Good afternoon, and welcome to our third quarter 2019 conference call. Thank you for dialing in. I'm joined today by Christina Johansson, our CFO, and Tom Blades, our CEO. We will now start with the presentations, followed by the question and answer session. With this, I'll turn the call over to Tom.
Okay. Thank you, Bettina. Good afternoon, ladies and gentlemen. If you're following on the screen, I think the headlines, no surprise, we're delivering what we said. If you saw on the top line, we view our markets, underlying markets, and particularly E&M, as being stable. I think you see that in our order intake. We do have some timing issues on projects and products. We're not nervous. We have enough in the pipeline. We have enough on the radar screen, therefore we continue as per our expectations, as per our strategy. The revenue's growing. Again, no surprise. I think the backlog gave us a heads up on that. As far as the next three lines are concerned, EBIT, net profit, and free cash are all significantly up on the same quarter last year.
They're outpacing the revenue, they will continue to accelerate towards the end of the year for us to make our targets. We have announced further productivity savings, additional cost savings that we've identified. We believe these will exceed EUR 40 million in total by 2021. We expect to see about EUR 30 million additional cost savings in 2020. With that, we do reaffirm our 2019 outlook, and we do announce significant EBITDA improvement expectations in 2020. Going briefly to the market. Beginning with E&M Europe. One second. Yes, thank you. A brief market overview in terms of Engineering & Maintenance Europe. Oil and gas is for us, of course, predominantly North Sea. $62 per barrel means that our customers are generating cash. That will continue. It's good for us. We do see a good call for our maintenance services.
We don't see a flattening, and we are able to be a little bit, Christina would say, picky on certain contracts that don't meet our margin expectations. Both in oil and gas and in chemicals and petrochem, we see strong demand for turnaround projects. I'll come back to that in more detail later. I think energy and utilities, no surprise there. Nuclear does remain in focus for all the obvious reasons. Different parts of the life cycle. In France, it's again refurbishing. There's one new build, Flamanville, which you're aware of. In the U.K. it's all around Hinkley Point and Finland, Olkiluoto. Again, there I think you've seen our announcement regarding Hinkley Point. We're confident that will come. Happy to answer more detailed questions in the question and answer session later on. Turning the page to E&M International. Oil and gas in the Middle East continues.
Installations are aging. You'll see an announcement very briefly for a new contract for a new customer in the Middle East. In the U.S., especially in the midstream market, pace has slowed somewhat. Doesn't mean there isn't any. It's a huge market dry units remain in favor to take the shale gas into downstream chem and petrochem. In chem and petrochem itself, the focus is on OpEx optimization, so efficiency and productivity. We do see some quite large projects on the horizon in petrochem for both Texas and Louisiana. Flip the page to our markets for technologies or our products and projects. In oil and gas, I think if we look at the landscape, we don't see a lot of capacity buildup. We do see debottlenecking, so driving efficiency, and we have a role to play there. Likewise, energy and utilities.
I think nothing surprising there. Nuclear, as I mentioned before, we are involved in decommissioning projects in Germany, and we are seeing increased request for information on our nuclear waste compaction technology. Pharma and biopharma continues. I think that's a story that will continue to grow as we go forward. With that, I will go to a couple of extra slides to give you some more granularity on some of the headlines I mentioned. Beginning with the margin improvements through SG&A and through what we call leaner processes or management streamline. I think when we shared our strategy with you in early 2017, we gave you the three horizons: stabilization, build up, and build out. One of the things we grappled with early on was risk management.
Recognizing risk, managing risk in the contracts, modeling risk, and then, of course, executing through flawless projects, where we're still not quite there, but we've made a lot of progress. Likewise, we were dealing with the compliance challenges. We built a large compliance team. Also in that time, I think I mentioned at one of the meetings that about 30% of our average time in headquarters was going into compliance. Now we're three years down the road. Our systems are in place. We've exited the DPA just under a year ago. We feel it's time now to, let's say, slim down a little bit headquarters and to move more entrepreneurial and let's say, profit ownership into the operating entities. For that reason, we've announced some major cost savings, a large part of which will impact the headquarters. We've also announced the elimination of the E&M divisions in Europe.
That's one management level less. The restructuring, as I mentioned before, will yield about EUR 40 million, a little bit more, in savings, which we will ramp up to that run rate in 2021. We'll see about EUR 30 million, again, a little more than EUR 30 million of those savings coming through to our 2020 bottom line. When we do that, we're effectively entering the third phase of our strategy, what we call the build-out phase. One of the important elements there is the performance culture. Being for a long time top-down driven or let's say, a strategic operator, I think we also mentioned in 2017, we'd like to move towards a strategic architect, and that's really what we're doing now. Again, it's no surprise. We announced it quite a while ago. Now it's time to act.
With that, we will then push the performance culture into the operating or customer-facing entities. Not to say they weren't doing it before, but now we're just putting more decision-making into their hands. We're streamlining decision-making. We're improving the levels of authority and letting the people run their business with their customers. We think it's the right thing to do. On the next page is something which I highlight quite often when I'm asked what keeps me awake at night. It's really when I look down the road, three years, five years down the road, there will be a shortage of craft labor. In Germany, we see it today. We measure it on the number of apprentice jobs that are advertised in the market, yet go unfilled because there aren't enough people applying for these jobs.
I think you see the same in the U.S., and that's the graphic on the left, the Christmas tree on its side. It shows the inversion of supply and demand on the craft labor market. On the right, you see the bar chart, which is, as I mentioned, the unfilled apprentice jobs in Germany. If you look at hourly wages for plumbers, electricians, they're all climbing. If you look at the time it takes to actually call for a plumber to come to your house, it takes even longer. I think wherever you look, it's quite clear that the supply-demand equation is turning and that there will be a war for talent going forward. Of course, it also drives our business because when customers have a large craft workforce, which is aging along with their plants, then they're looking for solutions other than just more of the same.
Again, that speaks towards what Bilfinger does. We have the people, we have the training competencies, we have the certification competencies, and we have the workforce that really thrive in this kind of environment. That's why, although it's a concern, we think we have the right answers to address that. I mentioned turnarounds across Europe as being part of our growth curve going forward. We have been growing in turnarounds. We're well positioned to do that because we're ready inside most of these facilities. We have the trust of the customer. When it comes to a shutdown, which needs impeccable planning, it needs a ramp-up of several hundred people at short notice. With long-term planning, we think we have what it takes to do that. We have been doing it.
I think the graph shows you 60 turnarounds in 2018, about more than 60, more than 70 this year, and that'll rise to more than 80 next year. The names in the box show you that these are all larger customers. Again, customers whose trust we've earned, and we're able to do these things. We're able to act cross-border, which many of our competitors cannot do. I think you've also seen that next year, the Forties Pipeline will go down in the North Sea for a period of time. That has a knock-on effect for turnarounds on land where facilities will close. They'll try to, of course, improve and debottleneck those plants then bring it up again in a short period of time. That's one of our strengths.
It's one of the things that's driving our margins, and it's something I just wanted to highlight as we go forward. First, of course, we have the numbers, and for that, I will pass over to Christina.
Thank you very much, Tom. Also from my side, warmly welcome to our quarter three presentation. Let us have a closer look at the financial performance of quarter three, starting off with the order intake on page 10. Orders received in the area of engineering and maintenance, very stable. Technologies with significant decrease versus last year, mainly then related to the timing of certain larger projects, and especially then in U.K. and Hinkley Point, as mentioned by Tom. Looking at the pure numbers, we are closing quarter three with an order intake of EUR 997 million versus a comparable number last year of EUR 1.1 billion. It's a reduction organically 7%, but as mentioned, we don't see any weakening in the market.
It's mainly related to the larger projects here if you compare the bulk. Here we just have a timing issue on a number of projects in U.K. but also in U.S. book-to-bill ratio is now down to 0.9. Looking at also comparing with last year, I think we need to keep in mind that last year was a very strong order intake throughout the year. Last year, we had order books when we closed the year that were 12% above the year before. Even if we are expecting a step up in the order books for the last quarter, it will be very challenging to achieve the same number as we had last year. It would actually require an order intake in the last quarter above EUR 1.3 billion.
Even if we are successful in a number of these large projects to also get them in the last quarter, it's a very demanding number. We will continue to do our best. Looking at, for example, Hinkley Point, I think it's also important to notice that even if the order intake will only come in in 2020, it will not have a significant impact on the workload and the sales next year, because most of that work will start to kick in and generate sales one year later. Proceeding to the revenue line, page number 11. Here we are, of course, benefiting from the solid, very strong order books from last year. We continue to be above the level of 2018. We generated EUR 1.1 billion of sales, which is an organic growth of 7%.
Looking at the full-year picture and our expectation for 2019, we are expecting that we will not be staying at 7%, but we will be somewhere between 5%-6% organic growth for the full year. The EBITDA adjusted. It improved to 3.1% for the quarter or EUR 34 million, a strong step up versus the last quarter, but also versus quarter 3 last year, where we closed quarter 3 last year with 2.1% or EUR 22 million. Special items. We generated special item cost of EUR 9 million in the quarter 3, most of that related to our ongoing rollout of SAP and also an HR software. Quite a modest number. We continue with this rollout, and you will see in the adjustment also cost coming up in quarter 4 and also going into 2020.
We are planning that this process will be finalized by the end of 2020, early 2021. The adjustments, it's also important to mention that the restructuring cost for what we have announced today, the further action items in SG&A. Will generate a one-time restructuring cost of approximately EUR 40 million, that we obviously will try to a large extent to get into quarter four this year. As long as IFRS will allow for it, we will try to take as much as we can of the restructuring cost in quarter four this year. The number that we right now are looking at is around EUR 40 million. Results. EBITDA reported quarter three is reaching EUR 25 million to be compared with EUR 11 million in quarter three last year. Also here, a clear improvement. Proceeding to page 12.
We have on the left-hand side, the development of our gross margin. Here you see an improvement to 10.2% in quarter 3, a clear improvement versus last quarter, but also versus quarter 3 last year. Good development, however, not yet at a satisfactory level. This is also a key target for quarter 4, but above all, also for 2020 to continue to make sure that we gain a substantial improvement on the gross margin. SG&A on the right-hand side is in this quarter going down, thanks to a couple of one-time positive effects, going down to only 7.6%. It was an especially good quarter. Here to set the perspective of the full year forecast in the right light.
We are expecting here that we will close this year for the full year with a ratio of 8.2%, but still a significant improvement this year, which also means if we compare with last year full year 8.7%, that we have a number of SG&A projects at all levels already ongoing, and also building into our total saving that we announced that we are expecting to achieve with the latest activities. The target this year to bring this ratio down to 7.5% in 2020, and even being able to do this with a stable revenue line next year. To continue to drive the SG&A overheads further down with a target of getting down to below EUR 300 million by 2021. Proceeding to our three segments. Starting off with E&M Europe. Very sound, very good performance, very stable.
Looking at the orders received, we have orders received that are organically about 2% below last year at the same time. Here we know that a number of framework agreements will be renewed and enter to the order books in quarter four. Very solid performance, and we will achieve also the orders received targets in this segment for next year. Looking at the revenue line, stability, we are in line with quarter three last year, organic growth plus 1%. Looking at the EBITDA, also here, we are talking about an EBITDA margin of 4.7%. In this segment, we have a fairly strong seasonality, so quarter two and quarter three, quarter four being the stronger ones. You see here 4.7% in quarter three, in line with what we also had last year. A very solid situation.
I want to mention the developments, very positive in the North Sea on the offshore business, but also, as mentioned by Tom, we are very, very successful in regard of turnaround activities in our European market. That will continue also next year. Proceeding to E&M International, including North America and Middle East. Here, we have a bit of a mixed picture. We have on one hand side, orders received that are organically minus 3%. However, here we have the effect of a number of large projects in the pipeline in North America with a timing aspect. It's the large project portfolio that is lacking a bit time-wise behind. We're also confident that we will be able to pick up going forward in the next quarters.
On the revenue side, we have a very, very strong improvement, 20% organic improvement, if we compare with quarter three last year. That is related to North America. Especially one large, very successful project generated substantially more sales and profit on this project than what we have seen before. Very good development. Also here, we are expecting that we will achieve the targets that we have set for this year, and well on track. Last but not least, we have the smallest segment, Technologies. Of course, this has been what we call a bit of the problem this year. You remember in quarter one and quarter two, we had one single entity, where we had to re-estimate the cost to complete on a number of projects, but also renegotiate claims and change orders with clients.
In quarter three, we had a loss in technologies, a substantially lower loss than what we saw in quarter one and quarter two, but still a loss burdening the results in quarter three. We are now expecting for quarter four that we will see a positive improvement in addition to quarter three and be on the positive side in regard of the EBITDA. Looking at the top line, we have an organic growth of +15%, if we compare the two quarters. In regard of orders received, here it is visible. Here we have a lack in incoming larger project orders timing-wise. On one side, we have the Hinkley Point effect here, but also a couple of other projects in the pipeline that time-wise take a little bit longer than we expected.
We also have the scrubber business here, where we have clearly, during the last quarters, been focusing on ramping up, improving our margins, and making sure that its transformation to Asia of the production would be successful. We are now expecting to ramp up the order intake mainly in the first half of 2020. A number of reasons why orders received is behind the level that we saw last year. Book-to-bill is down to 0.6. Also here, we are clearly seeing the improvement we had in quarter three, two effects that caused still a loss. One of them related to an old legal case, where there was an unexpected judgment by the German Federal Court of Justice. They actually revoked an arbitration award from 2017. The work in regard of this was executed in 2011.
This cost us around EUR 4 million additional provision here in quarter three, so it was a surprise to all of us. I also mentioned before, we are, however, in quarter four, also for technologies, expecting a certain pickup, so we will have a positive EBITDA in the last quarter this year. Proceeding to operating and free cash flows. Also here, a positive development above the prior year, but still not as significantly growing going forward and improving as we would like to see. We have a tradition in Bilfinger that the last quarter is not only the strongest when it comes to profitability, but also substantially cash coming in only in the quarter four. We are still having the expectation that we will pick up on the operating and free cash flow also this year in the quarter four.
I want to stress some improvement in regard of DSO. We are in the DSO days, moving to 84 days. That is compared with 87 the same period last year. We are also moving forward in regard of the amounts in the DSOs that are related to receivables is increasing versus what we have in work in progress. Which in our business is important because we don't have payment issues with our clients once the invoicing has taken place. We have, in general, very good payers. Further improvement in working capital expected in quarter four. In regard of the Operating cash flow, we are moving here in the quarter to a positive EUR 18, is to be compared with EUR 2 positive last year in quarter three. The free cash flow moving up to positive EUR 5 versus minus EUR 15 last year.
Net profit reported and adjusted positive in quarter 3 as well as year-to-date, despite a lower financial result. The lower financial result, of course, also related to the fact that we are only repaying our old bond early December. Right now we have the old bond, and we also have the new refinancing structure in the financial results. We also target a positive net profit for the full year 2019. Now I pass back to Tom.
Thank you, Christina. To wrap up, I think if we look at our strategy horizons or three horizons, we had two check marks left to place under build-up. Success in growth areas, that's coming. Net profit breakeven for the year, that'll come. Then we move into the build-out phase. As I mentioned before, we're well on the way with process and system harmonization. We don't give ourselves a tick just yet. What we're doing on the enhanced measures regarding further SG&A and streamlining will further drive performance culture. We think it's heading the right way. We are in various countries combining entities, reducing complexity. Also that one will be well on the way.
What we're doing really is something we announced quite a while ago, and we're now delivering to that in terms of streamlining and getting quicker and focusing the driving of the business, as I said, from the legal entities upwards. Finally is the outlook. We confirm and reaffirm our 2019 outlook. I think no surprise on the revenue line. We feel confident on our EUR 100 million target. It's not easy. It's not a walk in the park, but we know what it takes, and we believe that we will get there, so reaffirm the EBITDA adjusted line too. The free cash flow, I think you see the dynamics of their momentum is there. We will continue to bring that momentum forward and also deliver a positive result on free cash flow reported.
Looking beyond the end of this year into 2020, our indications for organic growth is stable with a focus on higher margins. As I stated before, we can afford to do that. We have good momentum. We have built a good backlog, and we are seeing a number of places where we're deliberately putting the bar a little bit higher in order to strengthen the margins. We believe next year we'll reach the 4% EBITDA margin. I know that's a little short of the 5% that we originally set out to achieve. We do believe that we'll be in the corridor for a sustainable 5% EBITDA towards the end of 2020. Again, some of the measures you've seen will help us get there.
In order to get all the way to 5%, which again, is something we target or believe we'll get to by the end of 2020, we do need to continue divesting some of the non-core and low-margin business, and we're actually moving a couple of additional companies into OOP. These companies, although they're performing, their margin will, at least in my opinion, never exceed 5%. Although they're on par with their peer groups, they don't fit into our aspirations. That's a little bit different from companies that may be sub 5%, where we have identified measures in terms of execution in structure or management or process that we will continue to turn around and keep inside of the core. The second line on the footnote there, seeking accretive acquisition opportunities, we have been doing so.
We are on the lookout for businesses that would help us expand, that would help us expand not only the margin, but also the product range and geographic reach. We believe that there are opportunities coming up, and again, these will help us to meet and even possibly exceed our targets, but we have to get there first. I think that concludes the outlook, and we're looking forward to your questions.
We would now be happy to take any questions you may have. If you would like to ask a question, please press zero and one on your telephone keypad. To withdraw your question, please press zero and two. First question comes from Craig Abbott from Kepler Cheuvreux.
Yes, good afternoon, everyone. Just a couple of questions on this outlook 2020 and beyond. I would like to just be a little bit clearer on to what extent the scope affects both potential creative acquisitions and the shifting of some more units over to OOP to be disposed. To what extent those two factors are necessary to get to and sustain the 5% target. Just to follow up on that, did I understand that comment just a moment ago correctly, that you have identified some new units, where they won't get to the 5%, that you are now moving to OOP for disposal? New units beyond what was communicated in the past? Thank you.
Maybe I'll begin and then pass it to Christina for the new units, as you call them. First of all, Craig, thanks for your question. In 2020, the outlook we've set, the 4% and then coming out of 2020 into the 5% corridor. That will be without necessarily driving those numbers through acquisitions. We are on the lookout for acquisitions. It'll help things along. Even if we did not make acquisitions, we do expect that the work we're doing on margins and SG&A will get us into that corridor. The scope question, you also asked what kind of targets would you be looking for? We can describe them, what they might look like, but we haven't found many yet that fit that profile. Ideally, the right target would have gross margins that are in excess of our current run rate.
To pull up the gross margin rate. SG&A in excess of 7.5, because that's where we're headed, and we can, of course, do that overnight. Ideally, additional scope. That will be the ability to provide our existing customers with more services in the plants where we're already present for a longer period of time. An example would be rotating equipment, where we do some work, but we don't do the full range. We don't do the large electric motors. We don't do the large turbines. These are services that our customers use, and if we're able to add to our portfolio, would give us the ability to, let's say, leverage that scope, in terms of a product range scope. The final scope would be geographic scope.
If we were able to make an acquisition that was able to do all the things I just described in one of our regions, and we could then use that as a reference and platform to take it to other regions, that would give us not only then a competency scope, but also geographic scope extension.
May I just follow up on that, please? How much firepower do you feel you have for putting through acquisitions?
I think, again, a good question. We're not speculating too much on that. I think you read the note that EQT intends to sell Apleona. That does figure into our thinking. If we're able to rotate out some of the companies that would add to that firepower. We have a range, which we're keeping internal right now for obvious reasons. I think we know roughly where we're headed, and we'll use that into our strategy consideration.
Okay, thank you.
If I can add, Craig, in regard of the units that we are now planning to dispose. I just want to remind that we started off this year with four legal entities that we wanted to dispose. Two of them left us in the first quarter this year. Two are still with us. I would regard both of them to not being very easy. One, we still believe that we will be able to exit until the end of this year. South Africa is probably by on this year. We have reviewed our entities and the progress we have made this year, and we have a small number of legal entities that we would like to also try to dispose next year. A small number.
To give you a feel for the size of it, if I take the two that we have in this entity right now, plus what we intend then to add, we are talking about a sales number of around EUR 250 million altogether. It gives you a feel for the size of these entities that we would like to still dispose. In regard of the M&A, I also want to add that the strategy on M&A, we also in our Capital Markets Day in February, when we present our results for 2019, I'm sure we will also disclose a bit more about what we would like to do on the M&A side. That is in a couple of months time, clearly, we understand the expectation that also the market would like to see how our M&A strategy looks going forward for the next years.
Okay. Thank you both. Very helpful.
The next question comes from Norbert Kretlow, Commerzbank.
Good afternoon, ladies and gentlemen. Two questions, if I may. The first one would be on the 2020 sales outlook, which is stable. I would assume that scrubbers and maybe also first rec from Hinkley Point should allow for low single-digit % organic growth. My question would be: Would you say that this assumption is fair? As a follow-up, if so, would your guidance imply that we are losing volume in other spaces, and where would that be? Also, as a follow-up to this issue, I understand that your exposure to the chemicals industry is typically cyclical, typically with a time lag, and I would expect that you're now facing, if there would be headwinds, you would be facing them now going into 2020. My question is: Do you see any significant underlying hesitance in your chemicals clients?
You mentioned that there are a lot of turnaround projects. Is there anything cooking negatively developing in chemicals demand? The second question would be on the headquarter reduction. We understood that a lot of your management time was consumed by the DOJ issue, the indication was always that once this is through, there would be more focus on the operations. My question would be just to make sure. Your cut in the headquarter, does this imply that only obsolete headcount is reduced, headcount which is no longer needed for the DOJ issue? Has there been any change to your efforts to focus on operating business?
Okay, Norbert, thank you for those questions. Let me begin with the broad picture on orders for 2020. Scrubbers, that does continue. What we've seen in the scrubber business is early take-up. Right now there's a lull as the, I would say, the fleet owners are installing the scrubbers and also waiting to see what the effect is on the fuel market. Our expectations, and we're getting already inquiries, are that there will be a second wave beginning early in 2020, and that second wave will actually feed into not only order intake, but towards the second half of the year, also into revenue on delivering those scrubbers. On Hinkley Point, we don't expect revenue in 2020 from the additional orders in Hinkley Point.
We do expect to see order intake, and then that order intake will materialize into revenue towards only the latter part of 2020 and certainly into 2021. If you look at our revenue profile, it's stable in 2020, and then the next step will really be in 2021. That's how we're looking at it. Again, Hinkley Point, this is why it was helpful to have the comment and the support from EDF. Our people are there, are working. It's a timing issue. I've said it a number of times, and I'm kind of shooting myself in the foot as well, but we are on-site.
We have a lot of people there working with the customer, helping them through their timing and sequencing, and therefore, as I mentioned, you'll see it in the order intake in either late this year or more likely now early next year, but you won't see it in the revenue until 2021. What we do see is the turnarounds, of course. I mentioned those. We also see some refinery expansions, and we have a couple of larger projects, which are at the, let's say, final contract negotiation, that give us confidence there that also there there is some activity. Our chemical clients, as you mentioned, it depends in which direction those chemicals are finding their end markets. If these chemicals in the form of polys and plastics are finding their end markets in the automotive industry, then yes, those are having some difficulties, let's say.
Not to the point where they're cutting back on maintenance, but where they themselves are, let's say, losing a little bit of momentum on their cash flow, on their bottom line performance. That's evident, but it isn't evident in the maintenance program. Your question on the headquarter productivity measures. It's not only the DPA and the DOJ. As I said at the beginning, we also had a lot of additional people looking at risk management. That's modeling risk. That's putting in place the risk matrix that we talked on early in the process. It's also around PSH, SAP introduction. It's on introducing our SAP systems into our HR systems.
A lot of the, let's say, build-up we had, if you imagine a wave, in order to deal with getting these projects through, we're over the peak of that wave, and we're able to therefore streamline our headquarters, and that's the benefit you're seeing in this announcement.
Maybe as a follow-up to this issue, when we talked about the DOJ issue before it was closed, my impression has always been that once it is overcome, once you're through with it, the chance would be that there would be more management capacity available to talk to the clients and to get orders in. We are not seeing this in order intake right now. Can you give us any update regarding, say, management capacity, which has been freed from the completion of the DOJ issue and the steps you're taking there and what we could expect going forward, or is this effect already through?
It's a good question. It's also a tricky question. Let me begin with the easy elements. A lot of our compliance people, especially in, let's say, in allegation management, these are people with a strong legal background.
an investigation background. They're not the most ideal people to talk to customers about orders, obviously. That's the extreme case. Therefore, we have to have a little bit of a change out there. Other functions, we're actually doing a 2-step process. We're reducing our headquarter staff by some, let's say, mutually agreed terminations, but also by transferring people into the operating entities. That then puts the decision-making into the hands of the operating entity management to say they're going to keep those, or they're going to keep half of them and displace others. That's why, as we work through our program, we actually ran a cascade. We think that we will reduce by a little over 100 people in the headquarters, about 50 people at what we call or the previous division management level, and by another 50 people in the operating entities in Germany.
That's a total of 200 in Germany. We already have programs ongoing in the U.S. to combine three entities into one. To move their back-office people into a single shared service group. We are doing regional consolidation in the Middle East, it's not only in Europe and in Germany, but across the board. These are the facts that you're seeing in the numbers.
Great, thanks.
Maybe if I could add to your first question, Norbert. Here, looking at the statement of a fairly flat top line going into next year. We have to keep in mind that we have had an incredible year in regard of sales in North America with some large projects here. I mentioned that in quarter three, we had an organic growth quarter-by-quarter of 20%, that is related to North America. We can't avoid here, as we have some timing issues in getting the new projects on board, that we will next year not be able to achieve the same top line as we will see this year. That is then obviously also explaining why the total top line next year will be fairly flat versus this year.
That's good to know. Thanks.
The next question comes from [Anna Spezkin] from UBS.
Thank you for taking my question. May I ask you, to what extent does your 4% EBITA margin target in 2020 depend on changes in the portfolio? I mean, disposals and acquisitions. Do you think it's also achievable on the current business mix? Thank you.
No, I think to be clear, the 4% don't expect any, let's say, significant contribution coming out of the disposals. If we are able to make an acquisition of the shape and nature that I described, then that, of course, would be on top of the 4%, but that's beyond our control. The 4% is what we can manage and commit to. Likewise, exiting 2020 towards the 5%, any acquisition we make will be on top of that.
That's very helpful. Thank you.
There are no further questions at the moment. If you want to ask a question, please press zero and one. Next question comes from [Christian Kord], HSBC.
Thank you very much for taking my questions. I'm aware that you already talked a little bit about the scrubber business, indicated that, let's say, in the last couple of months, there was not that much activity. I just would like to ask if you could shed some more light on this and where your current order book roughly stands here, please. You were also talking about the elimination of one level of management. I recall that something similar, I think, happened in 2013, if I'm not mistaken, which did not have significant positive effects on some of the developments within the company. Although that was a different management, did the company as such learn some things from the development that happened in 2013 that you're now trying to avoid when you do something similar?
Is this approach totally different from what happened in 2013 and is just based on a different level of management level elimination? Thank you very much.
Thank you, Christian. The second question is probably a catch question, right? It's hard to maybe respond perfectly to that. 2013, the company was very different. We were in very different markets. We were going through a very different phase. Revenue was probably twice the size. Many different things. Where we are today is, as I was trying to explain earlier on, in 2017 when we kicked off the 2020 strategy, we said we had to put in place many things that should have been there but weren't. Compliance, obviously, processes around risk, the SAP systems. It's like a wave. We have to build up resources. We have to take on board costs and effort in order to install those.
Once they're installed, then of course, we can reap the benefits of those measures and begin to come down on the far side of the wave. Whereas I think in 2013 it was downsizing, right-sizing, whatever. In 2019, going into 2020, we're just doing what is normal. Put in place a project team. Call that project risk or call it compliance. When the project's implemented, and this is part of the DPA, is not just to implement but to make sure it's embedded, it's sustained, it's in the DNA, then you can begin to ramp down that project team, if I can refer to it as such. As we do this, we've been very careful to make sure that the governance that we've created is in place. We wouldn't do this if we felt that we were putting risk in the wrong direction, that people would start misbehaving.
I think that's what four years plus of compliance have taught us. It's ingrained. It's part of our culture. The same goes for HSE. Therefore, as we do what we're doing, we do it for a very different set of motivational criteria than what the team did in 2013. On the scrubbers, at the end of Q3, we had a cumulative order book of EUR 110 million. We're now at EUR 125 million, so that's EUR 15 million more. I think the scrubber business, as I said, is going through a slight lull as people wait to see what is the effect on fuels. The IMO Chapter two implementation comes into being on the 1st of January. I think that'll be a big shift in bunker fuel prices, and people are waiting to see what is that shift, and then we do expect further orders.
We're already getting inquiries from the large customers. So far, we have orders for 73 ships, 84 scrubbers. These are eight major fleet customers, and those same customers are coming back and saying, "How is your slot planning looking for 2020." We know there's interest out there, but they're waiting for this triggering event to see what happens to the fuel prices.
Thank you very much for the answers. I did not intend to do any catch. Sorry about that if it sounded like this. Thank you very much for the insights.
Okay. We now conclude today's conference call. In case you might have further questions, don't hesitate to contact the IR team. Thank you for your participation, and have a nice day.