Risk Reporting

The STRABAG Group is subject to a great which are identified and assessed using an dealt with using an adequate risk policy.

Risk Management System

Our active risk management system serves the assessment, avoidance and reduction of risks which jeopardize business. The organization of STRABAG’s risk management builds on the project-related job-site and acquisitions controlling, supplemented by the higher-level assessment and steering management. These activities are supported by a number of regulations and measures, including:

a certified quality management system

internal group guidelines for operations workflow

a centralized administration, our Controlling Department, the Contract Management Department and internal auditing. The internal auditing oversees compliance with the company’s technical and commercial guidelines. Through the establishment of company-wide quality standards in quotation processing and supplemental services management, our centrally organized Contract Management Department can better assert our claims for outstanding debt.

The following central risk groups were defined in our group-intern risk report:

External Risks

The entire construction industry is subject to cyclical fluctuations and reacts to varying degrees depending on region and sector. The overall economic growth, the development of the building market and the competitive situation, as well as the conditions on the capital markets and technological changes in construction, could lead to risks.

These risks are continually observed and monitored by the various departments and operating units.

Changes in external risks lead to adjustments in our organization, market presence and range of services as well as the adaptation of our strategic and operating planning.

Operating Risks

The operating risks include primarily the complex risks of project selection and execution.

STRABAG keeps acquisition lists in order to review the project choice.

Business transactions requiring consent are reviewed and approved by our division managers and department heads or by the management board according to our internal rules of procedure.

Cost accounting and expense allocation guidelines have been set up to assure a uniform process of job costing and to establish a performance profile at our construction sites.

Project execution is managed by the construction team on site and controlled by monthly target/performance comparisons;

at the same time our central controlling provides constant commercial backing.

Financial Risk

Under financial risk we understand risks in financial matters and in accounting, including instances of manipulation.

Special attention is paid to our liquidity and accountings receivable management, which is secured through constant financial planning and daily status reports.

Compliance with internal commercial guidelines is guaranteed by the central accounting and controlling departments, which are also responsible for internal reporting and the periodic planning process.

Risks from possible instances of manipulation (acceptance of advantages, fraud, deception or other infringements of the law) are monitored by all business areas, but by internal auditing in particular.

Organizational Risks

Risks concerning the quality and quantity of personnel are covered by the central personnel department with the help of a specialized data base.

The company’s IT configuration and infrastructure (hardware and software) is handled by the central IT department,

controlled by our international IT steering committee.

Personnel Risk

Past experience has shown that having a highly qualified and motivated workforce is an important factor in competition.

In order to properly assess the potential of our employees in management, we introduced a series of aptitude diagnostics measures last year, including a management potential analysis.

In subsequent feedback talks, the management employees and the group’s senior executives together discussed issues such as planning, motivation, company loyalty and social competence.

Investment Risks

STRABAG can exert influence on the management of associated companies through its shareholder position and, if applicable, any existing advisory functions.