Bilfinger SE, Mannheim will not achieve the significant increase in earnings projected for 2014. In particular, the power business segment is suffering from the effects of the energy transformation in Germany that has led to a considerable reluctance to invest on the part of energy supplier.
Outlook for 2014
For 2014, Bilfinger now anticipates a decrease in earnings with an output volume of approximately €7.9 billion. An adjusted EBITA of between €380 - €400 million is anticipated (comparable figure for 2013: €419 million); adjusted net profit will be €230 million and €245 million (comparable figure for 2013: €255 million).
In the Industrial business segment, the company expects an increase in the EBITA margin to a good 6% with an output volume of approximately €3.7 billon.
In the Power business segment, the EBITA margin will decline significantly to a magnitude of 6%, from 8.9% in 2013, as a result of the currently low capacity utilisation in the Piping Systems division as well as due to a number of weaker project results; an output volume of approximately €1.5 billion is expected.
The Building and Facility business segment will continue to develop positively, with an EBITA margin of approximately 5% that is at the upper end of the target corridor and an output volume of approximately €2.7 billion.
In the first half of 2014, adjusted EBITA will be significantly below the 2013 figure.
Bilfinger will adjust capacities in the particularly impacted Power business segment as well as in the Industrial business segment and will initiate further near term cost reduction programs without delay. This will lead to an additional restructuring expense in the low to middle double digit million range in the second half of the year. In addition, implementation of the ongoing Excellence efficiency enhancement program will be accelerated.
Adapted from a press release by Emma McAleavey.
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