Bilfinger Se · XETR:GBF
Bilfinger — Non-Deal Roadshow (November 2020)
40 slides from Bilfinger's roadshow presentation, November 2020
Slide 1: Bilfinger SE Company Presentation
Bilfinger SE Bilfinger SE Company Presentation November 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 ▪ We will not compromise Motivate ▪ Continue to innovate our service ▪ Strict working capital 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- Sustainable focus optimizing 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 Assumption: the current lockdown measures will not have a material negative influence on business
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 Q3 2020
Financials Q3 2020
Slide 26: Q3 2020: Recovery gains pace
Q3 2020 Recovery gains pace: strong EBITA and cash flow development Full-year guidance affirmed Markets • Recovering in second half of 2020 as expected -26% org. • Orders received at lower level due to fewer projects and mark to market in oil and Orders received gas, but order backlog solid; positiv
Slide 27: Markets: E&M Europe
Markets: E&M Europe Industries Overall %* trend • Market starts to recover; some clients have announced large investments going forward Chemicals & 40% • German market keeping up comparably well Petrochem • Major chemical companies reported 3Q 2020 results slightly ahead of expectations • ESG climat
Slide 28: Markets: E&M International
Markets: E&M International Industries Overall %* trend • Expansion programs and need for modernization projects Chemicals & in Middle East (ME) 30% Petrochem • Projects delayed but attractive project pipeline in North America (NA) • In NA, energy investment trends focused on energy storage, wind, so
Slide 29: Markets: Technologies
Markets: Technologies Industries Overall %* trend • Energy transition focus in all our regions, esp. Europe and USA • Nuclear demand for new builds and maintenance increasing, esp. in France, Energy & 45% UK and ME Utilities • Nuclear decommissioning capability (waste treatment, services) offers opp
Slide 30: European business has shown high resilience and will emerge even stronger from this crisis
European business has shown high resilience and will emerge even stronger from this crisis In Numbers Reduction of ~4,000 employees year-to-date, majority in North America, Northern Europe, and the U.K. Currently ~650 employees are still in furlough schemes (in U.K., Nordics, Germany, Austria), down
Slide 31: Improved cost agility: the positive outcome from a difficult year
Improved cost agility: the positive outcome from a difficult year Levers Balanced workforce utilization planning Fast alignment with mid-term market outlook Adjusting in-house capacities to Q1/low point in quarterly intra-year Sustainable reduction of personnel in areas with longer-term revenues
Slide 32: Orders received on lower level due to limited number of projects
Orders received on lower level due to limited number of projects and lowered expectations in oil and gas, but solid order backlog; positive expectations for Q4 Development of orders received Orders received 2019 2020 • Decrease by -29% (org.: -26%) Q3 Q4 Q1 Q2 Q3 • Lack of project orders especially
Slide 33: Sequential recovery against Q2, solid EBITA adjusted
Sequential recovery against Q2, solid EBITA adjusted Development of revenue and profitability 2019 2020 Revenue • -21% (org.: -18%) below prior-year Q3 Q4 Q1 Q2 Q3 quarter, recovery after difficult Q2 Revenue -21%/-18% org. (€ million) EBITA adjusted 1,101 1,071 5.3% 915 870 • Positive at €23 millio
Slide 34: Gross margin at prior year level despite significantly lower revenues
Gross margin at prior year level despite significantly lower revenues SG&A expenses further reduced with partially sustainable improvements Gross profit (€ million) Adjusted selling and administrative expenses (€ million) 112 (10.2%) 89 5 2 6 (10.2%) -75 -75 -89 (-9.5%) (-8.6%) 34 (-8.1%) (4.3%) -73
Slide 35: Segment E&M Europe: strong recovery in both revenue and adjusted EBITA
Segment E&M Europe: strong recovery in both revenue and adjusted EBITA, highly resilient and agile maintenance business Development of revenue and profitability Orders received 2019 2020 • -14% (org.: -13%) mainly due to backlog reduction in upstream oil and gas Q3 Q4 Q1 Q2 Q3 business -12%/-11% org
Slide 36: Segment E&M International: top-line and earnings still under pressure
Segment E&M International: top-line and earnings still under pressure in challenging environment, leading to negative results also in full-year Development of revenue and profitability Orders received 2019 2020 • -60% (org.: -57%), in North America lack of contract awards due to challenging Q3 Q4 Q1
Slide 37: Segment Technologies: Sound quarter with positive EBITA adjusted
Segment Technologies: Sound quarter with positive EBITA adjusted Development of revenue and profitability Orders received 2019 2020 • Slight increase by 2% (org.: 2%) • Hinkley Point orders to be called off in Q4 Q3 Q4 Q1 Q2 Q3 and 2021 -5%/-5% org. Revenue Revenue 145 (€ million) 139 138 • -5% (org
Slide 38: Net profit burdened by significant amount of restructuring costs
Net profit burdened by significant amount of restructuring costs, on adjusted base positive Free cash flow improved significantly against prior year Net profit 1) (€ million) Free cash flow 1) (€ million) 17 43 44 11 6 20 5 -19 Q3 2019 Q3 2020 Q3 2019 Q3 2020 Reported Net Profit Reported FCF Adjuste
Slide 39: Sound financial position; further increase in liquidity
Sound financial position; further increase in liquidity due to active working capital management, despite start of payments of tax and social security deferrals Development of net liquidity Net liquidity 1) (€ million) Cash flow development year-to-date (€ million) excl. IFRS 16 9m 2020 IFRS 16 9m 2
Slide 40: 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