Bilfinger (ETR:GBF) reported a decline in third-quarter revenue and profitability as customers delayed investment and maintenance work, leaving parts of the industrial services provider’s workforce underutilized. The company reaffirmed its reduced 2026 outlook despite a 25% increase in orders.
Revenue fell 1% to EUR 1.36 billion, or 5% on an organic basis, while the EBITA margin declined to 4.6% from 5.8% a year earlier. Net profit dropped to EUR 43 million from EUR 55 million, and earnings per share fell to EUR 1.16 from EUR 1.47.
Orders Rise as Customers Postpone Work
Third-quarter orders reached EUR 1.7 billion, up 25% overall and 21% organically. The order backlog increased 6%. Jäkel said the quarter’s book-to-bill ratio was 1.25, but would have been 1.0 without a large contract extension.
That extension related to work at EDF’s Hinkley Point nuclear project. Asked whether the order could generate approximately EUR 100 million in annual revenue for three years starting in 2027, Schulz said the analyst’s estimate was “fairly good and spot on.”
Schulz said the company’s opportunity pipeline had grown partly because customers postponed, rather than canceled, work. He attributed much of the delay to decision-making disruptions associated with the Iran war. The pipeline reflects potential business weighted by Bilfinger’s assessment of whether projects will proceed and whether it can win them, he said.
In recent weeks, customer willingness to make decisions had improved, although the change was not dramatic, Schulz said. Jäkel added that the profitability of the existing backlog remained sound, with no significant decline in its quality.
Central Europe Bears Profitability Pressure
Jäkel said most of the group’s profitability decline was concentrated in Central Europe, where delayed spending, underutilized capacity and a less favorable service mix hurt gross profit. Orders in the segment rose almost 50%, helped by the large energy contract, while revenue fell 2%.
Western Europe faced lower orders and revenue as customers hesitated and larger projects approached completion. Even so, the segment’s margin improved to 6.5% from 6.3%, which Jäkel attributed to its greater flexibility in adjusting to market conditions.
In the international segment, revenue rose 5% to EUR 275 million, helped by the addition of Teknokon, while organic revenue was flat. Profitability declined from 5% to close to 4%, amid geopolitical pressures in the Middle East and Eastern Europe, Jäkel said.
Restructuring and Outlook
Bilfinger confirmed the 2026 guidance it issued in September: revenue of EUR 5.3 billion to EUR 5.7 billion, an adjusted EBITA margin of 4.6% to 5.0%, and free cash flow of EUR 180 million to EUR 220 million. Its reported EBITA margin outlook is 3.2% to 3.6%, reflecting costs associated with its restructuring program.
The initiative, called Program Agile, is expected to cost EUR 75 million and deliver a full annual EBITA improvement of EUR 75 million from 2028. It includes reducing capacity by up to 1,500 full-time equivalents, consolidating locations and combining consulting and engineering activities into a global organization. Schulz said the program is focused particularly on Central Europe and German-speaking countries.
Schulz acknowledged that management had prepared for work that did not materialize and that the company had lacked sufficient flexibility in parts of Central Europe. Bilfinger would be more conservative when allocating resources to future projects, he said.
Free cash flow rose to EUR 76 million in the third quarter from EUR 71 million a year earlier, supported partly by payments from settled customer disputes. Jäkel said he was confident Bilfinger would reach the EUR 200 million midpoint of its annual cash-flow guidance.
Looking ahead, Schulz said he expected 2027 to be a more normalized year, with some postponed work returning. Bilfinger plans to provide formal 2027 guidance in early March, Jäkel said.
About Bilfinger (ETR:GBF)
Bilfinger SE provides industrial services to customers in the process industry primarily in Europe, North America, and the Middle East. The company offers engineering, project, maintenance, turnaround, rotating equipment, and inspection services. It also provides new construction and decommissioning of nuclear power plants, treatment of radioactive waste, and nuclear fusion services. In addition, the company offers energy efficiency, carbon capture, utilization, and storage; and hydrogen, hydropower, and wind power services.
