ANNUAL REPORT BILFINGER SE

2023

Contents

To our shareholders

A.1 Letter to shareholders

A.2 Executive Board of Bilfinger SE

A.3 Report of the Supervisory Board

A.4 Corporate governance

A.5 Bilfinger in the capital market

A

Combined management report

B.1

The Bilfinger Group

B

B.2

Economic report

B.3

Opportunity and risk and report

B.4

Outlook

B.5

Non-financial Group declaration

B.6

Takeover-relevant information pursuant

to Sections 289a and Section 315a

of the German Commercial Code (HGB)

C

Consolidated financial statements

C.1

Consolidated income statement

C.2

Consolidated statement

of comprehensive income

C.3

Consolidated balance sheet

C.4

Consolidated statement of changes in equity

C.5

Consolidated statement of cash flows

C.6

Notes to the consolidated financial statements

D

Explanations and additional information

D.1

Responsibility statement

D.2

Independent Auditor's report

D.3

Practitioner's Report on Non-financial Reporting

D.4

Return-on-capital-employed controlling

D.5

Boards of the company

Ten-year overview

Financial calendar

Imprint

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Bilfinger SE

Bilfinger is an international industrial services provider. The aim of the Group's activities is to increase the efficiency and sustainability of customers in the process industry and to establish itself as the number one partner in the market for this purpose. Bilfinger's comprehensive portfolio covers the entire value chain from consulting, engineering, manufacturing, assembly, maintenance and plant expansion to turnarounds and digital applications.

The company delivers its services in two service lines: Engineering & Maintenance and Tech- nologies. Bilfinger is primarily active in Europe, North America and the Middle East. Process industry customers come from sectors that include energy, chemicals & petrochemicals, pharma & biopharma and oil & gas. With its ~30,000 employees, Bilfinger upholds the highest standards of safety and quality and generated revenue of €4.5 billion in financial year 2023. To achieve its goals, Bilfinger has identified two strategic thrusts: repositioning itself as a leader in increasing efficiency and sustainability, and driving operational excellence to improve the organizational performance.

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  • A To our shareholders
    B Combined management report
    C Consolidated financial statements
    D Explanations and additional information

A To our shareholders

A.1 Letter to shareholders

A.2 Executive Board of Bilfinger SE

A.3 Report of the Supervisory Board

A.4 Corporate governance

A.4.1 Declaration of corporate governance and corporate governance report

A.5 Bilfinger in the capital market

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A.1 Letter to shareholders

Dear Shareholders,

Ladies and Gentlemen,

2023 was a good year for Bilfinger. Given the current global political situation, this may sound unusually clear, but for Bilfinger it is simply true. Nor was it a chance outcome. It was the reward for our revised strategy and focus on our goal of becoming the No. 1 in enhancing efficiency and sustainability for our customers in industry.

Annual targets in part exceeded

Bilfinger benefited from good demand for its services across all regions and industries. Against the backdrop of wars and conflicts in Europe and elsewhere in the world, coupled with inflation that only came back down toward the year-end, companies faced the challenge of producing as efficiently as possible against high energy and input costs - while at the same time minimizing the environmental impacts. Notably in Europe, companies are laboring under the lack of skilled personnel, ever-increasing bureaucracy as well as the growing complexity in both production and digitalization. In response, they are looking to outsource to specialized industrial services provid- ers, which opens up new opportunities for Bilfinger.

Our success is measurable. Orders received rose organically in 2023 by 5 percent to more than €4.7 billion, while revenue went up 7 percent to €4.5 billion. The EBITA margin climbed from

1.8 to 4.3 percent. Free cash flow came to €122 million. In terms of EBITA and free cash flow, we exceeded our forecast for financial year 2023. Net profit stood at €181 million, which translates to earnings per share of €4.84. Adjusted for special items and calculated using a normalized tax rate, net profit increased from €82 million to €117 million, corresponding to earnings per share of €3.12. At the Annual General Meeting on May 15, the Executive Board and Supervisory Board will there- fore be proposing an increase in the dividend from €1.30 to €1.80 per share. The payout ratio equates to approximately 58 percent of adjusted net profit, putting it at the upper end of the range

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under the company's dividend policy, which targets payouts of between 40 percent and 60 percent of adjusted net profit.

As a result of this positive development, Bilfinger shares are promoted from the SDAX to the MDAX effective March 18, 2024, marking a return to the 50-sharemid-cap index after a good six years.

Technologically advanced reference projects with major international customers

Enhancing efficiency and sustainability for our customers and actively shaping the energy transi- tion are the focus of our business activities. This is illustrated by three standout customer con- tracts:

Bilfinger is the first company to have successfully sealed a strategic engineering alliance with chemical company INEOS at the latter's site in Cologne, Germany. This is a three-year contract with the objective of expansion into a long-term cooperation. The primary focus is to increase quality and efficiency by pooling all engineering services with one alliance partner, thus eliminating the need to coordinate a large number of smaller service providers. What clinched the decision in favor of Bilfinger was our comprehensive portfolio of solutions and expertise as a multidisciplinary engineering service provider.

Bilfinger is making a major contribution to the progress of the new Hinkley Point C nuclear power plant in the UK. The highlight in 2023 was delivering and assembling the core melt stabilization system. This key component of the safety concept for the new nuclear power plant comprises a number of structural elements weighing several tons that act as a safeguard beneath the reactor block.

In Lithuania, Bilfinger is supporting energy company Ignitis Gamyba in the expansion of a pumped storage hydroelectric power plant. Executed in collaboration with the Voith technology group, the contract aims to strengthen Lithuania's green and independent energy supply. The expansion of the hydroelectric power plant is part of the Baltic states' plans to be integrated into the European power grid by the end of 2025 as well as to reduce their dependence on energy imports and to systematically make greater use of renewable energy sources.

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Strategy: implementation on track to achieve mid-term targets

Our Capital Markets Day 2023 saw us present our revised strategy, which met with widespread approval. In implementing it, we focused in 2023 on three main levers to improve the Group's growth, profitability and cash flow. We put these strategic levers into place quickly and effectively

  • and to a large extent have already activated them.
  1. The efficiency program launched at the end of 2022 was fully completed in 2023. Focusing on administrative functions within the Group, it provides for cost savings of approximately €55 mil- lion, which will be fully effective from financial year 2024. By means of lean management and streamlined administrative structures as well as by bundling administrative tasks, the program aims for systematic improvements in organizational efficiency. Some of the savings will be rein- vested in training and education. For instance, this includes establishing training centers such as Bilfinger Education GmbH, launched in October 2023.
  2. We are improving operational excellence to enhance the performance of our organization. A key touchpoint here is increased standardization and bundling of the Group's various service lines. To this end, nine product centers were defined in the reporting year. Their task is to standardize products that will be offered by the operating companies in all the Group's markets. A standard- ized contract selection process continues to serve the purpose of operational derisking. Here, too, we have already made significant progress with a fundamental repositioning of our US business. While this resulted in lower revenue and orders received in the USA. for the reporting year, it will make our business significantly more robust and above all more profitable going forward.
  3. Bilfinger is targeting additional growth and higher profitability by positioning itself even better in its markets. The aim is to offer all products and serve all prospective customers in established markets. Alongside organic growth, selective acquisitions can also contribute here. In this context, an agreement was signed in September 2023 to acquire parts of the Stork Group, previously part of Fluor Corporation (USA). The transaction mainly encompasses the operating units in the Netherlands and Belgium as well as some entities in Germany and in the US, with more than 2,700 permanent employees and revenue of around €500 million.

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Sustainability at Bilfinger

Having a business model based on enhancing customers' efficiency and sustainability means we have to demonstrate our own credibility in these disciplines. In financial year 2024, Bilfinger will expand its sustainability reporting to even better reflect the company's own ambition in terms of efficiency and sustainability. Despite the revenue growth, our Scope 1 and 2 (market-based) car- bon emissions in accordance with the GHG Protocol have been reduced significantly by 9 percent from 50 to 45 ktCO2. Upstream Scope 3 emissions were recorded for the first time for the financial year 2023. These comprise carbon emissions caused at our suppliers as a result of our activities in the upstream value chain. Downstream Scope 3 emissions - those generated at customers as a result of our services or the use of our products in the downstream value chain - will be tracked from 2024. This will provide greater transparency for customers, investors and the general public. Bilfinger's commitment is similarly borne out by the latest rating from EcoVadis. The world's largest provider of corporate sustainability ratings has once again presented Bilfinger with a Gold Award for its sustainable, ethical and responsible practices. This puts Bilfinger in the top 5 percent of all companies assessed.

Strategic priorities in 2024

We are continuing to implement our strategy this year. One area of focus will be on the transformation from project business to product business. By standardizing and offering our expertise across all markets and regions, we are actively derisking and increasing our sustainable profitable growth. We will set about integrating Stork immediately after the closing, which is planned for the first half of 2024, thus substantially strengthening the Bilfinger Group. This transaction additionally serves as a blueprint for our acquisition strategy. We wish to grow primarily in markets we already serve and with products we already offer as a way of systematically expanding our core business.

Financial outlook for 2024

For 2024, Bilfinger anticipates revenue of between €4,500 million and €4,800 million. The Group's profitability will continue to rise, with an EBITA margin of 4.9 percent to 5.2 percent. This increase will stem from the positive effects of the efficiency program as well as growth and continued de- risking. The forecast does not include the acquisition of Stork expected for the first half of the year.

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Thanks to our shareholders and employees

Bilfinger is making very good progress. Our strategy is delivering and our products and services are addressing growing industry demand. We would like to thank you, our shareholders, for your continued trust and support. And we would like to express our gratitude to our employees for their outstanding commitment to Bilfinger. It is they who have made our recent progress and successes possible. To all our stakeholders who have supported us with constructive criticism, suggestions and productive dialogue, we pledge to remain open to discussion. Together, we will continue on our path of profitable growth in 2024 and make Bilfinger the No. 1 in efficiency and sustainability for our customers in industry.

Dr. Thomas Schulz

Matti Jäkel

CEO

CFO

Executive Board

of Bilfinger SE

Dr. Thomas,

Schulz

Matti Jäkel

, CEO

CFO

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A.3

Report of the Supervisory Board

A.4

Corporate governance

A.5

Bilfinger in the capital market

B

Combined management report

C

Consolidated financial statements

D

Explanations and additional information

2022

2013 - 2022

2001 - 2013

1998 - 2001

Dr. Thomas Schulz (CEO)

Born 1965 in Saarland, Germany Professional career

Chief Executive Officer at Bilfinger SE, Mannheim, Germany FLSmidth A/S, Copenhagen (Denmark), Group Chief Executive Officer

Sandvik AB, Stockholm (Sweden), most recently President SANDVIK Construction

Svedala Industri AB, Malmö (Sweden), Business Area Manager Academic career

Engineering studies and doctorate in mining at RWTH Aachen University, Germany

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Bilfinger SE published this content on 22 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 March 2024 09:59:09 UTC.