Bilfinger Se · XETR:GBF
Bilfinger — Non-Deal Roadshow (September 2018)
45 slides from Bilfinger's roadshow presentation, September 2018
Slide 1: Bilfinger SE Company Presentation
Bilfinger SE Bilfinger SE Company Presentation September 2018
Slide 2: Overview
Overview
Slide 3: Bilfinger at a glance
Bilfinger at a glance €4bn revenue Leading international industrial services provider Efficiency enhancement of assets, ensuring a high level of availability and reducing maintenance costs Clear 2-4-6 strategy with two divisions, four regions and six focus thereof recurring business >60% indus
Slide 4: Back to Profitable Growth: Service Lines, Regions, Industries
Back to Profitable Growth 2 Service Lines, 4 Regions, 6 Industries Our ambition We engineer and deliver process plant performance 2 Service Lines 4 Regions 6 Industries • E&T – Engineering & • Continental Europe • Chemicals & • Pharma & Where to play Technologies • Northwest Europe Petrochem Biophar
Slide 5: Service Portfolio
Service Portfolio Strong offering for capex and opex driven services E&T – Engineering & Technologies OPEX Packaged Units Turnarounds Efficiency Modifications Maintenance Expansions Operations Plant Expansions Emissions Maintenance Contracts CAPEX MMO – Maintenance, De-Sulfurizations Modifications &
Slide 6: Go-To-Market organization
Go-To-Market organization Market focus, customer centric E&T – Engineering & MMO – Maintenance, Technologies Modifications & Operations 6 industries Planning Oil & Gas Continental Europe International Regional Chemicals & Petrochem Execution Northwest Europe Energy & Utilities Pharma & Biopharma Tec
Slide 7: Organization
Organization New setup supports strategy implementation and 2020 ambition E&T MMO In every region: • Concentrated know-how • Customer proximity • Centralized project governance • Management of capacity utilization • Leverage high-value resources • More collaboration and cross selling • Enables fast
Slide 8: People: Driving Performance Culture
People Driving Performance Culture Mission Statement Performance Culture • Established Top Management Team • Vertical integration (e.g. value propositions) is leading to an increasing level of collaboration • Increasing focus on cash through cascaded incentive scheme • Switch from ‘adjusted’ to ‘rep
Slide 9: Compliance and integrity
Compliance and integrity Tremendous progress achieved in the last 18 months Starting Point First Steps Effective compliance World Class Compliance system System 2003 – 2005 2013 – 2015 2016 – 2018 2019 onwards • Nigeria corruption case • DPA • Extended DPA • Continuous • Start of monitorship • Stron
Slide 10: Growth potential through digitalization
Growth potential through digitalization
Slide 11: Market potential
Market potential We see significant market potential in digitalizing the process industry Estimated market potential • More than 16,000 plants within 2-4-6 in Continental and Northwest Europe • ~4,000 of these plants are mid-sized type with strong appetite for digitalization • Varying acceptance rat
Slide 12: Strategic position
Strategic position Bilfinger is well positioned to be the frontrunner in the IoT of process industries Process Industry Bilfinger IT Industry Digitalization hurdles Building digital bridges Applicability deficits • Requirement to • Deep knowledge of customer needs and • No access to plant improve pe
Slide 13: BCAP: Connecting data lakes
BCAP® Connecting data lakes and unlocking the potential of digitalization Engineering Operation Engineering Operation Cloud-based BCAP® platform Phase 1 – Consult Phase 2 – Connect Maintenance External data Maintenance External data Phase 3 – Visualize Isolated data lakes and Digital connection of p
Slide 14: New analysis options
New analysis options BCAP® provides a better decision-making basis What has happened? What could happen? What should we do? Descriptive Predictive Prescriptive Analytics Analytics Analytics Dashboards, reports Predictive maintenance Dynamic operation support Bilfinger SE | Company Presentation | Sep
Slide 15: Bilfinger Digital Next: Strategic Partnerships
Bilfinger Digital Next Strategic Partnerships and technical cooperation to unlock full potential Technical cooperations • Proven experience in optimizing process industry performance Unlock the potential of • Proven execution digitalization in the • Standardized Life capability in OT process industr
Slide 16: Cumulocity and BCAP provide prescriptive analytics
Bilfinger Digital Next Cumulocity and BCAP provide prescriptive analytics Azure • Real Time Data • Forward Digital Twin calculations COMOS OEE Dashboards Agent • Applications • Descriptive • Algorithms • Predictive • Prescriptive Agent ERP e.g. SAP/Oracle etc. Produc- Mainte- Sensor Sensor Quality t
Slide 17: Frontrunner in digitalizing the process industry
Bilfinger Digital Next Frontrunner in digitalizing the process industry Bilfinger Digital Next Core portfolio Value for our clients BCAP 7-15% Bilfinger Connected Asset Performance efficiency Bilfinger’s center of competence • Digital solution for process industry increase and growth driver in digit
Slide 18: Value add: first use cases
Value add Bilfinger has demonstrated the power of digitalization in first use cases Pilot Use Case Münzing Chemie Value add (in year 1) 10% OEE improvement potential discovered 10% Jürgen Reduced routine walks Anderes Dashboard 5% Less unplanned downtime 30% Improved data quality Exemplary BCAP® das
Slide 19: Improving our financial performance
Improving our financial performance
Slide 20: Ambitions will be achieved in three stages
Ambitions will be achieved in three stages Value Build out Build up Stabilization Time What does it mean in numbers? How will we execute? How will we measure and report progress? Bilfinger SE | Company Presentation | September 2018 page 20
Slide 21: Margin ambition supported by profit-pool analysis
Margin ambition is supported by an extensive profit-pool analysis Adjusted EBITA margin Profit pool according to FY 2016 Bilfinger profile1 (Mix FY 2020) • E&T with a defined path to improve profitability 5 to 9% E&T E&T • Entering blended margin range towards the end of the planning period EBITA •
Slide 22: We will address all P&L line-items
We will address all P&L line-items GROSS MARGIN • LOA1 process • Project management Impact on gross margin: improvement of ~200bps AMBITION2 ADDRESSING BOTH LINE ITEMS EBITA margin • Process and IT harmonization increase of • Procurement ~500bps by 2020 Impact on SG&A RATIO SG&A ratio: Improvement o
Slide 23: B-TOP has been rolled out
B-TOP B-TOP has been rolled out and ensures productivity targets Ramp up of measures [#] EBITA-effect per measure Highlights > 1,000 k€ • Tool and structure rolled out 250-1,000 k€ 425 5% • Local B-TOP professionals 380 7% installed and networks set up • Efficiency targets agreed 194 and included in
Slide 24: SG&A expenses show positive trend
SG&A expenses SG&A expenses show positive trend Adjusted SG&A expenses [EUR m] Highlights • 4 consecutive quarters with 112 lower SG&A expense quota 107 100 99 99 compared to previous year 87 92 86 76 • Streamlining of processes SG&A Expenses • Reduction of complexity in [EUR m] structures, organiza
Slide 25: Targets 2020 and Wrap-up
Targets 2020 and Wrap-up
Slide 26: Dividend of €1.00 for FY 2017
Dividend of €1.00 for FY 2017 Share buyback program advances as planned • Refinancing of syndicated cash-credit line (RCF) in June 2017 with volume: €300m; duration: 5 years Re- • Agreements on guarantee facilities in bilateral tranches with a total volume of €860m achieved financing • Conditions sl
Slide 27: Bilfinger 2020 – Company passes three phases
Bilfinger 2020 – Company passes three phases Stabilization phase completed Value Stabilization Build up Build out • Strategy defined • Top line growth resumed • Process and System • Organization announced • First successes in new growth areas harmonization fully rolled out • Execution master
Slide 28: Benefit from 49% of the value creation at Apleona
Benefit from 49% of the value creation at Apleona Vendor‘s Note: €100m, 10% compound interest p.a. upon maturity (book value 06/2018: €111m) Preferred participation note (PPN): • No management involvement • Certain information rights, some further rights • Investment: €195m • Book value 06/2018: €23
Slide 29: Bilfinger 2020 Financial ambition
Bilfinger 2020 Financial ambition Organic Growth Profit Cash Return • Positive adj. FCF from • EBITA adjusted ~5% Post-tax 2018 onwards • Gross margin ROCE reported: >5% CAGR • Over the cycle, from 2018 improvement by ~200bps 8 to 10% based on revenue FY 2017 onwards: Cash Conversion • SG&A ratio re
Slide 30: The Bilfinger Investment Case
The Bilfinger Investment Case: Turnaround case based on favorable business model Structural demand for industrial Favorable business Financial soundness services characteristics • BB / stable outlook • >60% of output in recurring • 36% equity ratio • Increasing # of Industrial plants • Increasing to
Slide 31: Quarterly Statement Q2 and Guidance FY 2018
Quarterly Statement Q2 and Guidance FY 2018
Slide 32: Q2 2018: Stabilization phase completed
Q2 2018 Stabilization phase completed, market environment support growth path Orders received with growth in the fourth consecutive quarter Continued double-digit growth in orders received Book-to-bill at 1.2 Revenue once againsignificantly increased with organic increase EBITA adjusted above adj. a
Slide 33: Current market situation and trends E&T
Current market situation and trends E&T Oil & Gas • Continuing brownfield investments in Europe • Increasing upstream activities in US Shale and Middle East Chemicals & Petrochem • Ongoing active brownfield investments • Key opportunities in US Gulf Coast • Demand for services in early project phase
Slide 34: Current market situation and trends MMO
Current market situation and trends MMO Oil & Gas • Demand for maintenance services improving, but competition remains strong Chemicals & Petrochem • Stable demand in Europe and Middle East for maintenance and modifications • Large Turnarounds being scheduled Energy & Utilities • Ongoing low demand
Slide 35: Recent examples of realized growth potentials (1/2)
Recent examples of realized growth potentials (1/2) Bilfinger is building digital bridges. A case in point: Rollout of BCAP (Bilfinger Digitalization • Consulting Connected Asset Performance) • Networking • Visualization and analysis at Fortum: Digital networking of • Optimization 123 hydroelectric
Slide 36: Recent examples of realized growth potentials (2/2)
Recent examples of realized growth potentials (2/2) Overhauled and elevated risk management A case in point: • Project steering Major contract awarded by Linde Major projects • Project risk management AG (construction of a • Stage-Gate process • Project manager platform polypropylene plant in the US
Slide 37: Positive momentum in orders received continues
Positive momentum in orders received continues: Growth against prior year as well as sequentially Development of orders received +15% / +21% • Orders received: 1,085 1,101 1,139 15% above prior year 988 1,054 696 (org.: +21%), 711 825 819 786 Orders (61%) Double-digit increase in both (72%) (78%) (7
Slide 38: Again growth in revenue, EBITA adjusted above prior-year
Again growth in revenue, EBITA adjusted above substantially burdened prior-year figure Development of revenue and profitability • Revenue: +6%/ +10% Increase of 6% (org.: +10%) esp. 1,001 1,001 1,082 1,058 in European MMO business 929 2.1% 1.1% • EBITA adjusted: Revenue 3.7% (€ million) Improved aga
Slide 39: Positive trends in gross margin and SG&A ratio
Positive trends in gross margin and SG&A ratio Adjusted gross profit (€ million) Adjusted selling and administrative expenses (€ million) 95 78 (9.0%) (8.4%) 0 7 7 11 0 43 -94 -103 -106 (4.3%) 95 (-10.1%) (-9.7%) 78 (-10.6%) 1 (9.0%) (8.4%) 42 -87 (4.2%) -99 -92 (-9.4%) (-10.0%) (-8.7%) Q2/17 Q1/18
Slide 40: E&T: Fourth consecutive quarter with positive EBITA adjusted
E&T: Fourth consecutive quarter with positive EBITA adjusted Development of revenue and profitability • Orders received: +10%/ +12% Strong quarter with +21% (org.: +28%) against low comparable, 281 308 299 book-to-bill at 1.3 also due to major Revenue 273 265 5.0% contract Linde Braskem (€ million)
Slide 41: MMO: Continued significant organic growth
MMO: Continued significant organic growth in orders received and revenue Development of revenue and profitability • Orders received: +8%/ +10% Strong development with +22% 657 664 716 708 (org. +25%), book-to-bill at 1.0. 625 Revenue Esp. positive development in (€ million) Europe supported by new 5
Slide 42: OOP: Focus on accretive units
OOP1): Focus on “accretive units” Revenue OOP (€ million) • Progress M&A track: 78 Dilutive: 13 units as of December 31, 2016 As of June 30, 2018 all have been sold or terminated accretive 55 Accretive: four units, sales process kicked off for two units dilutive 55 Q2 2018: positive effect on earnin
Slide 43: Operating cash flow significantly above prior-year
Operating cash flow significantly above prior-year Net profit positive due to write-up of PPN Apleona by €22 million Adjusted operating cash flow1 (€ million) Adjusted Net profit (€ million) net profit (€ million) Adjust- ments 0 28 22 Discontinued Operations 8 50 0 12 -41 Minorities -19 12 Reported
Slide 44: Outlook 2018 confirmed
Outlook 2018 confirmed: Significant improvement of adjusted EBITA expected in € million FY 2017 expected FY 2018 Organic growth in the mid single-digit percentage Orders received 4,055 1) range Revenue 4,044 Organically stable to slightly growing Significant increase to mid-to-higher double-digit- A
Slide 45: 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