Bilfinger ETR: GBF reported higher second-quarter revenue and earnings per share while citing delays in customer spending and temporary underutilization related to market uncertainty. The industrial services company confirmed its 2026 outlook, though it said it now expects to land at the lower end of its EBITDA-margin range.
Chief Executive Officer Thomas Schulz said second-quarter order intake totaled about €1.5 billion, which he described as the company’s third-largest quarterly intake in more than a decade, with or without the contribution from recently acquired Teknokon. Revenue increased 7% to €1.45 billion, while earnings per share rose 15% to €1.47.
“Our outlook is confirmed,” Schulz said, adding that revenue was tracking well and that management expected market momentum to improve in the second half of the year. He said customer hesitation following the conflict involving Iran had caused projects, maintenance work and turnarounds to be deferred rather than canceled.
Margin pressure from delayed spending
Chief Financial Officer Matti Jäkel said Bilfinger’s EBITDA margin declined to 5.3% in the second quarter from 5.5% a year earlier. Gross profit margin fell 80 basis points to 10.7%, which he attributed primarily to underutilization in operations as clients delayed both capital-expenditure and operating-expenditure decisions.
SG&A expenses increased by €2 million, reflecting the Teknokon acquisition, although the ratio of SG&A to revenue improved to 6.1% from 6.3% as the company continued integrating acquired businesses and executing efficiency measures.
Jäkel said the company expects delayed work to return during the second half. “When we go into over-absorption, then everything we make there drops straight to the bottom line,” he said, referring to higher utilization of Bilfinger’s workforce and capacity.
Bilfinger expects to achieve the lower end of its 2026 EBITDA-margin guidance, which Jäkel identified as 5.8%. He said the company’s initial plan had targeted a 6% margin at the midpoint of guidance, but first-half delays require a stronger second-half performance. He also pointed to ongoing improvement in SG&A efficiency.
Segment performance and order trends
- Western Europe: Orders received totaled €482 million, while revenue rose 1% to €477 million. The book-to-bill ratio was 1.01, and profitability improved 50 basis points, aided by efficiency gains from acquisitions.
- Central Europe: Orders declined 10% to €646 million, partly because the prior-year quarter included a large hydrogen contract. Revenue increased 9% to €664 million, but profitability fell to 4.3% from 5.2% because of delayed spending and underutilization, particularly in German-speaking markets.
- International: Revenue rose 10% to €302 million and book-to-bill reached 1.15. Profitability improved slightly to 3.9% from 3.8%. Order comparisons were affected by the non-recurrence of a U.S. contract renewal recorded in the prior-year quarter, while the segment included a gold-mining contract in Turkey associated with Teknokon.
Schulz said the company’s opportunity pipeline improved materially in the final month of the quarter after a slower start. He said clients had initially delayed decisions amid energy-price volatility and geopolitical uncertainty, but were increasingly resuming work because maintenance and project schedules cannot be deferred indefinitely.
Jäkel said Bilfinger had a 90% revenue-coverage ratio at the end of the second quarter, meaning that 90% of the revenue it forecasts has already been secured in backlog. The comparable figure was 88% a year earlier. He said that level of coverage supported management’s confidence in reaching the midpoint of its revenue guidance.
Energy demand offsets chemical-market pressure
Schulz said chemicals and petrochemicals represented 21% of Bilfinger’s revenue mix and remained under pressure in Central Europe, where customers are implementing cost-reduction programs and placing smaller orders. However, he said demand in North America and the Middle East was different and that Bilfinger was helping customers improve asset performance and outsource maintenance activities.
Energy has grown to 28% of the company’s revenue mix and has helped offset pressure in chemicals and petrochemicals, according to Schulz. Oil and gas accounted for 19% of revenue, supported by LNG activity and investment in the Middle East. Pharma and biopharma represented 10% of revenue and remained a smaller, more cyclical business, though Schulz said its longer-term outlook through 2030 was favorable.
The company highlighted selected projects including installation of an air-preheating system for a chemicals customer, engineering and installation work for the integration of a 320-megawatt hydrogen production plant for EWE, and mechanical, electrical and insulation work at a Turkish gold-processing plant.
Schulz also said Bilfinger sees mining, data centers and other smaller end markets becoming more important over time. Teknokon, consolidated from April 1, provides Bilfinger with a platform in Turkey and potential expansion opportunities in surrounding countries including Azerbaijan, Kazakhstan and Uzbekistan.
Cash flow guidance maintained
Second-quarter cash flow was €48 million, compared with €53 million in the previous quarter. Jäkel said lower advance payments, delayed invoice approvals and timing effects in billing weighed on cash generation. He added that a large contract’s terms and conditions were successfully negotiated in July, which should support second-half free cash flow.
Bilfinger maintained its full-year free-cash-flow target of €250 million to €300 million. Net liquidity was seasonally lower in the second quarter after the company paid its dividend and the Teknokon purchase price. The company also repaid much of a German-law-governed promissory note loan, then issued a new €300 million instrument in early July.
On longer-term profitability, Schulz said Bilfinger remained confident in its path toward an 8% to 9% EBITDA margin by 2030. He said the company is emphasizing more favorable contract structures, including time-and-material and unit-rate arrangements, while remaining cautious on lump-sum projects and avoiding EPC work.
About Bilfinger (ETR:GBF)
Bilfinger SE provides industrial services to customers in the process industry primarily in Europe, North America, and the Middle East. The company offers engineering, project, maintenance, turnaround, rotating equipment, and inspection services. It also provides new construction and decommissioning of nuclear power plants, treatment of radioactive waste, and nuclear fusion services. In addition, the company offers energy efficiency, carbon capture, utilization, and storage; and hydrogen, hydropower, and wind power services.
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