Two National Guard members shot near White House
Investing.com -- Bilfinger shares jumped over 8% on Thursday after the German industrial services provider reported stronger-than-expected third-quarter results and raised its full-year free cash flow outlook, while confirming guidance for sales and profitability.
The company posted third-quarter sales of €1.38 billion, up 7.8% from a year earlier. The figure came in 5% above Kepler Cheuvreux estimates and 3% ahead of consensus, based on data from Vara Research and Visible Alpha.
Bilfinger’s third-quarter EBITA was €81 million, down 4.7% on a statutory basis but up 6.6% when adjusting the prior year for a provision release. The resulting margin was 5.8%.
Orders for the quarter increased 1.2% year over year, giving a book-to-bill ratio of 0.98x, slightly below expectations. Kepler Cheuvreux noted the figure was 2% under its forecast. The company’s order backlog, however, rose 7% to €4.4 billion, equal to 81% of full-year sales, providing what the report described as “good forward visibility.”
Bilfinger refined its full-year outlook toward the middle of its previous ranges. The company now expects sales between €5.3 billion and €5.5 billion, compared with €5.1 billion to €5.7 billion previously. It forecast an EBITA margin of 5.4% to 5.6%, tightening from the earlier 5.2% to 5.8% range.
The free cash flow forecast was raised to €200 million to €360 million, up from €210 million to €280 million.
According to Kepler Cheuvreux, “Despite its previously wide guidance range, the company had always indicated toward the mid-point, which is where consensus
already is at 5.5% EBITA margin (source: Vara Research as presented on Bilfinger website). Therefore, at first glance, we would expect little change to consensus estimates.” The brokerage added that “the implied mid-points for Q4 look rather achievable.”
Across its operating divisions, results were mixed. The core Engineering & Maintenance (E&M) Europe division saw modest growth, with organic revenue up 2% and flat order intake.
Its EBITA margin was 20 basis points below the previous year, which Kepler Cheuvreux said likely reflected initial dilution from the recent small acquisition of nZero.
The E&M International segment continued to improve profitability, recording a 4% EBITA margin. Both North America and the Middle East contributed to the gain.
Order intake in the division grew 17%, driven mainly by the oil and gas sector in the Middle East. Kepler Cheuvreux reported that the U.S. market “remains cautious due to political uncertainties.”
The Technologies division again performed strongly, with revenue up 25% compared with a year earlier, benefiting from previous quarters’ high order intake. The margin rose 90 basis points to 7.8%.
Orders were broadly stable, producing a book-to-bill ratio of 1.13x, which the report described as “still very positive.”