Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bilfinger SE (BFLBF, Financial) reported a strong order intake of more than EUR1.5 billion, reflecting 20% organic growth and close to 40% inorganic growth.
- Revenue for Q2 2024 was over EUR1.3 billion, marking a 3% organic growth.
- Free cash flow showed a positive development with EUR26 million, compared to a negative EUR46 million last year.
- Earnings per share increased significantly from EUR0.79 to EUR1.28.
- The company confirmed its outlook for 2024, with expected revenue between EUR4.8 billion to EUR5.2 billion and an EBITDA margin of 4.8% to 5.2%.
Negative Points
- Safety performance showed a quarter-on-quarter decline, despite overall yearly improvements.
- The chemical and petrochemical industry, which makes up 25% of Bilfinger's top line, is still 2% below pre-COVID levels.
- The German market is underperforming, particularly in the chemical industry, due to higher energy costs and bureaucratic challenges.
- The EBITDA margin, excluding special items, was 4.6%, which, while improved, still indicates room for growth.
- The integration and restructuring costs related to the Stork acquisition are expected to continue into early 2025, impacting financials.
Q & A Highlights
Q: Very strong order intake and book-to-bill ratio. Were there any special factors in that? Should we expect a more normal type of book-to-bill for the next couple of quarters?
A: It was a special quarter with a good product mix and the effect of the former Stork entities. However, the order intake does not change our overall guidance for the year. (Thomas Schulz, CEO)
Q: Can you give us a feel for how the order pipeline is likely to materialize over the next two quarters?
A: The opportunity pipeline reflects our capability to offer more efficiency solutions. We expect the pipeline to crystallize in the next couple of quarters, fitting into our midterm target of 4% to 5% annual growth. (Thomas Schulz, CEO)
Q: Could you help us map out the likely special items for the last two quarters of this year?
A: Special items mostly relate to the Stork acquisition. We expect more badwill recognition and integration costs, which should net out to around zero for the full year 2024. (Matti Jäkel, CFO)
Q: Given the strong cash flow in H1, what is happening in H2 to get back within the guidance range?
A: We aim to flatten the intra-year cash flow seasonality. Special items will increase in H2, and we expect working capital to be around 10% by year-end. (Matti Jäkel, CFO)
Q: Is there anything one-off in nature in the Q2 order intake?
A: The order intake is flattish year-to-date compared to last year. We do not foresee huge one-off projects for this year. (Thomas Schulz, CEO)
Q: Can you reconfirm the margin run rate for Stork and the US business?
A: Stork performed better than expected, but it's too early to confirm the run rate. The US business is on similar levels, with a small revenue and profit contribution expected in 2024. (Matti Jäkel, CFO)
Q: Would you expect a better margin development in the second half for the technologies segment?
A: Yes, the margin should recover in the second half of 2024. Our outlook for technologies is 5% to 5.5%. (Matti Jäkel, CFO)
Q: Are there signs of a shift towards more frame and service contracts?
A: Yes, we see evidence of this shift due to our standardization process. Our goal to reduce project share is on track, but it will take more time to show a significant percentage shift. (Thomas Schulz, CEO)
Q: Can you provide more details about new orders in the oil and gas sector?
A: We are renewing contracts with added efficiency and competence. New orders are coming from regions like Rotterdam, Scotland, Denmark, and Norway. The market for gas and liquid-related supply is expanding. (Thomas Schulz, CEO)
Q: What is the update on the sale of South African activities and new potential M&A targets?
A: Discussions with local investors are ongoing but slow. We do not expect the sale to materialize in 2024. We are actively looking for M&A targets that support our core business and strategy. (Matti Jäkel, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
