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| Bilfinger: Q3 2015 Interim Report Mannheim-based Bilfinger said the group's output volume increased by 5 percent to €4,781 million in the first nine months of 2015. Orders received were up 23 percent to €4,957 million. This is attributable primarily to the extension of significant service contracts in the first half of 2015. spliterAlthough adjusted EBITA of €121 million was, as expected, significantly below the prior-year figure, it nonetheless underscores the earnings forecast for full-year 2015. "Bilfinger is on course to reach the forecast issued for 2015", says Chairman of the Executive Board Per H. Utnegaard. "As a result of the strategic repositioning that has now been initiated, we will lead the company back to a path of profitable growth in the medium term." As a consequence of a non-cash goodwill impairment undertaken already in the second quarter of 2015 in the amount of €330 million as well as operating losses in the Power business and restructuring expenses, net profit after the first nine months of 2015 amounted to minus €510 million. Strategic repositioning Bilfinger is facing far-reaching changes. The company is narrowing the focus of its business from three to two segments, concentrating activities that are currently spread around the globe on the home market of Europe and replacing a complex structure with a transparent and fast-moving organization. Bilfinger's profitability will increase sustainably as a result. "The two business segments Industrial and Building and Facility will operate as independent segments within Bilfinger and will be given greater entrepreneurial freedom. With this independence, each segment will be able to develop its strengths in a more targeted manner", added Per H. Utnegaard. Development of the business segments The Industrial business segment has a good basis for future development. In a number of areas, however, restructuring is necessary. Overall, output volume was stable at €2, 707 million, orders received of €2, 455 was 2 percent below the figure for the prior year. EBITA decreased to €94 million (previous year: €127 million). A strong reluctance to invest in the European and American oil and gas sectors, triggered primarily by the low oil price, continues to have a negative impact on this segment. "In the Industrial business segment, low-margin areas will be repositioned. The focus in this regard is on the optimization of organizational and cost structures", explains Per H. Utnegaard. "Moreover, a focused sales strategy in the operating business will help to further improve cooperation with strategically important customers and to expand the market position in core regions Central and Northern Europe. The Building and Facility business segment continued its successful development. Output volume increased by 11 percent to €2, 124 million. Positive exchange rate effects and the acquisition in mid 2014 of British real-estate consultancy GVA also contributed to this development. The increase in orders received by 52 percent to €2, 568 million is mainly attributable to the extension of significant facility management contracts in the first half of the year. EBITA increased to €95 million (previous year: €84 million). Outlook 2015 confirmed: output volume at prior-year level, adjusted EBITA between €150 and €170 million In the Industrial business segment, Bilfinger expects a significant decrease in output volume in 2015 to about €3.4 billion. The company anticipates an adjusted EBITA margin of more than 3 percent (2014: 5.1 percent). Output volume of the Building and Facility business segment will grow significantly, primarily as a result of the acquisition last year of British real-estate services provider GVA to a good €2.8 billion. The company expects an adjusted EBITA margin at the prior-year level (2014: 5.1 percent). For the full Group, with an output volume at the level of the prior year (2014: €6,246 million), Bilfinger anticipates an adjusted EBITA of between €150 and €170 million (previous year: €262 million). Operating losses and special items from the goodwill impairment in the Power business as well as restructuring expenses are the main factors behind the significantly negative net profit. A substantial portion of this, however, is non-cash. write your comments about the article :: © 2015 Construction News :: home page |