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Bilfinger reinstates dividend, forecasts growth after 2017
February 13, 2017 / 8:12 PM / 10 months ago

Bilfinger reinstates dividend, forecasts growth after 2017

FRANKFURT (Reuters) - German industrial services group Bilfinger (GBFG.DE) plans to reinstate a dividend for 2016, promised a share buyback and said on Monday it would return to growth in 2018 after years of strategy U-turns and management turmoil.

The logo of German industrial services provider Bilfinger is pictured outside its headquarters in Mannheim, Germany, May 11, 2016. REUTERS/Ralph Orlowski

Under Tom Blades, Bilfinger’s fourth chief executive in six years, the company said it would split its operations into two segments - engineering and maintenance - and focus on four regions from North America to the Middle East.

It said it would concentrate its efforts on six industries - the energy segments that already make up the bulk of its business, plus pharmaceuticals, metallurgy and, for the first time, cement.

“With this strategy, we will grow profitably – and at a rate that is stronger than the market,” Blades said in a statement.

Bilfinger said the 2016 dividend of 1 euro per share - more than twice what was expected, according to Thomson Reuters’ SmartEstimate - should set a floor for the coming years.

On top of a 150 million-euro ($159 million) share buyback starting in 2017, it said it would cancel the roughly 4 percent of treasury shares it holds, minus those needed for its employee share programme.

Bilfinger said 2017 would be a year of transition, with a medium to high single-digit percentage decline in output on an organic basis but higher orders and an improvement in its adjusted operating profit (EBITA) margin of about 1 percentage point.

After that, annual output should grow by at least 5 percent on average, with cost cuts driving the adjusted EBITA margin to about 5 percent by 2020, it said - a margin last achieved when ex-CEO Roland Koch left in 2013.

Bilfinger’s 2016 output of 4.22 billion euros - the value of work done over the year - fell 16 percent on a comparable basis but beat Thomson Reuters’ SmartEstimate of 4.15 billion euros. Adjusted EBITA of 15 million euros compared with an expected loss of 123 million.

($1 = 0.9436 euros)

Reporting by Georgina Prodhan; Additional reporting by Ilona Wissenbach; Editing by Maria Sheahan

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