Segment report

Overview of the four segments within the group

The business of STRABAG SE was divided into four segments in 2024, of which there are three operating segments, North + West, South + East and International + Special Divisions, and the segment Other, which encompasses the Group’s central divisions and central staff divisions. Klemens Haselsteiner passed away on 17 January 2025. The remaining board members temporarily took over his responsibilities until Stefan Kratochwill was appointed CEO of STRABAG SE on 19 February 2025, with immediate effect. The segments were comprised as follows in 2024 and in the current year of 2025:

Construction projects are assigned to one of the segments (see chart below). Of course, projects may also be assigned to more than one segment. This is the case, for example, with PPP projects in which the construction part is assigned to its respective geographic segment, but the concession part is assigned to the concessions unit of International + Special Divisions. In projects which span more than one segment, the commercial and technical responsibility is generally assigned to that segment which has the higher share of the overall project value.

Segments are primarily categorised according to geographical aspects. Specialities in particular – e.g. tunnelling – are naturally in demand worldwide. Such business fields are shown in the International + Special Divisions segment. At the same time, the North + West and South + East segments sometimes include international business fields such as environmental technology. These are predominantly organised from a country within the respective geographic segment.

Certain services may be performed in more than one segment. The activities below have been assigned to those segments in which the most significant portion of the services was provided. Details are available in the table.

With only a few exceptions, STRABAG offers its services in all areas of the construction industry in the individual European markets in which it operates and covers the entire construction value chain.

Range of services offered

Segment North + West

The North + West segment delivers construction services of nearly any kind and size with a focus on Germany, Switzerland, the Benelux countries and Scandinavia. Ground engineering can also be found in this segment.

Output volume – North + West segment

Output, revenue and EBIT

Revenue fell by just under 1% and so remained at a high level of € 7,221.27 million. The EBIT grew by 7% to € 692.67 million, resulting in a year-on-year increase in the EBIT margin from 8.9% to a very high 9.6%. In the year under review, performance exceeded expectations in Germany in particular. This was due in part to the milder weather conditions, which led to higher capacity utilisation in December, but is also a result of agreements reached towards the end of the year on supplementary claims from major projects.

Order backlog

Employees

The number of employees grew slightly by 1% to 22,392 FTEs, with increases in Germany and Switzerland. There were no significant changes in the segment’s other markets.

Outlook

In the German transportation infrastructures business, the volume of orders on hand provides a very solid basis for 2025. Increased demand and a growing number of projects are being observed relating to the energy transition. Especially at the municipal level, infrastructure expansion remains a challenge due to the ongoing price competition. Civil engineering is benefiting from Deutsche Bahn’s ongoing investment offensive and from cable construction projects for new power transmission lines. The relevant budgets are to be developed and adopted after the federal election, so that 2025 can be expected to be a transitional year.

Predatory pricing remains a serious concern in the Benelux countries. Here the Group will continue to pursue its chosen path of consolidation and stabilisation, in line with a highly selective bidding strategy. In the Netherlands and Belgium, the company is seizing initial opportunities in industrial construction, particularly in projects relating to the energy transition. A slight increase in demand is also expected in residential construction.

The consolidation and stabilisation that was initiated in Scandinavia will be continued here as well. The focus is on medium-sized projects, primarily in commercial and industrial construction. An increasing demand for larger projects is being observed in the infrastructure construction segment.

The demand for construction services in Switzerland remains stable. Following a period of successful initial consolidation, we are now continuing on our growth path. The necessary investments have already been made and are currently in the process of being implemented.

Selected projects – North + West segment

Segment South + East

The geographic focus of the South + East segment is on Austria, Poland, the Czech Republic, Slovakia, Hungary, Romania and South-East Europe. The environmental technology and construction materials activities are also handled within this segment.

Output volume – South + East segment

Output, revenue and EBIT

Order backlog

Employees

The number of employees in 2024 fell by 1% to 26,852 FTEs. Declining trends were observed in Austria and Slovakia, among other places. In contrast, employee numbers in Poland increased in line with the higher output.

Outlook

The order backlog in Poland has been developing positively, and a revival of public-sector investment is expected with the release of EU financing from the Covid-19 Recovery Fund. In the coming years, significant major projects in the areas of infrastructure, mobility and the energy transition will also shape market developments. Momentum in building construction is expected from the end of 2025 at the latest, driven by public- and private-sector investment.

The situation in Hungary continues to be viewed as challenging. The withholding of EU funds and the lack of public investment are reflected in a significant decline in the construction volume. On a positive note, however, orders from the automotive manufacturing industry and its suppliers are on the rise. A planned state economic stimulus package should also help to boost private consumption and strengthen the economy.

Increasing tender volumes are being seen in the Czech transportation infrastructures sector, especially in railway construction, although predatory pricing remains a factor in some larger projects. Significant orders were secured in railway station construction, road construction and building construction in 2024, leading to an increase in the order backlog. With interest rates falling, investments by private investors are expected to pick up once again as well. Additional projects involve the optimisation of structures in tunnelling, ground engineering and hydraulic engineering.

In Slovakia, the volume of tendered projects in transportation infrastructures is on the rise following the appointment of a new government and several major railway construction projects are expected to be awarded this year. A recovery and an increased level of tenders are also anticipated in the building construction sector in 2025. In May, for example, STRABAG was awarded the contract for the expansion of the F.D. Roosevelt Clinic in Banská Bystrica.

Demand in the markets of South-East Europe is developing positively. In Croatia, the focus is currently on transportation infrastructures and industrial construction, supported by EU investments. In Slovenia, the order volume has recently increased noticeably as a result of several project acquisitions. Romania is considered a promising market with a high demand for infrastructure, partly due to EU-funded investments.

The building materials and environmental technology activities that are bundled in the South + East segment are showing a satisfactory trend overall. These activities are of key importance for the action areas of circularity and expertise in the energy sector in our Strategy 2030.

Selected projects – South + East segment

Segment International + Special Divisions

The International + Special Divisions segment comprises the majority of STRABAG SE’s non- European business in addition to its global tunnelling activities. The segment also encompasses infrastructure development, real estate development and building solutions (previously property and facility services), irrespective of where these are performed. The segment also includes the group divisions United Kingdom, Energy Infrastructure, and STRABAG Hold Estate (real estate portfolio management).

Output volume – International + Special Divisions segment

Output, revenue and EBIT

Order backlog

Employees

The number of employees in the International + Special Divisions segment grew by 4% to 21,255 FTEs. In line with the development of output and due to acquisitions, the workforce grew most significantly in Germany and the Benelux region. Staff numbers were also ramped up in the Middle East to help execute large-scale projects acquired in the region.

Outlook

The international business, with its focus on established markets in the Middle East, India and South America, is showing significant output growth. Decarbonisation and the energy transition are helping to open up new opportunities here as well.

The building solutions business (previously property and facility services) expects to see stable development in 2025. In addition to the integration of companies acquired in 2024, the focus remains on inorganic growth through acquisitions in Austria, Germany and Central and Eastern Europe. By further developing its M&E and energy management expertise, the business is evolving into a full-service provider for the decarbonisation of existing buildings.

On 1 January 2025, in line with the Strategy 2030, an energy infrastructure segment was established within the Group. The business comprises the design, construction, operation and maintenance of network infrastructures and industrial facilities in the areas of electrical infrastructure, water and wastewater, security technology, smart cities and pipeline construction. The new business field, which was created by combining existing expertise, will be further strengthened through acquisitions. The aim is to offer end-to-end energy infrastructure solutions for grid operators, municipal utilities, municipalities and industrial clients.

In infrastructure development, the company is currently developing concession projects in Eastern Europe and South America. One focus is on the Haweswater Aqueduct Resilience Programme (HARP), for which STRABAG was selected as preferred bidder. Renewable energy projects are also being developed in the European core markets and in South America as part of the Group’s Strategy 2030.

The real estate development sector is being particularly affected by the bleak economic environment and political uncertainties. A significant recovery in commercial and private demand in the real estate markets is not expected until 2026 with a more favourable economic environment. At the same time, there are signs of a growing supply gap, especially for sustainable properties, along with a consolidation among developers. The strong development and implementation competence with regard to sophisticated sustainability and new work concepts could give STRABAG a competitive edge in the future.

STRABAG Hold Estate expands the STRABAG Group’s range of services to include the long-term, strategic management of real estate assets. The focus is on investments in the asset classes office, residential, hotel and mixed-use district properties. To date, five properties have been acquired; the focus is now on consolidating these investments by expanding both technical and commercial asset management.

Selected projects – International + Special Divisions segment

Segment Other