Bilfinger 2017: Stable foundation laid for the future

Business development in 2017
In financial year 2017, orders received for the Bilfinger Group of €4,055 million reached the level of the prior year, organically the figure rose by 4 percent. At the end of the year, order backlog amounted to €2,530 million, and was thus 3 percent below the figure for the prior year (organically: +2 percent). Output volume was down 5 percent at €4,024 million, the decrease was thus lower than expected. Organically, output volume was stable as compared the prior year.

In the Engineering & Technologies segment, orders received of €1,074 million declined as anticipated and output volume decreased to €1,106 million, also in line with expectations. In the Maintenance, Modifications & Operations segment, on the other hand, orders received grew to €2,535 million, output volume increased slightly to €2,515 million.

Adjusted EBITA at year-end was €3 million. This reflected the risk provisions for legacy projects in the USA of about €50 million. In the Engineering & Technologies segment, adjusted EBITA improved slightly, despite the losses from the legacy projects, to -€26 million. In the Maintenance, Modifications & Operations segment, adjusted EBITA dropped to €98 million. This was caused by a weaker turnaround business and burdens from framework agreements with new customers in the ramp-up phase.

Net profit was -€89 million. Here it is important to keep in mind that the prior year figure of €271 million included a capital gain of €539 million from the sale of the divisions Building, Facility Services and Real Estate. Net profit adjusted for amortization of intangible assets from acquisitions and goodwill impairment as well as special items remained nearly unchanged at
-€9 million.

Return on capital employed (ROCE) improved on a comparative basis but remained negative at -5.5 percent. Free cash flow (-€181 million) and adjusted free cash flow (-€69 million) were both negative, though each showed improvement as compared with the prior year.

Intended dividend payout for financial year 2017: €1.00
Considering the sound balance sheet and planned positive business development, the Executive Board - subject to a corresponding resolution from the Supervisory Board - will propose to the Annual General Meeting a dividend payout of €1.00 per share for financial year 2017, despite the negative adjusted net profit. In relation to the share price at the end of 2017, this represents a dividend yield of 2.5 percent.

Outlook
In financial year 2018, Bilfinger anticipates organic growth in orders received in the mid single-digit percentage range. From the beginning of the financial year, the company no longer reports according to output volume, but according to revenue. After Group revenue in the reporting year of €4,044 million developed better than expected, for 2018 Bilfinger anticipates organically stable to slightly growing revenue as a result of the now higher base level.

For adjusted EBITA (reporting year: €3 million), the Group expects a significant increase to a figure in the mid to higher double-digit million Euro range. Included in this figure is an increase in expenses by about €20 million for intensified activities in business development, particularly for the further development and market launch of the digitalization offerings. These activities will also contribute to an acceleration of growth in the coming years.

Return on capital employed and free cash flow will also improve significantly, though in 2018 both figures will again be negative due to special items.

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