UBS Equities-Bilfinger _2025 CMD feedback strong ambitions for 2030_ (Ne...-119160542

ab3 December 2025Global ResearchBilfinger2025 CMD feedback: strong ambitions for 2030Ambitious targets, with upside to our estimates partly on M&ABilfinger's Capital Markets Day in Offenbach yesterday saw management introduce 2030 guidance, including a 4-6% organic 2025-30 CAGR + 4pp M&A expectation, a target EBITA margin of 8-9% by 2030 (up from 6-7% range over FY26-27) and FCF (cpy) conversion above 90% (from >80%). We have slightly increased our outer year estimates to slightly below the low end of organic guide of 4% OSG and expect 7.2% EBITA margin in 2029E, noting improved credibility on margin delivery, but the fact 2030 targets rely in part on M&A to grow the International business to the right scale, where we see higher execution risk. We raise our price target on Bilfinger from €98 to €101. Neutral.Key comments from the CMD: top line, EBITA margin and M&A1) Bilfinger expects EBITA margin to rise from 5.5% to 6-7% range in 2026-27 (reiterated) and up to 8-9% by 2030, supported by market expansion and operational excellence, each contributing ~1–2p.p.; 2) The company's 8-10% 2025-30E revenue CAGR includes 4pp from M&A/ 4-6% organic growth broken down in 1-2% market growth, and 3-4% own initiatives, including outsourcing and more aggressive sales; 3) Guidance implies ~ €1.4B M&A contribution to revenues by 2030, double what Bilfinger achieved over 2022-25E but keeping strict selection criteria. However we note US and Middle East larger acquisitions may come with execution risk, though they are critical for Bilfinger to gain critical size. See more details inside.Changes in forecasts: slightly increasing outer year OSG and EBITA marginWe have left our recently updated 2025E and 2026E estimates broadly unchanged but have slightly increased our organic growth forecasts over 2027-29E, which now puts us slightly below the low end of the new 2030 organic CAGR guidance of 4-6%. We have also slightly raised our margin forecasts in the outer years (remaining below the 8-9% EBITA margin target at 7.2% in 2029E) given in our view part of the margin uplift in International will require Bilfinger executing on M&A to gain critical scale in the US and Middle East. Finally, we have raised FCF company def in 2026E and onwards on better working capital. Our forecasts don't incorporate any yet to be announced M&A.Valuation: €101 price target (from €98)Our price target increases from €98 to €101, reflecting our increased cash flows on higher revenue growth and EBITA margin towards the end of our forecast horizon, as well as progress on working capital reduction. Our PT is based on a blend of DCF and EV/EBITA valuation (10x EV/EBITA 2026E). Bilfinger currently trades at a ~6% 2026E EFCF yield, vs 6.8% for SPIE.Highlights (€m)12/2212/2312/2412/25E12/26E12/27E12/28E12/29ERevenues4,3124,4865,0385,4395,6905,8956,1086,329EBIT (UBS)138174245295356377412449Net earnings (UBS)75110174202251267295323EPS (UBS, diluted) (€)1.882.914.615.466.817.278.018.78DPS (net) (€)