Looking ahead, the group has identified a pipeline worth about €500bn of relevant projects coming to the Group’s key markets in North America, Asia-Pacific and Europe thie year and beyond.
As a consequence of the positive outlook, Hochtief expects to achieve an operational net profit in 2018 in the range of €470-€520m. This represents an increase of 4%-15% on 2017, with all divisions expected to drive the improvement.
“Generating value is in our DNA. Since the beginning of our transformation in 2013, we have succeeded in delivering dynamic and consistent value growth in our global business,” said CEO Marcelino Fernández Verdes. “2017 was again a very successful year for the group. We will continue our active and disciplined capital allocation policy.”
The Americas, Asia Pacific and Europe divisions all contributed to the growth in profit. Operational net profit, which excludes one-off impacts, increased by over €90m, or 25%, year-on-year, to €452m. This result is at the top end of the guidance range Hochtief communicated a year ago of €410m-€450m.
Sales grew 14% to €22.6bn, exceeding the revenue level of 2013 for the first time. This top-line expansion was accompanied by increased margins. The group’s operational profit before tax (PBT) margin was up 40 basis points year on year to 3.8%.
The company said that focusing on cash-backed profits is a key priority for the teams around the world. Net cash from operating activities increased by €200m, or 17%, to €1.4bn, driven by higher sales, increased margins and a further improvement in working capital management.
All three divisions reached an increased level of positive cash flow generation during the year. The Group’s enhanced balance sheet position is the result of the strong cash flow performance. Hochtief ended 2017 with almost €1.3bn of net cash, over €560m higher year on year.
The year-end order book of almost €45bn is at its highest level since 2012 and has increased by 12% on an exchange-rate adjusted basis. At over €30bn, new orders were €5.6bn higher, an increase of 23%.