“The fact that we were able to generate such momentum in the second six months is my highlight of the year. We’ve beaten all the targets we set in August.”

Anton Affentranger, CEO

“The strength and dynamism shown by all areas of the business in the second half of the year is remarkable. Everyone, genuinely everyone, pulled in the same direction. A perfect example of ‘One Company’ in action”!

Beat Fellmann, CFO

“Implenia is an agile business”

2017 was a challenging year. Adjustments to the Norwegian project portfolio and to claims associated with the ongoing Letzigrund Stadium case, as well as the optimisation measures in Road Construction and Civil Works in German-speaking Switzerland, meant that Implenia’s results for the first half were down on the same period of the previous year. As a result, the EBIT target for 2017 was set at just below CHF 100 million. In the second half-year, however, the Group put on an impressive display of its agility as a business: by the end of the year, Implenia had clearly exceeded its own forecasts for EBIT and cash flow. Its underlying operating business and record-high order books make Implenia optimistic about the future. In this interview, CEO Anton Affentranger and CFO Beat Fellmann take stock and talk about their expectations for 2018 and beyond.

“The fact that we were able to generate such momentum in the second six months is my highlight of the year. We’ve beaten all the targets we set in August.”

Anton Affentranger, CEO

“The strength and dynamism shown by all areas of the business in the second half of the year is remarkable. Everyone, genuinely everyone, pulled in the same direction. A perfect example of ‘One Company’ in action”!

Beat Fellmann, CFO


Striking revenue growth, record EBITDA, EBIT of CHF 103.2 million, massively increased free cash flow and good quality, record-high order books. How did Implenia manage all this after such demanding first six months?

Anton Affentranger: The fact that we – Implenia’s employees and Implenia’s management team – were able to generate such momentum in the second half is my highlight of the year. We’ve beaten all the targets we set in August, which is the best evidence possible for Implenia’s agility as a business.

Beat Fellmann: This pleasing performance confirms the soundness of our underlying operating business. The adjustments that we had to make to the first-half results were due to very special circumstances. It’s also great that all the segments posted positive results for the year.

Revenue is up by almost a fifth on the 2016 figure. Has this growth come mainly from the acquisition of Bilfinger Hochbau, or did Implenia grow organically too?

Beat Fellmann: The growth is largely based on the Bilfinger Hochbau acquisition. But if we strip that out, we still managed very satisfactory organic revenue growth of around 3 percent. In line with strategy, our revenue in Switzerland remained stable, while our other markets provided the growth. This is another step in the right direction as we work to strengthen our business portfolio regionally.

Staying with the operational performance, how is the EBITDA margin developing? In the first half of 2017 Implenia announced a new medium-term target range of between 5.25 and 5.75 percent.

Beat Fellmann: The result at EBITDA level was hampered by the one-time adjustments made in the first half-year, which led to an EBITDA margin below the target range. If it hadn’t been for these one-offs, we would have landed in the middle of the target range at an excellent 5.4 percent. And this is by no means the end of the story – the Segment International in particular has considerable potential for further improvement.

Norway has given you headaches, however. Are the measures taken to strengthen our operating performance there having the desired effect?

Anton Affentranger: No management school in the world teaches about the kind of thing we went through in Norway last year. Our CEO in Norway went on a hike and was missing for four months before he was found dead. This was extremely upsetting for all of us and stopped us in our tracks for a while. Now that Tone Bachke has taken over the CEO job on a permanent basis and the management team has been strengthened, however, we are close to our customers and our projects again. The contracts we won just before Christmas are proof of this.

Alongside Norway, the Segment International includes Implenia’s activities in Germany, Austria and Sweden. How are things going in the other countries?

Anton Affentranger: We weren’t able to offset the negative influence of the Norwegian performance in the second half of 2017. But Sweden, Austria and Germany are on track. In Germany, Implenia Construction has fulfilled our expectations and we were recently able to announce the biggest contract so far won by Implenia Construction: the total renovation of the Mülheimer Bridge in Cologne. There’s a large backlog of repair and upgrading projects within the German infrastructure sector, so there’s certainly a market for our services.

In summary, we can say that apart from the setback in Norway, the segment’s results have met expectations.

Development posted another set of record results for 2017. What’s behind this?

Beat Fellmann: We have a very good portfolio, we’ve benefited from a good market, and we have a top team. We were able to achieve better earnings than planned in both French and German-speaking Switzerland.

Does the same apply to the Segment Switzerland? This includes Modernisation, Buildings and Swiss regional businesses. Dark clouds have slowly been gathering in building construction …

Anton Affentranger:  I don’t see any dark clouds for our Buildings business. Buildings put in a first-class performance in 2017 and delivered an absolute record result. We met and actually exceeded the old 2.5 percent target for our whole-year EBIT margin for the first time. We’re now reaping the rewards of the efforts we began a year and a half ago to reposition the business. And order books for 2018 are already well filled, so even if the market changes, we’re confident. We’ve built up a Modernisation team in French-speaking Switzerland and already won our first orders there. The structural challenges in Swiss regional business made things harder for us and weighed on our 2017 results. So, last spring we decided to do what we had previously done at Buildings, and administer some painful but necessary treatment. We brought our capabilities in road construction, civil works and maintenance and repair in Switzerland together under one roof, and made some capacity adjustments. New projects such as the contract to upgrade the A1 motorway between Zurich-Ost and Effretikon show that we can be confident about the current year.

How are things going in the Segment Infrastructure?

Anton Affentranger: The performance of Infrastructure and the high quality of its projects provided a pleasant surprise again, not only here in Switzerland, but also in Germany, Austria and – with the “Grand Paris Express – also in France.

The massive increase in cash flow was one of the highlights of last year. How did Implenia achieve this?

Beat Fellmann: This is my tenth set of annual financial statements at Implenia, but I have never experienced anything like this! The strength and dynamism shown by all areas of the business – operational and support functions – in the second half of the year was remarkable. Everyone, genuinely everyone, pulled in the same direction. A perfect example of “One Company” in action!

How would you assess the market environment in which Implenia operates? Do you think there’ll be a property bubble?

Anton Affentranger: I don’t think there is much likelihood of rising property prices in Switzerland. In the core economic regions, Greater Zurich and Lake Geneva, the situation is very good. Interest rates are not going to rise quickly in the short and medium term. In Germany, the fundamentals for building and infrastructure construction are very good, with enormous demand. It’s more a question of whether there’s enough construction capacity: the shortage of skilled workers is a concern for the industry.

Beat Fellmann: All the forecasts point to significant growth for infrastructure activity; we’ve positioned ourselves nicely in this sector – in our home markets and beyond. Implenia is well set to make the most of both megatrends: infrastructure and urbanisation.

Implenia is pressing ahead with its internationalisation. The Group now has more employees from Germany than from Switzerland, and it’s working on complex infrastructure projects even outside its home markets. Will it keep up this pace?

Beat Fellmann: The markets are intact – particularly in terms of the infrastructure megatrend – and our strategic direction is clear: we want Implenia to generate 50 percent of its business abroad. And if attractive opportunities arise on the European market, we want to seize them. But we will grow primarily through our own efforts.

We’ve talked mainly about operational business so far. But Implenia is also pressing ahead with various Group-wide initiatives. Sustainability, for example, is firmly anchored in the firm’s vision. What’s been happening in this area?

Anton Affentranger: Lots! And I’ll happily give you a few examples. One of our investors recently confirmed in our employee magazine that his firm invested in Implenia partly because the Group fulfilled all the ESG (environment, social and governance) criteria, and because it is doing a great job in terms of sustainability. We’re proud of this. And since mid-2017, as part of its Corporate Social Responsibility programme, Implenia has been using its expertise to help construct school buildings for the “Smiling Gecko project in Cambodia. Individual Implenia employees are in Cambodia coaching local architects and construction managers.

Health&Safety is another important subject. What can you tell us about the Group’s work in this area.

Anton Affentranger: We’ve improved our accident figures significantly, but just missed our ambitious target for 2017. Much more important than reaching an abstract number, however, is the fact that we’ve established a Health & Safety culture at all levels of the Group.

Digitalisation is another subject keeping Implenia busy. What’s been achieved here?

Anton Affentranger: Implenia has invested significant resources in digitalisation in recent years, and this will continue. Over the coming years, the “Kairos” project will see the operating units supported by a modern digital solution; at the same time, the ERP system is being harmonised across the whole Group. The aim is to provide a uniform, integrated basis for the Group’s further digitalisation. We’ve also strengthened our BIM capacities, and gained new talent in this area through Hochbau Deutschland.

What’s your forecast for the current financial year and the year after that? Will Implenia meet its medium-term targets?

Beat Fellmann: We currently generate 40 percent of our revenue outside Switzerland. If we manage – and we think we will – to get a similar profit contribution from these markets as we do from Switzerland, then we have a great future ahead of us.

Anton Affentranger: Our order books are full, the quality of our portfolio is good, we are positioned in the right markets and – most important of all – our team is as strong and agile as ever. We’re sticking to our medium-term targets: top-line volume of around CHF 5 billion and an EBITDA margin of between 5.25 and 5.75 percent. As for 2018 and the years ahead, we feel confident.

Interview by Natascha Mathyl.