Bilfinger Se · XETR:GBF
Bilfinger — Non-Deal Roadshow (February 2019)
39 slides from Bilfinger's roadshow presentation, February 2019
Slide 1: Bilfinger SE Company Presentation
Bilfinger SE Bilfinger SE Company Presentation February 2019
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 and reducing maintenance costs €4.15bn revenue Clear 2-4-6 strategy with two service lines, four regions and six focus industries thereof recurring b
Slide 4: 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 5: 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 6: 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 7: 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 8: 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 9: 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 10: 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 11: Growth potential through digitalization
Growth potential through digitalization
Slide 12: 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 13: 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 14: New analysis options: BCAP provides a better decision-making basis
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 | Feb
Slide 15: Improving our financial performance
Improving our financial performance
Slide 16: We will address all P&L line-items
We will address all P&L line-items GROSS MARGIN • Growth opportunities in high-profitability areas • LOA1 process and Project management Impact on gross margin: improvement of ~200bps AMBITION2 ADDRESSING BOTH LINE ITEMS EBITA margin • Process and IT harmonization increase of • Procurement ~500bps b
Slide 17: 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 18: SG&A expenses
SG&A expenses SG&A expenses show positive trend Adjusted SG&A expenses [EUR m] Highlights • SG&A ratio continues to 112 move towards target level 99 99 94 87 92 90 86 76 • Streamlining of processes SG&A • Reduction of complexity in Expenses structures, organization and [EUR m] governance • Adjustmen
Slide 19: Portfolio rotation 2019 and 2020
Portfolio rotation 2019 and 2020 Further margin enhancement while keeping a sound balance sheet Funding sources: Re-Investment: Margin 1. Disposal Other Operations (OOP) ▪ Strengthening accretion 4 „accretive“ legal entities to be sold growth regions 2. Potential disposal of selected margin- ▪ Stren
Slide 20: Guidance 2019, Targets 2020 and Wrap-up
Guidance 2019, Targets 2020 and Wrap-up
Slide 21: 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 22: 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 12/2018: €117m) Preferred participation note (PPN): • No management involvement • Certain information rights, some further rights • Investment: €195m • Book value 12/2018: €23
Slide 23: 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 24: 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 25: 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 • ~55% of output in recurring • 35% equity ratio (as of Dec 31, • Increasing # of Industrial plants
Slide 26: Financials Q4 and Preliminary Figures FY 2018
Financials Q4 and Preliminary Figures FY 2018
Slide 27: 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 28: 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 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
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: 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 32: 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 33: 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 34: 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 35: 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 36: 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 37: 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 38: 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 39: 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