Bilfinger Se · XETR:GBF
Bilfinger — Non-Deal Roadshow (January 2019)
43 slides from Bilfinger's roadshow presentation, January 2019
Slide 1: Bilfinger SE Company Presentation
Bilfinger SE Bilfinger SE Company Presentation January 2019
Slide 2: Overview
Overview
Slide 3: Bilfinger at a glance
Bilfinger at a glance €4bn revenue Leading international industrial services provider Efficiency enhancement of assets, ensuring a high level of availability and reducing maintenance costs Clear 2-4-6 strategy with two service lines, four regions and six focus thereof recurring business >60% i
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 Deferred Prosecution Agreement concluded 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 • Strong tone fro
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: Connecting data lakes
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 | Jan
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: 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 | January 2019 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: improvement of ~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: Improvement o
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 ratio continues to 112 move towards target level 100 99 99 87 92 91 86 76 • Streamlining of processes SG&A • Reduction of complexity in Expenses structures, organization and [EUR m] governance • Adjustme
Slide 25: 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 26: Targets 2020 and Wrap-up
Targets 2020 and Wrap-up
Slide 27: Bilfinger 2020 – Company passes three phases
Bilfinger 2020 – Company passes three phases Stabilization phase completed 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 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 (book value 09/2018: €114m) Preferred participation note (PPN): • No management involvement • Certain information rights, some further rights • Investment: €195m • Book value 09/2018: €23
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 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 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 • 35% equity ratio (as of Sep 30, • Increasing # of Industrial plants
Slide 31: Quarterly Statement Q3 and Guidance FY 2018
Quarterly Statement Q3 and Guidance FY 2018
Slide 32: Q3 2018: Stable Quarter, favorable business environment
Q3 2018 Stable Quarter, favorable business environment Growth in orders received against strong prior year Book-to-bill >1 Revenue growth on track EBITA adjusted slightly higher, margin on prior-year level Net profit improved Free and operating cash flow above prior year Outlook 2018 confirmed Bilfi
Slide 33: Current market situation and trends E&T
Current market situation and trends E&T Oil & Gas • Continuing brownfield investments in Europe, greenfield investments developing in gas • Increasing up- and mid-stream activities in US Shale, in particular for cryo- driven gas strippers Chemicals & Petrochem • Brownfield investments in Europe • Gr
Slide 34: Current market situation and trends MMO
Current market situation and trends MMO Oil & Gas • Steady demand for maintenance services, but competition remains strong • In the North Sea, early signs for reinvestments in exploration Chemicals & Petrochem • Stable demand in Europe and Middle East for maintenance and modifications, evaluation of
Slide 35: Continued positive momentum in orders received
Continued positive momentum in orders received Book-to-bill >1 Development of orders received +5%/+6% • Orders received: 1,054 1,085 1,101 1,139 1,105 5% above strong prior year (org.: 696 670 +6%), especially positive in E&T 825 819 786 Orders (61%) (61%) (78%) (75%) (76%) • Share of orders > €5 mi
Slide 36: Again organic growth in revenue, EBITA margin on prior-year level
Again organic growth in revenue, EBITA margin adj. on prior-year level Development of revenue and profitability • Revenue: +5%/+8% Increase of +5% (org. +8%) as a 1,001 1,082 1,058 1,052 result of increased orders 2.1% 3.7% 929 Revenue 2.1% received (€ million) • EBITA adj.: 1.1% -0.6% Slight increa
Slide 37: SG&A ratio continues to move towards target level of 7.5%
SG&A ratio continues to move towards target level of 7.5% Expenses unchanged at ~€90m despite start-up costs for Digitalization and Business Development Adjusted gross profit (€ million) Adjusted selling and administrative expenses (€ million) 101 100 95 (10.1%) (9.5%) (9.0%) 0 0 10 11 0 5 -96 -103
Slide 38: E&T: strong orders received as basis for further growth
E&T: strong orders received as basis for further growth Development of revenue and profitability • Orders received: +10%/+10% Strong quarter: +64% (org. +63%) compared to low prior-year figure, 281 308 299 309 book-to-bill 1.5 Revenue 3.6% 265 a.o. due to various contract awards (€ million) for ship
Slide 39: MMO: EBITA margin adj. improved significantly
MMO: EBITA margin adj. improved significantly Development of revenue and profitability +7%/+8% • Orders received: Decrease as expected 664 716 708 712 625 -16% (org. -15%) compared to Revenue 5.2% prior-year figure, which was (€ million) 5.2% 2.6% impacted by catch-up effects and 4.4% entry of new f
Slide 40: OOP: Focus on disposal of accretive entities
OOP1): Focus on disposal of "Accretive" entities Revenue OOP (€ million) • Progress M&A track: 71 Dilutive: originally 13 units, meanwhile all have been sold or terminated Accretive: four entities, thereof two in sales processes accretive 47 45 dilutive • Business development: Orders received with p
Slide 41: Operating cash flow positive, net profit improved
Operating cash flow positive, net profit improved Adjusted operating cash flow1 (€ million) Adjusted Net profit (€ million) net profit (€ million) 13 13 17 -1 Adjust- 11 26 ments 9 2 Reported -9 Q3/17 Q3/18 -21 Q3/17 Q3/18 Q3/17 Q3/18 1 Adjustments correspond to EBITA adjustments, partial time offse
Slide 42: Outlook 2018 confirmed
Outlook 2018 confirmed in € million FY 2017 Expected FY 2018 Organic growth in the mid single-digit percentage Orders Received 4,0551) range Revenue 4,044 Organically stable to slightly growing Significant increase to mid-to-higher double-digit- EBITA adjusted 3 million € amount, i.e. range of €50 t
Slide 43: 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