Bilfinger Se · XETR:GBF
Bilfinger — Non-Deal Roadshow (September 2017)
39 slides from Bilfinger's roadshow presentation, September 2017
Slide 1: Bilfinger SE Company Presentation
Bilfinger SE Bilfinger SE Company Presentation September 2017
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 € 4.2bn output volume and reducing maintenance costs Clear 2-4-6 strategy with two divisions, four regions and six industries thereof recurring busin
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: New organizational setup supports strategy implementation and 2020 ambition
New organizational 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 fas
Slide 8: Raising the growth potential
Raising the growth potential
Slide 9: Industrial service market: Continuous growth of operating plants
Industrial service market Continuous growth of operating plants • Number of plants in our defined markets growing constantly Number of plants in our markets 45k • More than 75% of plants are over 10 years old and number 12k of ageing plants increasing 32k • Complexity of plants is increasing with po
Slide 10: Bilfinger Market Model
Bilfinger Market Model Contracted out market is USD 125 bn and rising Total service market (2-4-6) Contracted out market (2-4-6) Contracted out market by regions and [USD bn] [USD bn] industries (2016) Northwest Europe Middle East 2.6% 256 231 Regions Continental Europe 110 E&T 98 +2.9% 3.4% 143 Nor
Slide 11: Driving profitable growth
Driving profitable growth Three major growth levers for above market profitable growth Comparison of growth rates Growth levers and growth impact [CAGR 2016-2020 in %] In line with market Above market Outpace market Continental Northwest North More than 20 growth Middle East initiatives detailed, Eu
Slide 12: Our analysis for sustainable and profitable growth
Our analysis for sustainable und profitable growth Our market What we are How to win $ 125 bn CAGR ~3.4 % 2-4-6 Market Focus & Customer Centric People, engineering, credentials, customer proximity, innovation >5 % top line CAGR1 1 CAGR 2017-2020 in % Bilfinger SE | Company Presentation | September 2
Slide 13: Improving our financial performance
Improving our financial performance
Slide 14: 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 | September 2017 page 14
Slide 15: Margin ambition is supported by an extensive 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 16: 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 17: Overview of improvement measures
Overview of improvement measures Verticalized organization in E&T supports centralized project governance approach 2017 2018 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 Implementation of stage gate process in ex-Power units Quarterly project reviews Introduction of mandatory risk categories (projects) I
Slide 18: Stage-Gates: structured management process along the project life-cycle
Structured management process along the project life-cycle Tendering Phase Execution Phase Project execution Business Proposal preparation & contract Project Develop- Warranty period ment negotiation start-up Procurement, Construction Engineering materials mgt., and (erection) and subcontracting com
Slide 19: Current Trading and Guidance 2017
Current Trading and Guidance 2017
Slide 20: Q2 2017: development as expected
Q2 2017: development as expected Counteracting positive and negative effects from legacy projects Orders received organically stable Output volume decline in line with expectation Adj. EBITA negative due to risk provisions for legacy projects in USA Earnings after taxes from discontinued operations
Slide 21: Market Situation E&T
Market Situation E&T Oil and gas: • Continued cautious investment sentiment in the project business • Positive dynamic in selected areas such as gas supply and gas pipelines in Europe Chemicals and petrochemicals: • Market growth in North America continues • Overall growing trend toward digitalizati
Slide 22: Market Situation MMO
Market Situation MMO Oil and gas: • Low point in austerity cycle in Northwest Europe has been reached, though still no upturn in continuing intensely competitive environment • Efficiency enhancements remain a focus Chemicals and petrochemicals: • Stable demand in Europe in the maintenance business •
Slide 23: Orders received organically stable, book-to-bill ~1
Orders received organically stable, book-to-bill ~1 Development of orders received -4%/0% • Orders received: 4% below prior-year (org.: 0%) 1,026 1,069 947 928 988 • Book-to-bill ~ 1 Orders • Organic increase expected for 742 816 711 received 810 691 full year with an upswing in (72%) (76%) (72%) de
Slide 24: Output volume declines as expected; adj. EBITA negative
Output volume declines as expected Adj. EBITA negative due to risk provisions for legacy projects in USA Development of output volume and profitability -10%-6% • Output volume: -10% (org.: -6 %) 1,097 1,020 1,058 958 991 Includes a technical effect due to Output 2.1% the booking of risk provisions i
Slide 25: Initiatives to reduce SG&A costs are consequently implemented
Initiatives to reduce SG&A costs are consequently implemented Target 2020: ~7.5% of output volume IT PROJECTS PURCHASING INITIATIVE Status process and system harmonization: Global sourcing organization in roll-out phase Design phase for six core processes completed Roll-in of first pilot entity
Slide 26: Outlook 2017: Orders received and output volume confirmed
Outlook 2017: Orders received and output volume confirmed Adjusted EBITA break-even Starting Point Outlook in € million FY 2016 expected FY 2017 Orders received 4,056 Organic increase Output volume 4,219 Mid-to-high single-digit organic decline Adjusted EBITA 15 Break-even* *Assumption: on a compara
Slide 27: Targets 2020 and Wrap-up
Targets 2020 and Wrap-up
Slide 28: Refinancing completed; start of share buyback program
Refinancing of syndicated cash-credit line and guarantee facilities completed Start of share buyback program planned for September 2017 • Successful refinancing of syndicated cash-credit line (RCF) with a volume of €300m, duration of 5 years Re- • Agreements on guarantee facilities in bilateral tran
Slide 29: Bilfinger 2020: Ambition will be reached in three phases
Bilfinger 2020 Ambition will be reached in three phases with clear milestones 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
Slide 30: Bilfinger 2020 Financial ambition
Bilfinger 2020 Financial ambition Organic Growth Profit Cash Return • Positive adj. FCF at the • EBITA adjusted ~5% Post-tax latest from 2018 onwards • Gross margin ROCE2 reported: >5% CAGR • Over the cycle, from 2018 improvement by ~200bps 8 to 10% based on FY 2017 onwards: Cash Conversion • SG&A r
Slide 31: 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 • 40% equity ratio • Increasing # of Industrial plants • Increasing t
Slide 32: Bilfinger SE | Company Presentation | September 2017 page 32
Bilfinger SE | Company Presentation | September 2017 page 32
Slide 33: Appendix
Appendix
Slide 34: E&T: Decrease in output volume as planned
Q2 2017 APPENDIX E&T: Decrease in output volume as planned EBITA burdened by risk provisions, underlying development positive Development of output volume and profitability -18%/-19% • Book-to-bill >1: 316 300 296 Low level of output volume, 281 258 however, continued selective -8.2% -1.2% 0.9% tend
Slide 35: MMO: output volume decreased slightly
Q2 2017 APPENDIX MMO: output volume decreased slightly, EBITA as planned below comparably high prior-year Development of output volume and profitability -3%/-2% • Orders received: 655 644 637 588 570 -4% (org. -3%), but positive development compared to prior 5.5% 5.1% 3.6% 5.6% year in NorthWest Eur
Slide 36: OOP: Six units already sold in first half
Q2 2017 APPENDIX OOP: Six units already sold in first half Further units in advanced sales negotiations OOP Output volume (€ million) Dilutive: Progress M&A track: 100 • 13 units as of December 31, 2016 • Six have already been sold 18 dilutive Q2: Book loss of €4 million, cash-out of €1 million accr
Slide 37: Gross margin burdened by risk provisions
Q2 2017 APPENDIX Gross margin burdened by risk provisions in the amount of -€53m Visible improvement in selling and administrative expenses Adjusted gross profit (€ million) Adjusted selling and administrative expenses (€ million) 100 (9.1%) 81 14 (8.5%) 0 20 8 7 43 (4.4%) -107 -106 87 -127 81 1 (-1
Slide 38: Operating cash flow improved; net cash at €262 million
Q2 2017 APPENDIX Operating cash flow improved Net cash at €262 million Operating cash flow adjusted1 (€ million) Net profit (€ million) Discontinued Adjustments operations 35 28 Minority interest 50 24 Reported -143 -120 +15% 0 0 Continuing -57 -7 -92 -78 +87% -108 operations -54 Q2/16 Q2/17 1 Q2/16
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