Q & A Highlights

Q: What gives management confidence in achieving the implied high EBITDA margin for H2 2026, given the weaker-than-expected H1 performance? A: CFO Matti Jakel explained that the original plan for 2026 was a 6% EBITDA margin, a 50-basis-point improvement over 2025's H2 delivery of 6.0%. The H1 underachievement was due to temporary delays from the Iran war, which are expected to reverse. As work returns, the company will move from under-absorption to over-absorption, where incremental revenue drops directly to the bottom line. Combined with continued SG&A efficiency gains, this gives confidence in delivering the lower end of the guidance range at 5.8%.

Q: Can you provide color on what changed in June that made customers more willing to move forward with OpEx and CapEx plans, and how much of the order improvement is due to delays versus new projects? A: CEO Thomas Schulz noted that the initial shock of the Iran war caused customers to halt decisions, but by June, industries had adapted to the volatile environment. Crucially, maintenance and turnaround work cannot be postponed indefinitely without impacting efficiency and risking permits. CFO Matti Jakel added that while discretionary OpEx can be delayed by months, it has limits, and the company is already seeing work return. The order intake of EUR1.5 billion in Q2 was the third-best in over a decade, signaling a strong recovery in momentum.

Q: What is the company's revenue visibility for H2 2026, and does the guidance rely on securing new orders? A: CFO Matti Jakel provided a key metric: the backlog coverage ratio, which measures the percentage of forecasted revenue already secured in the backlog, stands at 90% at the end of Q2, up from 88% last year. This high level of coverage, consistent with prior years when revenue guidance was met, provides strong confidence in hitting the revenue midpoint without relying heavily on incremental H2 orders.

Q: How has the risk profile of new contracts changed compared to legacy contracts, and how does this impact margins? A: CFO Matti Jakel explained a strategic shift in contract structuring. The company has increased its share of time-and-material and unit-rate contracts, which carry lower risk than lump-sum contracts. They have successfully converted some time-and-material contracts to unit rates, allowing them to retain productivity gains. The company is much more cautious with lump-sum work and has completely avoided EPC (Engineering, Procurement, and Construction) contracts. This de-risking strategy has led to fewer "blowouts" (contracts that go bad) and has structurally improved the margin profile.

Q: What is the outlook for the Technicon acquisition, and is it generating new customer discussions? A: CEO Thomas Schulz confirmed that the gold mine order in Turkey is part of Technicon's contribution. The acquisition provides a base for expansion into surrounding countries like Azerbaijan, Kazakhstan, and Uzbekistan, where the mining industry is a key focus. The company's model of training and educating local colleagues to high standards is attractive in these markets. The M&A pipeline is described as "good," though valuations are expensive in some areas, and the Middle East is seen as a region with significant growth potential.

Q: Can you elaborate on the utilization levels required to achieve the H2 margin uplift, and how will the company manage this? A: CEO Thomas Schulz explained that H1 suffered from under-absorption due to delays. For H2, the company expects to move into over-absorption, which is more profitable. This is achieved not by hiring large numbers of new staff but by reducing vacation time, using external partners for lower-quality work, and deploying the right people to the right locations at the right time. He pointed to Western Europe's 7.7% EBITDA margin in Q2 as an example of successful resource deployment.

Q: How confident is management in achieving its ambitious mid-term margin targets, specifically for 2027? A: CEO Thomas Schulz expressed high confidence, noting that Western Europe is already delivering a 7.7% EBITDA margin. He stated that if all parts of the group performed as well as the best-performing ones, the group would already be close to an 8% EBITDA margin. The company has a full-fledged strategy to lift profitability, and 2027 is expected to be a step up from 2026, with a clear path toward the 2030 targets.

Q: What is the expected impact of low Rhine water levels on customer behavior and Bilfinger's business? A: CEO Thomas Schulz stated that the company has not yet seen a direct impact from clients. However, he noted that some German states have lifted truck driving restrictions to compensate for reduced water transport. Interestingly, the Iran war has reduced energy supply to Asia, which has actually created some additional work for Central European chemical clients. The net effect is currently seen as balanced, with no significant negative impact on the company's modeling.

Q: Can you provide the building blocks for achieving the full-year free cash flow guidance of EUR250-300 million? A: CFO Matti Jakel explained that H1 saw an increase in work in progress due to timing effects, which will resolve in H2. The company expects higher advance payments from new orders in H2. Critically, on one large contract, negotiations on terms and conditions were successfully concluded in July, leading to a step-up in cash flow generation for H2. With strong working capital management, the company is confident in achieving the guidance range.

Q: Has the on-off nature of the Gulf peace process changed day-to-day business willingness to move ahead on projects? A: CEO Thomas Schulz indicated that the situation has actually increased workload in the Middle East. Customers are focused on making their assets more resilient against similar crises. There is significant activity around diversifying inbound and outbound supply routes to reduce dependence on the Strait of Hormuz. This is driving investment in infrastructure and processing plants, which is very positive news for Bilfinger's future business in the region.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .