Bilfinger sees orders surge for second consecutive quarter

Industrial services group Bilfinger has reported a sharp increase in new orders for the second consecutive quarter, while reaffirming its financial outlook for 2026 despite continued uncertainty across key markets. The Germany-based company recorded orders worth £1.2bn during the third quarter, an increase of 25 per cent on the same period last year and one of the highest quarterly order intake figures achieved by the business over the past decade.

The performance was supported by continued demand for efficiency and sustainability projects, particularly in the energy sector, and included an order extension worth more than €300m from an existing customer. As a result, the group's order backlog increased to more than £3.6 bn, up 6 per cent year-on-year, while its book-to-bill ratio reached 1.25.

Despite the strong order intake, revenue slipped slightly. Bilfinger said customers continued to delay investment decisions and postpone call-off orders under framework agreements amid a volatile economic environment, particularly in Europe where energy prices remain elevated.

Gross profit fell to £102m from £117m in the same quarter of 2025, while EBITA declined to £47m from £60.8m. The EBITA margin stood at 4.6 per cent compared with 5.8 per cent a year earlier. Net profit for the quarter was £32m, down from £41m, while earnings per share fell from £1.10 to £0.87. Bilfinger noted that profitability had been affected by lower utilisation in parts of the business, reduced demand for more complex and higher-value services and changes to the overall project mix.

Free cash flow improved to £57m compared with £53m a year earlier, helped by contractual settlements and catch-up effects. The company's cash conversion rate increased to 121 per cent, up from 87 per cent in the prior-year period. During the quarter, Bilfinger launched "Program Agile", a group-wide initiative designed to improve responsiveness to changing market conditions. The programme includes measures such as capacity adjustments, resource sharing and the expansion of its global shared services organisation. The company estimates the initiative will contribute around £56m in annual earnings from 2028 onwards, with initial benefits expected to be visible during 2027.

Thomas Schulz, Bilfinger Group CEO, said: "2026 is a challenging year for Bilfinger. However, the strong order intake for the second consecutive quarter underscores the demand for our services to enhance efficiency and sustainability in the process industry.

"Bilfinger confirms the updated outlook for 2026. With Program Agile, we will be able to respond to market changes more quickly and effectively going forward.

"The months ahead will be highly demanding for our entire organization. My express thanks go to our employees for their dedication during this challenging phase."

Bilfinger said it continues to see opportunities across its core end markets, including energy, oil and gas, chemicals and pharmaceuticals. Among the contracts secured during the quarter were work on a boiler installation project at the Zeeland Refinery in the Netherlands, engineering and installation services for EDF's Hinkley Point C nuclear power station in the UK and piping-system work at a chemical plant in Poland.

The company also highlighted growing opportunities in the Middle East, where it is in discussions with customers about infrastructure reconstruction and the recommissioning of industrial facilities. Bilfinger confirmed the outlook issued in September, forecasting full-year revenue of between £3.9bn and £4.2bn. The group expects an EBITA margin of between 3.2 per cent and 3.6 per cent, or 4.6 per cent to 5.0 per cent on an adjusted basis, and free cash flow of between £135m and £165m.

The company also reaffirmed its medium-term targets for 2030, including average annual revenue growth of 8 per cent to 10 per cent, an EBITA margin of 8 per cent to 9 per cent and a cash conversion rate of at least 90 per cent.