RESPONSIBILITY SINCE Success Factors Yesterday, Today and Tomorrow.

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1 Annual Report 2014 RESPONSIBILITY SINCE Success Factors Yesterday, Today and Tomorrow.

2 WE ARE» a leading provider of valuable facilities management with advanced competence and deep roots in the service sector.» a market-oriented company with service networks in all conurbations in Germany. Solidity, competence and a solutions-oriented approach make us a reliable partner for our clients.» interested in our customers and in their challenges. Our intention, after all, is to pointedly accompany and support them in their profit-making processes. LASTING COMMITMENT, FOR OUR FUTURE. WE ARE» long-term oriented in everything we do.» a responsible employer for our workforce. We know only too well that their efforts and capabilities alone can create the solutions that our customers expect from us every day.» also committed beyond our routine business. Conscious and responsible interaction with each other, with society and with the resources of our environment reflects our entrepreneurial understanding.

3 1 A service provider with conviction and passion As one of the biggest owner-run providers of facilities managment, Gegenbauer is active in all of Germany s major conurbations. With the profound wealth of experience of our 90-year company history and more than 15,000 qualified employees throughout the group, the service and management concepts we realize are geared to property and real estate, and to the people we accommodate. Those relying on our performance include the industrial and commercial sectors, public-sector clients, banks and insurance companies, health and social facilities, and housing associations. FACILITIES SERVICES FACILITIES MANAGEMENT Industrial and commercial property Residential property Health and social facilities Building Services Security Services Event locations Various types of real estate require property-specific services. An office building, after all, has other requirements than a hospital, a residential complex or a venue for events. For this reason, Gegenbauer offers user-specific performance in the sphere of facilities management. And this performance is backed up by the overlapping facilities services of security services and building services.

4 2 GEGENBAUER ANNUAL REPORT 2014 Highlights 2014 JANUARY Commitment to sustainability and climate protection Since the beginning of the year Gegenbauer has been a member of Stiftung 2. This initiative supports politics in its efforts to establish market-economy framework conditions to climate protection and to activate, in this cause, the solution-seeking competence of German businessmen. The foundation is named after its most important target: to limit the average global warming of the earth to 2 degrees. MAY Gegenbauer expands its board of management With a turnover volume of almost 500 m, Gegenbauer enters into a new league. To take advantage of additional market opportunities, the company has reinforced its top management. With effect as of 1 st May 2014 the 59-year-old graduate engineer Karl-Otmar Giesler (left in the picture) joined the management board. He assumed responsibility for the strategically important field of Property Services from Christian Lewandowski, Chairman of the Board of Management. As spokesman for the management of Gegenbauer Property Services GmbH, Karl-Otmar Giesler will bring his extensive knowledge of the profession and of the branch to bear, levering further potential in the management of residential properties. SEPTEMBER Operator contract for the Max-Schmeling Hall extended For a further eight years: Berlin s Senator of the Interior, Frank Henkel, extended the lease and operator contract for the running of the Max-Schmeling Hall and of the Velodrom with Velomax Berlin Hallenbetriebs GmbH until 31 st December For Gegenbauer s subsidiary Location Management & Services GmbH this early extension of contract is a sign of great trust and brings long-term planning security.

5 3 NOVEMBER Complete relaunch of the Gegenbauer website Client-friendly and intuitive: the newly designed and technically revised website of the Gegenbauer group of companies is online. At the same time the career portal sports a new look. Thanks to the responsive design, the use of mobile terminal devices is now widely supported. Twenty-five years after the fall of the wall The Lichtgrenze (Light Border) Project On 9 th November 2014, Berlin celebrated the 25 th jubilee of the fall of the wall an event in which the Gegenbauer Group was closely involved. In the context of the project, which was followed worldwide, participating in the event with over 100 employees, 25 trainees took part as balloon bearers, allowing their personal messages for a world at peace and without walls to rise up into Berlin s evening sky. DECEMBER 3 rd in the FM Report 2014 In the Facilities Management Report 2014 of Bell Management GmbH the Gegenbauer Group achieved an encouraging third place. The survey was carried out among 137 property managers and investigated 27 different fields of competence, as well as various regions of Germany.

6 4 GEGENBAUER ANNUAL REPORT 2014 Report on the business situation Facilities management branch faces new challenges 2014 was an exacting financial year for the Gegenbauer Group. In contrast to the optimistic growth forecasts for our economy still being publicly announced at the beginning of the year 2014 and on which our planning was also based, the perspectives were clearly dampened in the course of the year. The keenly awaited recovery within the Euro zone stagnated, while various geopolitical crises further clouded the prospects of growth. Renewed support for the economy came solely from private consumption, which benefited from the generally good situation in the job market. Wages increased notably. Improvements in the employment situation continued, reaching a new all-time high in 2014 with an average working population in Germany of 42.6 m. With an external added value to gross earnings of more than 60 billion for facilities services and management performance, our branch according to current surveys is one of the pillars of the German economy. And particularly in the context of the past difficult years for the economy as a whole, it has proved to be a stable and crisis-resistant economic sector. Meanwhile every tenth employed person in our country works in the field of facilities management. Pricing pressure encumbers the entire market The economic pressure felt by the clients due to the economic framework conditions in the year under review was again clearly notable, for our branch as a whole and also for the Gegenbauer Group. In a situation of stable overall demand the pressure on market prices particularly from cost-driven tendering and award practices further increased. The result, on the one hand, was an increase in quality and productivity expectations and, on the other, a decrease in payment motivation. In the long run this development can benefit neither the users of facilities management and their assets nor the providers and their employees. Satisfying business development leads to new maximum value for turnover In this often very challenging environment the Gegenbauer Group was able to achieve a satisfactory development. Group turnover increased by 1.8 percent to m. This increase is attributable to organic growth. The field of operations facilities management increased its turnover in the year 2014 to m as compared to m for the previous year. This corresponds to a growth of 0.5 percent. The consolidating drive of the branch advanced unaltered in the year under review. The market-leading businesses in particular made efforts to improve their performance portfolio and their market presence by means of additional targeted purchases. With a turnover of m in the financial year 2014, the field of operations facilities services recorded a growth of 3.2 percent as compared to the figures for the previous year ( m).

7 5 Many sales successes achieved Again in 2014 we were able to win a whole series of well-known and demanding new clients. With an extensive service package in the field of facilities services for a leading aviation concern operating throughout Europe, for example, we were awarded the biggest individual contract in our company s history. In the segment of location management and services we recorded another big success: In prematurely exercising a contractually agreed option right the State of Berlin extended the lease and operator contract concluded with Velomax Berlin Hallenbetriebs GmbH for the two biggest communal multifunctional arenas in the German federal capital. The Max-Schmeling Hall and the Velodrom will now be operated by this company until 31 st December With this decision, both the state and the operator as well as the anchor tenants and the users of the arenas now have long-term planning security. EXTERNAL SALES IN % 11.1 % Security Services 35.3 % Building Services 27.5 % Industrial & Public FM 19.0 % Property Services 4.2 % Health Care 2.9 % Location Management & Services 53.6 % FACILITIES MANAGEMENT 46.4 % FACILITIES SERVICES A worldwide-operating motor vehicle subcontractor also decided to entrust Gegenbauer with its German production and research locations, as did various technology companies and political institutions. In Berlin alone, for example, our Group currently looks after seven federal ministries. DEVELOPMENT EXTERNAL SALES IN M And in Poland too, in the context of an invitation to tender, our company operating there was effectively able to extend the cooperation with a leading manufacturer of utility vehicles TOTAL FACILITIES MANAGEMENT FACILITIES SERVICES

8 6 GEGENBAUER ANNUAL REPORT 2014 IT.WORKS20 Enhancing efficiency, enabling growth A long-successful company usually makes use of the most modern technologies to achieve its targets. A management strategy adapted to the business in the IT environment is therefore an essential tool for a future-orientated organization. Against this background the management board and the supervisory board last year decided to initiate the most extensive IT investment project in our company s history. Essentially this involves the removal of the existing system landscape for ERP and the introduction of a new ERP based on the innovative SAP solution HANA. The project driver, apart from the increasingly complex demands of our customers, is the attempt to essentially achieve standardization, automation and integration of the previous process landscape. In addition to this the project lays an important foundation for the implementation of future corporate strategies also geared to qualitative growth. Sustainability anchored in core business activities Sustainability has long since developed from a trend to a fixed standard and a significant force in the market of the real-estate business. Green real estate and appropriately adapted operating concepts are now more popular than ever. In many respects the resources-intensive facilities management branch is itself expected to question and to optimize the economic, ecological and social effects of property operations. A comprehensive understanding of sustainability beyond the pure service level therefore focuses on far-reaching questions relating to management self-assessment. The Stiftung 2 foundation is a branch-overlapping initiative of chairmen of management boards, managing directors and family-run business owners in Germany. The aim is to provide support for politicians in their efforts to establish market-economy framework conditions for climate protection and to activate the solution-seeking competence of German businessmen in the interests of climate protection. With the engagement of Christian Lewandowski, Chairman of the Board of Management, in Stiftung 2 in the year 2014 we are further pursuing the objective of developing our own sustainability competence within the circle of committed partners. At the same time we want to give important impulses to direct practical transfer. In 2014, in order to adopt a still more transparent position vis-à-vis clients and society regarding our own track record on sustainable activities, we prepared the first sustainability report of the Gegenbauer Group. This is oriented, in terms of structure and content, to the specifications of the worldwide leading standards of the GRI (Global Reporting Initiative) in its latest version, G4. For reasons of transparency and topicality, as well as for ecological reasons, we have decided to publish this report solely online.

9 7 Stable conditions agreed on for consortium financing In 2014 for the very first time, to secure our organic growth and our future business projects and purchase plans, we concluded a consortium loan contract with four high-performance partners in the finance branch. The conditions thereby secured for the coming years underline the strength of our balances and provide the Gegenbauer Group with enough leeway for further growth options. Gegenbauer continues to grow in a challenging environment At the beginning of 2015, for the first time in Germany, a comprehensive statutory minimum wage was introduced. The Gegenbauer Group, which has always been for performance-oriented payment of its workforce and was on principle in favour of minimum wage levels, explicitly welcomes this measure. One very positive aspect seen by us in this connection is that the minimumwage-induced cost increases, which will presumably amount to some 3.5 m, will also be widely borne by our clients. All in all we expect that the challenges of the market will remain at an unchangingly high and demanding level. In particular the geopolitical global situation and the related economic situation for our clients will exert a very considerable influence on the medium- and longterm growth perspectives of the Gegenbauer Group. In view of the declining level of incoming contracts in the main segments of the building trade and a decreasing number of building permits it is expected that the dynamic force of building activities in the coming year will by notably weaker. Whereas the actual value of construction performance realized in 2014 increased by 3.3 percent, growth in the current year is expected to be 2.1 percent lower, which can hardly be expected to awaken new impulses. Despite this, our branch will continue in the future to play its important role in the design of competitive and value-adding processes. The facilities manager will continue to develop as the highly competent partner whose solutions are indispensable to customers operations. As systems providers, facilities managers now accept responsibility for entire process areas. The essential prerequisites in this context will be to continuously indicate to the users, with appropriate resources and employees, potential for cost optimization. At the same time sustainability competence must be increased and comprehensive and need-tailored reporting must be used to identify one s own contribution to added value. In this, the year of our company s 90 th jubilee, with our great wealth of experience and with the steps taken in the year 2014, we see ourselves as being well on our way. The facilities manager will continue to develop as the highly competent partner whose solutions are indispensable to customers operations.

10 8 GEGENBAUER ANNUAL REPORT 2014 Our Figures Change in % Total sales (incl. internal group sales) in m Facilities Management Industrial & Public FM Property Services Health Care Location Management & Services Facilities Services Building Services Security Services External sales in m Facilities Management Industrial & Public FM Property Services Health Care Location Management & Services Facilities Services Building Services Security Services Employees (annual average) 15,197 15, Facilities Management 4,500 4, Industrial & Public FM 1,531 1, Property Services 2,100 2, Health Care Location Management & Services Facilities Services 10,516 10, Building Services 8,730 8, Security Services 1,786 1, Corporate / Shared Services

11 Service Imprint Everything New, All Our Contact Data, Everything in Overview: New Opportunities, New Jobs, New Perspectives: GEGENBAUER HOLDING SE & CO. KG Friedrichstraße Berlin, Germany Phone Fax Bearing Responsibility, Documenting Sustainability: CONCEPT AND DESIGN HGB Hamburger Geschäftsberichte GmbH & Co. KG, Hamburg, Germany Living in the Network, Thinking in the Network, Working in the Network: PHOTOS Andreas Labes, Berlin, Germany Holger Petsch, Berlin, Germany Fotolia Information as of March 2015

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