Bilfinger Se Unsp/Adr

Good afternoon ladies and gentlemen and welcome to Bullfinger's Q2 2026 results webcast. My name is Martina Karl-Karke and I'm here today with our CEO Dr. Thomas Schulz and our CFO Matti Jakel. We will start with the presentation today on the quarterly highlights and then open the call for your questions. You can ask your questions via telephone by pressing star and 1 on your keypad or via chat in the webcast as usually. During the presentation all participants will be in listen-only mode and the event will be recorded. I will now hand over to Thomas.

Thank you. So, hello everybody. Welcome to our Q2 2026 result here out of Mannheim in Germany. Let's start with the highlights. We had actually quite a good order intake in the Q2 with around 1.5 billion euro and that in a quite volatile market environment especially with the Iran war. Our revenue has a quite good run rate and we foresee that definitely with more dynamic positive dynamic towards the second half and the end second half of this year and then of course the end of this year. Our EBITDA was not on the level as expected and actually moved down to 5.3%. Our earnings per share is up to 147, which is quite a nice improvement and the cash flow for the market situation with the Iran war is the 48 million, quite a good one. Our outlook is confirmed especially on the revenue where we see quite a dynamic in it and on the EBITDA margin at the lower end of the range but of course within the range. And from the 1st of April on our M&A Technocon is included in the figures. Before we go into the market and different business analytics and so on, something which is very important for us. It is the safety of the people we work with, our own people, suppliers, customers. And again, we had an improvement versus the Q2 25 on the total recordable incident frequency rate. and a fantastic improvement on the lost time injury frequency rate which is close to nil actually our ambition is to be on both or nil no accidents in work and our organization is doing here a fantastic good job When we then go into the different industries and we always show the four main industries for the Billfinger Group. You see on the left side the production index. Actually, the figures are from standard and poor's index to 2023. And the color code is, of course, corresponding with the more information per industry on the right side. Let's start with the chemicals and petrochemicals. Actually, one's by far the largest part of our top line. That changed. It's down to 21%. and the 21% in the revenue chair in the outlook is slightly flattish as we call it. What does it mean? We have especially in central Europe, Germany in the lead, quite a pressure in the market with cost reduction programs where we help customers, where we work with customers quite intensive, but of course the size of the orders and the demand is smaller than we are used to. So, in other areas like in North America and especially in the Middle East, it looks completely different. Then we come to the energy. Energy has a very good run for the Bill Finger Group, but energy as an industry we see quite positively for the years to come. It makes now 28% of the top line and actually replaced in a large extent that what we had as additional work in the chemical and petrochemical industry. The demand is quite favorable for that what we offer. For both industries, The outsourcing potential, the potential what we as Billfinger have to take over, especially asset performance, maintenance, turnaround business from our clients and their organizations is quite good. That is what we, by the way, see in all the industries. The next one is oil and gas. Stable, Good development, 19% of the top line, good demand for us, good customer relation, and with some differences in the region, but especially the run for LNG and investments in the Middle East out of the situation what we have since end of February are driving here a good demand for the future. Then last but not least, our green ones, the pharma and biopharma. It's 10% of the top line. Smaller business and a little bit more cyclical but quite good demand. Nevertheless that this year with some European impacts slowed the growth a little bit down but from 26 on quite a good outlook up to 2030. Out of this we go into some selected orders. On the left side you see out of the chemicals petrochem from one of our long-term well-established customers that we have the task to install an air preheating system with the pure target to improve efficiency. This is asset performance at its best and actually proves our high quality what we deliver to our clients. In the mid is Germany with energy sector. It's EWE Hydrogen. We are responsible for the engineering, installation and commissioning for the integration of a new 320 megawatt production plant for hydrogen. On the right side, with our new M&A, we actually were successful in the second quarter to close an order with a mining company, a gold mining company, for some mechanical, electrical and insulation work in the gold processing plant. Mining will have, for the Billfinger Group, as well as data centers and other Smaller industries, an important role in the future and actually a bigger and a better dynamic. Out of that into innovation. Innovation for us is important because we have a lot and we can offer to the customers a lot. It's a big differentiator in the peer group. It makes actually quite a lot of our good reputation. This time we are proud to present to you the Billfinger automated gas analyzing system. When you have large gas production sites, processing plants and so on, it can go over several square kilometer. To test the product, that means the gas and what you have in the gas, you use so-called analytic gas bottles. These analytic gas bottles get the content of gas and then they normally take that together and bring it to an external laboratory to check how the content of the gas is. In other words, how good the quality is. We offer a system, a mobile system, which can 24-7 do that on the site there where you take the gas bottle and on top of it collecting the data digital and on top of it certifying the product what the customer is producing. This is a significant improvement for our clients in the gas industry. Out of that we come to the demand and here you have our opportunity pipeline at the top left and it starts indexed in April 2024. When you now compare the three times quarter to 24 25 and on the right side in dark blue 26. You see the difference. We are more or less on the same level in the opportunity pipeline. Opportunity means what do we have in front of us where we can bid on and where we have a good chance to get the order. And you see as a difference to the others that in the quarter to 26, the first and the second month was fairly low. and the third one really showed an improvement. And that is what we mean that the quarter two showed at the end a significant improved dynamic. But what you see too is that actually the order pipeline up to November, December in 25 was slightly increasing and showing quite a good development for the business to come in 26. Then we had the winter downturn, a little bit longer and stronger winter than we actually calculated, which is only a few months or maximum a quarter, one and a half quarter deferral time impact. But the Iran war at the end of the February actually brought hesitation, prolongation, deferral, postponing of necessary work as projects, maintenance, turnarounds in the industry in Europe. and of course in the Middle East. That is nothing which is cancelled. It is a time effect. What you always have an unexpected bigger crisis. People are getting more hesitant. Our customers are getting more hesitant. They need more approval from supervisory boards. They crunched their budget multiple times instead of giving directly the order. So what we foresee is that the second half of the year creates a significant better dynamic and business environment for that what we have to offer. If we then look into the order intake, this 1.5 billion for the second quarter 2026, the third best with and without Technocon by the way, in more than 10 years for the Billfinger Group, shows that we already saw good signs at the end of the quarter too. The backlog improved to the Q1 and of course to the year end and is slightly down to that what we saw in Q2 2025. And with that, I would like to give to Matti, our CFO.

Yes, Thomas, thank you. Good afternoon, ladies and gentlemen. I will run you through the group numbers and then the segment numbers to provide some more color on the reports that we have issued early today. Revenue is up 7% to 1.45 billion euros for this quarter. The book to bill at 1.03. is better than what we have seen in the last three quarters where we were below 1.0 and obviously with a very huge order intake in quarter two 2025 we were at 1.31 but I come to the effects for quarter two last year again when we go through the segments. Gross profit is down by 80 basis points Thomas talked about the Temporary effects that the Iran war has on almost all of our industries and the delays that the uncertainty has caused and that's delays not only in capex but it is delays in opex spending so and that translates into some sort of underutilization within our operations and that's the main reason why gross profit margin slightly slipped to 10.7 percent. Conversely, on the SG&A expenses, they were up 2 million. That's related to the Technocon acquisition. But as a ratio, we improved from 6.3% to 6.1%. Continued integration of the acquisitions that we had, continued efficiency or effects from the efficiency program, which gave us that improvement. Overall, profit margin slightly down from 5.5 to 5.3%. Obviously, looking at our guidance, that's below what we had expected. But the reasons, I think, are fairly clear and should disappear in the second half of 2026. Let's take a look at the segments individually. Orders received in Western Europe, 482 million. Last year we won a big contract in the United Kingdom for a chemicals customer. That's an effect that we did not repeat this quarter, but if you look at it sequentially, quite an uptick over the last few quarters in orders received, underpinning the increased dynamic in the market. Revenue flat at 1% up to 477 million euros, booked to build at 1.01. And the profitability up 50 basis points in Western Europe. Here we see, as I said before, further efficiency improvements from the integrations of the acquired businesses. Over to Central Europe, which includes the DACH region, so the German-speaking countries, as well as the Nordic countries. Here, orders received minus 10% to 646. Again, last year, we won a fairly large contract, also for a hydrogen production facility, but much larger than the one that we showed earlier for EWE, so that makes up the difference. and the change in the numbers revenue up 9% to 664 million euros quite nicely given the circumstances and the environment book to build close to 1.0 showing a better dynamic than in the past quarters and the profitability down 90 basis points 5.2 to 4.3 here particularly in the german-speaking We saw quite some delays and quite some hesitancy in spending capex but more so in opex causing temporary underutilization throughout the operations across that geography. And lastly, Segment International, again on the orders received last year, a three year contract renewal in the United States, which happens every three years in the second quarter, did not repeat itself, but at minus 12% organically overall, minus 32% organically. What we have here included is the addition of the gold mine contract in Turkey that was also presented a few minutes ago. Revenue, nice growth at 10% to 302 million and the book to bill 1.15 also quite favorable and showing good dynamics in that market. Profitability, an uptick of one tenth of a percentage point, 3.8 to 3.9%, 12 million euros. So despite all the issues that we have in the Middle East, We saw a stable development in the profit margin for our segment international. How does that translate into earnings per quarter? 54 million in the second quarter. Matti Jakel, Matthi Jakel, Martina Borger For you who have been with Billfinger for a longer period, see that the tax rates may fluctuate from quarter to quarter depending on where we record income tax or taxable income throughout the various tax regimes in the countries. So that may fluctuate from quarter to quarter as you can see here. But 54 million, nice profit for the quarter. Cash flow at 48 million over 53 million last quarter so a good performance but also lower because we didn't receive as many large contracts so lower advance payments and we have timing effects when it comes to billing when our customers are hesitant not only with awarding contracts then they also slow down on approving our invoices. Again it's a timing effect that will disappear in the second half of 2026. Finally, a quick look at cash, net liquidity and leverage. You see a drop in cash in hand and you see a drop in financial debt. We repaid Large parts of our promissory note loan, in German Schulzein, Darlehen, I was told by our lawyers that's a huge difference. But then that's why we said a German law governed promissory note loan so that everybody knows that this is different to what you understand in the US or UK by a promissory note loan. It's debt, we paid back the debt, so that reduced the cash and it reduced the liabilities, financial debt. We reissued the same Instrument, and we collected 300 million in early July. So you will see the reversal of all of this when we get together back in the third quarter. 300 million increase in cash in hand and 300 million increase in financial debt. Net liquidity typically is low in the second quarter when we pay out the dividend, which we did. And we also paid the purchase price for the technical group Thomas Schulz, Andreas Müller, Martina Borger I hand back to my colleague.