(new: Statements from the telephone conference on the efficiency program and order intake, share price and analyst)
MANNHEIM (dpa-AFX) – The industrial service provider Bilfinger (Bilfinger SE) earned significantly more in the third quarter, primarily thanks to its savings program. “We are implementing our strategy. The focus is on increasing Ebita and cash flow,” said CEO Thomas Schulz on Monday, according to the announcement. The mood in individual sectors such as the chemical industry or regions such as Germany is characterized by skepticism. However, Bilfinger sees its strategy as being able to react to short-term market developments. The management is therefore confident that it will achieve its annual and medium-term targets. The stock rose.
Bilfinger wants to become more efficient in the coming years with streamlined administration and standardized work processes. Starting next year, around 55 million euros will be saved every year. There are also plans to cut 750 jobs. Bilfinger had already reduced 452 of these by the end of September, it said. In return, the program will cost 62 million euros this year.
“The program is getting into full swing,” explained Schulz in a telephone conference with journalists. A large part of the planned job cuts will take place in Germany. The Bilfinger boss did not want to say how many jobs would be cut in Mannheim. However, a large part of the head office is located there and a larger proportion of administrative and administrative positions in Germany will therefore be eliminated. Mannheim is and will remain an extremely important location for the Bilfinger Group, he emphasized.
Most recently, the Bilfinger share in the SDax rose by 2.32 percent to 36.16 euros. Since the turn of the year, the price increase has now totaled a good third. The strong improvement in margins in the third quarter underpins the annual targets, praised analyst Gregor Kuglitsch from the major Swiss bank UBS.
According to Monday’s announcement, sales in the third quarter climbed by four percent year-on-year to 1.12 billion euros. Adjusted for currency effects, revenue increased by seven percent. However, at a good one billion euros, incoming orders fell by eight percent compared to the previous year. Bilfinger justified this with the realignment of its US business. Without this, order intake would have grown slightly, said Schulz.
The project business with industrial construction in the USA brought in a lot of orders and large projects, but was loss-making for a long time, the manager explained. Bilfinger has not accepted any orders in this area since the end of last year. Overall, the company wants to reduce the share of project business in sales and order volumes to below 20 percent. In the third quarter, almost a third of the orders came from project business.
Things went significantly better for Bilfinger in day-to-day business, also thanks to a savings program. Earnings before interest, taxes and depreciation on enterprise value (Ebita) increased by more than half to 57 million euros. The main contributor to this was the plant construction and maintenance business in Europe, but also the business with larger plants. The associated margin improved from 3.4 percent in the previous year to 5.1 percent. The bottom line was that there was a profit of 37 million euros in the three months to the end of September, compared to 22 million euros in the same period last year.
In the current year, Bilfinger wants to improve the operating margin (adjusted Ebita margin) from 3.2 percent in the previous year to 3.8 to 4.1 percent. According to previous information, the margin is expected to rise to at least 5 percent by 2024 and then climb to six to seven percent in the next three to four years. The company wants to grow by four to five percent annually. In the current year, the group is targeting revenues of 4.3 to 4.6 billion euros, after a good 4.3 billion in 2022./mne/lew/mis
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