Bilfinger SE

Earnings Release • May 16, 2018

Bilfinger SE

Quarterly Statement Q1 2018

May 15, 2018

Q1 2018

Development as planned in an increasingly positive environment

Orders received with growth in the fourth consecutive quarter Book-to-bill at 1.2

Revenue once again with organic increase

EBITA adjusted above prior-year

Net profit improved

Operating cash flow below very good prior-year quarter

Current market situation E&T

Oil and gas:

• Continued cautious investment sentiment in European project business in Oil, some activities in gas supply and gas pipelines
• Increase in activity in US shale oil and gas (mid-stream) in various fields
• Signs of recovery in Middle East, projects moving from early prospects to approval and RFQs

Chemicals and petrochemicals:

• In Europe brownfield investments still very active, more greenfield projects expected
• Still many key opportunities in North America with focus on the US Gulf Coast
• The Middle East market remains challenging, increasing demand for owner's engineering services
• Increased trend towards digitalization, especially from small- and mid-caps, with the goal of optimizing production processes and efficiency enhancements

Energy and utilities:

• In Europe growth perspectives mainly in nuclear, also from emissions control, modernization and efficiency enhancements at existing plants
• Market for fossil fuel power plants remains difficult
• In Middle East shift from conventional to alternative energy, growing interest for emissions control

Pharma and biopharma:

• Demand in Europe continues to be strong
• Requests also from Emerging Markets

Current market situation MMO

Oil and gas:

• Demand for maintenance services starts to improve, (smaller) projects now beginning to advance from idea to approval
• Market remains competitive

Chemicals and petrochemicals:

• Furthermore stable demand in Europe in maintenance business and growing willingness to invest, increasing number of requests for small MMO-projects (brownfield, e.g. debottlenecking)
• Middle East customers stable on OPEX

Energy and utilities:

• In Middle East shift from conventional to alternative energy
• In Europe ongoing limited demand for traditional power plant services, instead more decentralization and outsourcing, digitalization as trend, focus on renewables, demand for modifications in hydro power stations

Metallurgy:

• In Europe Aluminum with stable demand on good level, Steal with signs of improvement, but industry faces structural changes (consolidation, potential US import tariffs)

Quarterly Statement Q1 2018

Continuing positive momentum in orders received: fourth consecutive quarter with growth, book-to-bill at 1.2

Development of orders received

• Orders received: 19% above prior-year (org.: +21%), Double-digit increase in both segments Share of orders >€5 million increased

• Book-to-bill: 1.2
• Order backlog: +5% above prior-year (org.: +9%)

Revenue with a year-on-year organic increase for the third time in a row, EBITA adj. with significant improvement

Development of revenue and profitability

• Revenue:

Q1 typically with lowest revenue in the course of the year In comparison to prior-year: decrease by -3%, but once again organic increase of +1%

• EBITA adjusted :

Negative, but significant improvement against prior-year quarter

• Special items:

Burdens from special items declining: €5 million vs. €36 million in the prior-year quarter

Gross margin at prior-year level SG&A expenses below very good prior quarter, but positive trend visible

Operating cash flow negative caused by seasonality and below very good prior-year quarter, net profit significantly improved due to lower burden from special items

E&T with positive momentum in orders received

Development of revenue and profitability

• Orders received:

Strong quarter with +16% (org.: +18%) in comparison to weak prior-year, book-to-bill at 1.1 with significant contracts in all focus industries

• Revenue:

Decrease by -11% (org. -7%) as a consequence out of low order backlog at beginning of the year Increasing capacity utilization expected over the course of the year

• EBITA adjusted:

Partly still poor utilization in Europe (Ex-Power) and still low volume in North America, but y-o-y improvement

MMO orders received and revenue with significant organic growth

Development of revenue and profitability

• Orders received:

Strong development with +19% (org. +22%), book-to-bill at 1.2 Esp. positive development in Continental Europe supported by catch-up effects in framework contracts

• Revenue:

Likewise positive with +6% (org. +9%)

• EBITA adjusted margin: In the first quarter typically weaker, however, with 2.1% stable y-o-y

OOP1): Dilutive: disposals nearly completed Accretive: sales process kicked off for two units

Revenue OOP (€ million)

Progress M&A track / Dilutive:

• 13 units as of December 31, 2016
• 11 have already been sold; two more with signing respectively termination
• Q1 2018: €2m positive P&L- as well as cash-effect
• Cash-out expected FY 2018: ~€5m, but no further capital losses

Accretive:

• Four units "managed for value" (after re-integration of Bilfinger VAM to core business)
• Sales process kicked off for two units

Business development:

• Orders received significantly above weak prior-year comparable (+27%/ org. +35%)
• Strong decrease in revenue by -46% (org. -33%), in South Africa delay in contract awards, projects in transmission line construction do not start before Q2
• Only slight improvement in EBITA adj. from -€5m to -€4m due to temporary lower revenue

Outlook 2018 confirmed: Significant improvement of adjusted EBITA expected

in € million	FY 2017	expected FY 2018
Orders received	4.055 1)	Organic growth in the mid single-digit percentage range
Revenue	4.044	Organically stable to slightly growing
Adjusted EBITA	3	Significant increase to mid-to-higher double-digit million € amount 2)

1) As reported, based on output volume/ comparable based on revenue: €4,079m

2) Despite significant increase in upfront costs for business development and digitalisation of € ~20 million, under the assumption of comparable F/X basis

Bilfinger 2020 – Company passes three phases Strong progress in stabilization phase

Quarterly Statement Q1 2018 Financial backup

Share buyback program advances as planned

Framework:

• Start: September 6, 2017
• Completion: at the earliest September 1, 2018; latest December 21, 2018
• Volume of up to €150m or 10% of shares

Current status:

• Number of shares bought back: 2,257,973
• Current average number of shares: ~ 13,500/day
• Average price: €36.98
• Total volume: ~ €83m
• In % of total equity: ~ 5.1%

Current degree of program completion: approx. 55%

You can find the current status of the program on our homepage:

http://www.bilfinger.com/en/investor-relations/shares/share-buyback-2017/

Status: May 09, 2018

Segment overview Q1 2018

							HQ/ Consolidation/ Other
		E&T		MMO		HQ/ Consolidation			OOP			Group
€ million	Q1 2018	Q1 2017	Δ in %	Q1 2018	Q1 2017	Δ in %	Q1 2018	Q1 2017	Δ in %	Q1 2018	Q1 2017	Δ in %	Q1 2018	Q1 2017	Δ in %
Orders recieved	296	254	16%	762	639	19%	-9	-7	-29%	52	41	27%	1,101	928	19%
Order backlog	775	774	0%	1,750	1,682	4%	-16	-29	45%	180	141	28%	2,689	2,568	5%
Revenue	265	296	-11%	625	592	6%	-3	-5	40%	42	78	-46%	928	961	-3%
Investments in P,P&E	2	2	0%	7	9	-22%	1	2	-50%	1	2	-50%	11	15	-27%
Depreciation P,P&E	-2	-3	33%	-10	-10	0%	-1	-1	0%	-3	-4	25%	-16	-18	11%
Amortization	-1	-2	50%	-1	-1	0%	0	0	0%	0	0	0%	-2	-3	33%
EBITA	1	-8	113%	13	12	8%	-21	-49	57%	-4	-5	20%	-11	-50	78%
EBITA adjusted	1	-2	150%	13	12	8%	-16	-19	16%	-4	-5	20%	-6	-14	57%
EBITA-margin adjusted	0.2%	-0.6%		2.1%	2.1%					-9.7%	-6.3%		-0.6%	-1.3%

Revenue 928 961 -3% 78 81 -4% Gross profit -94 -107 12% Selling and administrative expense 0 0 - Other operating income and expense 1 -29 103% Income from investments accounted for using the 2 2 0% equity method EBIT -13 -53 76% Amortization (IFRS3) 2 3 -33%
-11 -50 78% EBITA (for information only)
Special items in EBITA -5 -36 86%
EBITA adjusted (for information only) -6 -14 57%

€ million	Q1/18	Q1/17	Δ in %
EBIT	-13	-53	76%
Interest result	-4	-2	-100%
EBT	-17	-55	69%
Income taxes	-5	0	-
Earnings after taxes from continuing operations	-22	-55	60%
Earnings after taxes from discontinued operations	-3	0	-
Earnings after taxes	-25	-55	55%
Minority interest	1	0	-
Net profit	-24	-55	56%
Adjusted net profit	-7	-12	42%
Average number of shares (in thousands)	42,559	44,209
Earnings per share (in €) 1	-0.57	-1.24
thereof from continuing operations	-0.50	-1.24
thereof from discontinued operations	0.07	0.00

diluted earnings per share.

Special items of ~€50 million in FY 2018 expected

€ million	Q1 2017	Q2 2017	Q3 2017	Q4 2017	FY 2017	Q1 2018
EBITA	-50	-64	-6	2	-118	-11
Disposal losses, write-downs, selling related expenses	13	5	7	15	40	-2
Compliance	4	1	5	2	12	3
Restructuring and SG&A Efficiency	17	10	8	15	50	0
IT investments	2	5	6	6	19	4
Total Adjustments	36	21	26	38	121	5
EBITA adjusted	-14	-43	20	40	3	-6

Balance Sheet – Overview Assets and Liabilities

Non-current assets include non-cash purchase price components Apleona (Vendor Claim €109 million, Preferred Participation Note €210 million)

Marketable securities: investment in liquid and low-risk public funds, esp. to avoid negative interest (strategic base liquidity)

Assets classified as held for sale: decrease due to sale of Neo Structo

Decrease in equity due to earnings after taxes, share buyback and initial application IFRS 9. The equity ratio amounted to 37%.

Pension provisions stable due to relatively unchanged interest rate of 1.6%

Financial debt relates to bond of €500m

Consolidated Balance Sheet: Assets

€ million	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017
Non-current assets
Intangible assets	799	804	811
Property, plant and equipment	361	367	371
Investments accounted for using the equity method	26	22	18
Other financial assets	357	364	369
Deferred taxes	82	86	99
	1,625	1,643	1,668
Current assets
Inventories	77	82	70
Receivables and other financial assets	1,053	1,031	1,155
Current tax assets	16	30	28
Other assets	64	55	63
Marketable Securities	148	150	90
Cash and cash equivalents	508	617	636
Assets classified as held for sale	0	12	12
	1,866	1,977	2,054
Total	3,491	3,620	3,722

Consolidated Balance Sheet: Equity & liabilities

€ million	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017
Equity
Equity attributable to shareholders of Bilfinger SE	1,321	1,408	1,490
attributable to minority interest	-17	-25	-26
	1,304	1,383	1,464
Non-current liabilities
Provisions for pensions and similar obligations	292	293	292
Other provisions	26	27	29
Financial debt	509	509	509
Other liabilities	0	0	0
Deferred taxes	44	45	30
	871	874	860
Current liabilities
Current tax liabilities	34	34	32
Other provisions	425	442	441
Financial debt	2	2	2
Trade and other payables	619	640	688
Other liabilities	221	219	205
Liabilities classified as held for sale	15	26	30
	1,316	1,363	1,398
Total	3,491	3,620	3,722

Cash Flow Statement

		Q1
€ million	2018	2017
Cash flow from operating activities of continuing operations	-60	-37
- Thereof special items	-15	-28
- Adjusted Cash flow from operating activities of continuing operations	-45	-9
Net cash outflow for P, P & E and intangible assets	-10	-14
Free cash flow from continuing operations	-70	-51
- Thereof special items	-15	-28
- Adjusted Free Cash flow from operating activities of continuing operations	-55	-23
Proceeds from the disposal of financial assets	2	-5
Investments in financial assets	0	0
Changes in marketable securities	0	0
Cash flow from financing activities of continuing operations	-35	-4
- Share buyback	-32	0
- Dividends	0	0
- Borrowing/ repayment of financial debt	1	0
- Interest paid	-4	-4
Change in cash and cash equivalents of continuing operations	-103	-60
Change in cash and cash equivalents of discontinued operations	-6	-9
Change in value of cash and cash equivalents due to changes in foreign exchange rates	0	0
Change in cash and cash equivalents	-109	-69
Cash and cash equivalents at January 1	617	1,032
Change in cash and cash equivalents of assets classified as held for sale	0	3
Cash and cash equivalents at March 31	508	966

Valuation net cash: decrease due to ongoing share buyback

€ million	Mar. 31, 2018	Dec. 31, 2017
Cash and cash equivalents	508	617
Marketable securities	148	150
Financial debt	-511	-511
Net cash	145	256
Pension provisions	-292	-293
Expected cash-out disposals	~ -5	~ -5
Financial assets (Apleona, JBN)	340	338
Future cash-out special items	~ -155	~ -170
Intra-year working capital swing	0	~ -50
Valuation net cash	~ 25 to 50	~50 to 100

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 U.S. persons absent registration under or an applicable exemption from the registration requirements of the United States Securities Law.