Bilfinger Se · XETR:GBF
Bilfinger — Investor Day (October 2015)
57 slides from Bilfinger's investor day presentation, Oct 15, 2015
Slide 1: Capital Markets Day 2015: Strategy – Focus Focus Focus
Bilfinger SE | Capital Markets Day 2015 – Analysts„ and Investors„ Conference STRATEGY FOCUS FOCUS FOCUS Per Utnegaard, Dr. Jochen Keysberg, Axel Salzmann October 15, 2015
Slide 2: Agenda
Agenda I. Bilfinger Group Per H. Utnegaard II. Segment Industrial Per H. Utnegaard III. Segment Building and Facility Dr. Jochen Keysberg IV. Summary Per H. Utnegaard Bilfinger SE | Capital Markets Day 2015 – Analysts' and Investors' Conference Page 2
Slide 3: I. Bilfinger Group
I. Bilfinger Group | Per H. Utnegaard
Slide 4: CEO Assessment: We can build on our strengths
CEO Assessment We can build on our strengths High-quality services provider and partner to our customers High brand recognition Strong customer base with long-term relationships Skilled and experienced staff, impressive engineering expertise Comprehensive services offering Market leadership in impor
Slide 5: CEO Assessment: Numerous challenges
CEO Assessment Numerous challenges Stabilize the business by… High complexity … defining and focusing on core business … building on strong market position Low profitability and strengthening sales culture Low cash conversion … aiming for cost leadership, finalize restructuring No synergies … improv
Slide 6: Current status: Two different businesses at two different stages
Current status Two different businesses at two different stages BILFINGER SE INDUSTRIAL BUILDING AND FACILITY Market leader in Europe Facility Services: No. 1 in DACH Fragmented international activities Robust business model Low level of integration within segment Steady financial perfor
Slide 7: It's all about FOCUS and CORE!
It‟s all about FOCUS and CORE! The five cornerstones in our strategy Two CORE Leadership independent business: and skills: pillars: services, Cost Cash Our people Industrial and markets, leadership conversion make it work! Building and customers and Facility geographies Improve profitability, increa
Slide 8: Two independent pillars drive and unlock hidden potential
Two independent pillars drive and unlock any INDEPENDENT CORE COST CASH LEADERSHIP PILLARS BUSINESS LEADERSHIP CONVERSION AND hidden potential SKILLS Benefits of independence BILFINGER SE ▪ Increased visibility BUILDING AND FACILITY ▪ Drive decentralization INDUSTRIAL ▪ Stimulation of entrepreneuria
Slide 9: Focus on CORE services
Focus on CORE services INDEPENDENT CORE COST CASH LEADERSHIP PILLARS BUSINESS LEADERSHIP CONVERSION AND Do more of less! SKILLS ▪ Maintenance and Turnarounds ▪ Insulation, Scaffolding and Painting INDUSTRIAL ▪ Engineering ▪ Automation ▪ Fabrication and Installation ▪ Facility Management BUILDING ▪ R
Slide 10: Focus on CORE customers
Focus on CORE customers INDEPENDENT CORE COST CASH LEADERSHIP Accelerate development of key account management PILLARS BUSINESS LEADERSHIP CONVERSION AND SKILLS and leverage our high-profile customer base Accelerate High-profile customer base Key Account Management Several blue-chip customers In
Slide 11: Focus on CORE geographies
Focus on CORE geographies INDEPENDENT CORE COST CASH LEADERSHIP PILLARS BUSINESS LEADERSHIP CONVERSION AND From fragmented international footprint to European focus SKILLS INDUSTRIAL Europe: Central and Northern Europe BUILDING AND Europe FACILITY Strengthen our position in our home markets Bilfinge
Slide 12: Focus on CORE markets
INDEPENDENT CORE COST CASH LEADERSHIP Focus on CORE markets PILLARS BUSINESS LEADERSHIP CONVERSION AND SKILLS Process industries ▪ Chemicals INDUSTRIAL ▪ Energy ▪ Oil&Gas / Refineries ▪ Pharma BUILDING Real estate services AND for customers in various sectors FACILITY Expansion of market shares Bilf
Slide 13: Non-core businesses identified
INDEPENDENT CORE COST CASH LEADERSHIP Non-core businesses identified PILLARS BUSINESS LEADERSHIP CONVERSION AND SKILLS NON-CORE BUSINESSES Lack of strategic fit with Subcritical in size Risk reduction or geographies CORE Industrial: e.g. Industrial: e.g. ▪ Steel Construction ▪ Power* ▪ Engineering S
Slide 14: Clear distinction between CORE and Non-core businesses
Clear distinction between CORE and INDEPENDENT CORE COST CASH LEADERSHIP PILLARS BUSINESS LEADERSHIP CONVERSION AND Non-core businesses SKILLS Output volume (2015e) CORE business Non-core business Management’s strategic focus No strategic focus Increase investment activities Limited investme
Slide 15: Focus on cost leadership
INDEPENDENT CORE COST CASH LEADERSHIP Focus on cost leadership PILLARS BUSINESS LEADERSHIP CONVERSION AND SKILLS ▪ Continue successful restructuring, already launched measures on schedule ▪ Operational excellence: ▪ process optimization Improve competitiveness ▪ standardization to create shareholder
Slide 16: Focus on cash conversion
INDEPENDENT CORE COST CASH LEADERSHIP Focus on cash conversion PILLARS BUSINESS LEADERSHIP CONVERSION AND SKILLS ▪ Improve time to billing ▪ Optimize billing process Free up cash to create ▪ Improve overdues shareholder value ▪ Inject full working capital awareness Bilfinger SE | Capital Markets Day
Slide 17: Leadership and skills
Leadership and skills INDEPENDENT CORE COST CASH LEADERSHIP PILLARS BUSINESS LEADERSHIP CONVERSION AND Our people make it work! SKILLS Bilfinger Academy | Figures 2015e ▪ Onboarding: foster joined values, install worldwide standards ▪ Technical trainings: excellence in high quality services > 50.000
Slide 18: Wrap up: Key strategic initiatives will deliver on our objectives
Wrap up Key strategic initiatives will deliver on our objectives Core Description Deliverables Objectives ▪ Focus on two independent segments: ▪ Unlock any hidden potential Segments Industrial, Building and Facility ▪ Increased entrepreneurship and transparency FOCUS ▪ Outstanding engineering know-h
Slide 19: II. Segment Industrial
II. Segment Industrial | Per H. Utnegaard
Slide 20: Industrial: Good basis, but need for restructuring
Industrial Good basis, but need for restructuring BILFINGER SE INDUSTRIAL STRENGTHS: Leading supplier for Industrial services and solutions for process industries in Europe Comprehensive service offering Output volume 2015e: Well positioned to benefit from industry trends a good €3.4bn High
Slide 21: Navigator
Navigator MARKET FOCUS KEY INITIATIVES Market environment CORE geographies Restructuring Industry trends CORE services Operational Excellence Peer group CORE customers Commercial Excellence Higher Profitability, improved Cash conversion, reduced Complexity Bilfinger SE | Capital Ma
Slide 22: Opportunities in a challenging market environment
We see opportunities in a challenging market MARKET FOCUS KEY INITIATIVES environment MARKET CHARACTERISTICS OUR OPPORTUNITIES ▪ Stable, low-risk countries ▪ Excellent market position ▪ Slow growth environment ▪ Winning outsourcing projects pushes profitable growth ▪ Ongoing outsourcing trend ▪ High
Slide 23: Well positioned to leverage industry trends
KEY We are well positioned to leverage industry trends MARKET FOCUS INITIATIVES MARKET DYNAMICS AND KEY TRENDS WE ARE WELL POSITIONED ▪ Mobile devices in maintenance already Digitization of industry Industry 4.0 in use ▪ Several digital services in development Ongoing trend for ▪ Highly sophisticate
Slide 24: Industry 4.0 will impact maintenance and service offerings
Industry trend KEY Industry 4.0 will impact our maintenance and service MARKET FOCUS INITIATIVES offerings in the future Remote data analysis Predictive maintenance Real-time analysis of critical Analysis of historical and data points from customer's actual equipment data process and manufacturing d
Slide 25: Ongoing outsourcing offers growth opportunities
Industry trend MARKET FOCUS KEY INITIATIVES Ongoing outsourcing offers growth opportunities Top 15 companies Industrial Services providers in Germany Customers in process industries are continuously 12.6% reducing their fixed cost base: ongoing trend to 11.4% outsourcing 9.6% 9.8% Due to high qu
Slide 26: Most comprehensive service portfolio within peer group
Bilfinger with most comprehensive service portfolio MARKET FOCUS KEY INITIATIVES within peer group CAPEX Services OPEX Services Comprehensive offering both in CAPEX and OPEX services Engineering Automation Fabrication and Maintenance and ISP onshore ISP offshore Installation Turnarounds Some large c
Slide 27: Navigator
Navigator MARKET FOCUS KEY INITIATIVES Market environment CORE geographies Restructuring Industry trends CORE services Operational Excellence Peer group CORE customers Commercial Excellence Higher Profitability, improved Cash conversion, reduced Complexity Bilfinger SE | Capital Ma
Slide 28: Focus on CORE geographies: Leading position in Europe
Focus on CORE geographies MARKET FOCUS KEY INITIATIVES Leading position in Europe DACH market leadership in industrial maintenance services Nordics market leadership in industrial maintenance and strong market position in on- and offshore oil and gas services UK market leadership in maintenance and
Slide 29: Europe: A stable, low-risk market environment
Europe MARKET FOCUS KEY INITIATIVES A stable, low-risk market environment Europe: CORE ~80% 0.3 0.4 1.0 2.7 0.5 0.5 DACH Northern Europe UK BeNe Eastern Europe EUROPE Bilfinger SE | Capital Markets Day 2015 – Analysts' and Investors' Conference Page 29
Slide 30: Focus on CORE services
Focus on CORE services MARKET FOCUS KEY INITIATIVES Tailor-made services for process industries SEGMENT INDUSTRIAL Process industries Engineering, Industrial Industrial Insulation, Oil and Gas Support Non-core Automation and Fabrication Maintenance Scaffolding Services business Control and Installat
Slide 31: Focus on core customers
Focus on core customers MARKET FOCUS KEY INITIATIVES Leverage our high-profile customer base Ca. 80% of output volume generated Trend to with our top 100 high-profile customers ▪ supplier consolidation Oil&Gas/Refineries ▪ awarding of service Pharma contracts across different sites Bilfinger well po
Slide 32: Case Study Borealis: Excellence in engineering and maintenance
Case Study Borealis MARKET FOCUS KEY INITIATIVES Excellence in engineering and maintenance expertise Establishing of relation Bilfinger strategy is to to key account Borealis follow Borealis growth 2015 2005 ff strategy within their 2004 Stenungsund, 1997 Piesteritz, Sweden Core business areas: Germ
Slide 33: Case Study Borealis: Win-win partnership
Case Study Borealis MARKET FOCUS KEY INITIATIVES Win-win partnership with sustainable benefits Advantages Borealis – Performance-oriented Advantages Bilfinger – Satisfied Customer partnership with high focus on: ▪ Prolongation and development of existing ▪ Efficient maintenance and turnaround execut
Slide 34: Case Study Borealis: Our services towards Borealis
Case Study Borealis MARKET FOCUS KEY INITIATIVES Our services towards Borealis MECHANICAL MAINTENANCE SERVICES (BMC) TURNAROUNDS (STATIC, ROTATING) MODIFICATIONS MAINTENANCE CONSULTANCY WORKSHOP SERVICES AND EXTENSIONS Bilfinger SE | Capital Markets Day 2015 – Analysts' and Investors' Conference Pag
Slide 35: Navigator
Navigator MARKET FOCUS KEY INITIATIVES Market environment CORE geographies Restructuring Industry trends CORE services Operational Excellence Peer group CORE customers Commercial Excellence Higher Profitability, improved Cash conversion, reduced Complexity Bilfinger SE | Capital Ma
Slide 36: Restructuring measures already launched are on track
KEY Restructuring measures already launched are on track MARKET FOCUS INITIATIVES Restructuring / disposal of units which are loss-making or subcritical in size or geographies 2015 2016 2017 ff ~€70m restructuring expenses Cash-out in 2015 and 2016 ~€40m EBITA p.a. savings Headcount reduction (~1400
Slide 37: Operational Excellence will improve competitiveness and profitability
Operational Excellence will improve our competitiveness MARKET FOCUS KEY INITIATIVES and profitability Improve process efficiency Roll-out successfully piloted lean-program in division Industrial Maintenance Enhance standardization and digitization of processes, e.g. optimized work order manag
Slide 38: Operational Excellence – Example
Operational Excellence – Example KEY Lean processes and culture of continuous improvement MARKET FOCUS INITIATIVES Project PEPP Objectives of Project PEPP More than 50 improvement levers identified – “Process Excellence through Powerful People” Examples: ▪ Develop lean processes incl. Introduction o
Slide 39: Commercial Excellence
Commercial Excellence MARKET FOCUS KEY INITIATIVES We will increase sales and performance culture FUTURE SALES STRATEGY Focus on key accounts with clear responsibilities Advanced commercial initiatives with strategic customers Initiate incentives program Establish cross-regional and cross-di
Slide 40: Commercial Excellence – Example
Commercial Excellence – Example MARKET FOCUS KEY INITIATIVES BMC® is a best practice product suite for maintenance services ▪ Manufacturer of water valves with production in Germany ▪ Customer with increasing need for efficiency and Market Analysis operational improvements Go To Market Requirement M
Slide 41: Industrial: The way forward
Industrial The way forward Focus to create basis for future growth Grow business 2015 – strategy launch 2016 – transition year Mid/long-term perspective ▪ Continue restructuring In addition: ▪ Expand geography in our core business ▪ Focus on operational ▪ Standardize processes in excellence CORE bus
Slide 42: III. Segment Building and Facility
III. Segment Building and Facility | Dr. Jochen Keysberg
Slide 43: Starting from a robust position
Starting from a robust position BILFINGER SE REAL ESTATE SERVICES BUILDING AND FACILITY 21,500 highly skilled employees in Europe High degree of technical and commercial competence High degree of self-delivery and extensive value added Output volume 2015e: Excellent customer relationships a
Slide 44: Focus on real estate services as core
GROWTH Focus on real estate services as core FOCUS MARKET INITIATIVES WHERE WE COME FROM ... WHERE WE WANT TO GO... ▪ No clear logic of segment configuration and ▪ Position the Segment B&F lack of focus on full real estate value chain as a leading European real ▪ Lack of focus leading to limited vis
Slide 45: Covering the entire real estate value chain
Focus on real estate services FOCUS MARKET GROWTH INITIATIVES Covering the entire real estate value chain Value Development Design Realization Operations / Maintenance chain Integrated Real Estate Services / Lifecycle consulting / Lifecycle projects Bilfinger offering ▪ Advisory and Consulting ▪ Int
Slide 46: Focus on real estate services: Robust business model
Focus on real estate services FOCUS MARKET GROWTH INITIATIVES Robust business model No high dependency on a single customer Varied and independent market drivers ▪ Market consolidation ▪ Outsourcing ▪ Sustainability ▪ Multi-national customers ▪ Interest rates Customers from different sectors with di
Slide 47: Robust growth of relevant markets
Market FOCUS MARKET GROWTH INITIATIVES Robust growth of relevant markets Markets Growth until 2018 CAGR 2015 – 2018 Output Transaction market Europe Significant growth Core Transaction volume Robust growth Facility management market Europe Robust growth Output volume Construction market Germany Slig
Slide 48: Trend toward integrated real estate services
Market FOCUS MARKET GROWTH INITIATIVES Trend toward integrated real estate services Facility Real Estate Market trends Management Consulting ▪ Expansion of real estate value chain through acquisitions Example CBRE: Norland, Johnson Controls Example Bilfinger: GVA ▪ Increasing demand for integrated D
Slide 49: Trend for multi-national real estate services
Market FOCUS MARKET GROWTH INITIATIVES Trend for multi-national real estate services Strong focus on Europe Strong market position in the two largest European markets Germany and UK Overall present in 20 countries Customers require local presence and knowledge combined with multi-national management
Slide 50: Growth initiatives
GROWTH Growth initiatives FOCUS MARKET INITIATIVES MARKET DYNAMICS AND KEY INITIATIVES CORPORATE CLIENTS DIGITIZATION ENERGY EFFICIENCY Bilfinger SE | Capital Markets Day 2015 – Analysts' and Investors' Conference Page 50
Slide 51: Growth initiative: Corporate clients
Growth initiative: Corporate clients FOCUS MARKET GROWTH INITIATIVES Increasing demand for integrated real estate services Starting position Customer needs Initiatives ▪ Cost cutting ▪ Intensify key account approach ▪ Outsourcing ▪ Developing and offering new ▪ Single sourcing customer-oriented serv
Slide 52: Growth initiative: Digitization
Growth initiative: Digitization FOCUS MARKET GROWTH INITIATIVES Service provider are driving digitization Starting position Customer needs Initiatives ▪ Digitization of buildings (BIM) ▪ Cost transparency ▪ Better linkage between existing IT- ▪ Own R&D for digital solutions Tools ▪ Quality control (
Slide 53: Growth initiative: Energy efficiency
Growth initiative: Energy efficiency FOCUS MARKET GROWTH INITIATIVES Still high saving potential Starting position Customer needs Initiatives ▪ Extensive own experience ▪ Cost transparency and reduction ▪ Further development of own ▪ Close proximity to building energy monitoring system ▪ Mandatory e
Slide 54: Energy efficiency example: smartB
Growth initiative: Energy efficiency FOCUS MARKET GROWTH INITIATIVES Example smartB ▪ Pilot project in Berlin ▪ Innovative smart meter ▪ Office building ▪ Cloud-platform ▪ Approx. 17,000 m2 ▪ Real-time data analyses “We’ve taken a big step toward gaining a transparent view of our power consumption.
Slide 55: Medium-term, grow the business to > €3bn
Building and Facility FOCUS MARKET GROWTH INITIATIVES The way forward CONTINUE PROFITABLE GROWTH 2015 2016 ▪ Continuous operational excellence ▪ At minimum, growth in line with market ▪ Define and launch additional growth initiatives Start with bolt-on acquisitions Medium-term, grow the business to
Slide 56: IV. Summary
IV. Summary | Per H. Utnegaard
Slide 57: It's all about focus!
It‟s all about focus! Focus, clean up and Continue growth set basis for future growth Transition year and expand business 2015 2016 Medium- to long-term ▪ Industrial: Continue ▪ SG&A efficiency program ▪ Geographic expansion restructuring, focus on in our defined core markets operational efficiencie