Bilfinger Stock

Good afternoon, ladies and gentlemen, and welcome to Bilfinger's Q2 2026 Results Webcast. My name is Martina Kalkhake, and I'm here today with our CEO, Dr. Thomas Schulz; and our CFO, Matti Jakel. We will start with the presentation today on the quarterly highlights and then open the call for your questions. [Operator Instructions] And the event will be recorded.

I will now hand over to Thomas.

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 the Q2 with around EUR 1.5 billion. And that's 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 dynamic towards the second half and the end -- second half of this year and then, of course, the end of this year.

Our EBITA was not on the level as expected and actually moved down to 5.3%. Our earnings per share is up to EUR 1.47, which is quite a nice improvement. And the cash flow for the market situation, with the Iran war, is the EUR 48 million, quite a good one. Our outlook is confirmed, especially on the revenue, where we see quite a dynamic in it. And on the EBITA margin at the lower end of the range, but of course, within the range. And from the 1st of 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. And again, we had an improvement versus the Q2 '25 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.

When we then go into the different industries and 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. 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 petrochem, actually ones by far the largest part of our top line. That changed. It's down to 21%. And the 21% and the revenue share in the outlook is slightly flattish as we call it. What does it mean? 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. 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. 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. 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.

Then, last but not least, our green ones, the pharma and biopharma, it's 10% of the top line. It's a smaller business and a little bit more cyclical, but a quite good demand. Nevertheless, that this year with some European impact slowed the growth a little bit down, but from '26 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'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 were 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. 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's 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 kilometers. 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. And here, you have our opportunity pipeline at the top left, and it starts indexed in April 2024. When you now compare the 3x quarter 2, '24, '25 and on the right side in dark blue, '26, 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.

And you see as a difference to the others that in the quarter 2 '26, the first and the second month was fairly low and the third month really showed an improvement. And that is what we mean that the quarter 2 showed at the end a significant improved dynamic. But what you see too is that actually the order pipeline up to November, December in '25 was slightly increasing and showing quite a good development for the business to come in '26.

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 1 quarter, 1.5 quarter deferral time impact. 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.

That 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 Board. 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.

If we then look into the order intake, this EUR 1.5 billion for the second quarter 2026, the third best with and without Teknokon, by the way, in more than 10 years for the Bilfinger Group, shows that we already saw good signs at the end of the quarter 2. The backlog improved to the quarter 1 and of course, to the year-end and is slightly down to that what we saw in quarter 2, 2025.

And with that, I would like to give to Matti, our CFO.

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 3 quarters where we were below 1.0. And obviously, with a very huge order intake in quarter 2, 2025, we were at 1.31. But I come to the effect for quarter 2 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. So -- and 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. 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, 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 the second half of 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. 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.

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. And 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.

And lastly, segment International, again, on the orders received. Last year, a 3-year contract renewal in the United States, which happens every 3 years in the second quarter did not repeat itself, but at minus 12% organically, overall, minus 32% organically. What we have here included is the addition of the gold mine 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 and showing good dynamics in that market. Profitability, an uptick of 0.1 percentage point, 3.8% to 3.9%, EUR 12 million. 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.

How does that translate into earnings per -- for the year -- or for the quarter, sorry, EUR 54 million in the second quarter compared to EUR 48 million last year, 2025 in the quarter. So earnings per share up at 15% to EUR 1.47. That has been helped by a lower tax rate in the second quarter.

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. So 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, 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 when our customers are hesitant not only with awarding contracts, then they also slow down on approving our invoices. Again, it's a timing effect that will disappear in the second half of 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 a large part of our promissory note loan in German Schuldscheindarlehen. 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, so that everybody knows that this is different to what you understand in the U.S. or U.K. by a promissory note loan.

Anyways, it's debt. 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 EUR 300 million in early July. So you will see the reversal of all of this when we get together back in the third quarter, EUR 300 million increase in cash in hand and EUR 300 million increase in financial debt.

Net liquidity typically is low in the second quarter 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 April 1. 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 that, I hand back to my colleague.

Thank you, Matti. So now the group outlook for 2026, the outlook is confirmed. The EBITA 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 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. We, of course, target that what we said before.

When we look into the EBITA, it's the same level. It's 5% EBITA. As we said and explained in the presentation, we expected more. 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 EBITA 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 the quarter 1, 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 is clear indication that we are well in the range of EUR 250 million to EUR 300 million.

To finalize, a short feedback or a short summary of that what we had in the quarter 2. Orders were the third largest in the quarter since more than 10 years. Revenue was 7% up. EBITA 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.

[Operator Instructions] So the first question comes from Craig Abbott from Kepler Cheuvreux.

A couple of questions from my side, please. First of all, obviously, it's very reassuring to hear 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. But I'm 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.

And the second question is, now if we look at your guidance and the implied EBITA margin for the second half, it's pretty high, 6.7% versus 6% in H2 last year. And I'm just curious what gives you the confidence in the current environment, given where you come from H1 to be able to achieve this.

Yes, Craig, I'll take the first part of the question. We see actually in global business always the same situation is 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 asked their supervisory board 2, 3 times. They pushed 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.

In, especially, Western Europe, the rollercoaster with the energy cost significantly up, then down, then subsidized and all the very difficult to read outlook for the energy costs to go, customers were going on a break. And that lasts, as in oil crises, 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 rollercoaster used to: We have a deal, we have not a deal, we have a deal.

And 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 and to finalize the project. 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.

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. And then you are, of course, from a profit point of view in a different spot.

But for that, I give to Matti.

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 second half, we delivered 6.0%. 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 of an underachievement 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.

And when we go into overabsorption, then everything we make there drops straight to the bottom line. 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 second half of 2026.

Okay. 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, but both basically reporting 0 contribution. I just wonder, because it's a pretty meaningful amount, particularly on a quarterly basis. I just wonder were there any special factors here and how we should think about these 2 lines developing in H2?

Well, those lines, they do fluctuate a little bit. And we had a few movements 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, 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.

So we expect more normal progression in H2?

Yes.

So the next question comes from Pal Skirta from Bernstein. It seems for me that Pal 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.

It's kind of follow-up. So on, let's say, the postponed work in the first half and I think we discussed in the last call already. Let's say, by how much can your clients usually push out those decisions? So when are they actually like forced to come back? And if you look at the opportunity pipeline that obviously improved towards the end of the quarter. Let's say, can you like give an indication on how much was just about delays? And how much is like generally new projects that come into the market?

Very good question. 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 doesn't 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 second half of the year, 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 2 years or so because you have work permits. And you have certifications and permits to do additional work on a respective, let's say, area or land or location. And if you don't fulfill time milestones towards the authorities, your permit is gone.

So one of the things where we always work with clients in the -- 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 second half of the year. 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.

Maybe let me add, Michael. We distinguish between discretionary spend and nondiscretionary spend. And 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. And we're not talking quarters or even years, we're talking months. And so what we have seen in the first quarter, second quarter, some of the work has already come back and there's more to come in the second half.

Understood. 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. Is that wave already over? Or is that also rather a temporary thing in your view?

Yes, we can be very specific with that. The figures are, of course, Standard & Poor figures. And they are 2 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's not Germany, it's not Austria, it's not Denmark and so on. And that has an impact on the overall. And it is history. So it's past, it's over, then we didn't see it in our figures. So -- but from a pure reporting point of view, it, of course, is in the data of Standard & Poor's.

So the next question comes from Olivier Calvet from UBS.

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 forecasted guidance assumes an improvement in orders in the second half. And perhaps if you could comment how much of your backlog do you expect to convert into revenue this year? That would be question one.

And 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 I'm 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? And I just wanted to check if the organic order growth in international that was with that gold mine or not? Just out of curiosity.

I come with the second part first. Yes, it is in the gold mine order. And as we said 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. 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 Bilfinger standard.

So that makes us in the market expansion, which is one of our 2 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, the 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.

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. And that percentage tells us quite clearly where we are going in terms of revenue in relation to our guidance and our budget. And that ratio is 90% at the end of the second quarter and it was 88% last year. So to be very specific. It's not a number that we do publish all the time. But I think under the circumstances, it's the right thing to be very transparent here.

So 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. So that gives us confidence. And I hope that does give you confidence that we're on a good track for 2026 when it comes to revenue.

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?

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.

The question is from Andreas Wolf from Berenberg.

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 you have to go above a standard 100% utilization? And if yes, how are you going to handle that?

Yes. It is in the business, the so-called average or regular utilization, neutral utilization as we normally calculate when we do forecast 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 a pressure on the gross margin in our business model, mainly.

But we have times from of overabsorption, which means, as Matti rightly said. Whatever we do in the gross margin drops directly through 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 overabsorption. Overabsorption 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. It is adding here and there some lower quality work with external partners and so on. And with that, you run an overabsorption, which is definitely more profitable than the regular absorption. 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. 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. And that with a, let's say, not a 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 and that makes our business more profitable. I hope that answered your question.

And we'll now take a question from the chat. The question is from [ Igor Sanir from Bravo Pavillion ].

I have a quick question on Teknokon. 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. 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.

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. No, it's really -- a lot of people -- you spend a lot of time being -- or making Bilfinger very transparent.

So yes, always when you have an acquisition, there's a first-time consolidation and 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. And in broad terms, we're talking 2/3 is maintenance business, give or take, whatever is included, so the longer term work. And then 1/3 is more the short-term work or it's -- 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 the 1st of April were EUR 115 million that we received at the time we paid the purchase price. So I think that's in the financial report for the second half. So these are numbers that we have disclosed anyways.

I can read another question from the chat, which is from d'Arvieu Louis from Amiral Gestion.

The question is, you have ambitious midterm margin targets. How confident are you to keep improving the margin structurally in 2027 to stay on that trajectory?

Very confident. When you look into Western Europe already today on 7.7% EBITDA in the quarter 2. They had some hesitation in the U.K., actually in Belgium, Netherlands, too. So when we look into the profitability of our industry sector with an 8% to 9% EBITDA in 2030, we are not -- we will be not the best performing company.

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 and the year after. We have areas in the world, like in North America, where the EBITA margin is significantly higher than you have it here. 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. We have a full-fledged strategy on it. And we said that 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 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, and we will achieve it. That '26 has to be a step up to -- sorry, that '27 has to be a step up to '26 is clear.

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.

[Operator Instructions] There's 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 few years in terms of margin profile? Are newer contracts more attractive than legacy contracts, less attractive or the same?

That's a very broad question, I would say. The structure -- let's 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 3 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's 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. 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, it goes to the client. So 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. However, we work with our clients and we discussed, okay, let's look at the engineering phase. What can we do together in engineering? Because when the engineering is done, the risk of quantities is much, much reduced. And we don't have to put contingency on contingency on contingency.

So while we still have 1/3 of our work in projects, the underlying risk profile of the project contracts is much better than what we've seen in the past. 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. 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, 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.

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

We have further questions. We will now take the question from Pal, who had 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 heat wave, 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 lower utilization to bring assets offline? How should investors think about the net effect for Bilfinger?

Yes. 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 the 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 of 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.

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.

So the next question we will take from the telephone line from Olivier Calvet.

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 the 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 free cash flow. So you did around close to EUR 70 million in H1. You point to the low end of your margin guidance, but you reiterated the full year free cash flow guidance. Just if you could help us out on the building blocks and the working capital benefits you'd expect in the second half?

At first, to the refinery plants, we are, 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, Switzerland in 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. 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. 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.

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 at Bilfinger will contribute from 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 and that is what we see with the M&A, too.

Yes, Olivier. On the free cash flow, we have seen in the first half an increase in work in progress, so unbilled performance, timing effects, as I explained earlier. 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, 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 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. So that gives us confidence.

We have performed quite well on working capital management in the last so many quarters. We've seen those delays here. But as I said, we expect them to resolve themselves for the second half and quite confident on generating EBITDA and also positive contributions from working capital. Nothing out of the ordinary.

Did you confirm the full range, EUR 250 million to EUR 300 million?

Yes.

There's 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 return to some form of normality?

Yes. 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. 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. 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 into.

So 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, very positive news.

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. And 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.

Thanks a lot.

Good afternoon, ladies and gentlemen, and welcome to our Q1 2026 Results Call from Bilfinger. My name is Martina Kalkhake, and I'm here together with our Group CEO, Thomas Schulz, and our group CFO, Matti Jakel. As usual, we will start with a presentation of our quarterly highlights and then open the call for your questions. [Operator Instructions ] During the presentation, everyone will be on a listen-only mode, and the event will be recorded as usual.

I now hand over to Thomas. Thomas, please.

Hello, everybody, and thank you, Martina. So let's start directly with the highlights. We had a slower start into the year and predominantly based on the severe weather conditions, what we all enjoyed and which makes it quite difficult for us then in snow and ice to make the necessary work in -- on our customer sites. When we look into the orders, it's minus 5%. Revenue is up, despite the weather conditions, by 4% and our EBITA margin is on 4.6%, which is a 5% improvement on EBITDA.

The earnings per share went up to EUR 0.99. The cash flow is EUR 21 million. And the outlook is definitely confirmed, and the midpoint, as we always highlight, is actually our target for the revenue as well as for the EBITDA margin. And on strategy execution, we are well on the way. We closed on the 1st of April, the acquisition in Turkey with Teknokon. Before we go further into the market and into the financial figures and into any other thing related with our group in the first quarter, something about the safety performance. Safety is an indicator of quality.

And again, we had a fantastic good start into the year. We had a very good year 2025, and the start into this year was very good with a TRIF with 0.69, which is of course calculated on 1 million working hours and shows a fantastic performance. Our ambition is, of course, to have zero here. But despite the geopolitical trouble as well as the weather conditions, our organization showed a fantastic good performance. Out of that, into the industries. And as you know, on the left side, we show the production index, one of a lot of different KPIs what we use to forecast our business and in that case, to forecast our four main industries. And you see that we have here four graphs starting with 2023 indexed and going up to 2030, which is our midterm target and guidance, what we gave on the 2nd of December on the Capital Markets Day last year.

And when you look on the graphs, you see that the chemicals, petrochems are the lower performer ones, then oil and gas, then energy, and then pharma. Biopharma is the shining star. But all are growing, some more in a kind of a slow sideways with a little bit of pickup with oil and gas as well as with chemicals, petrochem, the others more aggressive with energy as well as biopharma. When we then look to the right side, let us start with the chemicals and petrochems. We have, as we already say for several quarters, if not years, significant regional differences in expected growth and in activity level. We see positive North America and the Middle East despite the Iran war, and we see more on a consolidation, more on a restructuring, more on a getting back to more profitability, business in Europe.

The outsourcing potential, the potential, what we see as Bilfinger to take over more maintenance work, more asset performance improvement work from our clients is, in that part of the industry, very good because we see a part of customers expanding and of course, a part, especially in Europe, contracting, and they actually ask for a lot of workload and a lot of input, and we can offer with our outsourcing potential good solutions. The revenue share is 20% on the top line, and the demand is, as you see, more on the sideway based on the regional differences, as I explained before. The second industry we would like to talk is energy. The increased demand for generation, storage and transmission of energy is actually giving the industry a positive outlook. It makes already 26% of our revenue share and with a good outsourcing potential.

And we don't see, as you see on the left side with the production index, which is in line with that how we forecast that industry, we see a further positive development in that part. And for the ones who follow us a longer time, you see that actually before chemicals, petrochem was up once 30% of the top line, now down to 20%, whereas energy is now up to 26%, which shows that with all the work what we do, as we always say, more than 80% is the same no matter which industry we work in, and we are able to go into industries with a good growth trajectory versus the ones being with a slower activity level. Then we have oil and gas. Of course, an impact short term through the trouble in the Middle East. It is 20% of our revenue share.

The outsourcing potential is good. The demand is good. What we see with all the trouble and the horror what happened and what is partly still ongoing, of course, higher oil and gas prices increase the willingness of that customer group to invest more, especially into improved asset performance, brownfield investments. We see here an increased demand and especially for LNG, especially in the United States, where we clearly see that they are now the main energy supplier into the world.

Then last but not least, our pharma, biopharma with the typical growth drivers to localize the business very quick in the market with new IP, which helps the industry to grow and to develop. Outsourcing potential good because they are not used to build that much in that short time. They need partners to do so. The demand is good, and our revenue share is 11%. If we then go from the industry into selected orders, this time three orders again for left the segment Western Europe out of the area asset performance. It's in the area pharma, biopharma in the United Kingdom, and it's about integrated services regarding enhancement of the asset performance for a biopharma production site. In the middle part, you see an order from Germany in the segment Central Europe, again in the asset performance business unit.

Here, it's about improving performance, doing engineering and installation services to optimize natural gas production in Germany. And on the right side, from the segment international and Czech Republic, basic detail and site engineering out of our construction management service within consulting and engineering. And it is actually to a big sub-supplier to a larger customer of us. From these selected orders into innovation.

Innovation for us is a driver of growth, it's a driver of reputation, it's a driver of customer reliability. And here, we have, together with our customers, the challenge on sites with multiple installations of scaffolding to have an optimized operating and handling, not only on the scaffold itself, actually on the necessary people and of course the timeline, so that the next companies, for example, us with insulation, painting, and so on can go into the right spot at the plant. This is what we do in an updated version of our Bilfinger Client Portal 2.0, where we are able to have an online data mobile device, which is using artificial intelligence to risk detect and to have so-called proactive decision-making, speak where to deploy scaffolding in the next 24 hours, 96 hours, and so on.

This helps to reduce the necessary time to do the work by up to or around 40%, which is a cost reduction for the customer and of course for us of around 30%, and actually is for us in that case, significant more competitive as well as more profitable for us. Out of that innovation into the group demand. And when we look into the opportunity pipeline, which is now indexed on the quarter 1 2024, you see that we had in the quarter 1, 2024 between 100 and 105 indexed as an opportunity in front of us. This is business index where we can bid on and where we know it will go on.

A year later, in the first quarter of 2025, you see the figure between 103 and 116, which is quite up versus the year '24. When we then look into what we had this quarter, it is actually 102 to 106 and not on the level as it was a quarter before. What's the background of that? Of course, severe weather conditions have a slight impact in that, but mainly the uncertainty what we saw in the geopolitical situation and of course, at its peak with the Middle East turbulences, which is not stalling or taking away possible order intake coming, but it's actually putting it on a timeline in a slower decision-making. And that is typical for these kind of crises. Why is that the case, especially in the process industry?

Because the Middle East part has an impact on the energy cost, which is a big part of the product cost, what our customers have. So decision-making is slowing down, but the decisions are not that they go away or that the investments are not needed. It just takes a little bit longer time. That had an impact on our order intake, which is then down 5%. But when we look into the order backlog, there we see a slight movement, a slight up of 1%.

When we then give some further input into the different areas of the order intake, of course, on the positive side, we have energy, we have pharma. We actually see oil and gas on the more depressed side is, of course, with chemicals because they are heavily under cost pressure. We sell a lot into that area, but -- the size -- the average size of these orders is significantly smaller than it was two years ago because they have to see how is energy cost developing in the next few days, weeks and months.

Out of that, I would like to give to Matti, our CFO.

Yes. Thanks, Thomas. Good afternoon. Just a quick look into the numbers and some details from the segments. Revenue achieved EUR 1.3 billion in the first quarter of 2026. That's plus 4%, so that's a nice growth rate despite all the issues that Thomas alluded to. On the gross profit, the margin is slightly down from 11.2% to 10.8%. That's mainly driven by the weather impacts that we had when you cannot work at full speed, then you have some underutilization to deal with.

On the contrary, we further improved our cost structure. We reduced our SG&A expenses by about EUR 3 million compared to the first quarter 2025, so the SG&A rate is now down to 6.4% for the quarter. As a result, our EBITA margin went up by 10 basis points, 4.6% over 4.5% last year. So the trajectory is in order. Taking a look into the segments and what we can say is that we see a bit of a mixed picture inside the segments, that's true for Western Europe, Central Europe, and also International, in the different regions. For example, here in Western Europe, in the U.K., order intake and revenue is up, while in the two countries, Netherlands and Belgium, orders received and revenue were down compared to the first quarter 2025. Growth came from energy, and even though that the chemicals and petrochemicals industry has its challenges, we saw some growth there, but a little bit of a decline in oil and gas on the orders received side.

The EBITA margin here went up quite nicely by 50 basis points from 6.3% to 6.8%. That is due to more efficient contract execution, but also to the successes in integrating our acquired businesses, be it the former Stock business or nZero in the U.K. Off to Central Europe. Also here, we saw a mixed picture. We saw growth in order intake and revenue in Scandinavia and the Nordic countries. While Germany or the DACH, the German-speaking area, was lower than the year before, both in orders received and in revenue. But if you look at book-to-bill here, we're almost at 1.0.99. So not too bad actually for the segment Central Europe in a difficult first quarter.

Profitability is on the same level as in the prior year. Here, we have seen more impact from the -- from the weather conditions or adverse weather conditions, so that's something that we had to deal with. But in the end, EBITA is up by 5% in -- from '25 to '26. Segment International, an interesting picture here, where the absolute growth is less than the organic growth that has to do with the dollar movement between Q1 '25 and Q1 '26. International contains North America, the Middle East, both geographies are dependent on the U.S. dollar, and then we have Eastern Europe, which is less dependent on the U.S. dollar. On orders received, we did see increases in North America with additions to our large framework contracts. Obviously, the Middle East was impacted by the beginning war in late February.

On the revenue side, a similar picture, where we did see increases in North America, while we saw declines in the Middle East and in Eastern Europe. From an industry perspective, we have seen additions in oil and gas industry in the International segment. Profitability went down from EUR 6 million to a break-even position. That had to do with both the geopolitical uncertainties or, to name it clearly, the war in Iran or against Iran, which has affected our operations in the Middle East, and the adverse weather conditions were more severe in Eastern Europe than in other places.

Taking a look at the net profit increased from EUR 32 million to EUR 37 million. That has mainly to do with an increased EBIT, but also we had a favorable onetime tax effect in the U.S., so that the tax rate decreased a few percentage points, and that has helped us. The earnings per share went up by 17% from EUR 0.84 to EUR 0.99 per share. And if we look at the adjusted net profit, which then at the end of the year is relevant for the dividend, that went up from EUR 0.94 to EUR 1.04 per share between the two quarters. The free cash flow is a lot lower than in last year's first quarter. As you may remember, we had a onetime effect of mid-double-digit million amount from a legal proceeding in the U.S. That money came in, in the first quarter of 2025.

So in our own plannings, budgets and forecast, that was included. And what happens when the weather is not as good as we had expected it and other uncertainties come into play, then it slows down the process on site, which means the invoicing and the building process. It takes more time to get our work certified and when it takes more time, it takes more time to issue and raise the invoices and then get paid. So when you look into a little bit of the details, you see that our work in progress increased more than what we would normally see. And the result is also to be seen in the net trade assets over revenue, which went up to 9%.

Both the free cash flow and the working capital will improve in quarter two and quarter three when those seasonal effects come to rest. Not much to report on net liquidity and leverage, which is fine. One thing that we are going to do is you see we have financial debt of EUR 178 million, which includes a promissory loan note that will expire, or a part of it will expire by the end of June, EUR 120 million. And then there is a variable interest component of EUR 30 million, so a total of EUR 150 million will be refinanced. And we went to the market today, so I'm sure some of you have seen the information already.

And with that, I hand it back to Thomas.

Thanks, Matti. So when we look into the outlook, of course, the outlook is confirmed. And it is confirmed on the revenue, and as you know, we always target the midpoint, and that is what we will achieve. EUR 5.4 billion to EUR 5.9 billion in the revenue, 5.8% to 6.2% EBITA margin and the free cash flow between EUR 250 million and EUR 300 million. The weather conditions are postponing decisions of customers. That gives us, as Matti rightly said, some time-limited underabsorption. The geopolitical situation actually makes customers a little bit more hesitant. They wait then a week or four weeks longer to see that things settle and that they know where they go. Because it's for them, for our customers, not always easy to make the announcement for an investment when just the oil price goes through the ceiling.

So out of that, we have full understanding for that, and we see that we will get that back and that we will have a successful year as we have the outlook confirmed. Out of that, the highlights, it was an interesting quarter one. We had, since quite a long time, a real winter, especially in Eastern Europe, but partly in Belgium and the Netherlands, too. And of course, the not nice at all war against Iran, not in Iran, against Iran, with all the trouble up and down and promise up and down, actually impacted decision-making on our customer side. That led to a minus 5% orders received. Revenue still weather -- despite the weather conditions, is 4% up. The EBITA is 5% up. It moved 10 basis points up from 5.4% to -- from 4.5% to 4.6%. Earnings per share up to EUR 0.99. Cash flow, EUR 21 million, which is a result of the weather conditions too. Outlook confirmed and strategy execution is well on track, and we are proud to get the colleagues in Turkey from Teknokon on board since 1st of April.

So with that, I would like to give back to Martina.

Thank you very much, Thomas and Matti. Ladies and gentlemen, you can now ask your questions. [Operator Instructions] And I'm already seeing that we have a few people lining up. So the first question is on the phone from Craig Abbott. [Operator Instructions]

First of all, I mean, yes, clearly, we got your message that you're still guiding toward the midpoint of the guidance range. Obviously, it's quite encouraging. But I'd just like to dig in a little bit deeper on that, please. I mean, a, this does imply like if we take the midpoint of the EBITA that you'd have to grow year-on-year, that EBITA number around 14% year-on-year to hit that midpoint. So I know you saw an acceleration last year as well. But does this mean that you're already seeing those -- that order rate pick up already in recent weeks? And I'm just trying to get a little bit more color on what gives you that confidence in this environment?

And the second question also is more structural. Looking at the quality of the order book, are you still seeing an underlying trend of the -- the quality of the orders that you are booking as being higher quality, i.e., structurally improving the profitability as those orders feed through? Thank you.

Yes. I'll start actually with the second one because that's easy to answer. Yes, we see that, and we are very confident that we have good orders. And we did the Capital Markets Day at beginning of December last year, actually to say -- to show you when we make these multi-year contracts, which is a big part of our business that we already have that in mind. If we would only guide on a year or two years, it would be impossible for the organization to know where we have to be in two, three, four, five years with the profitability. So the whole setup how we do it, the whole way how we work with these frame agreements, with these longer-term orders is, of course, on a significant improved profitability.

Then regarding the midpoint of the EBITA and the 14%, what you calculated, when you look into the start of last year versus the start of this year, it's roughly the same ratio what we had and regarding the EBITA, and we, of course, hit the midpoint in 2025, too. Where does it come from?

The crisis in the Middle East is not a crisis in the areas where we operate like in North America and Europe and of course, down to the Middle East, which is stopping or taking away or canceling orders or possible orders what we saw. That's not happening. What happens is the time element came in. Things are getting -- they slow down. The customers have -- we had a lot of customers meeting and they say, Look, the energy costs are going up. We expect next week they go down. Maybe they go up again, we don't know because we can't trust what comes out of Tehran. We can't trust what comes out of Washington. So we need a little bit more time until we realize it. For us, the visibility is very important because we order and organize the amount of people what we need to do to exercise the orders, of course, in a yearly planning. So we have quite a good visibility in it. What is the positive in it?

The positive in it is that oil and gas actually will invest more. We heard that already. The positive in it is, as said reason is the Middle East. They will overinvest to get more reliant or resilient, is maybe the better word, more resilient towards any negative military effect or supply chain effect, which normally triggers, and we already discussed that in the Middle East. I was there myself a couple of weeks ago, and we are reassured that they will overinvest to be prepared better if something like that is happening, too.

On the more negative side, of course, is with the chemical industry in Europe, they are overly sensitive on the energy cost. But the overly sensitivity gives us a lot of smaller orders to improve efficiency on their side, but they are not the same scale as we saw it two, three years ago. That makes the difference. We had and we said that in the quarter four, actually in '25, the largest amount of single orders in the last few years, but the average order size was smaller. So that's the visibility what we have. That's the reason why we confirm the outlook.

Let me just follow up on that and then I'll get back in the queue. Yes, I appreciate that. But I mean, the energy costs haven't come down and who knows? I mean, none of us have a crystal ball. We don't know how quickly they'll be resolved or not resolved. So I'm just curious, I mean, are you already seeing someone that hasn't lift, as they've kind of learned to live with the situation and move forward or because we're now in mid-May, right? So I'm just -- yes, if I could just dig a little deeper on that. That's all. Sorry.

Yes, we see that things are moving better than in the first quarter. Definitely, we have not the weather conditions that helps, of course. But the confidence in that volatility is a little bit back. When the war started, that was a big surprise for each and everyone. Then it was up and down. In March, you saw that in the opportunity pipeline, I think it was 106 versus 100 at the beginning of '24, which was very, very low for a March, which is normally quite active. That shows that situation. So that got postponed in the second, but mainly third and fourth quarter. We will have, as I know from my background in the past in construction equipment, when you have a wintertime or a crisis at the beginning of the year, the second half of the year will be the big part of the business. And that is what we expect.

On top of it, and I have to raise that, on top of it, when you talk with the European chemical companies and processing companies, they actually stepped into some of the supply what Asia was not able to supply based on the Strait of Hormuz closure, based on the Iran conflict. So that gave -- it's not a long-term thing, but it shows them that if something happens in the world, they are actually back on quite a good business, which gives them confidence back to do more on their assets, on their existing assets.

We will not see out of that situation up to now that they now start to reinvest hugely in Central Europe or so. We don't see that. But some of the confidence of that, that Europe can perform if the others struggle and this struggling that volatility, we will see more often from our point of view and our means the whole industry. So from that point of view, high volatility, but a kind of a confidence in that high volatility.

And we have a further question on the telephone line. The question comes from Olivier Calvet from UBS.

Just a couple of questions. Firstly, just in the prepared remarks, you -- I think you didn't mention lower refinery demand, which was something you mentioned at Q4. Just wondering if that has improved a little bit. And just now you were kind of alluding to European chemical companies seeing some potential benefits. Is that materializing in, at least the opportunity pipeline that you see maybe in April? And then just one question for you, Matti. Can you just discuss the sequential development you expect for working capital this year?

Okay. I'll start with the -- regarding the refinery. Yes, the time line is a little bit too short that they really increase a lot. But what we see is -- what we hear when we meet them is, "Look, now the world is in trouble, especially Asia, because they get a lot of oil and gas from out of the Middle East, and we can step in. Some of the components are quite expensive because you can't get them, because supply chain is not working, we can step in." You see a little bit broadness coming back. And with that, of course, what can we do to increase further the asset performance of the existing assets what we have in Europe?

It is not that negative touch as it was a few months ago where everyone said, "Oh, this is looking horrible for years, and the government is not doing anything." Now there is some confidence back, and we heard that from some of the announcements of chemical industry and petrochem-related companies. Is it a turning point, as I said before, into bigger growth and so on? No, we don't see that. We are at the bottom, and we will walk on that bottom for a while. Then when we look into the part what you had, Matti?

On the working capital, Olivier. We'll see some improvements in quarter two. As you may know that our payment terms are 45 to 60 days, so it takes a while before things will improve when we get the invoices out and get them paid. So largely, quarter three, but we'll see improvements in quarter two. And by the end of the year, working capital should be where we expected anyway.

And just a quick follow-up on that first part of the question. Just before you were mentioning the European chemical companies as well. Has the picture changed slightly, at least in, in your terms, sort of opportunity pipeline very recently?

Not on the chemical part, for Europe. That's not what we see. It doesn't get worse, it doesn't get better, but the mood got a little bit better. The willingness to discuss investments to have a fast and a better return on that investment is actually improved, definitely better than the last two years, to be honest.

[Operator Instructions] And we have a further question from the webcast from Stefan Westphalen from Westphalen Asset Management. The question says is, is there a new share buyback program planned? I will hand over to Matti.

Yes, Stefan, nice to meet you here. When we look at our capital allocation, we have priorities, and I think we were quite clear on them for quite some time, but we repeated them at the Capital Markets Day in December. We pay dividend, and we want that dividend to grow from year-to-year. We fund our organic growth. We fund our M&A growth. And then if the opportunity presents itself, then we look at other ways to give money to our shareholders. So share buybacks are part of the toolbox, but we don't have programs in place. And there is no new program planned at this point in time.

[Operator Instructions] The first one is from Egor Sonin from AlphaValue. [indiscernible] The question says, sorry if I missed it. I want to come back on working capital. I caught the comments on invoicing timing, but I'm trying to understand the DPO side. DSO jumped from 61 to 74 days and DPO from 67 to 82 days. Both move together. How much of the receivables stretch is genuine invoicing timing that reverses in Q1 versus customer payment behavior changing? And on the payables side, is the DPO extension a deliberate offset? Or are you seeing your own suppliers negotiations shift?

Okay. Egor, thanks for the question. I start with the customer payment behavior. We are -- the only place where we saw a change in behavior was in the Middle East, where the administrations of our customers pretty much shut down and they did not process anything for obvious reasons. They sent their people home or into the home office and things just slowed down. So I don't see that as a payment behavior change, but I see this as a part of the crisis management that these companies have to do.

Other than that, there is no change in customer behavior that we have noticed in the last few quarters. Obviously, our customers are always trying to negotiate and discuss with us payment terms, but as a high-quality supplier, they also value our services, and usually, we try to avoid that discussion. So the increase in DSO is really related to the slowdown in the invoicing that was driven by weather mostly, and that will pick up in quarter two and then should be resolved by quarter three at the latest.

On the DPO side, that is mirroring our receivables side. So when we don't get paid or we see there is a delay, then we also take a look at what we do with our suppliers at the same time. but we're not shifting the negotiations. And what we typically don't like to do is that we shift payments from quarter-to-quarter just to sort of improve our KPIs. We pay on time. That is our philosophy.

We have one further question on the telephone line. The question is from Andreas Wolf from Berenberg Bank.

I have a question on the contract award disruption, especially in the process industry. Would it require a normalization of the political situation? Or would in a certain point in time, the customer more or less have to move as the outsourcing decision is a strategic decision for the client? I'm just trying to understand how the political situation has to change. Thank you.

The industry leaders react actually on confidence more than on real decisions, especially in the Western world where -- or especially in Europe, where political decisions can take ages or never. It is more about the trust what will happen than really about the decision. If the trust is there that the trouble that the war in Middle East is sorted out, then the industry will go on as before, no matter what you hear then out of Washington, Tehran, and so on. And that is the confidence part within a volatile situation. When you look in general into crisis times and crisis locations, the industries and the companies acting in that, when something happens out of the dark as we had it in February, then it's a big impact. Things are -- companies get introvert. They check what is our security and safety procedure. We stop to do this and that and that until we have further information. And it was end of February, which made the March a very quiet month to make it like this and on decision. But a lot of talk what we can do and how to move.

Second, if in the industrial service part, maintenance predominantly, if you postpone things, everyone in that business, especially our processing customers know if they don't do it, if they delay it six months, 12 months, 18 months, the cost at the end is 2x, 3x, 4x higher than to do it earlier.

Next part in it is, of course, they -- we have a delay out of the winter time, we have a delay out of the Middle East decision-making process. And with that, we go back to our clients and saying, you see we have now to change the time set up how we do the work a little bit different because we don't have all the people all the time available for each site. So this kind of interaction between customers and us is more important than any political decision in the Middle East. And we see that customers are quite willing to go on and to do so.

The last thing is about the outsourcing. The outsourcing is an offer for clients, for specific clients that we take over their maintenance crews, their maintenance management teams and integrating that into our business because we do that 1,000, 1,500 times per day. We are definitely more efficient than if you have your own crews in a producing company on three, four, five sites. We have digital products. We have a significant bigger workforce. We have a very mobile, well-educated workforce, and we can act in hours.

Actually, in the Middle East situation, we were able to offer immediately on the same day when it happened in the morning on the same day, so-called task force teams to our clients if something happens that they can move in and to limit the damage, which was done very quick. And that was highly positively received. It helped us definitely in the customer relation. And as I said before, I was there on my own a couple of weeks back and talking with multiple customers, and the feedback was very, very positive in that way. And it will give us, together with the M&A growth, what we see in the Middle East, what we flagged on for quite a while, quite a good lift up for the group in -- out of that area, what we call then the segment International, the Middle East part.

We have further questions on the chat. And the next question is from Gerard O'Doherty from Bankhaus Metzler. A follow-up to Olivier's question on working capital for Matti. Can you also sequence the free cash flow cash conversion this year?

Well, the -- as we said, we are confirming the outlook of EUR 250 million to EUR 300 million for the free cash flow. Yes, the first quarter was a bit slow. But as I said, this will reverse itself in quarter two and more so in quarter three. So by quarter four, we should be well on track. And certainly, for the full year, we maintain the guidance.

We have further questions on the chat from Andre Bottcher from JMS Invest. There's two questions from Andre. The first one is any positive impact from German stimulus program yet? And the second question, when will the Teknokon acquisition be included in the '26 guidance?

Andre, let me take the second question. We will give an update on the guidance when we release quarter two, which will be on the 12th of August, if I'm not mistaken. Yes. So with quarter two publication, we will include the Teknokon acquisition in our 2026 guidance.

If it comes to the German stimulus program, actually programs, we have a defense investment, and we have an infrastructure investment where especially we as Bilfinger on the infrastructure are indirect impact, positively impact. You saw that the announcement last year and the start of the program, of course, politician-led program takes always quite a while until it gets into execution, had a positive impact. We see things will happen where we -- and that is what you can see in the media in Germany a lot, the disappointment about the decision-making process -- and yes, the very, very long time to do something on the other side, to talk everything up and down is, of course, everywhere in the media.

But be careful. The money will come. The current government, we can complain about them as much as you want. They recognize we have to do something. They recognize we have to do something in energy. We have to do something in infrastructure. I will not talk about defense, which is only a little actually touching the area where we are in, but we see that positive. If it would come faster, it would be great. We think what we see at the moment, an impact for us should be in 2027. It is hard to see that we really have an impact in 2026.

We said that already at the Capital Markets Day at the beginning of December. But we are a little bit more optimistic for 2027 because things like the new power plants, gas-driven power plants, that progress, there is some progress in it, which we think we will have a part of it. So overall, positive marketing and communication capability of the German government, let's say, a kind of an area of improvement and speed would be quite nice.

Thank you, Andre, for the question and the two of you for answering it. There's currently no further questions on the line or the chat. So let's probably give it a few seconds for giving people a chance to ask further questions. So as there is no further questions coming up, this concludes today's Q&A session. Thank you very much for your participation into today's call. If there's any further questions you may have, feel free to reach out to the IR team. And as we are doing a bit of roading and conferencing the next few days, we hope to see a lot of you on the road. Thank you very much, and goodbye.

Good afternoon, ladies and gentlemen, and welcome to our webcast on Bilfinger's Full Year and Q4 2025 results. My name is Martina Kalkhake, and I'm joined today by our Group CEO, Thomas Schulz; and our Group CFO, Matti Jakel. We will start with the presentation of the quarterly highlights and also the full year financials and then open up the call to your questions. [Operator Instructions] The event will be recorded also as usual. Now I hand over to Thomas.

Thank you very much, Martina. Hello, everybody out of the sunny Mannheim here in Germany. When we look into the year 2025, we can say that we achieved all financial targets what we set out for the year. It was a year with clear market -- our market position expanded, but in a very volatile environment.

Our orders received went up 6%, revenues 8%, EBITDA margin up by 30 basis points and free cash flow significantly up to EUR 330 million. We propose a share increase from EUR 2.40 to EUR 2.80 per share. The outlook for 2026, we fixed with EUR 5.4 billion to EUR 5.9 billion, and the EBITDA of 5.8% to 6.2%. On our list, where in the last year acquisitions, we did 3 acquisitions, and we announced 1 signing in that case for Turkey.

When we then look into the targets a little bit more detailed, you see on the left side, the revenue development, '24 full year to '25 full year. We achieved an 8% growth and a 4% organic. In EBITDA, we are up 13%. This proves that our system, our strategy with operational efficiency is actually working quite well. Our free cash flow made a significant jump upwards from EUR 189 million to EUR 330 million, which is a 75% increase. Our outlook was EUR 300 million to EUR 360 million but that was actually brought up during the year.

When we then look into that what we do as a company, you know that sustainability is the core. Efficiency is the core of the Bilfinger Group to improve that on our customer site and customer businesses. On that very lively slide, I would like to have your focus on the left down part, the greenhouse gas emissions, Scope 1 and 2 intensity measured in CO2 versus million euro revenue. And there, we have a significant step improvement by minus 15% from '24 to '25. The second thing is in the middle of the slide, you see more than 0.5% of our revenue as an investment in learning and development for our people. Our people are our assets. Our people are our reputation, our competence and, in that case, our future. That target, of course, we fulfilled for 2025, and we will fulfill it for 2026 too.

Above that, it's about safety. Safety is not only important that all our employees and people related are safe and in safe working conditions, it is actually for our customers a quite good KPI to see how our performance as a company, as a group on customer side is working. And we can announce with, yes, quite a lot of being proud of our own people that we had one of the best years ever in the Bilfinger Group.

We actually improved the TRIF from 1.12 down to 0.91 and the LTIF significantly from 0.32 to 0.18, which is both world-class and shows the position of us to help customers to get more efficient. Next thing is that we measure our business in 4 categories because for mechanical industrial service, the European taxonomy and classification out of Brussels just forgot about that part of the industry, which, of course, is quite important.

So we introduced, at the beginning of '23, our own classification. What you actually know when you buy, for example, a fridge in an electronic store. A is very environmental friendly, D is not environmental friendly. And here, you see the year '23, '24 and '25 on the left side. And you see that we are in the categories with the darker blue color, step-by-step going up when the gray one, which is actually the coal and fire energy generation-related business is slightly going down.

To give you a little bit more information you have on the right side, some of the orders. For, a, it's a clear energy generation CO2 reduction direct business; and, b, it's enhancing energy efficiency and then, c, is all the support for that work. If we then go further to the industry outlook and industry development, how is the business going? We use, for quite a while, the production index and you have that on the left side and its index the first time here to the year 2023.

Before it was 2019, the last year before COVID and '23 is the first year after COVID, hardly can say it was completely over, but a good measurement. And you see 4 graphs and the graphs actually symbolize the different industries. Of course, the most sticking out is, of course, the green one, pharma, biopharma with quite an increased outlook to EUR 130 million up in the index up to 2030. Then you have energy, then you have oil and gas and then you have chemicals and petrochem.

On the right side, you see very much what our share is. The biggest industry we are operating now in is energy with 24%. The demand is okay and good. And then we have chemicals and petrochem, which is 23%. Demand goes sidewards. And here, the sidewards movement is predominantly out of Germany. We don't see further going down but we don't see a significant up no matter that they are the first positive signs at the end of the tunnel.

Then we have oil and gas with 18% where the demand is good, too. And of course, pharma, biopharma, where we still see quite a positive market. Important in that is our outsourcing potential, the potential where customers decide or could decide to give us, Bilfinger, a big part of their complete maintenance business because we are experts in it. We do it more than 1,000 times per day, and that actually generates for the client a lot of positive profit impact.

These outsourcing potentials are significant good in the chemicals and petrochem because they are -- our customers are there for quite a while under pressure. And you see energy is good. Oil and gas is good and pharma and biopharma is good, and it's part of our growth story. Then we go further. It's about selected orders. We always show you free orders of different geographies and different industries. On the left side, it's from our dear client, Borealis in Sweden. It's actually about the responsibility of Bilfinger to create an increase in production capacity in chemicals and petrochem.

In the middle part, it's about energy. It's Estonia, our customer, Utilitas, and again, it's about district heating. We in Bilfinger a believe strongly that district heating is an ongoing positive development. And it makes actually from an energy point of view, a lot of sense. On the right side, we have oil and gas out of Germany. It's the company, Gassco, and it's about the reliability of the gas supply and gas infrastructure, which is nowadays more important than ever before.

Out of that, we go to innovation because we, as an industrial service provider, have a fantastic position by having most of our people permanently on customer side, to create ideas and to make products out of it. This product, what we show today, is the Bilfinger Acoustic Corrosion Detection System. When you are in a processing plant, you have pipes, you have containers, you have storage tanks with material in it, liquids, gas, powder, partly flammable, partly quite aggressive in the environment.

And when you try to detect corrosion, which is, of course, important to know what happens, you have normally in regular operation to empty all of that so that you can make your measurements. We developed together with other partners, a special acoustic emission sensor where we can go in a current environment in operation into the plant and measuring the effect of corrosion as a potential threat, leakage and so on. That is not only reducing the downtime for the customer and bringing up cost savings for the client, it is a significant safer approach and fits very much into our safety story.

Out of that, we come to the figures. On the top line is our more or less already quite famous opportunity pipeline, what we invented several years ago. It shows actually indexed to 2 years before the amount of possible opportunities for the Bilfinger Group judged by if they will, out of our point of view, happen and if we have a chance to take the order. And when you see the development of the fourth quarter in the last 2 years, we actually improved with that potential what we have in front of us to roughly 110 versus that what we had at the beginning of the year -- at the end of the year 2024 or in the year 2025 -- or '23 and '24.

When you look into it, a part of that improvement, of course, comes through our quite active M&A strategy, what we drive. Each M&A is, of course, adding us more potential. Out of that, the orders received, when you look here, we actually had a good year, but as it is typical for us as the Bilfinger Group, we have quite a fluctuation between the quarters in the order intake. It is based on the fact when milestones or contracts are dropping into a quarter from a timing or not.

So out of that, we had organically and inorganically negative development versus the quarter 4 in 2024. But our order backlog throughout the year and versus the quarter actually improved by 5% or 4%, which shows a very good stable development of our group and is fully in line with our growth story. Out of that, I would like to give to Matti, our CFO.

Yes. Thank you, Thomas. Good afternoon also from my side here. Yes, let's take a bit of a deeper look into the numbers. As Thomas said before, the orders received in the fourth quarter were a bit, let's call it, softish based on timing of contract awards and volatility in the markets that we have, I think, communicated quite well over the last 2 years, at least.

For the full year, orders received increased by 6% in total, 2% organically. The acquisitions play a role in here, but also we had a little bit of a negative impact from the weakening U.S. dollar. Order backlog reached EUR 4.3 billion after EUR 4.1 billion in 2024, so a very nice increase. Revenue, a strong increase of 8% and 4% organically to EUR 5.4 billion. Growth in the energy sector, in the pharma and biopharma sector and obviously, due to the cost pressure, some decline in chemicals and petrochemicals.

As part of our derisking, we introduced to report our revenue shares by a remuneration type. Early on, we just differentiated between projects and service and frame contracts. This year is a better picture almost 50%, 44% to be exact, is time and material, close to 20% is unit rates, 70% is mixed elements in the remuneration and only 20% is lump sum, which gives you a fairly good picture how well our contract portfolio is risk-managed.

On the profit side, our gross profit increased from 10.9% to 11.3%. That's an increase on the absolute terms of 13% and again, what we announced during the strategy, product mix improvements, derisking, standardization, all of these do drive our margin improvement across all segments. On the SG&A side, we remained stable across the year at 6.3%. However, we have to say that the acquisitions, the 3 acquisitions that we did in 2025 came in with higher SG&A ratios which does give us opportunities for cost efficiencies in the future years.

And EBITDA developed very well from 5.2% to 5.5%, and the last quarter at 6.1% was the strongest quarter sequentially. We had 4.5% in the first quarter, 5.5% in the second, 5.8% in the third quarter and then 6.1% in the fourth quarter. So a very nice development sequentially.

Important also is to look at the adjustments. As you know, we do report on the reported numbers, but to give you a full picture here, we had last year a positive contribution from those adjustments of EUR 7 million and this year of negative EUR 8 million. So that's a swing of EUR 15 million. If you factor that in, then you see the real operational improvement, which is then more than the 30 basis points here. If you refer it to EBITDA, then the improvement is 50 basis points. Take a brief look into the segments. You will know that we have changed the segment structure effective January 1, 2026. Here is 2025, so it's the pre-existing segments. Europe, a very large segment with orders received of close to EUR 4 billion. That's a slight decrease organically, but overall a 6% -- a strong 6% increase. Revenue, very similar, organically, a slight decrease, but overall, 6% increase for the full year. Book-to-bill at 1.06, stable, same as last year, 1.06 and the order backlog reached EUR 2.9 billion, so almost EUR 3 billion in the segment.

On the profitability, in margin numbers, a slight decline, from 5.9% to 5.8%. But what I mentioned before in terms of the adjustments, here, we have a swing of a total of EUR 17 million. So again, if we look at EBITDA adjusted, that improved from 8.1% to 8.5%. You find those numbers in the backup to the slide deck.

International, very nice performance across all KPIs, 17% increase organically, 13% in total when we look at orders received. We did quite well on frame contracts in the United States. The government customers still are hesitant to award contracts. We had the shutdown, shutdown ended and then there was another one. So that takes a little while for this process to restart again. But very good new orders from oil and gas and energy industry in the Middle East.

Revenue grew by 6%, 10% organically to EUR 742 million. And the profit from a breakeven position last year to almost 4% for the full year. And again, it's operational excellence that's driving margin expansion not only in the United States but also in the Middle East.

And then technologies, also a very nice performance on all KPIs, 6% increase in orders received, nice growth, in nuclear and in biopharma and pharma and the revenue increased by a stellar 17% to EUR 856 million. Book-to-bill at 1.0 is lower than last year, but you know the business is more volatile than the other ones, so nothing to be concerned about.

Profit, very stable in the fourth quarter at 8%. But overall, throughout the year from 6.2%, 80 basis points up to 7.0%, a very nice performance in our Technology segment. For the group, net profit for the year, in 2025, we achieved EUR 176 million for the full year. There is an impact in there that I need to mention. We bought back shares from minority shareholders in one of our larger entities that had a negative impact on the financial result and it had a negative impact on our tax rate. So consequently, the earnings for the year and the earnings per share are down by 1% for 2025.

Cash flow. I think Thomas mentioned it before, we achieved EUR 330 million free cash flow for the year, a 75% increase, 110% cash conversion rate, some positive effects in here, a large payment from a dispute in the United States that we settled in 2024 and the cash came in, in 2025, so that certainly helped to improve the cash flow. But more importantly, our working capital efficiency that we measure in net trade assets over revenue has improved from 9.6% to 8.3% as we had planned and announced it last year.

On the net liquidity or net cash position, no change on the debt side, very stable on the financial debt and also on the leasing liabilities, they fluctuate a little bit with the acquisitions. But we had payouts for the share buyback program. We had payouts for M&A, and we had payout, obviously, for the dividend but still, we increased our net liquidity position from EUR 88 million to EUR 146 million by almost EUR 60 million despite those payouts that we had.

No change on net debt and consequently no change on the leverage. We're down to 0.3 at the end of 2025. Capital allocation, very important. No change there. Dividend, very important. We will propose EUR 2.80 per share. That's up 17% from last year where we proposed and paid out EUR 2.40. We are funding our organic growth in terms of sales improvements, people development, innovation, digitalization. M&A plays a significant role. And more importantly, and as we announced at the Capital Markets Day, we will accelerate there. And then obviously, if something is left then we have all kinds of options in terms of shareholder returns, but it's also very important that we maintain no matter what we do, we maintain our investment-grade rating.

Let's take a quick look into 2026. The updated segment structure, as shown on the left-hand side. The segments are in size more equal than before. Western Europe is about 1/3 of the group, Central Europe a bit less than 50% and international is about 20% of the group. So it's more balanced than what we had before. We are working on a full restatement, and that restatement will be made available in the week of April 20 to everyone who is interested and we will publish this on our website. So for the Western Europe segment, which includes countries, Holland or Netherlands, Belgium, and the U.K. We see revenues of EUR 1.8 billion to EUR 2 billion for next year and an increased margin of 7% to 7.4%.

Central Europe, which includes Scandinavia, the Nordic countries, Germany, Switzerland and Austria, we see a revenue of EUR 2.5 billion to EUR 2.7 billion and an increased margin of 5.8% to 6.4%. And for international, EUR 1.05 billion to EUR 1.2 billion and also an uptick in EBITDA margin of 4.2% to 5.0%, and then reconciliation is just for completeness sake. So that, I think, good targets and what it does for the group. I'll turn over back to Thomas.

Thank you, Matti. So this is the group outlook. You see here on the right side of the slide, the full year '24, '25, the outlook for '26 and of course, the midterm targets for 2030 because that is where we run to.

When you look to the outlook, the EUR 5.4 billion to the EUR 5.9 billion reflects that what we see in a volatile business market, but at the same time, the growth potential, what we initiate to have. On top of it, an improvement in the EBITDA margin from 5.8% to 6.2%. For us, always as in the year 2025, the midpoint is the most important in that guidance and the free cash flow, EUR 250 million to EUR 300 million because we don't repeat or we can't repeat each year, any legal dispute where we get then cash paid in the year after.

Important for us here is the cash conversion. And there, we target, of course, more than 90% towards the year 2030. Important in that is our development as a company. And this actually is the whole strategy of the Bilfinger Group. As simple as it should be, it shows that we work on our own efficiency, what we call operational excellence at the bottom as well as the market expansion and then you see 3 boxes with '25 results just delivered. Then the midterm targets, '25 to '27, what we gave at the beginning of '23, and we gave new midterm targets to 2030 in December last year. You see that the targets what we have from '23 are still on the list, and we achieve. The same we will do, of course, with the 2030 targets.

Out of that, summary, again, we expanded sustainable profitable growth in a quite volatile market and the volatility will not end as we are well aware. Our orders received went up 6%, revenue 8%; EBITDA 30 basis points up versus the reported 5.2%, proposal for the dividend is still the same payout ratio of 53% from EUR 2.40 to EUR 2.80. Free cash flow is targeted is EUR 330 million in '25 and quite up from the year before. Outlook, I just explained. And of course, M&A is on our list. We did 3 in last year. And actually, we had one signing of a larger one in just before Christmas. And with that, I would like to give back to Martina.

[Operator Instructions] The first question comes from Michael Kuhn from Deutsche Bank.

Starting with E&M International in the fourth quarter, I think quite a standout results contribution. You mentioned operational excellence. Any other things you would like to point out or any more details also on Middle East versus North America performance?

So the -- at first, our colleagues did a great job that where we are coming from, especially in U.S., great job. But -- and that's the thing and that's the reason why we keep our strategy target and prioritization target for M&A in North America as well as in the Middle East. We are still too small to be sustainable big player in that market, what has to be with our competence.

So the improvement, as Matti said, is predominantly out of the operational excellence, how we are organized, how we work, how management layers, how competence is placed, how the global product centers are working with these parts of the world. And in -- I have to say that, in the situation what we have since Saturday morning in the Middle East, where all our people are safe, and we are very happy and was the first thing what we did in the crisis management. We see that our way of having a decentralized organization, especially with the new segment structure, makes it clear and easy or easier to manage, and that all contributes into a better performance.

Understood. Then on the margin improvement in '26, maybe some idea on gross profit versus SG&A/overhead. You mentioned some of the acquisitions you did came with higher SG&A rates. Any cost savings targeted here? And also on top line performance, you mentioned cross-selling initiatives at the CMD. Do you see those initiatives already bearing fruit?

With the cross-selling. Yes. Cross-selling is -- actually, it means that we are selling the good products, what we have in some spots to all the customers in the Bilfinger geography. The new segments will enable that because they are more balanced. They are more balanced in size. They are more balanced and competent. They are more focused on the customers. And there are less layers in between us and the customer, which always helps. This cross-selling is not really into the figures from the last few years. It's not really in that what we have in 2025. It improved, but you now, as it is an improvement on very little is still little. So there is more to come. It's actually part of the strategic lever market expansion.

On the margin side, Michael, and thanks for the question. We continue to drive operational excellence to see margin progression in our gross profit. On the SG&A side, we see a few notches that we can improve year-over-year, and that is what we are also doing. Yes, it's true that the acquisitions came in with higher SG&A cost and we'll take a deep look at what we can do there. And I'm sure we'll find good things that will bear fruit in 2026 in the years following.

Understood. And then 2 on M&A. Firstly, on Teknokon. From today's perspective, when would you expect the closing? And can you provide us with, let's say, a few more details or at least an indication on Teknokon annualized top line contribution and profitability?

The -- we expect the closing, of course, this year if everything goes well. It should be up to the mid of the year, if things are going as expected. Regarding Teknokon's business performance, we actually gave to the market the information that is in the higher double-digit million range in revenue, but the profitability we will not disclose.

Teknokon is -- and Turkey is when you look on a map, easy to understand between our growth areas Eastern Europe to the Middle East. When you look on a map, Eastern Europe for us, potentially at the moment, Czech Republic, Romania and especially Poland. But in the future, Ukraine and all the countries in between to the Middle East is building a bridge and starting with that bridge, Turkey is a very important partner.

And then lastly, again, sticking with M&A. How does the pipeline currently look like? Obviously, it can't be too precise, but let's say, is there a realistic chance for further deals over the next few months?

Yes. There's definitely a lot of chances, and I can explain that very short. At first, we work for quite a while, very professional and concentrated on filling up the funnel. Second, we are quite clear what we want to have, or we are quite clear what we don't want to have. We actually gave it on the Capital Market Day with 7 strategic points, which gives the parameter set for M&As. And third, it's a market situation.

The industry, our end customers are going more and more for the larger service providers based on CSRD reporting, human rights reporting, equal pay reporting, all the reporting which makes it fairly difficult for smaller suppliers to be competitive. So the ones having multi-service in the offering as we up to being the solution provider are easier than that. So we actually have quite a lot of demand and questions from smaller companies to join us to be part of the Bilfinger family. And that is, as you know, a very important part for us because we are a people company. The ones we acquire, we would like to have that they want to be acquired by the Bilfinger Group.

We have further questions on the line. So the next question comes from Olivier Calvet from UBS.

Just a couple left. Firstly, can you give us some more color on the hesitant customer behavior you mentioned in North America? Is that from a specific customer type? Or any color you could give us there, that would be great.

Yes. Olivier. Thanks for the question. What Matti rightly said is that you all remember, Mr. Elon Musk, coming into the White House at the end of '24, beginning of '25 with the DOGE program. And in that announcement was to cut positions in government-related offices by 50%. We have in U.S. quite a larger business, which is like commercial contracting, where we actually work throughout these offices and on top of it, some of our clients need, of course, permitting and approvals from these offices.

And based on the fact that then the people who were on the target list of Elon Musk at the beginning of '25, they said we will work not that much any longer as before and not over time and so on. A lot of approvals, a lot of things just slowed down significantly. And despite the more positive result, we saw that actually in the figures.

Okay. That's helpful. And then just to come back on your Middle East exposure, obviously, good to hear that your staff is safe there. Can you shed some light on how you're thinking about risk? How you're thinking about country exposure in the current situation?

Yes. The -- at first, again, a big thank you in the Bilfinger Group, very professional risk management, very professional crisis management. The monitoring, the reporting, the taking care of own individuals in the Middle East as well as here in the headquarter and in Europe was outstanding positive. It shows a strong company.

When we look into the Middle East, we cover there or we are acting in 7 countries, not in Iran, to make that fairly clear. We are not in Iran. Second, we are doing maintenance predominantly on customer sites and helping them to keep the sites up and running. We help them in engineering. We help them in turnarounds. We do a lot of work on the customer side. That work is still ongoing. And it's not impacted our business through logistics hurdle or traveling people in or out or goods in or out because our organization is acting local in a decentralized manner and on top of it, if we need support, which is always the support out of the competent centers then we do that digital or by phone.

When we look into the risk in the Middle East, it's too early to say. But as we know, at the beginning of the crisis, it gets always very hot in the media. And then the dust has to settle and then to see how it goes on. We will go on and not changing our point of view regarding the Middle East as a growth area where we will be bigger, where we have a lot of fantastic great customers and a lot of business with a lot of investments.

Yes. Okay. And then just on the margin guidance, I'm not sure you'll be able to or willing to give us that, but just trying. Are you able to quantify how much of a headwind is the chemical business and how much support you're getting from energy in your full year '26 EBITDA guidance?

Olivier, we're not guiding on industries, as you well know. And as you could see, the development in 2025 that we were moving that the revenue share between the industries were shifting from 28% in petrochemicals and chemicals in '24 to 23% in '25 and conversely, the energy industry from 21% to 24%. So we are -- our business model allows us to deploy resources between the industries. So from that point of view, we feel very well protected against those headwinds, but we don't guide on individual industries.

Okay. And maybe final nuts and bolts, just for you Matti. Tax rate you expect for '26. And I am correct in assuming there is no one-offs you expect in the free cash flow guidance for the year?

Yes, no one-offs on the tax rate and/or the cash flow -- free cash flow.

Tax rate you expect for '26 is -- what do you expect?

24%, 25%, that's the usual.

And the next question on the line is from Craig Abbott from Kepler Cheuvreux.

A couple of remaining. Once again, this year, similar to last year, your guidance spread from the low end to the upper end is quite large. I appreciate it's still early in the year and obviously, there's a lot of geopolitical volatility out there. So that's understandable. But I just wondered if you could shed some more color on there about what your scenario assumptions are as to like what would happen to only have a flat top line and what will happen to be able to reach that upper end? That's my first question, and I have one more.

Yes. Thank you very much, Craig. As you know, when we give a guidance for us, the most important is the midpoint. And the -- and that is what we actually calculate and then we look around what is the volatility in the market and that gives the spread. So out of that, what we see is, of course, the high volatility in the market and Saturday morning last week was not helping in that to make it like this. Not that we are from a business point of view really heavily impacted as far as we see it at the moment. But of course, it brings uncertainty into the world. And we all know uncertainty is not a good food for investment on our customer side.

On the other side, we see the dramatic need and demand for better energy solutions, not only more or lower in cost actually more to be safe that energy is always available at the right amount at the right location, especially in Europe. And that is what we not only have in Europe, we have that in the U.S. too and the thing when we look into that is positive from that.

Second in that is the chemical industry, which suffered a lot reached a level where we see and we hear from our customers that their restructuring programs and efficiency improvement programs are taking actually quite a positive development. So slight -- a little bit light, a very small light at the end of that long tunnel we see. So that is another positive in it.

Then we go on with the strategy execution. We did by purpose, as we explained it in December, an upgrade of our strategy to be better positioned to that what happens in the next few years, especially our sales force. We will be closer to the client. We will help them more, and we can show them with digital products to be more efficient, which is for us then a more profitable business, too.

Last but not least, of course, things like long winter time, high volatility are more on the negative side. On the positive side are the developments, what we see to come, Ukraine, the Baltic states, infrastructure packages and so on. So it is quite a balanced outlook what we think, no matter that we have a very volatile market.

Okay. And the second question is rather specific, but it was specifically mentioned in your detailed outlook report in the annual report where you were talking about the various end market investment programs. And I'm referring to the U.K. oil and gas services business, which you suggest is expected to decline by 1/4 over the next 3 years, while the industry and therefore, the industry spend would decline, obviously, by a similar amount. I just wondered if you could give us some indication of how significant this end market has been for you?

Yes. Actually, this whole oil and gas market in the U.K., when you look 20 years back and where it is now, significant less providers are in that business, a lot are out or completely gone as a company. Actually not so long ago, we saw that with peers.

Second, we know that it will go down and we work for years, of course, to counteract on that, as Matti rightly said, to go into other industries, process industries where we were not so focused before on it. But actually, it's the same 80%, 90% of the same work, food, pharma, hydropower, nuclear, there is a lot what we can do more as Bilfinger in the U.K. and actually in Benelux, too and what we call in the Western European segment, which is one of the arguments why we have that as one segment because it's the same thing, shift slightly from one industry into multiple different ones where we have a lot of good experience and already some of it in the top line.

So the fact is the U.K. oil and gas business will go down in that service part but the fact is that we were and we are further able to counteract and actually to put something on top of it.

Okay. And that's very specific U.K. You're not seeing the Norwegian business or other decline?

So the -- actually, Statoil just came out that they found another oilfield or another carbon hydrogen field, oil and gas. And there's no intention at the moment that they really go into it like we see it in the U.K. At the same time, we should not forget that the oil and gas industry works very much on expanding their business model into carbon capture, but will be more and more important, similar technology, same customer, similar 80%, 90%, the same work for us.

It's actually for Bilfinger quite a good news. So we see an industry going a little bit down and [ others ] will come up. And that is, as we saw in the last few years, helping us a lot. Give you one example in that, that we are not, how to say, playing too much Oracle on U.K. and Norway. Take Germany. When I joined, I think Germany was in the top line, 26%, 27%, and now it's 21% and the group still was growing 8% per annum since 2022.

So we are, as Bilfinger with our business model, definitely able to adopt to new situations and to capture opportunities to make out of challenges, actually good opportunities as it should be.

[Operator Instructions]. And the next question comes from the chat from [indiscernible] from AlphaValue and I will read that out. If high energy prices need to lower industrial output in Europe, could that eventually reduce maintenance demand for Bilfinger? How do you see sustained high EU energy prices affecting plant utilization and maintenance?

Yes. Let's start with the high energy prices, lower output. It is a relative game. If the prices in Europe are relatively higher than in other parts of the world, our customers are more under pressure with their production cost. So if the world suffers not to get enough oil and gas, then it hits the whole world and maybe some parts more to the east, more based on Iran than actually Europe or the United States at all.

Yes, there is a connection in it. But if customers are coming under pressure, regarding the output and the energy costs, they actually get from us more support. They get from us more support. This is a pressure market as we enjoyed already since years in Germany. What is the difference for the Bilfinger Group? We -- I look into Germany now, which is under pressure and was under pressure in the last few years.

We actually got more orders in the amount of orders, but they were smaller, significantly smaller in size because in a recession market, if you get an order for 100, you finalize it for 100. In an expanding market, you get an order of 100, you finalize it on 130. That's the big difference. But workload, we have a lot.

Then regarding energy prices, plant utilization and maintenance, same thing, same part. We are looking into very much when customers plan to shut down complete plants and where then the lack of capacity, which is then shut down in that location is going. And what we see, it is not all going. It's wrong information to say everything goes to China. We don't see that.

We see it in other parts of Europe and other plants to get a higher utilization where we help to shut down as well as to increase the higher utilization. And on the other European plants as well as into the United States. And of course, more and more still from a lower scale, the Middle East plays a more important role in what we call the regular chemical and petrochem business.

Thank you, Thomas. I hope this answers your question, [ Igor ], but feel free to add a follow-up in a chat, if you like. At this time, there is no further question in the chat or also on the line. So let's probably give it a few seconds to add further questions, if you like before concluding the call.

So I see there's a further question coming up in the chat. Let's give it a moment. The question is from Gerard O'Doherty from Metzler, Bankhaus Metzler. I don't see a question here in the chat yet. But I think he wants to ask via audio. So I'll ask technicians to open his line. He's dialed in as well. Gerard, can you -- yes, and line open.

We need a few more seconds. Gerard we don't see you see dialed in per phone. Would you mind to type your question on the chat, please? Let's give it a few seconds. Otherwise, we can also bilaterally follow up. So unfortunately, that doesn't seem to work. I suggest we conclude the call now as there are no further questions. Now it's coming up. So I suggest we take it.

So the question from Gerard is on working capital improvement. What we should expect this year on working capital improvements?

We continue to work on the working capital management and on the improvements. We had a significant improvement in 2025. That will definitely stick in 2026. A similar improvement, I think, would be more difficult to repeat. Otherwise, our free cash flow guidance would be higher. So you can expect it to stick and we're happy to improve year-over-year.

Thank you, Matti. And there's also a further question from Gerard whether the order pipeline has picked up in January, February of 2026.

Yes. We will give comments on the first quarter when we announce the first quarter. I think you expected that answer. The -- yes, not more to say on that.

And another follow-up from Gerard, whether on the FX development in '26, we can give comments regarding the weak U.S. dollar.

If I knew where the dollar would go, I'd not be standing here, I guess. Well, we have all seen the weakening in 2025 that has sort of come to a plateau. With the events and developments of the last few days, the dollar has strengthened somewhat. But I guess that's the normal volatility in volatile times. It's anybody's guess.

So I think there are so many economists out there who are much better suited to comment on where the dollar versus the euro will be in 2026. I think if you ask about exposure as our business is very local, and we're not relying on materials and exports and imports, our exposure is very, very small on the fluctuations of currencies.

Yes. We go in line with that, what market in general expects for the dollar development. We work here with the standard agencies about it because in a volatile market to forecast is -- it's [indiscernible].

Yes. From -- maybe just one addition here, from an operational point of view, as far as our contracts are concerned, we are not hedging currencies. It's not necessary because we work in a local currency. We are being paid in local currency. So our hedging volume is very, very limited.

We have one further question on the line from [ Andreas Wolf ] from Bereberg.

Congratulations on the achievements in 2025. It has now been nearly a year since the U.S. administration introduced its tariffs. Let's see whether those will remain in place. But my question is related to the client behavior that you might have observed since then. What implications does the globalization and location have for Bilfinger's business prospects?

Actually, no direct impact. We are a people company. The competence what we have to send around the world, we do digital or by phone. We have a few people who can travel in and out, but the flow of goods of hardware in our group is very, very, very limited. So the tariffs are not hitting us directly.

When we then look on the customer side, it is a lot of debate about which impact that has on the different products and the different production costs, et cetera, et cetera. But at the end of the day, it actually focus our clients to get more efficient. And this is the core of what we offer, efficiency improvement and efficiency enhancement on the customer side.

It is actually quite a good entry for us to go to the client and saying and talking with them, you have tariff headwind. We can help you to maneuver to monitor -- digital monitor the performance of your site, no matter where they are located and you can let us call it play it in the operation more from an international point of view, which definitely helps customers.

So out of that headwind in tariffs, we can do some more products. But it is fair to say that any disruption in the global business always is not a good food for investment. And so the mood on some customer groups is, of course, not that positive, but it's that long, not that positive that we actually don't think that '26 will be a different year than '25.

Thank you very much. That also was the last question on the line and also in the chat. So we conclude today's Q&A session. Thank you all very much for your participation this afternoon. As usual, if there are any further questions, the IR team is here to help you with your models and to answer further questions. Thank you very much, and goodbye.

Goodbye.

Bye.

The conference has now concluded, and you may disconnect. Thank you for joining, and have a pleasant day. Goodbye.

Good morning, everyone. Welcome to this special industrial location, and welcome to the special occasion for us here, presenting our Capital Markets Day 2025. My name is Anette Weidlich, I'm heading Group Communications, and I will moderate you through your day today. Also a warm welcome to all our guests dialing in via the webcast online. Good to have you here. You will be, of course, able to ask your questions via the chat. And also greetings to our colleagues that follow this Capital Market Day via the webcast around the world. Good to have you all here.

Before anything happens, safety happens. So in case of an emergency or if you have to evacuate this location, please make yourself familiar with the emergency exits. The first one is at the end of this fitting row on the left side, next to this very beautiful bioreactor. And further emergency exits going down the hall after the exhibition area. And of course, in the entrance where you came in. The exhibition, yes, that's also part of our safety. So please be aware of all the barriers we set up. We have our industrial climbers and all our colleagues showing all these things. So please let's make together sure this is all safe and secure for everyone attending.

We have a lot to show you here on stage. We have a lot to present you in the exhibition, and I will come later on to that. And to be honest, we also have a lot to be proud of. And for that, I want to show you -- we want to show you a short video. Thank you.

[Presentation]

Your performance is our business. That's our motto. It's relates, of course, to our customers. It relates to our employees. And maybe hopefully, it also resonates a little bit to you today.

So let's have a look at the agenda, what we will present to you today. Here on stage today. I also welcome my dear colleague, Jasmin Dentz, from Investor Relations, following the Q&A session with you.

Good morning, everybody. Hi.

In this morning, we will have presentations by our Executive Board, by our Group CEO, Thomas Schulz; and our Group CFO, Matti Jakel. And during the lunch, you will have the chance to visit our exhibition, and I will explain a bit further on that later. And in the afternoon, we will have further deep dive from our top management from the segment, from HR, HSEQ, and from Sales.

So let's get started, I'd say. And so I hand over to our Group CEO, Thomas Schulz. Please give him a warm welcome. Thank you.

Thank you, Anette. Good morning to everybody here in the room or in that fantastic nice hole, and of course, on the webcast. I will take you with me and with us on a journey up to 2030 for our company. And this journey is of a company with more than 140 years' experience, with more than 32,000 competent individuals in U.S., Europe and the Middle East. This is a company which offers to our clients' efficiency improvement at any time, at any asset they have as long as it is process-related.

When you look into us, we have 90% customer retention rate. 80% of that, what we do for clients is more or less the same. It doesn't matter if we help to produce, catch-up, treat nuclear waste, doing oil and gas, doing anything in pharmaceutical products. That is our competence, to deal with liquids and gases in processes, and we are really good at it.

We are market leading in a lot of geographies. We are market leading and a lot of technologies. We got a lot as awards, no matter if it's EcoVadis or recognition in the stock market. And we are asset light, what we like a lot. As Matti from time to time, says, it's asset like and not only asset-light.

We are organized in 3 segments where you see, by far, the big business and the majority reported is in Engineering & Maintenance Europe and then a little bit lesser in Engineering & Maintenance International and then the segment Technology. The main 4 industries are energy, chemicals, petrochem, oil and gas and pharma, biopharma, but they are by far more industries, what we serve, like mining, cement, food and so on.

If we look on that slide, this describes everything what we do, what we did and what we will do. A good company has a strategy which fits on one slide. That's the slide. And on that slide is our vision: to be the #1 for our customers in enhancing efficiency, and with that, sustainability too. On that slide is the journey, what we are on since '22, but it shows mainly the 2 main directions what we have in strategy, operational excellence, which is improving our own efficiency and market expansion positioning, which means that we bring more of our good products and competencies to our existing and new clients, but it shows our financial ambition too.

And we are, at the moment, and that's the expectation for this year on EUR 5.4 billion in revenue, 5.5% in EBITA and a cash conversion, which will be for that year, around 110%. We are on a good way to fulfill our midterm targets for 2025 to 2027. And when you're on a good way to fulfill your targets, you have to think about the next targets. It's one of the arguments. If you have changes in the market, you have to rethink about your targets, I think we can agree we have that. So out of that, our ambition for that what we want to do is based on that what we already delivered. We delivered up to today, 8% growth per year. This is the organic growth, the biggest part, self-propelled plus the M&A growth. We delivered from 3.2% operational adjusted to 5.5% for this year, and we have a cash conversion close to 110%. The target set for 2030 is 8% to 9% EBITA, 8% to 10% growth and a cash conversion in the north or equal of 90%.

Before I go into the journey, how we will realize it, and you will hear a lot about the little changes we have to say, what we have to do to achieve that and what we want to do to achieve that, some proof points for that, what we already delivered. On the strategy, the achievements efficiency program, done. Second, the operational excellence, roughly 50-meter of 100-meter is done. And then the market expansion, roughly 20%, 25% done. That is where we are.

First, for Matti, myself and the whole team, the whole gang, the bar is of interest where the dark color is not on it. What we can get more where we are going. This is the most important. Financially, we improved revenue since '22 by 25% EBITA, close to 300%, and cash close to 150%. But equal important, maybe more important, we return to the MDAX and the STOXX 600. We returned to investment grade. We returned to shareholders confidence. It's a completely different thing to meet you today than when I joined Bilfinger at the beginning of '22, and I will not talk about that any longer.

And we outperformed actually the indices quite a lot. We -- you see that on the left, we have a peer group where we have customers and peers from the global business against us. And all these indices we've performed, but -- and that's the part, this is actual and history. Now it's about future. And the future looks like this with trends and drivers, actually not really a big change to that what we enjoy for several years. Some are more, how to say, into our pace, some a little bit less.

Climate change is less discussed nowadays in the world. Still there. Customers are still running for it, but volatility in the market is there. We have over regulation. We don't see any reduction in that. Digitalization, a lot of things. And for us, all of that brings challenges and opportunities, that's the most important, the opportunities in it. Which kind of drivers are important for us, outsourcing, efficiency. The whole thing with artificial intelligence, energy cost, training for our people. There's a lot of trends in it where we can participate in making actually business out of it and offering advantage as efficiency improvement to our clients.

And of course, in the trend, we see the difference between how Europe performs in the industrial sector versus the rest of the world. But at the end of the day, it is important to understand that the Bilfinger group, we earn money with companies expanding, and we earn money with companies heavily under pressure because we offer efficiency improvement. And companies under pressure, it takes longer time for decision, but they need efficiency improvement. And we are there to support and to help.

The market where we look into is, of course, divided by 4 main industries plus the adjacent part. We had a disappointing development in our end market from '22 to this year. And that market, what we defined at the end of '22, beginning of '23, we actually only see a growth in the market of less than 0.5% when we believe it should be 2%. We were not alone with that belief, by the way. So we decided to expand the market, especially in the oil and gas and the chemical and petrochem part. And in that part, what is now EUR 210 billion and bigger as an addressable market, we see a growth of 1% to 2% up to 2030.

On top of it, we have an outsourcing potential in the market. And the outsourcing potential that customers give that, what is noncore for them is for us a big business driver which makes another 1%. But when we look into the opportunities what we have, I will not go into each and the list is actually longer: data center, hydrogen, nuclear investment, global investment for clean energy, aging infrastructure. These are things where we are driven by. This is where we jump on it, where we have what we call niche growth, no matter what the industry does.

On top of it, we have, of course, and that's not listed. When we go into areas where infrastructure is completely demolished as it is with the horrible war in Ukraine. This is where we are building. We still have people there, still have people there. We will be part of it to help to recover and build it up. We have multiple opportunities. The customers are looking for multi trade. What does it mean? It means that when they buy from someone, they would like to buy several products because the whole systematic to buy something from a company is so complicated and overregulated that they don't want to have so many sub-suppliers any longer. So out of that opportunity, we were sitting there in the top management and listening into our organization, what to change, what to do. And you have that, you have to listen to your people. You have to listen to your customers. You have to listen to the society you work in.

And we identified if we would go, as you see here on the slide, with that kind of a line, with that ring on top of it. If we would go on as we did before, yes, we will deliver the midterm targets to '25 to '27 with 6% to 7% EBITA. But we will deliver that then all the time around 7% up to 2030. This is not enough because when we build up what we all can add, which kind of niches and growth and competence areas we have, we can go higher. But we have to change here and there, not the strategy, but making an update, update on the strategy and update on the structure. And then we are definitely able to go to 8% to 9% EBITA and definitely 8% to 10% growth.

Despite the fact that the volatility in the market gets bigger, but we earn on it. When customers are scared because they don't know what to do about the high energy cost, we can come in, we can lower it, and we can lower it fast. So what are we doing? One part of the strategy is the operational excellence, our internal efficiency. And you see here 4 strategic levers, and we will talk today about that. We have Mirja with us, our group HR, HSEQ manager. She will talk about people, why that is good to invest and what we get as a return. We will talk about the standardization, procurement and, of course, about the derisking. And you see the bar how far we are already in working through that levers. And then you see there is still a way to go.

If we then look into that with the standardization, which is one of the levers, the global product centers. We had 9 before, we reduced to 5 to get more efficient. But you see the figures what we delivered. We delivered a 25% more innovations, what we bring to the market per annum. We delivered an update and upgrading of our products, 30% of our products since a few years are upgraded. And on top of it, 250% growth to get new products alive on the customer, that means we implemented it at the customer side. When you see these figures, you see this is an innovative, forward, technology-driven company. And not as I heard in '21, '22, you go to a simple service provider. No. You are here with an efficiency enabling competence company.

So what are we doing on the market expansion before we call the positioning because the first step was to position ourselves. Now it's about expanding. People who know me or us a little bit closer, we are doing things and steps because it never ever works that you do everything at the same time, and it especially doesn't work if you promise everything at the same time. So we do it in steps and the speed, how competent and how executive our people are in the company actually gives us as management the possibility to update the strategy. And I have the best team ever in the Bilfinger group with more than 32,000 competencies.

And when you look on these levers, sales, Gerald will talk about it, the same as about performance partner, mergers and acquisition and digitalization, and I will talk about that. Yes, we have mergers and acquisition a little bit lifted up out of the growth story because it's already in. We had an 8% growth per annum, including acquisitions. This year, we finalized 3.

And when you look on that slide, you have on the right side, what is actually the opportunities what we look for. We divide the world, of course, into the regions where we are, Middle East, United States and Europe. And we look into the share of wallet, that is the amount of money, what our customers invest in our market and how much percentage we have of that. That's the share of wallet. I'm personally not believing in market share. The share of wallet is what we know, the customer tells us what they invest. And I would like to have 100%, but will not be happy possible. But we work in that direction. Why is that important? Because in a decreasing market, you actually can go grow when you look into the share of wallet because in a decreasing market, the customer doesn't -- they don't stop to invest. They invest different. It takes longer time, and I would like to have a bigger share of that.

Second, the offering what we have. All the products, what we have, how much of that are we selling in that market. And then the market in itself, how much addressable is in it. And you see United States, good market. Our share of wallet is very little. And the offering is actually quite good, what we can do. So focus on larger acquisition. Then you have the Middle East. There, the share of wallet is bigger. We are better in that. Offering is good. Market is great. So larger acquisition. Then we have Europe. In Europe, our share of wallet is quite good. We are actually, in some areas, leading. Offering is quite good because it comes out of Europe, most of the products. The market is not the greatest at the moment.

So more on bolt-on acquisitions. And these bolt-on acquisitions, to make it clear, is not to add revenue at the top. If we get the company for EUR 30 million, EUR 40 million top line, that's not the issue. But it unlocks further potential, which means with that product range, I'm able to sell 3, 4, 5 other Bilfinger products to an existing or a new customer group. So there's a multiple in the revenue recognition. That makes it so difficult for us to tell you what the self-propelled growth and what is M&A growth because there is a hell of an overlap, and it shouldn't -- should be like that.

So what are the main selection criteria? It is total shareholder return and period, and that's it. I'm -- Matti and myself, we are not fenced on big synergy cases or we buy that because it's available or so. Apps, we did enough M&A in our career. And I can tell you, some were really not good. And I learned my lesson out of it. It has to add value. It has to add value for the shareholder. It has to add value for the customer. It has to add value for the people we get and it has to add value for the people we have. If that is not fulfilled, it's a small matrix. It's a one pager. We look on it. We can decide within an hour if a company is of interest or not. And on top of it, they are willing to join us, welcome. If they don't want to join us, don't touch them.

So strengthen the core, our core. We will not go into rocket science. We will not build electrical vehicles. So we go in the core. I got companies offered where I had to read what the hell they do. I never heard about it. So it is important that we understand that. This is our cookbook and every proposal, and it's a very, very long list because the market is favorable for M&A since years. It's a very long list, and quite a lot are falling through because they are not fulfilling that, and we will not give up to have that.

So out of that, we go into digitalization. There's a lot of talk about digitalization. What is the talk about it? Can you do this software or that and selling it? We don't earn the money by selling software, but we earn a lot of credibility, and we earn a lot of efficiency improvement for our customers if we utilize it in a proper way. And that is what is digitalization about. And we drive -- last year, we said we have 5% of that what we offer is with digitalization in it. Today, it's 15%. And in 2030, it has to be more than 80%. It doesn't mean 80% is software sales. Absolutely not. We are not a software company. But we are capable to utilize the competence and the technology of other industries to go in, to combine it and doing something out of it.

And here are some examples. And let the guy on board -- here, he is [ Max ], a colleague of us. And that is actually the best example of what I have, what we as Bilfinger do -- hello? What we, as Bilfinger do in digitalization. This is a partnership with a German-based company for using these kind of robots. It's a robot from an American company, and the software comes from another German company.

And we, as Bilfinger, are in cooperation with them. We don't build these. We don't do the software. It's not our job. But we use the sensors we have, partly self-developed, put them on it with our competence how to do maintenance. We can send that colleague in into areas which is dangerous or we can send it in just 24/7 to analyze and giving us data to predictive maintenance to tell the client in 4 weeks, in 3 months, this and that has to happen, give us the order, we ramp up. And when -- before it happens, we change it. This is predictive maintenance. This is digitalization, and it's beautiful. We have drawn technology. We use artificial intelligence -- are you leaving me here alone. We use artificial intelligence to optimize customer response, to optimize our own working, to get things quicker done and more reliable.

Out of that, back to the ambition. These are the ambitions for 2030. You see on the left side, the revenue growth. We delivered up to now 8%. The market will bring us 1% to 2%; the self-propelled, 3% to 4%; and the M&A, around 4%. The level between the interaction between market and self-propelled is quite overlapping. It's not a clear line. Because if we expand into a new niche, a new geography like France, Luxembourg, Canada, of course, it's self-propelled because we do it. The market doesn't come to us, a customer doesn't come to us.

Then we have M&A. And M&A, to say 4%, yes, the 4% is partly with that what we unlock with M&A, too. There are bits and pieces. If we have it in our hands, actually more customer doors open. That's the growth potential, 8% to 10% for 2030. Then on the EBITA margin, we improved 230 base points in it, adjusted if we look back to the year 2022, only for the ones looking into it. The operational excellence, what we do with ourselves brings 1% to 2% and the market expansion, another 1% to 2%. And that brings us to 8% to 9% on the next journey.

But if you want to do that, if you target sales, digitalization, people and so on, more updated, a little bit changed here and there, of course, we look into our own structure. And when you look into the Bilfinger structure today, this is the picture on the left part where you see our current segment structure then regions and business lines and then business units and then down the line, you have the customer. And the color code gives you, if that organizational structure is by geography, that means region, by product or by industry.

And you see that the current structure is a hybrid as we call it. For everyone who has people responsibility and business responsibility, avoid hybrids because it's difficult to manage. Why is it difficult? Because you can have different interests. And interest, if I take engineering and maintenance in Europe, it's a product. And Europe as a geography, what do I maximize, the product or the geography? That's a big question because the way how you manage, the way how you set ambition has to be simple and clear, and you run for one target in that part of the organization.

Further, we have an unbalanced situation. And you will see that on the next slide regarding how transparent we are to the capital market. For that, we decided to reorganize still the 3 segments, but driven by geography because our business is local. We are with most of our colleagues by far, the majority is on customer side, not in Bilfinger offices. On customer side, it's a local decentralized business. And we divide into Western Europe, into Central Europe and into international. No matter that the change looks quite big, but it isn't. Because we have already the regions, we put them together. The link into customer and so is not touched at all, but it gives us and it gives you a better transparency.

If we then look into what we are doing here to achieve the midterm targets for 2030, we come out of the current structure, where 69% is E&M Europe, and 15% E&M International and 16% Technology into Western Europe with roughly 35%, Central Europe with around 45% and International with 20%. And Matti will add another factor, another parameter into to read us better. So that you see the performance we promise and we deliver that you can benchmark us easier with the industry peers, customers and so on.

And out of that, where we talked about Matti. We welcome him. Thanks a lot.

Yes. Thanks a lot, and good morning. I will continue, as you would expect from the CFO, with other numbers. Our journey so far, navigating growth, margins and cash flow. So I go back to 2022. That is where we -- Thomas and I started, with a revenue of EUR 4.3 billion that has grown to EUR 5.4 billion, which is, Thomas said it a number of times, 8% CAGR combined of organic growth and M&A. The EBITA margin went up by 230 basis points, from 3.2% to 5.4%. So for those who look into records, they will find that the reported EBITA in '22 was 1.8%. The difference is just the provision that we took in '22 on the efficiency program, well known. And the cash conversion went from 97%. Then because of this efficiency program, lower to 64% in '23. This year with at least one major onetime effect up to 110%. So for about EUR 330 million when you take the midpoint of our updated guidance.

Looking into the next few years, we did a lot of financial modeling around the parameters of growth, organic growth, external growth, profitability. We will grow in the next 5 years by 8% to 10% per annum. Hence, we're accelerating our financial performance. I think Thomas explained it very well how we are going to do this, expanding in core markets, in adjacent markets, and we built on our proven M&A track record.

Profitability. Right now, we had 5.5%, so fairly and squarely targeting our current midterm targets of 6% to 7%. But for the next 5 years, we see growth potential to 8% to 9%. That's another improvement of 250 to 350 basis points.

Free cash flow. Free cash flow conversion. We had a target of 80% midterm right now. We believe that with further improving our trade working capital efficiency, we can exceed 90% in the next few years.

What is the composition now of the updated organizational structure and how do they contribute to growth on the top line and the bottom line? Western Europe and Central Europe, we see growth rates of 6% to 8% per annum over the next few years. And international, and I think that's very consistent with what we have communicated over the last few years, the growth potential in North America and the Middle East is greater than in Europe, and that's reflected by the growth rate that we are expecting for the segment International.

Profitability-wise, our services, what we call industry agnostic. We can deliver any service within our 4 core industries across those industries. So we don't have products that have a certain margin here and another margin there. So we believe that our segment will deliver, and that's the plan, 8% to 9% each in the course of the next few years and to get to that level of profitability. So we're not dividing or making a difference between Western Europe, Central Europe and/or International.

The segment structure will certainly provide, and I heard the comment already this morning, better transparency, easier to read and particularly easier to follow, what are the drivers in those geographies. If we look into the components, in the last 3 years, we had expected a market growth of about 2%. As a matter of fact, and doing sort of the calculation backwards, it's less maximum equal to 0.5% per annum. We achieved with our M&A, a growth component of about 4%. And the self-propelled, everything that we did ourselves with the strategic levers, adds up to about 3% to 4%. If you look at the color coding here, it is a blend. And as Thomas explained, we make an acquisition and that unlocks potential, and that is what has happened over the time. So we take an acquisition in the year, it's M&A growth. But when the unlocking of that potential happens in the future, it's self-propelled growth.

Going forward, we see market growth of 1% to 2% based on the fact that the market -- the addressable market is larger than what we had so far. And the components here on M&A, again, we expect about 4% and 3% to 4% from self-propelled. For those who like math will figure out very quickly that 4% on [ 3.7 billion ] is a lot less than 4% on EUR 5.4 billion. So while it doesn't look like we are really accelerating, but we're coming off a higher base. Consequently, the contributions from those components is certainly higher than what we have seen so far.

An important component, sustainability. When the EU taxonomy was set up, they forgot industrial services provider. And consequently, we had to come up with some measure, how the -- we can be read in terms of what's our contribution to sustainability. And we -- I wouldn't say invented, but we took something that is already out there in the market, the ABCDE category that everybody knows when you go out and buy a washing machine, a dryer, TV set or the like.

So the A category is the highest impact into the environment. These are plans, our customer plans that -- where the energy generation is by renewables, a hydro power plant, for example, a plan that deals with circular economy or direct CO2 reduction. So those are the plants that have the highest direct impact into the environment. Whenever we enhance efficiency, particularly when we perform insulation work, that's Category B. And then all the industrial services that are not directly covered on A and B but support is -- there's always a sustainability impact in there. There's always a positive environmental impact in there. And then we have category D, which is coal-fired energy generation and/or oil-fired energy generation. And that are the areas where we want to phase out over time because we are not able to make a positive impact on sustainability and CO2 reduction. If you look at the growth rates, we achieved a higher growth per annum in the last 2 to 3 years on the A and B categories, and we expect this to continue for the midterm.

On the profitability, coming off of about 3%, exactly 3.2% EBITA margin in 2022. We added about 1.5% to 2% by way of operational excellence. So everything that we did to enhance our own efficiency and about 0.5% through market expansion, 0.5 percentage point to be exact. Now taking the 5.5% EBITA margin as we have today and developing it forward, we've will add another 1 to 2 percentage points through further operational excellence. We have updated our levers, and another 1 to 2 percentage points by market expansion, be it organic albeit to M&A growth.

An important part of the EBITA margin and gross margin progression over the last few years was derisking. And we have discussed it with many of you many times what we did when we went through our entire portfolio. Until now, we have reported our revenue share between projects and framework and service contracts. We were not happy with it, to be honest, because it doesn't really show the risk profile of a contractor and its contract portfolio. What determines the risk profile really is how we are being compensated for our work. And from next year on, we will report our revenue by remuneration model, meaning how are we being paid for our services. About 44% right now this year is so-called time and material contracts, where we are being paid for the input that we deliver plus a margin.

On unit rates, we're also being paid for the work that we do based on quantities where the productivity risks and opportunities lies with the contractor. Then we have, what everybody knows, as fixed price or lump sum, which is about 20%. And then there is a number of mixed remuneration forms. Typically, we have a fixed component, a small fixed component on project management and we have all the rest on time and material or unit rates. So looking at it in totality, if you add time and material unit rates and the mix, about 80% of our work is what's called reimbursable. And that gives you a very good picture on the risk profile of Bilfinger. A number of peers use the same methodology. So you can compare us much better to other market players that are out there.

On the lump sum, and we have reduced our risk tolerance substantially in the last 3 years. Where we are entering into lump sum, we preferably -- it doesn't always happen. But preferably, we are involved in the design and planning and engineering phases of those projects or contracts. Because then the risk allocation is a lot fairer between the client or customer and ourselves and the contractor. If the tender is out there, where the only question is, give me your lowest fixed price on something that somebody else has planned and developed who are very, very reluctant to do that. So lump sum is not lump sum. You can make a lot of good money out of lump sum when you know how to do it. But the key is you have to be involved in the development and the planning of the contact or the works.

Totally different components or part of operational excellence is procurement. Our procurement spend is about 40% to 45% of our revenue. So our own value creation is 55% to 60%, and the rest, we purchase. We do purchase a lot of labor resources, but we also purchase materials and typical subcontracts. So what have we started to do in the last few years? Using AI to optimize procurement processes. We have a few bots at work. We already have AI agents at work, and there's the potential to reduce the admin work by 25% to 30% over the next few years. That's an enormous impact that we will deliver in our procurement operations.

Global sourcing, Thomas said it, our business is very local, very regional, but we source globally, be it on materials, like insulation material, like pipes, anything that is out of steel, stainless steel, carbon steel, we source globally.

Workforce, a very important component. We're not just waiting for people to show up at our doorstep. We go out and go to those countries where we can find workforce. And we have our own workforce that we can mobilize and travel throughout Europe, but we also go to countries. Lithuania is one. Turkey is another one where we find partners where we can source workforce also. It provides access to [ MAX ] and other technologies. Obviously, anytime you can lower your number of suppliers, you're doing a better job. So supplier development reduces the sourcing effort and it increases the quality of delivery.

With the many acquisitions that Bilfinger has done over the past, we have bought a lot of so-called workshops, prefabrication facilities and so forth. We find that there is a good opportunity to consolidate a scattered footprint to generate synergies. But this is only half of it. We also purchased those services, prefabrication. And here, we are very disciplined in looking at make or buy, how much of prefabrication do we want to do ourselves and how much can we source from the market. So another component that helps us in the supply chain in procurement to add 0.5 to 1 percentage point into the EBITA.

Over to my most favorite subject. Cash flow. Last year, we introduced NTA over revenue as a KPI, and we set ourselves a midterm target of about 8%. We've done very well in the last couple of years coming off of about 12% in 2022, down to 10% in 2024. Now it looks like we're getting to 8.5%, 8.3% is the current forecast. So we're getting to achieve our current target of 8%. And when I introduced the subject, I showed that the average of our peers is at 6%. So we always want to be at least as good as the average of our peers and oftentimes better. So until 2030, we want to improve our working capital efficiency. Again, focus is on accelerating billing, collection process, invoicing, but also the derisking I spoke about really helps improve working capital efficiency, which will then enable our cash conversion rate to grow to 90% and above.

So what are we going to do with all the cash flow that we will generate? We have priorities in our capital allocation, and they remain, in total, unchanged. We have a dividend policy of paying 40% to 60% of the adjusted net earnings. With earnings growth comes dividend growth. We will fund our organic growth, be it in sales, be it in people, what we hear about more this afternoon. We saw innovation and digitalization already. So we will fund our organic growth. We will put more emphasis on M&A, be it in the core business with bolt-on or core geographies, with bolt-on adjacent geographies and intent industries.

And then we were very happy to return to investment grade this year, and we want to keep the investment-grade rating going forward. All of you know that we have a shareholder -- a share buyback program running. It will complete at the end of this year before Christmas. We have no plans to set up a new share buyback program, but those optional shareholder returns are always in the toolbox of a company of the CFO to see what we can do, but it will be purely optional.

Our leverage is down to 0.5, 0.5 by the end of this year. When we received investment-grade rating, we set ourselves a threshold, so not a target, a threshold of 2.0 as leverage, which gives us quite a comfortable headroom to fund growth, particularly into M&A when it's -- when the opportunity is right, when it happens. So we're very well placed to exploit all the opportunities that we have shown you and we'll continue to show you this afternoon. We have a very strong balance sheet, financially very well sound or very sound.

And to sum it up, Bilfinger is a very attractive investment case. You would not expect me to say any different here. But since we are going to increase our sales, I have to do my part. An industrial or an asset-light industrial service provider, that is what Bilfinger is these days. Our customer retention rate is 90% plus. So when we work for a customer, we do it not just for one, we do it for many years and many times. The 8% to 10% CAGR is an ambitious growth rate, but we will do it through market expansion. The EBITA margin progression to 8% to 9% is what we do then sustainably. Talked about the strong cash flow generation and our disciplined and transparent capital allocation, and I believe strongly that these 5 components make Bilfinger a very interesting investment case.

With that, thank you very much for the intention so far. And I turn it over to Jasmin for our Q&A session.

That's true. So thank you so much, Matti. Thank you, Thomas. So we are now happy to take your questions first from those present here in Fredenhagen. And in the meantime, our virtual guests can, of course, type in their questions using the chat function.

So Thomas, welcome on stage again for the Q&A. So who has directly a question? So there's one from Michael Kuhn from Deutsche Bank.

Yes. I think I'm ready. One on, let's say, your elements of growth. Obviously, you've now broken out in more detail what you expect to be contributed from M&A going forward. Still, there is this -- those 2 elements, OpEx -- operational excellence versus market expansion. And I think you delivered more growth-wise and also margin-wise, via operational excellence so far. So maybe just a few additional words on, let's say, how you want to improve the market expansion element going forward even more probably by intensifying your customer interaction and so on.

Yes. The -- when you look into a typical industrial service provider, you work with most of the doing on existing customer assets. And the customers there and the responsibility, what you take actually doesn't give you a lot of time to go to the next side, which is maybe only 500 meters to the left or right to look for a new client. So that kind of in the business embedded DNA to work on existing customer base, we will break through with a dedicated sales force in the different segments and business units. We actually create, on the top management, what we call Group Executive Management, a Chief Sales Officer to support all the local entities and customer approaching entities to build up sales structure, sales strategy and enforcing that.

The -- when you look into my vitae, you see that I come actually from very much engineering product and service companies. And products have, per se, always a very strong sales force, always. The Volvos, the SKFs, the Sandviks, the [ FLSmidths ] and so on. And we in the industrial service part, the amount of sales force, what you have there, is fairly limited based on the nature of the business. But in a time where we have markets like in the Middle East or markets like in U.S., where we have more and more of our well-known blue chip customers going in and asking from us more service, we have opportunities to go outside the fence and selling more of our products. We did that in some parts in the last 12 to 24 months, very successfully.

Another element in it is we showed -- I showed one slide with the 9 niche things like data center and so on. There is by far more. And for that, you need dedicated expert teams going to the client to convince them.

Last but not least, I'll make an example for outsourcing. You have a company with 5 plants, and we have an own maintenance team of, let's say, 500 people. And you do on these 5 plants, the 500 people. I guarantee you, a company like us, we don't need 500 people. And you need regular, significant less. But when you have a turnaround, we can ramp up immediately because we have more than 30,000 people. Own companies producing can't have that. They have only 500 people. So why not to outsource it? Why not to give it to us? You actually save the money for the 500 people plus HR, finance, facility management, IT cost, whatsoever.

And we take over and with digitalization, we can prove to the client that we each year improve efficiency. That's the outsourcing, but you have to go aggressive on yourself, customers normally don't come to you. I generally don't believe that customers come to a supplier. You have to go there. This full-stop warehousing where customers come to a supplier, forget it, never sold them more than 35 years.

So please, Olivier. Go ahead.

Just one on your targets for 2030. Are you penciling anything from German infrastructure spend in your current organic growth targets? That's the first one.

The -- I know that the question will come. I was so close to mention it on the opportunity slide. I said it on the day when it came out. We, as Bilfinger, will not have a direct advantage out of the infrastructure package as well as the defense package, but we have an indirect one because our customers have an advantage out of it. If someone builds a power plant in Germany, of course, we are able to offer quite a lot, but we will not do everything. We are not the contact partner for the government.

Second thing is because -- typical for stock market, such an announcement comes, everyone goes rocket high. It is a political decision to invest taxpayers' money over 10 years into the market. There is a time line on it. In industry, we talk about months, maybe quarters. In politics, we talk a little bit longer line, years. And we said that we don't expect anything than coming through our customers on us before the end of '26. So there is only indirect and little in that outlook. And to give a little bit of base on it, we had 8% growth without that, where actually the investment out of Germany was more into things which were not so much for the infrastructure.

Olivier, you had a second one, right?

Yes. Just one on the rate of growth. On one of the slides, you see like an increasing arrow. I was just wondering if there was an acceleration in the rate of growth that you foresee? Or is that more even?

The only -- in mathematical terms will have a linear thing. It's always a bumpy road. But when you take that what we said about M&A, unlocking, of course, you get an acceleration in it. I take an acquisition, the -- everyone was happy that we acquired Stork. Actually, our Stork people were very happy and we are very happy to have them. So -- but what we see is on day 1, they unlocked a lot, but they unlock more and more into the future. That's explaining it, but it's not a hockey stick to make it fairly clear. It's the only thing what it should show is this is not exactly the same percentage.

I saw Craig raising his hands. So Craig, please.

Craig Abbott from Kepler Cheuvreux. The word -- can you hear me?

Yes.

Okay. The word adjacent markets appeared quite frequently, both on the product side and geographically. I just wondered if you could maybe be a little more specifically. I mean, geographically, i.e., have you already identified some markets. Would you be leveraging existing customers to enter these markets? Yes. If you could just maybe just shed a little bit more of your current thoughts on how -- well, how significant this component is likely to be and how you want to go about it?

The -- we have, of course, 3 dimensions in it: industry, geography and product for adjacent market too. What we show as core industry, that's the industry dimension, is the business in an industry with over a longer period of time, more than 10% of the revenue line. So that's the thing. We -- of course, when you look into and you have beautiful examples here with a bioreactor. It actually looks like any processing plant, but quite small because it's bioreactor. So the process industry, and I don't joke when I say ketchup, shampoo, oil and gas, district heating, it's only the size of the plant. District heating is hundreds of square kilometers. A biopharma plant, square meter. So that's adjacent industry.

Second, geography. We are not -- if we talk about adjacent geography, we are not talking about China or Peru, to be fairly clear or South Africa or something like that. We talk about neighbor countries where we have existing customers having plants there and actually asking us to join them there. And we will push more that we join them by force, which means we offer them, but that we go with them into France, Spain, Northern Italy and so on. That's adjacent geography.

And then adjacent product. Adjacent product is -- we acquired some companies like Rodoverken. We are an expert in district heating. And we know -- and I'm very specific now, Ukraine has a lot of district heating setup. And we are great in district heating, but we needed some competence in Nordic district heating as well as in the tank design. That unlocks a lot. So Rodoverken brings us this into the group or brought us this into the room, this is adjacent product. It unlocks more potential for us.

Maybe one more to add there, Craig, is -- so the Stork acquisition, we are now in a position to do a lot more work on sort of reengineered turbo blades, for example. So when the time is over for the OEM to supply spare parts and service, but the equipment is still running for another 10, 15 years. That is service that we learned from the Stork people is not only a very interesting service, but it's also from a margin perspective, quite higher or quite a bit higher than what we do with say, routine maintenance. So that would be something that we call adjacent products or service. And there's quite a bit of potential for growth there as well.

And customers really demand that -- it's not only that we would like to do it. Customers, they sit in the seat of a client. You want to give any little order. You have minimum to ask [ 3 ] suppliers to get a quotation. Otherwise, it's not with the governance and compliance. Then you have [ 3 ] possible suppliers. You have to -- you have to look into what is their track record, sustainability, governance, compliance and so on, financial strength and so on. If they have child labor, you can imagine.

And then you have 5 or 6 things to buy, that's a nightmare for the procurement department. So what are they doing? They look for companies being able to have 2, 3, 4, 5 of the products then instead of having 15, 25, 36 companies to scan, they have them [ 3 ]. And then a company like us comes around and says, actually, as more products we add as more, you have a benefit and the efficiency improvement because we influence more so you get a bigger advantage out of it.

So the next one comes from [ Nicolas Demeter ] from Metzler.

I have one question to the profitability improvement. I know 1.5 years ago, we were here, and there were a lot of stuff to do, and it seems like there were low-hanging fruits like standardizing businesses and everything. And now my question is, what do you think now it's -- now again, 3% to 4% improvement in EBITA, how easy is it to increase the profitability? What is the role of pricing? And would you say it's now harder to get to this target? How predictable is it?

At first, the -- and this is really as it is, it is never easy, to make it fairly clear. It's never easy. Gerald will come with sales and performance partner there pricing and so on. He will talk about that.

The potential what we see to improve the profitability, as Matti lined it out, what we will do in the different segments and so on, is completely backed up by as we are conservative people and plans in steps. We proved that the organization is realizing that what we have in the plan. We see it in the market as an opportunity. We see that as more we go that way, we play more the product mix. As we saw in the quarter 3 in last year where we had 6% operational profitability, that was product mix. That all is what we run the company more and more into it, which gives us, of course, an opportunity in a nutshell to raise profitability.

Do you have another one? So are there any other questions here? Please, Olivier.

Yes. Just one on sort of M&A. You specifically sort of mentioned the U.S. and Middle East as a target geographies, but they are very different. So what can you tell us about sort of target size or any specific industries you can elaborate on, and that would be great.

No, I can't do that too much because then I raise the bar, if we have to give a bit -- to make a fairly clear, you know how the world works. But it is clear that we are in U.S. and in the Middle East subscale. And size matters for Bilfinger. If you only have 10 people on the site and a big deal comes, you are not getting inquired. That's as simple as the world is.

On the other side, the bigger things are the ones where we can add the most efficiency improvement, means we get the highest profitability for ourself out because the customer has a significant bigger value base improvement. So from that point of view, it is clear that we look for something which fits to us, and I would not underestimate that the people, we have to see that they want to join us. We are not acquiring factories with robots. We would like to have that people join us. And if they are dead against it, not a good idea.

So also, we will have another Q&A session in the afternoon. Are there more questions? Please, [ Chard ]. Go ahead.

First of which was excellent. I just wondered, just in terms of the States, you were talking about share of wallet, and it seems to be one of the biggest opportunities out there. So in the context of growing organically and with acquisition in terms of how you deal with the EPCMs, which -- they seem to be quite important in terms of consulting procurements in the States.

And the second thing is just on bundling. You mentioned it in terms of bundling products in the context of your new sales strategy, I just wonder if you could just give us a little bit more detail on bundling?

Can you take the EPCM? Okay. The -- when we look -- let me start with the bundling part. If you go around here, there's not one product, what you see here. We call it product, the service. To make that clear, we call everything what we sell a product. The reason for that to explain that is customers like to have standardized offering. Then you offer the standard and then there's a -- great. I take the standard, but can you change this and that never ends. So at the end, it's more customized than ever before.

And we try to push that we go more like this. In that case, the example is the software industry where you buy actually a software and a service from Microsoft, which is actually fairly standardized, no matter that it's -- that you talk with people and getting a people service. And that is the way we push for. The good part in it is the top management of customers would like to have it because it's easier for them to place orders, to compare, to follow-up and so on.

The challenge is a little bit our own people because we have -- thanks, God, we have a lot of creativity in our group and we have a lot of creativity on customer side, too. So they meet and they say, "Oh, we make a standard deal." And then you look into it and then you say, "This is not standard at all." So this kind of bundling actually highlights that we give to our people and with that to the clients, packages where we say, "This is what you need to do." We offer you, for example, [ free statues ]. You can have the bronze, the silver and the gold [ status ]. And bronze, this is in it and then you go on. And as more products you can add in it, you actually can prove that you influence the work and the asset performance more with that, you have more potential to reduce cost means to improve efficiency.

Days out of the equipment business, where it was quite a long time in with reengineered products, too. Actually, more than 35 years. If you improve one unit, your improvement potential is roughly 5%. If you improve several units in a process, it's up to 20% in total. It's the biggest improvement. So we look into -- and if we say we make maintenance for you more efficient, then we are not looking only to one issue what the customer has at the moment. We look for all the points, what we can influence with maintenance. And then telling the client we bundle it for you, and this is your improvement potential. And with digitalization, with colleagues like him, who is sleeping. With colleagues like him, we can actually show the client business where you are today, and this is where you are tomorrow. Value-based selling. That's the big thing.

What was the first question?

What was the first -- I think it was on EPCM as part of our service offering. Is that what you...

It's more a question of -- let me just go back to my question here. So yes. Just EPCM, the engineering, procurement and construction management consultants in the States seems to be -- they play an important role of where customers actually buy their industrial services. That's my understanding of it. So when you were talking about more wallet share in States, what's your strategy with them, especially if you then bolt on M&A buying a target in the States. Is that a consideration which you have?

Engineering, procurement, construction management, we have already in our portfolio as part of the service offering. It's more prevalent in, let's say, U.S.-dominated markets. So North America, obviously, but also in the Middle East. And we play to some extent there.

The sourcing of industrial services in the U.S. works a little bit different from Europe, and I think that is what you're referring to. We have spent the last 12 months at least to take a very deep look into the U.S. market and the M&A opportunities there. If we had come to a conclusion, we would have probably made a deal already in 2025. So we're still in the process of figuring out what is the best possible option for Bilfinger to position it.

In general, and that's more for our entire service portfolio, we prefer to work directly for the end client without an engineer or an EPC contract in between. It's not always possible, and we have to adapt to the market circumstances. But our preference, and that also applies to possible M&A in the U.S., is to buy business where most of the business is directed with the end client.

So we do not have any questions from our virtual guests yet. So again, an invitation to type them into the chat function, and we will latest respond to them then in the afternoon.

Are there more here, [ Nicolas ], we want from you.

I have one question to the CapEx. You said it should be around 1.5%. My question was what is the main driver there? I think right now, it's like scaffolding or what is it actually?

In terms of share in the CapEx, it's replacement of scaffolding, mostly what we have in our business. Do we invest in some form or fashion in our workshops? Yes, we do. From time to time, we invest in machines that we need for installation, material and so forth. But it is, as we said, we're really asset-light. We prefer not to own real estate. It is what we use every day in our operations.

We have a Q&A in the afternoon.

Exactly. As I said, we will have another Q&A that afternoon. So Anette will now explain you how our guided exhibition tour works during lunch break, and see you then all in the afternoon. Thank you.

Yes. Now that we are heading into a lunch break. You all -- or some of you, as you already registered up for a guided tour have a colored dot on your name tag, and we have a slide explaining our guide tour. Maybe we can see that. So -- Yes, thank you. So we will start with the green and the blue tour, and you will meet in around 30 minutes, so you have enough time to get something to eat first. We will meet -- the blue tour will meet behind the exhibition area and blue tour -- Now I'm getting completely confused. You get it better than I do. Maybe, yes. So we'll start the blue tour behind the exhibition area, and the green tour meeting here upfront. We have a lot to see. We have -- from nuclear fusion from bioreactor, we have a gas protection track. We have free engineering turbo blades. We just talked about it. So please welcome us in our exhibition, and our colleagues are more than happy to explain everything to you.

Thank you, and see you soon again for lunch at 1:30 -- after lunch, get back on stage. Thanks.

[Break]

Welcome back from our lunch break. I see last colleagues, people coming back. Wait for you. I hope you enjoyed your lunch, and I hope you enjoyed experiencing our exhibition our colleagues really did a fantastic job putting everything together. And I hope you had some inspiring talks and took away some insights there.

So now we will move on with our deep dives. The first one will be presented by Jürgen Liedl, our Segment President, Central Europe, on the business in the segments. So please give a warm welcome to Jürgen Liedl. Thank you.

Thanks, Anette. Thanks, everyone, for coming back. I saw some very good conversations between you and our colleagues out there where they had the opportunity to share with you all the good stuff that we are selling and that we are executing at the client side.

I look forward now, let's say, in the next 20-ish minutes to share with you in further detail how the segments that Thomas has introduced in his presentation, how they are going to look like, in which kind of environment they operate, and how they will operate. Also, why these updated segments are bringing us to the next level of operational and financial performance.

As we said, from the beginning of next year on, we will have three updated strong segments, purely geography-led, and each one of them organized towards the requirements of the customers. We will have Western Europe, which currently generates about 35% of our revenue. We have Central Europe, with is about 45% of our revenue; and we have International with about 20% of our revenue. All four of them are offering the services that our clients require from us across the lifetime of an asset of a plant and in the way that the clients also think and act and buy these services from us. So all three of those segments offering consulting and engineering, prefabrication and installation, access and insulation and asset performance.

By the way, also those of you who have been in the circle, those are the stations where you have also the client experience in that we are generating and having in all of our segments. Also all -- sorry, all three of those segments is three. All three of those segments are working in all of our core industries, chemicals, petrochem, energy, oil and gas, pharma, and they're working on adjacent industries. How do they look like in further detail? You can see them here on the maps. And the countries that are highlighted, those are the countries where we already have a significant strong presence, where we're doing permanent work, where we have permanent locations, where we have a legal setup to do all kind of work that we want to do there. Western Europe, already strong in the U.K., in Belgium, Netherlands and in France. And one of you has asked a question about adjacent markets. So for example, Western Europe, Spain or Ireland or Portugal is or can be one of such adjacent countries where we are looking at how can we do business with our established clients in these countries that we're not doing yet.

Central Europe, active and strongly present in the Nordics, all countries there, in Denmark, in Germany, Austria and Switzerland. And we're also looking how we can do work and have a permanent presence in Italy. International segment with a broader range. So they are active in North America, especially in the U.S. They are active in the Eastern European countries, the ones that you see in dark blue and also in the Middle East.

Again, in terms of volume and seminar that these three segments bring to the market, they are all strong and they're all strong performing. We have between 8,000 and 10,000 own employees in each of those segments. So really, as we said, the size doesn't matter in our industries. And we have a strong size and strong workforce there. We also have, of course, a strong network of subcontractors, and we have access to big labor pools in each of those segments to make sure we bring in specific know-how where required. and also to make sure we can manage workloads, peak workloads with the labor pools out there.

Revenue that we are generating in each of those segments is between EUR 1.1 billion and EUR 2.5 billion currently. So also again, significant size. And all of them are already working and operating on a profitable level. So referring to the midpoint of our guidance, it's between 4.1% and 6.6%. So a strong basis for further margin improvement and for further growth.

What is the kind of work that we are doing? What's the kind of business that we are doing? You see here for each of the segments, the split of our revenue in the different industries. Again, you see we are already active in each one of the industries. We are successful in every segment and in every industry. We generate significant volume already in each of those industries. But you can also see on that slide immediately the opportunities that are created. So as an example, we generate already 20% of revenue in pharma and biopharma in Central Europe. Compare this with our current revenue share in Western Europe and in International, and you immediately see the potential because the markets are there everywhere. The know-how is also there in the industry. We just need to sell it and bring it to the market, which is what we are doing. Another opportunity is looking at the International segment. You see a very high share of work of revenue that we generate in adjacent industries. So like growing the share in our core industry, that's another big opportunity that we see and that we're working on.

Now what are the market dynamics? And with that also the opportunities that we have in these three segments because they are in some way specific. You can see on that chart like the Harvey ball or the triangle for all of those segments. And we are showing here how we assess our offering in those segments, how we assess the market and how we assess the share of wallet. Obviously, the darker blue, they say -- the more -- the higher opportunities are, the stronger our position is.

But looking at the market, there is a difference between Europe and the International segment between the European segment and the International segment. Europe in many industries is very much driven by efficiency. So our clients, especially in the chemicals industry, in the oil and gas industry, they request us to come in and from day 1, increase the efficiency, make the plant more reliable, take out the cost, improve the performance. And another thing that comes along with that is that in the European segment in both of them, we see increasing requirements for outsourcing. There is a huge comeback of outsourcing in these industries where our clients see outsourcing as a way to manage the cost, right? Because first of all, maintenance is often not their core know-how. Their core know-how is production. Our core know-how is maintenance. So our clients in difficult times, they focus on those things where they are best and they tend to outsource those things where they are confident they have a better partner, which we are. And so this is what is driving our market in Western Europe and in Central Europe.

In the International segment, all of the geographies that we see here, we see -- that we have here, we see very strong investments in all kinds of industries, in our core industries and also in adjacent industries. And this investment is done by local players, by regional players and by global players. And that creates a lot of growth opportunities for us. Of course, we also see investments in the European segments, but there they tend to be more focused on specific industries like energy, pharma or data centers as an example.

When you compare this with Bilfinger, again, in Europe, we have a very strong offering already today. And we have also a high share of wallet, especially in Western Europe. We have a few countries like the Netherlands, also Norway is another example where we are the clear and undisputed #1 in the market. So you will not find any other service provider who can offer that broad range of services in these countries and who has that high share of wallet. So we are proving that we are able to be the #1 and that there is a benefit for the client. And we are transferring that model from country to country. So yes, we do already have a high share of wallet, but looking at the overall market size, there's still good room to grow.

Compared with international, also there, we have many areas where we already have very high technical know-how and capabilities. For example, our engineering teams in the Middle East or our access services teams in Eastern Europe. They have really very strong reputation and know-how. Plus we are demonstrating day by day that we are able to win new work in these countries. So that is a good recipe also for further growth in these geographies, and that's a good strong basis for success.

You also see the different market sizes in these segments. When you compare that with the revenue that we generate, you will find out in Western Europe and Central Europe, we have a higher market share compared to international. We will grow the market share, the share of wallet, I apologize, the share of wallet in all of the segments, but much stronger, of course, in the International segment.

How are we going to do that? Those of you who have joined us in previous Capital Market Day will remember, hopefully, that picture in some way or the other. What we are demonstrating with this picture is how strong we are in a different area of our business. You see the different three segments, and you see the business and the services that we are offering. And the darker the blue, the stronger we are in terms of capabilities, the higher our share of wallet. And we have the plan and the pathway forward to close as many of those blank spots that are there. And you can zoom in into any country or any service and you can also zoom in even to our clients, and you will find those different patterns. And what we are doing is we are increasing the share of wallet, focusing on those areas which are light. How are we doing this? In the same way that Thomas has explained in the morning, we optimize our sales. So Gerald will explain more about this one. We're doing M&A, mainly bolt-on in the two European segments, and we're also open for bigger acquisitions in the international segment. We establish ourselves country by country as the performance partner because we are efficient, we are sustainable, we are reliable, we work safely. And we use innovation and digitalization to make our products more attractive, a recipe of success that has been working in the last 3 years, and it will continue to work in the future.

So where will this lead us? Profitable growth. You see here the financial targets, ambitions of our three segments based on the 2025 current expectations moving forward to 2030. On the top row, it's the revenue. On the bottom row, it's the EBITDA margin. We are growing and we will grow in the European segments on average, 6% to 8% per year CAGR and in the International segment between 12% and 15% per year on average from this year to 2030. Why is the International segment delivering a higher growth than the other ones? Two reasons. First, the market is growing stronger. And second, we are open for a bigger acquisition. And in the European segment, as we said, we are looking more on smaller specified acquisitions that help us then unlock growth, but it's not that big chunk that we intend to acquire at one point.

And in all three of those segments, by expanding our share of wallet, we are also driving self-propelled growth. EBITDA margin, we are starting from a profitable level on all three of them, but a slight difference. We are bringing all of those three segments up to an EBITDA margin between 8% and 9%. With the combination of operational excellence, there is still room to be better. There will always be room to get better, and we're working on that, but also with market expansion. Now obviously, when we're going to new clients, when we're going to new site, when we're looking at an adjacent industry, we want to make sure that this is profitable. there's not a lot of -- it doesn't make a lot of sense to spend your money and time and energy and management attention.

Okay, only have 5 minutes left, management attention to something that does not add to your bottom line. And also in terms of M&A, I mean, we have been demonstrating in the past that when we acquire a company, it's either accretive from day 1, but there is a clear plan and execution at to make it accretive in a very short time. And our recent acquisition has proven that.

Now a few examples on how we apply this on, where we are applying all of that, what I'm saying. On the left one, another example of the so-called adjacent market. In that sense, here in that example, it's the industry. Since 1.5 years, we're working with the Dutch Ministry of Infrastructure and Water Management. They have defined their bridges and locks and other waterway infrastructure as so-called critical assets, and they spend a lot of CapEx in that. Why? Because 1/3 of the area of Netherlands is below sea level, and sea levels will rather rise than go down. So the government and the population want to make sure that all those bridges, lock are working efficiently and safely and reliable. And they have trusted us with doing all the upgrades, all the electrical and automation upgrades in the area of which covers a big chunk of the Netherlands. Why? Because we have demonstrated these capabilities in other industries and because we are there on site, and we are present.

Another example on how we combine different bits and pieces together into one solution, you see in the middle with our client, E.ON. Especially within Europe, the storage of energy is becoming more and more important to manage the different fluctuations in production and in demand. And at Bilfinger, we have a solution, the so-called heat accumulators, which is a proprietary solution where we use water and the temperature of water to store energy. And you see such a tank that's in the middle picture, this is the silver tower. They can go up to 30, 40 meters. We have the technology to design them. We have fabrication workshops in several parts of Europe to build the material. We even have a patent and technologies to assemble them in efficient and safe way. And we have the teams in all of the regions and areas and locations to build them, which is why companies like E.ON and others, they're working with us more and more to get this one package delivered by one source and to make it happen.

Third example, working with clients more and more is global key accounts, key accounts. Shell is a company we used to come back to Shell in each of our Capital Market Day that finally are nearly our biggest customer. And we have been working with them a lot in the U.K., in Germany, in the Netherlands, and we still are. And since 2 years, we are now doing work with Shell also in North America. So we have won a contract, quite a big one in the Gulf of Mexico, where we are doing all the mechanical and electrical maintenance work and turnarounds of all of the offshore.

Why is Shell working with us? Because they like to see and appreciate how we are standardizing our execution. So that no matter where they go, they work with Bilfinger and they see this is building up. That means standardization on our end, but that also means standardization at the client side, at the customer side. And also because we have established also a global key account management system where we are working with Shell on different levels. And they not only do work with us here on specific plants, but they also invite us for workshops with other contractors when it comes to safety, when it comes to mental health. And now this year, we will even start an overall program with them and other suppliers in how to increase the efficiency on their sites. So this is really a strategic partner for us.

But we are not only working with big clients, we are also working with specialized clients because if we want to grow, we need to move into new segments. One example is the Sealand Refinery, which is a refinery in the Netherlands, where we are doing the full end-to-end maintenance for all of the mechanical piping and rotating equipment. So we make the equipment as efficient as possible, which means that equipment shall consume as little energy as possible.

Now in the past, Bilfinger has been offering that contract for several years to the clients, but we were only able to do the mechanical and piping work. We did not have the know-how and the capabilities to do the rotating equipment. Now with the acquisition of Stork, the know-how on rotating equipment came in, and you saw the examples over there. And since then, the client is working with us and they have given us the contract. Why? Because to say when we bundle those things from one supplier, it just takes out complexity for them and it increases efficiency.

And then we have two more examples to go where we combine local presence with global industry know-how. One is the U.K. Atomic Energy Authority with whom we are working in the South of Wales. The other one is Thor Medical with whom we are working in the south of Norway. One is obviously energy. The other one is medical. We do have teams on place who can do the engineering and who can do the electrical work for the work that we are doing. With the U.K. authority, this is the development of a virtual control room where their engineers can train and can be trained. And we combine the local automation and electrical know-how with our global experience in the nuclear industry. We bring it together. This is why the client is working with us. On Thor Medical, we are doing the engineering, procurement and project management, so EPCM that we've heard previously, for building a new facility at the Industrial Park for a first of its kind plant on a commercial scale for a cancer treatment. So that, again, that requires the local know-how and the people who are there, but also then experience and references from the nuclear industry and from the pharma industry, and we bring it all together. And this is exactly how this new segment structure, this updated segment structure is going to help us to accelerate growth and performance because there, it's just towards the client and internally much more aligned to deliver all of those things that we are doing.

So three strong segments, kindly different environment, but all of them, if you do it well, which we are, can work to your favor and they will. So that's why we are confident to deliver the targets that have been shown, and we're all excited to make it happen. Thank you.

I think we have time for one or two of the most pressing questions if there are some. If that's not the case, let's just move on with our program and welcome Mirja on stage for her deep dive about people.

Thank you. Thanks for having me here today. It's a pleasure to be here. I'm responsible for HR and HSEQ, and that's excellent because it's both about people, right? You heard Thomas say earlier, we are an asset-light company. You heard Matti say we are an asset-light company. Our assets are our people. We are proud to say that we've got more than 32 (sic) [ 32,000 ] of them in more than 20 countries, with more than 120 nationalities.

So that's as diverse as we can be and have to be because you heard Jug talk about our customer requests. And when you walked around here, you must have been impressed by what our colleagues are doing and by the variety of jobs they are covering and by the variety of requests they can look after for our customers. So they can go high, and I did this myself, not yet the roping, the colleagues promised that I can do that later on. But putting myself into safety gear and going up to 60 meters in a chemical plant and understand what our colleagues doing where they are operating. We have experienced colleagues. So you see here that the average length of service, and I think Thomas mentioned this earlier, is around 10 years in our organization, our own workforce, and that's excellent for us. And it gives us the opportunity to grow together with our employees. We provide great career opportunities. I talked to one of you in the lunch break, who said that the son is currently becoming an engineer and doesn't want to work in a bank. So looking for Bilfinger as an employer because that's really, really skilled jobs and skilled people we are always looking for.

So we have made a commitment back at Capital Markets Day in 2022 to invest 0.5% at least of our revenue on an annual basis into learning and development. And we set expectations, we meet expectations. So we have fulfilled and partly overfulfilled our commitment of this investment, as you can see here. So we are spending a significant amount of our revenue into learning and development activities. So this is very important for us. Again, you saw the variety of jobs, the variety of requests that our customers have. And I would like to give you an overview of what we have done and what we are still doing. So when we looked into this back in 2022, Bilfinger has always invested into its people. So there has always been activities on learning and development. However, in kind of in a more scattered way, I want to say, right? So what we have done over the last 3 years is we have streamlined our portfolio. We have brought our colleagues between countries together so that they can talk about and learn from each other what they do in terms of educating our colleagues. And all of that is always based on what you see here at the bottom, the Bilfinger values.

We are a value-oriented organization, and that is something that I think Thomas mentioned this earlier today. You see, for example, in the education GmbH, where we have around 300 apprentices a year in Germany alone in roughly 30 different apprenticeship schemes. And one part of the program is the democracy education where we make sure that we build a value-based team. Another example I want to give is the repeat program for engineers. That's really where we feel the power of a global organization. Jürgen mentioned that we depend on good collaboration of our colleagues also across borders. And here, we rotate engineers internationally to make sure that they can learn from each other and also teach each other.

And when we talk about challenges of the future, the volatile environment, the preparation of our workforce to handle colleagues like Max and artificial intelligence coming in, digitization, et cetera, we also have to make sure that we invest in our leaders. The executive flagship program that's mentioned here for our leaders is a collaboration with London Business School, one of the most renowned business schools in the world actually. And we have started this program a couple of months ago, and we really, really, really feel an impact because it is not off the shelf, but it is customized for us. For Bilfinger, we also work with immediate use cases for our own organization. So we are investing and now you have to ask what's the return and when does it come? So there is a long-term return. At the same time, we also see a short-term return. We already see it. Colleagues like to stay with Bilfinger because they see a career. They see that we are investing into them and they see that they can develop themselves and progress and grow with us.

We were able to bring down the voluntary turnover rate. So the number of colleagues we don't want to lose, right? So that's got to go down. And we were able to bring this down already to a level which sits slightly at the top of industry benchmark. If we are able -- and we believe we are able to with our investments and with the engagement that you feel in this organization to bring this down by 100 basis points, this will deliver savings of around EUR 5 million to EUR 10 million. It's a spend because it always, of course, depends in what jobs, what geographies, et cetera. So it really has an impact. And we know that in most of our countries, we are already an employer of choice, especially in those where we have scale because then we are known, right? So recruiting is a very, very important discipline for us. And here, we are also improving day in and day out.

HR, HSEQ, all about people. Bilfinger has a strong HSEQ performance, a strong safety performance, and you see that here. We have been able and we are reporting on that on a quarterly basis. We have been able to improve our KPIs and safety performance over the last years to a level which is on a top industry level. And that's important because our safety performance is part of our license to operate. You heard Jürgen talk about Shell. And together with Shell, for instance, we have a program to jointly further improve on the safety of our colleagues. So also our customers have high expectations and standards, and we have them as well because we want every one of our more than 32,000 colleagues to return safely and healthy home.

Every incident is still one too many. So our ambition remains 0 incidents. And we know that further working on health and safety of our colleagues and also looking at the health of our colleagues, we can see an impact of around EUR 10 million per annum if we continue to improve as we do at the moment.

So to summarize, we are investing at least 0.5% of revenue on an annual basis into learning and development. I gave you a few examples. We are creating a future-ready workforce. I think that's very visible here today. We are an attractive employer already, and we are getting stronger every day. We have already improved our HSE performance, and we are doing this also on a daily basis so that we are generating value and growing together with all of our stakeholders. And this was what I wanted to share with you today, and I'm happy to take some of your questions. Thank you.

Thank you, Mirja. So again, if there are any questions relating to Mirja's presentation, please raise your hands. Stefan, please go ahead.

Yes. Thanks for your speech. One question. I know from some other companies, they have their own academy. How are your plans here? Or what do you do to establish an academy or something like this and your cooperations with the leading universities in Germany or also on an international basis?

Yes. That's a very good point. We are already cooperating. I mentioned London Business School, and that's just one flagship program. We have further cooperations with business schools and with universities in many of our countries. I know at least some examples also here for our German colleagues who work closely with universities in the areas where we operate. That is already happening, and we always have to make sure we target this to the jobs that we have and need into the skills that we have and need. So that's a very good point, and that's a very important part of our work, yes.

With regards to the academy, personally, I think -- and I know many companies still have kind of a physical academy in places where it makes sense, right? So they have a large scale of their colleagues. Now remember, we are in more than 20 countries. So physically building something like that, not so sure whether that makes sense. But the idea of an academy in the sense of a learning environment that combines all of the different elements that we need for different target groups and especially making sure that we do not reinvent the wheel with -- in terms of training and education offering many times. That's a very, very important one.

So Nikolas, there's another question.

Yes. Maybe one question to the lost time number. I think it was last year at 0.3. So there, we saw a little increase. And now year-to-date, we are slightly below 0.2. What actually helped that it is this year so much lower than last year? What was the reason for that?

I'm with the organization for 6 months, okay, but I'll try. So what I see is that Bilfinger has a culture where we care for each other. So that was my -- also very first impression when I came in. And couple that with very professional programs. So Bilfinger really has -- and you saw this today, right, we open with safety first also in this environment. So this is very much a habit in the organization. It is a habit with our customers where we have clear structures, clear responsibilities, clear KPIs and then are able to further improve our safety performance. Where exactly the difference comes from from last year to this year, I don't know, but maybe one of the colleagues can answer that later. But that's a general attitude and a general potential that we have in our organization.

Is there another question with a direct link to Mirja's presentation? That's not the case. So then welcome Gerald on stage for our deep dive on sales.

Thank you very much. Good afternoon. Thank you, Mirja, for this deep dive into our -- one of our assets and that are our people. The second asset for us are our customer that are our market. If we look into the market expansion, we have 2 sublevers. One is performance partner. Your business is our performance. What does this mean? We want to drive the improvements in the performance for our customer. We don't want to sell only single services. We want to actively support our customer to achieve the efficiency, sustainability and at the end, operational excellence in sales, and that is the main topic also for the future to reach our growth.

So with our strategy to expanding in revenue with sales, that gives our -- gives us the opportunity to reach the numbers for 2030. Let's have a look into the market. We saw at the beginning, big markets are right on our doorstep. But these big markets are very volatile. And you can see the growth of the market is rather low. It's 1% to 2%. Despite all these challenges in the market, we see also opportunities. And in the lunch break, I was asked, where do you see the biggest opportunity? And one of the biggest opportunity is the topic outsourcing. And here, Bilfinger has a big advantage.

Bilfinger is benefiting from declining market as well as from growing market. That sounds a little bit strange, why declining market. So in declining market, customer has usually cost problems. Therefore, they have to look for other systems for our organization and then outsourcing came in place. And the outsourcing requests are different from the industries. So in oil and gas industry, outsourcing is very mature, roughly 55% of the services are outsourced in the oil and gas industry.

In the pharma and biopharma industry, the driver for outsourcing is to enable the customer to concentrate on their core business. So totally different approach. In chemical and petrochemical, we have a mixed picture. It's a bit depending also from the area, from the country where they are producing. For example, in Europe, cost is the main driver for outsourcing costs and to secure the production in terms of people. We all know the demographic development, and that will be a challenge. The baby boomer will retire in the next 7 to 8 years. and we will lose and our customer will lose a lot of qualified people. And here, we can come in and support the customer and to cover this gap.

In energy, outsourcing is driven by new and innovative production facilities like hydrogen, like hydropower. For these facilities, for these new facilities, the energy provider are looking for O&M operation and maintenance provider. So we take over also the operation. We don't take over the responsibility for the outcome, but we take over the operational responsibility and the maintenance responsibility. And in the adjacent industry, it's a mixture of that. If we look into our ambition, -- so more than 50% of the growth, 8% to 10% should come or will come from the market and from inside from Bilfinger, so-called self-propelled. So more than 50% of 8% to 10%, so roughly 5% to 6% should come from ourselves, should be driven by ourselves.

How we want to reach it? We want to increase the share of wallet that was mentioned several times today and where we want to do it in our core business. So we have -- in a lot of our regions, our countries on our sites, we are delivering 1, 2, 3 services, but we can offer much more. And this is what we want to aim for to close the portfolio to deliver the full portfolio from Bilfinger in the core business. Adjacent markets and adjacent products were mentioned several times. Here, there are new opportunities, and I have an example with me where you can see how we want to tackle the market.

Outsourcing. Outsourcing, most probably the main topic, outsourcing is not a trend. Outsourcing has always waves. But currently, we are on the top of the wave. And one disadvantage of outsourcing is the outsourcing will not come to us. So we have to go for outsourcing. We have to explain the customer what is the benefit for the customers in terms of outsourcing. So we have to take care about outsourcing. And that is one of the task of the Adapt future sales organization. Today, pricing was an issue. Pricing together with the remuneration model is very important for us to gain certain margin and also for the customer to get transparency. The pricing or we can influence the pricing with the bundling of our products with delivering of our solutions. And what we don't prefer -- that was a question also in the lunch break. We don't prefer to deliver single services. Here is the benefit rather low.

We have to deliver value -- we have to deliver concepts for the customer. Then it's an advantage for the customer and as well advantage for us. And all these things can be happened only if we have the right people in the right place. Therefore, people learning, development, training the people is a very important thing to make all this way forward happen. If we look in the current situation, we are currently facing more than 6,000 customers, active customers. And the positive message is more than 40% out of the 6,000 customers are buying more than one services from Bilfinger, multi-trade or full concept, full solutions.

If we look into the outsourcing share for our customer, so the whole circle is 100%, 100%. So roughly 1/3 will stay with the customer. So that is not addressable for us. Then roughly 20%, 23% is not addressable. Not addressable means we cannot delivering any advantage for the customer, any product for the customer. But the good message is 45% out of this 100% is the addressable market for us. And with our services, we can cover all this 44%, 45%, also the positive message. So this is our addressable market. And with the growth of 1%, you see quite a huge potential. Customers appreciate us for the right side, our global presence. A lot of our customers are international companies.

Shell was mentioned before, BP is another one, Borealis, Future Borouge International. They have a lot of sites all over the globe, also Middle East, Europe and U.S. and the customer wants to have the same system, the same quality, the same delivery model on all the sites where we are acting for. So they appreciate a lot our global presence. The most important thing, most probably for the customer, mainly for the technical department of the customer is our domain knowledge.

Domain knowledge means we are the expert. We know quite well what we are doing, how we are doing that and what is the benefit for the customer. And -- you are part of the journey of Bilfinger the last couple of years, and you saw how we changed our delivery models. We are going more and more into products, into transparent delivery. Before we had a lot of different services in different shape. And now with this clear product sales and solutions, what means solutions? Solutions are, for example, in maintenance, a comprehensive concept, a comprehensive product about how we run maintenance, how we create benefit for the customer and how we secure also the availability for the plant for the customer. That are the solutions. And these solutions we have in turnarounds in German unlocking Allen shutdowns of plants. We have this solution in inspection service.

You can see it here in the exhibition, one of the part of the inspection service. And we have the solutions also in engineering. So this makes us very unique. And here, the pricing comes into here, we are not so comparable with the competitors because the competitors cannot deliver in this kind of shape. The main driver in the future, mainly in maintenance is digitalization. So the operation cost in digitalization will be flat. We saw in the industry 1% growth, so almost nothing.

But -- if we look now, the part of digitalization in maintenance overall is roughly 10% to 15%. 2030, this part will be more than 60%. So more than 60% of the whole spend in the future will come from digitalization in maintenance. So that is a huge step change, and that will create also different business models. And you saw today also with MAX and with our AI-based maintenance approach, we are well prepared to tackle these challenges in the future.

And overall, value-based selling, several time mentions. The customer don't want to buy Technik, costs only money. They want to have value. We have to explain the customer what is the benefit if you get these services from Bilfinger? What are the efficiency gain? What are the cost savings, how we can support the availability in the customer plant. That is value-based selling. And the left-hand side and right-hand side flows together into our so-called sales powerhouse. And this sales powerhouse is adapt sales organization, which should support the future growth story of Bilfinger.

What is now the task? The task of this powerhouse is sales strategy, sales plan. Also our general sales approach. In our industry, sales is very local or in the best case, it's focused on a country, but we need sales cross-border. So we drive here out of the sales powerhouse cross-border sales. We want to have new customers. We want to increase the share of wallet. We want to have standardized processes. And to get all of it, we need qualified people.

So one task of the powerhouse is also to train the people in terms of our products and in terms of the sales process. And also a discussion during the lunchtime about the attitude of engineers, so to say, they have not really the sales DNA, and this is what we have to implement for our people. We will not hire new people. We have existing people. We have the capability to drive the sales. And so the new setup will be built internally in Bilfinger. And of course, in the center of the sales powerhouse are our four products, consulting engineering, preriefab and installation, insulation and asset performance. And the focus is always the customer. Only discounts, the wishes of the customer are counting nothing else. Now I can show you on 4 examples how this should work. And these are brand new examples, so that is not old stuff.

On the left-hand side, we have an adjacent industry. That is a data center. And for all 3 examples, different KPIs are important. For example, for data center, they have only one KPI that is availability, 100% nothing else, not 99.9%, it is 100%. You can imagine if in the hyperscaler, the data center fail, what's happened in the world. The world is close to a collapse. So therefore, 100% availability and you can read it also after the bullet point or in the bullet point one Bilfinger solution, 365 days 24 hours a day. That is where we are on site for this customer. And that's a little bit different to the chemical industry, to the energy industry. They don't have shift system. They have shift system in production, but not in maintenance. That was 30 years ago. But for data center, that is the most important thing.

And what you can see, we have maintenance for all the trades. We offer builfinger bundling services, and we do also small modification on site. What we don't do, we don't act on IT stuff, on IT equipment and this kind of stuff. Here, we are talking about the utilities, about the heat treatment, about cooling and about infrastructure. Another example -- that is an example for our global presence. UPM is a Swedish company, is originally, I think, a paper production company, and we have long relationship for them or with them. And 3 years ago, they decided we go to Germany and we build a biorefinery. And they look for a partner. And 3.5 years ago, we started to talk to them to support them in the engineering phase over the brief application phase, construction phase.

And at the end, we end up with a maintenance contract based on our Bilfinger maintenance solution. So this is a, I would say, unique maintenance setup unique for the market, not for us. So that is our standard delivery model, this building a maintenance solution. And you can see we deliver mechanical, electrical, so all trades, what is necessary to run a biorefinery in Germany. And the third example is an example from the energy. Availability, also very important. Here, Fortum, Finnish company, Finnish power producer, and they run a district heating system, German system.

And you can imagine these days, if the district heating fails, it is not nice because in a lot of living room, it's very cold. So therefore, 100% availability. And here, we do operation and maintenance. This was an existing site took over by Fortum, and we took it over from another supplier. The performance of the supplier was not good. They delivered only what the customer said to him, and we have the active approach. We make proposal how we can improve the performance, how we can reduce the cost. So we took this over in November this year. And this is also a comprehensive operation and maintenance model.

And you can see all these three examples are from one of our new segments. I hope you got a little bit the feeling how the new sales organization can contribute for the future growth. So 50% of the growth should come from internally. And I hope you you take with you that Bilfinger is well positioned in the challenging but promising market. All what I present here and what present to my colleagues, you can see here in our exhibition and you see these four areas are exactly our four products and which products we're offering in these four areas. So now I'm happy to get your question.

Yes. You mentioned that your global customers are increasingly appreciating that Bilfinger is now increasingly global. And you now already have a much higher share of wallet. Of course, the target is to gain more. against which competitors, which peers are you now increasingly competing against with these global customers?

On global base, fortunately, there are not so many competitors. There are some in Belgium, Netherlands. There is not really a global competitor, but more regional competitor in Germany. So if we are -- if we have 5 -- between 5 and 10 customers over the whole globe, then it's all. So not so much who can deliver a comprehensive solution. If we look into single services, we have a lot of local competitors. And there is also a trend what we see with huge customers or with global customers. They try to bundle their services, they try to reduce their suppliers and then came automatically into our field. And we have currently roughly 5 tenders, European tenders where we should deliver, for example, insulations, scaffolding, access service or also maintenance.

If there is another question, I ask one from Olivier, please.

Just you talked about 44%, 45% of outsourced services at your customers. Is that sort of your estimate of what the customer could outsource because you mentioned it's addressable? Or is that something that's already addressed by competitors?

No, both. Some -- I mentioned it in the oil gas, 55% is outsourced of the 100%. And this is the addressable market for us. So we say to the customer, look, 45% of your spend can be taken over by us. So we define this for some customer by ourselves. And if we talk to customers, customers are not really aware. If we are talking about outsourcing, we are not talking about technicians, we are talking with management. And management, in fact, has no clue what brings outsourcing and what is the effect of outsourcing. So therefore, we have to explain them the efficiency gain, the benefit for them.

All right. And with that, let's move to our wrap-up together with Thomas and Matti.

So thanks a lot. So you got a lot of information. We make now a wrap-up actually of the whole package, what we presented, not of that, what you can see there. This well-known slide where the rumors is out, I have it as a wallpaper in my living room, maybe. It actually -- again, it shows what we are doing, what we did, what we are doing and what we will do. We work on two main elements, our own efficiency and on the market expansion. And of course, we have an ambition for 2030, and that is purely based on that, what we already delivered and what we will go on to deliver.

But when we look a little bit back and seeing what we delivered, I don't want to talk more about the strategic levers and so on. But when you look into the financials, what we deliver, and I got the question regarding the EBITDA ambition, what we have up to 2030, how we see that, of course, with peers in the market, customers, the business environment, actually, the most difficult for a top management to improve profitability of a company is internal. It's not external. It's internal. It's the mindset of the people. It's the mindset of the people.

You build up a strategy, you show that you can deliver step by step, you give a target and you look back and say, see, this is what we got. When we both took over, I remember that very well in one of the lot evening events what we had, we were sitting and saying for Christ sake, why are they -- why don't they believe in themselves to get over 3% EBITDA. That was the biggest hurdle, maybe the biggest hurdle I had in my career with such a big group of people. We have to trust back. We have a clear plan. We will achieve that.

Other things like, of course, the confidence in the market, the confidence in the media, return to and so on, that all supports that because the business in itself is there. The profitability is there. You have to capture it with a strategy, with training, education, experience, digitalization. The market is there. I don't want to go further into the details as we already did. The market actually versus last year, we had EUR 190 million plus -- billion plus as an addressable market. This year, EUR 210 billion plus as an addressable market. We have a lot of opportunities more than we show here on the -- and these opportunities are actually built for us for the competence what we have.

When you look into that and seeing what you see here, it is -- it fits 100%. It's up to us to capture that. But for that, we have to change a little bit that how we operate, how we are organized. Sales is important. We will bring sales culture into industrial service companies and customers will appreciate it, especially the ones under pressure. This adjustment is known in other industries already. Why not in industrial service? I said it in one sentence this morning. Industrial service is actually coming from doing business on customer side and being local.

We have now with a special force to go out and making that happen. With all the changes what we do structurally wise too, there is no talk from us about a cutting program or anything. No we reshuffle and bring more money to the front line to offer and to discuss with our customers all the goods what we can do for them. And when we do it and when I go myself out, there's always something what we sell. There's always something what we can do more than before. Out of that, that structure, what we go in, we make us more transparent to track us with that what we promise, what we perform and you can compare us more to the performance of geographies, the performance of peers, to performance of customers. And on top of it, Matti with the remuneration model, which gives another transparency on us. This is the way we will go forward.

And it creates, of course, internally a lot of pressure to perform because it's easier to compare. I grew up in a lot of different structures. That was the structure what I saw throughout all the B2B business for local decentralized as the most successful. And believe me, we looked into it a lot what we will do with it. Out of that...

Yes, we will accelerate our financial performance. We delivered 8% CAGR over the last 3 years. We will deliver 8% to 10% into 2030. We improved our profitability by 230 basis points already, and we will improve by 250 to 350 additional basis points to get ourselves to an 8% to 9% profit margin. We will improve our free cash flow as well as the cash conversion rate. We targeted 80%. Now we're targeting 90% and better.

We've talked about the updated segment structure quite a lot today. It's very important. It's, I would say, close to our heart. It took a while to get the organization to this point. Now we feel the point in time is right to do this, it will provide much better transparency from the outside for the investors, for the analysts, but also and very important for our clients and for our customers.

The growth rates that we see in Europe is 6% to 8%, in international, 12% to 15% and the profitability will achieve the 8% to 9% across all segments. Even more transparency on our risk profile, moving away from projects versus services to remuneration gives you a much better indication and much better comparability with peers and other players in the market. Even better working capital efficiency—. We had a target of 8% NTA net trade assets over revenue. We have lowered that to 6%, helping us to achieve a cash conversion rate of 90%, continuously working on working capital efficiency, accelerating collection and billing processes in the first place.

Last but not least, our disciplined and transparent capital allocation in its totality will not change, but the compositions and the components will fluctuate over the course of the next 5 years to fund our growth, both organically and through M&A. But first and foremost, our dividend policy, 40% to 60% of adjusted net earnings is not going to change.

Our balance sheet is very strong. We have enough headroom to our very low leverage right now. So there is plenty of room to maneuver for growth, be it organically or be it through M&A. And here's the sales pitch, a very attractive investment case with the 5 components, asset-light industrial services provider, very high customer retention rate, exceptional growth, interesting and ambitious 8% to 9% profitability, a very strong and continuous cash flow generation and disciplined and transparent capital allocation. In a nutshell.

In a nutshell.

In a nutshell. And we have seen very, very competent people showing you what type of services we deliver to our clients, our customers. So I hope you enjoyed it as much as we did. We have an advantage. We can enjoy it every day. So I hope you remember what you have seen here this time. We have not set a date for the next Capital Markets Day. But when we come out, I think I'm not going to promise too much, but we will have something very similar to this one here. So thank you very much for being with us today. We -- take it easy. Thank you very much for being with us today. Obviously, we're always happy to take more of your questions. And for that, I turn it to our colleagues.

Thank you, Matti. Thank you, Thomas. So this is also true for our virtual guests who are very shy today. So if you have any more questions, please type them in the chat function. And for those here, it's more easy. I already see the hand. So please, Michael.

Thank you very much for the great presentation. I have one question on pricing. I mean, globally, we all know inflation is around 2%, maybe 3%. And I understand that a lot of your contracts are probably tailor-made, but as you move more towards standardized products or services and maybe multiyear contracts, what about pricing? I mean, if you would increase 1% or 2%, maybe you could increase your targets to 10% to 12%.

Yes. Thank you for that ambition. You should join us. At first, if it comes to pricing, it's a significant element in our working towards the client. But to go to the client and say we have to raise prices, that's not working. It is a value-based selling, the value-based selling. They know if we offer more, if we do here and there more, we can prove it that efficiency on their side improves. And to give you a little bit of ratio, if we offer a service and it costs, let's say, EUR 1 million and we impact that they earn EUR 2 million, EUR 3 million over the year on the bottom line, what's the talk about the pricing? But they have to be informed about that. You have to calculate that in front of them. You have to have the relation with them. That's actually the sales powerhouse approach. It doesn't work if you come every 3 years to renew the contract and then say a little bit like that. That doesn't work. We have to be permanently on it.

Second, pricing has an element, what we call product offering, the mix of the products you offer. You have markets where some products are higher in price than in other markets. In the geographical organization, you have it on a golden plate to play that game regarding change of product offering, product mix. We had in the third quarter last year, we said we are 6% EBITDA. One part of it was that we had a favorable product mix. There, we were able to play it. This is what we drive more to play the product mix.

Then regarding your ambition, to make that clear, if you go to the United States, the average EBITDA level for industrial service companies is double-digit. The average EBITDA level for United States companies, industrial service business are double-digit. Now we can go on and say, yes, they have one currency and they don't have Brussels, Berlin, Paris, and other capitals. So that maybe is 2%, 3% on the EBITDA. There you are with the 8% to 9%. We have peers in Europe saying up to 27%, 28%, 7% to 8%. I don't think that their ambition is flat on 29 and 30—. So from that point of view, the market has it, but it's not that we go out and say we make it more expensive. You have to deliver return, you have to deliver value for the client, and we are able to do that more and more.

Now who's next? Michael?

One more on the new segment structure, where I think it definitely makes sense to have a pure regional reporting still. You also said that size matters. And obviously, the size distribution is quite uneven. And I think also within the segments, there's probably some heterogeneity. So how do you make sure you, let's say, benchmark properly internally so that the segments can deliver on the ambitions and, let's say, also adjust for the element of M&A and make sure the M&A support is appropriate. so that the segments can actually deliver?

The -- actually, borders are not so important for us to make it very clear. It's more the area of responsibility for management teams. You have a map in the office. There you have all the customers on it. And if the walls are big enough and we don't have our famous strategy slide on it everywhere, then you have a map, for example, for oil and gas, a map for biopharma and so on. You can split it as much as you want and you put all the clients on it. And then you put all the dots on it where we are already present and selling something. And then you make your strategy to go in. That's the share of wallet calculation because we want to know our people tell us these are the amount of customers I have in the different industries. This is what they invest. Because that is what they tell us, and this is our share of wallet. And these are the activities what we do to improve that. That's actually the whole realization in it.

And then we measure on what is the share of wallet today and what is the share of wallet tomorrow. The opportunity pipeline, what we invented a few years ago actually triggers that to look into all the territories where we are, all the geographies, region segments, no matter how we call it, where they give us an overview what is out in the market and where can we go on? What is the likelihood that it happens, what is the likelihood that we get it. So that information we have. We actually built up a fantastic good culture to be focused on the client. Now the next step is to go aggressive on them in a way to offer them improvement. So that transparency is important.

Then the last thing on it, we always have differences in country versus other countries. This GDP, amount of people living there, size of the industry and so on. And for us, it's important, and that is what we said, it's a local decentralized business where the power sits because that is where we make the business happen. It's the local responsibility to develop that.

In that structure, you get a fairly simple overview how things are developing share of wallet improvement, how the plan is realized. It's like a dashboard, like sitting in the car and having the tachometer in front of you and the tachometer are free where we look into. And it makes -- to make it fairly clear, it makes a lot of fun when you do that because a lot of our customers are in more than one segment or more than one region.

And you can compare them. And you see how are we performing here versus there. This kind of internal competition, as we call it, is a very positive thing to learn from the best in the Bilfinger Group so that the ones who are not on the top can see how to do it better. And it actually helps customers because over with us, they compare their own performance too. That's the reason why we call ourselves a little bit the barometer of an industry, of the process industry.

Stefan, you...

Yes. Thanks again for the very good insightful presentations today. One question about the topic of artificial intelligence. This is a big topic, I think, for many industries. And how can you exploit this to bring up your cross-selling ratio and to sell more solutions to existing clients or to bring similar solutions which you have for existing clients to new clients?

Yes. The -- you can look into what we can do internally, operational excellence and, of course, in the market expansion. You talked about procurement.

Yes. We're using a lot of increasingly AI to improve our processes. I showed some or explained some examples within the procurement process, but we also have started to use AI throughout the entire finance organization. I've put a position in place, individual to look into AI in finance to improve the use of AI within our finance organization and to bring it to a level that compares to others. We're not sort of an early adopter, but we have started some initiatives. This will also play into the learning and development. You have to educate people in the application of AI and to overcome some resistance that is, I guess, human and natural. But that is what we do internally in adopting AI for ourselves as part of our operational excellence.

And it's the same towards the client. We actually use a kind of language software to translate and to give support to our people to communicate with customers faster and more efficient. But this is at the early stage because it's on the customer side at the early stage, too. And here, again, the same as with the EBITDA. The biggest roadblock in bringing a company from analog to digital are our own people. Why? Because they are -- they have concerns to utilize it. If we would have the same digital setup on customer side and our company as most of the people already have at home, we would be 5 years ahead. I come out of an industry was belong in the industry of mining. Mining per se had to go very early into digitalization because the mine sites are really far away from civilization. So digital was necessary because the costs were too high to bring in people, fly in, fly out each day didn't work out. So what was it? We worked in all the companies I worked before actually to was to convince our own people to utilize it. And when you look into, I give you all the same experience with your own companies where you work in. When you come home and if you have kids in the age of 14, 15, 16 gaming around with -- yes, all the games, I don't want to make any advertising, but I stop to play with my son because before I start to play, I'm already dead in that game. But you try to get that information, what you need to have to play the games. What we have in the industry, what we offer, what we work with is significantly lower in the requirements. So what is it then that we are not doing more? It has to do that we have to convince, we have to make learning and development and training to overcome that fear, you know what the comments were on a big management meeting when we got Max in the little colleague without weekend. There are some people were scared. We have to take that away. It's technology. It helps us. It's good. It's something great, and it makes a lot of fun. And a lot of people here, they really have fun in it. So AI internally, externally, definitely. Are we the main driver? No. The same as in high tech. We utilize that what is ongoing for the benefit for us and our customers. We are not a software company. We are not an AI company, but we are unbelievably open to utilize whatever is possible and available for us.

If you look at the colleague, Max, the beauty -- there's several beauties about that device, I have to say. But one of the key elements is data collection with sensors, be it temperature, be it pressure, be it physical condition and what have you and collecting all the data and putting those into AI models is going to shape and reshape our business. So it's not a matter of choice. It's just a matter of getting it right.

Take the opportunity. There's one more, Andreas.

Thank you for the insight. I have another question on digitalization. To what extent is a higher share of digitalization and predictive maintenance a reaction to the service delivery of competitors? And to what extent can digitalization contribute to even higher profitability than you have planned?

There's a reason why we use internally share of wallet. It doesn't matter what the peers are doing to make it fairly clear. It is important what the customer needs. This permanently looking left and right what others are doing at best brings you in a position to be a good follower. We don't want to be a follower. We want to be the #1. These people want to be the #1. That's the reason why we have it.

And when we look to our customers, they talk a lot about digitalization. Why are they doing that? Because they need to have suppliers doing the same or more for them because alone, they can't do it. We can't do it alone. We use Microsoft. We use Boston Dynamics. We use a lot of other companies for that because it's not Bilfinger, which developed that robot, but we use drone technology from I don't know what companies all to fly over oil fields and offshore platforms to offer customers quick data analyze, early warning systems. And that improves our competitiveness and keeps a lot of others just out of the market.

Entry barrier is significant higher today for someone who would like to compete with us 10 years ago, and it will get higher. Then the profitability, it's easy to say, oh, if you use digitalization, you get more money. It is not like that. Digitalization is an environment we work in. It's like the air we breathe. It's not a project. It's not one product. It's an environment we work in. It's a society we work in. But if you are able with digitalization in that environment to add more value to the client, you can actually price more because the value-based selling drops in.

If you -- I have a good example, which has nothing to do with digitalization, what I always bring to all my salespeople when it comes to that point. It is a flacaf, bottle of perfume, I think we would say. You know what the most expensive on it is. It's the bottle. It's the bottle, not the perfume. And when you know the price for the bottle, I know it. I will not tell you for some of the main brands. And then you see what they price. You actually question, why the heck I'm not doing my own perfume because it's a huge margin on it. So what is the margin on it? -- value the value is on it. So -- and we -- of course, we don't do. Thanks God, a little bit oil -- but what I tried to sell is value-based selling is to have the capability to improve for the customer something.

For us, it's the efficiency and sustainability. It's not enough to have that capability. You have to sell it and you have to prove it. And digitalization, that's the real good thing. You actually can prove it. I come out of a time in the '90s where we offered the process equipment. And then others came in and say, we can do better. No one could prove it. The customer bought then this equipment and bad luck didn't perform. Do you think the customer went to the market and said, "Oh, I bought something what didn't perform? No way. No way. Nowadays, we can go out and say, this is what we offer you. This is the improvement what you get, and we can really prove it. We actually can bring them to hundreds of sites to show what we already did. That's value-based selling. But again, I know I repeat a lot. We have to get out of our fence where the customer sits today and going to new customers, too. And for that, you need an aggressive sales force. That makes a lot of fun again.

So any more open questions, issues, Olivier, please?

Just two nuts and bolts and then I have a third one. So M&A and capital allocation, so you want to stay investment grade. Is that fair to say the 2x leverage is the maximum you want to go to? And the second nuts and bolts is on the free cash flow. Overall, you've done an impressive job with working capital. Is it fair to say CapEx to sales should stay broadly level at the 1.5%?

Yes to the second question. First question, it's a threshold right now as we speak, based on our past performance and based on S&P giving us an investment-grade rating. Obviously, as we improve our performance, our profitability, we will have further discussions with the rating agency and then see if we need to make adjustments on the risk profile or the like. But for us, right now, we have a threshold of 2.0 as leverage.

Yes. And then just on the derisking trajectory. So you've said now you've got 20% lump sum revenue, 80% reimbursable. Can you just help us understand where it was in 2022 and where you want to go, if you want to quantify it?

I don't have the exact numbers, but from recollection and memory, I would say that the lump sum portion was more around 30%, if not more. The 20% certainly is a much better share in terms of composition. We have not looked too much into the future and saying as part of the modeling, this has to go down to 15%, 10%, or 5%. It is looking at the overall risk tolerance and risk appetite, it's a component. Doing lump sum work is part of our service offering, part of our offering. But as I said, and I hope I explained it well, lump sum is not equal to lump sum. You can do lump sum when you have been involved before, and you know very well what is going to happen during the execution of the works. So as— I would not say in absolute terms, it's bad, not at all. It's part of the offering. It's part of the product mix and obviously, of the margin mix, but it has to be executed properly.

Are there any more? So as this isn't the case, thank you for your active participation, for your attendance. You will now have the possibility to attend the exhibition again. Anette, please join us on stage and then thank you.

We should say goodbye. So, of course, as it is, but especially here in that, a fantastic exhibition, well done, guys. Really, I'm very proud of you. Great show. We will repeat that. For all the guests here, of course, on the webcast, but especially here in the room, thanks a lot for taking the time and going with us in quite detailed discussions. For us, it's very important because on your questions, we measure how we improve our communication and, of course, getting to know us better than before. Of course, you can always call—, we're always available, Investor Relations for that. We have it. No matter what you do now afterwards, stay safe. That would be a big, big thing. Thanks a lot.

Thank you.

Thank you.

Yes. No matter what you do, you, of course, join another exhibition tour. We meet again maybe in 50 minutes, grab a coffee, get yourself maybe some cake and then we meet again close to the industrial climbers or again behind the exhibition circle. We also have a LEGO box. Maybe you need more Christmas presents where you can build your own bioreactor with LEGO—, just some inspiration. But anyway, we look forward to seeing you again over there, and thanks for joining. Have a good afternoon. Thank you.

Thank you.

So ladies and gentlemen, a very warm welcome to Bilfinger's Third Quarter 2025 Results Conference Call. My name is Jasmin Dentz, and I'm joined today by Thomas Schulz, our Group CEO, and Matti Jakel, our Group CFO. As always, all documents related to our Q3 reporting have been made available on our website. As usual, we will start our webcast with a presentation of the quarterly highlights, the current market environment and our financials and then open the webcast for your questions. [Operator Instructions] The webcast will be recorded.

And I will now hand over to our CEO. Thomas, please, the floor is yours.

Thank you. Hello, everybody. As always, we start with our highlights for the -- this time, the quarter 3 2025. We had quite a good stable development in a very volatile market. Our orders received increased by 1%, at least by 1% absolute and our revenue by 8%. Our EBITA margin is on 5.8%, and our earnings per share moved slightly up to EUR 1.47. Significant improvement close to 30%, we had in the free cash flow, which went from EUR 55 million to EUR 71 million. We updated our outlook and gave a new revenue outlook of EUR 5.3 billion to EUR 5.5 billion for the year and 5.4% to 5.6% EBITA margin.

I would like to repeat what we said in the last few calls, we always hit the midpoint of the guidance, what we give. That's what we are after. And very important, and you are all invited, and we hope that you all participate, we will give new midterm targets on the upcoming Capital Markets Day in the area of Frankfurt on December 2 this year.

Before we go more into market data and so on, as always, our ESG topics, and it is with a strong focus on safety. When you look here into that slide, on the left side, we have the total recordable incident frequency. It's based on 1 million working hours, and you see that we moved quarter-on-quarter from 0.88 to 1.01, which is a slight, yes, creating of a disadvantage. We work on to have 0 as a figure there. We put a lot of effort, time, actually emotions and money into it. With our current result and what we proved in the last few years, we are actually playing in the top league, not only in the industrial services segment.

The other figure what we report on, which is quite important, too, is the lost time injury frequency on 1 million hours, too. And there, we have an improvement from 0.29 to 0.17, and there, we are, let's say, closer to the 0 and 0 means we have no accidents in whatever we do. And that in a company with more than 30,000 people is definitely an achievement if we come there.

Out of that, we look into the market. And for us, we have one indicator what we show since several quarters, it's the production index. It's based on 2019, and it is for Europe, Middle East and North America. And we show our 4 biggest industries where we operate in, which means where we have more than 10% of our revenue line for a longer period of time. And when you see, it's the typical gap, the green line, which represents pharma, biopharma is still on a growth, which means this industry develops quite well. Whereas the other 3 like energy, oil and gas versus 2019 is slightly up in the production index and chemicals and petrochem is actually below 2019.

When we then look into the specific industries, I just said that chemicals and petrochem is below 2019 in these areas for the base of -- for the production index, it's predominantly Germany, which lowers here the figures. When we look into the demand is on the side movement. Again, it's Germany, which has a negative impact here. It makes 23% of our revenue share, but the outsourcing potential, the potential where we can as Bilfinger can go to our clients to offer them to take over all the maintenance and for us to in-source, for them to outsource, to have a stronger efficiency gain if professionals like us, like Bilfinger is doing it is quite a good market, predominantly based on the pressure what our clients see in the global market for chemical and petrochem products.

The second industry is energy, 23% of the revenue share. The demand is good, and the outsourcing potential is good. What we see especially and that for a longer period of time is the increasing demand for storage and transmission. The third one is oil and gas. There, we have a strong LNG demand, and we have lower refinery demand. It means 20% of our revenue share is in that part. Demand is good overall, and outsourcing potential is good. About pharma, I already said, where it comes from that they are on that good growth path for quite a while now, the demand is good and the outsourcing potential is good, and it makes -- made in that quarter 13% of our revenue line.

Out of that, some selected orders to see what we really do on the client side, let us start with Germany in adjacent industries. Adjacent industries are all the industries we work in, which are not belonging to the 4 big ones, what I showed before. And here, it's about a semiconductor manufacturer in Germany where we got the order for prefabrication and installation of the wastewater treatment system, for, of course, efficient resource, efficient chip production.

The second one is out of the area of energy in Sweden from the German client, E.ON. It's the prefabrication and assembly of heat accumulator to increase reliability and sustainability in district heating supply. I hope you remember that we, as Bilfinger, are a leading company in district heating solutions. It's all about liquids and gases, and there we are really great.

Then the last one is oil and gas out of Kuwait. It's with our well-known KNPC client, and it's for the North Oil Pier. It is about a front-end engineering design service. And of course, the background is enhancing operational efficiency, which is the core of our offering. When we talk about core of our offering, we are on innovation. This time, we introduce to you the so-called DRIS 2.0. It is a system to inspect insulation during routine operations to describe where the challenge comes from. If you are in an area with low temperatures, northern part of Europe, for example, and you open the insulation on a pipe with a higher temperature, you always create moisture in between the insulation and the pipe. If you then close the insulation, you actually create a situation where rust and other damages can happen. That's the reason that in general, this kind of investigations and opening of insulation on these type of pipes are only happening during a so-called turnaround schedule.

And the turnaround schedule means shutdown of that part of a plant or the whole plant. When you do that, shutdown of a whole plant or a part of a whole plant, then you can imagine it costs the customer a lot of money. So we worked on how to reduce the turnaround schedule. One part is that we can inspect and repair and work on the insulation in these weather conditions without harming the system, and we came up with a portable solution to do that. This kind of solution actually gives us a possibility to shorten the turnaround, the shutdown of the complete plant time by more than 10%. We see always more than 5% cost savings, and it helps the clients to do what we call case-based execution. It's another word for if they believe or if we see there could be a damage and we don't need to shut down the whole plant, we can do then the repair and everything during regular operation. This is a big advantage in a more efficient world.

Out of that, I would like to look into the Bilfinger demand. You know our opportunity pipeline. The opportunity pipeline is that what we, as a Bilfinger Group, quote and work with inquiries and possible upcoming business in the market judged by, if it really will happen and how likely it is that we have a share as Bilfinger in that. And we go 2 years back, that means July 2023 is the 100. And when you look into, we actually have from last year, third quarter 2024 to this year's third quarter 2025, quite an increase of 15% of the opportunities.

When we look more into detail into that, it is clearly that the demand for enhancing efficiency on customer side, no matter which industry is increasing, and it's a proof of that, what we said before, Bilfinger will perform if the market goes up or if the market goes down, and we have that mixed picture in the world between the center of Europe and, for example, the Middle East and North America and the growth part on the other side.

Orders received is 1% up to EUR 1.36 billion coming from EUR 1.344 billion. For us, important in that is, of course, the development, as we always say, of the order backlog, that's 7% up. If we look year-to-date, we actually have a book-to-bill year-to-date of 1.1 which is good. We are in the order intake as revenue year-to-date because we are already in the mid of November, quite a growth as we predicted as midterm targets.

Out of that, I would like to give to Matti, our Group CFO.

Thank you, Thomas. Good afternoon, ladies and gentlemen. I guess, by now, you will have studied the material that we published earlier today or in the early hours of the morning. Let me add some comments to our financial performance for the third quarter 2025, which was the CEO said a good quarter, the CFO says it was a solid quarter.

Thank you.

Important, if you look at year-to-date performance, it does demonstrate the progress that Bilfinger is making. Into the numbers, revenue up by 8%, 7% organically to almost EUR 1.4 billion for the third quarter 2025. You see the changes there. Contributors were all segments. Europe at plus 5%; E&M International at plus 8%. Organically, even 14% in International. However, you all know how weak the dollar has developed over the last few months, and hence, we have a foreign exchange effect here. Technologies up almost a quarter, 24% or 25%. And I'll come to the segments in a moment.

Thomas talked about the movement and changes in our core industry. They are reflected in the 2 pie charts here. The share in chemicals and petrochemicals went down by 2 percentage points, 25% to 23%. Conversely, oil and gas went up from 17% to 20%. So we see a bit of a revival here in oil and gas is well known. However, it also demonstrates our strong position in oil and gas offshore in the North Sea on the Norwegian side as well as the British side but also increased activities in facilities for the production of hydrogen.

Looking into profitability. The third quarter 2024 was very strong in terms of gross profit at 12.3%. This quarter, in absolute numbers, we are on the same level as last year, 11.3%. An interesting feature this year is that all 3 quarters now were above 11.0%, which means we have also, like you've seen in cash flow, leveled out the profit generation throughout the year.

On the SG&A, we made some progress. The ratio went from 6.1% down to 5.8%. In absolute numbers, we went from EUR 78 million to EUR 80 million. That's due to the acquisitions that we communicated early on, the Rodoverken in Sweden and the nZero in the U.K.

On the EBITA margin, also slightly down from 6.0% to 5.8%, in absolute terms, an increase of EUR 5 million, everything as we had expected and communicated earlier.

A little bit on to the segments. If we look into E&M Europe, which is our largest segment, so what you see on the group number is also reflected here. Revenue grew by 4%, overall flat. And if you look at it organically, again, the 2 acquisitions added to the overall growth. Sorry, that was on the orders received. On the revenue, it's up 5%, 2% here, you can see the additions of the 2 acquisitions as well.

So where do we see growth, in energy and oil and gas industries and chemicals, as we all know, petrochemicals remain challenging there. Profitability, slightly down by 0.2%, but absolute an increase of plus 2%. On International, quite some progress. Orders received up at 17% organically and 10% due to the U.S. dollar weakness, 10%, up to almost EUR 200 million for the quarter 2025.

Interesting in the U.S. is that the business in the industry or for the industry, is very active, while the business that we have for the U.S. government and governmental entities has slowed down quite a bit due to DOGE activity of Mr. Musk earlier this year, but also due to the shutdown, which luckily for, I guess, a lot of people was finished or completed last night. So it will not release everything that was not done in the last few quarters immediately, but we will see some better numbers there in the future quarters.

Revenue growth predominantly in the Middle East, but also in our maintenance business in the United States, again, here, plus 14% organically, including foreign exchange adjustments plus 8% to EUR 182 million and a book-to-bill of 1.05, indicating further growth.

On the profit side, you may remember that we had an impact last year in the third quarter from an arbitration case, which was then offset at group level. But here for the segment, we've done quite well to 4% for the quarter, proving that especially the transition and transformation in the U.S. is taking good shape.

In Technologies, order intake is flat, about EUR 270 million, plus 1% organically, that's the business where we see more of the larger projects. And we do see some volatility in the order intake, as you can see from the graph, but EUR 270 million is a strong quarter as was the quarter 3 in 2024 as well.

Revenue up 24%, 25% to EUR 239 million. Very strong business in life science and nuclear, where we had received a good order intake in the last few quarters, now sort of in execution. On the profit side, plus 42%. So a good increase, not only in absolute terms, but also 90 basis points from 6.9% in to 7.8%. And again, operational excellence, derisking efficiency improvements, all of this is at work in the segment Technologies.

Net profit for the quarter remained at EUR 55 million last year and this year. You can see that the tax rate increased from 21% to 25%. That's the impact of a change in law in Germany, where the corporate tax rate will be reduced by 1 percentage point per year until 2028 and thus lowering the value of our deferred tax assets. So that's a onetime effect in this quarter.

The earnings per share is EUR 1.47 this time versus EUR 1.45. Why the difference? We have a smaller number of shares as we are progressing with our share buyback program. The number of shares is reduced.

Cash flow. Free cash flow, operating cash flow, both benefiting from what you see on the right-hand side. The net trade assets or trade working capital over revenue as a percentage came down to 8%, which is the target that we have given ourselves, thus improving the free cash flow over and above what we generate in profitability. Positive contributions from all segments, and I think I now stop counting because it's the ninth consecutive quarter of positive cash flow. Maybe in -- or the fourth quarter 2025, we counted 10 and then we stop this.

Solid performance.

Yes. Group net liquidity and leverage, nothing much to report here. Liquidity follows the free cash flow. Leverage at about 0.4, way below the threshold of 2, which then brings me to our outlook. Let's look at the segments first.

This is based on the current performance or the year-to-date performance 2025, where we narrowed the bandwidth for E&M Europe on the revenue side from EUR 3.5 billion to EUR 4 billion, now to EUR 3.6 billion to EUR 3.9 billion. On the margin, 5.8% to 6.2% now. E&M International is unchanged, performing there as we planned. And with some of the uncertainty in the U.S., we've felt more comfortable to leave it as is.

Technologies, as you saw, the very good performance. We increased revenue update or outlook from -- to EUR 800 million and EUR 850 million and profitability quite an increase to 6.8% to 7.2%. And then on the Reconciliation Group, some minor adjustments.

Group totals. On the revenue side, EUR 5.3 billion to EUR 5.5 billion for the full year, targeting the midpoint. EBITA margin, 5.4% to 5.6%, targeting the midpoint. And free cash flow based on the good performance so far, quite an increase to EUR 300 million to EUR 360 million for the free cash flow, again, targeting the midpoint.

So much from my side, and I turn it back to Thomas for the wrap-up.

The -- as you saw with that what we announced, we are always referring, of course, to the midterm targets, what we set ourselves at the beginning of '23, where we clearly see that we are on a good level to achieve that what we promised. And it's, of course, quite nice to see that we -- with the NTA, net trade assets, are already on 8% down, which is quite good.

So to summarize that, let's say, solid performance with orders received fairly flat, revenue 8% up, EBITA margin 5.8% versus actually, the third quarter last year was the highest operating real EBITA for more than 15 years and longer, we couldn't look back. Earnings per share up to EUR 1.47. Cash flow close to 30% up in the quarter. We narrowed the guidance. And as we communicated quite often, we actually always hit and have in mind the midpoint of guidance range and there we are on a good way. And very important new midterm targets will -- which we then will talk a lot about for the coming 5 years on the Capital Market Day on December 2.

And with that, Jasmin?

Thank you, Thomas. Thank you, Matti. [Operator Instructions] So the first one comes from Michael Kuhn from Deutsche Bank.

I'll start with the opportunity pipeline. I think that number looked particularly strong compared with what we had over recent quarters. So interested in the underlying drivers and let's see where you see the most pronounced pockets of strength.

Yes. That's true. It is. And -- the -- of course, our acquisitions, what we did in the last few years. This year, it will be 3 acquisitions, for example, they are enablers and kind of unlocking more potential with the existing business, what we have to make it in more crisp wording, if we bid on a service contract and we got here and there some more additional competence, we actually can enlarge that what we bid towards the client with the whole base of the Bilfinger offering. This is part of our M&A strategy, and that works out. That's one part of the stronger opportunity pipeline.

And the second one is, and we will talk more about when we come to the Capital Markets Day, we know what we have to, how to say, put on the next development step within the company to achieve more leverage in the different markets because we see quite a lot of growth in our existing markets, but we have to get more aggressive in sales.

Understood. Then one on E&M Europe, and I know it's a bit nitty-gritty because the margin was just down 20 bps, still we got so used to margin increases. Was there anything particular you would like to find out? Or is it just a normal fluctuation?

Michael, this is Matti. I would say it's a fairly normal blip, which we see from quarter-to-quarter, 0.2 percentage point is not disconcerting at all. Sometimes the contract mix or product mix offers a different composition of margin generation. What we do see, although is we don't see sort of a harmonized picture. We see variances from quarter-to-quarter between the regions. So sometimes the German-speaking region is up, and United Kingdom is down, and the next quarter, it's different. I think it's also fair to say, Michael, that Technologies is operating in Europe exclusively. So if we combine or look together at the performance of the E&M Europe segment plus Technologies, which is the total of our European business, I think we're quite well underway.

That's for sure. And then I also wanted to actually ask about Technologies. Obviously, very strong year-to-date development also order-wise and that more and more translating into profitability. You pointed out some pockets of strength here, nuclear, life science. Could you give us an idea, let's say, in terms of percentage contribution of those particular growth drivers and let's say, what margin differentials you see within Technologies, so bandwidth in terms of what's the lowest margins you generate there and the highest and how the mix is evolving?

Yes. The -- we are generally not going too much into details within the segment. But actually, the thing is that we see regarding Technology that especially in the pharma, biopharma area was quite a lot of revenue growth in it. And oil and gas, some, energy keeps roughly the same level. It is fair to say that all the improvements, what we did in the last few years on the Technology segment worked out quite well. It's fair to say that our people there are doing a great job. But as Matti rightly said, it is actually part of Europe. And we are very much combined with that what we do in the E&M Europe segment, too. So both together is maybe a better view than to separate them.

So the next question comes from Olivier Calvet from UBS.

First one, maybe on order wins. You showed an increase in opportunities, but orders received are flat organically. Can you comment on your order win rate perhaps? This is the first one.

Yes, I can comment that we will not give more further comments on that. But the thing is orders, what we see in the opportunity versus that what we already have then in the order intake. There is, of course, always a time delay in it, too. And the time delay is related with that what the clients are doing, permitting the whole thing what you have, number one. Number two, we always have this with the order intake and the opportunity pipeline. Last quarter, we had a very strong order intake growth. And we had to explain why it was strong.

Now we explained why it was only, which is still a very good level, flat order intake. We have these movements in between the quarters. For us, more important in the order intake is actually the year-to-date order intake movement, the order backlog, and that's then in relation with the opportunity pipeline and then, of course, the hidden win rate and so on. And we see here in the year-to-date order intake was roughly 5%, is going exactly in the direction as we actually promised at the beginning of '23, where we -- what we said before, already could recognize that at the beginning of '23, our 2% industry growth, what we believed year-on-year for the next 5 years, was too high.

We see actually in hindsight that the industry growth, which was realized in the areas where we are in '23 and '24 was not hitting the 0.4%. Despite that, we are in our 4% to 5% growth area, which shows that our self-propelled growth actually worked quite well.

Yes. That makes sense. Second one is on staff. I see employee numbers up 1% year-on-year. Just wondering if you're facing any issues in hiring and if that's a limiting factor for your growth going forward?

We are not seeing any real issues in that. You always have issues if you are in remote areas. I think that's obvious. If you are in an area with a lot of people living, it's easier to recruit. If you are more on the country side with low people living per square kilometer, it's, of course, tougher. But in general, we don't see that. We are, as Bilfinger, especially in the blue color range, very attractive. We have a good learning and development program. We can bring regular educated people up to engineering level and so on. So with that, we don't see that discussion what we always have in the newspaper that there's a shortage of staff. We don't have that in that way.

And then just on the U.S. shutdown and sort of government-related demand. Could you quantify the share of your revenues within E&M International that is directly impacted by the shutdown or by sort of government demand generally? And do you see any upside to your E&M International sales now that the shutdown is over?

The share of revenue in International is about 20% to 25%, that we do for government entities across all levels within the United States, be it federal, state and sometimes municipal. Things that linger for months and months, even if a compromise has been found, will take a few more months until the administration goes back into normal working mode. So we're not expecting anything to change quickly. The U.S. is having Thanksgiving later this month, and then Christmas is around the corner. So I would think we see improvements starting in the second quarter of 2026 because that will take some time to get going again and then issue contracts and then we can get started on the work there. So more during the Q2, Q3 2026.

So now that we've talked about the opportunity pipeline already twice. I also received a question on this behalf via the chat function. It comes from Nikolas Demeter from Bankhaus Metzler. And he says, looking at the opportunity pipeline, we see growth of around 15% compared to last year. While the order backlog shows organic growth of 7%. I have 2 questions on this.

I recall you once mentioned that the current reported order backlog essentially reflects only the orders to be executed over the 12 months. With that in mind, has the total multiyear order backlog beyond this 1-year horizon increased more strongly than the 7%, which will support revenue growth in 2027? I think he means '26 and the years after.

And second, what should we expect for Q4 in terms of order intake? Can we expect a solid level of new orders, given that the opportunity pipeline appears to be quite strong?

Yes. The order backlog -- at first, thank you for your question. I look, of course, to my solid CFO, the -- any comment on the order backlog development? Are we going that much in detail?

Well, let's make sure that we all understand how we report contracts. On multiyear contracts, we only show the next 12 months as order backlog. On project contracts, which have a fixed duration, be it 6 months, 12 months or be it 24 or 36 months or any time, we show the full contract value. So only on framework contracts where the drawdowns, the call-offs are uncertain, we show the expectation for the next 12 months.

Comparing the order pipeline and the backlog development is something that we do all the time. But it's not easy to find a correlation. The order pipeline includes anything from what we have heard is going to come, anything that is in assessment, anything that -- where there is a tender out there or anything that we're negotiating even without a tender with our clients. All of this goes into the pipeline. So there's a lot of judgment in the order pipeline. Internally, we certainly have rules, how to judge what's in the pipeline. And hence, that determines the development.

So I think it would be wrong to assume that the development of the order pipeline is exactly then to be seen in the order backlog. Many things happen between an opportunity in the pipeline and then the contract award. So I would think that the relation of a 15% increase in the pipeline that converts into 7% order backlog growth is a very good conversion.

Yes. And to look -- when you look several quarters back where we showed a percent you see that actually very often our order intake development is on a higher percentage than the pipeline development. Just to say that we eat market share out of that is too simple. We have a lot of variables, as we call it, in the opportunity pipeline, but you have to have that because you forecast is actually that work happening, what means that the customer makes an order out of it.

And second, is it -- which part is coming to Bilfinger and not only into the peer group. And third, the timing element. And you can imagine that a direct correlation is tricky, but it gives us the opportunity pipeline, a good view in the detail how to reestablish our resources for the future to be early enough aware of where we go up, where we go down and so on. And of course, it helps very much in the discussion with the single customers how the actually workload out of the industry -- in the whole serving industry is, which makes it easier for the clients to manage their timing too. We hope that was not too theoretical. I actually can talk for hours about it, but the -- it is a good indicator how we see opportunities for Bilfinger developing. But it's not a direct correlation to the order backlog development.

Okay. Our next question comes from Craig Abbott from Kepler Cheuvreux.

Yes, I'm trying to just understand a little bit more on the accounting impact on these acquisitions. I think you've done 3 to date. If we could maybe just like have a combined -- some combined figures here for sales and EBITA that have been realized so far and what do you expect them to contribute on a full year basis? Rough figures are fine, of course. And then also how much you paid for these? And if you could also point us to the line item in the cash flow because maybe it's just been folded up in a general line item. I didn't see it, but how much you've been paid -- you paid for these acquisitions? That would be my first question, please.

Yes, Craig. Accounting impact of the acquisitions. We have made 2 acquisitions that are included in the year-to-date numbers of -- for the group. The third acquisition just closed on October 1. So nothing included in until the end of September. The top line figures are the contribution to order intake is about EUR 35 million to EUR 40 million. The revenue is about the same number. So compared to the group, it doesn't change or it doesn't move the needle much in terms of numbers, but it puts us into a much better position.

Profitability wise, they do deliver what we said when we talk about M&A, it needs to be accretive, and they have added above-average EBITA margin year-to-date. And we expect this to continue throughout the fourth quarter. The third acquisition, Nordic Mechanical Solutions, which we did or closed on the 1st of October, will add a small portion again, but not move the needle much in terms of revenues and profits.

In terms of purchase prices, we don't disclose those. And if you didn't find them in our publication, then that's not a surprise. The free cash flow is not impacted by our M&A.

No, I know. But I was looking at the statement of cash flow in the Slide 27 and 28 of your quarterly statement. But anyways, we can follow up afterwards...

Yes. please.

Okay. Now the second question is just on the cash flow in general, obviously, we saw a very good trend in the first 9 months, and you obviously raised your guidance there on your target. So congratulations there. That's all obviously in the right direction. But I'm just trying to get a feel for how sustainable this is. I know there was a big swing in the trade payables and advanced payments there, about EUR 90 million was a big factor. Not to get like too nitty-gritty, it is just to get a feel for -- do you see this development as like being sustainable? Or were there may be some special factors there you'd like us to be aware of so that we don't like extrapolate this kind of development going forward?

But as I said before, it's 9 quarters in a row that we are positive in cash flow. So I guess you can call that sustainable. So going forward, that should be the measure for us. This year is stronger than what we had expected, but it also includes, as we communicated earlier this year, a onetime payment from the arbitration settlement last year, which was a mid-double-digit number. That's not recurring next year to say that. With -- if you look at the midpoints and everything, then our cash conversion rate for this year will probably come out somewhere between 100% and 110%, which is higher than the above 80% that we're targeting. So in the long run, the plus 80% that we have set as midterm targets is what you should be expecting from us.

So Nikolas from Metzler has another question regarding the E&M International segment. He says you mentioned that a larger M&A transaction in North America or the Middle East could be on the agenda if valuations were appropriate. That makes sense to me as these markets appear to offer strong growth and potential and improving profitability. I would, however, ask you to remind us why a large acquisition is considered necessary.

Looking at the numbers, with order intake up 15% organically and organic revenue growth of 14%, the segment already appears to be performing very well, especially in the Middle East region and the 9-month figures also reflect solid momentum. It would be great if you could elaborate on this again.

Yes. Very good question. At first, thank you for the appraisal what we get here. But I make it like this 14%, 15% of very little is still very little. And our issue in North America and, to a large extent, in the Middle East, is that we are just subscale. Size matters in our business. If you have hundreds of people on a location or only 50 people on a location, if you are bigger, you are the one in the top position to get the big, quite profitable long-term agreements. If you are the small one, you are more like fast in, fast out supplier, which is not that stable and creates actually more internal work, more admin work. So out of that, we have to get bigger.

We have 2 opportunities to get larger scale as we have it in our positioning, strategic lever. We do an organic run. That is what you see in the figures. But to have based on the timing with that good growth environment in North America as well as in the Middle East, we already said last year, it is necessary to look more into M&A, into unorganic growth, and that is what we will refer to on the Capital Markets Day more in detail, but it is necessary to do larger steps in that.

Last thing what I have is when -- there is no definition on larger M&A. Our definition on larger M&A is we are conservative people, Matti and myself, and we are actually very proud of it. And we will not do anything which would put the company in any kind of risk. On the other side, an acquisition of a EUR 50 million revenue is not seen as a larger M&A. It's as a bolt-on M&A. So when you then look to the cash flow, our conservative positive approach in how we manage the company, I think it's clear that large for us is maybe not as big as for our bigger corporates.

There's another question in the chat from Chaima Ferrandon from ODDO BHF, and it reads, regarding Germany, could you please give us a sense of the performance you have seen in Q3? And what to expect for the end of the year? Can you give us an update regarding the infrastructure, defense plan in Germany? Have you seen any signs of first orders towards your clients?

Yes. Let me start with the second one, infrastructure, defense. In defense, money is spent. Quite a lot goes into Ukraine, as you know. Some is going into infrastructure. Germany will be a kind of a logistic hub in a situation of self-defense to follow our German government wording. And as you know, compulsory service voluntarily and then a little bit with, let's say, additional motivation will come on the way. So there, money will be spent. Infrastructure just takes longer to get money into investment because we are blessed with not only Brussels regulation, we are blessed with Berlin regulation. And that makes investments into infrastructure quite a long-term item. So out of that, we don't see yet on our customers that they had additional top line through these -- through the infrastructure package.

In defense, we are actually more or less not in. So out of that, as we said before, we don't believe that we would see something coming towards us from our clients who then got something before the end of '26. When we look in general into Germany, you saw most likely the announcement of the chemical industry in Germany. They are fairly under pressure. Utilization is low. Production is low. Costs are high. When you hear that, then you can get quite negative. We out of Bilfinger, for us, it's a call to support our clients more with enhancing the efficiency on the assets, what they have to get them best performing under the current situation.

And in that respect, we think that, a, our strategy to be the one who delivers efficiency improvement to our clients is quite a good one. It pays off quite good. And last thing, what I have is, and that is what I learned on my own side out of by far more cyclical industries, if companies go through a tough recession, as some of our customers in Germany do and they survive with all the necessary activities, they are actually very competitive when that is over. So we are for the mid- to long term, not too negative.

[Operator Instructions] And there is another in the chat. It comes from Metzler from Gerard O'Doherty, could I ask for 2 points of clarification, please. In the pipeline, you mentioned opportunities in the chemical sector. I assume this is outside Germany. In your comments at divisional level, you mentioned the jump in profits and Technologies was part due to derisking projects. Could you expand on this, please?

Yes. At first, with the pipeline, yes, we have quite a lot of chemical customers or customers out of the chemical industry outside Germany, too. And in some parts, there is actually the business going quite well. So Germany is in the chemical industry, actually very much the very far low end in the development.

Yes, Gerard. On derisking, it's not about derisking projects. It's derisking sort of the contract profile that we have in not only Technologies, but also in the other 2 segments, Europe and International. What we have started 2.5 years ago with setting the updated strategy is looking at the entire contract portfolio and look at where we had larger and smaller risks or more significant risks in the past. We tried to stay away from lump sum turnkey projects, which was a part where Technologies had suffered quite a bit. We don't do those. We don't do those anymore, full stop.

We talk to our clients. We ask them to award large projects in phases, an engineering phase or a design phase and engineering phase and then a construction phase so that everything is quite clear when things have to happen. We looked at long-term contracts, framework contracts, where we didn't make the margins that we think we should be making, and we renegotiated rates. Sometimes we walked away when the client wasn't willing to come to the table. So in that sense, we increased the level of profitability slowly piece by piece by piece. And you can see that in the margin -- gross margin development, but also profit margin development over the last 2.5 years. So it's not something that we did just in quarter 3 and not just in Technologies, but for the last 10 quarters across the entire group.

So thank you very much, Thomas and Matti. There are no further questions at the moment. So thank you all very much for your active participation in today's call. And as mentioned twice already, but also from my end, our next event will be our Capital Markets Day on 2nd of December. And I'm really hoping to welcome as many of you in person there as possible. So please make sure to find your way to our Capital Markets Day. It will be worth it.

And if there are any remaining questions, of course, as always, please reach out to me or the Investor Relations team. So thank you very much, and goodbye.