Bilfinger head resigns on profit warning

Roland Koch, the chairman of the German contractor Bilfinger’s Executive Board has resigned following a profit downgrade for 2014. Herbert Bodner, a former chair of the Executive Board and currently a member of Bilfinger’s Supervisory Board will take Koch’s place on an interim basis until the end of May next year.

Koch’s resignation came as the company announced a reduced profit forecast for the year. With sales expected to come in at €7.8 billion, earnings before interest, tax and amortisation (EBITA) are now seen between €340 million and € 360 million - €40 million less than previously expected. The forecast for net profit is €25 million lower, in the range of €205 million to € 220 million.

Bilfinger said the downgrade was due to falling profits in its Power business segment, with a recently discovered loss on a project in South Africa being one of the contributing factors.

Koch said in a statement, "Predictability on the capital market is an important commodity for a continuingly successful company like Bilfinger. As a result of two profit warnings in quick succession, for which I as chairman of the Executive Board take responsibility, this trust has been shaken. I hope that with my offer 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. Bilfinger has taken significant steps forward in recent years. I am certain that the future will be successful."

Supervisory board chairman Bernhard Walter added, "I view the approach in the interests of the company proposed by Roland Koch as fair and worthy of my utmost respect. These thanks also apply expressly for his work in the last three years. In its integration to an engineering and services group, Bilfinger has made substantial progress under the leadership of Roland Koch. All significant strategic decisions, including the major organisational changes within the scope of the Excellence programme, have met with the unanimous approval of the Supervisory Board. We stand by these decisions."

Bilfinger was ranked no.11 in this year’s edition of Construction Europe’s CE-100 league table of Europe’s biggest contractors. It was no. 34 in sister magazine International Construction’s Top 200 ranking of the world’s largest construction companies. Bilfinger is the second largest contractor headquartered in Germany after Hochtief.