Q2 2026 Bilfinger SE Earnings Call

August 12, 2026

Speaker #1: Good afternoon, ladies and gentlemen, and welcome to the Bilfinger SE Q2 2026 results webcast. My name is Martina Kalkark, and I'm here today with our CEO, Dr. Thomas Schulz, and our CFO, Matti Jakel.

Martina Kalkhake: Good afternoon, ladies and gentlemen, and welcome to Bilfinger's Q2 2026 results webcast. My name is Martina Kalkhake, and I am here today with our CEO, Dr. Thomas Schulz, and our CFO, Matti Jäkel. We will start with a presentation today on the quarterly highlights and then open the call for your questions. You can ask your questions via telephone by pressing star and 1 on your keypad or via chat in the webcast as usually. During the presentation, all participants will be in listen-only mode, and the event will be recorded. I will now hand over to Thomas.

Martina Kalkhake: Good afternoon, ladies and gentlemen, and welcome to Bilfinger's Q2 2026 Results Webcast. My name is Martina Kalkhake, and I am here today with our CEO, Dr. Thomas Schulz, and our CFO, Matti Jäkel. We will start with a presentation today on the quarterly highlights and then open the call for your questions. You can ask your questions via telephone by pressing star and one on your keypad or via chat in the webcast as usually. During the presentation, all participants will be in listen-only mode, and the event will be recorded. I will now hand over to Thomas.

Speaker #1: We will start with a presentation today on the quarterly highlights, and then open the call for your questions. You can ask your questions via telephone, by pressing star and 1 on your keypad, or via chat in the webcast, as usual.

Speaker #1: During the presentation, all participants will be in listen-only mode, and the event will be recorded. I will now hand over to Thomas.

Speaker #2: Thank you. So, hello everybody. Welcome to our Q2 2026 results here out of Mannheim, in Germany. Let's start with the highlights. We had actually quite a good order intake in Q2, with around €1.5 billion.

Thomas Schulz: Thank you. Hello, everybody. Welcome to our Q2 2026 result here out of Mannheim in Germany. Let's start with the highlights. We had actually quite a good order intake into Q2 with around EUR 1.5 billion, and that in a quite volatile market environment, especially with the Iran war. Our revenue has a quite good run rate, and we foresee that definitely with more dynamic, positive dynamics towards the H2 and the end, H2 of this year, and then of course, the end of this year. Our EBITDA was not on the level as expected and actually moved down to 5.3%. Our earnings per share is up to 147, which is quite a nice improvement, and the cash flow for the market situation with the Iran war is to EUR 48 million, quite a good one.

Speaker #2: And that in a quite volatile market environment, especially with the Iran war. Our revenue has a quite good run rate, and we foresee that definitely with more dynamic, positive dynamics towards the second half and the end second half of this year, and then of course the end of this year.

Speaker #2: Our EBITDA was not at the level expected and actually moved down to 5.3%. Our earnings per share is up to 1.47, which is quite a nice improvement, and the cash flow, for the market situation with the Iran war, is at 48 million, which is quite a good one.

Speaker #2: Our outlook is confirmed, especially on the revenue, where we see quite a dynamic in it, and on the EBITDA margin at the lower end of the range.

Thomas Schulz: Our outlook is confirmed, especially on the revenue, where we see quite a dynamic in it, and on the EBITDA margin at the lower end of the range, but of course, within the range. From 1 April on, our M&A Teknokon is included in the figures. Before we go into the market and different business analytics and so on, something which is very important for us. It is the safety of the people we work with, our own people, suppliers, customers. Again, we had an improvement versus the Q2 2025 on the Total Recordable Incident Frequency Rate and a fantastic improvement on the Lost Time Injury Frequency Rate, which is close to nil. Actually, our ambition is to be on both on nil, no accidents in work, and our organization is doing here a fantastic, good job.

Speaker #2: But of course, within the range. And from the 1st of April on, our M&A, Technocon, is included in the figures. Before we go into the market and different business analytics and so on, there's something which is very important for us.

Speaker #2: It is the safety of the people we work with—our own people, suppliers, customers. And again, we had an improvement versus Q2 '25 on the total recordable incident frequency rate.

Speaker #2: And a fantastic improvement on the lost time injury frequency rate, which is close to nil. Actually, our ambition is to be on both at nil.

Speaker #2: No accidents in work. And our organization is doing here a fantastic good job. When we then go into the different industries, and we always show the four main industries for the Bilfinger group, you see on the left side the production index, actually the figures are from Standard and Poor's, index to 2023.

Thomas Schulz: When we then go into the different industries, we always show the 4 main industries for the Bilfinger Group. You see on the left side, the production index. Actually, the figures are from Standard & Poor's index to 2023. The color code is, of course, corresponding with the more information per industry on the right side. Let's start with the chemicals and petrol chems. Actually, once by far the largest part of our top line. That changed. It is down to 21%. The 21% in the revenue share in the outlook is slightly flattish, as we call it. What does it mean?

Speaker #2: And the color code is of course corresponding with the more information per industry on the right side. Let's start with the chemicals and petrochems.

Speaker #2: Actually, once by far the largest part of our top line, that changed. It's down to 21%, and the 21% in the revenue share in the outlook is slightly flattish, as we call it.

Speaker #2: What does it mean? We have, especially in Central Europe—Germany in the lead—quite a bit of pressure in the market with cost reduction programs, where we help customers, where we work with customers quite intensively. But, of course, the size of the orders and the demand is smaller than we are used to.

Thomas Schulz: We have, especially in Central Europe, Germany in the lead, quite a pressure in the market with cost reduction programs where we help customers, where we work with customers quite intensive, but of course the size of the orders and the demand is smaller than we are used to. In other areas like in North America and especially in the Middle East, it looks completely different. We come to the energy. Energy has a very good run for the Bilfinger group, but energy as an industry, we see quite positively for the years to come. It makes now 28% of the top line and actually replaced in a large extent that what we had as additional work in the chemical and petrochemical industry. The demand is quite favorable for that what we offer.

Speaker #2: So in other areas like in North America and especially in the Middle East, it looks completely different. Then we come to the energy. Energy has a very good run for the Bilfinger group, but energy as an industry, we see quite positively for the years to come.

Speaker #2: It makes now 28% of the top line, and actually replaced in a large extent that what we had as additional work in the chemical and petrochem industry.

Speaker #2: The demand is quite favorable for what we offer. For both industries, the outsourcing potential—the potential that we as Bilfinger have to take over, especially in performance maintenance turnaround business from our clients and their organizations—is quite good.

Thomas Schulz: For both industries, the outsourcing potential, the potential what we as Bilfinger have to take over, especially asset performance, maintenance, turnaround business from our clients and their organizations is quite good. That is what we, by the way, see in all the industries. The next one is oil and gas. Stable, good development, 19% of the top line, good demand for us, good customer relation, and with some differences in the region, but especially the run for LNG and investments in the Middle East out of the situation what we have since end of February, are driving here a good demand for the future. Last but not least, our green ones, the pharma and biopharma. It is 10% of the top line. It is smaller business and a little bit more cyclical, but a quite good demand.

Speaker #2: That is what we, by the way, see in all the industries. The next one is oil and gas. Stable, good development, 19% of the top line, good demand for us, good customer relations, and with some differences in the region, but.

Speaker #2: Especially the run for LNG and investments in the Middle East out of the situation what we have since end of February, are driving here a good demand for the future.

Speaker #2: Then last but not least, our green ones, the pharma and bio pharma. It's 10% of the top line. It's smaller business, and a little bit more cyclical, but a quite good demand.

Speaker #2: Nevertheless, that this year with some European impacts, slowed the growth a little bit down, but from 26 on quite a good outlook up to 2030.

Thomas Schulz: Nevertheless, that this year with some European impact slowed the growth a little bit down, but from 2026 on quite a good outlook up to 2030. Out of this, we go into some selected orders. On the left side, you see out of the chemicals petrochem from one of our long-term, well-established customers that we have the task to install an air preheating system with the pure target to improve efficiency. This is asset performance at its best and actually proves our high quality, what we deliver to our clients. In the mid is Germany with energy sector. It is EWE Hydrogen. We are responsible for the engineering, installation, and commissioning for the integration of a new 320-megawatt production plant for hydrogen.

Speaker #2: Out of this, we go into some selected orders. On the left side, you see out of the chemicals, petrochem from one of our long-term well-established customers that we have the task to install an air preheating system with the pure target to improve efficiency.

Speaker #2: This is asset performance at its best, and actually proves our high quality what we deliver to our clients. In the mid is Germany with energy sector.

Speaker #2: It's EWE Hydrogen. We are responsible for the engineering, installation, and commissioning for the integration of a new 320-megawatt production plant for hydrogen. On the right side, with our new M&A, we actually—

Thomas Schulz: On the right side, with our new M&A, we actually were successful in Q2 to close an order with a mining company, a gold mining company, for some mechanical, electrical, and insulation work in the gold processing plant. Mining will have, for the Bilfinger group as well as data centers and other smaller industries, an important role in the future and actually a bigger and a better dynamic. Out of that into innovation. Innovation for us is important because we have a lot, and we can offer to the customers a lot. It is a big differentiator. In the peer group, it makes actually quite a lot of our good reputation. This time, we are proud to present to you the Bilfinger Automated Gas Analyzing System. When you have large gas production sites, processing plants, and so on, it can go over several square kilometer.

Speaker #2: Successful in the second quarter to close an order with a mining company. A gold mining company for some mechanical electrical and insulation work in the gold processing plant.

Speaker #2: Mining will have for the Bilfinger group, as well as data centers and other smaller industries, an important role in the future, and actually a bigger and a better dynamic.

Speaker #2: Out of that, into innovation. Innovation for us is important because we have a lot to offer, and we can offer the customers a lot. It's a big differentiator in the peer group.

Speaker #2: It makes actually quite a lot of our good reputation. This time, we are proud to present to you the Bilfinger Automated Gas Analyzing System.

Speaker #2: When you have large gas production sites, processing plants, and so on, it can cover several square kilometers. To test the product, that means the gas and what you have in the gas, you use so-called analytic gas bottles.

Thomas Schulz: To test the product, that means the gas and what you have in the gas, you use so-called analytic gas bottles. These analytic gas bottles get a content of gas, and then they normally take that together and bring it to an external laboratory to check how the content of the gas is. In other words, how good the quality is. We offer a system, a mobile system, which can 24/7 do that on the site there where you take the gas bottle, and on top of it, collecting the data digital, and on top of it, certifying the product what the customer is producing. This is a significant improvement for our clients in the gas industry. Out of that, we come to the demand. Here you have our opportunity pipeline at the top left, and it starts indexed in April 2024.

Speaker #2: These analytic gas bottles get a content of gas, and then they normally take that together and bring it to an external laboratory to check how the content of the gas is—in other words, how good the quality is.

Speaker #2: We offer a system, a mobile system, which can 24/7 do that on the site, there where you take the gas bottle, and, on top of it, collecting the data digitally, and, on top of it, certifying the product that the customer is producing.

Speaker #2: This is a significant improvement for our clients in the gas industry. Out of that, we come to the demand. And here you have our opportunity pipeline.

Speaker #2: At the top left, and it starts indexed in April 2024. When you now compare the three times quarter to 24, 25, and on the right side, in dark blue, 26, you see the difference.

Thomas Schulz: When you now compare the three times Q2 2024, 2025, and on the right side in dark blue, 2026, you see the difference. We are more or less on the same level in the opportunity pipeline. Opportunity means what do we have in front of us where we can bid on, and where we have a good chance to get the order. You see as a difference to the others that in Q2 2026, the first and the second month was fairly low, and the third month really showed an improvement. That is what we mean that Q2 showed at the end a significant improved dynamic. What you see too is that actually the order pipeline up to November, December in 2025 was slightly increasing and showing quite a good development for the business to come in 2026.

Speaker #2: We are more or less on the same level in the opportunity pipeline. Opportunity means what we have in front of us, where we can bid and where we have a good chance to get the order.

Speaker #2: And you see, as a difference to the others, that in the quarter to '26, the first and the second month were fairly low, and the third month really showed an improvement.

Speaker #2: And that is what we mean—that the second quarter showed, at the end, a significantly improved dynamic. But what you see, too, is that actually the order pipeline up to November and December in '25 was slightly increasing and showing quite a good development for the business to come in '26.

Speaker #2: Then we had the winter downturn—a little bit longer and stronger winter than we actually calculated—which is only a few months or, at maximum, a quarter to one and a half quarters' deferral time impact.

Thomas Schulz: Then we had the winter downturn, a little bit longer and stronger winter than we actually calculated, which is only a few months or maximum a quarter, one and a half quarter deferral time impact. The Iran war at the end of February actually brought hesitation, prolongation, deferral, postponing of necessary work as projects, maintenance turnaround in the industry, in Europe, and of course, in the Middle East. There is nothing which is canceled. It is a time effect. What you always have, an unexpected bigger crisis. People are getting more hesitant. Our customers are getting more hesitant. They need more approval from supervisory boards. They crunch their budget multiple times instead of giving directly the order. So what we foresee is that the second half of the year creates a significantly better dynamic and business environment for that what we have to offer.

Speaker #2: But the Iran war at the end of the February actually brought hesitation, prolongation, deferral, postponing of necessary work as projects, maintenance turnaround in the industry in Europe, and of course in the Middle East.

Speaker #2: There is nothing which is canceled. It is a timing effect. You always have an unexpected bigger crisis. People are getting more hesitant. Our customers are getting more hesitant.

Speaker #2: They need more approval from supervisory boards. They crunch their budget multiple times instead of giving directly the order. So what we foresee is that the second half of the year creates a significant better dynamic and business environment for that what we have to offer.

Speaker #2: If we then look into the order intake, this 1.5 billion for the second quarter 2026, the third best with and without technocon, by the way, in more.

Thomas Schulz: If we then look into the order intake, this EUR 1.5 billion for Q2 2026, the third best with and without Teknokon, by the way, in more to that what we saw in Q2 2025. With that, I would like to give to Matti, our CFO.

Speaker #2: To that, what we saw in Q2 2025. And with that, I would like to hand over to Matti, our CFO.

Speaker #3: Yes. Thomas, thank you. Good afternoon, ladies and gentlemen. I will run you through the group numbers and then the segment numbers to provide some more color on the reports that we have issued early today.

Matti Jäkel: Yes. Thomas, thank you. Good afternoon, ladies and gentlemen. I will run you through the group numbers and then the segment numbers to provide some more color on the reports that we have issued early today. Revenue is up 7% to EUR 1.45 billion for this quarter. The book-to-bill at 1.03 is better than what we have seen in the last three quarters, where we were below 1.0. With a very huge order intake in Q2 2025, we were at 1.31. I come to the effect for Q2 last year again when we go through the segments. Gross profit is down by 80 basis points. Thomas talked about the temporary effects that the Iran war has on almost all of our industries, and the delays that the uncertainty has caused, and that's delays not only in CapEx, but it is delays in OpEx spending.

Speaker #3: Revenue is up 7% to 1.45 billion euros for this quarter. The book to bill at 1.03 is better than what we have seen in the last three quarters where we were below 1.0, and obviously with a very huge order intake in quarter to 2025, we were at 1.31.

Speaker #3: But I come to the effects for Q2 last year again when we go through the segments. Gross profit is down by 80 basis points.

Speaker #3: Thomas talked about the temporary effects that the Iran war has on almost all of our industries. And the delays that the uncertainty has caused, and that's delays not only in CapEx but it is delays in tax spending.

Speaker #3: So. And that translates into some sort of underutilization within our operations. And that's the main reason why gross profit margin slightly slipped 10.7%. Conversely, on the SG&A expenses, they were up 2 million.

Matti Jäkel: That translates into some sort of underutilization within our operations, and that's the main reason why gross profit margin slightly slipped to 10.7%. Conversely, on the SG&A expenses, they were up EUR 2 million. That's related to the Teknokon acquisition. As a ratio, we improved from 6.3% to 6.1%. Continued integration of the acquisitions that we had, continued efficiency or effects from the efficiency program, which gave us that improvement. Overall, profit margin slightly down from 5.5% to 5.3%. Obviously, looking at our guidance, that's below what we had expected, but the reasons, I think, are fairly clear and should disappear in H2 2026. Let's take a look at the segments individually. Orders received in Western Europe, EUR 482 million. Last year, we won a big contract in the United Kingdom for a chemicals customer.

Speaker #3: That's related to the Technocon acquisition. But as a ratio, we improved from 6.3% to 6.1%. Continued integration of the acquisitions that we had, continued efficiency, or effects from the efficiency program, gave us that improvement.

Speaker #3: Overall, profit margin slightly down from 5.5 to 5.3%. Obviously, looking at our guidance, that's below what we had expected. But the reasons I think are fairly clear, and should disappear in the second half of 2026.

Speaker #3: Let's take a look at the segments individually. Orders received in Western Europe: €482 million. Last year, we won a big contract in the United Kingdom for a chemicals customer.

Speaker #3: That's an effect that we did not repeat this quarter, but if you look at it sequentially, quite an uptick over the last few quarters in orders received.

Matti Jäkel: That's an effect that we did not repeat this quarter, but if you look at it sequentially, quite an uptick over the last few quarters in orders received, underpinning the increased dynamic in the market. Revenue flat at 1% up to EUR 477 million. Book-to-bill at 1.01, and the profitability up 50 basis points in Western Europe. Here we see, as I said before, further efficiency improvements from the integrations of the acquired businesses. Over to Central Europe, which includes the DACH region, so the German-speaking countries, as well as the Nordic countries. Here, orders received minus 10% to EUR 646 million. Again, last year, we won a fairly large contract also for a hydrogen production facility, but much larger than the one that we showed earlier for EWE, so that makes up the difference, and the change in the numbers.

Speaker #3: Underpinning the increased dynamic in the market. Revenue flat at 1% up to 477 million euros. Book to bill at 1.01. And the profitability up 50 basis points in Western Europe.

Speaker #3: Here, we see, as I said before, further integration of the acquired businesses. Over to Central Europe, which includes the DACH region—the German-speaking countries—as well as the Nordic countries.

Speaker #3: Here, orders received are minus 10%, to 646. Again, last year we won a fairly large contract, also for a hydrogen production facility, but much larger than the one that we showed earlier for EWE.

Speaker #3: So that makes up the difference. And the change in the numbers. Revenue up 9% to 664 million euros. Quite nicely given the circumstances and the environment.

Matti Jäkel: Revenue up 9% to EUR 664 million, quite nicely given the circumstances and the environment. Book-to-bill close to 1.0, showing a better dynamic than in the past quarters. The profitability down 90 basis points, 5.2% to 4.3%. Here, particularly in the German-speaking countries, we saw quite some delays and quite some hesitancy in spending CapEx, but more so in OpEx, causing temporary underutilization throughout the operations across that geography. Lastly, and organically what we have here included is the addition of the goldmine contract in Turkey that was also presented a few minutes ago. Revenue, nice growth at 10% to EUR 302 million, and the book-to-bill 1.15, also quite favorable, enjoying good dynamics in that market. Profitability, an uptick of one-tenth of a percentage point, 3.8% to 3.9%, EUR 12 million.

Speaker #3: Book-to-bill close to 1.0, showing a better dynamic than in the past quarters. And the profitability down 90 basis points, from 5.2% to 4.3%.

Speaker #3: Here, particularly in the German-speaking countries, we saw quite some delays and quite some hesitancy in spending CapEx, but more so in OpEx, causing temporary underutilization throughout the operations.

Speaker #3: Across that geography. And lastly, in terms of organic growth, what we have included here is the addition of the gold mine contract in Turkey, which was also presented a few minutes ago.

Speaker #3: Revenue showed nice growth of 10% to €302 million. The book-to-bill ratio of 1.15 is also quite favorable and shows good dynamics in that market. Profitability saw an uptick of one-tenth of a percentage point, from 3.8% to 3.9%, corresponding to €12 million.

Speaker #3: So, despite all the issues that we have in the Middle East, we saw a stable development in the profit margin for our segment International.

Matti Jäkel: Despite all the issues that we have in the Middle East, we saw a stable development in the profit margin for our segment international. How does that translate into earnings per for the year or for the quarter? Sorry. EUR 54 million in Q2, compared to EUR 48 million last year, 2025 in the quarter. Earnings per share are up at 15% to EUR 1.47. That has been helped by a lower tax rate in Q2. For you who have been with Bilfinger for a longer period, see that the tax rates may fluctuate from quarter to quarter, depending on where we record income tax or taxable income throughout the various tax regimes in the countries. That may fluctuate from quarter to quarter, as you can see here. But EUR 54 million, nice profit for the quarter. Cash flow at EUR 48 million over EUR 53 million last quarter.

Speaker #3: How does that translate into earnings per for the year, or for the quarter—sorry? €54 million in the second quarter, compared to €48 million last year, 2025 in the quarter.

Speaker #3: So earnings per share are up at 15% to 1 euro 47. That has been helped by a lower tax rate in the second quarter.

Speaker #3: For you who have been with Bilfinger for a longer period, see that the tax rates may fluctuate from quarter to quarter depending on where we record income tax or taxable income throughout the various tax regimes in the countries.

Speaker #3: So that may fluctuate from quarter to quarter as you can see here. But 54 million, nice profit for the quarter. Cash flow. At 48 million over 53 million last quarter.

Speaker #3: So a good performance. But also lower because we didn't receive as many large contracts. So lower advance payments and we have timing effects when it comes to billing.

Matti Jäkel: A good performance, but also lower because we did not receive as many large contracts, so lower advanced payments. We have timing effects when it comes to billing, when our customers are hesitant, not only with awarding contracts, then they also slow down on approving our invoices. Again, it is a timing effect that will disappear in H2 2026. Finally, a quick look at sort of cash, net liquidity, and leverage. You see a drop in cash in hand, and you see a drop in financial debt. We repaid large parts of our Schuldscheindarlehen. I was told by our lawyers that is a huge difference. That is why we said a German law-governed promissory note loan so that everybody knows that this is different to what you understand in the US or UK by a promissory note loan. Anyways, it is debt.

Speaker #3: When our customers are hesitant, not only with awarding contracts, then they're also slowed down on approving our invoices. Again, it's a timing effect that will disappear in the second half of 2026.

Speaker #3: Finally, a quick look at sort of cash. Net liquidity and leverage. You see a drop in cash in hand and you see a drop in financial debt.

Speaker #3: We repaid large parts of our promissory note loan in German Schuldschein, Darlehen. I was told by our lawyers that's a huge difference. But then that's why we set a German law-governed promissory note loan.

Speaker #3: So that everybody knows that this is different to what you understand in the US or UK by a promissory note loan. Anyways, it's debt.

Speaker #3: We paid back the debt, so that reduced net cash and that reduced the cash, and it reduced the liabilities, financial debt. We reissued the same instrument and we collected €300 million in early July.

Matti Jäkel: We paid back the debt, so that reduced net cash or that reduced the cash, and it reduced the liabilities, financial debt. We reissued the same instrument, and we collected EUR 300 million in early July. You will see the reversal of all of this when we get together back in Q3, EUR 300 million increase in cash in hand and EUR 300 million increase in financial debt. Net liquidity typically is low in Q2 when we pay out the dividend, which we did, and we also paid the purchase price for the Teknokon Group straight after the closing on 1 April. That pushed up our leverage a little bit, but compared to last year, 0.6, now 0.7, so not a big movement there. That, I hand back to my colleague.

Speaker #3: So, you will see the reversal of all of this when we get together back in the third quarter. €300 million increase in cash in hand and €300 million increase in financial debt.

Speaker #3: Net liquidity typically is low in the second quarter, when we pay out the dividend, which we did. We also paid the purchase price for the Technical Group straight after the closing on April 1st.

Speaker #3: And that pushed up our leverage a little bit. But compared to last year—0.6, now 0.7—so not a big movement there. And with that, I hand back to my colleague.

Speaker #1: Thank you, Matti. So now to the group outlook for 2026. The outlook is confirmed. The EBITDA margin is expected at the lower end of the range, and the Technocon acquisition is included.

Thomas Schulz: Thank you, Matti. Now to the group outlook for 2026. The outlook is confirmed. The EBITDA margin is expected at the lower end of range, and Teknokon acquisition is included. When we look into the revenue, we have a 5% improvement versus H1 2025. Of course, the guidance, what we gave for 5.4 to 5.9, we are on a good run with the revenue. We, of course, target that what we said before. When we look into the EBITDA, it is the same level. It is 5% EBITDA, as we said and explained in the presentation, we expected more.

Speaker #1: When we look into the revenue, we have a 5% improvement versus the first half of the year 2025. And of course, the guidance what we gave with 5.4 to 5.9, we are on a good run with the revenue.

Speaker #1: We, of course, target what we said before. When we look into the EBITDA, it's at the same level. It's 5% EBITDA as said and explained in the presentation. We expected more.

Speaker #1: But the second half of the year, regarding that what we see in the market dynamics with all the things what we have on hand, it looks good that we are then in the guidance, not outside the guidance, in the guidance, in the EBITDA one.

Thomas Schulz: But the second half of the year, regarding that, what we see in the market dynamics with all the things what we have on hand, it looks good that we are then in the guidance, not outside the guidance, in the guidance, in the EBITDA one, at the lower end of the range. The free cash flow with EUR 69 million looks quite lower than last year, but of course, there is no repeat of a special case what we had out of the normal payment and cash inflow in Q1 2025. But with the run rates, what you already saw in H2 2025, with all the growth and all the activities, what we do gives clear indication that we are well in the range of EUR 250 million to EUR 300 million. To finalize, a short feedback or short summary of that, what we had in Q2.

Speaker #1: At the lower end of the range. The free cash flow with 69 looks quite lower than last year. But of course, there is no repeat of a special case what we had out of the normal.

Speaker #1: Payment and cash inflow in the quarter one 2025. But with the run rates what you already saw in the second half of 25 with all the growth and all the activities what we do gives clear indication that we are well in the range of 250 to 300.

Speaker #1: To finalize, a short feedback or short summary of that what we had in the quarter two. Orders were the third largest in the quarter since more than 10 years.

Speaker #1: Revenue with 7% up. EBITDA margin a little bit lower than expected. Earnings per share up. Cash flow in the market conditions quite on a good level.

Thomas Schulz: Orders were the third largest in the quarter since more than 10 years. Revenue with 7% up. EBITDA margin, a little bit lower than expected. Earnings per share up. Cash flow in the market conditions, quite on a good level. And the outlook, of course, confirmed. So with that, Martina, I think we can go to Q&A.

Speaker #1: And the outlook, of course, is confirmed. So with that, Martina, I think we can go to Q&A.

Speaker #2: Thank you very much, Thomas. Ladies and gentlemen, we will now start the Q&A session. As previously mentioned, you can ask your questions via phone by pressing star and one, or via the chat in the webcast.

Martina Kalkhake: Thank you very much, Thomas. Ladies and gentlemen, we will now start the Q&A session. As previously said, you can ask your questions via phone by pressing star and one, or via the chat in the webcast. I am seeing that we have first questions lining up. So the first question comes from Craig, from Kepler Cheuvreux. Craig, your line should be open. Please go ahead.

Martina Kalkhake: Thank you very much, Thomas. Ladies and gentlemen, we will now start the Q&A session. As previously said, you can ask your questions via phone by pressing star and one, or via the chat in the webcast. I am seeing that we have first questions lining up. So the first question comes from Craig Abbott, from Kepler Cheuvreux. Craig, your line should be open. Please go ahead.

Speaker #2: And I'm seeing that we have the first questions lining up. So, the first question comes from Craig Evans from Kepler Cheuvreux. Craig, your line should be open.

Speaker #2: Please go ahead.

Speaker #4: Yeah, good afternoon. Can you hear me okay?

Speaker #2: Yes.

Speaker #3: Yes.

Speaker #4: Okay, excellent. Thank you. Yeah, good afternoon, gentlemen. I have a couple of questions from my side, please. First of all, it's very reassuring to hear that you saw orders start to pick up at the end of the quarter.

Craig Abbott: Yeah, good afternoon. Can you hear me okay?

Martina Kalkhake: Yes.

Thomas Schulz: Yes.

Craig Abbott: Okay, excellent. Thank you. Good afternoon, gentlemen. A couple questions from my side, please. First of all, it is very reassuring that you saw orders start to pick up at the end of the quarter. You showed us the opportunity pipeline really picking up in June. I am just curious if you could provide some color on what has changed that has made your customers now, also here in Central Europe, to be more willing now to move forward with both their OpEx and CapEx investment plans. Is it just simply optimism that the Middle East conflict will soon be resolved? That is the first question. The second question is, I look at your guidance, and the implied EBITDA margin for the H2, it is pretty high, 6.7% versus 6% in H2 last year.

Andreas Wolf: Okay, excellent. Thank you. Good afternoon, gentlemen. A couple questions from my side, please. First of all, it is very reassuring that you saw orders start to pick up at the end of the quarter. You showed us the opportunity pipeline really picking up in June. I am just curious if you could provide some color on what has changed that has made your customers now, also here in Central Europe, to be more willing now to move forward with both their OpEx and CapEx investment plans. Is it just simply optimism that the Middle East conflict will soon be resolved? That is the first question. The second question is, I look at your guidance, and the implied EBITDA margin for the H2, it is pretty high, 6.7% versus 6% in H2 last year.

Speaker #4: You showed us the opportunity pipeline really picking up in June. But I'm just curious if you could provide some color what has changed that has made your customers now also here in central Europe to be more willing now to move forward with both their opex and capex investment plans.

Speaker #4: Is it simply optimism that the Middle East conflict will soon be resolved? That is the first question. The second question is: if we look at your guidance and the implied EBITDA margin for the second half, it's quite high—6.7% versus 6% in H2 last year.

Speaker #4: And I'm just curious what gives you the confidence in the current environment, given where you're coming from after your H1 to be able to achieve this.

Craig Abbott: I am just curious what gives you the confidence in the current environment, given where you are coming from up your H1, to be able to achieve this? Thank you.

Speaker #4: Thank you.

Speaker #1: Yeah, Greg, I'll take the first part of the question. We see actually in global business always the same situation. If an unexpected crisis of a larger extent—in that case, the Iran war—is happening out of nothing, then you get a kind of a shock. Customers are stopping a lot of things.

Thomas Schulz: Yeah, Craig, I will take the first part of the question. We see actually in global business, always the same situation. If an unexpected crisis of a larger extent, in that case, the Iran war, is happening out of the nothing, then you get a kind of a shock. Customers are stopping a lot of things. They actually ask their supervisor about two, three times. They push back on acting. In that case, in the Middle East, for the Middle East, of course, a lot of people were at home and not going back to the offices. In especially Western Europe, the roller coaster with the energy costs significantly up, then down, then subsidized, then all the very difficult to read outlook for the energy costs to go, customers were going on a break. That last, as in all crises, a few weeks.

Speaker #1: They actually ask their supervisor report two, three times. They push back on acting and in that case in the Middle East. For the Middle East, of course, a lot of people were at home and not going back to the offices.

Speaker #1: In especially Western Europe, the roller coaster with the energy cost significantly up, then down, then subsidized, then all the very difficult to. Outlook for the energy costs to go.

Speaker #1: Customers were going on a break. And that last as an oil crisis is a few weeks and we saw then in and we got and I was you know that I'm going out quite often to clients then in June we saw actually that the society in the industries got used to that roller coaster, used to we have a deal, we have not a deal, we have a deal.

Thomas Schulz: We saw then, and we got, and I was, you know that I am going out quite often to clients. Then in June, we saw actually that the society in the industries got used to that roller coaster, used to, we have a deal, we have not a deal, we have a deal. Then, of course, looking into and knowing if they postpone maintenance, if they postpone turnarounds, if they postpone their project, everything gets postponed. Efficiency improvement, too. To finalize the projects. So out of that, there was then more push, more dynamic in the market to go on with things and to inform us in discussion with us when things will happen so that we can organize it.

Speaker #1: And then, of course, looking into and knowing if they postpone maintenance, if they postpone turnarounds, if they postpone their projects—everything gets postponed, efficiency improvement too.

Speaker #1: And to finalize the projects. So out of that, there was then more push, more dynamic in the market to go on with things. And to inform us in discussion with us when things will happen so that we can organize it.

Speaker #1: And that explains in a second the under-absorption, because the people we have are under-absorbed, not utilized enough. To make it like this, we need more than double in the months to come.

Thomas Schulz: And that explains in a second, the under-absorption, because the people we have under-absorbed, not utilized enough to make it like this, we need more than double in the months to come to organize that what the customers have a demand for it. Then you are, of course, from a profit point of view, in a different spot. But for that, I give to Matti.

Speaker #1: To organize that what the customers have a demand for it. And then you are of course from a profit point of view in a different spot.

Speaker #1: But for that, I give to Matti.

Speaker #3: Yes, Craig. If we look at how we set out the year for 2026, and if we look at the midpoint of our guidance, the profitability that we had intended was 6%.

Matti Jäkel: Yes, Craig. If we look at how we set out the year for 2026, and if we look at the midpoint of our guidance, the profitability that we had intended was 6%, and that is what we said all along. If you compare this to last year, that's a 50 basis point uptick. If I look at last year's H2, we delivered 6.0%. So that 50% basis point, that was already in the making and in the plan. Now, because of some of the delays and a bit of an underachievement in the H1, we need to step up to the plate a little bit stronger and harder. And we rely on what has not happened in the H1 is going to happen in the H2. And when we go into overabsorption, then everything we make there drops straight to the bottom line.

Speaker #3: And that is what we said all along. If you compare this to last year, that's a 50 basis point uptick. If I look at last year's second half, we delivered 6.0%.

Speaker #3: So that 50% basis point, that was already in the making. And in the plan. So now because of some of the delays and a bit.

Speaker #3: Under achievement in the first half, we need to step up to the plate a little bit, stronger and harder and we rely on what has not happened in the first half is going to happen in the second half.

Speaker #3: And when we go into over-absorption, then everything we make there drops straight to the bottom line. You can see on our SG&A we're better off than last year.

Speaker #3: And that will continue. So, given that mix, that gives us the confidence to deliver to the lower end of the range at 5.8%, with, obviously, an implied margin for the second half of 2026.

Matti Jäkel: You could see on our SG&A, we're better off than last year, and that will continue. So given that mix, that gives us the confidence to deliver to the lower end of the range at 5.8%, with obviously an implied margin for the H2 of 2026.

Speaker #4: Okay, thank you. I just have one quick technical question and I'll get back in the queue. If we look at the consolidation and other operations line, there were some large moves in that second quarter in both directions, with both basically reporting zero contribution.

Craig Abbott: Okay, thank you. I just have one quick technical question, then I'll get back in the queue. If we look at the consolidation in another operations line, there were some large moves in that Q2 in both directions, with both basically reporting zero contributions. And I just wonder, because it's a pretty meaningful amount, particularly on a quarterly basis, just wonder, were there any special factors here in how we should think about these two lines developing in H2? Thank you.

Speaker #4: And I just wonder because it's a pretty meaningful amount, particularly on a quarterly basis, I just wonder whether any special factors here and how we should think about these two lines developing in H2.

Speaker #4: Thank you.

Speaker #3: Those lines do fluctuate a little bit, and we had a few movements here in sort of opposite directions last year and this year.

Matti Jäkel: Well, those lines, they do fluctuate a little bit. We had a few movement here in sort of opposite directions last year and this year, nothing to be concerned about. Maybe one thing that I should add here is other operations. Our business in South Africa really benefited from a very high demand in 2025, Q1, Q2. That didn't repeat itself for various reasons. I'm not going to go into the detail. That's normal fluctuations, and we find ways to compensate for that.

Speaker #3: Nothing to be concerned about. Maybe one thing that I should add here is other operations. Our business in South Africa really benefited from a very high demand in 2025.

Speaker #3: First quarter, second quarter. That didn't repeat itself for various reasons. I'm not going to go into the detail. But that's normal fluctuations and we find ways to compensate for that.

Speaker #4: To expect a more normal progression in H2.

Speaker #3: Yes.

Speaker #4: Okay. Thank you.

Craig Abbott: Mm. We expect a more normal progression in H2?

Speaker #2: Thank you very much, Greg. We can continue with the question queue on the call. So the next question comes from Paul Skueta from Bernstein.

Craig Abbott: We expect a more normal progression in H2?

Matti Jäkel: Yes.

Craig Abbott: Okay. Thank you.

Martina Kalkhake: Thank you very much, Greg. We can continue with the question queue on the call. The next question comes from Paul Goetha from Bernstein. Paul, your line should be open. Please go ahead. It seems for me that Paul probably dropped out of the telephone call, so let's continue with the next person on the queue. That would be Michael Kuhn from Deutsche Bank. Michael, your line should be open.

Martina Kalkhake: Thank you very much, Craig. We can continue with the question queue on the call. The next question comes from Paul Goetha from Bernstein. Paul, your line should be open. Please go ahead. It seems for me that Paul probably dropped out of the telephone call, so let's continue with the next person on the queue. That would be Michael Kuhn from Deutsche Bank. Michael, your line should be open.

Speaker #2: Paul, your line should be open. Please go ahead. It seems to me that Paul has probably dropped out of the telephone call, so let's continue with the next person in the queue. That would be Michael Kuhn from Deutsche Bank.

Speaker #2: Michael, your line should be open.

Speaker #5: Good afternoon. Thanks for taking my questions. This is kind of a follow-up. Regarding the postponed work in the first half—and I think we discussed this in the last call already—can you say by how much your clients can usually push out?

Michael Kuhn: Good afternoon. Thanks for taking my questions. It is a kind of follow-up. So on, let us say, the postponed work in the H1, I think we discussed it in the last call already. Let us say, by how much can your clients usually push out those decisions? When are they actually forced to come back? If you look at the opportunity pipeline that obviously improved towards the end of the quarter. Let us say, can you give an indication on how much was just about delays and how much is generally new projects that come into the market?

Speaker #5: Those decisions. So when are they actually like forced to come back? And if you look at the opportunity part, that obviously improved towards the end of the quarter, let's say, can you give an indication on how much was just about delays and how much is like generally new projects that come into the market?

Speaker #1: That's a very good question. Hi Michael. At first, a lot of the business that we do is actually creating additional business, and that comes on top of it.

Thomas Schulz: Very good question. Hi, Michael. At first, a lot of the business what we do is actually creating additional business, and that comes on top of it. In crisis situation, business what we do does not get a lot of additional, if at all, additional business. In crisis, the orders what we get and the work what we do normally is very much regulated to a smaller amount. So these kind of additional work, especially in the maintenance part, asset performance part, that is what has to come in the H2 because it is very much impacting the efficiency. Then we have larger orders, new orders, projects.

Speaker #1: In a crisis situation, the business we do doesn't get a lot of additional—if at all—additional business. In a crisis, the orders we get and the work we do normally is very much regulated to a smaller amount.

Speaker #1: So these kind of additional work, especially in the maintenance part, asset performance part, that is what has to come in the second half of the year.

Speaker #1: Because it is very much impacting the efficiency. Then we have larger orders, new orders, projects. And the projects, you can move but you can't move it for half a year or two years or so because you have work permits.

Thomas Schulz: The projects you can move, but you cannot move it for a H1 or 2 years or so because you have work permits and you have certifications and permits to do additional work on a respected, let us say, area or land or location. If you do not fulfill time milestones towards the authorities, your permit is gone. So one of the things where we always work with clients, actually in the pre-feasibility and the feasibility and actually in the pre-engineering phase, is the time schedule so that we really hit the milestones. Otherwise, our clients get the permitting problem with the authorities. That describes a little bit that we actually foresee quite a revenue improvement in the H2. We are in close contact with our clients to organize it. So from that point of view, our visibility on that is actually quite good.

Speaker #1: And you have certifications and permits to do additional work on a respected let's say area or land or location. And if you don't fulfill time milestones towards the authorities, your permit is gone.

Speaker #1: So one of the things where we always work with clients in the actually in the pre-visibility, in the visibility and actually in the pre-engineering phase is the time schedule.

Speaker #1: So that we really hit the milestones. Otherwise, our clients get the permitting problem with the authorities. That describes a little bit that we actually foresee quite a revenue improvement in the second half of the year.

Speaker #1: We are in close contact with our clients to organize it, so from that point of view, our visibility on that is actually quite good.

Speaker #3: Maybe let me add, Michael. We distinguish between discretionary spend and non-discretionary spend. And on OPEX, you can delay to a certain extent doing maintenance work or fixing one thing or the other.

Matti Jäkel: Maybe let me add, Michael. We distinguish between discretionary spend and non-discretionary spend. On OpEx, you can delay to a certain extent doing maintenance work or fixing one thing or the other, but that really has limits, time limits. We are not talking quarters or even years, we are talking months. So what we have seen in the Q1, Q2, some of the work has already come back, and there is more to come in the H2.

Speaker #3: But that really has limits, time limits. And we're not talking quarters or even years. We're talking months. And so what we've seen in the first quarter, second quarter, some of the work has already come back.

Speaker #3: And there's more to come in the second half.

Speaker #5: Understood, thank you. And then, maybe a smaller thing: I think in Central Europe, on one of the slides you mentioned some softness in pharma. I think, for a couple of years, you benefited quite a bit from onshoring efforts.

Michael Kuhn: Understood. Thank you. Maybe a smaller thing. I think in Central Europe, on one of the slides, you mentioned some softness in pharma. Is that wave already over, or is that also rather a temporary thing in your view?

Speaker #5: Is that wave already over or is that also rather a temporary thing in your view?

Speaker #1: Yeah, we can be very specific with that. The figures are of course standard and poor figures. And they are two big markets. In Europe, where we are actually more or less not really in.

Thomas Schulz: Yeah, we can be very specific with that. The figures are, of course, Standard & Poor's figures, and there are two big markets in Europe where we are actually more or less not really in, and they had a setback based on taxation and other things. It is not Germany, it is not Austria, it is not Denmark, and so on. That has an impact on the overall. It is history, so it is passed, it is over, and we did not see it in our figures. From a pure reporting point of view, it of course, is in the data of Standard & Poor's.

Speaker #1: And they had a setback based on taxation and other things. It's not Germany, it's not Austria, it's not Denmark, and so on. And that has an impact on the overall.

Speaker #1: And it is history, so it's past, it's over. And we didn't see it in our figures. But from a pure reporting point of view, it, of course, is in the data of Standard & Poor's.

Speaker #5: Okay, that's reassuring. Thank you.

Speaker #1: Thank you, Michael.

Speaker #2: Thank you very much, Michael. So the next question comes from Olivier Calvet from UBS. Olivier, please go ahead.

Michael Kuhn: Okay. That is reassuring. Thank you.

Thomas Schulz: Thank you, Michael.

Martina Kalkhake: Thank you very much, Michael. The next question comes from Olivier Calvet from UBS. Olivier, please go ahead.

Speaker #6: Hi. Thanks for taking my questions. Maybe the first one just on your thoughts on organic growth going forward. If we see order intake remaining under pressure over the next few months, and just to confirm that your forecast, your forecasted guidance assumes an improvement in orders in the second half and perhaps if you could comment how much of your backlog you expect to convert into revenue this year.

Olivier Calvet: Hi. Thanks for taking my questions. Maybe the first one just on your thoughts on organic growth going forward. If we see order intake remaining under pressure over the next few months. Just to confirm that your forecasted guidance assumes an improvement in orders in the H2. Perhaps if you could comment how much of your backlog you expect to convert into revenue this year? That would be question one. Then just secondly, on the Teknokon acquisition, I think good to see an order here from that gold mine here. You've had control for a quarter now, but just curious if you are seeing increased discussions as a result of your expanded footprint in the region, if you're seeing new customers or if that's mostly with existing ones.

Speaker #6: That would be a question one. And then just secondly on the technical acquisition, I think good to see an order here from that gold mine here.

Speaker #6: You've had control for a quarter, now that I'm just curious if you are seeing increased discussions as a result of your expanded footprint in the region.

Speaker #6: If you're seeing new customers or is that mostly with existing ones? And I just wanted to check if the organic order growth in international, that was with that gold mine or not.

Olivier Calvet: I just wanted to check if the organic order growth in international, that was with that gold mine or not. Just out of curiosity. Thank you.

Speaker #6: Just out of curiosity, thank you.

Speaker #1: The I come with the second part at first, yes. It is in the gold mine order. And the as we said for the technical, for the Turkish acquisition, we are not only having in the target Turkey, we actually have countries around Azerbaijan, Kazakhstan, Uzbekistan, and so on in the focus too.

Thomas Schulz: Yeah, I come with the second part at first. Yes, it is in the gold mine order and the asset for the Teknokon, for the Turkish acquisition, we are not only having in the target Turkey, we actually have countries around Azerbaijan, Kazakhstan, Uzbekistan, and so on in the focus too. But you need a base because we need people on customer sites. When you look into these countries, Turkey included, one part of the process industry, which is our main industry, is the mining industry in these areas. Their high-quality work, digitalized, is very much appreciated. We have a quite motivating model for customers in that area by, with our training and education program, to take local colleagues in and educating them on the Bilfinger standard.

Speaker #1: But you need a base because we need people on customer sides. When you look into these countries, Turkey included, one part of the process industry, which is our main industry, is the mining industry in these areas.

Speaker #1: And there high-quality work, digitalized, is very much appreciated. And we have a quite motivating model for customers in that area by with our training and education program to take local colleagues in and educating them on the building a standard.

Speaker #1: So that makes us in the market expansion, which is one of our two main dimensions in the strategy execution. Very attractive. So then if it comes to the order intake, the order intake, what we see in the second half of the year, as we always say, order intake fluctuates for us.

Thomas Schulz: So that makes us in the market expansion, which is one of our two main dimensions in the strategy execution, very attractive. If it comes to the order intake, the order intake, what we see in the H2 of the year, as we always say, order intake fluctuates for us, goes up and down. But of course, we expect that the full year for 2026 is a quite positive development on the order intake despite the Iran war.

Speaker #1: It goes up and down, but of course, we expect that the full year for 2026 will show quite positive development on the order intake, despite the Iran war.

Speaker #3: Yes, Olivier. And your question on backlog conversion into revenue. What we measure month to month to month is what we call the coverage—that is, how much have we already realized in revenue and how much of the revenue that we forecast is already in the backlog.

Matti Jäkel: Yes, Olivier, and your question on backlog conversion into revenue. What we measure month to month to month is what we call the coverage. That is how much have we already realized in revenue and how much of the revenue that we forecast is already in the backlog. That percentage tells us quite clearly where we are going in terms of revenue in relation to our guidance and our budgets. That ratio is 90% at the end of Q2. It was 88% last year. To be very specific, it is not a number that we do publish all the time, but I think under the circumstances, it is the right thing to be very transparent here. What we have on hand and what we have placed is in line with previous years where we always hit our revenue guidance in the midpoint.

Speaker #3: And that percentage tells us quite clearly where we are going in terms of revenue in relation to our guidance and our budgets. And that ratio is 90% at the end of the second quarter.

Speaker #3: And it was 88% last year. So, to be very specific, it's not a number that we publish all the time, but I think under the circumstances, it's the right thing to be very transparent here.

Speaker #3: So, what we have on hand and what we have placed is in line with previous years, where we always hit our revenue guidance at the midpoint.

Speaker #3: So that gives us confidence and that we're on a good track for 2026 when it comes to revenue.

Matti Jäkel: That gives us confidence, and I hope it does give you confidence that we are on a good track for 2026 when it comes to revenue.

Speaker #6: Okay, so in other words, you're confident on your visibility in the second half and you're not relying on incremental orders in the second half to hit the midpoint of your guidance.

Olivier Calvet: Okay. In other words, you are confident on your visibility in the H2, and you are not relying on incremental orders in the H2 to hit the midpoint of your guidance?

Speaker #3: Well, we have order intake months after months on our framework contracts and with others. But we already have 90% in the books already, which is a fairly high number compared to prior years.

Matti Jäkel: Well, we have order intake month-after-month on our framework contracts and with others. But we already have 90% in the books already, which is a fairly high number compared to prior years. So confidence is there.

Speaker #3: So confidence is there.

Speaker #6: Yeah. Thanks.

Speaker #2: Thank you, Olivier. We have a further question on the phone lines. The question is from Andreas Wolf from Bernberg. Andreas, please go ahead.

Olivier Calvet: Yeah. Thanks.

Martina Kalkhake: Thank you, Olivier. We have a further question on the phone lines. The question is from Andreas Wolf from Berenberg. Andreas, please go ahead.

Speaker #5: Yeah, hi everyone. Thank you for taking my question. Could you talk about utilization H2 last year and the utilization you need to achieve the year-on-year margin uplift in H2 this year?

Andreas Wolf: Yeah. Hi, everyone. Thank you for taking my question. Could you talk about utilization in H2 last year and the utilization you need to achieve the year-on-year margin uplift in H2 this year? So do we have to go above a standard 100% utilization? And if yes, how are you going to handle that? Thank you.

Speaker #5: So, do you have to go above a standard 100% utilization? And the VS, how are you?

Speaker #1: Yeah. It is in the business, the so-called average or regular utilization, neutral utilization, as we normally calculate when we do forecasts and so on.

Thomas Schulz: Yeah. It is in the business, the so-called average or regular utilization, neutral utilization, as we normally calculate when we do forecasts and so on. Then you have the term of the under-absorption. That means you drop 1%, 2%, 3% below that. You have more people available than you have work, which then of course, creates your pressure on the gross margin in our business model, mainly. We have times of over-absorption, which means, as Matti rightly said, whatever we do in the gross margin drops directly through and is a profit creation. In situations as we are in the H2 of this year, we see that coming, that we have over-absorption. Over-absorption doesn't mean that we need now armies of people more to do the work. It is actually less vacation time.

Speaker #1: Then you have the term of the under absorption. That means you drop one, two, three percent below that, you have more people available than you have work, which then of course creates your pressure on the gross margin in our business model, mainly.

Speaker #1: But we have times from over of over absorption, which means as Matti rightly said, whatever we do in the gross margin drops directly through.

Speaker #1: And is a profit creation. And in situations as we are, in the second half of this year, we see that coming, that we have over absorption.

Speaker #1: Over absorption doesn't mean that we need now armies of people more to do the work. It is actually less vacation time what we took quite a big part already in the first half of the year.

Speaker #1: It is adding here and there some lower quality work with external partners and so on. And with that, you run an over absorption, which is definitely more profitable than the regular absorption.

Thomas Schulz: What we took quite a big part already in the H1 of the year. It is adding here and there some lower quality work with external partners and so on. With that, you run an over-absorption, which is definitely more profitable than the regular absorption. That is how we run that margin uplift. We look, of course, into that what we have in the revenue, which kind of work we have in the revenue, what is our product mix, what is our geographical mix, and with the new structure, significantly easier to do that. Then based on that, you can see how you run. Let's look into Western Europe in Q2, where we delivered a 7.7% EBITDA. That with a, let's say, not huge improvement of the revenue. So what did we do there?

Speaker #1: That is how we run that margin uplift. And we look of course into that what we have in the revenue, which kind of work we have in the revenue, what is our product mix, what is our geographical mix, and with the new structure, significantly easier to do that.

Speaker #1: And then based on that, you can see how you run. Let's look into Western Europe in the second quarter where we delivered a 7.7% EBITDA.

Speaker #1: And that with a, let's say, not huge improvement of the revenue. So what did we do there? We were able more and more to deploy the right people with the right quality at the right time at the right location.

Thomas Schulz: We were able more and more to deploy the right people with the right quality at the right time, at the right location, and that makes our business more profitable. I hope that answered your question.

Speaker #1: And that makes our business more profitable. I hope that answered your question.

Speaker #2: It seems so. Thank you very much. We have further questions and we'll now take a question from the chat. The question is from Igor Zonin from Bada Alfavelia.

Martina Kalkhake: It seems so. Thank you very much. We have further questions, and we'll now take a question from the chat. The question is from Igor Sonin from Baader Helvea. I have a quick question on Teknokon. Backlog is -2% absolute, but -8% organic. So it looks like the acquisition brought in a fairly large book relative to its revenue. Could you give a sense of the duration and the remuneration mix of that backlog? I'm just trying to understand whether it behaves like your maintenance business or whether it's longer cycle work.

Speaker #2: I have a quick question on TechnoCon. Backlog is minus 2% absolute, but minus 8% organic. So it looks like the acquisition brought in a fairly large book relative to its revenue.

Speaker #2: Could you give a sense of the duration and the remuneration mix of that backlog? I'm just trying to understand whether it behaves like your maintenance business or whether it's longer-cycle work.

Speaker #3: That's a very good observation, Igor. We always like when people read all our publications, then we know it's worth the work that many people put in.

Matti Jäkel: That is a very good observation, Igor. We always like when people read all our publications, then we know it is worth the work that many people put in. No, it is really

Speaker #3: No, it's really a lot of people. Who spend a lot of time being or making building a very transparent. So yes, always when you have an acquisition, there's a first time consolidation and that is also true for backlog.

Thomas Schulz: I agree. I fully agree.

Matti Jäkel: It is a lot of people who spend a lot of time making Bilfinger very transparent. Yes, always when you have an acquisition, there is a first-time consolidation. That is also true for backlog. In terms of the mix of work, most of the work that Teknokon does resembles the mix that we have throughout the group. In broad terms, we are talking two-thirds is maintenance business, give or take, whatever is included, so the longer-term work, and then one-third is more the short-term work, or we call it project work. But the mix that we acquired with Teknokon fairly much mirrors the Bilfinger business model. In numbers, the increase in backlog on 1 April were EUR 115 million that we received at the time we paid the purchase price. So I think that is in the financial report for the H2, so these are numbers that we have disclosed anyways.

Speaker #3: In terms of the mix of work, most of the work that TechnoCon does resembles the mix that we have throughout the group. In broad terms, we're talking two-thirds is maintenance business, give or take whatever is included so the longer term work.

Speaker #3: And then one-third is more the short term work or it's we call it project work. But the mix that we acquired with TechnoCon fairly much mirrors the Bilfinger business model.

Matti Jäkel: The mix that we acquired with Teknokon fairly much mirrors the Bilfinger business model. In numbers, the increase in backlog on 1 April were EUR 115 million that we received at the time we paid the purchase price. So I think that is in the financial report for the H2, so these are numbers that we have disclosed anyways.

Speaker #3: In numbers, the increase in backlog on the first of April were 115 million. That we received at the time we paid the purchase price.

Speaker #3: So I think that's in the financial report for the second half. So these are numbers that we have disclosed anyways.

Speaker #2: Thank you very much. I can read another question from the chat, which is from David Luis, from Amira Gisjan. The question is, you have ambitious midterm margin targets.

Martina Kalkhake: Thank you very much. I can read another question from the chat, which is from Davier Louis from Amiral Gestion. The question is: You have ambitious mid-term margin targets. How confident are you to keep improving the margin structurally in 2027 to stay on that trajectory?

Speaker #2: How confident are you to keep improving the margin structurally in 2027 to stay on that trajectory?

Speaker #1: Very confident. When you look into Western Europe, already today on 7.7% EBITDA in Q2, they had some hesitation in the UK—actually in Belgium and the Netherlands too.

Thomas Schulz: Very confident. When you look into Western Europe already today on 7.7% EBITDA in Q2. They had some hesitation in the UK, actually in Belgium, Netherlands, too. When we look into the profitability of our industry sector with an 8% to 9% EBITDA in 2030, we will be not the best performing company. To make that fairly clear, we are under the top 20%. That is what we see. We have peers already having that as a target for next year and the year after. We have areas in the world, like in North America, where the EBITDA margin is significantly higher than you have it here. We can use all the different parameters to explain that why, but generally, we have to lift up our profitability. We see that we can do that.

Speaker #1: So when we look into the profitability of our industry sector with an 8 to 9% EBITDA in 2030, we will not be the best performing company.

Speaker #1: To make it fairly clear, we are under the top 20%. That is what we see. We have peers already having that as a target for next year.

Speaker #1: And the year after. We have areas in the world, like in North America, where the EBITDA margin is significantly higher than you have it here.

Speaker #1: And we can use all the different parameters to explain that why, but generally we have to lift up our profitability. We see that we can do that.

Speaker #1: We have a full-fledged strategy on it. And we set it on the capital market day at the beginning of December. If all the Bilfinger groups would perform as already the ones perform as we would like to have performing them, then we are more or then we are close to 8% EBITDA in the whole group.

Thomas Schulz: We have a full-fledged strategy on it. We said it on the Capital Market Day at the beginning of December, if all the Bilfinger groups would perform as already the ones perform as we would like to have performing them, then we are close to 8% EBITDA in the whole group today. Out of that, it is a lot of work to do. We do it step by step. We will inform you how far we are, what we do, and so on, and we will achieve it. That 2027 has to be a step up to 2026 is clear. From that point of view, we are in quite a good expectation what we will deliver in 2027 as well as up to 2030. It is a good company.

Speaker #1: Today, so out of that, it is a lot of work to do. We do it step by step. We will inform you how far we are, what we do, and so on.

Speaker #1: And we will achieve it. That's 26 has to be a step up to sorry, that 27 has to be a step up to 26 is clear.

Speaker #1: So from that point of view, we are in quite good expectation what we will deliver in 27 as well as up to 2030. It's a good company.

Speaker #2: Thank you, Thomas. Just a reminder for the participants, you can ask your questions via phone by pressing start and one. Or via the chat function.

Martina Kalkhake: Thank you, Thomas. Just a reminder for the participants, you can ask your questions via phone by pressing star and one or via the chat function. There is another question on the chat, which I would read as well, which is from Moritz Walz from Discover Capital. Has the structure of your received orders and the underlying contracts changed over the past four years in terms of margin profile? Are newer contracts more attractive than legacy contracts, less attractive or the same?

Speaker #2: There's another question on the chat, which I would read as well. Which is from Moritz Waltz from Discover Capital. Has the structure of your received orders and the underlying contracts changed over the past few years in terms of margin profile?

Speaker #2: Are newer contracts more attractive than legacy contracts? Less attractive, or the same?

Speaker #3: That's a very broad question, I would say. No, the structure let's put it this way. We look at various aspects of risk profiles. Moritz, one key element is remuneration in how are we getting paid for our work?

Matti Jäkel: Hmm. That is a very broad question, I would say. No, the structure. Let us put it this way. We look at various aspects of risk profiles, Moritz. One key element is remuneration. How are we getting paid for our work? Is it time and material? Is it unit rates, or is it lump sum? So three very generic forms of being paid, remunerated for our work. With time and material, the lowest risk. On unit rates, we assume productivity risk, and on lump sum, we assume productivity and also quantity risk. That is very generic for the contracting industry. What we have seen in the last few years is an increase in the time and material, but also in the unit rates. With unit rates, we feel very comfortable because we control the productivity, and whatever productivity improvement we have and generate stays with us.

Speaker #3: Is it time and material? Is it unit rates, or is it lump sum? So, three very generic forms of being paid—remunerated—for our work.

Speaker #3: With time and material, the lowest risk on unit rates, we assume productivity risk. And on lump sum, we assume productivity and also quantity risk.

Speaker #3: That's very generic for the contracting industry. What we have seen in the last few years is an increase in time and material, but also in the unit rates.

Speaker #3: And with unit rates, we feel very comfortable because we control the productivity, and whatever productivity improvement we have and generate stays with us on time and material.

Speaker #3: It goes to the client. So we like unit rates and we have been able to change some of the unit for some of the time and material contracts to unit rates.

Matti Jäkel: On time and material, it goes to the client. We like unit rates, and we have been able to change some of the time and material contracts to unit rates. When it comes to lump sum, we are a lot more careful than we were in the past. We don't take any EPC work. That's a bad word in Bilfinger. Really, it's a bad word in Bilfinger.

Speaker #3: When it comes to lump sum, we're a lot more careful than we were in the past. We don't take any EPC work. That's a bad word in Bilfinger.

Speaker #3: Really, it's a bad word in Bilfinger.

Speaker #1: Definitely a bad word, yeah.

Speaker #3: However, we work with our clients and we're discussed, okay, let's look at the engineering phase. What can we do together in engineering? Because when the engineering is done, the risk on quantities is much, much reduced.

Thomas Schulz: It's definitely a bad word, yeah.

Matti Jäkel: However, we work with our clients, and we discuss, okay, let's look at the engineering phase. What can we do together in engineering? Because when the engineering is done, the risk on quantities is much reduced, and we don't have to put contingency on contingency on contingency. While we still have one-third of our work in projects, the underlying risk profile of the project contracts is much better than what we've seen in the past. We do see that in the numbers. We have a lot fewer, what we call blowouts, so contracts that really go bad. That has improved our risk profile. It has improved our margin profile. So I would say it is how we work with the client to make the contract attractive. Yes, there's clients out there that in their first proposal, come and say, "I want this one thing.

Speaker #3: And we don't have to put contingency on contingency on contingency. So, while we still have one-third of our work in projects, the underlying risk profile of the project contracts is much better than what we've seen in the past.

Speaker #3: And we do see that in the numbers. We have a lot fewer what we call blowouts. So contracts that really go bad, and that has improved our risk profile.

Speaker #3: It has improved our margin profile. So I would say it is how we work with the client to make the contracts attractive. Yes, there's clients out there that in their first proposal come and say, I want this one thing you build it, you take every risk.

Speaker #3: We don't like that. But we don't tell the client, go away. We tell the client, here are some ideas to make it workable for you and make it workable for us.

Matti Jäkel: You build it, you take every risk." We don't like that. But we don't tell the client, "Go away." We tell the client, "Here are some ideas to make it workable for you and make it workable for us.

Speaker #1: Definitely. And the when you look into the attractiveness, we have it actually as one sub lever in our strategy. We call it de-risking. That's a big part of that.

Thomas Schulz: Definitely. When you look into the attractiveness, we have it actually as one sub-lever in our strategy. We call it de-risking. That's a big part of that. We have a good organization. With the new structure, we are closer all together. With that, the judgment, which kind of risk we actually take with an order is very transparent. That is as much as transparent to the client and makes it, to us, possible to avoid these, what we call horrible or blow up or red flag contracts.

Speaker #1: We have a good organization with the new structure. We are closer all together and with that, the judgment, which kind of risk we actually take with an order is very transparent.

Speaker #1: That is as much as that transparent to the client. And makes it for us possible to avoid these what we call horrible or blowup or red flag contracts.

Speaker #2: Thank you. We have further questions. We will now take the question from Paul, who had apparently a technical difficulties. So I will read it out.

Martina Kalkhake: Thank you. We have further questions. We will now take the question from Paul, who has apparently technical difficulties, so I will read it out. We have recently seen very low water levels on parts of the Rhine following the European heatwave, which historically has created challenges for German chemical producers. Are you seeing any impact on customer behavior so far in Q3? Specifically, does this create an additional headwind by delaying discretionary projects and turnaround activity further, or could it actually support maintenance demand if customers use periods of low utilization to bring assets offline? How should investors think about the net effect for Bilfinger?

Speaker #2: We have recently seen very low water levels on parts of the Rhine following the European heat wave, which historically has created challenges for German chemical producers.

Speaker #2: Are you seeing any impact on customer behavior so far in Q3? Specifically, does this create an additional headwind by delaying discretionary projects and turnaround activity further?

Speaker #2: Or could it actually support maintenance demand if customers use periods of lower utilization to bring assets offline? How should investors think about the net effect for Bilfinger?

Speaker #1: Yeah, at the moment, we don't hear that from the clients. We see that in media. And in that case, we have to admit that politicians, especially in the States, act quite quickly.

Thomas Schulz: Yeah. At the moment, we don't hear that from the clients. We see that in media. In that case, we have to admit that politicians, especially in the States, act quite quick. You know that we have that weekend or Sunday truck driving restriction, and some of the states actually lifted that completely to put more from the water to the truck, which is good. On the other side, we see in the Central European chemical industry, some additional work coming out based off the Iran war and the reduced energy supply into Asia. That made it, in the last few weeks and months, more positive for some of our clients here in Germany and actually in Central Europe. To summarize it, here it weighs a little bit. On the other side, it's more positive. Up to now, we don't see that impact.

Speaker #1: You know that we have that weekend or Sunday truck driving restriction. And some of the states actually lifted that completely. To put more from the water to the truck, which is good.

Speaker #1: On the other side, we see in the Central European chemical industry, some additional work coming out based off the Iran war. And the reduced energy supply into Asia that counter that made it in the last few weeks and months more positive for some of our clients here in Germany and actually in Central Europe.

Speaker #1: So to summarize it, it's here it weighs a little bit. On the other side, it's more positive. Up to now, we don't see that impact.

Speaker #2: Thank you. We have further questions. So the next question, we will take from the telephone line, from Olivier Calvet. Olivier, please go ahead for your follow-up question.

Martina Kalkhake: Thank you. We have further questions. The next question we will take from the telephone line from Olivier Calvet. Olivier, please go ahead for your follow-up question.

Speaker #4: Yeah, thanks for taking my follow-ups. Just a couple left. You've just mentioned, Thomas, the likely refineries clients. I was just curious if you could quantify the rough share or exposure for you of those kind of clients in your chemicals business.

Olivier Calvet: Yeah. Thanks for taking my follow-up. Just a couple left. You just mentioned, Thomas, the likely refineries clients. I was just curious if you could quantify the rough share or exposure for you of those kind of clients in your chemicals business. Then a second question probably also for you would be on M&A, right? If you, without being too specific, could comment on the M&A pipeline. And thirdly, perhaps for you, Matti, on the free cash flow. So you did around close to EUR 70 million in H1. You point to the low end of the margin guidance, but you have reiterated the full-year free cash flow guidance. Just if you could help us out on the building blocks and the working cash flow benefits you would expect in the second half. Thanks.

Speaker #4: Then a second question probably also for you would be on M&A, right? If you without being too specific, could comment on the M&A pipeline.

Speaker #4: And thirdly, perhaps for you, Matti, on free cash flow. So you did around close to 70 million in H1. You point to the low end of the margin guidance, but you've reiterated the full year free cash flow guidance.

Speaker #4: Just if you could help us out on the building blocks and the working capital benefits, you'd expect in the second half. Thanks.

Speaker #1: At first, to the refinery plants, we of course not going in the details. So much by country because here when we talk about the River Rhine, it's predominantly Belgium, Netherlands, and Germany.

Thomas Schulz: At first to the refinery plants. We, of course, are not going in the details so much by country, because here when we talk about the River Rhine, it is predominantly Belgium, Netherlands, and Germany, Switzerland, and that part. But you see that our share in chemical and petrochem is roughly 21% over the whole group. So the exposure is there, but the exposure with the impact, what we as Bilfinger got already since 2021, 2022 with very high energy costs for our clients and some plant closure, what we reported on in the last few years, shows that with whatever happens in that part, we actually counter-compensate with more business out of energy, especially. So it is at the end, quite good in the customer relationship building. We have more single work to do. The orders are smaller, and we help them in dealing that with shortage in water supply.

Thomas Schulz: At first to the refinery plants. We, of course, are not going in the details so much by country, because here when we talk about the River Rhine, it is predominantly Belgium, Netherlands, and Germany, Switzerland, and that part. You see that our share in chemical and petrochem is roughly 21% over the whole group. So the exposure is there, but the exposure with the impact, what we as Bilfinger got already since 2021, 2022 with very high energy costs for our clients and some plant closure, what we reported on in the last few years, shows that with whatever happens in that part, we actually counter-compensate with more business out of energy, especially.

Speaker #1: Switzerland, and that part. But you see that our share in chemical and petrochem is roughly 21% over the whole group. So the exposure is there, but the exposure with the impact—what we as Bilfinger got already since '21, '22—with very, very high energy costs for our clients.

Speaker #1: And some plant closures, which we reported on in the last few years, show that whatever happens in that part, we actually counter-compensate with more business, especially out of energy.

Speaker #1: So it is at the end quite good in the customer relationship building. We have more single work to do. The orders are smaller, and we help them in dealing that with shortage in water supply.

Thomas Schulz: It is at the end, quite good in the customer relationship building. We have more single work to do. The orders are smaller, and we help them in dealing that with shortage in water supply.

Speaker #1: Of course, there is an end then to it too. But that is more what the market can tell you in that. But in our modeling, the impact is not we don't see that.

Thomas Schulz: Of course, there is an end then to it, too, but that is more what the market can tell you in that. But in our modeling, the impact is not. We do not see that. M&A pipeline looks good. In some parts it looks very expensive, to be honest, and in some other parts, very promising in that way that we see some areas in the world, like the Middle East, definitely outperforming growth rates, what we had in the model before, based on making a whole area with a lot of countries like Saudi Arabia, UAE, and so on, more resilient for crisis situations and finding new routes for in and outbound supply into their countries, which we as Bilfinger will contribute from and for it.

Speaker #1: M&A pipeline looks good. In some parts, it looks very expensive, to be honest. And in some other parts, very promising. In that way, that we see some areas in the world like the Middle East definitely outperforming growth rates, what we had in the model before.

Speaker #1: This is about making an entire region with many countries, such as Saudi Arabia, the UAE, and others, more resilient in crisis situations. It also involves finding new routes for inbound and outbound supply to their countries, which we at Bilfinger will contribute to.

Speaker #1: And for it, if we then look into, when we say the timing effect in it, crises are then more difficult to get people around the table to make a final decision on whatever it is.

Thomas Schulz: If we then look into when we say the timing effect in it, crises are then more difficult to get people around the table to make a final decision on whatever it is. And that is what we see with the M&A, too.

Speaker #1: And that is what we see with the M&A too.

Speaker #3: Yes, Olivier. On the free cash flow, we have seen in the first half an increase in work in progress. So we’re on unbilled performance timing effects, as I explained earlier.

Matti Jäkel: Yes, Olivier. On the free cash flow, we have seen in H1 an increase in work in progress, so unbilled performance, timing effects, as I explained earlier. That will resolve itself in H2, so that is part of the working capital. We expect all the intake to generate advanced payments as we always do, but a little more than we had in H1 2026. On one large contract, we have built up a considerable work in progress where we had to negotiate terms and conditions, and that was successfully done in July. So there is already a step up that will hit H2 2026 in terms of free cash flow generation. So that gives us confidence. We have performed quite well on working capital management in the last so many quarters.

Speaker #3: That will resolve itself in the second half. So that's part of the working capital. We expect order intake to generate advanced payments, as we always do.

Speaker #3: But a little more than we had in the first half of 2026. On one large contract, we have built up considerable work in progress, where we had to negotiate.

Speaker #3: Terms and conditions. And that was successfully done in July. So there's already a step up that will hit the second half of 2026 in terms of free cash flow generation.

Speaker #3: So that gives us confidence when we've performed quite well on working capital management in the last so many quarters. We've seen those delays here.

Speaker #3: But as I said, we expect them to resolve themselves in the second half, and we are quite confident on generating EBITDA and also positive contributions from working capital.

Matti Jäkel: We have seen those delays here, but as I said, we expect them to resolve themselves in for H2 and quite confident on generating EBITDA and also positive contributions from working capital. Nothing out of the ordinary.

Speaker #3: Nothing out of the ordinary.

Speaker #2: Thank you.

Speaker #4: Okay, but you confirm the full range? Of 250 to 300? Okay. Yeah.

Martina Kalkhake: Thank you. There is

Speaker #3: Yeah.

Olivier Calvet: Okay. But you confirm the full range

Speaker #4: Thank you.

Speaker #2: Thank you, Olivier. There's a further question in the chat, which I will read out. The question is from Gerard O'Doherty from Metzler: Since the end of Q2, given the on-off nature of the peace process in the Gulf, has anything changed positively or negatively in terms of day-to-day business willingness to move ahead on projects, return to some form of normality?

Matti Jäkel: Yes

Olivier Calvet: of 250 to 300? Okay. Yeah.

Olivier Calvet: Of 250 to 300? Okay. Yeah.

Matti Jäkel: Yeah.

Olivier Calvet: Thank you.

Martina Kalkhake: Thank you, Olivier. There is a further question on the chat, which I will read out. The question is from Gerard O'Doherty from Metzler. Since the end of Q2, given the on-off nature of the peace process in the Gulf, has anything changed positively or negatively in terms of day-to-day business willingness to move ahead on projects, a return to some form of normality?

Speaker #1: Yeah, what we see is more actually more workload in that respect for the Middle East. To look into how to make the assets what our customers have in that region more resilient against similar crises.

Thomas Schulz: Well, what we see is actually more workload in that respect for the Middle East, to look into how to make the assets, what our customers have in that region, more resilient against similar crises. Second, a lot of talk and they actually act in that area quite well regarding, as I said before, what we call the inbound and outbound supply for the different countries in the Middle East. To make it simple, they look for new routes to receive and to deliver their products and getting products from all over the world into. The Strait of Hormuz will sequentially lose its big part of importance. They will do everything to balance that more, which means infrastructure in processing plants too, which is of course for us, very positive news.

Speaker #1: Second, a lot of talk, and they actually act. In that area, quite well regarding, as I said before, what we call the inbound and outbound supply for the different countries in the Middle East.

Speaker #1: They look to make it simple. They look for new routes to receive and to deliver their products, and getting products from all over the world in, too.

Speaker #1: So the Strait of Hormuz will sequentially lose a big part of its importance. They will do everything to balance that more, which means infrastructure and in-processing plants too, which is, of course, for us very, very positive news.

Speaker #2: Thank you very much. I do not see any further questions that are willing to be asked. So this concludes our Q&A session today. Thank you very much for your participation.

Martina Kalkhake: Thank you very much. I do not see any further question that is willing to be asked. So this concludes our Q&A session today. Thank you very much for your participation. Thank you. For investors and analysts, if you have any further questions, as usually, please feel free to reach out to the investor relations team. Thank you very much and goodbye.

Speaker #2: Thank you. And for investors and analysts, if you have any further questions, as usual, please feel free to reach out to the Investor Relations team.

Speaker #2: Thank you very much, and goodbye.

Matti Jäkel: Thanks a lot.

Craig Abbott: Bye

Thomas Schulz: Bye

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Q2 2026 Bilfinger SE Earnings Call

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