Bilfinger Se · XETR:GBF
Bilfinger — Non-Deal Roadshow (July 2018)
44 slides from Bilfinger's roadshow presentation, July 2018
Slide 1: Bilfinger SE Company Presentation July 2018
Bilfinger SE Bilfinger SE Company Presentation July 2018
Slide 2: Overview
Overview
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 € 4.0bn revenue and reducing maintenance costs Clear 2-4-6 strategy with two divisions, four regions and six industries thereof recurring business >60% Com
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
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 | Jul
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 in 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 | July 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: ~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 • Lean headquarters ~300bps •
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 • SG&A expenses 115 112 continuously reduced 107 through 2017 100 99 99 86 87 SG&A • 3 consecutive quarters with 76 Expenses lower SG&A expense quota [EUR m] compared to previous year • Streamlining of processe
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 Strong progress in stabilization phase 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 maste
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 Preferred participation note (PPN): • No management involvement • Certain information rights, some further rights • Investment: €195m • Book value 03/2018: €210m • Measured at Fair Value
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 ROCE2 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 r
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 • 38% equity ratio • Increasing # of Industrial plants • Increasing t
Slide 31: Quarterly Statement Q1 and Guidance FY 2018
Quarterly Statement Q1 and Guidance FY 2018
Slide 32: Q1 2018: Development as planned
Q1 2018 Development as planned in an increasingly positive environment Orders received with growth in the fourth consecutive quarter Book-to-bill at 1.2 Revenue once again with organic increase EBITA adjusted above prior-year Net profit improved Operating cash flow below very good prior-year quarter
Slide 33: Market dynamics
Market dynamics Positive market dynamics support our growth ambitions E&T Markets MMO Markets Oil & Gas Oil & Gas • Continuous brownfield investments in Europe • Demand for maintenance services improving, • Increasing upstream activities in US Shale and but competition remains strong Middle East Che
Slide 34: Continuing positive momentum in orders received
Continuing positive momentum in orders received: fourth consecutive quarter with growth, book-to-bill at 1.2 Development of orders received +19%/ +21% • Orders received: 1,054 1,085 1,101 19% above prior-year 928 988 (org.: +21%), 711 825 819 774 Orders 691 (70%) Double-digit increase in both (72%)
Slide 35: Revenue with organic increase, EBITA adj. improvement
Revenue with a year-on-year organic increase for the third time in a row, EBITA adj. with significant improvement Development of revenue and profitability • Revenue: -3%/ +1% Q1 typically with lowest revenue 1,082 in the course of the year 961 1,001 1,001 928 In comparison to prior-year: Revenue 3.7
Slide 36: 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 37: Appendix
Appendix
Slide 38: Gross margin and SG&A expenses
APPENDIX Gross margin at prior-year level SG&A expenses below very good prior quarter, but positive trend visible Adjusted gross profit (€ million) Adjusted selling and administrative expenses (€ million) 113 (10.4%) 81 1 78 8 10 7 (8.5%) (8.4%) 1 0 -86 -95 -107 112 (-7.9%) (-10.2%) (-11.1%) 81 (10.
Slide 39: Operating cash flow and net profit
Operating cash flow negative caused by seasonality and APPENDIX below very good prior-year quarter, net profit significantly improved due to lower burden from special items Adjusted operating cash flow1 (€ million) Adjusted Net profit (€ million) net profit (€ million) 1 Adjust- -22 ments 28 15 Cont
Slide 40: E&T with positive momentum in orders received
APPENDIX E&T with positive momentum in orders received Development of revenue and profitability • Orders received: -11%/ -7% Strong quarter with +16% (org.: +18%) 3.6% 5.0% in comparison to weak prior-year, 296 273 281 308 book-to-bill at 1.1 with significant Revenue 265 contracts in all focus indus
Slide 41: MMO orders received and revenue with organic growth
APPENDIX MMO orders received and revenue with significant organic growth Development of revenue and profitability • Orders received: +6%/ +9% Strong development with +19% 657 664 716 592 625 (org. +22%), book-to-bill at 1.2 Revenue Esp. positive development in (€ million) 5.2% Continental Europe sup
Slide 42: Non-core business divestment
APPENDIX Non-core business Divestment of non-core dilutive units plus reduction of complexity Status divestments OOP – dilutive units Number of legal entities within Group 13 279 • Target achieved to sell or 232 close all dilutive units by 189 mid-2018 0 Dec 2016 CMD 2018 March 2016 CMD 2017 CMD 201
Slide 43: OOP: disposals nearly completed
APPENDIX OOP1): Dilutive: disposals nearly completed Accretive: sales process kicked off for two units Revenue OOP (€ million) Progress M&A track / Dilutive: 78 • 13 units as of December 31, 2016 • 11 have already been sold; two more with signing respectively termination Q1 2018: €2m positive P&L- a
Slide 44: 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