Hochtief SWOT Analysis, USP & Competitors

Hochtief

Parent Company

Hochtief Group

Category

Construction Services

Sector

Real Estate and Construction

Tagline/ Slogan

We are building the future

USP

Continuous innovation in the construction sector, helping them stay ahead of competition

Hochtief STP

Segment

Based on geography - Europe, the Americas, Australia, Asia, Africa

Based on project type - infrastructure projects, real estate and facilities

Target Group

Targets projects predominantly in Europe, the Americas, Australia and Asia

Delivers integrated services covering life cycle of infrastructure projects, real estate and facilities

Positioning

As a single point for all solutions – from financing and construction to operations

Hochtief SWOT Analysis

Strengths

1. Leading edge in construction industry through innovations - In total, HOCHTIEF's US subsidiary Turner has constructed 300 buildings using Building Information Modelling. The company’s Australian subsidiary Leighton installed a new warning system developed by its subsidiary Visionstream
2. Single point for all solutions - From design, financing and construction to operation, the company can complete the entire job whether it is infrastructure projects, real estate or facilities
3. Strong order backlog - HOCHTIEF is very strongly placed with many projects under execution and many more in the pipeline providing a continuous source of revenue in the near-to-medium term

Weaknesses

1. Leighton’s compliance with code of ethics seems to be a cause for concern – Hochtief is a majority stakeholder in Leighton, which in February 2012 announced that it had voluntarily reported to the Australian Federal Police (AFP) a possible breach of its Code of Ethics that, if substantiated, may contravene Australian laws
2. Weaknesses in operating expenses and investment management as its operating profit margin declined

Opportunities

1. Growth in offshore wind farms - HOCHTIEF Offshore Development Solutions acquired the four offshore wind farms, North Sea Windpower 4-7 (NSWP 4-7), from project developer Enova
2. Exposure to high growth markets will boost revenues - India and the Gulf states are among the primary growth markets in which the company aims to develop business. The company was awarded new projects in both regions in 2011 and 2012

3. Contribution to geothermal energy - HOCHTIEF Concessions has two projects underway in this high-growth segment. This creates an opportunity for HOCHTIEF to expand the growing geothermal market

Threats

1. Intense competition which could affect the company's earnings growth and market share - The competition is becoming increasingly intensive as project opportunities are fewer, while more and more companies are vying for them. Price competition is escalating, especially when it comes to small and medium-sized projects
2. Declining construction sector in the US - With the general economic

conditions in the US deteriorating and if it continues to display prolonged economic slowdown in the future, HOCHTIEF's revenue from this segment will be adversely affected

3. Rising input costs - HOCHTIEF will have to deal with an uptrend in raw material costs which will pressurize margins

Hochtief Competition

Competitors

1. Bechtel

2. Hornbach Holding

3. Bilfinger Berger