Hochtief increased net profit by 31% in 2017
In 2017 Hochtief has further enhanced its balance sheet strength and significantly increased cash flow, sales and profits. "Generating value is in our DNA. Since the beginning of our transformation in 2013, we have succeeded in delivering dynamic and consistent value growth in our global business. 2017 was again a very successful year for the Group", said CEO Marcelino Fernández Verdes. "We will continue our active and disciplined capital allocation policy."
Hochtief has delivered strong profit growth in 2017. Nominal net profit rose by 31% to EUR 421 million with the Americas, Asia Pacific and Europe divisions all contributing to this positive profit development. Earnings per share were 32% higher at EUR 6.55. Operational net profit, which excludes one-off impacts, increased by over EUR 90 million, or 25%, year-on-year, to EUR 452 million. This result is at the top end of the guidance range Hochtief communicated a year ago of EUR 410-450 million.
Sales also developed positively with growth of 14% to EUR 22.6 billion, exceeding the revenue level of 2013 for the first time. This top-line expansion was accompanied by increased margins. The Group's operational PBT margin was up 40 basis points year on year to 3.8%.
Focusing on cash-backed profits is a key priority for the Group's teams around the world. Net cash from operating activities increased by EUR 200 million, or 17%, to EUR 1.4 billion, driven by higher sales, increased margins and a further improvement in working capital management. Hochtief achieved an outstanding EBITDA cash-conversion rate of 106%. All three divisions reached an increased level of positive cash flow generation during the year. The Group's enhanced balance sheet position is the result of the strong cash flow performance. Hochtief ended 2017 with almost EUR 1.3 billion of net cash, over EUR 560 million higher year on year. The strong balance sheet and positive business outlook were recognized in May 2017 when ratings agency S&P assigned a BBB, investment-grade, debt rating for the Group, subsequently reaffirmed in October 2017.
The year-end order book of almost EUR 45 billion is at its highest level since 2012 and has increased by 12% on an exchange rate adjusted basis. At over EUR 30 billion, new orders were EUR 5.6 billion higher, an increase of 23%. In total Hochtief has identified a pipeline worth EUR around 500 billion of relevant projects coming to the Group's key markets in North Ameri¬ca, Asia-Pacific and Europe in 2018 and beyond.
As a consequence of the positive Group outlook, Hochtief expects to achieve an operational net profit in 2018 in the range of EUR 470-520 million. This represents an increase of 4-15% on 2017, with all divisions driving this further improvement in the Group performance.
Hochtief will propose a dividend of EUR 3.38 per share for 2017, an increase of 30% (2016: EUR 2.60 per share), reflecting the Group's strong profit performance and Hochtief management's focus on value creation and shareholder remuneration.
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