Bilfinger Se · XETR:GBF
Bilfinger — Non-Deal Roadshow (June 2019)
39 slides from Bilfinger's roadshow presentation, June 2019
Slide 1: Bilfinger SE Company Presentation June 2019
Bilfinger SE Bilfinger SE Company Presentation June 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 € 503m, EBITA adj. € -26m FY 2018: Revenues € 3.477m, EBITA adj. € 134m 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
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 deodorization 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 Deferred Prosecution Agreement (DPA) concluded Prevent Compliance system is industry leading Prävention Compliance-related activities are ongoing, Compliance Reaktion is an integral part of syste
Slide 11: Growth potential through digitalization
Growth potential through digitalization
Slide 12: Market potential in digitalizing the process industry
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: frontrunner in the IoT of process industries
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 | Jun
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 show positive trend
SG&A expenses SG&A expenses show positive trend Adjusted SG&A expenses [EUR m] Highlights • SG&A ratio continues to 99 99 move towards target level 92 90 94 86 87 89 76 • Streamlining of processes SG&A • Reduction of complexity in Expenses structures, organization and [EUR m] governance • Adjustment
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: Apleona
Apleona VCN: meanwhile sold, cash-in 04/2019 PPN: benefit from 49% of the value creation Vendor‘s Note (VCN): €100m, 10% compound interest p.a. upon VCN: cash-in 04/2019 maturity (book value 03/2019: €128m), meanwhile settled cash-in 04/2019 Preferred participation note (PPN): PPN: • No management i
Slide 23: 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 24: Bilfinger 2020: Build up phase on track
Bilfinger 2020 Build up phase on track 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 organization in full
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 Q1 2019
Financials Q1 2019
Slide 27: Q1 2019: On aggregate, a solid start to 2019
Q1 2019: On aggregate, a solid start to 2019 Stable demand in our markets Book to bill at ~1 with significant revenue growth Adjusted EBITA improved, good performance in ‘E&M’, losses in ‘T’ mainly due to underperformance of a single entity Net profit reported positive, supported by Apleona’s Vendor
Slide 28: Market environment: Europe
Market environment: Europe North Sea – customers with strong cash flows, continuing positive trend for E&M “catch-up“ and asset life extensions Greenfield Petrochem projects in Antwerp Refinery expansions in the UK, Germany Chemical parks trending towards Unit Rate contracts (Bilfinger preferred app
Slide 29: Market environment: North America & Middle East
Market environment: North America & Middle East High activity in Permian, Marcellus/Utica and Bakken NOC focusing on downstream in country value generation Shale gas driving new cracker projects and mid-stream Green field petro chem announcements in Abu Dhabi cyro-plants Fertilizer/Ammonia projects
Slide 30: Orders received below strong prior-year quarter
Orders received below strong prior-year quarter, which was supported by catch-up effects and more orders > €5m Development of orders received -12%/-9% • Orders received 1,101 1,139 1,105 1,114 -12% below strong prior-year 971 696 670 quarter (org.: -9%), which was 786 765 Orders (61%) (61%) 747 supp
Slide 31: Significant revenue growth, adjusted EBITA slight improvement
Significant revenue growth, adjusted EBITA with slight year-on-year improvement Development of revenue and profitability • Revenue +9%/+11% +9% increase (org.: +11%) due 1,058 1,052 1,115 to strong order backlog and 1,008 928 good demand Revenue (€ million) 3.3% 2.1% • Adjusted EBITA 1.1% -0.4% Slig
Slide 32: Gross profit improvement continues to be in focus
Gross profit improvement continues to be in focus 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 (10.6%) provisions 0 82 78 • Future improvement by (8.1%) 391 (8.4%) 0 336 (9.4%) • portfolio optimization 0 1
Slide 33: SG&A target remains at 7.5%
SG&A target remains at 7.5% Adjusted selling and administrative expenses (€ million) • Adjusted SG&A ratio in FY18 improved to 8.7% despite increased expenses for business development 7 16 5 35 40 and digitalization • Target 2020 confirmed: 7.5% of -95 -110 -94 revenue (-10.2%) (-9.9%) (-9.3%) • Pos
Slide 34: Segment Technologies
Segment Technologies: increase in revenue, EBITA adjusted still negative mainly due to underperformance of single entity Development of revenue and profitability • Orders received +14%/+14% -35% below strong prior year quarter (org.: -35%), on account of 145 127 128 lumpy project business Revenue 11
Slide 35: Segment E&M Europe: positive development continues
Segment E&M Europe: positive development continues Development of revenue and profitability • Orders received +3%/+4% -16% below strong prior year quarter (org.: -14%), which was supported by 706 695 705 619 635 significant catch-up effects from the Revenue revaluation of framework agreements 5.3% (
Slide 36: Segment E&M International: good quarter
Segment E&M International: good quarter, with growth in orders received and revenue Development of revenue and profitability • Orders received +29%/+20% Strong growth +44% (org.: +35%) especially in US project business 222 213 191 Revenue 165 174 10.2% (€ million) • Book-to-Bill: 0.74 0.9% 1.8% 2.1%
Slide 37: OOP: Sale of two entities closed in Q1
OOP1): Sale of two entities closed in Q1 Revenue OOP (€ million) • M&A progress on track: Dilutive: all 13 entities disposed or terminated by 2018 +5%/org.+41% Accretive: two out of four entities are sold Related ~ €30 million cash-inflow in Q1 2019 42 44 • Business development: Revenue increased
Slide 38: Operating cash flow, net profit, net trade assets and net liquidity
Negative operating cash flow from payables swing-back and DSO deterioration against end of last year. Net profit reported positive, supported by Apleona’s Vendor Claim Note repayment agreement and a settlement in Discontinued Operations Adjusted Adjusted operating cash flow1 (€ million) Net profit (
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