Bilfinger Se · XETR:GBF
Bilfinger — Non-Deal Roadshow (August 2020)
39 slides from Bilfinger's roadshow presentation, August 2020
Slide 1: Bilfinger SE Company Presentation August 2020
Bilfinger SE Bilfinger SE Company Presentation August 2020
Slide 2: Overview and strategic outline
Overview and strategic outline
Slide 3: Bilfinger at a glance
Bilfinger at a glance Leading international industrial services provider Efficiency enhancement of assets, ensuring a high level of availability and €4.33bn revenue reducing maintenance costs Clear 2-4-6 strategy with two service lines, four business units and six focus industries thereof recu
Slide 4: 2-4-6 still holds
2-4-6 still holds 2 Service Lines, 4 Business Units, 6 Focus Industries Our ambition We engineer and deliver process plant performance Where 2 Service Lines 4 Business Units 6 Focus Industries to play E&M – Engineering & E&M Europe Chemicals & Pharma & Maintenance E&M North America Petroch
Slide 5: Global trends
Global trends Aging Assets & ESG / Climate Skilled Labor Data & Artificial Asset Integrity Change Shortage Intelligence Europe & US: Aging assets ▪ CO2 limits Europe ▪ Machine learning ▪ Increasing maintenance ▪ Emissions & Air pollution ▪ Demographics ▪ Predictive / prescriptive costs ▪ Clean energ
Slide 6: Bilfinger core capabilities
Bilfinger core capabilities Skilled labor Domain Expertise Digitalization ▪ Europe’s #1 Maintenance Services ▪ Engineering / Process knowledge ▪ Bilfinger Digital Next Company ▪ Focus on key industries ▪ Convergence of BMC & BCAP to ▪ Leading Employer Branding ▪ Customer intimacy / collaboration dig
Slide 7: Our capabilities addressing global trends
Our capabilities addressing global trends Global Trends affecting our business Bilfinger Aging Assets & ESG / Climate Skilled Labor Data & Artificial capabilities Asset Integrity Change Shortage Intelligence Skilled Fabric maintenance Circular economy Employer of choice Cloud analytics labor Domain
Slide 8: Strategic Assumptions
Strategic Assumptions Geographic Industry Digitalization Engineering & War for focus focus Maintenance and talent Technologies ▪ Europe ▪ Chemicals & ▪ Enabling opportunity ▪ Technologies ▪ Skilled blue collar is Petrochemicals support Engineering a differentiator in the ▪ North America ▪ Driving pr
Slide 9: Strategic Imperatives
Strategic Imperatives Unique service offering/ Integrity & HSE People Differentiators Asset light model Attract ▪ Multi-service provider ▪ ROCE focus Motivate ▪ Continue to innovate our service ▪ Strict working capital ▪ We will not compromise Retain and commercial offering management Develo
Slide 10: We never compromise on integrity and safety
We never compromise on integrity and safety Safety is good business Integrity is non-negotiable LTIF1 1.2 1.0 0.85 Fully integrated Prevent 0.74 Established compliance 0.8 0.67 Detect culture 0.6 Self- optimizing Sustainable focus 0.4 Respond compliance Continuous learning 0.25 cycle 0.2 Part of our
Slide 11: 2 Service Lines
2 Service Lines Engineering & Maintenance Technologies FY 2019: E&M Europe: Revenues €2,578m, EBITA adj. €106m FY 2019: Revenues €538m, EBITA adj. €-28m FY 2019: E&M International: Revenues €912m, EBITA adj. €42m E&M covers the entire lifecycle of an industrial plant: T provides solutions for the pr
Slide 12: Engineering & Maintenance: Excellence in services covering the lifecycle of industrial plants
2 Service Lines Engineering & Maintenance: Excellence in services covering the lifecycle of industrial plants Engineering Maintenance Turnarounds AVR Chevron Neste refinery The Netherlands, Duiven USA, Offshore, Gulf of Mexico Finland, Porvoo • Conceptual engineering and construction • Industrial an
Slide 13: Technologies: Excellence in products, manufacturing and innovative solutions
2 Service Lines Technologies: Excellence in products, manufacturing and innovative solutions Nuclear services New energy Fabrication & Installation EDF Hinkley Point Cryostar LNG stations BP Deutschland (Ruhr Oel GmbH) United Kingdom Germany, Poland, France, BeNe Germany, Gelsenkirchen-Scholven • Ne
Slide 14: Deep Dive Technologies: individual weaknesses with high impact
Deep Dive Technologies: individual weaknesses with high impact Dedicated programs identified to secure successful turnarounds Final exit from conventional Energy & Legal power performance projects Utilities Entity 1 Focus on Nuclear 45% Legal Pharma & Entity 2 Biopharma 35% Legal Entity 3 Exit local
Slide 15: Deep Dive: Technologies
Deep Dive: Technologies Intensive care and structured transformation approach for the two struggling LEs Baseline Changes impacting 2020 Suffering from legacy New projects with solid stage gate approval process and projects intensified project control mechanisms. Exit projects/sectors Operational in
Slide 16: Improving our financial performance
Improving our financial performance
Slide 17: Outlook 2020
Outlook 2020 Positive earnings and free cash flow Actual FY 2019 Outlook FY 2020 Revenue €4,327 million Decrease of ~20% EBITA adjusted €104 million Positive Free cash flow reported €57 million Positive Underlying assumptions: • Greatest negative impact of the crisis in the second quarter, followed
Slide 18: Financial targets 2024
Financial targets 2024 Revenues EBITA ROCE Free Cash margin reported Flow sustainably min. reported >5 5 8-10 >200 €bn % % €m i.e. organic growth of ~5% CAGR from 2020 onwards Investment Grade (mid-term perspective) Sustainable dividend stream going forward Policy: 40 to 60% of adjusted net profit N
Slide 19: Sustainable value creation
Sustainable value creation Top Line +5% revenue CAGR Bottom Line >200 bps. gross margin 1 Increase integrated services 5 Boost execution performance 2 Intensify customer collaboration 6 Decrease operational costs 3 Capitalize digitalization & innovation 7 Utilization & efficiency increase 4 Lift val
Slide 20: Gross margin improvement and SG&A efficiency will lead to 5% adjusted EBITA margin target
Gross margin improvement and SG&A efficiency will lead to 5% adjusted EBITA margin target Adjusted >12.0 reported gross margin ~12.0 Gross margin improvement to a margin of >12% by 2024 [%] 9.8 8.4 9.4 9.5 ▪ Execution improvement ▪ Disciplined hurdle rates for future contracts ▪ Improved utilization
Slide 21: Levers for SG&A efficiency improvement
Levers for SG&A efficiency improvement Target of 160 legal entities achieved one year ahead of schedule Further reduction of organizational complexity ongoing Current status of legal entity reduction project Target of reduction to 160 legal entities reached one 279 ~-40% year earlier than planned 23
Slide 22: Levers for SG&A efficiency improvement
Levers for SG&A efficiency improvement Process and system harmonization with substantial program extensions Extended functionality Extended target scope Degree of target achievement ERP/SAP in terms of revenue 100% as of Mar. 31, 2021 ~90% as of Dec. 31, Additional add-ons for DONE 2020 Revenue ERP
Slide 23: Working capital management
Working capital management Key to higher cash conversion DSO: 74 DSO measures WIP 32 Reduction of WIP as main objective Accounts ▪ Project business: receivable 54 ▪ Increased bundling leads to improvement of contract and better negotiation position, e.g. claim management -11 payment terms Prepayment
Slide 24: Capital allocation priorities
Capital allocation priorities Financial Intended M&A policy Dividend Policy1 Criteria ▪ Actual rating S&P: BB-/outlook ▪ Floor of €1.00 is confirmed ▪ EBITA accretive one year after stable ▪ Sustainable dividend stream integration ▪ Policy to maintain conservative going forward: 40 to 60% of ▪ ROCE
Slide 25: Financials Q2 2020
Financials Q2 2020
Slide 26: Q2 2020: Solid cash flow and sound financial position
Q2 2020: Solid cash flow and sound financial position Scenario: market low point behind us Markets • Slow recovery in June, further improvements expected in second half of 2020 Orders received -15% org. • Solid development in base-business, lesser amount in large projects • Year-to-date -3% org. in
Slide 27: Progress: Hinkley Point contracts signed, two major legacies resolved
Progress: Hinkley Point contracts signed Two major legacies resolved Tier 1 supplier for Hinkley Point C • >€500 million contracts signed Cologne Municipal Archives definitive settlement • Insurance fully covers Bilfinger’s payment obligation • No impact on liquidity and earnings Settlement finalize
Slide 28: Hinkley Point C
Hinkley Point C Total orders received later than originally planned, but twice as high >€500 million contracts signed, orders being called off Tier 1 supplier Accumulated orders in € million 500 Planning as of today Signing NSSS & BNI 250 Signing BoP Planning mid-2019 2019 2020e 2021e Bilfinger SE |
Slide 29: Markets: E&M Europe
Markets: E&M Europe Industries Oil price COVID-19 Overall %* impact impact trend • Reduced production levels, but maintenance still needed Chemicals & 40% • German market keeping up comparably well Petrochem • Majority of turnarounds postponed to 2021 • ESG climate change drivers still hold, e.g. CO
Slide 30: Markets: E&M International
Markets: E&M International Industries Oil price COVID-19 Overall %* impact impact trend Chemicals & • Expansion programs and need for modernization projects in ME 30% Petrochem • Projects suspended or delayed until 2021 in NA • Continued increase in ME power demand drives further development of alte
Slide 31: Markets: Technologies
Markets: Technologies Industries Oil price COVID-19 Overall %* impact impact trend • Energy transition focus in all our regions, esp. Europe and USA • Nuclear demand for new builds and maintenance increasing, esp. Energy & 45% in France, UK and ME Utilities • Nuclear decommissioning capability (wast
Slide 32: Solid development in base-business, lesser amount in large projects
Solid development in base-business, lesser amount in large projects Development of orders received • Orders received -18%/-15% Decrease by -18% (org.: -15%) 1,133 1,060 compared to good prior year, 997 1,057 Orders 931 year-to-date merely -3% org. received 798 667 674 719 657 • Hinkley Point contrac
Slide 33: Revenue and EBITA adjusted affected by COVID-19 and oil price volatility
Revenue and EBITA adjusted affected by COVID-19 and oil price volatility Development of revenue and profitability • Revenue -31%/-29% -31% (org.: -29%) below prior-year 1,147 quarter, trough in April and May, June 1,101 1,071 915 slightly improved Revenue 793 (€ million) • EBITA adjusted 5.3% Decrea
Slide 34: Gross margin significantly below prior year mainly caused by underutilization
Gross margin significantly below prior year mainly caused by underutilization SG&A expenses further reduced, with temporary as well as sustainable measures Gross profit (€ million) Adjusted selling and administrative expenses (€ million) 97 (8.5%) 11 2 2 67 (7.4%) -75 -86 -102 (-9.5%) 34 (-9.4%) (-8
Slide 35: Segment E&M Europe
Segment E&M Europe: significant decrease in revenue due to COVID-19 and oil price volatility, positive EBITA adjusted Development of revenue and profitability • Orders received -26%/-24% -13% (org.: -11%) below high prior- 672 year quarter, book-to-bill of 1.3 664 647 573 indicates volume recovery i
Slide 36: Segment E&M International
Segment E&M International: sharp revenue drop mainly in North America Development of revenue and profitability • Orders received -51%/-52% -45% (org.: -46%), both regions 267 North America and Middle East 238 significantly below prior year Revenue 193 5.7% 165 (€ million) 2.8% • Revenue 131 8.6% Dec
Slide 37: Segment Technologies
Segment Technologies: significantly below expectations due to COVID-19 but also underperforming entities Development of revenue and profitability • Orders received -21%/-20% Slight increase by 1% (org.: 3%), 145 additional Hinkley Point C orders 136 139 expected for H2 and 2021 Revenue 113 108 (€ mi
Slide 38: Robust cash flow thanks to active working capital management
Robust cash flow thanks to active working capital management helped by deferred tax payments and social security contributions Sound financial position, no additional financing needs expected Adjusted Free cash flow 1) (€ million) Net profit (€ million) net profit (€ million) 139 3 1 10 -9 Continuin
Slide 39: Disclaimer
Disclaimer This presentation has been produced for support of oral information purposes only and contains forward- looking statements which involve risks and uncertainties. Forward-looking statements are statements that are not historical facts, including statements about our beliefs and expectation