Praesentation Kramer - Bilfinger

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Praesentation Kramer - Bilfinger

Industry – the world we live in.MCE GroupBilfinger Berger Capital Markets Day, November 26, 2009Ludger Kramer, CEO of MCE Group


Agenda• Group overview• Market and strategy• Financial Development• Summary2


Group overviewKey financial highlights 2008• New business: € 995 mn• Sales:€ 919 mn• EBIT: € 45 mn• EBIT margin: 4.9 %MCE GroupPower Generation and DistributionBiotech, Pharmaceuticals, Fine Chemicals2009Fsales split36%6%Sales by ….…end market…business typePlant Engineering, Steel ConstructionMechanical and Apparatus Engineering19%6%Others16%Energy49%Servicesbusiness40%Projectbusiness60%Industrial Services 23%Processindustry35% 1Personnel Services, Engineering & Consulting10%Note:1 Primarily biotech, chemical and petrochemicals3


Group overviewEnd marketsService scopeSelect customersEngineerin ng/manufa acturing/co onstructionn• Energy (oil & gas,Power Generationcoal, nuclear, biomass,hydro andand Distribution(36%)wind)Biotechnology,Pharmaceuticals,Fine Chemicals (6%)Plant Engineering &Steel construction(19%)Mechanical andApparatusEngineering (6%)• Pharmaceuticals• Biotechnology• Energy (hydro)• Infrastructure/civilconstruction• Niche (windtunnels, etc.)• Energy (hydro)• Chemicals• Pipe work incl. pressure/low pressure steel pipes,underground pipelines and gas storage, penstock/hydraulicsteel structures, columns, vessels and heat exchangers• Systems and plants (incl. skids and superskids)• Modular components, apparatus sets and compact plants• Bridges, hydro-tec steel constructions, transformer boilers,generator, frames, climate wind tunnels, transportationsystems, components for steel constructions• Hydraulic steel work, weldments, metallurgical machinery, spare andwear parts, apparatus engineering, special purpose machinery• Components/casings for water, gas and steam turbines, aeronautics• Control room/plant monitoring systems (e.g. electrical cabling)Industrial Services (23%),Personnel services,Engineering & Consulting(10%)• Paper• Chemicals andpetrochemicals• Plant overhauls and revamps, integrated engineering,maintenance consultancy, maintenance services, on-siteservices, training and instruction• Full service partner for components, systems, plants andplant units4


Group overview• Market leading provider of products and services for the process-industryin Central EuropeEnd customer baseRisk/return profileFinancial performance• Focus on industries i with longtermplanning horizon• Focus on “mega-trend”growth industries• energy, healthcare,chemicals• Blue chip customers• Geographic diversificationifi • Strong end-customerrelationship• Strong base of frameworkagreements inservice business• Balanced mix of service andproject business• Diversified end markets• Focus on “engineered” productsand services with highermargins• Focus on business withadequate “performance”risk (no overall plantperformance risk)• Superior project managementcontrols risk with projectmanagement-tools and controlof value-added chain• Highly skilled engineers• Flexible workforce -1/3 leased externally• Track record of outstandingt performance• Business highly cash-generating• No bank debt• High visibility of revenues6


Agenda• Group overview• Market and strategy• Financial Development• Summary7


Market and StrategyPower generation anddistributionOil, gas, chemicals &petrochemicalsBiotech andpharmaceuticalsSteel and infrastructure• Characterised by lowseasonality and continuousgrowth• long term planning horizons• strong long-term pipeline pp• Underlying dynamics unaffectedby short-term economic cycles• Increasing levels of capitalexpenditure driven by• aging infrastructure• liberalisation ofthe Europeanpower industry• increase inenergy demandd• environmental issues• Tight supply and demandbalance expected to lead tosustained high oil and gasprices over the medium term,despite recent decline• Capacity utilisation ratesremain at historic highs• Oil and gas companies lookingthrough current prices whenmaking capital investmentdecisions• continued capitalspending required toupgrade and expandaging g installed base• Expected to demonstratehighest growth rates acrossthe chemicals industry• Shift from classicalpharmaceutical to biotech• biotech market expected todemonstrate double digitgrowth for the next5–10 years• Industry facing unprecedentedchallenges (cost pressure,patent expirations, lack of newproducts ...) drivinginvestment in new R&Dcentres, ,pilot plants, otherresearch facilities• State stimulus packagesdriving infrastructureinvestment globally• New EU member statesand emerging economiesstill “catching up”regarding infrastructure• Eastern European civilconstruction expectedto sustain double digitgrowth and remain resilientthrough 2011• Aging infrastructure indeveloped countries8


Market and Strategy – Project BusinessGlobal energy consumptionuadrillion Btu)Commentary750Energy650• Growing realisation within the EU for the need to diversify mix of550energy supply, phase out of nuclear in Germany450• Aggressive capital expansion projects driven by historic350underinvestment and liberalisation of EU power industry250150• average age of power plants > 25 years50• capital expenditure on emission control technologies due to2005 2010 2015 2020 2025 2030legislation (e.g. LCPD, Kyoto Protocol)Liquids Natural Gas Coal Nuclear OtherOil, gas and chemicalsSource: Energy Information Administration/International i ti t ti Energy Outlook 2008 • Substantial capital investment by refineries to expandcapacity - oil companies looking through current prices whenmaking capital investment decisionsPharma and biotech(QDeveloping capacity gap in GermanyCapacity need 120230–45 GW capacity gap100in 20208060402002008 2010 2012 2014 2016 2018 2020Hydro Nuclear Lignite Hard coal Gas OthersNotes:1 Source: RWE, Boston Consulting Group, trend:research 2008, terms of German nuclearphase out 2002 new builds currently under construction included; without announced newbuilds; without offshore wind farms2 Required capacity to assure today’s level of security of supply(Generatio on capacity ¹ (GW W))• Increasing focus on R&D productivity in light of upcoming patentexpirations and lack of new products – increasing investmentin new development centres, pilot plants, other researchfacilitiesImpact on MCE• MCE well placed to benefit from environmental legislation andtrend towards diversifying mix of energy supplies given• expertise across oil & gas, coal, nuclear, biomassand hydro• carbon capture and storage capabilities9


Market and Strategy – Service BusinessEvolution of outsourcingservices modelIncreasinng value e-addedPartneringOutsourcing• Strategic activities assigned tothird parties• Long term performance anddevelopment contracts• Simple, labour intensive servicesoutsourced to third parties toachieve reduced cost andimproved efficiencies• Potential transfer of employeesto service provider• Most functions performed in-houseIn-house • Some non-core, non-strategicactivities outsourced tospecialised providersCommentary• Theme of streamlining focus to core activities amongstcustomers, facilitating real annual growth in the contracted-outmarket• increased focus on cost efficiency and flexibilitydriving willingness to outsource a greater scope ofservices to external service providers/partners• Increased emphasis on value proposition with higherengineering and technical skills - not just maintenance andrepair services• secured plant availability more important than puremaintenance cost• safety concerns and environmental regulations drivingmaintenance consultancy and engineering services• Imperative to maintain “prime” supplier status, given generaltrend towards outsourcing to “multi-service” providersImpact on MCE• MCE well placed to benefit from trend towards partnering givenits positioning as a full service provider—”Life-Cycle Partner”10


Market and StrategyMCE’s growth strategy supported by key market driversStrategic initiativesSupporting market drivers1• Maintain focus on growth industries (energy,pharmaceutical and biotechnology)• Increase power engineering and manufacturingcapacities• acquire pharma / biotech engineering expertise• expand focus on steel and hydropower• leverage penstock expertise• strengthen nuclear capabilities• Strong investment patterns in energy and chemicalmarkets driven by globally stable demand andhistoric underinvestment2• Expand product coverage and capabilities• expand power plant service offerings• expand pipeline capabilities (300mm to 1,000mm)• establish product competencies through acquisitions /partnering / licences• Increasing outsourcing scope to external serviceproviders/partners with greater emphasis onvalue proposition3• Broaden geographic reach -“follow the customer”• maintain focus on Central Europe• continue regional expansion into West Germany• leverage medium-term growth opportunities in CEEand Middle East• Central and Eastern Europe remain stable markets andare growing at above average rates compared toWestern Europe11


Agenda• Group overview• Market and strategy• Financial Development• Summary12


Financial Development• Order intake and sales expected to remain stableat € 900 million level• Further growth expected in EBT, EBIT: EBIT margin > 5%• Good cash position• Market position in Germany and Eastern Europe to bestrengthened – new organisation supports strategic focus onenergy and the process industry• Main focus on growth industries• Energy / Process Industry• Pharmaceuticals, Biotechnology• Expand product coverage and capabilities• Broaden geographic reach – "follow the customer“13


Financial Development[T €] 2007 2008 % forecast 2009* %Order intake 846,337 994,821 +17.5 894,853 -10.0Sales 782,096 919,478 +17.6 864,812 -5.9EBIT 31,880 45,040 +41.3 50,384 +11.9Employees 6,422 6,655 +3.6 6,436 -3.3* as per 2009-09-3014


Agenda• Group overview• Market and strategy• Financial Development• Summary15


SummaryMCE DivisionsEnd market dynamicsMCE´s future positioningPower Generationand Distribution• Characterised by low seasonality and continuous growth:long-term planning horizon• Underlying dynamics unaffected by short-term economic cycles• Increasing level of capital expenditure• Increase engineering andmanufacturing capacity• Expand pipeline capabilities• Expand range of power plant servicesBiotechnology,Pharmaceuticals,Fine Chemicals• Highest growth rates across chemical industries expected• Shift from classical pharmaceutical to biotech• Driving investment in new R&D centers, research facilities• Expand product competenciesthrough acquisitions / licences• Acquire engineering expertisePlant Engineeringiand SteelConstruction• State stimulus package driving infrastructure investment• New EU member states still catching up in infrastructure• Aging infrastructure in developing countries• Expand focus on nichemarkets• Leverage penstock expertiseIndustrial Services(focus on Oil, Gas,Chemicals, Petrochemicals)• Tight supply & demand balance – increase in oil & gas pricesexpected• Capacity utilisation rates increase• Continued capital spending required to upgrade and expandinstalled base• Expand outsourcing partnerships• Expand product competenciesthrough acquisitions / licences16


Thank you for your attention.17

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