Koch Not Ready to be Fired

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04 August 2014 | Updated 01 January 1970

The engineering and services group Bilfinger, which expanded dramatically this year into the UK building and facility with the takeover of GVA Grimley Holdings in May and Europa Support Services in late 2013, has seen a second profits warning that has seen Chairman of the Executive Board Roland Koch very gracefully fall on his sword - before any possibility of being fired.

Roughly speaking, a statement and forecast made today (Tues 5 Aug) from Bilfinger SE's  Executive Board says the financial forecast for 2014 published on June 30 is about Euro 25million out (and not in a good way). The firm has an anticipated output volume of approximately Euro 7.8billion. Adjusted net profit is now expected to be between Euro 205 million and Euro 220 million - a reduction of Euro 25 million.

In fairness, the adjustment has little to do with heavy investment and more to do with a reduction of earnings expectations in the power business segment. This resulted, among other things, from a project loss in South Africa that has only now come to light. The Executive Board now expects an EBITA margin (a company's earnings before the deduction of interest, tax and amortisation expenses) of between 4 and 5 per cent in the Power business segment this year.

Roland Koch to leave Bilfinger

Roland Koch, Chairman of the Executive Board at Bilfinger SE, has offered to step down with Herbert Bodner, taking over. Koch is credited with making Bilfinger a more recognisable engineering and services group with a facilities bent. In his passing-out speech, he explained: "As a result of two profit warnings in quick succession, for which I as Chairman of the Executive Board take responsibility, trust has been shaken. I hope that with my offer (to resign) it will be possible to quickly normalise the situation. This is not least because I must realise that significant parts of the Supervisory Board and myself do not agree to a sufficient extent on the evaluation of the next, directly necessary measures."

National Grid Gas - Asset Health Framework

Last month alone, Bilfinger won an Asset Health Framework contract understood to be worth £60million a year for 7 years. It will involve engineering for all disciplines plus procurement and construction/installation for projects on sites ranging from small above ground installations to large electric/gas turbine driven compressor stations.

Article written by Brian Shillibeer | Published 04 August 2014

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