Bilfinger Se · XETR:GBF
Bilfinger — Investor Day (February 2019)
35 slides from Bilfinger's investor day presentation, Feb 14, 2019
Slide 1: Preliminary figures 2018 and outlook 2019
Bilfinger SE | Capital Markets Day 2019 Preliminary figures 2018 and outlook 2019 Tom Blades, CEO | Christina Johansson, CFO | Duncan Hall, COO | Michael Bernhardt, CHRO February 14, 2019
Slide 2: Tried and proven team
Tried and proven team More than 100 years of competence in the industry Tom Blades Michael Bernhardt Duncan Hall Christina Johansson CEO CHRO COO CFO Strategy 2020 Human Resources Operative Business Finance, Legal & Compliance HSEQ Procurement, IT 41 years experience 22 years experience 32 years exp
Slide 3: Compliance Management System: A competitive advantage
Compliance Management System A competitive advantage Certified by compliance monitor in December of 2018 Prevent Compliance system is industry leading Prävention Compliance-related activities are ongoing, Compliance Reaktion Erkennen is an integral part of system in a continuous process of innovatio
Slide 4: FY 2018: Earnings expectations met, cash and growth targets exceeded
FY 2018: Earnings expectations met, cash and growth targets exceeded Outlook Actual FY 2018 FY 2018 Organic growth in the mid single-digit Orders received +12% percentage range Revenue Organically stable to slightly growing +6% Significant increase to mid-to-higher double-digit-million EBITA
Slide 5: FY 2018: Strong order book drives future revenue growth
FY 2018: Strong order book drives future revenue growth Orders received FY 2018: organic growth of 12%, book-to-bill ratio of 1.07 Q4: organic increase of 3% Revenue FY 2018: organic growth of 6% exceeded expectations Q4: organic increase of 4% EBITA adjusted FY 2018: significant increase to €65m, m
Slide 6: FY 2018: Strong cash development in fourth quarter
FY 2018: Strong cash development in fourth quarter Liquidity Adjusted free cash flow significantly improved to €56m, DSO improvement by 14 days in Q4 Reported free cash flow close to break-even Balance sheet / dividend Solid balance sheet, maintain baseline dividend proposal1) of €1.00 per share; sh
Slide 7: Financials Q4 and Preliminary Figures FY 2018
Financials Q4 and Preliminary Figures FY 2018 Christina Johansson, CFO CMD 2019 | February 14, 2019
Slide 8: Strong order book
Strong order book Development of orders received +3%/ +3% +10%/ +12% • Orders received: 1,085 1,101 1,139 1,105 1,114 FY: +10% above prior year (org.: 4,055 4,459 696 670 +12.5%), with especially strong 819 786 765 Orders (61%) (61%) (69%) order momentum in E&T (75%) (76%) received (€ million) • Q4:
Slide 9: Revenue growth continues, Q4 remains strongest quarter
Revenue growth continues, Q4 remains strongest quarter Development of revenue and profitability +3%/+6% • Revenue: +3%/+4% FY: Increase of +3% (org. +6%), 1.082 1.115 4.044 4.153 strong book and bill 1.058 1.052 929 Revenue 2.1% • EBITA adj.: (€ million) 3.7% 3.3% FY: Increase as expected, 1.1% 1.6%
Slide 10: Gross profit with 20bps quarter-on-quarter improvement
Gross profit with 20bps quarter-on-quarter improvement Adjusted gross profit (€ million) 391 (9.4%) • Full year with y-o-y 339 0 improvement; prior year was (8.4%) 118 3 burdened by project risk 113 (10.4%) 100 (10.6%) provisions 1 (9.5%) 0 • Future improvement by 0 391 336 (9.4%) • portfolio optimi
Slide 11: Stable y-o-y SG&A supporting growth
Stable y-o-y SG&A supporting growth with increased start-up costs of ~20m EUR for business development and digitalization Adjusted selling and administrative expenses (€ million) • Adjusted SG&A ratio in FY18 improved to 8.7% despite increased expenses for business development 10 16 35 40 and digita
Slide 12: E&T: visible improvements, but still mixed performance within segment
E&T: visible improvements, but still mixed performance within segment Development of revenue and profitability +7%/+8% • Orders received: +17%/+17% FY: Strong increase: +32% (org. 1,235 +34%) compared to low prior-year 362 1,157 308 299 309 figure, book-to-bill 1.2 Revenue 265 Q4: +28% (org. +26%);
Slide 13: MMO: Progressive EBITA adj. margin improvement
MMO: Progressive EBITA adj. margin improvement Development of revenue and profitability +5%/+6% • Orders received: 0%/0% FY: Increase of +7% (org. 9%), book- 2,628 2,758 716 708 712 713 to-bill at 1.05 625 Q4: Increase of +7% (org. 7%), book- Revenue 4.0% (€ million) to-bill at Q4 1.03; especially g
Slide 14: OOP: Two of four accretive entities will be sold by end of Q1 2019
OOP1): Two of four “accretive" entities will be sold by end of Q1 2019 Revenue OOP (€ million) • M&A progress on track: 293 Dilutive: all 13 entities disposed or terminated in 2018 Accretive: out of four entities, one signed, one closed accretive 195 Consequently a book loss of €9 million in Q4 2018
Slide 15: Cash turnaround with exceptionally strong Q4
Cash turnaround with exceptionally strong Q4 Adjusted operating cash flow1 (€ million) Adjusted Net profit (€ million) net profit (€ million) +109% Discontinued operations 55 163 110 36 14 60 Adjust- -20 -24 Adjust- 112 78 ments 50 -3 ments 149 Continuing operations -141 30 -1 Reported -7 -89 48 Rep
Slide 16: Initiatives for higher efficiency and lower costs
Initiatives for higher efficiency and lower costs IT PROJECTS PROCUREMENT INITIATIVE Status of process and system harmonization (ERP-System): Increasing number of e-auctions to improve the competitive Template solution set up advantage Degree of completion: 40% Reduced prices for direct mate
Slide 17: Strengthening sense of purpose
Strengthening sense of purpose Tom Blades, CEO CMD 2019 | February 14, 2019
Slide 18: Extensive analysis since mid-2016
Extensive analysis since mid-2016 2016/2017 2018/2019 • Deep analysis of the company, its markets and its customers Procedure • Deep dives on key entities • Evaluated our strengths, opportunities and challenges • Leverage “orders received” customers selectivity • Analysis based on decades-long indu
Slide 19: Strategy affirmed, enhanced setup: 2 Service Lines, 4 Regions, 6 Industries
Strategy affirmed, enhanced setup 2 Service Lines, 4 Regions, 6 Industries Our ambition We engineer and deliver process plant performance 2 Service Lines 4 Regions 6 Industries • Technologies • Continental Europe • Chemicals & • Pharma & Where to play • Engineering & Maintenance • Northwest Europe P
Slide 20: European Engineering Resources
European Engineering Resources Maintenance & Modification Engineering with increasing contribution to gross profit 2017 2018 2017 2018 Orders 30% Change in received 26% 30% orders 20% received 10% 0% 30% Revenue Change in 25% 28% 20% revenue 10% 0% -10% bps 500 Gross profit Change in 32% 250 gross 4
Slide 21: 2 Service Lines: Enhanced setup for build up and build out phase
2 Service Lines Enhanced setup for build up and build out phase Technologies Engineering & Maintenance FY 2018: Revenues € 499m, EBITA adj. € -24m FY 2018: Revenues € 3.495m, EBITA adj. € 133m Market Market High growth potential for technological products esp. in Increasing demand in Engineering Mai
Slide 22: Operational Excellence delivering the Strategy
Operational Excellence delivering the Strategy Duncan Hall, COO CMD 2019 | February 14, 2019
Slide 23: Where will Operational Excellence make a difference?
Where will Operational Excellence make a difference? EFFECTIVENESS ▪ Incremental margin growth through continuous improvement Do the right ▪ Project delivery utilizing governance, risk management and short interval project control things ▪ Secure higher margin growth with product technology, value l
Slide 24: Technologies: ambition to grow higher-margin business
2 Service Lines Technologies: ambition to grow higher-margin business Tech- Scrubber Pharma & Nuclear nology biopharma Services expertise Descrip- • High demand driven by legis- • Ageing society and global rise of • Worldwide build programs tion lation on emissions and CO2 middle class drives new pr
Slide 25: Engineering & Maintenance: combined and full life cycle services driving value
2 Service Lines Engineering & Maintenance: combined and full life cycle services driving value Tech- Combined Bilfinger Corrosion nology strength Turnaround under Concept insulation Descrip- • €36m deoderization plant for • High risk events for customers – • Major root cause of process tion Fluxys s
Slide 26: Operational excellence in action
Operational excellence in action Project: Conoco Phillips 2016-21 Scope: Scaffolding, Painting and Insulation Services for Offshore Platform Project Performance Indicators (e.g. CPI, SPI, MPI, others) Norm based work, % of used manhours Greater Ekofisk Area Contract financial performance vs targets,
Slide 27: Sustainable and profitable growth
Sustainable and profitable growth Structured process for performance improvement Strategy Measure performance Deliver value for the deployment and improve customer and ourselves ‘What’ and ‘How’ – Bilfinger and customer High value products and deployment and accountable and services reducing mutual
Slide 28: Looking forward 2019 and beyond
Looking forward 2019 and beyond Tom Blades, CEO CMD 2019 | February 14, 2019
Slide 29: Overall positive market outlook
Overall positive market outlook Update on market developments (1/2) Oil & Gas Chemicals & Petrochem Energy & Utilities Pharma & Biopharma ▪ Maintenance & field life ▪ Stable maintenance ▪ CHP / district heating ▪ Few investments but larger Conti- business nental extension investments ▪ Perceived inc
Slide 30: Oil & Gas and Chemicals & Petrochemicals show positive outlook in growth regions
Oil & Gas and Chemicals & Petrochemicals show positive outlook in our growth regions Update on market developments (2/2) Oil & Gas Chemicals & Petrochem Energy & Utilities Pharma & Biopharma North ▪ Number of active drilling ▪ American Chemical ▪ Energy storage market ▪ US is largest market in Ameri
Slide 31: Outlook 2019: next step on our way to reach targets
Outlook 2019: next step on our way to reach targets in € million Actual FY 2018 Expected FY 2019 Revenue 4,153 Mid single-digit organic growth EBITA adjusted 65 Significant increase to more than €100 million Free Cash Flow reported -4 Positive1) 1) Including positive effect from first-time applicati
Slide 32: Bilfinger 2020: Further progress in build-up phase
Bilfinger 2020 Further progress in build-up 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 master plan • New organizat
Slide 33: Bilfinger 2020: Financial ambition
Bilfinger 2020 Financial ambition Organic Growth Profit Cash Return • EBITA adjusted ~5% • Positive adj. FCF from Post-tax • Gross margin 2018 onwards ROCE reported: >5% CAGR improvement by ~200bps • Over the cycle, from 2018 8 to 10% based on revenue FY 2017 • SG&A ratio reduction by onwards: Cash
Slide 34: Preliminary figures 2018 and outlook 2019
Bilfinger SE | Capital Markets Day 2019 Preliminary figures 2018 and outlook 2019 Tom Blades, CEO | Christina Johansson, CFO | Duncan Hall, COO February 14, 2019
Slide 35: BACKUP: New segment structure (simulation)
BACKUP New segment structure (simulation) Reconciliation in € million Technologies Engineering & Maintenance Total Group E&M E&M Europe International Revenues 499 2,732 763 159 4,153 EBITA adjusted -24 101 32 -44 65 EBITA adjusted margin -4.8% 3.7% 4.2% - 1.6% Bilfinger SE | CMD 2019 | February 14,