Bilfinger SE

Investor Presentation • Nov 12, 2020

Bilfinger SE

3 rd Quarter 2020 Results

November 12, 2020

Q3 2020

Recovery gains pace: strong EBITA and cash flow development Full-year guidance affirmed

Markets	• Recovering in second half of 2020 as expected
-26% org. Orders received	• Orders received at lower level due to fewer projects and mark to market in oil and gas, but order backlog solid; positive expectations for Q4
-18% org. Revenue	• Most European entities with sequentially increasing revenues • Oil- and gas-related regions UK and Nordics with approx. -30% year-on-year
€23 million EBITA adjusted	• Positive contributions from all European regions including Technologies • E&M International still under pressure in difficult environment
€43 million Free cash flow reported	• Continuing robust cash flow thanks to active working capital management • Sound financial position, no additional financing expectations
Outlook affirmed	• Year-on-year revenue decrease of ~20% • EBITA adjusted and free cash flow reported positive

Markets: E&M Europe

Industries	%*		Overall trend
Chemicals & Petrochem	40%	• Market starts to recover; some clients have announced large investments going forward • German market keeping up comparably well • Major chemical companies reported 3Q 2020 results slightly ahead of expectations
Energy & Utilities	10%	• ESG climate change drivers still hold, e.g. CO limits, emissions, 2 decentralized power generation • Green energy investments expected to pick up (e.g. renewables, hydrogen) • Nuclear remains in focus in France, UK, and Finland
Oil & Gas	30%	• After recent deep decline expecting gradual recovery short and midterm • Majority of projects and turnarounds postponed • Midstream (e.g. pipelines, storage, transportation) less impacted

* % of segment revenues FY 2019

Markets: E&M International

Industries	%*		Overall trend
Chemicals & Petrochem	30%	• Expansion programs and need for modernization projects in Middle East (ME) • Projects delayed but attractive project pipeline in North America (NA)
Energy & Utilities	5%	• In NA, energy investment trends focused on energy storage, wind, solar and CO reduction. Continued but delayed growth 2 • Continued growth in ME population and industry drives further development of alternative and nuclear energy concepts as well as water solutions
Oil & Gas	45%	• Large oil & gas and LNG investment plans in several ME countries (e.g. UAE, Qatar, Kuwait) for the upcoming years • CAPEX and OPEX spend expected to increase from 2021 onwards in NA

* % of segment revenues FY 2019

Markets: Technologies

Industries	%*		Overall trend
Energy & Utilities	45%	• Energy transition focus in all our regions, esp. Europe and USA • Nuclear demand for new builds and maintenance increasing, esp. in France, UK and ME • Nuclear decommissioning capability (waste treatment, services) offers opportunities in Germany and France
Pharma & Biopharma	35%	• Mega trends remain unchanged despite Covid-19 • Clients start reviewing their global supply chain routes which will add opportunities in Europe

European business has shown high resilience and will emerge even stronger from this crisis

In Numbers

Reduction of ~4,000 employees year-to-date, majority in North America, Northern Europe, and the U.K.

Currently ~650 employees are still in furlough schemes (in U.K., Nordics, Germany, Austria), down from almost 3,000 at the peak

"Investment" of ~70m EUR restructuring expenses, full payback within ~2 years

Strict cost management involving both temporary and sustainable measures reduced the SG&A expenses well below budget, full-year expectation ~€310m, target 2021: <€300m

Improved cost agility: the positive outcome from a difficult year

Levers

Balanced workforce utilization planning

• Adjusting in-house capacities to Q1/low point in quarterly intra-year revenues
• Switch from internal to external resources, also using agility of flexible resources from Poland (Bilfinger entity with skilled labor lease, working in various European countries)

Reduce seasonal underutilization to drive gross margin Starting FY 2021 with a clean cost base

Split between own resources and external sourcing Regions with major headcount reductions

Fast alignment with mid-term market outlook

• Sustainable reduction of personnel in areas with longer-term subdued outlooks, e.g. oil and gas U.K., North America, targeting operations and SG&A
• Consequent wind-down unprofitable business and/or pursuing strategic alternatives, e.g. loss-making areas in Technologies

Region / Division	Headcount Dec. 31, 2019	Headcount Sept. 30, 2020	Change
UK	3,737	3,058	-679
Nordics	3,979	3,449	-530
North America	3,123	1,986	-1,137
Technologies	2,415	2,352	-63
Group 1)	33,327	29,375	-3,952

1) Excluding JVs

Quarterly Statement Q3 2020

Orders received on lower level due to limited number of projects and lowered expectations in oil and gas, but solid order backlog; positive expectations for Q4

Development of orders received

Orders received

• Decrease by -29% (org.: -26%)
• Lack of project orders especially in E&M International / North America
• Backlog reduction in upstream oil and gas business
• Larger parts of Hinkley Point expected to be mainly booked in Q4 and 2021

Order backlog

• -6% below prior-year level (org.: -3%)

Book-to-bill

• Mirrors low orders received in Q3, but year-to-date at 1.05

Sequential recovery against Q2, solid EBITA adjusted

Development of revenue and profitability

Revenue

• -21% (org.: -18%) below prior-year quarter, recovery after difficult Q2

EBITA adjusted

• Positive at €23 million, rebound due to recovery in European markets
• Technology with positive contribution

Special items

• -€24 million (thereof -€18 million restructuring costs, -€3 million IT investments and -€3 million loss on OOP divestment)
• In Total ~€70 million expected in FY 2020

Gross margin at prior year level despite significantly lower revenues SG&A expenses further reduced with partially sustainable improvements

Gross profit (€ million) Adjusted selling and administrative expenses (€ million)

Adjustments Reported

Segment E&M Europe: strong recovery in both revenue and adjusted EBITA, highly resilient and agile maintenance business

Development of revenue and profitability

Orders received

• -14% (org.: -13%) mainly due to backlog reduction in upstream oil and gas business
• Book-to-bill YTD at 1.07

Revenue

• Decrease by -12% (org.: -11%), with -30% North Sea upstream business

EBITA adjusted

• Clearly positive, benefitting from agile cost management, leading to strong margin improvement up to prior-year level despite lower revenue

Outlook 2020

Revenue: significant decrease EBITA adjusted: positive

Segment E&M International: top-line and earnings still under pressure in challenging environment, leading to negative results also in full-year

Development of revenue and profitability

Orders received

• -60% (org.: -57%), in North America lack of contract awards due to challenging environment (COVID-19 and elections)

Revenue

• Decrease of -55% (org.: -52%), partly expected, but amplified by difficult environment

EBITA adjusted

• Clearly negative, primarily affected by underutilization in North America, capacity adjustments ongoing

Outlook 2020

Revenue: significant decrease EBITA adjusted: negative

Segment Technologies: Sound quarter with positive EBITA adjusted

Development of revenue and profitability

Orders received

• Slight increase by 2% (org.: 2%)
• Hinkley Point orders to be called off in Q4 and 2021

Revenue

• -5% (org.: -5%) below prior-year, also due to wind-down of loss-making activities, but sequential recovery visible in growth areas

EBITA adjusted

• Good margin development, strategic measures for underperforming entities well under way

Outlook 2020

Revenue: slight decrease EBITA adjusted: significant

improvement, but still negative

Net profit burdened by significant amount of restructuring costs, on adjusted base positive Free cash flow improved significantly against prior year

Net profit 1) (€ million)

Free cash flow 1) (€ million)

1) Adjustments correspond to EBITA adjustments, Net Profit: in addition special items in financial result and in taxes

Sound financial position; further increase in liquidity due to active working capital management, despite start of payments of tax and social security deferrals

Development of net liquidity

Net liquidity 1) (€ million)

30.09.19 30.06.20 30.09.20 Net trade assets (€ million)

Cash flow development year-to-date (€ million) excl. IFRS 16

	9m 2020 excl. IFRS 16	IFRS 16 impacts	9m 2020 incl. IFRS 16	9m 2019 excl. IFRS 16
EBITA adj.	-22		-22	46
Depreciation	42	43	85	41
Change in NWC (Reported)	80		80	-194
Others	-22		-22	23
Adjustments	-24		-24	-50
Operating CF Reported	54		97	-134
Net CAPEX	-19		-19	-37
Free CF Reported	35		78	-171
Proceeds/Investments financial assets	5		5	143
Changes in marketable securities	0		0	-210
Dividends	-7		-7	-43
Change in financial debt	0	-40	-40	373
Interest paid	-15	-3	-18	-6
FX / other / disco	-8		-8	-45
Change in Cash	10		10	41

1) Including IFRS 16 leases DSO: Trade receivables + WIP – advance payments received, DPO: Trade payables

Outlook 2020 Positive earnings and free cash flow

	Actual FY 2019	Outlook FY 2020
Revenue	€4,327 million	Decrease of ~20%
EBITA adjusted	€104 million	Positive
Free cash flow reported	€57 million	Positive

Assumption: the current lockdown measures will not have a material negative influence on business development.

Quarterly Statement Q3 2020 Financial backup

Segment development Q3 2020

											Reconciliation	Group
		E&M Europe			E&M International			Technologies			HQ / Consolidation Other	/		OOP			Group
€ million	Q3 2020	Q3 2019	Δ in %	Q3 2020	Q3 2019	Δ in %	Q3 2020	Q3 2019	Δ in %	Q3 2020	Q3 2019	Δ in %	Q3 2020	Q3 2019	Δ in %	Q3 2020	Q3 2019	Δ in %
Orders received	501	580	-14%	82	207	-60%	90	88	+2%	-9	-5	-79%	45	128	-65%	710	997	-29%
Order backlog	1,577	1,623	-3%	387	412	-6%	493	408	+21%	-79	-23	-246%	81	199	-60%	2,458	2,620	-6%
Revenue	571	647	-12%	108	238	-55%	138	145	-5%	-16	-11	-53%	69	81	-14%	870	1,101	-21%
Investments in P,P&E	3	11	-74%	0	2	-82%	1	1	-8%	0	0	n/a	2	0	n/a	6	15	-57%
Increase in right-of use assets	4	5	-5%	0	2	-97%	0	1	-92%	1	1	+15%	0	0	n/a	6	9	-34%
Depreciation w/o special items	-15	-16	+7%	-2	-3	+20%	-2	-2	-2%	-5	-5	-20%	-1	-2	+41%	-26	-28	+6%
Amortization	0	0	n/a	0	-1	+104%	0	0	n/a	0	0	n/a	0	0	n/a	0	-1	+98%
EBITDA adjusted	43	47	-9%	-7	17	-	8	-5	-	0	-1	+100%	5	4	+33%	49	62	-20%
EBITA	22	28	-21%	-11	14	-	-6	-7	+20%	-7	-11	+33%	2	2	-9%	0	25	-101%
EBITA adjusted	27	31	-12%	-9	14	-	6	-7	-	-4	-6	+36%	3	2	+78%	23	34	-32%
EBITA-margin adjusted	4.7%	4.8%		-8.6%	5.7%		4.2%	-4.5%		22.5%	54.1%		4.7%	2.3%		2.7%	3.1%

Segment development YTD 2020

												Reconciliation Group
		E&M Europe			E&M International			Technologies			HQ / Consolidation / Other			OOP			Group
€ million	YTD 9/2020	YTD 9/2019	Δ in %	YTD 9/2020	YTD 9/2019	Δ in %	YTD 9/2020	YTD 9/2019	Δ in %	YTD 9/2020	YTD 9/2019	Δ in %	YTD 9/2020	YTD 9/2019	Δ in %	YTD 9/2020	YTD 9/2019	Δ in %
Orders received	1,751	1,897	-8%	371	609	-39%	491	313	+57%	-98	-25	-288%	185	307	-40%	2,700	3,101	-13%
Order backlog	1,577	1,623	-3%	387	412	-6%	493	408	+21%	-79	-23	-246%	81	199	-60%	2,458	2,620	-6%
Revenue	1,635	1,907	-14%	403	718	-44%	358	400	-10%	-27	-28	+2%	209	260	-19%	2,579	3,256	-21%
Investments in P,P&E	14	31	-56%	2	6	-59%	1	2	-27%	1	2	-28%	3	3	+0%	22	43	-50%
Increase in right-of use assets	20	15	+37%	4	3	+28%	1	2	-43%	3	7	-56%	0	1	-16%	29	27	+7%
Depreciation w/o special items	-48	-47	-1%	-9	-9	-4%	-6	-6	-2%	-11	-12	+3%	-6	-6	+6%	-80	-79	0%
Amortization	0	0	n/a	-1	-2	+33%	0	0	n/a	0	0	n/a	-7	0	n/a	-8	-3	-189%
EBITDA adjusted	80	116	-31%	-14	34	-	-13	-24	+43%	-5	-10	+47%	10	10	+3%	57	127	-55%
EBITA	1	64	-98%	-29	24	-	-32	-30	-6%	-13	-36	+63%	3	3	-25%	-71	25	-
EBITA adjusted	33	69	-53%	-23	26	-	-19	-29	+34%	-17	-22	+24%	4	3	+21%	-22	47	-
EBITA-margin adjusted	2.0%	3.6%		-5.7%	3.6%		-5.4%	-7.3%		62.3%	79,8%		2.0%	1.3%		-0.9%	1.5%

		YTD			Q3
in € million	2020	2019	Δ in %	2020	2019	Δ in %	Decrease by -21%, organically -18%
Revenue	2,579	3,256	-21%	870	1,101	-21%
Gross profit	191	291	-34%	89	112	-21%
Selling and administrative expense	-237	-284	16%	-75	-89	15%
Impairment losses and reversal of impairment losses according to IFRS 9	-2	-3	-	0	-3	-	Significant effects: Portfolio adjustments -3 (prior year -1), restructuring expenses -14 (prior year: -3)
Other operating income and expense	-41	7	-	-16	-1	-
Income from investments accounted for using the equity method	9	10	-12%	2	4	-56%	Depreciation of property, plant and equipment and amortization of intangible assets of -13 (prior year: -15), amortization on right-of-use
EBIT	-80	22	-	0	24	-	assets (IFRS 16) of -13 (prior year: -13)
Amortization of intangible assets from acquisitions and impairment of goodwill	8	3	335%	0	1	-
EBITA (for information only)	-71	25	-	0	25	-
Special items in EBITA	49	22	96%	24	10	146%	Currency effects: 1
EBITA adjusted (for information only)	-22	47	-	23	34	-32%

		YTD			Q3
in € million	2020	2019	Δ in %	2020	2019	Δ in %
EBIT	-80	22	-	0	24	-	Financial result above prior year, in 2019
Financial result	-21	-11	-	-8	-10	-	burdened by negative carry regarding refinancing of Bond 12/2019
EBT	-101	11	-	-8	14	-
Income taxes	0	-16	-	-9	-7	-
Earnings after taxes from continuing operations	-101	-5	-	-17	6	-	No capitalization of losses in German tax group of the SE
Earnings after taxes from discontinued operations	-2	15	-	-2	1	-
Minority interest	1	1	-	0	1	-
Net profit	-103	9	-	-19	6	-
Adjusted net profit1)	-32	17	-	11	17	-36%
Average number of shares (in thousands)	40,295	40,282		40,301	40,291		In addition to the special items in EBITA, the financial result (in prior year) and taxes are
Earnings per share (in €)	-2.56	0.23		-0.47	0.16		also adjusted
thereof from continuing operations	-2.52	-0.13		-0.43	0.15
thereof from discontinued operations	-0.04	0.36		-0.04	0.01
1) from continuing operations

Special items Expectations for FY 2020: on prior-year level, also due to significant restructuring in Technologies

in € million	Q3 2019	Q4 2019	FY 2019	Q1 2020	Q2 2020	Q3 2020
EBITA	25	7	32	-20	-51	0
Disposal losses/gains, write-downs, selling-related expenses	1	3	-3	0	2	3
Compliance	-1	0	-1	0	-17	0
Restructuring, extraordinary depreciations	1	35	40	6	28	18
IT investments	8	11	36	3	3	3
Total adjustments	9	49	72	9	16	24
EBITA adjusted	34	57	104	-11	-35	23

Balance Sheet – Overview of Assets and Liabilities

Goodwill decreases to 768 (06/20: 777).

Non-current assets include PPN Apleona 240, property, plant and equipment 277, according to IFRS 16 right-of-use assets from leases 194, deferred tax assets 61, thereof from tax-losses carried forward 37.

Current assets: decrease mainly due to reduction of receivables and other financial assets to 942 (06/20: 1,057), significant decrease in other current financial assets (current) to 53 (6/20: 257, including 200 for Stadtarchiv Köln)

In Q3 2020, decrease in equity due to negative earnings after taxes -38.

Pension provisions: Negligible decrease with stable Euro interest rate of 0.8%

Financial debt relates to Bond 06/2024 with 250, SSD with 123 and leases with 197.

Current liabilities relate for the most part to payables of 888 (06/20: 1,127), thereof trade payables 312 and payments received 129.

Consolidated Balance Sheet: Assets

€ million	September 30, 2020	December 31, 2019	September 30, 2019
Non-current assets
Intangible assets	771.8	802.5	808.7
Property, plant and equipment	277.0	311.9	307.3
Right-of-use assets from leases	193.5	227.4	229.5
Investments accounted for using the equity method	17.6	18.5	19.7
Other financial assets	254.7	255.5	257.5
Deferred taxes	60.7	60.6	81.2
	1,575.3	1,676.4	1,703.9
Current assets
Inventories	61.9	57.1	57.3
Receivables and other financial assets	941.5	1,057.3	1,242.2
Current tax assets	19.0	20.4	29.8
Other assets	43.7	43.8	60.6
Marketable securities	0.0	0.0	330.1
Cash and cash equivalents	509.8	499.8	495.7
Assets classified as held for sale	0,0	0.0	0.0
	1,575.9	1,678.4	2,215.7
Total	3,151.2	3,354.8	3,919.6

Consolidated Balance Sheet: Equity & liabilities

in € million	September 30, 2020	December 31, 2019	September 30, 2019
Equity
Equity attributable to shareholders of Bilfinger SE	1,005.1	1,165.3	1,146.5
Attributable to minority interest	-10.0	-12.4	-12.5
	995.1	1,152.9	1,134.0
Non-current liabilities
Provisions for pensions and similar obligations	344.2	338.0	341.0
Other provisions	23.0	23.6	24.2
Financial debt	525.6	551.3	551.7
Other liabilities	0.1	0.0	0.2
Deferred taxes	4.2	4.3	40.7
	897.1	917.2	957.8
Current liabilities
Current tax liabilities	21.8	25.4	45.6
Other provisions	303.1	301.9	298.1
Financial debt	46.2	49.7	548.8
Trade and other payables	605.2	679.7	722.0
Other liabilities	282.7	228.0	213.3
Liabilities classified as held for sale	0.0	0.0	0.0
	1,259.0	1,284.7	1,827.8
Total	3,151.2	3,354.8	3,919.6

Consolidated Statement of Cash Flows

	YTD		Q3
in € million	2020	2019	2020	2019
Cash flow from operating activities of continuing operations	97.2	-95.8	48.6	18.2
- Thereof special items	-23.9	-49.7	-1.4	-14.5
- Adjusted cash flow from operating activities of continuing operations	121.1	-46.1	50.0	32.7
Net cash outflow for P,P&E and intangible assets	-18.7	-36.9	-6.0	-13.1
Free cash flow from continuing operations	78.5	-132.7	42.6	5.1
- Thereof special items	-23.9	-49.7	-1.4	-14.5
- Adjusted free cash flow from continuing operations	102.4	-83.0	44.0	19.6
Payments made / proceeds from the disposal of financial assets	5.2	143.2	1.8	-0.1
Investments in financial assets	0.0	0.0	0.0	0.0
Changes in marketable securities	0.0	-209.7	0.0	0.0
Cash flow from financing activities of continuing operations	-65.2	285.8	-15.7	-15.1
- Share buyback	0.0	0.0	0.0	0.0
- Dividends	-7.3	-42.9	-0.8	-0.7
- Repayment of financial debt / borrowing	-39.7	339.0	-12.8	-11.3
- Interest paid	-18.2	-10.3	-2.1	-3.1
Change in cash and cash equivalents of continuing operations	18.5	86.6	28.7	-10.1
Change in cash and cash equivalents of discontinued operations	-5.8	-48.5	-0.7	-1.2
Change in value of cash and cash equivalents due to changes in foreign exchange rates	-2.7	0.5	-0.9	0.1
Change in cash and cash equivalents	10.0	38.6	27.1	-11.2
Cash and cash equivalents at January 1 / July 1	499.8	453.8	482.7	506.9
Change in cash and cash equivalents of assets classified as held for sale	0.0	3.3	0.0	0.0
Cash and cash equivalents at September 30	509.8	495.7	509.8	495.7

Balance Sheet items relevant for valuation

in € million	Jun. 30, 2020	Sep. 30, 2020
Cash, cash equivalents and marketable securities	483	510
Financial debt	-373	-373
Net cash (+) / net debt (-) 1)	110	137
Pension provisions	-350	-344
Financial assets (Apleona PPN / book value)	240	240
Future cash-out special items	approx. -80	approx. -80

1) Without leasing liabilities of -199 (Sep. 30), -218 (Jun. 30)

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.