annual report 2010 - strabag · 2013. 10. 16. · of 2011; by contrast, ... the supervisory board...

ANNUAL REPORT 2010

www.zueblin.de

2010 2009 2008 2007 2006

Construction activities

Percentage change on previous year – 4 – 14 + 5 + 10 + 65

Germany 1,645 1,806 2,094 1,956 1,975

% 68 72 71 70 77

International 774 718 856 853 584

% 32 28 29 30 23

2,419 2,524 2,950 2,809 2,559

Orders received

Germany 1,287 1,701 2,259 1,972 1,757

International 1,084 510 1,175 754 805

2,371 2,211 3,434 2,726 2,562

Orders on hand

Germany 1,619 1,959 2,053 1,830 1,756

International 1,231 886 1,062 782 725

2,850 2,845 3,115 2,612 2,481

Employees (31.12.)

Germany 6,382 6,398 6,608 6,926 6,001

International 6,920 5,881 7,821 7,793 4,031

13,302 12,279 14,429 14,719 10,032

Equity 253 197 163 129 113

Balance sheet total 1,265 1,210 1,253 1,034 962

EBITA 87 53 50 36 24

Cash flow 94 78 71 54 30

Net income for the year

(Group share) 59 37 31 17 7

(in € million)

CONSOLIDATED FIGURES FOR ED. ZÜBLIN AG FIVE-YEAR FINANCIAL SUMMARY

Title: ADAC Head Office, Munich*

Foreword 3

Report of the Supervisory Board 4

Management report 7

Market situation and trends 7

Report from the business segments 9

Development of the Group 13

Financial position and profit situation 14

Report in accordance with § 312 of the German Stock Corporation Law 15

Risk management 17

Research, development and the environment 23

Employees 26

Procurement 27

Supplementary report 29

Forecast report 29

Consolidated financial statements 32

Notes to the consolidated financial statements 36

Auditor's report 79

The annual financial statements and management report of Ed. Züblin AG for the 2010 financial year will be

submitted to the operator of the online Federal Gazette (Bundesanzeiger Verlagsgesellschaft mbH, Cologne)

and will be published in the online Federal Gazette.

The annual financial statements of Ed. Züblin AG may be requested from the company; the annual financial

statements are available to download from the website www.zueblin.de.

CONTENTS

Pumped Storage Power Plant,

Vianden (Luxemburg)*

FOREWORDFOREWORDFOREWORDFOREWORD

REPORT OF THE SUPERVISORY BOARD

MANAGEMENT REPORT

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS

AUDITOR'S REPORT

ED. ZÜBLIN AG 2010 3

Dear shareholders, clients and business partners,

dear colleagues and friends of the company,

2010, our 92nd financial year, was another successful year for our company.

Ostensibly, the severe financial and economic crisis has been overcome; however, the public sector's

enormous debts will lead to considerable restrictions on public sector expenditure in future. The macro-

economic situation in Germany has evolved far more positively than in the rest of the EU. In particular, levels of

debt in Greece, Ireland, the Iberian Peninsula and, to a certain extent, in Italy too, must be assessed critically.

Today, the repercussions in those countries on the EU and the rest of the world cannot be gauged yet.

The government stimulus packages only had a minor impact on our performance. This is due, in particular, to

the fact that we have increasingly turned to larger projects where there is only limited competition. Capacity in

the construction industry remains high, meaning that there is a trend towards many orders being placed on a

loss-making basis. We have not participated in this competition based entirely on price and have consistently

developed our principles in calculating a project's profitability and in accepting new work. This led to a reduc-

tion in incoming orders in 2010. Despite this trend, our orders on hand as at 31 December 2010 exceed the

level of the previous year. A few of the incoming orders expected in 2010 were not signed until the beginning

of 2011; by contrast, incoming orders abroad were very pleasing in 2010.

The results of all the divisions were also pleasing, as was the trend in the Group's liquidity. The substantial

cash holdings at the end of 2009 again increased considerably during the reporting year.

The high levels of technical expertise in all branches, in our Central Engineering Division and in our subsidiaries

remain a guarantee of our success.

Our organizational structures remain subject to a constant process of adjustment. Under the motto "Strategy

2015", we have decided to attend to our core market, Germany and the Benelux countries, even more closely.

This will be effected both by strengthening our regional presence and by developing technical expertise in

individual divisions. Our strategy also includes the expansion of steel construction activities, environmental

activities, ground engineering, structural renovation, fire-resistant and chimney construction and the imple-

mentation of new segments, such as green buildings. The keyword "sustainability" will acquire a central signi-

ficance over the next few years. Sustainability and ecological balance will increasingly be used as arguments

by our clients in the course of awarding contracts in future. We are outstandingly positioned for this process.

Our longstanding preferred "teamconcept", which is characterised by a partnership-based collaboration be-

tween clients and us, already takes account of these focal points. However, our strategic focus also includes

scrutinizing high-risk projects even more critically. This may also have an impact on our current core markets.

We should like to express our thanks to all those who have contributed to our success in the last financial year.

We should like to thank our clients and business partners for the trust they have shown in working with us and

all our staff and their representatives for their dedication and commitment to our company.

The Board of Directors

FOREWORD


4 ED. ZÜBLIN AG 2010

In the 2010 financial year, the Supervisory Board performed the tasks incumbent upon it by law, the Articles of

Association and its rules of internal procedure. The Supervisory Board monitored the Board of Directors of the

company in its management of business. The Board of Directors informed the Supervisory Board promptly

and comprehensively, both in writing and verbally, about ongoing business, the status of the company and its

subsidiaries and the most important financial data. The opportunities and risks of new business segments

were discussed in depth. As part of ongoing business, the meetings also dealt with major bids and the risks

posed by existing construction projects. The "Cologne North-South Stadtbahn" project continued to take up a

great deal of time here. In particular, the Board of Directors examined deviations in the course of business

from plans and targets as well as measures to minimize risk.

The Supervisory Board held four ordinary meetings and one extraordinary meeting in the 2010 financial year.

In two cases, circular resolutions were passed. As a rule, members of the Board of Directors participated in

meetings of the Supervisory Board.

In the year under review, the Supervisory Board focused on internal organization, the development of earnings,

construction industry trends in our markets, new business segments and the company's strategic direction.

The Board of Directors explained the company's quarterly financial statements. In the process, the Board of

Directors went into the low equity ratio, in particular, and the strategic direction, to improve this significantly

and permanently. The Board of Directors also presented the risk monitoring system in depth and the Super-

visory Board saw its effectiveness for themselves. Key reports by Internal Audit were made available to the

Chairman of the Supervisory Board. In previous years, the Board of Directors reported on the large number of

legal actions by the two minority shareholders on numerous occasions. In 2010, all the legal actions by the

minority shareholders were ended amicably by the conclusion of a compromise settlement.

In 2010, the company applied the German Accounting Law Modernization Act for the first time and imple-

mented the Act on the Appropriateness of Management Board Compensation. The impact of these laws on

the annual financial statements and the Board of Directors' contracts of employment was the subject of

intense discussion. Furthermore, the Board of Directors regularly consulted the Chairman of the Supervisory

Board, in writing and verbally, with regard to particular occurrences.

The Supervisory Board was involved in all decisions that were of fundamental importance for Ed. Züblin AG.

The Board of Directors submitted all issues requiring approval in good time for resolution by the Supervisory

Board. Transactions for which approval by the Supervisory Board was required were examined with the help

of documentation from the Board of Directors and debated extensively in the meetings of the Supervisory

Board. The approval required by law and the Articles of Association was given to the best of our knowledge.

The Supervisory Board has established two committees, the Executive Committee and the Co-Determination

Committee in accordance with § 27 Para. 3 of the Co-Determination Act (MitbestG). The Executive Com-

mittee met once in the 2010 financial year. There was no occasion for the Co-Determination Committee to act

in the 2010 financial year.

The annual financial statements including the management report of Ed. Züblin AG compiled by the Board of

Directors and the consolidated financial statements drawn up under IFRS including the Group management

report for the 2010 financial year, including the accounting records, have been audited by the auditors, Warth

& Klein Grant Thornton AG Wirtschaftsprüfungsgesellschaft, Düsseldorf, – elected by the General Meeting and

commissioned by the Supervisory Board – and have each received an unqualified auditor's report.

The audit documentation and the Board of Directors' proposal on the appropriation of profits, the correspond-

ing audit reports by the auditors, the Board of Directors' report on relations with related parties pursuant to

§ 312 of the German Stock Corporation Law (AktG) (report on relations with related parties) for the 2010

financial year and the audit report by the auditors on the report on relations with related parties were all

submitted in their entirety to the members of the Supervisory Board well before the balance sheet meeting on

FOREWORD

REPORT OF THE SUPERVISORY BOARD MANAGEMENT REPORT




AUDITOR'S REPORT


19 April 2011. During this meeting, the Board of Directors explained the net assets, financial position and

results of operations of the company and the Group in detail. At the meeting of the Supervisory Board on

19 April 2011, the auditors reported the significant findings of their audit. They also established that the Board

of Directors had taken the measures incumbent upon it in accordance with § 91 Para. 2 of the German Stock

Corporation Law (AktG) in an appropriate form. In particular, the Board of Directors has established an

appropriate internal control and risk management system, which is consistent with the requirements of the

company and which appears appropriate, according to its design and actual application, to recognize

developments which jeopardize the continuance of the company in good time. The auditors were also

prepared to provide additional information and answer any questions that members might have.

The questions on the financial statements and audit reports raised by the Supervisory Board were answered.

The Supervisory Board established that there were no objections to be raised against the audit reports and

that the findings of the audit by the auditors were to be approved. The Supervisory Board therefore gave its

consent to the annual financial statements of Ed. Züblin AG compiled by the Board of Directors and the con-

solidated financial statements for the 2010 financial year drawn up under IFRS in the meeting of the Super-

visory Board on 19 April 2011. The annual financial statements of Ed. Züblin AG are therefore approved in

accordance with § 172 of the German Stock Corporation Law (AktG). In its assessment of the position of the

company and the Group, the Supervisory Board concurs with that of the Board of Directors in its manage-

ment report and Group management report for Ed. Züblin AG and the Group.

The Board of Directors has prepared a report for 2010 on relations with affiliated companies in accordance

with § 312 of the German Stock Corporation Law (AktG). The auditors audited the 2010 report by the Board

of Directors and issued the following audit certificate:

"On the basis of our audit and assessment performed in accordance with professional standards, we confirm

that

1. the factual statements in the report are correct,

2. the performance rendered by the company in connection with the legal transactions set out in the

report is not inappropriately excessive,

3. in the case of the actions set out in the report there are no circumstances that give rise to an assess-

ment that differs significantly from that of the Board of Directors."

The Supervisory Board has reviewed the 2010 report on relations with related parties including the findings of

the auditors with regard to its completeness and accuracy and has approved the report. According to the

conclusive outcome of the review of the report on relations with related parties and the audit report prepared

by the auditors, there are no objections to the Board of Directors' statements at the end of the report on

relations with related parties.

Finally and allowing for financing the planned investment and the equity situation of Ed. Züblin AG, the

Supervisory Board agreed to the Board of Directors' proposed appropriation of profits in its meeting on

19 April 2011.

Messrs Jörn Beckmann, Klaus Pöllath, Hans-Joachim Rühlig, Edgar Schömig and Dr. Alexander Tesche were

reappointed as members of the Board of Directors. Mr Eberhard Gläser retired, as planned, on 31 December

2010. The Supervisory Board would like to thank Mr Gläser for his successful work – over several decades –

for the company.

Mr Nematollah Farrokhnia resigned from the Supervisory Board on 10 May 2010. Dr. Volker Kier, Messrs

Nikolaus Landgraf, Christof Sänger and Tom Schittek left the Supervisory Board at the end of the General

Business and Hotel Complex „THE SQUAIRE“, Frankfurt / Main Airport

Dr. Jürgen Kuchenwald

Chairman


Stuttgart, April 2011

The Supervisory Board


Meeting on 15 July 2010 because their rotating period in office had ended. Mrs Inge Hamm and Dr. Gerhard

Gribkowsky, Dr. Peter Krammer, Mr Udo Steffens and Dr. Thomas Voigt were elected as new members of the

Supervisory Board. The constituting meeting of the Supervisory Board on 15 July 2010 elected Dr. Kuchen-

wald as Chairman and Mr Wolfgang Kreis as Deputy Chairman of the Supervisory Board.

The Supervisory Board would like to thank those members leaving the Supervisory Board for their work to the

benefit of the company.

The Supervisory Board extends its gratitude to all executive boards, general managers and employees of the

companies within the Züblin Group for their achievements, their commitment and their loyalty to the company.

We would like to thank the bodies representing employees for their objective and constructive collaboration in

the work of the Supervisory Board and the relevant committees. They have all contributed once more to a

strong profit for the year 2010.

FOREWORD


MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS



AUDITOR'S REPORT

MANAGEMENT REPORT


MARKET SITUATION AND TRENDS

With record growth of 3.6%, the German economy has made a rapid and impressive recovery from the severe

economic crisis. Germany benefited from the sharp upturn in the global economy through a surge in exports,

with exports rising by 14.2% year-on-year. There were also clear signs of recovery in domestic demand. In

2010, expenditure by private households increased by 0.5%, while investment in capital goods actually rose

by 9.4%. Overall, domestic demand rose by 2.6% year-on-year in 2010. Nevertheless, there has only been a

moderate increase in commodity prices, at the year-end there was evidence of a slight rise in the inflation rate.

Construction investment rose by 2.8% in 2010, having fallen by 1.5% in 2009. The macroeconomic upturn

has not yet reached the main German construction trades, although the impact of the economic crisis on the

sector was not dramatic either, being mitigated in particular by the compensatory effect of the stimulus pack-

ages. In contrast to companies in manufacturing industry, which posted growth in sales of some 12% in 2010,

sales in the main construction trades fell by 2.3% compared with the previous year. As a consequence of the

very significant curtailment of the construction season caused by adverse weather conditions, the slight

growth in sales originally forecast could not be achieved.

While residential construction recovered sharply and posted growth in 2010, both industrial and commercial

construction and public sector construction closed the year with a fall in sales.

Because of the weak order situation in 2009, replacement investment was postponed in manufacturing

industry and new investment was often not even considered. The resulting meagre backlog of orders in the

construction industry was one of the main reasons for the fall in operating performance in industrial and

commercial construction. While capacity utilization did not reach pre-crisis levels as a consequence of the

very positive economic trends in 2010, the improvement in the business situation and the very positive outlook

have already made themselves felt in the orders received in industrial and commercial construction.

In 2010, public sector construction lagged well behind expectations. While the federal government provided

funds of just under € 15 billion up to 2011 for the expansion and refurbishment of the national transport routes

and federal buildings as well as to encourage future investment by local authorities with the two stimulus

packages two years ago, only € 2.7 billion of these funds were utilized in 2009. Of the remaining € 12 billion, it

is estimated that € 6 billion were invested in the past year. Since the subsidies were not spent promptly or to

the extent available, the economic impetus they provided was not as effective as had been expected.

In view of the budgetary pressures facing them, local authorities have already reduced investment, since many

of them are now being obliged to take measures to balance their budgets. As a result of deleting the addition-

ality criterion in the German Future Investment Act (Zukunftsinvestitionsgesetz), the subsidies received were

used purely as budget support in many cases meaning that no additional benefits were generated on the

market. These funds were largely used to improve the energy efficiency of public buildings, for which the

contracts were mainly awarded to companies in the finishing trades. The construction industry only partici-

pated to a minor extent.

Orders received in the public sector were therefore 5.2% below the comparable figure in the previous year.

Industrial and commercial construction benefited from the improvement in the business situation and the

positive prospects for industry with growth of 6.0%. In residential construction orders received increased by

9.8%. Throughout the main construction trades, orders received were 1.6% up on the figures for the previous

year in 2010.

Production costs in the construction industry have risen once more in comparison with the previous year.

Towards the end of the reporting year, the prices for steel, copper and oil were up year-on-year. The global

economic upturn, but, in particular, increased demand from the developing countries contributed to this.

MANAGEMENT REPORT


Despite the fall in sales, employment in the construction industry remained stable in 2010 because of the

short-time working payments. Employment levels in the main German construction trades even increased

slightly compared with the previous year.

Recession in our European niche markets overcome

In several European countries, the scars left by the economic crisis in the development of the construction

industry are still very apparent. In the past year, Finland and Sweden were the only countries where there were

signs of a turnaround.

Although most Central and Eastern European countries have emerged from the recession quickly, the con-

struction sector in these countries has not returned to the rapid growth rates made possible by accession to

the EU in recent years. The macroeconomic recovery in the Czech Republic has not yet spread to the local

construction industry, which was characterised by a slump in construction activity in 2010. The trend in

Slovakia and Hungary was slightly more moderate. In 2010, growth in the construction industry only exceeded

growth in the economy as a whole in Poland. Construction activity declined once again in Austria, while the

construction industry in Switzerland achieved moderate growth thanks to government stimulus packages.

Prospects in markets outside Europe

The emerging markets outside Europe, the Far and the Near East as well as new markets in Central Asia were

less affected by the financial and economic crisis by and large. The performance of the construction industry

features a regional pattern with the exception of the countries in the Persian Gulf.

According to World Bank criteria, Qatar ranks as one of the expanding economies. The Gulf state has the

third largest reserves of natural gas after Russia and Iran. The Football World Cup in 2022 also contributes to

this.

The United Arab Emirates (UAE) have the sixth largest oil reserves and the seventh largest natural gas

reserves in the world. Abu Dhabi generates around 60% of the UAE's GDP, while Dubai, as the second largest

Emirate, contributes around 25% to GDP. Abu Dhabi has the financial potential, with many major projects, to

press ahead with diversifying the economy.

Singapore's fundamental economic data are positive. The growth rate in 2010 stood at 14.7%. The growth is

attributable, most notably, to a strong recovery in manufacturing industry. Demand is expected to stabilise in

the construction industry in the next three years.

Chile's construction trades showed signs of a recovery in the course of 2010 and have consequently over-

come the recession that began at the end of 2007/beginning of 2008. Growth has accelerated since the

middle of the year.

FOREWORD





AUDITOR'S REPORT


REPORT FROM THE BUSINESS SEGMENTS

Züblin's business activities are divided into three core segments:

• Turnkey Construction

• Construction Engineering

• Plants and Specialist Areas

The figures attributable to our business segments in 2010 are as follows:

Performance Orders received Orders on hand

Turnkey Construction 1,563 1,701 1,849

Construction Engineering 592 532 752

Plants and Specialist Areas 264 138 249

2,419 2,371 2,850

(in € million)

Turnkey Construction

Turnkey Construction embraces all building construction activities in Germany and abroad. Züblin has special-

ized in the turnkey construction of challenging and complex structures. In 2010, the geographical emphasis

remained in Germany and neighbouring countries.

Our activities in this segment encompass office buildings, shopping centres, hotels, garages, research

establishments, university buildings, other public buildings, industrial and residential buildings.

Orders received in 2010 and orders under construction (some of which are on a joint venture basis) that are

worth mentioning in this segment are:

– office and administrative buildings, such as the Vodafone Campus in Düsseldorf, the conference and meet-

ing centre at the new headquarters of the European Central Bank in Frankfurt/Main, the high-rise buildings

De Rotterdam in Rotterdam, Opernturm (Opera Tower) in Frankfurt/Main and Tanzende Türme (Dancing

Towers) in Hamburg, a command centre for the US Army in Wiesbaden, major administrative buildings in

Munich, Regensburg, Düsseldorf, Aachen, Bietigheim, Heidelberg, Oostende (Belgium) and Ruwais (UAE) as

well as a hotel in Aalsmeer (Netherlands),

– shopping and commercial centres, such as the Forum Mittelrhein with a cultural building in Koblenz, shop-

ping centres in Ronnenberg near Hanover, Spangdahlem (Eifel), Hamburg, Dortmund and Dresden as well

as buildings and a shopping centre for a new district centre with infrastructure in Ruwais (UAE),

– schools, university and cultural buildings, in association with the PPP "Drei Schulen in Mülheim/Ruhr" and

the Niederlausitz See Campus, a school in Wiesbaden and the Sheikh Zayed Desert Learning Center in Al

Ain (UAE), buildings for the university hospitals in Cologne, Bonn and Ghent (Belgium), Wildau University and

the Friedrich Löffler Institute on the Baltic island of Riems as well as the theatre in Nieuwegein and the city

hall in Gouda (Netherlands),

– industrial buildings, such as a production plant for photovoltaic modules in Frankfurt/Oder, a chip factory in

Dresden, distribution and logistics centres in Bruchsal and Haderslev (Denmark) as well as 25 buildings with

infrastructure for the new Khalifa Port in Abu Dhabi (UAE),

– residential buildings, such as 278 semi-detached and terrace houses for the US Army in Wiesbaden as well

as large housing estates in Munich, Stuttgart, Frankfurt, Berlin and Konstanz.

MANAGEMENT REPORT


Construction Engineering

The Construction Engineering segment comprises activities in Germany and abroad. It will become more

important temporarily over the next few years because of a large number of infrastructure projects.

The spectrum encompasses power stations as well as bridge construction, other construction engineering,

ground engineering, hydraulic engineering and tunnel construction.

New orders and orders under construction (some of which on a joint venture basis) that are worth mentioning

in this segment for 2010:

– power station buildings, such as block 9 of the Mannheim major power station, the RDK8 (steam power

station) in Karlsruhe, the planning and execution of the structures for the extension of the pumped-storage

power station in Vianden (Luxembourg) and the extension of the Maasvlakte power station near Rotterdam

(Netherlands),

– transport infrastructure, such as the planning and construction of 42 bridges and underpasses for the

privately financed section of the M51 motorway between Kliplev and Sonderborg (Denmark) and the

renovation or construction of 72 engineering structures in the course of the extension of the A5 between

Offenburg and Malsch,

– noise barriers, for example along the high-speed rail route from Cologne to Rhein/Main, on a railway track in

Lüneburg and on a 14 km long section of the A8 in Wroclaw (Poland),

– bridges, such as a cable-stayed bridge over the Waal as part of the eight-lane extension of the A50 between

Ewijk and Valberg (Netherlands), the Andelsbachtal bridge for the A98 at Laufenburg, 3 railway bridges on

the dual carriageway from Nuremberg to Erfurt at Goldisthal and a railway bridge over the IJssel at Zwolle

(Netherlands),

– tunnels, such as a metro tunnel in Amsterdam (Netherlands), two railway tunnels for the City Line and a

tunnel for the city motorway in Stockholm (Sweden), the Bleßberg and Rehberg-Masserberg railway tunnels

on the new stretch of railway from Ebnisfeld to Erfurt, a road tunnel in the course of the B29 Schwäbisch

Gmünd bypass, a contract section of the North-South Stadtbahn in Cologne, the expansion of the City

tunnel in Leipzig,

– a tunnel constructed by using a pipe jacking process for intake and outlet structures at a seawater

desalination plant in Perth (Australia) and for a wastewater main with 23 ducts in Singapore as well as an 8.6

km long supply tunnel (for water and cables) in Doha (Qatar),

– hydraulic structures, such as a storm water barrage in Greifswald and the reconstruction of the Klingenberg

dam in Saxony,

– mine and adit construction in Chile, for example, in the El Teniente, Alcaparrosa and Cantillaria Norte mines,

– foundation piles and high-pressure injection underpinning of the Großmarkthalle for the ECB in Frankfurt,

– excavation pit for the Turkish embassy in Berlin,

– foundation piles and retaining wall for the central station in Vienna.

Plants and Specialist Areas

This segment comprises steel construction, building services engineering, precast concrete plants in Karls-

ruhe and Gladbeck, machinery, plant and chimney construction, environmental technology, the operation of

car parks and services for niche markets.

Züblin Stahlbau GmbH, Hosena, was able to acquire market share because of its considerable expertise in

the construction of power plants and other plants and reports substantial utilization of capacity. Apart from

major power plants in Lünen and Hamm (Germany), successes in international business are making a crucial

contribution to the company's excellent order situation. In particular, the following projects should be empha-

Funder Valley Bridge near Silkeborg (Denmark)*

FOREWORD





AUDITOR'S REPORT


sized here: the major power station at Eemshaven (Netherlands), the nuclear power stations in Olkiluoto

(Finland), Toul (France) and Geregu (Nigeria).

Züblin Umwelttechnik GmbH, Stuttgart, operates in the field of environmental remediation comprising ground-

water, soil and vapour cleanup as well as pollutant remediation and site rehabilitation both in Germany and the

rest of the world. With offices in Germany, Italy, Romania and France, it ranks as one of the leading com-

panies in Europe in this area. In Romania, the first large-scale remediation project was completed following

achievement of the contractually agreed remediation targets. In addition to consultancy services, Züblin

Umwelttechnik GmbH supplies a German chemicals group with technical equipment for cleaning up sites in

Mexico, India and Japan among others.

The activities of our precast concrete plants in Karlsruhe and Hagsfeld are concentrated on the production of

concrete components for building construction, civil engineering and noise protection. In the financial year, the

precast concrete plants succeeded in holding their own in a difficult market environment.

Züblin Maschinen- und Anlagenbau GmbH, which is based in Kehl/Rhine, has sustained its position as a

manufacturer of reinforcement welding machines and concrete tube forms in a market segment that is highly

competitive throughout the world. In Eastern Europe, the market launch of the new semi-automatic machine

for welding BST 500 steel reinforcements developed for the lower end of the market was a success. This

enhancement complements the high-end fully-automated Züblin MAB welding machines, which are recog-

nized and appreciated throughout the global market.

OOMS-ITTNER-HOF GmbH, Cologne, ranks as one of the leading companies throughout Europe in the

construction of furnaces and chimneys for power stations, waste incineration systems, in the petrochemicals

industry and the chemicals industry. The range of products and services encompasses the construction of

new plants, the redevelopment, modernization as well as the inspection and servicing of existing plants to

bring/maintain them in line with best available technology. In-house engineering departments develop tailor-

made solutions for a satisfied clientele. PARK SERVICE HÜFNER GmbH & Co. KG, Stuttgart, expanded its

market position further in the 2010 financial year. In Germany, it manages ca. 32,000 parking spaces in more

than 50 parking facilities, such as in stand-alone parking facilities but also in shopping centres, hospitals,

cultural and leisure facilities as well as trade fairs. In the financial year, it concluded a contract to manage more

than 16,000 parking spaces with Messe München (Munich Trade Fairs) and several long-term leases with the

municipality of Geislingen and private investors to manage city centre garages, including a shopping centre.

Züblin Gebäudetechnik GmbH, Erlangen, with its core expertise in heat technology, refrigeration, ventilation

and air-conditioning, sanitary engineering, process measuring and control technology and utilities supplies,

expanded its offices in Frankfurt, Cologne and Munich further in 2010. In Munich, Züblin Gebäudetechnik

GmbH undertook a comprehensive, long-term renovation of the European Patent Office. Given the substantial

demand in the area of technical building services, further growth over the next few years is expected.

Shopping Center

“Rhein-Galerie”, Ludwigshafen

FOREWORD





AUDITOR'S REPORT


DEVELOPMENT OF THE GROUP

Developments in the construction market in our core countries have also influenced the situation in the Züblin

Group. While there has been no diminution in the ferocious competition to which medium-sized and smaller

projects are exposed, the situation for large-scale projects has evolved into a competitive partnership. Our

clients' increasing willingness to invest has led to orders received rising by more than 7%. This increase is

attributable to orders from abroad. In Germany, delays in the awarding of contracts led to orders being post-

poned to the 1st quarter of 2011.

Of the Group's orders received (€ 2,371 million), € 1,287 million are attributable to Germany, which equates to

a fall of 24%. By contrast, orders received from abroad increased by 113% to € 1,084 million. This develop-

ment was caused by large-scale projects.

Overall, orders on hand are virtually unchanged at € 2,850 million. Orders on hand attributable to Germany

have also decreased in line with the trend in orders received (– 17%). By contrast international orders on hand

have risen by 39%.

There was a slight 4% reduction in operating performance to € 2,149 million in the 2010 financial year. This

development is mainly attributable to weather conditions and the decline in major infrastructure projects.

Performance carried out within the framework of the manpower provision for STRABAG AG and its sub-

sidiaries and the corresponding residual orders on hand are included in the figures cited and have decreased

as scheduled. Performance in this regard fell by 27% to € 67 million.

Construction activities Orders received Orders on hand

€ million

3,500

3,000

2,500

2,000

1,500

1,000

500

0

€ million

3,500

3,000

2,500

2,000

1,500

1,000

500

0

2,371

2,211

2009 2010

€ million

3,500

3,000

2,500

2,000

1,500

1,000

500

0

€ million

3,500

3,000

2,500

2,000

1,500

1,000

500

0

2,4192,524

2009 2010

€ million

3,500

3,000

2,500

2,000

1,500

1,000

500

0

€ million

3,500

3,000

2,500

2,000

1,500

1,000

500

0

2,8502,845

2009 2010

MANAGEMENT REPORT


Financial position and profit situation

Total operating performance according to the consolidated income statement (sales revenues, change in

inventories and own work capitalized) fell by € 23 million to € 2,175 million compared with the previous year

(€ 2,198 million). Germany recorded the sharpest fall here of € 92 million to € 1,735 million. In Europe (ex-

cluding Germany) total operating performance came to € 320 million (previous year: € 287 million), while total

operating performance in the rest of the world rose from € 84 million to € 120 million.

The percentage of expenses for materials and subcontractor work in relation to total operating performance

according to the consolidated income statement decreased to 67% (previous year: 68%). The percentage of

personnel expenses also decreased from 23% to 22%.

At € 36 million, "Other operating income" was up on the level of the previous year (previous year: € 34 million).

"Other operating expenses" shrank to € 155 million (previous year: € 158 million).

In the financial year, EBITDA rose by 31% to € 122 million (previous year: € 93 million).

At € 35 million, depreciation/amortization was down on the figure for the previous year (€ 40 million). This

figure contains write-downs on goodwill of € 0.3 million (previous year: € 0.0 million). Last year, this item

included unscheduled write-downs on the market values of property of € 5 million.

EBIT improved to € 87 million (previous year: € 53 million).

At € – 2 million, "interest" remained on the level of the previous year.

The Group's profit for the year before tax amounted to € 85 million (previous year: € 51 million) and € 59

million (previous year: € 38 million) after tax.

In the year under review, the Group invested € 44 million (previous year: € 35 million) in intangible assets and

property, plant and equipment. In the previous year, investment in financial assets came to € 1 million. The

investments are balanced by depreciation/amortization of intangible assets and property, plant and equipment

of € 35 million (previous year: € 40 million).

The balance sheet total increased by around 5% compared with the previous year to € 1,265 million. The

proportion attributable to non-current assets is unchanged, at around 20%, while around 80% are attributable

to current assets including liquidity. Current trade receivables rose to € 372 million (previous year: € 328

million). Cash and cash equivalents increased as a result, in particular, of the profit for the year and continuing

stringent management of working capital by around € 32 million to € 509 million. Net liquidity (balance of cash

and cash equivalents/securities and current and non-current financial liabilities) rose to € 477 million com-

pared with € 443 million in the previous year.

The equity ratio rose – thanks to the profit for the year – by 4% to 20%. Equity (including minority interests) is

shown at € 253 million as at 31 December 2010 (previous year: € 197 million).

At € 233 million, non-current liabilities remained virtually at the level of the previous year and equal 18% of the

balance sheet total. Current liabilities equal around 62% of the balance sheet total (previous year: 65%).

The Züblin Group's centralized financial management ensures that the Group has sufficient financial flexibility

at all times. A centrally run zero-balancing cash pooling system ensures that any liquidity in the Group is

aggregated and managed centrally. All relevant Group companies are included in the centralized financial

planning. The Group's liquidity is planned on an annual basis under which target and actual figures are sub-

jected to ongoing comparison using variance analysis.

FOREWORD





AUDITOR'S REPORT


The Züblin Group has credit facilities in the triple-digit millions at its disposal but, in view of the Group's ex-

cellent liquidity position, these constitute fallback lines if anything and may also be used by other companies in

the STRABAG SE Group. They do not give rise to any liability risks. On 31 December 2010, there were

payables to banks of € 11.9 million.

The Züblin Group has sufficient guarantee facilities via its participation in a STRABAG SE syndicated guaran-

tee facility and, apart from this, via bilateral credit facilities with banks and credit insurers. Since 12 October

2010, the syndicated guarantee facility offers a total volume of € 2.0 billion; however, this may also be used

by other companies in the STRABAG SE Group. This does not give rise to any additional liability risks.

Contruction activitiesContruction activities

2,419 € million

68% Germany1,645 € million

21% other Europeancountries510 € million

11% Countries outsideEurope264 € million

according to geographical region according to business segment

2,419 € million

65% Turnkey Construction1,563 € million

24% ConstructionEngineering,Tunnel andGround Engineering592 € million

11% Plants and Specialist Areas264 € million

Report in accordance with § 312 of the German Stock Corporation Law (AktG)

The report prepared in accordance with § 312 of the German Stock Corporation Law (AktG) gave an account

of Ed. Züblin AG's relations with affiliated companies in 2010.

The 2010 report closes with the statement that in the case of every legal transaction in this regard with

Ed. Züblin AG, performance and counterperformance were commensurate with the circumstances known at

the time of the legal transaction.

It is further stated that according to the circumstances known at the time the decision was taken, the com-

pany was not prejudiced by the actions taken or omitted.

The report was presented to the auditors together with the 2010 annual financial statements and the 2010

Group management report and was certified by them.

Fire Brigade and

Rescue Center,

Mülheim / Ruhr

FOREWORD





AUDITOR'S REPORT


RISK MANAGEMENT

The Züblin Group is exposed to a variety of risks as part of its operational activity because of the size and

complexity of the projects in which it is involved as well as the time taken to complete them, which are

recorded, assessed and managed with the help of an adequate risk policy. Its active risk management system

serves to recognize any risks that would jeopardize the company promptly, to avoid them and to reduce them.

In its organization, Züblin's risk management system is based on its project-related systems for controlling

acquisitions and construction sites, supplemented by the higher-level audit and control management tools

and supported by a variety of regulations and actions including an accredited quality management system,

internal Group guidelines governing workflows in the operating divisions, in the department responsible for

controlling, in the legal support for operational units, in contract management, in Finance and in Internal Audit.

All regulations and actions are regularly monitored by Internal Audit and by the departments responsible for

technical and commercial controlling. An evaluation of the quality management system involving an internal

working group took place in 2010 because of the events at the North-South Stadtbahn in Cologne. Legal

support starts in the tender phase and continues through all phases of the project. The Contract Management

department supports us in processing orders for supplementary work and in enforcing our claims. By

monitoring construction materials on construction sites, we ensure that they are used correctly. The degree of

support provided to our trainees in training centres as well as the internal training and continuing professional

development of our employees constitute an additional element of our risk management. By combining key

processes in our Central Engineering Division and our centralized procurement, we are able to recognize risks

in good time. These units are also integrated in our processes where this is advisable.

Project risks

Acquisition lists are maintained to review the selection of contracts. Contracts are selected on the basis of our

capacity and our expertise through regular discussions among the management of our divisions. If selection

leads to tendering, at the end of the acquisition phase, the price is determined with the responsible members

of the Board of Directors. This process involves an assessment of individual cost estimates, the human

resources organization of the construction project and individual risks such as security of supply and guaran-

teed prices from individual contractors and contractors' creditworthiness.

Reportable transactions are reported by our departmental and divisional managers and analyzed and ap-

proved by the Board of Directors in accordance with internal rules of procedure.

Contract implementation is managed by the local construction team. Responsibilities on our building sites are

clearly regulated from the senior construction management to the site foreman. It is essential that project

calculations are constantly adjusted to reflect the latest findings. Construction progress is also monitored by

comparing target and actual figures to be able to counteract any deviations as early as possible. Parallel to

this, the department responsible for centralized controlling provides ongoing commercial and technical

support. If necessary, the Board of Directors will involve the Central Engineering Division and Internal Audit in

the process. The results of the ongoing project calculations are included in the standardized project report. In

addition to the current status of the project, it gives departmental managers, divisional managers and the

Board of Directors a forecast of the end of the construction phase as well as showing them opportunities and

risks that have not yet been incorporated in the project calculation. The project report is supplemented by a

project monitoring process based on the figures in the project report. Within the project monitoring process,

charts and project status flags indicate positive or negative developments at the construction site. Information

MANAGEMENT REPORT


on and experiences with clients, suppliers and subcontractors are stored in project databases, procurement

databases and other databases.

This information is available to all divisions for their day-to-day activities. The project control system is

supplemented by a defect management system under which defects are treated systematically. The findings

gleaned in the process are then fed back into the process chain.

Legal risks

The company is involved in various legal disputes with its minority shareholder or its representatives. These

are actions for rescission relating to General Meeting resolutions of 22 June 2006, 11 April 2007, 5 July 2007,

3 December 2007 and 5 August 2008. All actions for rescission were pending at the Stuttgart Higher Regional

Court. The company and the minority shareholder have reached agreement jointly, with the agreement of the

majority shareholder STRABAG SE, on ending all pending legal disputes instigated by the minority shareholder

against the company. The action by the minority shareholder Lenz regarding the integration of the building

construction and construction engineering activities of STRABAG AG, Cologne, into the company was already

decided in the company's favour in 2009 and is therefore not subject of the compromise settlement. The

company, STRABAG SE and the minority shareholder will strive to work together constructively in a manner

that will be conducive to the development and prosperity of the company. At present, there are no legal

disputes pending between the company and its shareholders.

At the beginning of March 2009, an accident occurred in the area of the construction site for the North-South

tunnel on the Cologne Stadtbahn. This led to the building housing the historic city archives of the City of

Cologne and major parts of two adjacent buildings collapsing and sliding, to some extent, into a pit that

opened up beside the Waidmarkt cross-over junction on the Stadtbahn. Two people were buried under the

ruins and died before they could be rescued.

The work is being carried out by a joint venture consisting of Bilfinger Berger AG, Wayss & Freytag Ingenieur-

bau AG and our company. The joint venture is run by Bilfinger Berger AG (responsible for technical manage-

ment) and Wayss & Freytag Ingenieurbau AG (responsible for commercial management). Our company has a

33.3% stake in the joint venture.

The cause of the accident is still not known. Since March 2009, the public prosecutor's office has been

investigating against parties unknown. Independent proceedings for the taking of evidence are being held at

the Cologne District Court. The expert commissioned by the court is still making enquiries.

Since the beginning of 2010, the people responsible for monitoring construction at both the joint venture and

the Kölner Verkehrsbetriebe (KVB – Cologne public transport company) have been the subject of public

criticism triggered by investigations at other structures on the North-South Stadtbahn, particularly the Heu-

markt station. The public prosecutor's office is investigating employees of the joint venture on the grounds of

irregularities. It has also stated that there are currently no indications that these investigations are connected

with the accident in March 2009. Following an intensive examination of the structures in question by both the

joint venture and surveyors, no defects have become apparent that give reason for having doubts about

safety. At the end of 2010, the public prosecutor's office announced that the absence of steel hoops would

not have led to the collapse.

We continue to assume that the company will not incur any significant losses as a result of this event.

FOREWORD





AUDITOR'S REPORT


Sector-related risks

In 2010, the German construction industry was supported once again by a variety of development pro-

grammes set up by the federal government. However, the funds provided were not drawn in full. The

development programmes related more to construction of roads and railways and smaller-scale building

construction measures, meaning that Züblin only benefited from this to a relatively minor extent. In 2010,

building construction did well overall. Orders received in the main construction trades rose by 6.1%. This is

primarily attributable to residential construction, which posted a 9.8% change. The industrial and commercial

sector increased by 4.9% and public sector building construction by 3%. This increase in demand led to

insolvencies in the main construction trades falling by 10% over the course of the year compared with the

previous year. The trend in the number of unemployed was also downward. This trend will continue in 2011

albeit in an attenuated form. Capacity in the German economy's key industries was utilized once more sur-

prisingly quickly, meaning that investment in expansion is to be expected in this segment. At the same time,

there is increasing demand from investors for replacement investment. At present, it is difficult to predict

whether this positive trend is sustainable. While the financial crisis has been overcome ostensibly, the budget

deficits in many European countries and in the USA are forcing the respective governments to make enor-

mous savings meaning that demand for public sector investment is likely to decrease in the medium term.

Small and medium-scale projects are still subject to intense competitive pressures. This is another reason why

housing construction is of only minor significance at Züblin. In industrial and commercial construction, we are

still succeeding in implementing partnership-based projects with the Züblin teamconcept model. This model

aims to achieve early involvement in order to be able to discern opportunities for optimization in the planning

phase. The chance of avoiding any conflict is therefore much bigger. It remains to be seen whether we will be

able to implement this model successfully and profitably in periods when markets are difficult. Natural dis-

asters are focusing attention on energy efficiency once more. A consideration of life cycle costs is therefore

acquiring considerable influence as part of the calculation of a project's profitability among our clients. Certi-

fication of buildings by the German Sustainable Building Council (DGNB – Deutsche Gesellschaft für nach-

haltiges Bauen e.V.) is also becoming increasingly significant. Züblin is represented in the requisite bodies in

order to react to changes in the requirements in good time. This also includes the issue of green buildings.

The positive developments on the construction market also affect the prices charged by our subcontractors

and suppliers. Steel prices and other commodity prices are highly volatile. We try to counter this by agreeing

prices at an early stage. This is also true of contractual relationships with our subcontractors.

At an international level, Züblin is concentrating on regions where markets are not yet saturated. We aim to

implement complex construction projects there in all our segments. However, local markets involve particular

risks such as currency risks, tax risks, payment security risks, risks based on cultural differences and risks in

equipping construction projects with qualified personnel. The political situation in some developing countries is

unstable, meaning that we are withdrawing from these markets temporarily at least. The complexity and size

of international projects is increasing. This leads to considerable financial and earnings risks. Against this

background, Züblin will attend to orders even more selectively in future. The Board of Directors is also

examining an amendment to the company's strategic direction.

Despite falling demand for construction services, highly qualified construction engineers remain in very short

supply. The company is maintaining its efforts to counter this risk through close links to large numbers of

universities.

MANAGEMENT REPORT


Financial risks

The Group's commercial rules and regulations, from which the Group-internal reporting system and the

recurrent planning process are derived, also contain responsibilities for financial risks, the majority of which are

monitored centrally by the departments responsible for accounting and controlling. All central departments in

the Group, in particular Internal Audit, are also responsible for scrutinizing all commercial transactions in the

Group for possible instances of manipulation (taking undue advantage, deception, fraud and other breaches

of the law). In addition to credit risk, we include liquidity, interest rate, currency and price risks under financial

risks.

The Züblin Group's cash and cash equivalents are predominantly managed by Finance in close collaboration

with the CFO of Ed. Züblin AG. With the aim of avoiding risk, liquidity is solely invested in banks with top

quality, external ratings. Even against the background of the financial markets crisis, sufficient liquidity for the

Group is guaranteed through its year-round positive liquidity and the credit lines committed by banks.

The Züblin Group's supply of guarantees was secured in October 2010 with the premature replacement of the

syndicated revolving letter of guarantee facility, which had been in place since the end of 2005, by the con-

clusion of a new syndicated guarantee credit with a term of 5 years. However, this new syndicated guarantee

credit guaranteed by STRABAG SE with a total volume of € 2 billion is also available to other companies in the

STRABAG SE Group. The Group also has various bilateral guarantee credits with credit insurers and banks.

The Züblin Group supplies an appreciable percentage of its total construction services outside the euro zone

via Züblin International GmbH and Züblin Spezialtiefbau GmbH in particular. As a rule, no transaction risk is

incurred in this connection because sales revenues and associated costs are settled in the same currency in

each case. If need be, where revenues and costs diverge, hedging transactions are concluded in compliance

with the relevant Group guidelines. In principle, the Group only concludes derivative instruments where there is

a concrete link to the underlying transaction with the aim of making price, interest rate or currency risks more

calculable or of hedging them.

The recoverability of construction receivables is reviewed on an ongoing basis in the operating units respon-

sible for construction activity from the aspect of country risk (for orders outside the euro zone) and the actual

risk of the respective client defaulting. In the case of private clients, receivables may be hedged through

various instruments such as payment guarantees. In the case of traditional building construction projects,

credit risk is frequently reduced through prepayments by the clients. Credit risks are taken into account with

individual value adjustments or risk group-based value adjustments.

Procurement market risks

The global economic recovery is reflected in rising commodity prices. As expected, commodity prices rose in

2010 compared with the previous year. We expect prices to rise further in 2011 while becoming far more

volatile.

By coordinating decentralized and centralized procurement units, we are able to select subcontractors and

suppliers specifically to ensure that prices and the quality of the goods/services are guaranteed. Prices for

subcontractor services are expected to rise in 2011 because higher commodity prices were not passed on in

2010 and, at the same time, capacity utilization will increase.

Price risks are minimized by agreeing prices with subcontractors and suppliers at an early stage.

Audi Car Body Plant, Ingolstadt

FOREWORD





AUDITOR'S REPORT


Human resources risks

The Züblin Group's employees make a material contribution to our success, to the development and growth

of the company. The recruitment and retention of qualified personnel is therefore vitally important.

Our exacting requirements for our employees are met through consistent professional development. A key

component of risk management relates to recruitment. Appropriate measures are taken to minimize the risks

of bottlenecks caused by a lack of recruits, for example, and an aging workforce. The changes resulting from

the Bologna reforms to universities and the anticipated repercussions of demographic change are changing

the framework conditions for recruitment and personnel development. Increasing competition for qualified

technical and management staff makes it more difficult to fill specialized positions and demands that we

intensify our personnel marketing activities. We run an intensive marketing programme to recruit new

graduates. Contact with school children through suitable school marketing programmes is also becoming

increasingly important to tackle the issue of choosing one's career as early as possible.

Resignation risks, such as staff turnover, the departure of top performers and consequently a loss of expertise,

are contained by measures to improve staff loyalty. The range of issues here extends from improving the

work-life balance to measures to promote health. In addition, personnel development activities not only serve

to guard against adjustment risks (by rectifying shortfalls in staff qualifications) but they also serve to motivate

staff (by minimising motivation risks or preventing burn-out) and fostering staff loyalty.

In the identification of personnel-induced risks and the prompt initiation of measures to avoid them, we receive

excellent support from the system of controls used by Human Resources.

Taking account of all the measures and activities mentioned, from today's viewpoint, there are no personnel

risks, which might jeopardize the Group's existence.

North South Line,

Metro Amsterdam

(Netherlands)*

FOREWORD





AUDITOR'S REPORT


RESEARCH, DEVELOPMENT AND THE ENVIRONMENT

Research, development and innovations – today's ideas for tomorrow's business

For a long time, the optimization of costs was regarded as a strategic guiding principle for competitiveness in

the construction industry. However, construction also requires a broad range of technologies and expertise if it

is to produce technical solutions that will win clients over. Züblin specifically promotes all the innovations that

will allow projects to be carried out more efficiently while achieving higher standards of quality. The aim is to

implement research and development projects in cooperation with the operating units, so that the construc-

tion sites can benefit rapidly from the expertise gained. Large numbers of interdisciplinary development pro-

jects are dealt with every year and presented in the Group brochure "Research, Development, Innovation",

which appears annually.

The Central Engineering Division is our centre of expertise within the Group and is therefore in charge of the

acquisition, planning and execution of development projects. 450 highly qualified employees at 9 locations

support the operating units in tasks in civil engineering and tunnel construction, in structural construction

engineering and in turnkey construction. Here, the range of services covers the entire construction process,

from the early acquisition phase via tendering and implementation planning to site management. Development

projects are primarily carried out in the areas of building equipment, construction physics, information &

communication technology, energy, building materials technology, civil engineering and tunnel construction,

traffic route construction and safety. International innovation networks are maintained and continuously

expanded.

Sustainability in the construction industry

Social discourse is focused on the impact of economic and industrial activities on the environment in the

globalized economic area, with particular attention being paid to the issues of the limited availability of

resources and climate change.

Politicians, administrations and industry as key drivers of society are faced with the challenge of changing

production processes in such a way that the environment and the economy can be brought together in a

socially responsible manner. The three issues ecology, economy and social affairs define sustainability in the

economic context.

Tremendous potential for efficiency is expected from the construction and property sector as the largest

sectoral consumer of energy – ca. 42% of greenhouse gas emissions and ca. 35% of primary energy con-

sumption are ascribed to it. For the Züblin Group, the challenge now lies in devising a suitable strategy in this

area of tension created by politics, social responsibility, consideration for the environment and safeguarding its

own economic interests. In the process, we have to adapt to new client requirements, make our employees

aware of these issues and develop our own expertise.

Starting from the research project "Resource-efficient building" for the day after tomorrow's world, the

Sustainable Construction technology centre in the Central Engineering Division has developed a position of

expertise in this area. The central point constitutes the preparation of building certificates based on estab-

lished systems in accordance with international standards and the devising of holistic solutions in which

particular attention is paid to energy efficiency in the building's life cycle. This allows clients to measure and

compare the qualities of the building.

MANAGEMENT REPORT


A scheme to produce an ecological balance sheet, which will meet clients' new requirements relating to

sustainability, which are of relevance in terms of competition, was also drawn up.

From innovation to implementation

Renewable energies are a key issue in terms of innovation activities. Projects are being developed in the area

of storage technologies to alleviate the fluctuations in the generation of electricity and heat from renewable

sources caused by nature. Pilot plants for tidal power stations were also constructed.

The efficiency of a building's operation and the quality of its atmospheric environment are primarily controlled

by technical building equipment. To this end, among others, projects were carried out to simulate buildings, to

forecast energy requirements and to monitor them in the reporting year.

The aims and content of these works are the optimization of the operating energy requirement while at the

same time maximizing the comfort of the atmospheric environment and increasing planning security, for

example through the analysis of thermally activated components by means of weather forecast-based con-

trols or simulation programs with which the thermal behaviour or light conditions of or in buildings can be

analyzed. In future, it will be possible to carry out German Energy Conservation Regulations (EnEV) calcu-

lations in the tendering phase and the use of standardized cost estimates as a brief, rapid calculation for

technical building equipment construction will serve as a decision-making tool for further processes.

In traditional building construction, too, the example of the high-rise buildings carried out in recent years

shows how structural and construction materials technology-related optimization measures give planners and

quantity surveyors new scope. Methods are also being devised to give a better understanding of the ageing

processes of components and construction materials, which make use of the latest sensor technologies.

Tunnel construction

The development of Energietübbing® (energy segment) is one of many innovative contributions to the issue of

renewable energy generation. To exploit the geothermal potential of machine-driven tunnels, the absorbent

pipes laid in the segments were connected to a heat pump in a circuit and used for the thermal activation of

the tunnel or the surrounding ground. Following completion of a test and demonstration area, a geothermal

plant will now be commissioned.

Through the development of additional sophisticated IT tools, which have been tailored to tunnel construction,

among other things, the analytical consideration of subsoil freezing, which is normal in the tendering phase,

can be made more precise and optimized. Another tool that is already marketable serves to record and

evaluate relevant project data on interface processes between mineral and tool surfaces.

Tracks of the future

Züblin's non-ballasted track system installed on the German high-speed railway lines of Deutsche Bahn AG

offers rapid, quiet and above all safe travel to thousands of ICE passengers every day of the week. The pro-

duction system, which Züblin is continuously refining, stands for innovation and cost-effective construction

techniques. Noise barrier walls ensure that the acoustic damage to the environment caused by traffic volume

is reduced to an acceptable level. Züblin has continuously refined a system of noise barrier walls for the

aerodynamic requirements of high speed railway tracks with the result that it has now achieved market

leadership in this sector.

Prison Complex, Wuppertal*

FOREWORD





AUDITOR'S REPORT


Planning and constructing in new dimensions

In the meantime, the "5D planning in the construction process" development has attracted a great deal of

attention. 5D is the Group's building information model (BIM) and stands for a model-based, integrative

method of working by all those involved in a project over all phases. This method of working is currently being

integrated in the calculation software and supplemented by construction processes and graphic functions.

This new generation of calculation software completed structural drafts and calculated quantities for building

construction and engineering construction in the reporting year.

Network – construction

Sophisticated, large-scale construction research projects are best implemented in cooperation with partners

from industry, research institutes and universities. Züblin maintains excellent links with different organizations

in the world of European construction research with the aim of communicating the social benefits of con-

struction research as well as lobbying for and launching national and pan-European research and develop-

ment projects. In 2004, Züblin joined the European Network of Construction Companies for Research and

Development (ENCORD) – with a membership of 21 large European construction companies. The aim of the

network is to advance industry-led construction research, to exchange information on best-practice methods

or new processes by holding workshops for instance. Issues such as knowledge management and transfer or

the carbon disclosure project (CDP), which aims to quantify the ecological footprint of listed companies are

debated in a practical manner. ENCORD is also a forum in which issues relating to sustainability can be

agreed and shaped within the European construction industry, such as the Construction and Real Estate

Sector Supplement (CRESS) to Global Reporting Initiative (GRI). Since July 2006 Züblin has been entrusted

with the function of secretary general of ENCORD.

In addition, Züblin is active in the European Construction Technology Platform (ECTP), which brings together

and advances the interests of construction research in the course of the European Commission's 7th Frame-

work Programme. In the reporting year, Züblin played a crucial role in initiating and developing the Research

and Development for Future Infrastructures in Europe (reFINE) initiative with the aim of launching European

research programmes, which will promote the modernization of infrastructure on traffic routes.

MANAGEMENT REPORT


EMPLOYEES

In view of the diminishing supply of specialist staff, entrepreneurial success on the international market is

increasingly dependent on employees' specialist expertise and motivation. Here, it is very important that we

make the right decisions regarding personnel to ensure we remain competitive, particularly in times when

there is a shortage of engineers. Our staff make a crucial contribution to our company's success with their

expertise, their ability to innovate and their commitment.

The construction section is subject to constant change in terms of economic and social policy. Project

development, sustainable construction or research and development are examples of the fact that in addition

to construction, construction-related services are becoming increasingly important. In order to operate

successfully in all these areas, our staff require ongoing training and qualification measures in technical and in

personal skills. These were implemented successfully in the 2010 financial year.

We use the Thomas analysis to evaluate our employees' potential. This is an analytical process used in staff

development and recruitment, which diagnoses their attitudes and abilities. Personal development targets and

areas of employment can be worked out in subsequent feedback and appraisal sessions and supported

through individual development and training measures.

In addition to carrying out technical and construction-specific training schemes, seminars focusing on

improving participants' communication, management and social skills have also been held using the

centralized training services offered by BRVZ GmbH, a commercial service provider within the Züblin Group.

The management development programme was also redesigned in the past financial year to take better

account of the specific needs of various target groups.

Our company also offers specialist graduate trainee programmes for people who have completed a

bachelor's or a master's degree. Talented young people with the requisite academic qualifications are either

introduced to the practical requirements in our Central Engineering Division or they are introduced rapidly and

specifically to the requirements on our construction sites and in administration in our special, individually

focused trainee programme, which lasts up to 15 months. To provide optimal preparation for their future roles,

young technical staff are looked after by an experienced mentor and the personnel development team during

the trainee programme and participate in complementary training measures.

To attract suitable young trainees for our company, we continue to be intensely involved in the sphere of

higher education and the vocational training sector. Our personnel marketing programme, which focuses

systematically on selected universities, ensures that we attract competent recruits to our company despite

declining graduate numbers. Our commitment ranges from maintaining close links with universities to adapt-

ing our induction programmes to the requirements of bachelor's and master's degrees. Internships for

students, support with theses, the Group's own trainee programme and internal professional training con-

stitute an integral component in securing junior staff.

To meet our expectations in terms of quality in the area of commercial, technical or industrial training, we need

to enthuse young people about construction or about a training programme in the construction industry

through effective marketing to schools. The centrally established commercial training centre in Bebra has

proved its worth in the rigorous encouragement of trainees already working for the Züblin Group. A com-

parable institution is being prepared for industrial trainees.

DESY-XFEL Injector Complex, Hamburg*

FOREWORD





AUDITOR'S REPORT


PROCUREMENT

In the reporting year, work started on coordinating the placement of contracts, numbering over 12,000, by

selecting subcontractors and suppliers specifically in accordance with strategic and economic aspects.

By using the internal procurement information and management system, regional procurement was linked to

central strategies.

This highlighted different trends within the various procurement markets and contributed to optimizing and

securing our costs and the implementation of our projects.

Maasvlakte Power Plant,

Rotterdam (Netherlands)*

FOREWORD





AUDITOR'S REPORT


SUPPLEMENTARY REPORT

At the beginning of 2011, an area of Japan was devastated by an earthquake and a subsequent tsunami.

Nuclear reactors were severely damaged as a consequence of these natural disasters. These developments

have boosted discussions about withdrawing from the nuclear industry. Our core markets are also affected by

this. At present, higher energy costs are anticipated. The construction of new nuclear power stations is a

matter of debate.

The situation in north Africa and on the Arabian Peninsula as well as the Near East is becoming increasingly

unstable. Since, with the exception of the Arabian Peninsula, we do not have a presence in these regions, we

assume, at present, that these developments will not have any significant influence on our Group.

The current financial situation facing public sector budgets is deteriorating noticeably. Demand for loans is

increasing and the inflation rate is trending upwards. The additional risk of inflation and the impact this will

have on financial markets will depress demand for capital goods. However, because of the substantial level of

orders on hand, we assume that this will not affect Züblin in 2011.

There have been no other events of particular significance since the reporting date.

FORECAST REPORT

The federal government is forecasting economic growth of 2.3% for 2011. This estimate is also confirmed by

the leading economic research institutes. The 1.6% increase in expenditure by private households in Germany

and the rise in capital investment of around 8% are cited as reasons for the positive economic outlook. These

two factors should lead to an increase in domestic demand of 2.0% in total. The proportion of exports should

increase by 6.5% compared with the previous year. The repercussions of the substantial levels of some EU

countries' sovereign debt are difficult to forecast. Not only the stability of the European Monetary System is

being called into question but public sector demand in the countries affected will remain rather weak as a

result of the requisite fiscal tightening.

In the main German construction trades, the economic recovery will, in all likelihood, continue to have an

impact still in 2011.

The recovery process in manufacturing industry that is so crucial to industrial and commercial construction is

already so far advanced that replacement and expansionary investment, which had been postponed many

times because of the economic crisis, will lead to new orders for the construction industry. However, the main

association of the German construction industry only expects a subdued rise in sales in industrial and com-

mercial construction of a nominal 1% in 2011.

Growth in newly completed housing is expected once again in 2011.

By contrast, sales in public sector construction are expected to fall sharply for the second time in succession

in 2011. The main association of the German construction industry is forecasting a nominal decline in public

sector construction volume of 4.5%.

Overall, sales in the German construction industry will match the level of the previous year in 2011.

The federal government has provided € 15 billion for the period from 2009 to 2011 with the two stimulus

packages. Of these investment funds, some € 5 billion should be used for the construction of trunk roads and

federal waterways as well as for the refurbishment of government buildings. € 10 billion of these funds were

MANAGEMENT REPORT


attributable to the future investment programme, which is largely implemented at local authority level. Since

only ca. 60% of all the aid funds were invested in the last two years – a considerable portion of the stimulus

packages will still have an impact in 2011 – if the available funds are actually used.

Irrespective of this the federal government and regional governments will keep their construction investment

stable in 2011. However, a reduction must be expected at local authority level. The meagre budgets will tend

to be used to refurbish public buildings. Despite their poor condition generally, repairs to local authority roads

and transport infrastructure will be postponed further.

In the Benelux countries, a moderate recovery in the construction industry is expected. In Finland and

Sweden growth rates in the construction industry will remain high in 2011 and in subsequent years. Current

estimates are that the Danish construction sector will also perform well.

Meanwhile, most of the central and eastern European countries have largely overcome the economic crisis.

With the exception of Hungary, these countries' government debt is far lower than in euro zone countries.

Based on EU funds from the Cohesion Fund, the expectation is that construction investment in these

countries will soon be growing more rapidly than in western Europe. Once again, very rapid growth is forecast

for Poland in 2011. Hungary, too, is expected to overcome its longstanding economic crisis from 2011. By

contrast, the recovery in the Czech construction industry will be somewhat delayed. Slovakia is likely to return

to growth in 2011, while the Austrian construction industry – as in Germany – is expected to post slight

growth once more. By contrast, the construction market in Switzerland looks stable.

Russia's infrastructure requires enormous investment to bring it up to 21st century standards but the eco-

nomic crisis meant that Russia was only able to implement a fraction of the requisite construction projects

recently. Here, too, an increase in construction investment is forecast in the medium term.

The majority of Züblin's markets outside Europe are characterized by above average economic growth. Asia

and China, in particular, even more than Latin America, will remain the strongest drivers of global growth in

2011. However, inflation is playing an increasing role in countries where there is no output gap.

In the final quarter of 2010, Chile further stepped up its construction activities. This trend is also likely to

continue in 2011. The government wishes to construct more social housing. In the process, it aims to focus

on the regions that suffered most from the earthquake.

Development of the Züblin Group

The Züblin Group is entering 2011 with a substantial backlog of orders. Some 80% of German operating

performance during the year is already underpinned by actual construction orders. Given the high levels of

orders received in 2010, international business is also expected to post stable growth.

In 2011, the Züblin Group's performance will be higher than that of the previous year. Profits are also

expected to match the previous year's level.

In view of the situation with regard to Ed. Züblin AG's equity and the ongoing challenges in the economic

environment, the Board of Directors of Ed. Züblin AG is currently developing a 2015 strategy, which may lead

to structural changes. In the interests of strengthening the Group's equity, the Board of Directors of Ed. Züblin

AG will recommend to the General Meeting that profits are reinvested in Ed. Züblin AG.

For an assessment of the Group's development in the years following 2011, it is of crucial importance whether

the trend in interest rates and inflation influences the economic recovery in Germany and throughout the world.

At the moment, we are assuming moderate growth in companies' investment programmes. Public sector

Upgrading of Motorway A5 between Malsch and Offenburg, Structural Works*

FOREWORD





AUDITOR'S REPORT


investment will fall if anything. This may be offset by major infrastructure programmes, such as Stuttgart 21.

However, this project is politically controversial. From today's viewpoint and allowing for the gratifying orders

received in the first quarter of 2011, we continue to expect the Group's development to be positive.

Future-related comments

This annual report contains comments, which relate to the future development of the Züblin Group and eco-

nomic and political developments. The comments represent estimates, which we have reached, after funda-

mental scrutiny, on the basis of the information available to us at the time the annual report went to press.

However, since they are dependent on factors, which are outside our influence, actual developments may

differ from our forecasts.



CONSOLIDATED INCOME STATEMENT

2010 2009

Notes € thousand € thousand Sales revenues (1) 2,170,245 2,196,451

Change in inventories – 2,650 – 3,812

Own work capitalized 7,433 6,040

Other operating income (2) 36,422 33,719

Cost of materials and purchased services (3) – 1,464,508 – 1,486,466

Personnel expenses (4) – 476,426 – 499,766

Other operating expenses (5) – 154,566 – 158,399

Results from equity participations (6) 335 599

Other results from participations (7) 6,101 4,235

Earnings before depreciation, interest and taxes (EBITDA) 122,386 92,601

Depreciation/amortization of intangible assets and property, plant and equipment (8) – 34,789 – 39,599

Earnings before interest and taxes (EBIT) 87,597 53,002

Interest and other financial income (9) 8,929 8,999

Interest and other financial expenses (9) – 10,694 – 11,007

Interest – 1,765 – 2,008

Earnings before taxes 85,832 50,994

Taxes on income (10) – 25,869 – 12,760

Earnings after taxes 59,963 38,234

of which earnings due to minority shareholders 289 1,049

of which earnings due to the parent company's shareholders 59,674 37,185

STATEMENT OF COMPREHENSIVE INCOME

2010 2009

€ thousand € thousand

Earnings after taxes 59,963 38,234

Actuarial gains/losses from defined pension commitments and similar obligations – 7,147 – 7,512

Adjustment item resulting from the currency conversion of subsidiaries abroad 2,642 1,637

Deferred taxes on gains or losses taken directly to equity 2,130 2,241

Other changes recognized in equity (minority interests) 237 13

Overall result 57,825 34,613

of which due to minority shareholders 526 1,062

of which due to the parent company's shareholders 57,299 33,551

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS

CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED


AUDITOR'S REPORT


CONSOLIDATED BALANCE SHEET

ASSETS 31.12.2010 31.12.2009

Notes € thousand € thousand

Non-current assets

Intangible assets (11) 28,704 25,503

Property, plant and equipment (11) 203,768 200,710

Shares in equity participations (12) 128 278

Other financial assets (12) 9,729 14,498

Trade receivables (15) 410 144

Non-financial assets (15) 854 2,003

Other financial receivables and assets (15) 8,721 1,884

Deferred tax assets (13) 2,364 2,622

254,678 247,642

Current assets

Inventories (14) 69,393 81,273

Trade receivables (15) 372,056 327,897

Non-financial assets (15) 18,481 17,218

Other financial receivables and assets (15) 40,658 59,461

Cash and cash equivalents (16) 509,468 476,504

1,010,056 962,353

1,264,734 1,209,995

LIABILITIES 31.12.2010 31.12.2009

Notes € thousand € thousand

Equity

Capital stock (17) 20,452 20,452

Reserves (17) 229,202 172,903

249,654 193,355

Minority interests (17) 3,568 3,698

253,222 197,053

Non-current liabilities

Provisions (18) 180,379 170,174

Payables (19) 18,116 26,245

Trade payables (19) 2,172 2,989

Non-financial liabilities (19) 696 849

Other financial liabilities (19) 800 781

Deferred tax liabilities (13) 30,004 22,017

232,167 223,055

Current liabilities

Provisions (18) 96,636 94,656

Payables (19) 13,993 7,251

Trade payables (19) 566,113 594,016

Non-financial liabilities (19) 44,635 45,031

Other financial liabilities (19) 57,968 48,933

779,345 789,887

1,264,734 1,209,995



CONSOLIDATED CASH FLOW STATEMENT

2010 2009

Notes € million € million Net income for the year 60.0 38.2

Write-downs/write-ups 34.7 39.6

Changes in non-current provisions 6.5 6.8

Noncash expense and income 2.9 15.1

Profit from the sale/disposal of assets – 3.5 – 1.8

Cash flow from the result 100.6 97.9

Changes in items:

Inventories 12.1 11.9

Receivables from construction contracts, trade receivables incl. joint ventures – 50.3 147.5

Group receivables and receivables from companies in which participations are held 19.1 5.6

Other assets – 3.9 5.3

Payables from construction contracts, trade payables incl. joint ventures – 27.1 – 39.2

Group payables and payables to companies in which participations are held 5.7 1.8

Other payables 4.7 – 12.1

Current provisions 6.9 15.3

Cash flow from operating activities 67.8 234.0

Acquisition of financial assets – 1.0 – 1.3

Acquisition of intangible assets and property, plant and equipment – 41.1 – 35.4

Profit from the sale/disposal of assets 3.5 1.8

Carrying amounts of non-current assets disposed 2.5 5.8

Cash flow from investment activities – 36.1 – 29.1

Payment of lease liabilities – 5.5 – 3.7

Liabilities to banks 4.0 – 38.4

Dividend distributions – 1.0 0.0

Cash flow from financing activities – 2.5 – 42.1

Net change in cash and cash equivalents 29.2 162.8

Cash and cash equivalents at beginning of period 476.5 313.6

Change in cash and cash equivalents arising from changes in the consolidated group 2.3 0.1

Change in cash and cash equivalents arising from currency differences 1.5 0.0

Cash and cash equivalents at end of period (21) 509.5 476.5

Interest paid 3.5 4.7

Interest received 5.9 6.4

Taxes paid(–)/refunded(+) – 6.4 – 8.3

Dividends received 6.0 4.6

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



AUDITOR'S REPORT


STATEMENT OF CHANGES IN EQUITY

Changes in equity with no impact

on income

Capital

stock Retained earnings

Other reserves

Actuarial gains/

losses

Foreign currency reserves

Group equity

Minority interests

Total equity

€ thousand € thousand € thousand € thousand € thousand € thousand € thousand € thousand

As at 31.12.2008 20,452 10,293 126,222 6,342 – 3,287 160,022 3,141 163,163

Overall result 37,185 – 5,271 1,637 33,551 1,062 34,613

Other changes 6,914 – 7,132 – 218 – 218

Dividend distribution 0 – 505 – 505

As at 31.12.2009 20,452 17,207 156,275 1,071 – 1,650 193,355 3,698 197,053

Overall result 59,674 – 5,017 2,642 57,299 526 57,825

Other changes 11,915 – 11,915 0 0

Dividend distribution – 1,000 – 1,000 – 656 – 1,656

As at 31.12.2010 20,452 29,122 203,034 – 3,946 992 249,654 3,568 253,222


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

STATEMENT OF CHANGES IN INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT

Cost

31.12. Previous

year

Change in consolid.

companies Currency

differences Additions1) Disposals Transfers

31.12. Reporting

year € thousand € thousand € thousand € thousand € thousand € thousand € thousand

2009

Intangible assets

Concessions, industrial property rights and similar rights and values 3,978 47 21 271 440 0 3,877 Goodwill 30,477 0 16 0 0 0 30,493 – of which from capital consolidation (10,300) (10,300) Capitalized development costs 0 0 0 1,530 0 0 1,530 Advance payments 78 0 0 0 78 0 0 34,533 47 37 1,801 518 0 35,900

Property, plant

and equipment

Land, leasehold rights and buildings, including buildings on third-party land 123,434 0 553 614 1,516 355 123,440 Plant and machinery 177,612 39 4,630 22,921 19,322 2,543 188,423 Other equipment, operating and office equipment 75,872 255 322 9,087 8,534 – 1,376 75,626 Advance payments and work in progress 1,795 0 0 3,632 21 – 1,522 3,884 378,713 294 5,505 36,254 29,393 0 391,373

2010

Intangible assets

Concessions, industrial property rights and similar rights and values 3,877 0 37 81 78 0 3,917 Goodwill 30,493 0 41 0 0 0 30,534 – of which from capital consolidation (10,300) (10,300) Capitalized development costs 1,530 0 0 3,514 0 0 5,044 Advance payments 0 0 0 108 0 0 108 35,900 0 78 3,703 78 0 39,603

Property, plant

and equipment

Land, leasehold rights and buildings, including buildings on third-party land 123,440 0 551 1,528 2,229 2,826 126,116 Plant and machinery 188,423 – 19 6,382 21,975 18,221 64 198,604 Other equipment, operating and office equipment 75,626 – 65 572 13,800 6,301 – 16 83,616 Advance payments and work in progress 3,884 0 – 60 4,047 14 – 2,874 4,983 391,373 – 84 7,445 41,350 26,765 0 413,319

1) of which public sector grants € 0 (previous year € 693,000)

2) of which value impairment on property, plant and equipment € 0 (prev. year on land € 4,722,000), on goodwill € 309,000 (prev. year € 0)

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS

CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AUDITOR'S REPORT


Cumulative depreciation/amortization Carrying amounts

31.12. Previous

year

Change in consolid.

companies Currency

differences Additions2) Disposals Transfers

31.12. Reporting

year

31.12. Reporting

year

31.12. Previous

year € thousand € thousand € thousand € thousand € thousand € thousand € thousand € thousand € thousand

3,528 35 21 228 405 0 3,407 470 450

6,990 0 0 0 0 0 6,990 23,503 23,487

(3,500) (3,500) (6,800) (6,800)

0 0 0 0 0 0 0 1,530 0 0 0 0 0 0 0 0 0 78

10,518 35 21 228 405 0 10,397 25,503 24,015

18,222 0 75 8,019 314 0 26,002 97,438 105,212

105,706 7 3,109 21,437 11,322 406 119,343 69,080 71,906

42,179 121 275 9,915 6,766 – 406 45,318 30,308 33,693

0 0 0 0 0 0 0 3,884 1,795 166,107 128 3,459 39,371 18,402 0 190,663 200,710 212,606

3,407 0 30 223 78 0 3,582 335 470 6,990 0 18 309 0 0 7,317 23,217 23,503

(3,500) (3,500) (6,800) (6,800)

0 0 0 0 0 0 0 5,044 1,530 0 0 0 0 0 0 0 108 0

10,397 0 48 532 78 0 10,899 28,704 25,503

26,002 0 131 3,177 1,393 0 27,917 98,199 97,438 119,343 – 16 4,768 21,077 13,745 – 71 131,356 67,248 69,080

45,318 – 52 486 10,003 5,548 71 50,278 33,338 30,308

0 0 0 0 0 0 0 4,983 3,884 190,663 – 68 5,385 34,257 20,686 0 209,551 203,768 200,710


26,002 0 131 3,177 1,393 0 27,917 98,199 97,438 119,343 – 16 4,768 21,077 13,745 – 71 131,356 67,248 69,080

45,318 – 52 486 10,003 5,548 71 50,278 33,338 30,308

0 0 0 0 0 0 0 4,983 3,884 190,663 – 68 5,385 34,257 20,686 0 209,551 203,768 200,710

18,222 0 75 8,019 314 0 26,002 97,438 105,212

105,706 7 3,109 21,437 11,322 406 119,343 69,080 71,906

42,179 121 275 9,915 6,766 – 406 45,318 30,308 33,693

0 0 0 0 0 0 0 3,884 1,795 166,107 128 3,459 39,371 18,402 0 190,663 200,710 212,606

3,407 0 30 223 78 0 3,582 335 470 6,990 0 18 309 0 0 7,317 23,217 23,503

(3,500) (3,500) (6,800) (6,800)

0 0 0 0 0 0 0 5,044 1,530 0 0 0 0 0 0 0 108 0

10,397 0 48 532 78 0 10,899 28,704 25,503



SHAREHOLDINGS PURSUANT TO § 313 PARA. 2 OF THE GERMAN COMMERCIAL CODE (HGB)

Share

%

Fully consolidated companies

Germany

Ed. Züblin AG, Stuttgart

Blees-Kölling-Bau GmbH, Cologne1) 100

DYWIDAG Bau GmbH, Munich1) 100

Eberhard Pöhner Unternehmen für Hoch- und Tiefbau GmbH, Bayreuth1) 100

ECS European Construction Services GmbH, Mörfelden-Walldorf1) 100

Josef Riepl Unternehmen für Ingenieur- und Hochbau GmbH, Regensburg1) 100

Ooms-Ittner-Hof GmbH, Cologne1) 100

SBR Verwaltungs-GmbH, Kehl/Rhine1) 100

SF - Ausbau GmbH, Freiberg1) 100

Xaver Bachner GmbH, Straubing1) 100

Z-Bau GmbH, Magdeburg1) 100

Züblin Gebäudetechnik GmbH, Erlangen1) 100

Züblin International GmbH, Stuttgart1) 100

Züblin Projektentwicklung GmbH, Stuttgart1) 100

Züblin Spezialtiefbau GmbH, Stuttgart1) 100

Züblin Stahlbau GmbH, Hosena1) 100

Züblin Umwelttechnik GmbH, Stuttgart1) 100

Züblin Wasserbau GmbH, Berlin1) (N) 100

Fully consolidated companies

Abroad

N.V. STRABAG Belgium S.A., Antwerp/Belgium 100

Przedsiebiorstwo Budownictwa Ogólnego i Uslug Technicznych, Slask Sp. z o.o., Katowice/Poland 61

Shanghai Changjiang-Züblin Construction & Engineering Co. Ltd., Shanghai/China 75

Züblin A/S, Trige/Denmark 100

Züblin Baugesellschaft m.b.H., Vienna/Austria 100

Züblin Construct S.R.L., Bucharest/Romania 100

Züblin Ground and Civil Engineering LLC, Dubai/UAE 100

Züblin Holding GesmbH, Vienna/Austria 100

Züblin International Chile Ltda., Santiago/Chile 100

Züblin International Malaysia Sdn. Bhd., Kuala Lumpur/Malaysia 100

Züblin Kft, Budapest/Hungary 100

Züblin Nederland BV, Vlaardingen/Netherlands (A) 100

Züblin Polska Sp. z o.o., Poznan/Poland 100

Züblin Scandinavia AB, Sollentuna/Sweden 100

Züblin Spezialtiefbau Ges.m.b.H., Vienna/Austria 100

Züblin stavebni spol. s.r.o., Prague/Czech Republic 100

Zucotec - Sociedade de Construções, Lda, Lisbon/Portugal 100

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



Share

%

Non-consolidated affiliated companies of minor significance

Germany

2. Züblin Vorrats GmbH, Stuttgart 100

6. Züblin Vorrats GmbH, Stuttgart 100

Bodensanierung Bischofswerda GmbH, Stuttgart 100

DIMMOPLAN Verwaltungs GmbH, Stuttgart (I) 100

EURO SERVICES Catering & Cleaning GmbH, Mörfelden-Walldorf 100

FDZ Grundstücksverwaltung GmbH & Co. Objekt Stuttgart-Möhringen KG, Mainz 94

Industrielles Bauen, Betreuungsgesellschaft mit beschränkter Haftung, Stuttgart (R) 100

JUKA Justizzentrum Kurfürstenanlage GmbH, Cologne3) (A) 51

Kieswerk Diersheim GmbH, Rheinau 60

Lehmann Verwaltungs-GmbH, Müllrose 100

Parking Bowling Green GmbH, Stuttgart 100

Projektgesellschaft Willinkspark GmbH, Cologne3) (A) 100

Züblin Maschinen- und Anlagenbau GmbH, Kehl/Rhine 100

Züblin Services GmbH, Stuttgart 100

Non-consolidated affiliated companies of minor significance

Abroad

Baytürk Grup Insaat Ithalat, Ihracat ve Ticaret Limited Sirketi, Ankara/Turkey (I) 100

Beijing Züblin Equipment Production Co. Ltd., Beijing/China 100

BSS Tunnel- & Montanbau GmbH, Berne/Switzerland (I) 100

Demirtürk Uluslararasi Insaat, Ithalat, Ihracat ve Ticaret Limited Sirketi, Ankara/Turkey (I) 100

Mister Recrutamento Lda., Lisbon/Portugal 100

OOO Züblin Russia, Ufa/Russia 100

OOO Züblin, Moscow/Russia 100

POLTEC Sp. z o.o., Wroczlaw/Poland 100

TOO Züblin Kasachstan, Almaty/Kazakhstan 100

Z-Design EOOD, Sofia/Bulgaria 100

Züblin AS, Oslo/Norway 100

Züblin Australia Pty Ltd., Perth/Australia 100

Züblin Bulgaria EOOD, Sofia/Bulgaria 100

Züblin Chile Ingeniería y Construcciones Ltda, Santiago/Chile 100

Züblin Engineering Consulting (Shanghai) Co., Ltd., Shanghai/China 100

Züblin Holding Thailand Co. Ltd., Bangkok/Thailand2) 49

Züblin Hrvatska d.o.o., Zagreb/Croatia (R) 100

Züblin Ireland Limited, Dublin/Ireland 100

Züblin Slovensko s.r.o., Bratislava/Slovakia 100

Züblin Thailand Co. Ltd., Bangkok/Thailand (I) 100



Share

%

Associated companies, equity participations

Germany

BMTI - Baumaschinentechnik International GmbH, Cologne 50

BRVZ Bau- Rechen- und Verwaltungszentrum GmbH, Cologne 50

Associated companies, equity participations

Abroad

Züblin International Qatar W.L.L, Doha/Qatar (R) 49

Associated companies of minor significance

Germany

BS-Baugeräte-Service GmbH & Co. KG i.I., Augsburg 25

BS-Baugeräte-Service-Verwaltungsgesellschaft mbH i.I., Augsburg 25

Büro-Center Ruppmannstraße GmbH, Stuttgart 50

ITC Engineering GmbH & Co. KG, Stuttgart (R) 50

PARK SERVICE HÜFNER GmbH & Co. KG, Stuttgart 48

stahl + verbundbau gesellschaft für industrielles bauen m.b.H., Dreieich 30

Wohnbau Tafelgelände Beteiligungs-GmbH, Munich 25

Wohnbau Tafelgelände GmbH & Co. KG, Munich 25

Associated companies of minor significance

Abroad

Arena Development N.V., Hasselt/Belgium 50

ASG Invest N.V., Genk/Belgium 50

Industrial Engineering and Contracting Co. S.A.R.L. i.L, Beirut/Lebanon 50

Ontwikkelingscombinatie Maasmechelen N.V., Antwerp/Belgium 50

Philman Holdings Company, Inc. Metro, Manila/Philippines 20

Techno Çelik Yapi Sanayi ve Ticaret A.S., Istanbul/Turkey 30

Plinius Vastgoed N.V., Hasselt/Belgium 43

A = Addition

N = Name change

I = Indirect participation

R = Reclassification

1) § 264 Para. 3 of the German Commercial Code (HGB) is invoked for the company.

2) Voting rights 79.35%, profit participation 100%

3) Lack of controlling influence resulting from the contractual structure

Some of the percentages in the shareholdings have been rounded.

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



GENERAL REMARKS

Ed. Züblin AG, which is based in Stuttgart, is a German construction group with subsidiaries in Germany and

abroad. The Group's core business segments are:

- Turnkey Construction

- Construction Engineering

- Plants and Specialist Areas

In implementation of § 315a of the German Commercial Code (HGB), the consolidated financial statements of

Ed. Züblin AG as at 31.12.2010 have been prepared in accordance with the provisions of the International

Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) whose

application was mandatory on the balance sheet date, including the Interpretations of the International

Financial Reporting Interpretations Committee (IFRIC).

Applied are exclusively those IASB Standards and Interpretations accepted by the European Commission on

the balance sheet date and published accordingly in the Official Journal of the European Union. In addition,

further disclosure requirements of § 315a of the German Commercial Code (HGB) are met.

These consolidated financial statements are included in the consolidated financial statements of STRABAG

SE, Villach/Austria.

In addition to the income statement, the statement of comprehensive income and the balance sheet, a cash

flow statement is compiled in accordance with IAS 7 and a statement of changes in equity is shown (IAS 1).

For better clarity of presentation, various items of the balance sheet and the consolidated income statement

have been combined. These items are reported and explained separately in the Notes. The consolidated

income statement is drawn up in accordance with the total cost format.

The consolidated financial statements are presented in € thousands, which can result in rounding differences.

The Board of Directors of Ed. Züblin AG, Stuttgart, released these consolidated financial statements for publi-

cation on 7 April 2011. They will be approved in the meeting of the Supervisory Board on 19 April 2011.



CHANGES IN ACCOUNTING STANDARDS

The IASB has adopted the following changes to existing IFRSs and adopted some new IFRSs and IFRICs,

which have already been endorsed by the EU Commission and whose application has consequently been

mandatory since 1 January 2010:

To be applied to financial

years starting on

in accordance with

IASB EU law

IFRS 1 Changes relating to First-time Adoption of IFRS 01.07.2009 01.01.2010

IFRS 1 Additional Exemptions for First-time Adopters 01.01.2010 01.01.2010

IFRS 2 Changes relating to Share-based Payment with Cash Settlement by a Group Company 01.01.2010 01.01.2010

IFRS 3 Business Combinations (revised 2008) 01.07.2009 01.07.2009

IAS 27 Consolidated and Separate Financial Statements (changed) 01.07.2009 01.07.2009

IAS 39 Changes relating to Suitable Underlying Transactions 01.07.2009 01.07.2009

IFRIC 12 Service Concession Arrangements 01.01.2008 30.03.2009

IFRIC 15 Agreements for the Construction of Real Estate 01.01.2009 01.01.2010

IFRIC 16 Hedges of a Net Investment in a Foreign Operation 01.10.2008 01.07.2009

IFRIC 17 Distributions of Non-cash Assets to Owners 01.07.2009 01.11.2009

IFRIC 18 Transfers of Assets from Customers 01.07.2009 01.11.2009

Changes in various IFRSs as a result of the 2009 annual improvement process 01.01.2009 31.12.2009

Because of the first-time application of the IFRSs mentioned above, there have been the following changes

compared with 31 December 2009:

IFRS 3 and IAS 27: the regulations for the consolidation of capital were revised in phase II of the Business

Combinations project. Material changes are that the option of recognizing minorities at their fair value (full

goodwill method) has been standardized, transaction costs will have to be recognized as expenses in future,

goodwill will not be adjusted in the event of a retrospective reassessment of the purchase price and in the

case of a step acquisition, the previous investments will be revalued through profit and loss.

The revised IAS 27 demands the recognition of all repercussions from transactions with minority shareholders

in equity, if they do not result in any change of control and these transactions lead neither to goodwill nor to

profits and losses. In the event of control being lost, the Standard gives a detailed instruction as to how it is to

be depicted in the balance sheet. Accordingly, the remaining holding is to be measured at fair value and any

profit or loss arising from the new measurement is to be recognized as such.

Application of IFRS 3 and IAS 27 did not result in any changes in the reporting year. They will have an impact

on the accounting for corporate acquisitions in future.

First-time application of the other IFRSs and IFRICs mentioned had little impact on the consolidated financial

statements of Ed. Züblin AG as at 31.12.2010, since the changes are only applicable in isolated cases. There

were no changes to accounting policies.

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



FUTURE CHANGES IN ACCOUNTING STANDARDS

The IASB and IFRIC have adopted additional standards and interpretations, whose application is not yet

mandatory in the 2010 financial year or have not yet been endorsed by the EU Commission. The following

standards and interpretations are:

To be applied to financial

years starting on

in accordance with

IASB EU law

IFRS 1 Change relating to the Limited Exemption for First-Time Adopters from Comparable Disclosures in Accordance with IFRS 7 01.01.2009 01.07.2010

IFRS 1 Change relating to Hyperinflation and a Fixed Conversion Date 01.07.2011 1)

IFRS 7 Disclosures in the Notes on the Transfer of Financial Instruments 01.07.2011 1)

IFRS 9 Financial Instruments 01.01.2013 1)

IAS 12 Deferred Taxes: Recognition of the Carrying Amount of an Asset 01.01.2012 1)

IAS 24 Related Party Disclosures (amended) 01.01.2011 01.01.2011

IAS 32 Changes relating to the Classification of Rights Issues 01.02.2010 01.02.2010

IFRIC 14 Prepayments of Minimum Funding Commitments 01.01.2011 01.01.2011

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments 01.07.2010 01.07.2010

Changes in various IFRSs as a result of the 2010 annual improvement process

in essence 01.07.2010

01.07.2010/ 01.01.2011

1) Endorsement procedure is still ongoing

Of the Standards and Interpretations listed above, only IFRS 9 is expected to have an impact on the con-

solidated financial statements.

IFRS 9: the regulations for the Recognition and Measurement of Financial Assets were fundamentally revised.

In essence, the categories for the recognition and measurement of financial assets were restructured.

Reclassification of assets is compulsory in the event of any change to the business model. New rules were

provided for the subsequent measurement of financial liabilities unless they are to be measured at amortised

cost.

There are no plans to apply the new Standards prematurely.

CONSOLIDATED COMPANIES

The consolidated financial statements as at 31 December 2010 embrace, in addition to Ed. Züblin AG, all

significant German and foreign subsidiaries in which Ed. Züblin AG owns, directly or indirectly, the majority of

voting rights and the contractual structure does not exclude a controlling influence. Significant associated

companies and jointly managed companies are reported in the balance sheet using the equity method (equity

participations).

Companies that are insignificant, even in their totality, for conveying a picture of the Group's net assets,

financial position and profit situation corresponding to the actual conditions are not consolidated.

The companies and equity participations within the scope of the 2010 consolidated financial statements are

shown in the list of shareholdings.

The financial year of all consolidated and associated companies is the calendar year.



In the 2010 financial year, the consolidated Group recorded the following change:

Full

consolidation

Equity

method

As at 31.12.2009 37 2

First-time consolidation during the financial year 1 1

Excluded from consolidation during the financial year 1) – 3 0

As at 31.12.2010 35 3

of which companies abroad 17 1 1) of which a merger within the Group

Newly consolidated companies

Züblin Nederland BV, Vlaardingen/Netherlands was included for the first time in the Group's scope of consoli-

dation with a share of 100%. The date of incorporation was 27.08.2009.

As a rule, the consolidation of companies included for the first time is measured at the acquisition date. As a

result of expanding business activities, the company already belonging to the Group in the previous year was

included in the consolidated financial statements as at 31.12.2010 for the first time by means of full consoli-

dation. Overall, the effects of this newly consolidated company were of minor significance. In the 2010 finan-

cial year, first-time consolidation of this company contributed € 40,242,000 to consolidated sales revenues

and € 916,000 to the consolidated earnings. If it had been consolidated for the first time in the previous year,

the company would have contributed € 3,690,000 to consolidated sales revenues and € -5,000 to earnings.

Acquisitions after the balance sheet date

On 29.03.2011, the subsidiary DYWIDAG Bau GmbH, Munich, acquired 100% of the shares in the companies

BFB Behmann Feuerfestbau GmbH, Bremen, and SFB Behmann Feuerfestbau GmbH, Schwedt/Oder, for a

purchase price of around € 9 million.

Behmann is a medium-sized group with construction activities worth some € 20 million in the areas of fire

resistant construction, chimney construction and technical insulation and complements the existing activities

of the Züblin company Ooms-Ittner-Hof.

FOREWORD


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BUSINESS SEGMENTS



The purchase price is to be assigned to the assets and liabilities as follows:

Carrying

amount, pre-

acquisition

Carrying

amount, post-

acquisition

€ thousand € thousand

Acquired assets and liabilities

Difference/goodwill still to be allocated 0 8,736

Other non-current assets 40 40

Current assets 5,595 5,595

Non-current liabilities – 1,182 – 1,182

Current liabilities – 3,951 – 3,951

Purchase price 9,238

Net liquidity absorbed – 1,338

Net outflow from the acquisition 7,900

The final allocation of the purchase price has not yet been undertaken.

The basis on which the purchase price and the difference/goodwill that has still to be allocated are valued are

the prospective earnings from this business segment, allowing for existing business relationships and orders

on hand as well as synergies with this business segment's existing units in the Züblin Group.

Deconsolidations

Industrielles Bauen, Betreuungsgesellschaft mit beschränkter Haftung, Stuttgart, and Züblin Hrvatska d.o.o.,

Zagreb/Croatia were deconsolidated as at 31.12.2010 on the grounds of reduced business dealings. Züblin

Romania S.R.L., Bucharest/Romania, was merged with Züblin Construct S.R.L., Bucharest/Romania, which is

already fully consolidated.

METHODS OF CONSOLIDATION

The financial statements of the companies included in the consolidation, located in Germany and abroad,

have been prepared according to standardized accounting and valuation methods. The annual financial state-

ments of the consolidated companies in Germany and abroad have been correspondingly adapted; insigni-

ficant differences are retained.

Capital consolidation is carried out in accordance with the requirements of IFRS 3. Consequently, all assets

and liabilities of a subsidiary are recognized at fair value. The proportionate equity thus determined is balanced

against the carrying amount of the holding. Positive goodwill attributable to separately identifiable intangible

assets, acquired within the framework of the business merger, is reported separately. Where it is possible to

determine a useful life for these assets, regular depreciation/amortization is applied over the expected useful

life. Intangible assets with an undetermined useful life are valued annually and, where appropriate, written

down on the basis of impairment testing.

In accordance with IAS 38, any remaining excess of the cost of acquisition over the acquirer's interest in the

fair value of the net assets acquired is recognized as goodwill and tested for impairment once a year in

accordance with IAS 36. The option in the case of shares of non-controlling shareholders to recognize these

also at fair value (full goodwill method) is not invoked.



When calculating the acquisition costs for business combinations, contingent purchase price components are

recognized at their fair value on the date of first-time consolidation. Subsequent deviations from this figure are

recognized through profit or loss. The new rules in IFRS 3 stipulate that transaction costs are no longer part of

acquisition costs but are expensed immediately.

Negative goodwill from capital consolidation was immediately recorded in the consolidated income statement.

In a step acquisition, the assets and debts are recognized at fair value at the acquisition date. Existing shares

are measured at fair value through profit or loss. Goodwill is established on the acquisition date.

Differences arising from the acquisition or sale of shares in affiliated companies without control being acquired

or lost are recognized entirely in equity without any effect on income. Recognition of goodwill is no longer

possible in accordance with the new rules in IFRS 3.

For the participations included using the equity method, the same principles are applied for capital consolida-

tion as for fully consolidated companies, with equity consolidation based on the financial statements at the

Group's balance sheet date.

Within the framework of debt consolidation, trade receivables, loans and other receivables are balanced

against the corresponding liabilities and provisions between the subsidiaries included in the consolidated

financial statements.

Revenue and expenses from supplies and services within the Group are eliminated. Interim results from

supplies and services transactions within the Group are cancelled in so far as they are significant.

Non-controlling shares in the equity and results of companies controlled by the parent company are presented

separately in the consolidated financial statements.

For consolidations, deferred taxes have been recognized as appropriate.

FOREIGN CURRENCY TRANSLATION

The Group's presentation currency is the euro. The financial statements of companies abroad were translated

into euros using the functional currency concept in accordance with IAS 21. For all companies this is the

respective national currency.

Material currencies are listed at their rates on the balance sheet date and their average rates under [22]

Financial instruments.

All balance sheet items were translated at the average exchange rate on the balance sheet date. Revenue and

expense items were translated at the average exchange rate for the year.

Currency differences recorded directly in equity without effect on income amount to € 2,642,000 (previous

year € 1,637,000) and are shown in the adjustment item for foreign currency differences. This item includes

currency differences amounting to € 2,914,000 (previous year € 1,339,000) resulting from the consolidation of

capital. Currency translation differences between the balance sheet date within the balance sheet and the

average rate within the income statement are netted off in equity.

Currency differences amounting to € 3,162,000 (previous year € – 1,208,000) were recognized with effect on

income.

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



ACCOUNTING POLICIES

Intangible assets, property, plant and equipment

Acquired intangible assets and property, plant and equipment with a determined useful life are recognized at

cost of purchase or production less scheduled and non-scheduled depreciation/amortization. The production

cost of self-constructed assets also includes, in addition to the direct costs, prorated overheads. Interest on

borrowing for material qualifying assets are capitalized.

Development costs are capitalized if the Group can demonstrate that completion of the intangible asset is

technically feasible, meaning that it will be available for use internally or for sale, and that it intends to com-

plete the intangible asset and use or sell it. Evidence must also be provided that the asset will generate a

future economic benefit, resources are available to complete the asset and that the expenses attributable to

the asset during its development can be reliably determined. The cost of production for these assets encom-

passes all costs directly attributable to the production process and production-related overheads. Financing

costs are capitalized for material qualifying assets.

Goodwill is tested for impairment once a year and if there are specific indicators, as defined in IAS 36.

Within the framework of the impairment test, cash-generating units are identified to which goodwill is as-

signed. Where the carrying amount of the cash-generating unit, including goodwill, exceeds the recoverable

amount for this unit, a corresponding impairment is recognized.

Scheduled depreciation/amortization of limited-life assets is carried out using the straight-line method in

relation to the foreseeable useful life. Where there are indications of impairment with any of the assets and

where the present values of the future net cash flow are below the carrying amount, adjustment is made to

the lower fair value in accordance with IAS 36.

The following useful life periods were assumed for determining the rates of depreciation/amortization:

Useful life in years

Intangible assets

Software 3 – 5

Patents, licences 3 – 5

Property, plant and equipment

Buildings 25 – 50

Investments in third-party buildings 5 – 40

Machinery 3 – 21

Office equipment 3 – 13

Vehicles 5 – 12

Capitalized development costs are written down on a straight-line basis over the period during which

revenues are expected from the project in question.

Public sector subsidies and investment grants are deducted from the respective asset on the assets side and

taken into consideration on a scheduled basis in line with its useful life.

Lease agreements where all opportunities and risks in relation to the assets are mainly assignable to the com-

pany are treated as finance leases. The property, plant and equipment of these lease agreements are capital-

ized at the present value of the minimum lease payments or lower fair value at the beginning of the lease and



depreciated over the expected useful life or the shorter term of the agreement. This is balanced against

obligations resulting from future lease payments, which are recognized at the present value of the obligations

not yet fulfilled on the balance sheet date.

In addition there are also lease agreements for property, plant and equipment which are to be regarded as

operating leases. Lease payments under these agreements are recorded as expenses.

Financial assets

Shares in associated and jointly controlled companies are, in accordance with IAS 28, valued at equity, unless

they are insignificant shares. For the purpose of transition to IFRS, the financial statements of the main com-

panies valued using the equity method were adapted to the IFRS accounting policies. The revaluation is per-

formed on the basis of estimates, in as far as the companies valued at equity do not present financial state-

ments under IFRS.

Subsidiaries that are not consolidated due to insignificance and participations that are not entered at equity

are classified as available for sale and entered at cost of purchase or fair value in accordance with IAS 39,

provided this value can be reliably determined.

Interest-bearing loans are shown at face value, unless a reduction in the value is required. Non-interest-

bearing or low-interest loans are discounted to the present value.

Deferred taxes

Deferred taxes are determined using the balance sheet liability method under IAS 12 for all temporary differ-

ences between the valuation of the balance sheet items in the IRFS consolidated financial statements and the

respective tax base applicable to the individual companies. Furthermore, the probably realizable tax benefits

arising from existing losses carried forward is included in the determination. Differences resulting from goodwill

that are not tax-deductible represent exceptions to this comprehensive deferment of taxes.

Deferred tax assets are only shown if it is probable that the relevant tax benefit is realizable. The measurement

of the tax deferment is based on the income tax rate applicable in the respective country at the time of the

expected reversal of the difference in value.

Inventories

Inventories are valued at the lower of the cost of production or purchase or their net realizable value.

The cost of production includes all direct costs as well as a reasonable proportion of the indirect costs caused

during production. Sales costs and general administration costs are not included in the production costs.

Interest on borrowing in connection with the production of key inventories, which are to be classified as

qualifying assets is capitalized.

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



Trade receivables

Trade receivables are shown at face value less value adjustments for individual identifiable risks.

Long-term non-interest bearing or low-interest receivables are discounted. Foreign currency receivables are

valued at the exchange rate applicable on the balance sheet date or, in the case of hedging, at the guaran-

teed exchange rate.

Receivables from construction contracts are recognized according to the percentage of completion method

under IAS 11. The measure for the degree of completion is the work accomplished by the balance sheet date.

Threatened losses with respect to work in progress are taken into account through corresponding adjust-

ments for impairment.

Where the measured performance that has been rendered within the framework of a construction contract

exceeds the corresponding advance payments received, it is carried as assets under "receivables from con-

struction contracts". In the opposite case, it is entered separately under liabilities.

Profit realization in the case of construction contracts carried out in joint venture is reported according to the

work accomplished by the balance sheet date using the percentage of completion method. Threatened

losses from work in progress are taken into account by corresponding adjustments for impairment. Receiv-

ables from and payables to joint ventures also include – besides capital contributions, inpayments, with-

drawals and activity allocations – the pro rata profit from the contract.

Non-financial assets

Non-financial assets are valued at cost of purchase less irregular non-scheduled depreciation.

Other financial assets

Financial assets, which are classified as loans and receivables, are valued at net cost less impairments.

Cash and cash equivalents

Cash and cash equivalents comprise all near-liquidity assets, which at the time of acquisition or investment

have a residual term of less than three months. Cash and cash equivalents are valued at net cost.

Provisions

Provisions for termination pay are formed in compliance with legislation. The Group is obliged to pay a non-

recurrent termination bonus to employees of Austrian subsidiaries, who joined before 1 January 2003, in the

event of termination or at the time of retirement.

The termination pay depends on the number of service years and the relevant remuneration at the time of

termination and ranges from two to twelve monthly salaries. There are provisions formed to meet this obliga-

tion.

The provisions for termination pay are determined by means of actuarial calculations using the projected credit

method. For this purpose, future salary increases are taken into account to project the employees' expected



entitlement in relation to the period of employment. The present value of the partial entitlements already

earned by the balance sheet date is assigned to provisions.

Provisions for pensions are calculated using the projected unit credit method under IAS 19. This method,

measuring the present value of the pension expectancy, serves to determine the discounted pension entitle-

ment. Because of the fixed pension commitment, it is not necessary to take future salary increases into

account as part of the actuarial parameters.

The ad valorem effect of interest and pension dynamics on pension and provisions for termination pay is

referred to as actuarial gains and losses and recognized in equity without effect on income. The service cost is

shown under personnel expenses, while the interest portion for the transfer to provisions is under financial

results.

Pensions from the conversion of partial-retirement settlements are determined according to the same actuarial

principles as the pension provisions.

The assumptions with respect to discount factors, salary increases and fluctuation used for calculating termi-

nation pay and pension provisions vary according to the country's economic situation. Expected mortalities

are calculated on the basis of country-specific mortality tables.

The other provisions take account of all recognizable risks and contingent obligations. They are recognized,

on the basis of commercial judgment, to the amount required to cover the Group's future payment obligations.

In each case, the amount entered is the one that is most probable after careful examination of the facts. Non-

current provisions are, unless they are of secondary importance, reported at the discounted settlement value

at the balance sheet date. The settlement value also includes cost increases to be taken into account on the

balance sheet date.

Non-financial liabilities

The non-financial liabilities shown under other liabilities are reported at repayment value. Overpayments from

construction contracts are classified as non-financial liabilities.

Financial liabilities

Liabilities are, as a rule, reported at repayment value. Foreign currency liabilities are valued at the average

exchange rate on the balance sheet date. Interest-free liabilities, especially those arising from finance leases,

are shown in the balance sheet at the present value of the repayment obligation.

Contingent liabilities

Contingent liabilities are possible or existing obligations where resource withdrawal is not likely. They are not

reported in the balance sheet. The figure for obligations stated under contingent liabilities corresponds to the

extent of the liability existing on the balance sheet date.

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



Revenue realization

Revenues from construction contracts are realized on an ongoing basis using the percentage of completion

method. The measure for the degree of completion is the work accomplished by the balance sheet date.

Sales revenue from the sale of the Group's own projects, supplies and services to joint ventures and from

other services are realized when the power of disposal and the opportunities and risks associated therewith

are transferred or when the service is supplied.

Estimates

Estimates and assumptions relating to the amount and balance sheet presentation of the assets and liabilities,

income and expenses as well as to the disclosure of contingent liabilities are necessary for the preparation of

the consolidated financial statements and concern mainly the assessment of construction projects until com-

pletion of construction, in particular with regard to the amount of profit realization, accounting and valuation of

provisions and impairment testing of goodwill and other assets. Future-related estimates and assumptions at

the balance sheet date take account of the expected future business development, the situation at the time of

the preparation of the consolidated financial statements, besides making a realistic assessment of the future

development of the global and branch-specific environment. Within this general framework, changes may

occur that differ from the assumptions and are beyond the control of the management board. As a result, the

actual amounts may not correspond to the values estimated. In such a case, the assumptions and, if appro-

priate, the carrying amounts of the relevant assets and liabilities are adapted to the new situation. At the time

of the preparation of the consolidated financial statements there were no indications that the underlying

assumptions and estimates would need to be adapted to any significant extent.



EXPLANATORY NOTES TO THE INCOME STATEMENT

(1) Sales revenues

The sales revenues of € 2,170,245,000 (previous year € 2,196,451,000) concern in particular proceeds from

construction contracts, proceeds from the sale of the Group's own projects, supplies and services to joint

ventures, other services, as well as shares in profits from joint ventures. The sales revenues from construction

contracts, which include partial profits on an accrual basis according to the actual work accomplished (per-

centage of completion method), total € 1,962,374,000 (previous year € 1,983,362,000).

The sales revenues only convey an incomplete picture of the performance rendered during the financial year.

Therefore, the entire economic performance is shown and this comprises – in addition to the Group's total

operating performance together with the proportionate performance in joint ventures – the performance

rendered to STRABAG AG and its subsidiaries in accordance with the manpower provision contract.

Construction activities break down as follows:

2010 2009

€ million € million Germany 1.645 1.806

International 774 718

2.419 2.524

(2) Other operating income

2010 2009

€ thousand € thousand Insurance refunds, payment of damages, compensation 7,721 11,238

Gains on foreign currency translation 7,591 5,504

Income from the retransfer of provisions 6,147 3,056

Income from the disposal of fixed assets with the exception of financial assets 3,912 2,283

Income from writing back value adjustments on current assets 3,730 2,530

Derecognition of liabilities 2,068 2,936

Investment allowances 1,703 826

Rental and lease income 1,559 3,996

Other 1,991 1,350

36,422 33,719

In essence, other income encompasses reimbursement of expenses incurred in previous years.

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



(3) Cost of materials and purchased services

2010 2009

€ thousand € thousand Cost of materials 345,631 320,135

Cost of purchased services 1,118,877 1,166,331

1,464,508 1,486,466

The cost of purchased services relates in particular to services rendered by subcontractors as well as design/

planning work, hiring of equipment and repairs carried out by third parties.

(4) Personnel expenses

2010 2009

€ thousand € thousand Wages 141,044 149,073

Salaries 260,984 268,095

Social security contributions and expenses relating to benefits 72,481 80,126

Cost of pensions and similar obligations 1,894 2,451

Cost of termination pay 23 21

476,426 499,766

The cost of termination pay or pensions and similar obligations includes the service cost and the pension

entitlements earned during the financial year from partial-retirement entitlements converted to pensions to the

amount of € 482,000 (previous year € 451,000). The interest element from "cost of pensions and similar

obligations" is shown under "interest".

The average number of employees is as follows:

2010 2009

Non-manual employees 4,666 4,710

Manual employees 5,869 6,248

10,535 10,958



(5) Other operating expenses

2010 2009

€ thousand € thousand Rental and lease expenses 27,534 25,651

Various services and fees 26,503 26,019

Travel and advertising expenses 19,449 19,258

Insurance premiums 15,626 12,443

Allocations to/withdrawals from reserves 14,092 10,147

Administration costs 14,053 12,693

Discount/impairment current assets 10,843 16,449

Guarantee certificate costs 7,406 8,710

Contributions, fees and charges 4,523 4,600

Losses from currency translation 4,429 6,712

Professional development measures 2,477 2,294

Other taxes 1,635 1,885

Other 5,996 11,538

154,566 158,399

(6) Results from equity participations

2010 2009

€ thousand € thousand Income from participations in associated companies 550 599

Expenses from participations in associated companies – 215 0

335 599

Income from equity participations are attributable to BRVZ Bau- Rechen- und Verwaltungszentrum GmbH,

Cologne, expenses are attributable to BMTI – Baumaschinentechnik International GmbH, Cologne.

(7) Other results from participations

2010 2009

€ thousand € thousand Income from participations 6,438 4,240

Expenses from participations – 158 0

Write-down on shares in participations – 179 – 5

6,101 4,235

(8) Depreciation/amortization of intangible assets and property, plant and equipment

Scheduled and non-scheduled depreciation/amortization is reported in the "Statement of changes in intangi-

ble assets and property, plant and equipment".

In the reporting year, goodwill suffered impairment losses of € 309,000 (previous year: € 0). Property, plant

and equipment and intangible assets suffered no impairment losses (previous year: € 4,722,000).

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



(9) Interest

2010 2009

€ thousand € thousand Interest and other financial income 8,929 8,999

Interest and other financial expenses – 10,694 – 11,007

– 1,765 – 2,008

"Interest and other financial expenses" includes interest elements from the transfer to termination pay and

pension provisions to the amount of € 5,724,000 (previous year € 5,915,000) as well as from finance leasing

to the amount of € 1,625,000 (previous year € 2,187,000). Financial income also includes € 1,200,000 from

write-ups on financial assets, while financial expenses include write-downs on loans amounting to € 885,000.

(10) Taxes on income

This item comprises taxes on income paid or owed by the individual companies as well as deferred taxes.

2010 2009

€ thousand € thousand Actual taxes 15,360 8,657

Deferred taxes 10,509 4,103

25,869 12,760

Deferred taxes on actuarial gains of € 2,130,000 (previous year € 2,241,000) are recorded neutrally in the

statement of comprehensive income.

The reason for the difference between the German income tax rate of 29.83% (previous year 29.83%) and the

Group's overall tax ratio is presented as follows:

2010 2009

€ thousand € thousand Earnings before taxes 85,832 50,994

Theoretical tax expenditure 29.83% 25,604 15,212

Difference to tax rates abroad – 322 – 1,914

Tax effects from:

Expenses not deductible against tax 2,106 6,024

Tax-free earnings – 3,114 – 1,443

"At equity" reporting of associated companies 45 – 58

Effects from capital consolidation 1,460 0

Tax refunds/additional tax payments – 394 – 1,502

Change in the value adjustment on deferred tax assets 643 – 3,268

Other – 159 – 291

Tax expenditure reported 25,869 12,760



NOTES TO THE BALANCE SHEET

(11) Intangible assets and property, plant and equipment

The composition of intangible assets and property, plant and equipment is shown in changes thereto.

No borrowing costs were capitalized for property, plant and equipment and intangible assets in the reporting

year.

Goodwill

At the balance sheet date, goodwill breaks down as follows:

31.12.2010 31.12.2009

€ thousand € thousand Ed. Züblin AG 15,100 15,100

N.V. STRABAG Belgium S.A. 3,300 3,300

Ooms-Ittner-Hof GmbH 2,500 2,500

Josef Riepl Unternehmen für Ingenieur- und Hochbau GmbH 1,317 1,317

Eberhard Pöhner Unternehmen für Hoch- und Tiefbau GmbH 1,000 1,000

Others 0 286

23,217 23,503

The goodwill is subject to an annual impairment test. In so doing, the recoverable value of a cash generating

unit (CGU) is compared with the corresponding carrying amount.

As a rule, the cash generating unit equates to the legal unit acquired or those legal units that benefit from the

potential synergy of the business combination.

The recoverable value equals the market value or value-in-use, which results from discounted future cash

flows.

Value in use is determined on the basis of the current planning statements approved by the Board of Directors

in the internal reporting process, which are based on past experience and expectations regarding future

market development. The detailed planning period encompasses a period of at least three years and is

extended, if necessary, if this will improve the presentation of future cash flows. The last detailed planning year

forms the basis for the calculation of "perpetuity", if usability of the cash generating unit is not limited to a

shorter period because of legal conditions.

The calculation of the discount rate for future cash flows takes account of segment and country-specific risks

and growth rates. The discounting rates for CGU used as part of the company valuation are between 6.7%

and 7.3% after taxes and between 9.6% and 10.4% before taxes (previous year: between 7.5% and 8.0%

after taxes and between 10.7% and 11.4% before taxes).

Because of the industry's specific characteristics (long-term production), multi-year planning is subject to

uncertainties. Should our planned targets not be met in relation to operating performance and expected return,

further impairment of goodwill is possible. Minor changes in the discount rate would not require any adjust-

ments for impairment.

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



Capitalized development costs

Expenses for research and development are incurred in numerous technical special proposals, in actual com-

peting projects and in introducing construction projects and products on the market.

In the 2010 financial year, development expenses of € 3,514,000 were capitalized (previous year € 1,530,000);

additional research and development expenses incurred in the 2010 financial year in the amount of

€ 4,312,000 (previous year € 2,511,000) did not fulfil the criteria for capitalization and were therefore

expensed in full.

Leasing

At the balance sheet date, the following carrying amounts, which are not freely at the Group's disposal

because of existing finance lease agreements, are included in "property, plant and equipment".

31.12.2010 31.12.2009

€ thousand € thousand Real estate leases 16,700 17,349

Equipment leases 10,797 15,892

27,497 33,241

On the other hand, lease liabilities are reported with a present value of € 20,248,000 (previous year

€ 25,658,000).

The lease term of the finance lease agreements for real estate is 20 years, the term of the equipment leases

ranges from two to five years. The payments made for the 2010 financial year amount to € 7,165,000 (pre-

vious year € 9,088,000).

The payment obligations resulting from operating lease agreements over the next few years are presented as

follows:

Present values Minimum lease payments

31.12.2010 31.12.2009 31.12.2010 31.12.2009

€ thousand € thousand € thousand € thousand Term up to one year 7,490 5,927 8,633 7,553

Term from one to five years 7,765 13,546 10,195 16,510

Term more than five years 4,993 6,185 5,830 7,455

20,248 25,658 24,658 31,518

In addition to the finance lease agreements there are also operating lease agreements for the use of plant and

machinery. The expenses arising from these agreements are recognized in the income statement. The pay-

ments made in the 2010 financial year total € 11,866,000 (previous year € 8,022,000).



The payment obligations resulting from operating lease agreements over the next few years are presented as

follows:

31.12.2010 31.12.2009

€ thousand € thousand Term up to one year 9,737 7,712

Term from one to five years 12,702 16,234

Term more than five years 840 1,287

23,279 25,233

Restrictions on disposal/purchase commitments

In order to provide collateral for financing (value 31.12.2010 € 6,672,000), land charges have been entered

with respect to land with carrying amounts of € 21,230,000 (previous year € 18,520,000).

At the balance sheet date there were obligations to the amount of € 2,236,000 (previous year € 1,531,000) in

connection with the purchase of property, plant and equipment which have not yet been taken into account in

the financial statements.

(12) Financial assets

Further details on the Group's main participations are shown in the statement of shareholdings. The develop-

ment of financial assets in the year under review is presented as follows:

As at

31.12.2009

Change

in con-

solidated

companies

Reclassi-

fications Additions Disposals

Write-

downs/

write-ups 1)

As at

31.12.2010

€ thousand € thousand € thousand € thousand € thousand € thousand € thousand Shares in affiliated companies 7,328 – 267 – 15 73 – 149 – 170 6,800

Shares in equity participations 278 0 0 0 – 150 0 128

Other participations 2,777 0 15 4 – 21 – 9 2,766

Loans to affiliated companies 4,393 0 0 885 – 5,430 315 163

14,776 – 267 0 962 – 5,750 136 9,857

1) Loans to affiliated companies contain write-ups of € 1,200,000 and write-downs of € 885,000

Financial assets are all measured at amortized cost.

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



The value adjustments to the financial assets valued in accordance with IAS 39 in the financial year have

evolved as follows:

Shares in affiliated

companies/participations

(IAS 39) Loans

31.12.2010 31.12.2009 31.12.2010 31.12.2009

€ thousand € thousand € thousand € thousand

Gross amount 17,602 19,555 1,048 5,593

Value adjustment

As at 01.01. 9,450 9,450 1,200 1,420 Change in consolidated companies/reclassifications – 1,593 0 0 – 225 Changes in the current year 179 0 – 315 5

As at 31.12. 8,036 9,450 885 1,200

Carrying amount 9,566 10,105 163 4,393

The following table provides a summarized overview of financial information (100%) on associated companies:

2010 2009

€ million € million Balance sheet total 75.5 25.6

Total liabilities 74.5 24.0

Sales revenue 238.9 172.8

Profit for the year 2.9 1.2

The pro rata loss for the current reporting period in the losses of associated companies not recognized in the

balance sheet amounts to € 0, the cumulative pro rata loss comes to € 5,096,000.



(13) Deferred taxes

Temporary differences between the valuations in the consolidated financial statements in accordance with

IFRS and the respective tax valuations have the following effect on the respective tax deferrals shown in the

balance sheet:

31.12.2010 31.12.2009

Deferred

tax assets

Deferred

tax liabilities

Deferred

tax assets

Deferred

tax liabilities


Non-current assets

Intangible assets 0 3,279 0 1,924

Property, plant and equipment 0 18,278 0 18,605

Current assets

Inventories 0 0 0 0

Receivables and other assets 0 50,192 0 50,530

Non-current liabilities

Provisions 12,795 0 14,181 0

Current liabilities

Provisions 3,255 0 3,018 0

Payables and sundry 6,341 0 6,227 0

Fiscal losses carried forward

Capitalized fiscal losses carried forward 21,718 0 28,238 0

44,109 71,749 51,664 71,059

Offsetting of tax assets and liabilities – 41,745 – 41,745 – 49,042 – 49,042

Balance sheet entry 2,364 30,004 2,622 22,017

As at 31 December 2010, a debit balance of € – 27,640,000 (previous year € – 19,395,000) is produced.

Apart from the deferred tax expenses of € – 10,509,000 recognized in the income statement, the change to

the balance shown of € – 8,245,000 is the result, in particular, of the change to the deferred taxes of

€ 2,130,000 recorded neutrally. On the balanced sheet date, deferred tax liabilities recorded in equity without

effect on income amount to € 1,686,000 (previous year € – 443,000).

Deferred taxes on losses carried forward have been capitalized in as much as they can probably be netted off

against future profits. For differences in carrying amounts and fiscal losses carried forward with regard to

corporation tax of € 145,158,000 (previous year € 153,510,000) and trade tax of € 96,355,000 (previous year

€ 91,412,000), deferred tax assets were not recognized because their effectiveness in terms of tax relief is not

sufficiently assured. Non-capitalized tax losses carried forward can, as a rule, be used for an unlimited period.

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



(14) Inventories

31.12.2010 31.12.2009

€ thousand € thousand Raw materials and supplies 32,483 27,120

Finished products, goods and buildings 3,346 4,119

Unfinished products and buildings 2,280 3,257

Land without buildings 19,497 20,741

Advance payments made 11,787 26,036

69,393 81,273

In the financial year, no impairments were recorded on inventories (previous year € 2,193,000 on land without

buildings). The impaired inventories are shown with a net realizable value of € 17,300,000 (previous year

€ 17,380,000). The other inventories of € 52,093,000 (previous year € 63,893,000) are recognized at the cost

of purchase or production. Land without buildings contains carrying amounts of € 16,300,000, which are not

likely to be realizable within one year.

(15) Receivables and other assets

The receivables and other assets are broken down as follows:

31.12.2010 31.12.2009

of which of which

total current

non-

current total current

non-

current

€ thousand € thousand € thousand € thousand € thousand € thousand

Trade receivables

Receivables from construction contracts 1,439,802 1,439,802 0 1,301,306 1,301,306 0

for which advance payments received – 1,240,794 – 1,240,794 0 – 1,175,073 – 1,175,073 0

199,008 199,008 0 126,233 126,233 0

Remaining trade receivables 104,536 104,126 410 148,057 147,913 144

Receivables from joint ventures 68,922 68,922 0 53,751 53,751 0

372,466 372,056 410 328,041 327,897 144

Other receivables and assets

Receivables from affiliated companies 16,502 16,502 0 34,962 34,962 0

Receivables from companies in which participations are held 9,291 9,291 0 9,816 9,816 0

Remaining receivables and assets 23,586 14,865 8,721 16,567 14,683 1,884

49,379 40,658 8,721 61,345 59,461 1,884

Non-financial assets 19,335 18,481 854 19,221 17,218 2,003

Total 441,180 431,195 9,985 408,607 404,576 4,031

"Non-financial assets" includes income tax claims of € 8,042,000 (previous year € 9,429,000).



The receivables from construction contracts concerning all contracts not yet invoiced at the balance

sheet date are broken down as follows:

31.12.2010 31.12.2009

€ thousand € thousand Costs accrued by the balance sheet date 1,887,318 1,897,427

Profits accrued by the balance sheet date 154,897 138,056

Cumulative losses – 37,379 – 54,392

Minus receivables reported under liabilities – 565,034 – 679,785

1,439,802 1,301,306

Receivables from construction contracts to the amount of € 565,034,000 (previous year € 679,785,000) are

reported under liabilities because the advance payments received exceed the amount of receivables.

In accordance with custom in this branch of business, the client may withhold invoice settlement to safeguard

his contractual rights. The amounts withheld are as a rule covered by collateral (bank or Group guarantees).

Please refer to [22] Financial instruments/credit risk with regard to the criteria for the creation of value adjust-

ments.

Value adjustments on "remaining trade receivables" have evolved as follows during the financial year:

31.12.2010 31.12.2009

€ thousand € thousand Gross amount 120,139 159,463

Value adjustment

As at 01.01. 11,406 8,386 Changes in consolidated companies – 3 47 Transfer/utilization 4,200 2,973

As at 31.12. 15,603 11,406

Carrying amount 104,536 148,057

The value adjustments on receivables from affiliated companies are broken down as follows:

31.12.2010 31.12.2009


Value adjustment

As at 01.01. 9,376 5,053

Changes in consolidated companies 0 – 790

Transfer/utilization 576 5,113

As at 31.12. 9,952 9,376


FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



The value adjustments on receivables from companies in which participations are held evolved as follows in

the financial year:

31.12.2010 31.12.2009


Value adjustment

As at 01.01. 10,810 3,441

Transfer/utilization 1,056 7,369

As at 31.12. 11,866 10,810


(16) Cash and cash equivalents

31.12.2010 31.12.2009

€ thousand € thousand Securities 4,216 4,377

Cash in hand 268 226

Bank balances 504,984 471,901

509,468 476,504

Cash and cash equivalents include balances abroad amounting to € 7,584,000 (previous year € 7,466,000),

which are subject to restrictions on transfer in as much as a monetary transfer to other countries may only

take place once the construction contracts have been concluded and declared. Cash and cash equivalents

are not pledged.

(17) Equity

The company's fully subscribed capital stock amounts to € 20,451,675.25, divided into 8,000,000 no-par

shares.

The General Meeting of Ed. Züblin AG on 15 July 2010 resolved to pay a dividend of € 0.125 per no-par share

entitled to dividends (= € 1,000,000.00) from the net retained profit from the 2009 financial year of

€ 2,928,905.64 and to allocate the remaining amount of € 1,928,905.64 to other retained earnings.

€ 9,986,000.00 from Ed. Züblin AG's net income for the year 2010 were allocated to other retained earnings

in accordance with § 58 Para. 2 of the German Stock Corporation Law (AktG).

The reserves shown in the balance sheet encompass currency differences, the statutory and free retained

earnings, changes in financial instruments with no effect on income and changes in equity with no effect on

income based on actuarial gains/losses in the calculation of provisions for personnel.

STRABAG SE, Villach/Austria, has held a majority share in Ed. Züblin AG since 23.11.2005.

Its direct voting stock comes to 57.26%.



The Group's capital management is aimed at safeguarding an appropriate credit rating and complying with

national and international criteria for project tenders through an appropriate equity ratio. Ed. Züblin AG

ensures that all Group companies have sufficient capital in the form of equity and outside capital.

There are no external minimum capital requirements.

(18) Provisions

As at

31.12.2009

Currency

differences/

reclassifi-

cations

Change

in con-

solidated

companies Transfer

Re-

transfer

Utili-

zation

As at

31.12.2010

€ thousand € thousand € thousand € thousand € thousand € thousand € thousand

Provisions for termination pay 808 0 0 116 0 111 813

Provisions for pensions 107,545 43 – 166 13,101 0 8,208 112,315

Provisions for taxes 10,810 0 0 11,773 951 4,393 17,239

Other provisions

Construction- related provisions 77,146 382 – 394 27,636 3,066 20,298 81,406

Workforce- related provisions 41,244 932 – 7 21,668 368 28,922 34,547

Remaining provisions 27,277 325 – 53 14,350 2,713 8,491 30,695

264,830 1,682 – 620 88,644 7,098 70,423 277,015

Current provisions concern provisions for taxes and other provisions amounting to € 96,636,000 (previous

year € 94,656,000). The non-current provisions of € 180,379,000 (previous year € 170,174,000) mainly con-

sist of provisions for termination pay and for pensions and provisions for warranties

The financial outflows in the case of warranty provisions are generally between one and five years.

In essence, tax provisions relate to current income tax. € 10,691,000 result from the year under review

(previous year € 6,147,000).

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



Provisions for termination pay and for pensions

The provisions for termination pay show the following changes:

2010 2009

€ thousand € thousand Present value of termination pay obligations (DBO*) on 1.1. 808 923

Service cost 23 20

Interest cost 40 49

Termination payments – 111 – 183

Actuarial gains(–)/losses(+) 53 – 1

Present value of termination pay obligations (DBO*) as at 31.12. 813 808

* Defined Benefit Obligation

Provisions for pensions are created for obligations arising from future entitlements of present employees and

ongoing payments to present and former employees and their surviving dependants. The obligations relate in

particular to retirement pay. As a rule, individual commitments are calculated in accordance with the em-

ployee's service status at the time of the commitment (such as length of service, remuneration). Since 1994,

new commitments have not been made as a matter of principle.

The company's employee pension scheme consists of a defined benefit system that is not financed out of

funds. With defined benefit plans, the company has an obligation to fulfil commitments made to present and

former employees. There are no defined contribution plans in the form of financing through support funds.

The amount of the provisions for pensions is calculated using actuarial methods on the basis of reference

tables by Prof. Dr. Klaus Heubeck (2005 G). Here, a discounting rate of 5.00% (previous year 5.50%) was

applied. An increment rate of 2.00% (previous year 2.25%) was included as a factor for future pension

increases.

The provisions for pensions are broken down as follows:

2010 2009

€ thousand € thousand Present value of pension obligations (DBO*) on 1.1. 107,545 101,415

Change in consolidated companies/Reclassifications – 124 – 3

Service cost 459 431

Interest cost 5,684 5,866

Pension payments – 8,208 – 7,677

Actuarial losses(+)/gains(–) 6,959 7,513

Present value of pension obligations (DBO) as at 31.12. 112,315 107,545

* Defined Benefit Obligation

In the income statement, the service cost is shown in EBIT and the interest cost from the transfer to pro-

visions for pensions in interest.

The actuarial losses recognized directly in equity, taking account of deferred taxes, amount to € 5,632,000

(previous year € 1,514,000).



The adjustments to termination pay and pension provisions, which experience has indicated are required, are

made up as follows:

31.12.2010 31.12.2009 31.12.2008 31.12.2007 31.12.2006

€ thousand € thousand € thousand € thousand € thousand Present value of defined benefit obligation termination pay provision 813 808 923 996 1,120

Present value of defined benefit obligation pension provision 112,315 107,545 101,716 109,819 118,185

Fair value of plan assets 0 0 – 301 – 194 – 4,709

Budget deficit 113,128 108,353 102,338 110,621 114,596

Experience-based adjustments to the termination pay provision 53 – 1 14 – 187 0

Experience-based adjustments to the pension provision 6,959 7,513 – 6,794 – 993 – 3,384

Experience-based adjustments 7,012 7,512 – 6,780 – 1,180 – 3,384

Termination payments of € 29,000 and pension payments of € 8,315,000 are expected for the following year.

Other provisions

The construction-related provisions include, inter alia, warranty and guarantee obligations, contract implemen-

tation cost, and subsequent cost of contracts already invoiced as well as threatened losses from pending

business. The workforce-related provisions mainly include profit sharing, anniversary obligations, partial-

retirement expenses and personnel adjustment expenses. Other provisions include provisions for legal costs,

fees and damages.

The companies included in the consolidated financial statements of Ed. Züblin AG are exposed to several

threatened or pending legal proceedings, whose outcome is either indeterminable or cannot be predicted with

certainty because of the uncertainty connected with legal proceedings of this kind. Provisions have been

created to the extent required for probable or already pending legal proceedings of this kind. This is also true

of legal proceedings, of which the Züblin Group has become aware although it has not yet been served by the

competent courts. Since these provisions, which are taken into account in the consolidated financial state-

ments, are based on estimates, it is entirely possible that completion of these proceedings will force us to

make payments above and beyond the amounts provided and whose extent or range cannot be sufficiently

precisely determined on 31 December 2010.

Overall, no negative effects are expected from these proceedings, which could have a material impact on the

Group's net assets, financial position or the result of its operations.

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



(19) Liabilities

The liabilities are broken down as follows:

31.12.2010 31.12.2009

of which of which

total current

non-

current total current

non-

current


Financial liabilities

Payables to banks 11,861 6,503 5,358 7,838 1,324 6,514

– of which secured by mortgages (6,672) (7,801)

Payables arising from finance leases 20,248 7,490 12,758 25,658 5,927 19,731

32,109 13,993 18,116 33,496 7,251 26,245

Trade payables*

Receivables from construction contracts – 565,034 – 565,034 0 – 679,785 – 679,785 0

for which advance payments received 660,305 660,305 0 825,019 825,019 0

95,271 95,271 0 145,234 145,234 0

Other trade payables 387,835 385,663 2,172 351,148 348,159 2,989

Due to joint ventures 85,179 85,179 0 100,623 100,623 0

568,285 566,113 2,172 597,005 594,016 2,989

Other financial liabilities

Due to affiliated companies 18,900 18,900 0 15,450 15,450 0

Due to companies in which participations are held 0 0 0 18 18 0

Remaining liabilities 39,868 39,068 800 34,246 33,465 781

58,768 57,968 800 49,714 48,933 781

Non-financial liabilities 45,331 44,635 696 45,880 45,031 849

Total 704,493 682,709 21,784 726,095 695,231 30,864

* the advance payment balance from construction contracts included here is classified as non-financial

At the balance sheet date, € 1,072,000 of the financial liabilities secured by mortgages (previous year

€ 1,401,000) relate to project finance raised by Züblin Projektentwicklung GmbH, Stuttgart.

Non-financial liabilities contain income tax liabilities of € 1,669,000 (previous year € 498,000).



OTHER DISCLOSURES

(20) Contingent liabilities

The Group has undertaken the following suretyships and guarantees:

31.12.2010 31.12.2009

€ thousand € thousand Suretyships and guarantees with the exception of financial guarantees 1) 24,665 9,934

Liabilities from warranty agreements 1,053 0

25,718 9,934

1) Of which € 8,522,000 was shown under [22] Financial instruments/credit risks in the previous year.

In the construction industry, the issue of various guarantees to cover the commitments contained in con-

struction contracts is both usual and necessary. These guarantees are usually issued by banks or credit

insurance companies (= guarantors) and, in essence, comprise tender guarantees, performance guarantees,

advance payment guarantees and warranty bonds. In the event of a guarantee being called, the guarantors

have a contractual right of recourse against the Group. There is only a risk of a guarantee being called if the

underlying contractual commitments have not been properly fulfilled.

Obligations or probable risks arising under guarantees of this kind are taken into account in the balance sheet

as liabilities or provisions.

In the case of joint ventures in which companies of the Züblin Group are participating, there is joint and several

liability together with the other partners, as customary in this branch of business.

Otherwise there are no financial risks from off-balance sheet transactions.

(21) Notes to the consolidated cash flow statement

The cash flow statement is presented using the indirect method, broken down according to cash flows result-

ing from operating activities, investment activities and financing activities. Cash and cash equivalents consist

exclusively of cash in hand, balances at banks and marketable securities. The effects of changes in the con-

solidated group were eliminated and shown in cash flow from investment activities.

Cash and cash equivalents comprise the following:

31.12.2010 31.12.2009

€ thousand € thousand Marketable securities 4,216 4,377

Cash in hand 268 226

Balances at banks 504,984 471,901

509,468 476,504

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



(22) Financial instruments

A financial instrument is a contract, which leads simultaneously to a financial asset at one company and to a

financial liability or an equity instrument at the other company. In particular, financial assets comprise cash and

cash equivalents, trade receivables as well as other receivables and derivatives. As a rule, financial liabilities

establish an obligation to return cash or another financial asset. These include, in particular, financial liabilities

such as liabilities to banks and finance lease liabilities as well as trade payables. In principle, they are recog-

nized for the first time on the settlement date.

At the balance sheet date, financial instruments are broken down as follows:

31.12.2010 31.12.2009

Valuation

category

according to

IAS 39

Carrying

amount Fair value

Carrying

amount Fair value


ASSETS

Valuation at cost of purchase

Loans to affiliated companies L&R 163 163 4,393 4,393

Trade receivables L&R 372,466 372,466 328,041 328,041

Other financial assets L&R 49,379 49,379 61,345 61,345

Cash and cash equivalents L&R 509,468 509,468 476,504 476,504

931,476 931,476 870,283 870,283

Valuation at fair value/

cost of purchase

Shares in affiliated companies AfS 6,800 6,800 7,328 7,328

Participations AfS 2,766 2,766 2,777 2,777

9,566 9,566 10,105 10,105

LIABILITIES

Valuation at cost of purchase

Financial liabilities FLaC – 32,109 – 32,109 – 33,496 – 33,496

Trade payables FLaC – 473,014 – 473,014 – 451,771 – 451,771

Other financial liabilities FLaC – 58,768 – 58,768 – 49,714 – 49,714

– 563,891 – 563,891 – 534,981 – 534,981

Total 377,151 377,151 345,407 345,407

By valuation categories

Loans and Receivables (L&R) 931,476 931,476 870,283 870,283

Available for sale (AfS) 9,566 9,566 10,105 10,105

Financial liabilities at amortized costs (FLaC) – 563,891 – 563,891 – 534,981 – 534,981

Total 377,151 377,151 345,407 345,407



Cash and cash equivalents, trade receivables and other financial receivables have short residual terms in the

vast majority of cases. Therefore, their carrying amounts on the balance sheet date equate approximately to

their fair values. Loans are mainly interest-bearing. Their carrying value therefore corresponds to the present

value of the financial assets. The shares in affiliated companies and participations are measured at cost, since

their fair values cannot be reliably determined.

Trade payables as well as other financial liabilities have short terms, as a rule; the reported figures more or less

represent their fair values. The fair values of bonds, payables to banks and finance lease liabilities are calculat-

ed as the present values of the payments associated therewith, taking account of the respective market para-

meters applicable.

Net earnings from financial instruments according to valuation categories break down as follows:

L&R AfS FLaC L&R AfS FLaC

2010 2010 2010 2009 2009 2009


Interest 7,729 0 – 4,086 8,951 48 – 5,091

Impairment of value – 10,447 – 179 0 – 15,779 – 5 0

Reinstatement of original value 4,930 0 0 2,530 0 0

Income from the derecognition of liabilities 0 0 2,068 0 0 2,936

Net earnings 2,212 – 179 – 2,018 – 4,298 43 – 2,155

Dividends and expenses from participations, which are shown in results from participations, are part of the

operating result and are therefore not part of net earnings. Impairment of value, reinstatement of original value,

gains on disposals and losses on disposals of loans and receivables as well as financial liabilities at amortized

cost are shown in other income or other expenses.

Impairment of value, reinstatement of original value, gains on disposal and losses on disposal of available for

sale financial instruments (AfS) are shown in results from participations, if they are participations or shares in

affiliated companies, and otherwise in other income and other expenses.

With regard to loans outstanding and receivables that have neither been written down nor are in default, there

are no signs at the balance sheet date indicating that the debtors will not fulfil their payment obligations.

Principles of risk management

With regard to its assets, liabilities and planned transactions, the Züblin Group is exposed to interest rate,

currency, credit and liquidity risks. The aim of financial risk management is to limit these risks through ongoing

finance-oriented activities.

The basic principles of financial policy are laid down by the Board of Directors and monitored by the Super-

visory Board. Implementation of this financial policy and ongoing risk management is the responsibility of

Group Treasury, which is integrated in the BRVZ Bau- Rechen- und Verwaltungszentrum GmbH, Cologne.

Certain transactions require prior approval by the Board of Directors, which is kept regularly informed of the

extent and the amount of current risk exposure.

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



Interest rate risk

The interest rate of financial instruments, both on the assets and the liabilities side, is generally variable.

Accordingly, the risk consists in rising interest expense or a lower interest yield resulting from disadvantageous

changes of the market interest rate.

The volume of receivables from and payables to banks by currency – with details of the average interest rates

on the balance sheet date – breaks down as follows:

Balances with banks

Carrying

amount

Average

interest rate

€ thousand 2010 EUR 432,774 0.79%

PLN 25,885 2.71%

AED 14,921 0.29%

CNY 5,618 2.04%

Other 25,786 1.59%

504,984 0.93%

Payables to banks Carrying

amount

Average

interest rate

€ thousand 2010 EUR 11,818 4.08%

SEK 43 7.50%

11,861 4.09%

If the level of interest rates had been 50 basis points higher (lower) as at 31.12.2010, earnings and equity

would have been € 2,404,000 higher (lower) (previous year € 2,388,000 higher (lower)). The calculation is

based on closing volumes of interest-bearing financial assets and liabilities on 31.12.2010. Tax effects result-

ing from changes in interest rates were not taken into consideration in the calculation.

There were no substantial volumes of derivative financial instruments at the reporting date.

Currency risk

In essence, there is exposure to currency risks at Züblin International GmbH and Züblin Spezialtiefbau GmbH

and their subsidiaries and investments. As a rule, construction contracts are obtained in the national currency

in operational business and their implementation including tasking sub-contractors is also largely carried out in

the national currency.

Materials are also purchased locally, in the national currency (natural hedge), as a rule. Currency risk only

emerges if personnel and/or equipment need to be deployed from Germany or from financial transfers from

Germany or from a transfer of the share in the earnings. Translation risks may also result from the conversion

of results from companies reporting in foreign currency in the Züblin consolidated financial statements.



Changes in major Group currencies:

Currency

Rate on balance

sheet date

31.12.2010

Average rate

2010

Rate on balance

sheet date

31.12.2009

Average rate

2009

1 EURO = 1 EURO = 1 EURO = 1 EURO = AED 4.879 4.853 5.254 5.126

CLP 621.531 673.669 725.494 770.860

CNY 8.822 8.928 9.835 9.537

PLN 3.975 4.005 4.105 4.347

A change in the earnings for the year because of unhedged currency positions in the case of primary financial

instruments would influence earnings by € 5,013,000 (previous year € 5,025,000) in the event of an average

change in the exchange rate of 10%. The calculation is based on closing volumes of financial assets and

liabilities at the respective year-end.

Credit risk

At the balance sheet date, the maximum credit risk to which financial assets are exposed is € 431,574,000

(previous year € 403,884,000) and equates to the carrying amounts shown in the balance sheet. Of this figure,

€ 372,466,000 (previous year € 328,041,000) relate to trade receivables. Receivables from construction con-

tracts and from joint ventures relate to ongoing construction projects and are therefore not yet due in their

entirety. Of the other trade receivables amounting to € 104,536,000 (previous year € 148,057,000), fewer than

1% are overdue and not written down.

The recoverability of construction receivables is constantly reviewed from aspects of country risk in the

operational units responsible for the construction activity and from the respective client's actual credit risk. In

the case of private clients, receivables are hedged via credit management instruments such as payment

guarantees, if applicable. In the case of traditional building construction contracts, credit risk is often reduced

by advance payments from the clients. Credit risks are taken into account through individual value adjust-

ments or risk group-specific value adjustments.

The credit risk with respect to other primary financial instruments on the assets side is also considered to be

low since the contract partners are exclusively financial institutes of excellent standing.

Furthermore, there is an indirect credit risk (from liabilities assumed in the case of financial guarantees) to the

amount of € 1,400,000 (previous year € 0).

Individual value adjustments are made to financial assets if the carrying amount of the financial asset is higher

than the present value of the future cash flows. Financial difficulties, the customer's insolvency, breach of

contract, considerable delays in payment by the customer are used as triggers for this. If a receivable is

unrecoverable, it is derecognized. The individual value adjustments comprise numerous individual items, of

which none is material when considered individually. In addition to the assessment of the credit risk, account

is also taken of the respective country risk.

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



Liquidity risk

For the Züblin Group, liquidity not only means the ability to meet one's payment obligations in the narrower

sense but also the availability of the financial leeway needed to carry out its business through adequate

guarantee lines.

If the Group's own liquidity should not be sufficient, the Züblin Group has the option of covering its working

capital requirement via bilateral cash credit lines totalling € 100,500,000, which may, however, also be used

by other companies within the STRABAG SE Group. In 2010, Ed. Züblin AG did not make use of the bilateral

cash credit lines.

Ed. Züblin AG has bilateral guarantee facilities totalling € 450,000,000 at its disposal. In addition it participates

in STRABAG SE's syndicated guarantee facility, which totals € 2.0 billion.

Financial liabilities result in the following payment obligations (interest payments calculated on the basis of the

interest rate on 31.12. and repayments) in subsequent years:

Carrying

amount Cash flows

31.12.2010 ≤ 1 year 1-5 years > 5 years

€ thousand € thousand € thousand € thousand Financial liabilities

Payables to banks 11,861 6,708 4,534 1,685

Payables arising from finance leases 20,248 8,633 10,195 5,830

32,109 15,341 14,729 7,515

Trade payables and other liabilities (see [19]) lead in essence to cash outflows equal to their carrying amounts

as they fall due.

(23) Business with related parties

Business with related parties is to be disclosed and explained in accordance with IAS 24.

In addition to the Board of Directors and the Supervisory Board, both legal entities and companies, which can

control the reporting company or one of its subsidiaries or can exercise a decisive influence, either directly or

indirectly, on the reporting company or its subsidiaries are considered as related parties in the sense of IAS 24

"Related Party Disclosures", as well as those natural persons and legal entities, which the reporting company

can control or on which it can exercise a decisive influence.

In particular, STRABAG SE, Villach/Austria, with its direct and indirect subsidiaries and companies consoli-

dated at equity, to which 57.26% of the shares in Ed. Züblin AG, Stuttgart are attributable, counts as an

important related party.

Furthermore, the core shareholders of STRABAG SE, the Haselsteiner Group (Haselsteiner Family Private

Foundation, Dr. Hans Peter Haselsteiner), the Raiffeisen-Holding Niederösterreich-Wien Group (Vienna/

Austria), the UNIQA Group (Vienna/Austria) and Rasperia Trading Limited (Limassol/Cyprus), which is con-

trolled by Mr Oleg V. Deripaska (Moscow/Russian Federation) are to be viewed as related parties in the case

of Ed. Züblin AG.

Ed. Züblin AG maintains normal business relations with affiliated subsidiaries, which are not consolidated.

Transactions with these related parties are the result of normal business dealings. Group companies' trans-



actions with equity companies and other participations are, without exception, to be attributed to the normal

operating activities of the companies involved in each case and were concluded on normal market terms.

In addition, Ed. Züblin AG companies have not undertaken any material transactions with members of the

Board of Directors or Supervisory Board of Ed. Züblin AG. This is also true of close family members of this

group of people.

However, material transactions as defined in this provision were undertaken by companies in the Züblin Group

with companies in whose management or supervisory bodies these people are represented. These com-

panies are mainly to be attributed to STRABAG SE.

In 2010 and 2009, the Züblin Group had the following relations with related parties:

2010 2009

€ thousand € thousand Goods and services supplied 284,504 200,992

Goods and services received 179,062 147,572

Receivables as at 31.12. 11,886 25,295

Payables as at 31.12. 11,782 13,135

In the 2006 financial year, the building construction and engineering construction activities of STRABAG AG,

Cologne, were acquired, as were its project development activities. Contracts for the acquisition of STRABAG

AG subsidiaries operating in this segment contained various different bonus and surcharge agreements as

well as other guarantee commitments (guaranteed balance sheet figures). In the past financial year, a retro-

spective purchase price adjustment commitment in favour of N.V. STRABAG Benelux S.A., Antwerp (a sub-

sidiary of STRABAG AG, Cologne) in the amount of € 3.5 million materialized from the underlying purchase

and assignment agreement for the shares in N.V. STRABAG Belgium S.A., between STRABAG AG, Cologne

(vendor), and Ed. Züblin AG, Stuttgart, as well as Züblin International GmbH, Stuttgart (purchaser).

In the 2010 financial year, additional guarantees in the amount of € 0.2 million also accrued from the purchase

of the building construction and engineering construction activities of STRABAG AG, Cologne.

In the financial year, Ed. Züblin AG was reimbursed income of € 0.5 million (previous year € 4.3 million) from

the winding up of remaining building construction sites under the manpower provision agreement that was

agreed between the parties.

In addition, there are additional trade relationships, services and lending relationships between the Züblin

Group and the STRABAG SE Group. Legal transactions with these related parties were charged at normal

market conditions.

Normal third party financing and insurance transactions were conducted with the Raiffeisen-Holding Nieder-

österreich-Wien Group and the UNIQA Group.

BRVZ Bau- Rechen- und Verwaltungszentrum GmbH, Cologne (abbreviated to: BRVZ GmbH, an associated

company) supplies commercial, administrative and information technology services for Ed. Züblin AG and its

affiliated companies, which are paid for through an allocation of administrative costs. Ed. Züblin AG and its

affiliated companies were debited with expenses amounting to € 13.7 million (previous year € 13.3 million) by

BRVZ GmbH.

BMTI Baumaschinentechnik International GmbH, Cologne (abbreviated to: BMTI GmbH, an associated com-

pany) supplies services relating to equipment planning, investment and disinvestment in the equipment pool,

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



as well as maintenance and repairs, which are paid for through an allocation of administrative costs. Expenses

amounting to € 33.6 million (previous year € 30.2 million) were debited to Ed. Züblin AG and its affiliated com-

panies by BMTI GmbH.

On the balance sheet date, there are receivables of € 6.0 million (previous year: € 6.4 million) due from the

equity participation Züblin International Qatar W.L.L, Doha/Qatar.

All transactions with associated companies were concluded on normal market terms.

At the balance sheet date, there were the following business relationships with Züblin Group companies that

are not consolidated:

2010 2009

€ thousand € thousand Goods and services supplied 2,923 7,302

Goods and services received 5,861 10,592

Receivables as at 31.12. 4,616 9,667

Payables as at 31.12. 7,118 2,315

Business relationships with members of the Board of Directors and the first management level (management

in key positions), their family members and companies, which are controlled or decisively influenced by

management in key positions, are of minor significance.

There are many legal transactions with other companies where members of the Supervisory Board and the

Board of Directors fulfil management roles. However, these are included in the STRABAG SE figures; please

see the table above showing "Related parties STRABAG SE Group".



(24) Management and supervisory bodies

Board of Directors

Dipl.-Ing. Jörn Beckmann M. Eng., Cologne Technical Director

Dipl.-Kfm. Hans-Joachim Rühlig, Ostfildern Commercial Director

Dipl.-Ing. Eberhard Gläser, Aichwald-Krummhardt Technical Director, until 31.12.2010

Dipl.-Ing. Edgar Schömig, Stuttgart Technical Director

Dipl.-Ing. Klaus Pöllath, Stuttgart Technical Director

Dr. Alexander Tesche, Stuttgart Commercial Director

Holders of General Power of Attorney

Marina Humitsch, Spittal/Drau (Austria) Herbert Krutina, Breitenfurt (Austria)

Dipl.-Ing. Uwe Schilling, Stuttgart, until 31.12.2010

Supervisory Board

Dr. Jürgen Kuchenwald, Cologne

Chairman Former Chairman of the Board of Directors of STRABAG AG, Cologne

Dipl.-Ing. Nematollah Farrokhnia,

Klosterneuburg (Austria), until 10.05.2010 Chairman of the Board of Directors of REC Uluslararası İnşaat Yatırım Sanayi ve Ticaret A.Ş, Ankara (Turkey)

Wolfgang Kreis, Linkenheim* Deputy Chairman Chairman of the Group Works Council of Ed. Züblin AG

Dr. Gerhard Gribkowsky, Grünewald, as from 15.07.2010 Management Consultant

Helmut Betz, Stuttgart* Banker, Stuttgart Division of Ed. Züblin AG

Inge Hamm, Stuttgart, as from 15.07.2010 Regional Manager Baden-Württemberg at IG Bauen-Agrar-Umwelt, Stuttgart*

Dr. Thomas Birtel, Mülheim/Ruhr Member of the Board of Directors of STRABAG SE, Villach (Austria)

Dr. Volker Kier, Vienna (Austria), until 15.07.2010

Management Consultant Kier & Partner Management-Consulting GmbH

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MANAGEMENT REPORT

BUSINESS SEGMENTS



Supervisory Board

Dr. Peter Krammer, Vienna (Austria), as from 15.07.2010 Member of the Board of Directors of STRABAG SE, Villach (Austria)

Dipl.-Kfm. Werner Schneider, Senden Managing Partner in Schneider & Geiwitz GmbH, Neu-Ulm

Nikolaus Landgraf, Riederich*, until 15.07.2010

Regional Manager Baden-Württemberg at IG Bauen-Agrar-Umwelt, Stuttgart

Udo Steffens, Wachtberg*, as from 15.07.2010 Member of the Joint Works Council of Ed. Züblin AG

Dr. Götz Sadtler, Bonn

Lawyer Klaus Ulrich, Lahnstein* Technical Specialist of the trade union IG Bauen-Agrar-Umwelt National Executive Board, Frankfurt/Main

Dipl.-Ing. Christof Sänger, Stuttgart*, until 15.07.2010

Construction Engineer, Group Staff Divisional Manager of the Central Engineering Division of Ed. Züblin AG

Dr. Thomas Voigt, Stuttgart*, as from 15.07.2010 Divisional Manager of the Central Engineering Division of Ed. Züblin AG

Tom Schittek, Chemnitz*, until 15.07.2010 Site Foreman, Central Division of Ed. Züblin AG

* Employee representatives

The total emoluments of the members of the Board of Directors of Ed. Züblin AG, including their remuneration

for fulfilling their responsibilities in subsidiaries, amounted to € 2,636,000 (previous year € 2,587,000).

Former members of the Board of Directors and their surviving dependants received € 970,000 (previous year

€ 1,125,000). Pension provisions of € 12,266,000 (previous year € 12,088,000) are available for them.

The emoluments of the Supervisory Board totalled € 36,000 (previous year € 36,000).

(25) Proposal on the appropriation of profits

In its individual financial statements prepared in accordance with the German Commercial Code, Ed. Züblin

AG is reporting a net profit for 2010 of € 19,972,936.37 (previous year € 5,856,000). Of this figure,

€ 9,986,000.00 will be transferred to other retained earnings in accordance with § 58 Para. 2 German Stock

Corporation Law (AktG).

From the net retained profit from the 2010 financial year of € 9,986,936.37, the Board of Directors proposes

to transfer an amount of € 9,980,000.00 to other retained earnings to further strengthen the company's

existing equity base and carrying forward the remaining amount of € 6,936.37 to the new account.

(26) Special occurrences after the closing date

There have been no particular events since the closing date.



(27) Other disclosures

In the 2010 financial year, a total of € 561,000 (previous year € 539,000) was recorded in expenses for the

auditors Warth & Klein Grant Thornton AG Wirtschaftsprüfungsgesellschaft, Düsseldorf, for auditing the

accounts, € 8,000 (previous year € 30,000) for other confirmation or valuation services and € 18,000 (previous

year € 18,000) for other services.

Address of the Group's parent company:

Ed. Züblin AG

Albstadtweg 3

D-70567 Stuttgart

Germany

Telephone +49 711 7883-0

Telefax +49 711 7883-390

www.zueblin.de

Stuttgart, 7 April 2011

Ed. Züblin AG

The Board of Directors

Beckmann Pöllath Rühlig Schömig Dr. Tesche

FOREWORD


MANAGEMENT REPORT

BUSINESS SEGMENTS



AUDITOR'S REPORT


We have audited the consolidated financial statements prepared by Ed. Züblin AG, Stuttgart – comprising the

income statement and the statement of comprehensive income, the balance sheet, the cash flow statement,

the statement of changes in equity and the notes to the consolidated financial statements – together with the

Group management report for the business year from 01 January to 31 December 2010. The preparation of

the consolidated financial statements and the Group management report in accordance with IFRSs, as

adopted by the EU, and the additional requirements of German commercial law pursuant to § 315a Para. 1

HGB and the additional provisions of the Articles of Association are the responsibility of the company's legal

representatives. It is our responsibility to express an opinion, based on our audit, on the consolidated financial

statements and the Group management report.

We conducted our audit of the consolidated financial statements in accordance with § 317 HGB (German

Commercial Code) and German generally accepted standards for the audit of financial statements promul-

gated by the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan and perform the audit

such that misstatements materially affecting the presentation of the net assets, financial position and results of

operations in the consolidated financial statements in accordance with the applicable financial reporting

framework and the Group management report are detected with reasonable assurance. Knowledge of the

business activities and the economic and legal environment of the Group and expectations as to possible

misstatements are taken into account in the determination of the audit procedures. The effectiveness of the

accounting-related internal control system and the evidence supporting the disclosures in the consolidated

financial statements and the Group management report are examined primarily on a test basis within the

framework of the audit. The audit includes assessing the annual financial statements of those entities included

in consolidation, the determination of entities to be included in consolidation, the accounting and consolida-

tion principles employed and significant estimates made by the company's legal representatives, as well as

evaluating the overall presentation of the consolidated financial statements and the Group management report.

We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the consolidated financial statements comply with the IFRSs,

as adopted by the EU, and the additional requirements of German commercial law pursuant to § 315a Para. 1

HGB and the additional provisions of the Articles of Association and give a true and fair view of the net assets,

financial position and results of operations of the Group in accordance with these requirements. The Group

management report is consistent with the consolidated financial statements and as a whole provides a suit-

able view of the Group's position and suitably presents the opportunities and risks of future development.

Düsseldorf, 7 April 2011

Warth & Klein Grant Thornton AG

Wirtschaftsprüfungsgesellschaft

Weißmeier

Wirtschaftsprüfer

Hausmann

Wirtschaftsprüfer

AUDITOR'S REPORT

Photo credits:

Title Tom Philippi, Stuttgart 2 Andreas Muhs, Berlin 6 IVG THE SQUAIRE, Frankfurt-Flughafen 12 Thomas Eiken, Mühltal16 Jens Willebrand, Köln22 Andreas Muhs, Berlin 27 Iwo Hoffmann, Berlin

all other photos: Ed. Züblin AG

Where the caption is marked with *, the work was carried out as a joint venture.

www.zueblin.de

Ed. Züblin AGAlbstadtweg 370567 Stuttgart / Germany Telephone +49 711 7883-0Telefax +49 711 [email protected]

annual report 2010 - strabag · 2013. 10. 16. · of 2011; by contrast, ... the supervisory board...

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