the 2022 and 2023 financial years as follows:

Additions to the consolidated group

The following companies formed part of the consolidated group for the first time in the reporting period:

Companies included for the first time were consolidated at the date of acquisition or the next reporting date, provided this had no significant difference to an inclusion at the date of acquisition.

With the purchase agreement from 21 December 2022, STRABAG acquired 100% of northern German cleaning services provider Bockholdt GmbH & Co. KG, Lübeck. After obtaining the necessary official approvals, the closing took place on 28 February 2023. The acquisition of the Bockholdt Group is aimed at reinforcing STRABAG’s services in infrastructural facility management in northern Germany. In addition to maintenance cleaning, the portfolio of the acquired companies also includes innovative services in the field of industrial cleaning, robot-assisted cleaning of ventilation systems, and the environmentally friendly cleaning of solar and wind power plants, provided by the company’s own industrial climbers. Professional pest control as well as operating room and hospital cleaning are also among the special features of the service portfolio. The goodwill results primarily from the market expansion in northern Germany.

Additions to assets and liabilities from the first-time consolidation of Bockholdt GmbH & Co. KG are comprised as follows:

STRABAG SE acquired the following medium-sized companies in Austria during the 2023 financial year.

The closing of the acquisition of 100% of the shares in Slabihoud GmbH, Hans Lohr GmbH as well as Palaoro Elektrotechnik GmbH, all based in Vienna, took place in January 2023. With this acquisition, STRABAG is expanding its M&E (mechanical and electrical) competencies in Austria to include further business areas. Technical building equipment (including heating and cooling systems as well as electrical installations) is an important factor for ensuring sustainable building operations.

The acquisition of 100% of the shares in Wieser Verkehrssicherheit GmbH, Wals-Siezenheim, and the acquisition of 100% of the shares in SITEC Verkehrstechnik GmbH, Liebenfels, were closed in August 2023. Both companies are active in the field of traffic safety technology.

STRABAG acquired 100% of Obermayr Holzkonstruktionen GmbH, Schwanenstadt, by way of an assignment agreement dated 13 July 2023. The acquisition strengthens the company’s expertise in timber construction. The closing took place in September 2023.

The goodwill arising from the acquisitions is attributable to the expansion of expertise and business areas.

Additions to assets and liabilities from the first-time consolidations in Austria are comprised as follows:

Under a purchase and assignment agreement from March 2023, the STRABAG SE Group acquired 100% of the shares in Adolf List Bauunternehmung GmbH & Co. KG, Reutlingen. Antitrust approval was granted in June 2023. The company is active in the fields of road construction and ground engineering as well as in building construction and civil engineering for public and private customers and has around 110 employees.

Additions to assets and liabilities from the first-time consolidation of Adolf List Bauunternehmung GmbH & Co. KG are comprised as follows:

The other first-time consolidations had only an insignificant impact on assets and liabilities.

All companies which were consolidated for the first time in 2023 contributed T€ 122,409 (2022: T€ 17,469) to revenue and with a profit of T€ 3,548 (2022: profit T€ 4,121) to net income after minorities.

Assuming a theoretical first-time consolidation on 1 January 2023 for all new acquisitions, they would contribute T€ 173,136 (2022: T€ 17,469) to consolidated revenue and a profit of T€ 4,881 (2022: T€ 4,121) to net income.

Disposals from the consolidated group

As at 31 December 2023, the following companies were no longer included in the consolidated group:

The disposals of assets and liabilities from deconsolidations are composed as follows:

Resulting profit in the amount of T€ 7,600 (2022: T€ 1,111) and losses in the amount of T€ 7,226 (2022: T€ 334) are recognised in profit or loss under other operating income or other operating expense. The deconsolidation earnings of companies whose functional currency differs from the euro also includes the recycled earnings of the currency translation differences recognised directly in equity up to the date of deconsolidation.

One of the STRABAG SE Group’s business fields is real estate project development. When project developments are sold as share deals, the disposal profit is not presented as a deconsolidation gain but - from an economic point of view - is recognised as revenues from the project development. No project companies were sold in 2023. In the previous year, revenues from project development in the amount of T€ 52,253 and corresponding expenses in the amount of T€ 40,673 were recognised gross.

There were no significant restrictions on the use of assets or risks related to structured entities at the end of the reporting period.

Winding up Russia

Starting with the 2022 financial year, only those orders in Russia that had been in place before the start of the war in Ukraine continued to be fulfilled. New orders are no longer accepted.

Due to the decision to withdraw from Russia, existing sites and buildings in the amount of T€ 8,987 as well as the real estate project in Moscow recognised in inventories in the amount of T€ 20,529 were written off in full in the 2022 financial year as well. A provision in the amount of T€ 9,131 was made for the cost of severance payments to existing staff.

Existing orders were completed or sold in the 2023 financial year. This did not result in any significant impact on earnings. As at 31 December 2023, only a small order backlog of T€ 3,547 remained in Russia.

A presentation of the activities in Russia as discontinued operations as defined by IFRS 5 is not possible as these activities were not discontinued immediately. The impact on earnings from the discontinuation is therefore recognised in the relevant items of the income statement.

Non-controlling interests

As at 31 December 2023, the amount of the non-controlling interests stood at T€ 18,443 (2022: T€ 22,392) in the STRABAG SE Group and is thus immaterial. The non-controlling interests comprise numerous subsidiaries and mainly affect the project development companies.

Besides the above-mentioned investments, the ownership interests in subsidiaries in the financial year changed only insignificantly or had insignificant impact. The changes are represented in the list of investments, which is included in the annual financial report.

Currency translation

The items contained in the financial statements of each Group entity are measured on the basis of the currency corresponding to the currency of the primary economic environment in which the entity operates (functional currency).

The functional currency of STRABAG’s subsidiaries is the respective local currency, with the exception of the following companies, whose functional currency is the euro:

• AKA Zrt., Budapest
• AMFI HOLDING Kft., Budapest
• BHK KRAKÓW JOINT VENTURE Sp. z o.o., Warsaw
• EXP HOLDING Kft., Budapest

The consolidated financial statements are prepared in euro, STRABAG’s reporting currency.

Foreign currency transactions are translated into the functional currency at the foreign exchange rate on the day of the trans-action. On the reporting date, monetary items are translated at the closing rate, while non-monetary items are translated at the rate on the day of the transaction. Exchange differences are recognised in profit or loss.

Assets and liabilities of Group entities whose functional currency is not the euro are translated from the respective local currency into euro at the average exchange rate on the reporting date. As well as the corresponding profit for the period, the income statements of foreign Group entities whose functional currency is not the euro are translated at the average exchange rate for the reporting period. The differences resulting from the use of both rates are reported outside profit or loss.

Monetary items in form of receivables or payables which settlement is neither planned nor likely to occur in the foreseeable future are, in substance, a part of an entity’s net investment in a foreign operation. Currency translation differences arising on such monetary items are initially recognised in other comprehensive income and reclassified from equity to profit and loss on disposal of the net investment.

The most important currencies, including their average exchange rates, are listed under item (35) Financial instruments. Currency translation differences of T€ 3,645 (2022: T€ 1,768) were recognised directly in equity in the financial year.