Bilfinger Se Unsp/Adr

Good morning, ladies and gentlemen, and welcome to Billfinger's first quarter 2024 webcast. My name is Bettina Schneider, and I'm here together with Thomas Schulz, our group CEO, and Matti Jekyll, our group CFO. Thank you for joining us so early today so we can inform you on our Q1 numbers before we start our annual general meeting at 10 a.m. We start now with the presentations. Afterwards, you will have the opportunity to ask your questions via phone or via chat in the webcast. I'd like to inform you that all participants are in a listen-only mode and that the conference call is being recorded. With this, I hand over to Thomas.

Good morning, everybody. Let us start directly with our highlights for the quarter one 2024 for our Billfinger Group. We had an orders received with 1.144 million euro and booked a bill of 1.05 million euro. So the quarter regarding the order intake was as we expected it and normalized because last year we had with a book to build a 1.3, an extraordinary high growth in the quarter one, 2023. Our revenue was up organically 3% and the real highlight, we more or less doubled the margin to 4% on the EBITDA. Our cashflow, another very positive news, was positive and actually made the swing close to 60 million for minus 26 to plus 24. We keep, of course, our outlook with a 4.5 to 4.8 billion euro on revenue and a 4.9 to 5.2 percent on EBITDA. We see the market situation stable to positive across all regions and all sectors. Our earnings per share went up to 0.66 euro from 0.18 And we have a capital market day on the 12th of June during the Akema to give more information, especially about the acquisition stock, the progress on our strategy, and cash flow. If we then go to a very important issue and parameter for us as Bilfinger, it's part of the ESG range. It's about safety. And you see on the right side, on the top, the TRIF. And as lower the figure is, as better it is. And you can see that our organization actually improved from last year to this year, down to 0.76. More significant improvement we have actually on the LTIF, lost time injury frequency rate. And that is down to a fantastic 0.06 rate. Of course, our target is to have both figures, both KPIs on zero, but it shows we as Billfinger at wherever we are to our partners, a very safe environment. Out of that into the market. I said at the highlights, it's a stable to positive market. We are acting mainly in four main industry groups, energy, chemical and petrochem, pharma, biopharma, oil and gas. All over positive. Let us start with the energy. There are big investments going on. We see, especially in North America and in the Middle East for the future, huge growth rates and a very stable and ongoing good investment level, not in the same high percentage figures in Europe. If we then go to the chemical and the petrochem industry, which makes roughly 30% of our top line, The chemical industry globally actually grows more than the whole global industry on Earth. But we have, of course, regional differences. Europe is on a fairly low level when we see U.S. market growing roughly twice and the Middle East up to five times faster than we have in Europe. That puts our customers, especially in the chemical industry, very much under pressure here in Europe, which opens for us a lot of additional work. Then we come to a growth sector. It's pharma, biopharma, roughly 10% of our top line. There you see that we have 8% growth for the next few years in that market. It's very profitable. It's a high-tech area. It's an area where we as Spielfinger have very strong customer relations, good business to be in. Last but not least, oil and gas. Oil and gas for several years now has a revival, same as nuclear has an energy revival. And in oil and gas, the spend on exploration, which actually is important to see how the growth in that area will go on for the next five to 10 years, is around 5%. And that is very positive. We have a lot of positive figures in that area too. So overall, in the markets where we are acting, stable to positive, and in the way how customers order to industrial service providers like us, Billfinger, It looks quite good. Out of that, we would like to talk about our order intake and the level of demand. Because of the fact that we are acting across a lot of industries and 80% of our business is more or less the same, no matter which industry we are in, we implemented a few quarters ago the so-called opportunity pipeline. It is indexed to the 1st or to the January 2022. And it shows the level, monetary level, what we can bid on, what is available in the market. When you look on the right side, you see the three blue sticks, and it shows an increasing trend throughout the first quarter on a significant higher level than we had at quarter one last year or at the beginning of that opportunity pipeline KPI. Below you have the orders received. It looks, of course, with minus 17 percent, not that positive. But last year, with close to 1.4 billion, with a book to bill over 1.3, was an extraordinary quarter, which actually is not good in the way as we do our business because it's about providing people to the sites. And if we have too much orders at the same time, we have to talk with a lot of customers to even that out over a longer period of time. This quarter is 1.144. It is book to bill of 1.05. This is what we call a normalized positive quarter. The other highlight in it is that we actually reduced the percentage of projects within the order intake, which is in line with our de-risking and our standardization efforts out of the strategy. Our order backlog is more or less the same as we had it in quarter one, 2023. out of the demand into selected orders to explain what we are really doing in the different areas and regions and industries. First example is with Gazunie in the Netherlands. It's about a tenuous engineering frame agreement. What we got as Bilfinger, especially regarding the energy transition with hydrogen transport as well as CO2 carbon capture and storage and transport. The second one shows our strong position within the Middle East. It's about Saudi electricity company in Saudi Arabia, of course. It is about another side where we do the comprehensive maintenance services on steam turbine generators and critical boilers. This is out of a very long-term partnership where we support Saudi electricity company to provide all over in that strong growth country energy. The last example is out of adjacent industries. It's about the semiconductor manufacturers, this time here in Germany. It's about that we deliver design, fabrication, and installation for ultra-pure water and wastewater treatment. This is, of course, important for the semiconductor manufacturer, and it's important that it's not only efficient, it has to follow a high-tech request regarding ultra-pure water content. Out of that... I would like to go to innovation. Innovation for industrial service provider, especially in the field of digitalization and more and more artificial intelligence is utmost important for us to show our customers that we are leading efficiency improvement in all areas. This time it's about the so-called product carbon footprint calculation. It offers significant savings for the client on an existing plant or new to build plants where we are able to calculate more or less unlimited scenarios with different components to give to the client the scenario with the lowest CO2 footprint in the material, what is built in on the site or will be built in on the site. That, of course, gives the client the possibility to optimize the CO2 footprint, to optimize the material that they use, and having a good step ahead in their target for a lot of customers, 2030, to be carbon neutral with scope-free issues, too. Out of that... I would like to go to Matti, our CFO.

Thanks, Thomas. Good morning, everyone. Thanks for joining us this early. Revenue grew by 3% to 1.09 billion euros. The planned reduction of our U.S. revenues equates to about 2%. Hence, the overall business grew by 5% in total, which is in line with our overall guidance. EBITDA margin almost doubled from 2.1% in Q1 2023 to 4%, which is a very good start and quite supportive of our 2024 guidance. The largest improvement we see in E&M International, where the margin improved by 540 basis points. Gross profit for the group, gross profit margin, improved from 9.5% to 10.3% or 80 basis points. SG&A cost reduced by 5 million euros, a consequence of our efficiency program, and the SG&A ratio consequently improved from 7.4% to 6.7% again. an improvement of 70 basis points. In total, we are seeing savings of around 11 million euros from the efficiency program, both in SG&A expenses, but also some in the cost of sales. The EBITDA margin improvement translates into an earnings per share of 66 cents for the first quarter, compared to 18 cents in quarter one 2023. That is more than tripling in absolute terms. The financial result remained stable, while lower tax rates helped the improvement. On another note, as you know, we have the annual general meeting today, and we are proposing a dividend for the financial year of 2023 of one euro and 80 cents per share, which is a payout ratio of 58%. close to the upper range border of our financial policy, and the dividend yield on the year-end share price equates to 5.2%. Another positive news on the first quarter is our free cash flow. Year over year, the free cash flow improved by 50 million from minus 26 to plus 24 million, largely a consequence of the increased earnings. The special items shown here at the bottom right corner of minus $8 million is mainly due to the payouts from the efficiency programs as we have announced it early on. The net trade assets to revenue ratio went up a notch to 11%. That's a key indicator that we are monitoring very closely. Net liquidity. Since January 1, net liquidity decreased by 26 million from 120 million euros to 94 million euros. Two sort of major events happened in the first quarter. One is the stock acquisition where we paid the purchase price in March of 29 million, and we also repaid the bond in March, 250 million euros. which was offset by the corresponding reduction in securities and other investments. As part of our financial policy, we are aiming to receive investment-grade rating. Quite a long time ago, Bilfinger set its financing targets to 20%. or for FFO to net debt to larger than 30% and the net debt to EBITDA ratio to 2.5%. In the first quarter, we took a look at these ratios. We reviewed and revised these ratios to 50% and 2.0%, thus moderating our risk profile. This change still leaves ample headroom for organic and inorganic growth, as well as distributions to shareholders. And in combination with our solid performance, Standard & Poor's just issued a research report, and they provided Bilfinger with a positive outlook, indicating that we're getting a lot closer to receiving investment rates. Let's take a quick look into the operations and through the segments. E&M Europe, the order intake has normalized after the exceptional quarter one 2023 with a book to bill of 1.10. We are well underway to continue our profitable growth path. Revenue grew organically at 4% across all the regions and the revenue split remains largely the same by and by industries. EBITDA margin went up by 120 basis points from 3.3% to 4.5%, with effects from de-risking and efficiency program driving this improvement. The largest improvement in the profitability is what we have seen in E&M International. But let's take a look at the order intake in the first place. Again, order intake went down from 241 to 156 million by design. It's much lower due to the successful repositioning in part of our U.S. business where we're exiting the installation business and we're focusing on maintenance activities. The revenue decline was much smaller at minus 4%. indicating a reduced revenue volatility, which again helps the de-risking. EBITDA went up from minus 6 to plus 3 million euros, now marking the third profitable quarter in a row. And lastly, segment technologies. Order intake went down from €182 million to €160 million. You may remember that we had a large portion of orders received on the Hinkley Point nuclear power plant project in the first quarter of 2023, which just didn't repeat this year, not unexpectedly. Revenue grew slightly by 1% from €167 million to €170 million, so very steady orders. And the EBITDA margin at 4.2% remained almost unchanged compared to the prior quarter or prior year quarter. That's it for a quick rundown of the numbers. Back to Thomas.