Bilfinger SE (GBF) Earnings Call Transcript & Summary

Yes, indeed, welcome to the Capital Markets Day of Bilfinger 2024. To all of you here, in Frankfurt, it's very good to see you in person, but also to everybody joining us today via webchat and video stream, especially also our colleagues worldwide. Thank you for taking the time. My name is Bettina Schneider, and I lead you through the day, but as always, safety first. Thank you very much. We start now with the presentations. We will make many short breaks to have your questions and to give you the answers. We have a lunch break to socialize and as a highlight at the end of the day, I hope all of you will join us to the ACHEMA where we would like to show you what we show our customers in these days to our customers in the processing industry. But as of now, let's get going. We start with the first presentation with our group CEO, Thomas Schulz; and Group CFO, Matti Jakel. Welcome on the stage.

Good morning. Let's be a little bit more blow, so, especially from the left side where our own people sit. We have this evening -- we have more later on. Okay. Welcome to our Capital Market Day 2024. Today is about our potential. That is what we will talk about. It's into sustainable, profitable growth. As all good companies, we have a strategy and we actually showed our updated strategy in February last year. And we informed that we have 2 major directions where we go with the company. One is operational excellence. You can say it's simply the internal improvement of our own efficiency. And the other one is the positioning in the market to go into profitable, sustainable growth. And we show here on that slide, what we delivered in 2023, which is -- was a reasonable result, I would say, Matti, and that result is to see in the light to achieve our midterm targets with a growth of 4% to 5% per year, up to 2026, roughly 6% to 7% EBITDA and a cash conversion in the north of 80%, and we will achieve that. And today, on this Capital Market Day, we will inform what did we do in the strategy? What are we doing further? What is about the stock acquisition and especially what are we doing more to generate more cash? Which is very important. So out of that, the agenda looks like that. Matti and myself, we go with the whole group. Then, we have Jürgen and I would like to have my whole jam besides Matti and myself standing up and showing yourself, this is the Bilfinger group executive management team and reflects the whole company, HR, HCQ, procurement, innovation and products as well as the 3 segments and, of course, finance and then you have that CEO on side of it, not on top. And I learned very well that with digital in the future, there could be actually digital CEO. Let's see what we can do about that. But coming back, then in the afternoon session, we have the segments. And after the segments, we do wrap up. And then, of course, during the different blocks, you can ask and of course, after the wrap-up about the whole thing again. And then we go together as Bettina said to the ACHEMA. And of course, you can ask us whatever you want. This is the time to mingle. This is the time to answer all the questions what you have. But before we go into the strategy, what are we today? Who are we? We are not a construction company. It's over done and out. We are a company with more than 30,000 employees doing industrial service in North America, Europe and in the Middle East and in a lot of areas, actually market leading in technology and in other things, too. And we are a company offering for our clients from consultancy to maintenance and turnaround. Whenever you have a plant and you have gas and liquids, we are there to support you and make it more efficient and sustainable. And we can take it over completely, and we proved that for more than 100 years. We have more than 80% in the maintenance and engineering. And we have, yes, 17% around in technology. You will hear about that, too. We are in 4 main industries, but actually, we are in all industries. The main industries are defined that we do more than 10% of the revenue in that industry, but we are a mirror of the global processing industry. No matter if it's ketchup or medicine or oil and gas or anything and 80% of that what we offer is the same, that's a uniqueness and gives us a fantastic opportunity to maneuver. If an industry goes up, we can allocate more resources from other industries going a little bit down. We are now in the MDAX, which makes us actually quite happy to be back in the MDAX. We have around EUR 5 billion turnover and our profitability, no matter that '23 was well received in the market still too low. And that's our vision. Same is with the cash, developed in the right direction, still too low. And the management team knows exactly what we talk about when Matti enters the room. Important is what are the drivers for the business? What is it? What drives our business? What is it? What drives our future? And the trends are very important for that. We are in a very volatile world, and you know that. Since the financial crisis, the amount of impact on Board, on Supervisory Boards, on CEOs, CFOs, management teams is unbelievable high. And customers more and more look to focus on their core and not on everything. You hear that Pureplay 20 years, 30 years ago, consultancies were telling us, you have to be diverse. Now they all tell you, you have to be a pure play because the impact is so big, over bureaucracy, impact of politicians into our daily doing, labor shortage, climate change, you can name it. It's a lot. What is in for us? What are the drivers for our business? The drivers for our business is that customers under pressure, no matter if it's positive pressure, that means they expand and would like to build new things like in North America, Middle East, partly in Europe or they are under pressure because they decline because energy cost goes through the ceiling and so on, then they come to us. That's our business model to support clients in both areas. And that is what we call outsourcing because they come to us, can you take over all the maintenance? Can you take over the engineer? Can you take over how to build these factories all over the world exactly the same? We, as Bilfinger, we can do that. We decomplex the clients. We improve efficiency. We improve sustainability, and we can calculate it on the millimeter, on the gram CO2 for the clients. And that is important because we unload them in the adjacent part what they have to do with all these parts. That is what we, as Bilfinger do. And we work with labor shortage with our training and education. We work with labor shortage that we tell customers, you don't need 200 people on site, have 10, and we bring the rest. That's where we earn money on. They get more efficient, they earn more money, we earn on that. That's our business model. So how does the industry look like? The industry looks like actually, for us, quite good. No matter how you see the growth rates in the different areas. You see here the 4 main industries for us. Energy, you see chemicals, petrochem, oil and gas and biopharma. And then adjacent industries like metallurgy, cement and others, which are not so big in our portfolio. But we are working there, too. Where if we -- as I said, if we pump ketchup or if we pump a medicine, we still pump a liquid and we are experts in it. When you look into, we didn't change the overall outlook of the market growth. We said 16 months ago roughly, 2% growth in the industry where we act in, and we keep that a little bit of movement, biopharma, energy, a little bit better and chemical industry through Europe, especially Germany, kind of lower, but on average, still the 2%. And then the behavior of the clients what we live from. If they go up 2%, it doesn't mean we go up. We can go up 10%, 15%, and we can go down if they would say we stopped the plant completely from 1 day or another. And they are not doing that, by the way, no matter that it always pops up. Outsourcing is the thing. They come and say, you take over, you an expert in that, why should I do it? I have 5 plants, I have experienced from 5 plants, you have experience from 3,000 plants. You are the expert and with digital systems, we can offer them to measure us daily on the efficiency improvement, so the world changed into the positive for service companies like us, if you have the right competence at the right spot. Out of that, what is our growth? We have a very attractive growth. We have the 2% market growth, as you see. We have the self-propelled growth, which means that in existing regions and technologies, we still have a long way to go to cover it properly. You will hear about the segments, but in a nutshell, we can say if we would have in all the markets we act with all the technologies, what we already have in Bilfinger, a low market share, our revenue would be more than double. That is a potential because it's low risk. We know the culture. We know the people, we know the customers. They only have to recognize that we can offer more. And this offering more is what they ask for because only to have scaffolding will not help you as a supplier. You have to offer the customer efficiency. And for that, you need insulation, you need engineering, you need, of course, the whole package, and we can offer that. That's our strength. And on top of it, we put M&A because M&A for us is important to establish ourselves in markets as the solution provider, as stock, for example, shows. And what is the important there? The important is, of course, that we look into our balance sheet, and we have a very good one, a very healthy one. The importance is that we create EPS total shareholder return. The importance is that we only look for companies which are fitting into the product offering what we already have. They strengthen us in areas where we don't have these kind of products because when you look on the map, and you will see that it looks like a patchwork. And we would like to make it one color, everything dark-blue and great future, of course. So back 2 main directions, operational excellence and positioning. Efficiency program, the EUR 55 million put to savings, what we promised to deliver this year, where roughly EUR 12 million, EUR 13 million are going into education and training will happen and the efficiency program was finalized end of last year. As we promised, the year 2024 will bring in that money. It's all calculated in. No need to talk further about it. So we talk about operational excellence. And here, you see the strategic levers what we drive here. And you will see them quite often because it's not about the amount, it's about the effectiveness. And what you see here, too, is the progress what we have since last Capital Market Day. The reason to show it in that detail is that you see that we are not only saying it that we really do it. And you actually can break it down to the figures what we deliver. And that transparency, we will keep so that you can read us better because we know that still some media calls us construction company or anything else. That is not the Bilfinger. We are a leading industrial service provider, highly competent people with more than 30,000 employees in more than 30 countries with more than 100 nationalities, that is what we stand for. We are extremely good and that what we do, and I'm extremely proud of my people in that. So another part is derisking. What does it mean derisking? Standardization comes and derisking is that service is not that you go on the site and say you start to work, that you actually go to the client and say, "This is my offering. You have that plant with this, we give you KPIs what we will fulfill and that is the work that we will do for you. And that is what you pay us for." That is derisking, because you are standardized. The customer knows what he gets, and we know when we get paid and what we have to do, makes life significantly easier because you copy and paste it. We did it for BASF for Bayer, for Dow Chemicals, for Proctor & Gamble, for Shell, for Total Energy, doesn't matter. That is derisking and standardization. I have some deep dives, and the deep dive is competence development because it's not only that we decided to do the education and training completely in-house to get the apprentices and it's actually about educating, further educating and training our own employees, we already have, offering people from other industries or other companies to join us. This upskilling is an offer. We have training programs. You can go around the world, no matter if you are a blue color or white color. We offer that, that makes us very much attractive. We can bring a blue color, regular work up to an engineer degree. We can do that. But it's not on a university, all the time, it's actually on customer side, working being part of the innovation and product team. With that, we are not more -- not only more higher attractive than others because that's a relative game. We actually have more quality towards the client. We can do more with less people for the customer less money. And for us, less complexity in it, and our people when they are upskilled and higher quality, they show the Bilfinger true value towards the client. And we proved that already. This is not what we just started. That is ongoing for decades, but we channel it, we standardize it, we pack it and everyone has to go through it and we make a motivating thing out of it. Then last thing in that is digitalization. Everyone talks about artificial intelligence. When we have still in the industries where we operate, no automation in it, we have to educate, we have to bring the people to digitalization that they lose the fear what is coming to them. And you train that. And when you do that, you see that the people really think, wow, that is great. We can do 10x more and it's easier to make more fun, but you have to educate that. That is part of the training and education. That's the reason why we said minimum or more than 0.5% of the revenue we invest each year in training and education so that you can track us, are you doing that what you say? Then the positioning. On the positioning, we have 4 main strategic levers what we work on. You see the progress. Market expansion is one of the big things. I think it's easy to understand. But what it really means is that we are able to offer in each region, all the products. We are not doing that today or several -- out of several reasons, but it's a hell of a good potential because customers ask for more products bundled. You will hear about that regarding the stock acquisition, how logical that acquisition is and was. Let us take one strategic lever, external digitalization and innovation because we have an internal part to improve ourselves and an external part. Today, we only have 5% of our revenue with digital products, only 5%. That's the truth. Of course, you can say, why are you not doing more as [indiscernible] customers have to allow it. They have to open up and saying, "I don't want to have scaffolding. I would like to have drones with sensors." And this is not easy. This, you have to convince, everyone would like to be the #2, not the #1, to go into a new technology. But we have so good customer contact. We are so big on customer sites that we actually can implement it. And that is what we drive for. And our target is to be more than 40% with digital products on the revenue in the midterm targets. We will achieve that because we have a fantastic situation for us as Bilfinger. We have a market which is booming like the Middle East and partly in North America. And we have a market which is heavily under pressure, which is in Europe -- especially in Germany. And they asked for tools to get things done faster and that they can track how our performance is. That calls for digital products. If we then look into specific examples that you see what we already do, you have on the left side, Scaffolding, you can do Scaffolding with 3D installations. It makes a significant faster, safer, more reliable and repetitive. You have in the middle part, predictive maintenance which means we tell the client before something happens in the process or on equipment like pumps and mills. What will happen so that when we have the next shutdown can do already the additional work that they have no more downtime. We can do with the third-party drones on insulation, actually flying on oil and gas offshore platforms instead of having Scaffolding in the Northern Sea, which is I can tell you out of experience in November or in February, not a nice thing to be on, and we can use drones to analyze, to check and having spot-related work, which makes it cheaper, faster, safer, more efficient. And then sustainable Bilfinger. We pray that we enable companies to get more efficient and with that more sustainable. And sustainability is a technical thing. I'm not talking moral politics, technical thing. We are each day reducing CO2. We can calculate, we can prove. We can put a stamp on it from a [indiscernible] or from any consultancy, not a problem, we do it. We don't talk about it. We do it. We just do it. But if you offer that, you have to be sustainable yourself. And we are part of the value chain. But the part of the value chain, what we cover is very minor because customers have a sustainability impact with their production site in our value chain of more than 95%. The suppliers close to 5%, and we are below 0.1%, but you have to be a role model that you do it yourself. And we agreed for the GHG Scope 3 in 2025 to do that, Novasep. EcoVadis put us on gold, which means we are under the top 5%, which is very important for clients. They look exactly into that measurement. On the right side, you see a result out of a challenge because Brussel forget us, completely in the EU taxonomy that there's mechanical industrial service companies. So whatever we do on the site, our clients can put it in the taxonomy, we not. So we implemented last year on the Capital Market Day, our own classification to show you the progress to be transparent, and we use that what you have in electronic stores when you look on the refrigerator. It's Class A, very good to D, really bad. And we promised in the midterm target, we are out of D and we move more into A and B, and we achieved that through the bundling of our products through the combination to go to the clients. So this into the sustainable profitable growth shows you we perform on that what we promised. You can see that in the different strategic levers as well as in the financial figures. And we have quite a potential further to go. And with that, I give over to Matti.

Yes. Thank you, Thomas. Good morning, ladies and gentlemen. All of what Thomas just told you translates into performance. Anyone who bought a Bilfinger here on the 1st of January 2022 for -- or invested EUR 100 and would look at his account statement would see it's worth EUR 219. So 119% total shareholder return since January 2022. How did we do this on the strategic side? Thomas told you already, we completed the efficiency program. We implemented the functional organization. We spent a lot of effort on derisking, which improved our profitability and we acquired Stork and today is the day to tell you how that stock acquisition is fitting into the [indiscernible] organization, what it does to our outlook for 2024 and more details on this one. On the capital market, we returned to the MDAX in March this year. Very happy to have that achieved. Standard & Poor's gave us a positive outlook in May of 2024. We outperformed against the indices first against the SDAX and then against the MDAX, I have to admit the MDAX is not the biggest challenge in the world, as you all know. And we have an increase in sales side coverage, which we take as a real compliment from the capital market of our performance. Let me take you back to the Capital Markets Day 16 months ago in February of 2023. We issued midterm targets importantly with a step in between, which is 2024, where we said we would increase our margin to 5% and above and the cash conversion of 70% for 2024 and the midterm targets, well-known, well communicated revenue growth of 4% to 5% per annum, 6% to 7% EBITDA margin and the cash conversion to exceed 80%. How does the stock acquisition now change or affect the 2024 numbers? In February, we issued a guidance without Stork because the transaction was still pending. We signed in September of 2023 closing as you are all aware, happened on April 1st of this year. There is an increase in revenue. We expect about EUR 300 million to EUR 400 million for the 9 months from April 1st to December 31st to add to our revenue. So we increased the outlook on the revenue to EUR 4.8 billion to EUR 5.2 billion. The EBITDA margin said would be 4.9% to 5.2%. There's a bit of a dilution, and I come to this. And we widened the range from 4.8% to 5.2%. Still, if you take the midpoint, we promised 5%, we will deliver 5% in 2024. The free cash flow doesn't change from EUR 100 million to EUR 140 million. The additional profit that comes in through the acquisition, through the stock business, will be offset by the integration costs that we will have to pay out in 2024. So that equals out. Going into the segments, there's only one change and it's E&M Europe. The entire acquisition as it stands today, only affects the segment Engineering and Maintenance Europe. The others remain the same, as you can see on this slide, E&M International unchanged, technology is unchanged and the reconciliation, which completes the group is also unchanged. The additional revenue takes E&M Europe to a revenue between EUR 3.2 billion and EUR 3.6 billion. And the margin, we are taking the range one notch lower from 5.9% to 6.2%. We take it to 5.7% to 6.1% to address the dilutive effect that the Stork business will have only this year. Turning the attention back to our midterm targets and cash. First of all, we have done a lot of work on the efficiency program, operational excellence and the positioning to get the margin progression going. This is extremely important to prepare the organization and then the cash can follow. It's always profitability first and then the cash follows. So cash conversion to take it to 80% consistently, you see higher values for -- the prior year is 97% in 2022 and 78% in 2022. And if you look further back, we see a lot of up and down in cash conversion. The idea is to make this more even across the future. How are we going to do this? The key to working capital improvement is really to look at capital efficiency, and that's a supporting midterm target that we will be working. We will be reporting the net trade assets as a percentage of revenue, where we are operating at around 12% in the last 2 years with a bit of an improvement that we see this year. But the midterm target here is to take this to 8% and below. You see our peers are trading between 11% and 1%, and that's just a selection there. If you look at the average of 6%, you see there's even further potential beyond 8% as a capital efficiency measure. The strategic levers that we have applied and continue to apply on the revenue side and the profit side also have a cash impact. Take competence development, take standardization, take derisking, take automation and take market expansion to a varying degree between medium and high. Why is that the case? For our working capital improvement, it is extremely important to shorten the billing cycle, so from delivery of our service to getting the invoice out to the client and then getting paid. How do the strategic levers support this derisking. And I would like to give you one example there. The focus on cash flow in contract terms and contract conditions. Oftentimes, we have contracts where we are billing on milestones, which means achieving something technical, where the client is solely responsible to say, yes or no. You have not delivered or you have delivered. So we are in the hands of the client to say this has happened and then sign off. We are moving away from milestone billing to progress billing meaning we bill month by month, the work that has been performed. Yes, finally, we will deliver the milestones, but their technical milestones and that should be the limit. Otherwise, we will be funding work continuously until we get paid, which binds our working capital. Change order management is the same. Oftentimes, it happens that on a contract, the client changes specifications, timing, deliveries and what have you. If you're bound by a milestone, the time extension will just do the very same pushing out the achievement of the milestone and we have to even deliver more services and fund those services. So going to progress billing will really help improve our working capital. Automation. All our invoices come with a lot of documentation and to efficiently organize. This is another matter of focus that we have started and we will continue time writing, document handling and the entire billing process will be fully automated and hopefully, in the future, also fully digitized. This doesn't come easy. There's a lot of hard work in there, and there's a lot of training and development with our people involved because they're used to sometimes a very old-fashioned way of doing business. So the focus here is not on the finance people because they do understand the importance. But it's training the operational staff that it's very important to deliver high quality to satisfy the client on the one hand side, but on the other hand side, to make sure that the money flows as fast as possible into our bank account. All of this will help on various fronts. Our cash flow will be more consistent throughout the year. So the known and well-known bathtub will be much shallower. The capital efficiency will increase. And the measure that we're using, as I said here is average net trade assets over revenue, taken it from 12% right now to a level of 8% and below. From this, taking a look at the capital allocation, this remains unchanged. We will fund distributions, dividends. You know our policy very well, 40% to 60% of the adjusted net profit will continuously grow. The last 2 years, we were at the higher end of this bandwidth close to 60%. We will fund the organic growth that we have talked about 4% to 5% revenue growth per year has to be funded. And as we will see during the day, we are funding M&A transactions as well, where we are looking to achieve attractive top line and bottom line growth, increasing total shareholder return, access to skilled labor. I think Thomas really explained this very well how important that is. And the second one is obviously driving the full line offering in all our core regions so that we service our clients. And last but not least, share buyback is an important part of the toolbox that we will be using if and when the time is right to do this. All of this is based on a sound financial policy where we expect to achieve investment rating. I wouldn't say any time soon, but we have certainly taken important steps and the positive outlook that we got from Standard & Poor's this year makes me very, very confident that this is almost around the corner. So what is here for you to remember, we make it really easy for you. Revenue EUR 4.8 billion to EUR 5.2 billion, profit, 4.8% to 5.2% 2024. So, cash flow, strong focus on working capital improvement, taking NTA to revenue from 12% to 8% in the midterm and capital allocation remains unchanged. With that...

Thanks again, Jürgen Liedl, President, Engineering & Maintenance Europe, talking about Stork.

Good morning, everyone. My name is Juergen Liedl. As Bettina said, I'm President of the Segment, Engineering & Maintenance Europe, or E&M Europe. On April 1st, we have successfully closed the acquisition of Stork in Europe. So Belgium, Netherlands, Germany. And I would like to talk now about why this is such a perfect fit in our strategy? What kind of opportunities that provides us now for sustainable profitable growth, and how are we going to make that happen? I'll start with the first. Why is it just a perfect fit? Let's look at our M&A strategy. As Thomas said, we are looking at -- and Matti said, we're looking at quite a lot of potential targets right now. But we have a very strict set of criterias that we are applying. So how does an ideal M&A target look like for us? First of all, it shall add an increase to total shareholder return. Second, it shall be a benefit of our portfolio. So we're looking for companies who are doing things that we are familiar with in a market, where we are competent and successful, but providing services that we are not doing in that market yet. And that, of course, then leads to attractive top line and bottom line contribution that is also a criteria for us. And especially, I think, in Europe, access to skilled labor is something that is a key requisite and also a competitive advantage. So that's also very high on our KPI list. And last not least, an efficient integration. We want to integrate companies as efficient and as quick as possible when we acquire them. Now when you look at the Stork acquisition, that ticks all of those boxes. The acquisition will be accretive or is accretive, not will be because it already happened. It is accretive from the one-off. We have a very complementary portfolio in the Netherlands and Belgium, and I will talk more about that later. And also in Germany, what Stork is doing in Germany adds value to what we're already doing there. We have now an additional yearly volume of EUR 530 million, starting from Q1 with the current EBITDA margin of 2.5%. But as we are so familiar with the business, we have plans in hand, and we are confident that we will raise that margin to our targeted level, also more of that to come in 2 or 3 minutes. What I really like about is the access to the skilled lever. We have now more than 2,700 highly qualified employees being part of the Bilfinger team and to add even more of that and some -- they have some competencies that we have not had yet as an example, electrical and instrumentation. The whole industry is moving from coal and gas to electricity. And if you want people to drive with electrical cars, there needs to be an infrastructure. So electricians are one of the most sought resources that we currently see in Europe. And a big share of those 2,700 people provide and have exactly that know-how. Perfect. And last, not least, the efficient integration. So Stork has been a peer for us in Belgium and Netherlands, but we know them well. We even have been working on the same sit with same contracts with them. They think and act very similar to us. They have the same kind of culture. So we are very familiar. And when you know a company from the market, you can be confident in the beginning if the 2 companies fit together or not. And this is what we are seeing. So there is a good cultural fit to us, and that also just makes the integration easier. So that's why we signed the transaction on the 6th of September. We have done the closing for the Belgium, Dutch and the German entities on April 1st, and we will be finished with the full integration in Q1, quarter 1 of 2025. I want to spend a little bit more time on the complementary portfolio. What does that mean? And how does it help us to position ourselves and to drive sustainable, profitable growth. Some of you who were with us in February 2024, they may remember the chart and the picture that you see on the left side of that. That is a core element of our strategy. You have -- when you look into our industries, you have some companies who provide single trades. So those are the dots that you see on the left side. And they may be very good at that. So that's fine. But then you have some companies who have a broad range of services. And then you have some companies and there gets fewer and fewer, who are combining it. So who are combining this broad range of services and they make solutions out of that. And these solutions are tailored to increase the efficiency and the sustainability of a plant. And this is where we are moving more and more at Bilfinger. And this is exactly that big fit, the strategic fit, that Stork is delivering, that is offering. Look at -- and of course, that increases the entries of barriers for our competition because you need to build up all of those know-how and all of those solutions. It's not -- it takes time. It doesn't come overnight. And that, of course, also drives our profitability. Now look at E&M, Engineering and Maintenance in Belgium and Netherlands. Bilfinger has been already very good in engineering. So we are consistently ranked in the region amongst the top 3, we'll get better. We will become the #1, but we are already very good. We are definitely the #1 in all of our clients say that in that region when it comes to insulations, scaffolding and painting or corrosion protection. And we do a little bit of mechanical, but we could be better. Now we have the Stork coming. They had a very fantastic technical consultancy know-how to our engineering department. So at the very early stage, defining asset management, defining maintenance services, something that we have in other regions already, but we haven't had that to that extent, by far not in Belgium and Netherlands. So that's a perfect fit. They are also very strong in mechanical, especially in the Netherlands. And they know electric instrumentation and control, which is something that we have in other regions, but we did not have really nothing of that already available in Belgium and Netherlands. So with that now, we cover the full service portfolio. We can cover all of our products that we want to offer and we are doing this, and we can combine it to solutions. I have a few examples on specific cases and contracts afterwards. But also then in Germany, the business that Stork is generating in Germany, it's about EUR 50 million, 5-0, of those EUR 530 million. They are specialized in mechanical and electrical equipment. So they upgrade, they modify, they maintain turbo machinery and generators. I just realized I always say they, but it's we. No, sorry -- still getting used to it. So we have that now in our portfolio as well. And it's also a very nice add-on to our existing framework contracts or when we make a shot on our turnaround of a plant, we now have more know-how and more services to offer. We haven't had that in the past. We have it in other areas. So also that mechanical and electrical machinery, we have it in Scandinavia, for example, very successful of that. So we know the business. It's also one of our global product centers. We now have it in the next future. And another thing, which is still worth to mention, when you look at E&M Europe, the head count on -- end of last year, we had about 24,000 own employees in Europe. And you see a big majority of that is in DACH and other regions were smaller. Now with those 2,700 colleagues coming through the acquisition, I have a more balanced portfolio across Europe. And [indiscernible] region where there's still a lot of investment ongoing. You have the harbors of Antwerp, you have the harbor of Rotterdam. It's a country. It's an industry that has been driving the sustainability and the energy transition since 3 or 4 years. So there's a lot of positive things going on in that region, perfect. How does that leads to the financials? Matti has explained the financial outlook, and I think you've seen the numbers. So within the segment E&M Europe, we are adding for this year another EUR 300 million to EUR 400 million of revenue, quarter 2, 3 and 4. And we are -- it has an impact in this year on our EBITDA margin, but it's digestible, I would say. Stork is currently operating at 2.5% EBITDA margin. They have done this last year, the year before. That has also been the budget for this year. But again, we know them. We even have known some of the people. So we had time to prepare and we have a good plan to improve that as quickly as possible. And we see the first synergies already being realized. So that updated outlook for the segment of Europe. No changes in any of the other business in E&M Europe. We are adding Stork, including the one-off costs in this year and [indiscernible] provision.

Badwill.

Badwill provision. My apologies. We end up between 5.7% and 6.1% in our outlook. Now -- there is a plan, of course, to move and increase the profitability from 2.5% up to 7% and higher in the midterm. And you can see the effect, the positive impact, the synergies along our strategic levels. So efficiency. First of all, we're integrating the stock business into our functional organization. Stork, the business that we have acquired was a business unit of EUR 530 million. So they had their own overhead. They had their own administration. We don't need that twice. And that creates a lot of savings which you see here in that lever. In addition, we did see and we do some dilutive contracts. And that's something we have kind of learned within Bilfinger in the last 16 months, how to go to the client, on how to convince the client that they need our people and they can add value and we need more favorable terms. And that can be payment terms, that can be invoicing terms, that can be prices. You name it. And we are applying this now at the Stork portfolio case by case. We're working through this, and that will have a significant impact, which you see in operational excellence also on the margin. Plus, of course, we are working on the standardization, which makes things more efficient. And we have now doubled the size of procurement volume in Belgium and Netherlands that creates synergies and opportunities to save on procurement costs. So all of that feeds into operational excellence cluster. And finally, the position, again, by combining those services, to meaningful solutions, we have a completely different level to talk to the clients. And we are not providing 2 or 3 welders or 5 scaffolders, or we are providing solutions. And that is just a driver for profit and for growth, and you can see the effect of that. Why am I personally convinced that we will manage this 7% midterm? Because we've demonstrated it also [indiscernible] for the last couple of years. So this is a margin level that is not unusual in that region. Why? It's attractive, and we have a good management team, and we already have a very good position. So that's why I'm convinced that will come. How are we doing that? That's our integration plan. Again, what you see here, we have already started. We had ample opportunities before the closing on the preparation. We've done, of course, before the signing, we did a lot of due diligence. We know the company, we know the market and so on. So we have made up our minds on what can we do on day 1, and we had a plan on integration already at closing. We put a lot of effort on day 1 in terms of communications. So to convey the excitement that we have also to destruct people, day 1, April 1st was effective, was Easter Monday, but we had the first management calls with the Stork management to welcome them to explain how we depreciate them being part of us. And what are all those good ideas are in great ideas that we will be working on. Then from April 2, we had townhall meetings in most of the sites where [indiscernible] always Stork management and Bilfinger management. We are doing this together. They are part of our team from day 1. And that got quite a very good response, not even amongst the crews, amongst the teams, but also at the client. So immediately, clients started to talk of us and asked us Bilfinger, how can we use that now? How can you help us become more efficient and more sustainable? So we have been working on the joint customer approach, prioritizing the clients which we talk to, having the first conversations also providing the material when our salespeople go out there, when our managers go out to and talk to. That is done. From day 1 on, Stork was part of our functional organization. So we have prepared that at the beginning. We have slightly changed the reporting lines. They are part of our governance from day 1. They are part of our functional organization from day 1. So we have a joint management team now. And of course, we further work on improving, especially the optional organization because this is -- that drives all of those synergies in operational excellence and in positioning, but from day 1 on, part of the functional organization. Big focus is now on rebranding. We have acquired brands like Stork, [indiscernible] and so on, you name it. If we present ourselves and sell ourselves and go to the clients as one company, it will all become Bilfinger. So that's something we're working on that will be finished by end of the year plus integration of IT systems and processes. Also there, I think we have a very -- I'm looking to board, but we have a very good approach. Of course, there are some processes and systems, which are building our global systems, finance, HR, safety, CRM. We are bringing the Stork people and the Stork business onto our system. And there is no negotiations. Global systems are applied to the business that we have acquired. But keep in mind, Stork is a company who knows good stuff as well. And the business that we have acquired, they know how to do things. So we are now looking more at the operational systems and processes, and we compare them case by case. And some of them, we find out that we can learn from the acquired business. Some of them we found odd, we are the ones who can do that better. And so there's a learning also for us in that region and across the group. So -- and in addition to that, of course, we made sure that the day-to-day business is not affected by that. And so we don't want the stuff on site being busy on integration. We are doing it in a phased way, in a meaningful way and in a careful way. We will not harm the day-to-day business, and that's working well. So first feedback after the first 2 months, it's now already. Very good response from the clients. So the assumptions that we had when looking still from outside inside on all the synergies, they have been confirmed. Also, the one-off costs have been confirmed. Good feedback from the acquired teams and lots of opportunity. And the first synergies are already realized. So we have work streams that are active and kicking is all progressing. Now of course, that creates a lot of work for the people. But why are we doing this? And I give you 2 examples that excite us, us means the the gem, me, but also the teams and the clients. These are -- 2 examples where we are showing this combining services and translating them into meaningful solutions that no one else can do in Belgium and Netherlands. I'll start with the first reference is ICC. ICC is a Dutch company, who is owning and operating plants that produce green hydrogen. And -- it's quite a new company on the market compared to the sales, buyers, ExxonMobil. So they have been looking for a partner who can manage and also execute the ongoing maintenance at their sites and also small modifications, right? And you see -- some of those things, maintenance execution, modifications engineering, modifications execution, we, at Bilfinger have already been able to provide in the Netherlands. But some of those things that have been required, we were not able to provide and this is where the acquired business of Stork comes in. So they have very good references and experience in asset management, in the Netherlands and elsewhere. They know maintenance planning and also they cover some of the locations, which we don't with our people to do the execution of maintenance and the execution of modifications. That is something we could not have provided before the acquisition. And again, that's something which there are only very, very few companies that can do that. With that client, as a side note, that client has even waited to sign the framework contract until we have closed the acquisition because they were also -- they read that we had did the signing and they have really waited for us to close the acquisition before they sign the contract. I think that tells us a lot on how we can add value. Another one, again, hydrogen. When you go from the -- from Rotterdam to [indiscernible], which is one of those industrial areas, you drive until you see the sea, 20 minutes or 25 minutes, you will find a big hydrogen plant being built and that's the so-called Shell Holland hydrogen one plant, which is generating 200 megawatts of green hydrogen, which is powered from the offshore wind. And that hydrogen is used to provide the Pernis refinery also from Shell with green hydrogen. If you go to that site, you will see people from Bilfinger who are doing very, very vast things. We have already done the technical consultancy when the plant was being designed, so all the permitting services, that was done by Bilfinger. We have started to do the scaffolding in the insulation. That's also done by Bilfinger. Now the mechanical works and the electrical works are also done now by Bilfinger. It was struck previously. So when you go there, we have such a big role already that we play in that project and it's one of the -- first in Europe to that size that is going to be built. So it's a great learning for us. It's a perfect reference. And by the way, the reason why this is called Shell Holland hydrogen One is because Shell wants to build the second one. So there are 4 plots on that side. The one is currently being built. The second one is in the line also for Shell to be constructed. And then you have 2 other ones, one for BP and one for Air Liquide, who have also kind of put their foot there because they want to build similar plant huge opportunity. And again, that's something you will not find a lot of companies who can do that, and that's something we now can do together with the acquisition. That's why we are really all excited about it. Good.

Very good. Thank you very much, Juergen. I hope you enjoyed your lunch. And I hope that you all had also some coffee because now we're getting in more details. You will hear a lot what you have already heard this morning. However, now allocated to the segment to understand how our segments will achieve the midterm targets and beyond. As a first presenter, you know already Juergen now coming as really the President of E&M Europe to present his segment.

Thank you. That's a good start appreciate it. Thanks a lot. So thanks for coming back, everyone. And thanks, Bettina for implying that my presentation will require coffee because it will be boring. I take this as a motivation for next 20 minutes. Good. So what you will hear now in the afternoon is more details, more flavor on how we are implementing the strategy that Thomas and that Matti have explained, in our specific segments. So Christian, Thorsten and myself will go through the segments. You will see some common flavor as we walk through. You will see some specific topics that keep us busy in these segments. And I'm starting again with engineering and maintenance, Europe. So what's the starting point? Where are we today? We have already a very good position in many markets in Europe. So overall, as a service provider as an industrial service providers in those 16 countries where we are active, we cover already a significant range of services. So in the end, you will find someone in our business who can do more or less anything. And that's a good process to start. But we will -- we still have good opportunity to grow, and I will talk about this one in a second. We have demonstrated in the last year and also in '23, again, that we can grow above market average. So last year, we made EUR 3.03 billion revenue. that is about 9% more than we had the year before. So for me, that's a proof that our business model and our value proposition works. And it works in easy times for their clients, and it works in difficult times for the client. We also have already quite a good -- I have to apologize Matti. We had a solid EBITDA margin, but there is more to come. What we've been working a lot in the last 12 months in Europe was the functional organization. So we have reorganized the regions and we have reorganized all of the regions into the functional organization. As an example, what is really of a benefit, I now have in each all of our 5 regions, I have someone and that the team and the management, who is responsible for one of our 8 products, that is something we did not have before. And even I have now, we have now the P&L, so we can look at the order intake, we can look at the revenue, we can look at the margin that we are generating with each of our products in each of the regions. And that's just a good starting point to work on all those other things data coming. So good basis with room to improve and we have a plan to improve. So what you can also see here then is we did not only work on the functional organization and on the efficiency program. But we've also started working now as the organization is in place. We have started working on the other levers. On market expansion, I have a separate slide afterwards because this is really the core of what we are doing and what we'll be doing in the next 2 to 3 years in Europe. So I have a separate slide to explain that in more detail -- how that is working and why that will deliver profitable growth. Derisking for us in Europe is very much about renegotiating dilutive framework contracts. A dilutive contract can either be because of lower rates, but because of unfavorable payment conditions. And we have gone through our portfolio. We had 2 years ago, 1.5 years ago, we had quite a lot of them, and we have worked them through case by case by case. And in many instances, we have been able to convince the clients to renegotiate the rates to improve the indexation conditions or to improve the payment terms. In some of them, we have not managed that sometimes happen again, it always takes 2 to find a solution. But I was -- what I was really impressed about the teams in the regions that they have stood the ground and said, "If I do not reach my acquired margin or my acquired conditions, the ones that I want to have, I stay out of that. So we have let some of those contracts also go -- and it always happens also in our industry that 2 or 3 years -- 2 or 3 years later, the clients are coming back. So that may be the case with us as well here. The market expansion is within our existing markets, and again, more on that on the next page, but we are also looking carefully on adjacent market. And that can either be a geography or a country. So Thorsten, who will talk later on about the segment technologies. He is very active in many of those countries in Europe. We are building pharma plants, energy -- green energy plants and so on and so forth, but we don't have a lot of maintenance presence in those countries, right? In Scandinavia, we have the one or the other country as an example. And we start kind of handing another client relationships. And as the plants are being built, we get introduced from engineering and maintenance to talk to the clients how we can improve the maintenance. And as these plants are going into production, there is more work for us as well. And that will mean that in some of those countries where we don't have a huge presence in Europe right now in Engineering and Maintenance Europe, we will be more active. But also industries, adjacent industries is something we are looking at as well, where we can apply the knowledge that we have. One of the examples there is data centers. Everyone is talking about artificial intelligence, but artificial intelligence requires 2 things. First of all, chips. And second, data center. Someone needs to calculate and do all those statistics of the deep data models. And that is done in data centers, but the interesting part of that is the data center requires a lot of energy. And we have companies like Google, they want green energy. And they also produce a lot of heat. Now again, energy creation and heat are 2 of the core competencies of Bilfinger. So we are applying our core competencies that we have learned in other industries to new industries. And this is what we're looking more at market as well. Innovation and digitalization -- the -- last year, we talked a lot about robots and drones, and we continue to work on that, but something that has accelerated is how to use automation, you may call it robotics, but how you use process automation for the administrative work. Matti was talking in the morning about us reducing the NTA and reducing the [ risk ] and automated invoicing is one of those tools that we have started to introduce in our scaffolding business in the U.K. Then we have introduced in our scaffolding business in the Netherlands. And now we are rolling it out to a scaffolding business in Germany. In the past, someone was writing the documentation for the scaffold that has been built. He or she attaches an investor then he sent it to the client. Then it lies on the desk of the client. At some point in time, the client has time to pick it up to click it. Client comes back with question. It lies on one of our decks again. And so it just takes time and time and time until really the money comes on our bank account. Now with this automated processes, all of that goes through robots or through a software and the software works day and night. The software doesn't keep something lying on its desk. And also the quality and the amount of questions we get back is much less. The quality is higher and the amount of questions we get back is fewer. So it has -- we get the money from the works that we have done in a very short time and it requires less administration 2 benefits. So let me talk about the positioning and market expansion. What you see here is the table with many different colors. It's a schematic theme every -- in the left is illustrative for today and the right is illustrative for the future. And each line represents one of the regions. And every -- sorry, each column represents one of the regions and each line represents one of our products where we are active. And it is quite a mixed picture that we see, where some -- in some areas, we have very high market penetration in some low market. And in some, we are not present as well. What we have gone is through all of that, all of those markets where can we sustainably and relatively grow. And what the future for Bilfinger in E&M Europe look like this, similar like this. Again, that's just illustrative. But what you'll see is that we will create more dark spots with more market penetration. But you also see, we are not going to conquer the world is all at once. So we are prioritizing, what we are doing. So for example, in spectrum services is something which we will push in the future. Engineering is something we will push in the future. But the overall objective is that we have a consistent portfolio to all of our regions. And again, the logic behind that is the same one that we talked about when we had the stock presentation. And Thomas talked about outsourcing in the morning. This is a big enabler of outsourcing. When the big clients like [ BSF or sells ], they are thinking of outsourcing the maintenance on a plant they want to have someone who can do all of those trades, not someone who can do turnarounds, maintenance, modifications, mechanical, electrical, you name it. So they are looking at exactly tables -- same table, so similar tables like this one. And guess who they find Bilfinger. So that puts us in a very favorable position. And another positive outcome of that is, again, we can combine these services into solutions. I'll come to that in a second. So we have standardized our product and our organization. We have identified the white spot. We are working on the core expansion. The organization is helping us on this -- this functional organization is helping us a lot to make just the management of that much more efficient. We're using training and education as a facilitator. If people are working on other grades, you need to train them. We are allocating budgets to do so. And then we are looking if the right M&A activities help us to accelerate this. Let me give you some examples on how we can combine that into solutions. And again, you need a broad range of services in a specific market to be able to do so. The first one is the Bilfinger and it's year report. We have developed a solution where we go on the site, and it's more and more becoming tailored to the food and beverage industries, where we go on a site, we assess the current CO2 emissions. And we propose with our technical consultancy teams the changing modifications of the plant. And then we also have the ability to do the engineering. If the client says, "Yes, this is a good idea. They are pleasing us, can you please do the engineering?" Yes, we can. And then we can even do the modifications. To give you one example, we have started to work on that with Heineken on about 10 plants, 5 to 10 plants in Europe. We started with a EUR 1 million technical consultancy contract where we have a sister plant and came up with recommendations on what to change. Heineken like the way we work with them. So they have given us a EUR 10 million contract on doing the engineering. They still like to work with us. And now we have signed a EUR 100 million framework contract to then actually do the modifications in the rebuilding. So it's -- you will not find many companies in Europe who can deliver that on that -- and I know we -- and that creates just a huge potential, if we're doing it right. We have our leverage, I would say, about EUR 20 million is revenue that we can generate on such a plant, typically food and beverage plant, and if we look at the plants that we have in our pipeline, so the ones where we address the clients, it's more than 300 so to speak. Another example is the Bilfinger advanced inspection where we apply technology that is -- the technology is there, but we apply to a certain application, to a specific application. We have done that in the U.K. and it's so-called phased array ultrasonic testing. I'm not an engineer, I have to admit, but it's an advanced in inspection and testing of pipes that are installed in nuclear power plants, but also in refineries and in oil and gas terminals, where it's just much more efficient, i.e., it takes less time to do those inspections. And these inspections you have to do when you build a plant. So again, we're talking about nuclear, where we have the first contract for that, I think you point -- and -- but it's also something that is then regularly done as part of maintenance and asset integrity. And we have tested it and you can do the kind of calculation, so you can just take the time it takes to do that inspection in a conventional way and to do that inspection in this PAU way this advanced way, and you need 60% less time in the way that we are doing. Why? In simple terms, you don't have to move the pipe around the equipment, but you move the equipment around the pipe. Sounds simple, but someone needs to invent it and do it and we have done that. So also there, this generates on an annual revenue on the site and maintenance revenue, ongoing revenue, about EUR 1 million per site and look at the plants and where we can apply this, it's a lot -- so opportunity to roll out the standardized product across Europe on many, many plants and to grow sustainably in a profitable way. Last example, Bilfinger [ Proteolysis ] this is a software that we have designed to measure the efficiency of pumps, who are in operations of a chemical park. The efficiency of a pump depends a lot on the angle of the bleeds within the pump -- and it depends a lot on the rotations per minute. So we have designed a software that optimizes this. So when the clients give us their operational data. We can run it through our software, and we can suggest on how to modify the pump and on how to operate the pump. And then again, we can in addition to the engineering know-how, we also have the capability to go into the plant, to disassemble the pump, bring it to our workshops, rework it, upgrade it, bring it back into the pump into the plant and assemble it again. So we can help the client from the beginning to the end to increase their efficiency. And with that solution, we can create up to 50% savings in the energy consumption. Again, that's something you can very easily measure because the client has the automation on the sites, where you can measure how much electricity per hour or day or tons of our board is consumed. And we have proven that with that solution, we can save up to 50% in energy. And of course, what follows them is also CO2 reduction. Also there, we generate per pump, I would say, about EUR 500. It sounds like a small number. But if you think of all those pumps that are just installed on the typical chemical site, and that's not really a big one, you very quickly come up to more than 1,000 pumps who are installed on such a site. So again, big opportunities. So that's why we are confident that we will continue to grow above market average. So in addition to the 2% market growth, -- we are adding 2% sale propel growth. So on average, also in the following years, we will grow 4% or more. And we are also convinced that we will move our EBITDA margin from the 5% in 2022 to 7% to 8% in midterm. So organization is in place. We are moving into the next phase of the strategies. We're getting good response from our clients, and we continue to work on things like the ones that I have presented.

Good afternoon, everyone. I'm going to tell you about the transformation within the Middle East region and North America as well as some exceedingly large opportunities for growth in these regions. Bilfinger has got a large geographical footprint across the Middle East and North America. In the Middle East, we're in all the major countries, including UAE, Saudi and Qatar. We're in emerging countries, including Egypt. And we're also present in India with access to its vast pool of skilled engineers and craft labor. In the U.S., we have more than 40 hubs across the states. Most of them are in the Southeast states. We're also present in the belt of traditional manufacturing industries in the Midwest, and we have a high presence in the Gulf Coast region with the oil and gas and petrochemical industries. We said last year that we will stop doing major construction projects in the U.S. And with that, we took out about [ EUR 150 million ] of revenues to construction. We also did some restructuring, and we saw an immediate impact on our profitability. Over the coming years to the midterm, we are replacing the loss-making construction activity with engineering and maintenance services. And with that, you will see the share of projects reducing into the midterm. The high share of adjacent industries relate to the work that we're doing with Procter & Gamble and also with U.S. government and the U.S. Army. It's services, smaller to [ stronger ] build profitable, and we will continue to do that while strengthening services in the other segments. Now how are we going to deliver the strategy of profitable growth? Well, we're continuing to derisk the business. So the existing large projects that we have are executed in close cooperation with our global product centers and also with external experts. They will complete this year. We are leveraging AI-driven innovations and digitalization. And later in a bit, I will tell you about how we work as a sustainability partner both in the Middle East and in North America. Now most important in the short term is market expansion. And I'll give you an example of Saudi Arabia. Saudi is an emerging super power in the Arab world. Is a G20 economy with 35 million people and a well working capital and finance market. With about 12% of oil production, they are also a swing producer within OPEC plus and thereby directly impacting oil price and global energy markets. Bilfinger has been in Saudi since 1980. We work in the energy sector with a Saudi Electricity company. We keep their plans going, and we're pretty good at that. And as such, Bilfinger is important for the electricity supply into Saudi Arabia. Now with the ambitious Vision 2030 in Saudi, they offer attractive incentives for foreign companies and to expand our businesses within all the industries that Bilfinger is present in. So we expect that white spots within oil and gas and petrochemical in Saudi Arabia will deliver some of that growth in the years to come. We are already investing in organization and in facilities in our own capacities for organic growth. And in parallel, we are seriously considering some opportunities to acquire, to grow much faster. All right, so far. Juergen, gave you a brilliant explanation of the methodology of this. So I won't to do that again, but I'll tell you how we are set up today and how we aim to move in the coming years. So in the Middle East, we're particularly strong in engineering and mechanical maintenance. We do or by complementing these services with electrical instrumentation and control and by testing and inspection, we were able to provide the integrated and nested services that our customers demand. In North America, we do a lot of traditional services like mechanical on rotating and staffing equipment, welding, on piping, we do -- we do installation and scaffolding and so on. We see that in North America with aging assets and strict environmental conditions and there will be higher demand for turnarounds and for life extension activities. So key to profitability and growth is that we're able to provide integrated services providers of single and dual services get commoditized, while they may have some barriers, scopes are smaller and profitability lower. I said, I give you some examples about how we work as a sustainability partner. So in North America, the government is spending about $1 trillion towards 2030 in order to achieve their targets on energy transition. This -- these funds are available through direct investments, services and tax incentives. We have been working together with the state of Georgia to electrify the public transport system and successfully completed the installation of charges on a number of yards. We're also working with the manufacturer of textile fabrics based on corn oil. This is opposed to the traditional manufacturing of nylon and polyester and [indiscernible] based on the petroleum feedstock. So Bio nylon supported by Bilfinger. We expect a number of these opportunities in the coming years. The next example I'm going to give is in the Middle East. So post COP 28, ADNOC confirmed their target to reduce the emission of greenhouse gases by 30% within 2030. Bilfinger has taken the role as a technology provider with ADNOC. And in the past year, we have successfully completed a number of projects with them like decarbonization of oil producing activities like electrification of major equipment like boilers and pumps and generators and also engineering for LNG and hydrogen projects they have. Now we see it after ADNOC is in parallel also increasing their oil production. And there -- to align their activities since the targets in Paris of the 1.5 degree. They're also making available a high number of such sustainability-related projects. Thirdly, Juergen talked about also the larger customers based in Europe, and we support them when they move to the Middle East and to North America. They are expecting that we deliver to them a consistent, high service level and quality and want us to follow them in their internationalization. So some of these opportunities are huge. And we expect there will be growth also within the International segment in the midterm, when we work closely with our international customers on a global basis. So I'm going to sum up. We are confirming the target growth of 6%. And why is that? Well, we have strong fundamentals in core markets. Industrial Services in North America are expected to grow by 7.3% year-on-year towards 2030. In the Middle East, we've been able to deliver 2-digit growth for the past 3 years, and we expect that to continue well into the midterm. The self-propelled growth going to be achieved on top of how the market grows by expanding on existing services by moving into other industries like oil and gas and petrochemicals in Saudi and also considering other territories and geographies to take that growth. So 6% will be counted from 2024, given that we took out a significant part of our revenues in '23 to '24. Finally, on the profitability target, 5% to 6% achievable. We moved from a loss in 2022 to a black 0 in '23 and successfully completed the efficiency program, continue to work on operations excellence and by replacing the loss-making construction projects, we expect that the profitability will come with engineering services and maintenance. In sum, 2023 and '24, we're transforming, but we are well on track to deliver growth and profitability in the International segment. Thank you. So Thorsten Hoppe will talk about technologies.

Yes. Thank you. Good afternoon to all of you. It's a pleasure to introduce you to the 2,000 people of technologies. A year ago, I introduced you to our key industries. I explained to you the homework we have to do and also the financial aspiration. Now a year later, we can say that we increased our revenues by 25% last year. And also the EBITDA margin improved by more than 50%. So we are on the right track. I'm extremely proud of the achievement of these 2,000 people in technologies and really, this team is driving it forward. So in which businesses are we -- you see them here on the right side. You see the 3 business lines. It is nuclear. It is energy transition, and it is life science. These are the 3 industries we are focusing very dedicated. And how are we doing it? What are the type of our contracts. We don't do -- and let's say it very clearly, we don't do just a fixed price for someone who said build me something. No, no, no. That's not what we are doing. What we are doing is we are doing an engineering component to fully understand what this nature of our, for example, piping work is -- then we do a procurement work, a fabrication work. And finally, only we lock in an installation work. So that's in nature, very much of our business, how we do it today with very strict gate reviews to really make sure that we are working only in these 3 industries very focused in these 3 industries. Okay. So what is key for us? Key for us is really standardization and derisking. That is where we worked a lot on and it starts really with choosing the right projects and contracts. And it is also that we do repetitive work. We have clients where we do now the 20th time the same than before. And obviously, that helps us a lot to be very precise. First of all, we can offer the client something very competitive, but we can also predict it very much in terms of when is the delivery of all of that. And certainly, for us, it's absolute margin security. So derisking standardization, a lot of work done also now getting it more and more digital. That is really key for us, and we will continue on this work. The -- what is now in the next phase. And as I mentioned, operational excellence obviously will always continue. What is really key for us next? Key for us next that is market expansion. I go into that in a minute. But what we can already say, we are now in Bilfinger with our products, very well established. We see our -- in the regions very close collaboration with my 2 peers. So we have products, we have regions and we can bundle these products to an offering to a contract. And what we do now with the market that we expect, first of all, in the Bilfinger regions, but second of all, also, as we are doing very repetitive work with our clients, that they bring us into their regions, where they execute their work. So sustainability, that is really what is the DNA of technologies today and the future. As we are in nuclear, as there is a decarbonization really going on as we are an energy transition with a new type of energy-related project, as we are in life science generating, let's say, the product, the contracts for clients, who work on obesity or against obesity, and also on insulin type drugs. So all of that is there really where sustainability, that is in our DNA and through our repetitive work and through the way how we design it with the teams is also very efficient. And so therefore, our vision of Bilfinger -- that is, for us, really something which fits absolutely in our day-to-day work. Innovation and digitalization, obviously, I mean, we are in an accelerating pace during these days. And I think it will go even faster over the next year. So digital [ plans ] is key for us. We have a fabrication component, supply chain completely digital is key for us. We will be pretty soon in the next nuclear power plant involved. And for that, it is absolutely paperless how we are delivering into this plant. Let's talk a bit where we are today, what we showed last year and where we will be in the midterm in terms of our contracts of our work. We will have a very balanced portfolio between projects and between products. I mentioned it already, that in Bilfinger, we are structured by product. And we are bringing this together. We are the integrator of all of that, bringing it together in technologies. And what we are doing is, in terms of piping or skids, we do it again and again, for Hinkley Point, for example, I think you all know that we are involved there with the biggest piping contract ever someone did for what happens in the nuclear island, what happens between the various nuclear islands what happens even in the reactor. So a few hundred kilometers of pipes we are bringing in. So it is nothing special any longer that is, for us, really very standardized in the way how we do it from the engineering over the fabrication to the installation. So for us, it's a product how we are doing it. Same with skids and pharma that is really the same of its kind and other process units the same. So midterm, what we are envisioned is really a balanced portfolio, a balance between projects and products and how we want to bring that together. Obviously, we have excellent skills and we have invested a lot anyway in our people, how we bring all of that together because that gets key. How do we bring it together -- and that's -- they were really in terms of a number of people, in terms of qualification, a lot of efforts went into this. As you have seen it before, from my colleagues, on the left side, you see here the -- where we are today with 3 business lines. And you see here the various geographies. And where we -- what we can say today, and that's where we are coming heritage from in Continental Europe, we have a strong position. Now especially with the work we did over the last couple of years, and our Bilfinger also developed itself in the sense of getting really this strong presence in regions we can reach out to -- that is in the future, we can reach out with very dedicated teams into these regions, working very close together. Collaboration is really key for us to make that happen. And we are extremely happy to see that our clients who see us successful doing this one contract, bring us to the next and then bringing us overseas or wherever it is. So for us, it's really we are pretty conservative in our growth, let's say, what we declare. But if the world really goes to, let's say, a complete decarbonized world. And if we see what happens in terms of pharma, biopharma, then we think we can really be very dark blue in most regions in not too far future. And we have a very dedicated team to make that happen. Okay. Let's give you a few examples. And you see on the one side, you see nuclear, then you see energy transition and then also Life Science on the right here. So we are in Hinkley Point U.K. That is roughly what we declare a EUR 500 million contract, and we are doing there this work, as I described it earlier, big piping work. So that was 2 reactors. Based on this, U.K. has a 24 gigawatt expansion plant. These 2 reactors make 3.5 gigawatt. So based on that, there is now the next plant coming up financing of Sizewell will be announced very shortly. We are already in with a piping strategy. We are already in, working very close with in so-called MEH Alliance, working together, developing it with the client together. And obviously, the intent is doing repetitive work, doing it really as what we did for Hinkley Point 1 or Hinkley Point 2, doing it with Sizewell 1, Sizewell 2. And then as you most likely have heard already well 4 is then the next one coming along. And then on top of it, let's not only stay in U.K. also the 24 gigawatt gives a lot of -- show a lot of potential. There is Poland, there's Czech and France also declared, let's say, built most likely more than 12 minimum 8 -- there's a few more I may need for export because some or at least one country decided not to do work any longer in nuclear, and it's unfortunately ours. So they produce -- they build power plants for export whether even asked Switzerland to participate in the CapEx costs of such a plant. So therefore, for us, it's really -- there is -- we have currently the biggest contract. We are the only one doing it to offset size in one plant, many more to come. Let's talk about energy transition. It's a hype on hydrogen. We have the contracts. As Juergen has shown it before. We have also the -- we have a couple of more engineering contracts. We are working with really the key clients currently, and there will be the announcement of further big contracts very soon. So that we can clearly see the world is moving in that direction. We are in with engineering and also with execution. Same is also with carbon capture. And then for us, infrastructure improvements like modular lived pipe racks. This is all where we can add what we already learned how to standardize engineering. That's what we can add to this type of projects. And then our -- on the right side, you see life science. Life science is really a success story. We are working there really in the core of these plants on the ingredient processes where we provide skips, where we provide piping. And this is really with a couple of really strategic clients. We don't reach out to everybody and doing just 1 project or 1 contract. For us, it's important really that we have chosen partnerships with strategic clients. They bring us into various countries. And what we can see is now 3 years later, we tripled our revenues in this business. And this life science business will be the first one. where we are certain that we can reach a double-digit margin. Okay. So what is the outlook, what our midterm targets. I mentioned already what happened last year. What we can see is that the market is stable, we'll deliver, let's say, a 3% growth. So it will be another 3%. What we definitely think certainly, we can deliver year-over-year. So we believe we can grow 6% year-over-year last year, 25%. And in terms of EBIT margin, assets worked out last year with all this hard work of people very well. We say that predictably, we and conservatively, we see the a 6% to 7% margin in the foreseeable future. So that, in summary, gives you an overview of technologies. There's still more homework to do as always. But we think we are absolutely in the right industries and the right -- with the right clients, expansion, market expansion for us important and also important, this balanced portfolio between projects and products. Thank you very much.

So we are more or less through. Now the wrap up. What you heard today was actually about -- and actually, it should work. Yes. What you heard about today is we are several things. How far are we with the strategy implementation, what we delivered, what the potential is to go on that we achieve our midterm targets, and you got a lot of details, which kind of work we do because we are not a construction company. It's very important. These are the trends and drivers what we have. This drives our business, and there is no change visible in the next 20 years that we will see really an improvement on the volatility that we see a real improvement on over bureaucracy that we see a real improvement on labor shortage as long as we are not moving the societies more digital, where governments have to invest more in infrastructure. There is a big task and a growing task for industrial service to take over more and more adjacent and non-core parts of our customers that they can focus on that, what they actually would like to produce and to sell. That is already complicated enough. And we saw that before, actually in the digital or IT industry, where every company has their own people to install printers and laptops and software updates and all professional bigger companies, this is completely outsourced and outsourced to IT service companies. And it's a similar thing what we see in the industry. And on top of it, not only that we take that, we can make the life of the clients significant better by earning more money with that what they have on existing assets, which is more than 90% of our work, and already in the planning helping customers to plan it like that, that industrial service that the maintenance, the turnaround is already factored in how you design everything what you have. And we proved that more or less daily on battery factories on hydrogen. We actually do it if -- when we change in district heating, into a district cooling system like Munich, a lot of that we, as an industrial service provider can do that. And as more offering we have is better for the client, it is because the combination of all the offering really brings the efficiency. And that is, of course, the thing that we can grow and that we grow in an expanding market. We heard about the Middle East, we heard about North America. We definitely have pockets in Europe, too. If it comes to Greentech, for example, and we can grow in declining markets too because customers are forced to outsource more -- to focus on that what is essential for them. A company which does -- this kind of work 3,000, 4,000, 5,000x is always better than the company doing it on their own 2 or 3 or 5x on their own sites. And that's the card to play. And that is, for us, as a group, will drive further shareholder return and shareholder value, which is important. And we have a hell of a good way to go. There is a lot more in the company than we saw because we delivered no matter if it's functional organization efficiency program, strategy update, whatever it is. You can see it in the figures. When you look through the material, you can link the strategic successes, what we have on the strategic levers with the figures. And that is how we will be transparent to the future, too. On the other side, market starts to recognize more and more. There are the [ MDAX ] media, the last negative comment we got on media, which was for Bilfinger for quite a while, regular that we got at the last negative comment on media about us was in November 2022, actually when we announced the efficiency program. So out of that, the attractiveness on growth and then the attractiveness on profitability, the attractiveness on cash generation, the attractiveness to be the #1 in the eyes of the clients for industrial service. That is what we actually showed today. The growth what we have with the 4% to 5% in the market with 2% is a reasonable growth on top of it, M&A, but if you project that to the future, significant more to come. That's how we see it. We were fairly clear and detailed how we are doing M&A and where we look into. And when you take the stock acquisition, it took more than 1.5 years to realize it, not because the seller wanted -- had problems to get rid of it or didn't want to sell it. It was actually us which were very clear what we are intending to pay for and how it has to look like when we take it over. Because we look into value creation, and a pure strategic argument to buy a company because it fits strategically is not an argument. It has to create value. It has to fit into the company. Never ever buy a company where you think strategic it fits. And the first thing what you have to do is to cut people because you recognize it's really not profitable enough or it doesn't fit or anything. Then why to do M&A? We are unbelievable, simple, unbelievable, crystal clear what we want. Why are we so crystal clear? Because then the offers, what we get from the industry, from owners and other companies is already significant easier to dwell than if you only go out and say we want to do M&A because then you are bumped with whatever you can't imagine with what, and you don't want to have that. So out of that, Matti will make the wrap-up for the financial.

Yes. Thank you, Thomas. So we took you back to the last Capital Markets Day, where we issued our midterm numbers, with an intermediate step in 2024, 5% [ EBIT higher ]. This year, 70% cash conversion, 6% to 7% profitability in the midterm and 80% -- over 80% cash conversion thereafter. A big lever in achieving that cash conversion is working capital management and improving that. And I think I explained that quite in detail. I think the takeaway here really is measuring average net trade assets over revenue. It's a simple measure, easy to understand, comparable to a lot of other businesses and companies and peers. So we will take that from 12% down to 8% in the midterm with derisking automation, competence development and so forth. The outlook -- and I removed the previous outlook that we gave earlier this year. So it's easy to remember, EUR 4.8 billion to EUR 5.2 billion, 4.8% to 5.2% on the EBITDA margin. EUR 100 million to EUR 140 million on the free cash flow, including the special items payout from the efficiency program. If you do that, then the Cash conversion rate adjusted comes to 70%, which is what we promised [ 60 months ] ago. Finally, capital allocation, no change, very solid. This is what we deliver, increasing profits, increasing dividends, we're funding our organic growth. We're funding M&A. And last but not least, if share buyback makes sense, it's in the cards. All of this based on a good sound balance sheet, a good and sound financial policy and investment grade rating, as I said earlier, is hopefully around the corner. With that, I think there's the last wrapping up the wrap up.

So that slide, if you think about us, that slide actually should always appear. And that is minimum what we tell all our colleagues. And it shows actually the way forward our journey where we are on. We promised something on the Capital Market Day in 2023, where we start here on that graph. And we delivered what we promised, partly a little bit more. And we will deliver for this year as we promised, and we will definitely deliver the midterm targets. And what comes after is potential. The industry supports us no matter if they are under pressure or not, or expanding. And how we are set up with the bundling, derisking offering from projects to products, we get more and more positive feedback from our clients and actually a lot of pressure. You heard that from the segment colleagues to go with them around the world. And from time to time, we have to say no, because it's too far out. And from time to time, we say, maybe, and let's look into it how it works out. But the attractiveness of us is fantastic and makes it really fun to work in Bilfinger.