Bilfinger SE

Investor Presentation • Nov 25, 2019

Bilfinger SE

3 rd Quarter 2019 Results Presentation Conference Call for Investors and Analysts

Tom Blades (CEO), Christina Johansson (CFO) November 13, 2019

Q3 2019: Bilfinger making steady progress, streamlining management structure

Market: underlying markets stable Orders received: timing issues

Revenue: continued growth

Adjusted EBITA: significant year-on-year improvement Technologies improved sequentially, but still negative

Reported net profit: positive in quarter and year-to-date

Productivity: further measures being implemented, >€30m additional 2020 cost savings

Outlook: 2019 reaffirmed, significant EBITA improvement in 2020

Markets: E&M Europe

	Industries	%*		Trend
	Oil & Gas	25%	• Overall positive outlook in E&M Oil & Gas driven by gas infrastructure buildout and input terminals / LNG projects • Strong demand for offshore maintenance, turnaround projects and decommissioning
	Chemicals & Petrochem	45%	• Stable market development with turnaround opportunities for the upcoming years • CO /emissions impacting future investment decisions 2
	Energy & Utilities	10%	• Hydrogen beginning to play more of a role in European energy transition • Maturing offshore wind parks leading to opportunities for inspection and maintenance • Nuclear remains in focus in France, UK, and Finland
* % of segment revenues FY 2018

Bilfinger SE | Quarterly Statement Q3 2019 | November 13, 2019 page 3

Markets: E&M International

Industries	%*		Trend
Oil & Gas	15%	• Aging installations based in ME fuel demand for brownfield CAPEX projects for rehabilitation, upgrades & repair • Mid-stream gas investments in NA continue but the pace has slowed
Chemicals & Petrochem	30%	• Focus on OPEX optimization to support refining margins • Significant investments in Petro-Chemical announced for Texas / Louisiana
Energy & Utilities	10%	• Continued concepts being developed for alternative energy power generation in ME • In NA, energy investment trends focused on energy storage, wind, solar and CO reduction 2

* % of segment revenues FY 2018

Markets: Technologies

	Industries	%*		Trend
	Oil & Gas	10%	• Modification and modernization requirements of European gas distribution systems • Debottlenecking opportunities in refining
	Energy & Utilities	40%	• Energy transition focus in all our regions, esp. Europe and USA • Nuclear demand for new builds and maintenance increasing, esp. in France and UK • Decommissioning a developing opportunity in Germany
	Pharma & Biopharma	40%	• Classic pharma continues to grow • Many small to medium-size biopharma projects nearing FID (final investment decision)
* % of segment revenues FY 2018

Bilfinger SE | Quarterly Statement Q3 2019 | November 13, 2019 page 5

Preparing the ground for the "build-out phase": Leaner processes, less regulation – focus on value generation

Significant margin improvement expected in 2020

• Gross margin improvement remains major focus:
  • Execution improvement
  • Disciplined hurdle rates for future contracts
• Additional net SG&A savings >€30 million in 2020, by 2021 reduction of SG&A run-rate to <€300 million p.a.:
  • Reduction of Executive Board size and HQ staff, elimination of
  • one management level in Europe
  • Restructuring adjustments of in total ~€40 million
  • in 2019 and 2020
  • Payback in less than 1.5 years

Implementation initiated

Craft labor supply/demand inversion driving Bilfinger's market dynamics

• Supply side shortage expectations
• "War for talents" determines competitive edge
• Demographics

Quality, competence & certification imperatives

Supports firming prices

* Bundesinstitut für Berufsbildung (ed.): Datenreport zum Berufsbildungsbericht 2019. Informationen und Analysen zur Entwicklung der beruflichen Bildung. Bonn 2019. p. 15.

Bilfinger Turnaround Concept (BTC) No. 1 provider in Europe for turnarounds in the process industry Profitability driver for E&M also in 2020 and 2021

BTC:

• Ability to ramp up/down large number of qualified personnel
• Minimize outage
• Asset long-term integrity assurance
• Decades of experience
• Market leader: ~80 turnarounds/year
• International network, local execution
• Cost-efficient & transparent: one-stop service provider
• Digital tools, modular handbook, methodology training
• Rollout of BTC across all European E&M markets
• High number of repeat customers
• Access to new customers

Quarterly Statement Q3 2019

Stable orders received in E&M, Technologies with significant decrease due to project timing and current strong focus on execution

Development of orders received

• Orders received

Decrease (-10% / org.: -7%) due to project timing in UK and US and careful selection of new projects in Technologies

• Book-to-bill: 0.9
• Order backlog -7% below prior-year quarter (org.: -5%)

Revenue growth remains positive; significant improvement in adjusted EBITA

Development of revenue and profitability

• Revenue

+5% increase (org.: +7%) due to good market demand

• Adjusted EBITA Increased to €34 million (prior year: €22 million), significant margin improvement (3.1% against 2.1%)
• Special items -€9 million, thereof -€1 million restructuring and -€8 million from IT investments

Gross margin improvement to 10.2% Adjusted SG&A ratio of 7.6% dipping below run-rate of 8.2%

Segment E&M Europe: continued sound performance

Development of revenue and profitability

• Orders received

-2% below prior-year quarter (org.: +0%), major framework contracts to be prolonged in Q4 / currently not reflected in orders received

• Book-to-bill: 0.9
• Revenue -1% (org.: +1%), stable development on already good level
• Adjusted EBITA Adjusted EBITA and margin both on good prior-year level

Segment E&M International: strong revenue growth, considerable margin improvement

Development of revenue and profitability

Bilfinger SE | Quarterly Statement Q3 2019 | November 13, 2019 page 14

• Orders received +2% (org.: -3%) slightly above prioryear quarter based on project expansions

• Book-to-bill: 0.9; <1 also due to project timing
• Revenue

Continued strong revenue growth of +25% (org.: +20%) especially due to strong project execution in North America

• Adjusted EBITA

Increase through growth and considerable margin improvement (5.7% against 1.8%)

Segment Technologies: sustained positive revenue trend, sequentially improving but negative adjusted EBITA, positive Q4 expected

Development of revenue and profitability

• Orders received

-61% (org.: -62%) below prior-year quarter due to project timing and the careful selection of new projects

• Book-to-bill

At 0.6, continued focus on profitability improvement and execution

• Revenue

+13% (org.: +15%) increase based on good order backlog

• Adjusted EBITA

Still negative; positive EBITA contribution expected in the fourth quarter. One-time effect of -€4 million: unexpected judgement by the German High Court (BGH) that revoked an arbitration award from 2017 (work executed in 2011)

Operating and free cash flows positive and above prior year DSO improved y-o-y with higher portion of receivables already invoiced

Bilfinger SE | Quarterly Statement Q3 2019 | November 13, 2019 page 16

Time

Outlook 2019 reaffirmed, significant margin improvement in 2020

in € million	Actual FY 2018	Expected FY 2019	Indications FY 2020 (organic)
Revenue	4,153	Mid single-digit organic growth	Stable with focus on higher margins
65 EBITA adjusted		Significant increase to more than €100 million	~4% margin
Free Cash Flow reported	-4	Positive1)	Positive

• Continued divestment of non-core and low-margin business
• Seeking accretive acquisition opportunities
• Will support delivery of the generally confirmed target of a 5% adjusted EBITA margin
• This is only expected to be achieved towards the end of 2020 on a going forward basis

¹⁾ Notwithstanding IFRS16 effect: break-even

Quarterly Statement Q3 2019 Financial backup

Segment development Q3 2019

							Reconciliation				Group
		Technologies			E&M Europe			E&M International			HQ / Consolidation Other	/		OOP		Group
in € million	Q3 2019	Q3 2018	Δ in %	Q3 2019	Q3 2018	Δ in %	Q3 2019	Q3 2018	Δ in %	Q3 2019	Q3 2018	Δ in %	Q3 2019	Q3 2018	Δ in %	Q3 2019	Q3 2018	Δ in %
Orders received	88	223	-61%	618	628	-2%	207	203	2%	-1	-8	92%	86	58	47%	997	1,105	-10%
Order backlog	408	500	-18%	1,703	1,652	3%	412	550	-25%	-5	-20	77%	101	146	-31%	2,620	2,828	-7%
Revenue	145	128	13%	688	695	-1%	238	191	25%	-4	-7	43%	33	45	-28%	1,101	1,052	5%
Investments in P,P&E	1	1	-36%	11	11	3%	2	1	77%	0	2	-80%	0	3	-89%	15	18	-17%
Increase in right-of use assets	1	0	-	5	0	-	2	0	-	1	0	-	0	0	-	9	0	-
Depreciation	-2	-1	-104%	-17	-10	-80%	-3	-1	-119%	-5	-2	-138%	-1	-3	72%	-28	-17	-67%
Amortization	0	0	0%	0	0	18%	-1	-1	-5%	0	0	0%	0	0	-	-1	-1	2%
EBITDA adjusted	-5	-2	-91%	50	43	17%	17	5	249%	-1	-8	85%	1	2	-30%	62	39	59%
EBITA	-7	-9	24%	29	33	-12%	14	3	296%	-11	-14	23%	1	-1	-	25	11	116%
EBITA adjusted	-7	-3	-95%	32	33	-2%	14	3	300%	-6	-10	42%	1	-1	-	34	22	53%
EBITA-margin adjusted	-4.5%	-2.6%		4.7%	4.7%		5.7%	1.8%		-	-		1.6%	-2.0%		3.1%	2.1%

in € million	Q3 2019	Q3 2018	Δ in %
Revenue	1,101	1,052	5%
Gross profit	112	100	13%	+5%, organically +7%
Selling and administrative expense	-89	-95	7%
Impairment losses and reversal of impairment losses according to IFRS 9	-3	1	-
Other operating income and expense	-1	3	-
Income from investments accounted for using the equity method	4	2	70%
EBIT	24	10	130%	Depreciation of property, plant and equipment and amortization of intangible assets of -15 (prior
Amortization (IFRS 3)	1	1	0%	year -17), amortization on right-of-use assets (IFRS 16) of -13 (prior year 0), in total -28 (prior
EBITA (for information only)	25	11	116%	year -17)
Special items in EBITA	10	11	-11%
EBITA adjusted (for information only)	34	22	53%
				Currency effects of -1

in € million	Q3 2019	Q3 2018	Δ in %
EBIT	24	10	130%	Interest result below prior year due to absence
Financial result	-10	-1	-573%	of interest from VCN Apleona (-3) and negative carry from refinancing (-3), interest
EBT	14	9	55%	on leases IFRS 16 (-1)
Income taxes	-7	-8	7%
Earnings after taxes from continuing operations	6	1	442%	No capitalization of losses in German tax group of the SE
Earnings after taxes from discontinued operations	1	-1	-
Minority interest	-1	-2	71%
Net profit	6	-1	-
Adjusted net profit1)	17	12	35%
Average number of shares (in thousands)	40,291	41,182		In addition to the special items in EBITA, the
Earnings per share (in €)	0.16	-0.03		financial result and taxes are also adjusted
thereof from continuing operations	0.15	-0.01
thereof from discontinued operations	0.01	-0.02

1) from continuing operations

Special items

in € million	Q3 2018	Q4 2018	FY 2018	Q1 2019	Q2 2019	Q3 2019
EBITA	11	-6	-7	-3	3	25
Disposal losses/gains, write-downs, selling-related expenses	0	21	17	-7	1	1
Compliance	-1	2	9	0	0	-1
Restructuring, extraordinary depreciations	7	11	22	0	2	1
IT investments	5	9	24	6	11	8
Total adjustments	11	43	72	-1	15	9
EBITA adjusted	22	37	65	-4	17	34

Balance Sheet – Overview of Assets and Liabilities

Current liabilities include payments received 160

Marketable securities with 330 in call and time deposits.

Bilfinger SE | Quarterly Statement Q3 2019 | November 13, 2019 page 24

Consolidated Balance Sheet: Assets

in € million	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018
Non-current assets
Intangible assets	808.7	803.9	807.1
Property, plant and equipment	307.3	324.0	364.1
Right-of-use assets from leases	229.5	0.0	0.0
Investments accounted for using the equity method	19.7	34.9	30.0
Other financial assets	257.5	376.7	373.4
Deferred taxes	81.2	74.9	82.5
	1,703.9	1,614.4	1,657.1
Current assets
Inventories	57.3	61.7	81.2
Receivables and other financial assets	1,242.2	1,102.3	1,229.6
Current tax assets	29.8	22.8	21.6
Other assets	60.6	50.6	57.4
Marketable securities	330.1	120.0	120.0
Cash and cash equivalents	495.7	453.8	353.9
Assets classified as held for sale	0.0	50.4	0.0
	2,215.7	1,861.6	1,863.7
Total	3,919.6	3,476.0	3,520.8

Consolidated Balance Sheet: Equity & liabilities

in € million	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018
Equity
Equity attributable to shareholders of Bilfinger SE	1,146.5	1,217.6	1,251.9
Attributable to minority interest	-12.5	-12.9	-14.2
	1,134.0	1,204.7	1,237.7
Non-current liabilities
Provisions for pensions and similar obligations	341.0	288.2	292.0
Other provisions	24.2	24.6	25.1
Financial debt	551.7	10.8	508.4
Other liabilities	0.2	0.1	0.0
Deferred taxes	40.7	39.4	46.2
	957.8	363.1	871.7
Current liabilities
Current tax liabilities	45.6	33.8	33.3
Other provisions	298.1	383.6	399.6
Financial debt	548.8	501.6	2.2
Trade and other payables	722.0	750.5	765.0
Other liabilities	213.3	212.7	211.3
Liabilities classified as held for sale	0.0	26.0	0.0
	1,827.8	1,908.2	1,411.4
Total	3,919.6	3,476.0	3,520.8

Consolidated Statement of Cash Flows

		9m	Q3
in € million	2019	2018	2019	2018
Cash flow from operating activities of continuing operations	-95.8	-99.1	18.2	1.9
- Thereof special items	-49.7	-46.1	-14.5	-9.2
- Adjusted cash flow from operating activities of continuing operations	-46.1	-53.0	32.7	11.1
Net cash outflow for P,P&E and intangible assets	-36.9	-42.2	-13.1	-16.8
Free cash flow from continuing operations	-132.7	-141.3	5.1	-14.9
- Thereof special items	-49.7	-46.1	-14.5	-9.2
- Adjusted free cash flow from continuing operations	-83.0	-95.2	19.6	-5.7
Payments made / proceeds from the disposal of financial assets	143.2	-1.0	-0.1	0.6
Investments in financial assets	0.0	-0.7	0.0	-0.4
Changes in marketable securities	-209.7	27.4	0.0	27.4
Cash flow from financing activities of continuing operations	285.8	-131.2	-15.1	-29.6
- Share buyback	0.0	-85.0	0.0	-27.5
- Dividends	-42.9	-43.8	-0.7	-0.1
- Repayment of financial debt / borrowing	339.0	-0.7	-11.3	-1.8
- Interest paid	-10.3	-1.7	-3.1	-0.2
Change in cash and cash equivalents of continuing operations	86.6	-246.8	-10.1	-16.9
Change in cash and cash equivalents of discontinued operations	-48.5	-15.5	-1.2	-8.0
Change in value of cash and cash equivalents due to changes in foreign exchange rates	0.5	-1.2	0.1	-0.2
Change in cash and cash equivalents	38.6	-263.5	-11.2	-25.1
Cash and cash equivalents at January 1 / July 1	453.8	617.1	506.9	379.0
Change in cash and cash equivalents of assets classified as held for sale	3.3	0.3	0.0	0.0
Cash and cash equivalents at September 30	495.7	353.9	495.7	353.9

Valuation net cash / net debt

in € million	Sep. 30, 2019	Jun. 30, 2019
Cash, cash equivalents and marketable securities	826	837
Financial debt	-873	-873
Leasing liabilities (IFRS 16)	-228	-235
Net cash (+) / net debt (-)	-275	-271
Pension provisions	-341	-320
Financial assets (Apleona PPN)	240	240
Future cash-out special items1)	~ -5	~ -20
Further intra-year working capital swing	-	-
Valuation net cash (+) / net debt (-)	~ -380	~ -370

1) Not yet reflecting the provisions of new SG&A program, announced November 13, 2019

Disclaimer

This presentation has been produced for support of oral information purposes only and contains forwardlooking statements which involve risks and uncertainties. Forward-looking statements are statements that are not historical facts, including statements about our beliefs and expectations. Such statements made within this document are based on plans, estimates and projections as they are currently available to Bilfinger SE. Forward-looking statements are therefore valid only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Apart from this, a number of important factors could therefore cause actual results to differ materially from those contained in any forwardlooking statement. Such factors include the conditions in worldwide financial markets as well as the factors that derive from any change in worldwide economic development.

This document does not constitute any form of offer or invitation to subscribe for or purchase any securities. In addition, the shares of Bilfinger SE have not been registered under United States Securities Law and may not be offered, sold or delivered within the United States or to US persons absent registration under or an applicable exemption from the registration requirements of the United States Securities Law.