Budimex Sa · GPW:BDX
Budimex Sa — Q1 2021 Earnings Presentation
26 slides from Budimex Sa's earnings presentation, May 2021
Slide 1: Investor Presentation 1Q'21
Investor Presentation 1Q’21
Slide 2: Table of Contents
Table of Contents 1. Market snapshot 1.1 Overview of construction segment 1.2 Labour market 1.3 Prices of main materials 2. Budimex Group in 1Q’21 2.1 Budimex Group – top facts 2.2 P&L 2.3 Evolution of Net Treasury Position 2.4 Results by segment 2.4.1 Construction segment 2.4.2 Real estate segment
Slide 3: Market snapshot
Market snapshot
Slide 4: 1.1 Construction production by segment
1.1 Construction production by segment ▪ In 1Q’21 construction production in Poland decreased by 11,2% Comment ▪ The production was strongly impacted by COVID-19 pandemic, especially in general construction segment Construction and assembly production ’12 – ’21 (bn PLN, enterprises with > 9 employee
Slide 5: 1.1 Production vs. net profit margin in construction
1.1 Production vs.net profit margin in construction ▪ High cost inflation combined with no real indexation impacted strongly margins of Comment big construction companies, but recent quarters have brought relief Construction production (companies > 9 employees) vs. net profit margin in construction
Slide 6: 1.2 Labour market
1.2 Labour market ▪ Since the begin of COVID-19 pandemic unemployment rate increased by 1,0 p.p. Comment ▪ Wages in construction are still growing, but the dynamics is lower compared to the average wage in economy Unemployment rate (%) Employment in construction (thous. employees) 12,0 510 483 10,0
Slide 7: 1.3 Prices of main materials
1.3 Prices of main materials ▪ The trends in the prices of materials, in particular steel, oil and asphalt, are worrying Comment ▪ In the coming quarters, average profitability in construction may be under pressure Concrete Reinforcement steel 180 220 198 160 200 160 180 140 160 117 173 140 120 140
Slide 8: Budimex Group 1Q'21 results
Budimex Group 1Q’21 results
Slide 9: 2.1 Budimex Group – top facts in 1Q'21
2.1 Budimex Group – top facts in 1Q’21 ▪ Drop in sales in 1Q’21 → 1Q’21: 1,2 bn PLN (-15,3% y-o-y) ▪ Increase of % EBIT in construction segment → 1Q’21: 4,1% (+1,8 p.p. y-o-y) ▪ Rising share of railway in construction sales → 1Q’21: 23,3% (+3,7 p.p. y-o-y) ▪ Increase of net cash → 03’21: 2,5 bn PLN*
Slide 10: 2.2 P&L
2.2 P&L ▪ Our goal is to keep profitability above market rates that may be under Comment pressure due to rising material costs 1Q'21 1Q'20* ∆ Sales 1 245 1 470 -225 0 y-o-y dynamics -15,3% 6,5% -21,8 pp. 0 Gross margin 97 110 -13 0 % sales 7,8% 7,5% 0,3 pp. 1 SG&A -63 -58 -5 % sales 5,1% 3,9% 1,1 pp
Slide 11: 2.2 P&L - results by segment
2.2 P&L - results by segment ▪ In 02’21 Budimex S.A. signed conditional agreement to sell 100% shares Comment in Budimex Nieruchomości ▪ Since 1Q’21 real estate segment is presented as discontinued operations 1Q’21 sales 1Q’21 EBIT Internal eliminations (y-o-y) (% of sales) -103 M PLN -8 M PLN 1 245
Slide 12: 2.3 Evolution of Net Treasury Position
2.3 Evolution of Net Treasury Position ▪ Comfortable and stable NTP was the basis for the recommendation of a Comment dividend payment of 426 M PLN Net Treasury Position in Budimex Group (M PLN) 2,6 2,5* 2,3 2,2 2,1 2,1 2,1 2,0 2,0 1,9 1,8 1,8 1,8 1,71,8 1,6 1,6 1,5 1,5 1,3 1,4 1,3 1,2 1,1 0,9 0,9 0
Slide 13: Construction segment – 1Q'21 results
Construction segment – 1Q’21 results
Slide 14: 2.4.1 Construction segment
2.4.1 Construction segment ▪ Negative dynamics of sales was mainly due to the more difficult weather Comment conditions at the beginning of the year and the schedule of design works on D&B road contracts 1Q'21 y-o-y dynamics Sales and EBIT margin (M PLN) Sales 1 180 -17% 8,4% 8,3% 3,9% 2,9% 5,1% 2,3
Slide 15: 2.4.1 Construction segment – offers placed
2.4.1 Construction segment ▪ Value of offers placed in 1Q’21 increased y-o-y, mainly due to higher activity in Comment general construction segment Offers placed in Budimex Group (bn PLN) 31 58 95 120 139 107 47,4 46,1 average value 43,7 4,1 (M PLN) 2,0 40,5 4,2 +25% 8,6 3,5 10,6 10,7 9,0 6,9 24,2 1
Slide 16: 2.4.1 Construction segment – contracts signed
2.4.1 Construction segment ▪ In 1Q’21, Budimex acquired contracts worth 1,0 bn PLN, while the value Comment of contracts pending amounted to over 3 bn PLN Contracts signed in Budimex Group (bn PLN) 9,0 0,8 7,3 7,5 0,2 6,6 0,5 2,2 0,0 5,7 -57% 2,6 2,3 0,5 2,6 1,8 2,8 1,3 0,6 3,2 2,3 0,1 4,1 0,3 3,2 3
Slide 17: 2.4.1 Construction segment – backlog
2.4.1 Construction segment ▪ Strongly diversified backlog Comment ▪ Record backlog value at the end of 1Q’21: 12,8 bn PLN Backlog in Budimex Group (bn PLN) Share 12,7 12,8 1,1 8% 1,0 8% 10,8 10,3 10,1 0,8 7% 2,6 20% 2,9 23% 1,0 10% 0,6 6% 2,4 22% 2,7 26% 2,5 25% 4,0 32% 3,8 30% 1,3 13% 1,2 12% 3,6 3
Slide 18: Real estate segment – 1Q'21 results
Real estate segment – 1Q’21 results
Slide 19: 2.4.2 Real estate segment – discontinued operations
2.4.2 Real estate segment – discontinued operations ▪ High presales is the result of wide offer and the continued stable structural Comment demand for flats in the largest cities 1Q'21 y-o-y dynamics Sales and EBIT margin (M PLN) Sales 183 3325% 13,4% 13,2% 16,8% 20,9% 28,4% -140,5% 16,9% 674 Gross
Slide 20: 2.4.2 Real estate segment – market offer
2.4.2 Real estate segment – discontinued operations ▪ Market offer in 03’21 was lower than in 12’20 Comment ▪ In 03’21 land bank amounted to 6 834 flats Market offer as at 03’21 (flats) presold 4 332 not presold 3 706 Gdansk 41 Poznan Warsaw 2 923 499 2 332 485 Wroclaw 626 161 Cracow 223 591 1 374 1
Slide 21: Services segment – 1Q'21 results
Services segment – 1Q’21 results
Slide 22: 2.4.3 Services
2.4.3 Services ▪ The development prospects of the FBSerwis Group in the near future are optimistic Comment ▪ In 2Q’21, FBSerwis started the execution of contracts for waste management in Warsaw Group’s services segment composition 1Q'21 y-o-y dynamics Sales 168 27% Gross margin 32 37% ▪ environmenta
Slide 23: 2.4.3 FBSerwis – key financial data
2.4.3 FBSerwis – key financial data ▪ Sales structure in 1Q’21: Waste Management – 78%, Infrastructure Maintenance – 15%, Comment Facility Management & Street Lightening – 7% ▪ FBSerwis Group reported attractive margin in 1Q’21 Sales (M PLN) EBIT (M PLN) 610 -1,3% -0,4% -0,1% 3,9% 8,9% 12,2% 16,8% 1
Slide 24: 2.5 Employment
2.5 Employment ▪ Generally, in 1Q’21 the Group increased the employment level Comment ▪ Taking control over FBSerwis Group in 07’19 increased employment of Budimex Group by ca. 1 000 people Employment in Budimex Group* Bx Group w/o FBS FBS 7 840 7 478 7 387 7 256 7 274 934 989 1 041 1 006 1 045 6 05
Slide 25: 3. Budimex S.A. on WSE
3. Budimex S.A. on WSE ▪ In 1Q’21 most key construction companies in Poland noted the Comment increase of market value vs. 12’20 Market value as at 03’21 (M PLN) -0% +40% +56% +34% +24% +52% -8% +27% +41% +26% +9% % change vs. 31.12'20 7 812 WIG20: -2% WIG-BUD.: +8% 1 230 551 389 381 279 273 151 142
Slide 26: 3. Budimex S.A. on WSE – dividends
3. Budimex S.A. on WSE ▪ In 03’21 Management Board recommended a dividend payment of 426 M PLN (310 Comment M PLN of FY’20 net profit + 116 M PLN from reserve capital) Dividends paid (M PLN) ∑ = 3 149 123,3 M PLN PLN per share 450 426* 383 Dividend 280 303 232 208 174 156 161 149 112 116 Dividend pe