Bilfinger 2017: Stable foundation laid for the future

• Organic growth in orders received after three years of decline
• Trend reversal: Output volume better than expected
• Growth driver digitalization: Investments of €20 million in business development
• Intended dividend payout for financial year 2017: €1.00
• Outlook: Significant improvement in earnings

In financial year 2017, industrial services provider Bilfinger laid the foundation for sustainable future growth. In what remains a difficult market environment orders received increased organically after three years of decline. A reversal of the previous trend is also apparent in output volume: The Group returned to organic growth in the third and fourth quarters. Output volume for the full-year thus exceeded expectations. In orders received we grew organically once again and, despite burdens from US legacy projects, we were able to achieve a break-even result in adjusted EBITA.

CEO Tom Blades: “We have structured, stabilized and put Bilfinger on a sounder footing. Our strategy 2020 is taking hold. Progress is noticeable and we are taking bigger operational steps forward.”

Growth driver digitalization – investments in business development
Bilfinger views digitalization of the process industry as one of the Group’s key growth opportunities in the years to come. There is substantial pent-up demand at mid-sized companies in the sector. With its technologies, Bilfinger is in a position to significantly increase the effectiveness of a plant, to decrease maintenance costs and to reduce unplanned downtimes. The underlying concept for the digitalization of the process industry is called “BCAP” (Bilfinger Connected Asset Performance).

“For small and medium-sized companies, there is nothing comparable currently on offer. With BCAP, we are closing a gap in the market. We offer consulting, digital networking, data collection and analysis as well as forward-looking maintenance all from a single source. My expectation is that this will give us a significant growth spurt, because we are already there where digitalization is needed”, says Blades.

To further support growth opportunities, the Group is investing an additional roughly €20 million in financial year 2018. These investments will be made in the expansion of the service range especially in the field of digitalization as well as in strategic business development.

Rapid implementation of strategy 2020 – streamlining of portfolio well advanced
In the implementation of strategy 2020, Bilfinger is undergoing three phases; stabilization, build-up and build-out. Key milestones have been achieved and the company is now transitioning from the stabilization to the build-up phase.

Further progress was also made in the streamlining of the portfolio in recent months. Of the 13 loss-making companies up for sale that are no longer part of the core business, ten of them have been sold to date. The process is expected to be concluded as planned for all 13 units by mid 2018.

Internal fitness program – compliance, IT systems, BTOP
To ensure that Group structures and processes are fit for the future, Bilfinger has initiated Group-wide programs, one of which is “BTOP”. The objective of BTOP is to take greater advantage of the strengths inherent in the Group. B stands for Bilfinger and TOP for the initiatives that serve to drive improvement processes throughout the Group.

At the same time, substantial investments are being made in the harmonization and enhancement of the IT and process landscape in order to increase the effectiveness and flexibility of these systems. These investments will amount to more than €50 million over a period of three years.

A positive impact will also be provided through the reduction in the number of legal entities which, at the end of the year, dropped below the interim target of 200 to stand at 196. The focus is especially on merging operating units, leading not only to a reduction in sales and administrative expenses, but also allowing for a more aggressively pursuit of a uniform market appearance. Much was achieved in the area of compliance in financial year 2017. The company is well on its way to putting a first-class compliance system in place. This includes, among other things, Group-wide uniform processes and systems, regular training for all affected employees as well as the consistent pursuit of both internal and external allegations. Our objective is clearly laid-out in the Group Mission Statement: We never compromise on safety and integrity.

Key figures for the Bilfinger Group

* includes a capital gain in the amount of €539 million