Budimex Sa · GPW:BDX
Budimex Sa — Q1 2020 Earnings Presentation
28 slides from Budimex Sa's earnings presentation, May 2020
Slide 1: Investor Presentation 1Q'20
Investor Presentation 1Q’20
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’20 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’20 construction production in Poland increased by 9,0% Comment ▪ The production was not impacted strongly by COVID-19 epidemic, as no administrative stopping of construction works took place Construction and assembly production ’10 – ’20 (bn PLN, enterp
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 statistical data show that margins are currently improving Construction production (companies > 9 employees) vs. net profit
Slide 6: 1.2 Labour market
1.2 Labour market ▪ Current epidemic could cause visible increase of unemployment rate in upcoming Comment months ▪ Seasonal q-o-q drop of average wage in construction in 1Q’20 Unemployment rate (%) Employment in construction (thous. employees) 12,0 510 483 10,0 470 8,0 5,4 424 6,0 430 4,0 390 2,0 0
Slide 7: 1.3 Prices of main materials
1.3 Prices of main materials ▪ Global factors and lower dynamics of construction production in Poland Comment affected the prices of main materials Concrete Reinforcement steel 180 180 160 160 147 160 140 140 130 120 140 136 120 129 100 100 114 80 120 80 60 119 60 1Q'10 1Q'11 1Q'12 1Q'13 1Q'14 1Q'15
Slide 8: Budimex Group 1Q'20 results
2.4 tJ Budimex Group b ud m eX 1Q’20 results
Slide 9: 2.1 Budimex Group – top facts in 1Q'20
2.1 Budimex Group – top facts in 1Q’20 ▪ Increase of sales in 1Q’20 → 1Q’20: 1,5 bn PLN (+6,9% y-o-y) ▪ Increase of % EBIT in construction segment → 1Q’20: 2,3% (+0,6 p.p. y-o-y) ▪ Rising share of railway in construction sales → 1Q’20: 19,6% (+7,2 p.p. y-o-y) ▪ Increase of net cash → 03’20: 1,8 bn P
Slide 10: 2.2 P&L
2.2 P&L ▪ Improvement on top line in 1Q’20 (+7% y-o-y) mainly due to high sales Comment dynamics in construction segment (+12% y-o-y) and full consolidation of FBSerwis Group 1Q'20 1Q'19 ∆ FY'19 FY'18 Sales 1 475 1 380 95 1 7 570 7 387 y-o-y dynamics 6,9% 3,1% 3,8 pp. 1 2,5% 16,0% Gross margin 111 1
Slide 11: 2.2 P&L - results by segment
2.2 P&L - results by segment ▪ Negative contribution of real-estate segment on Group’ EBIT resulting Comment from the schedule of notary sales (only 4 notary deeds signed in 1Q’20) 1Q’20 sales 1Q’20 EBIT Internal eliminations (% Group sales) (% Group EBIT) -88 M PLN -11 M PLN 1 475 M PLN 33 M PLN -6
Slide 12: 2.2 P&L – historical results
2.2 P&L – historical results ▪ Low contribution of real estate segment in 1Q results impacted Group’s Comment EBIT margin Sales in Budimex Group (M PLN) 1 475 1 339 1 380 1 083 1 053 988 798 853 834 846 681 577 1Q'09 1Q'10 1Q'11 1Q'12 1Q'13 1Q'14 1Q'15 1Q'16 1Q'17 1Q'18 1Q'19 1Q'20 EBIT in Budimex G
Slide 13: 2.3 Evolution of Net Treasury Position
2.3 Evolution of Net Treasury Position ▪ NTP improvement in 1Q’20 due to advance payments and efficient Comment invoicing of construction works Net Treasury Position in Budimex Group (M PLN) 2,6 2,3 2,2 2,1 2,0 2,0 1,8 1,8 1,8 1,71,8 1,6 1,6 1,6 1,5 1,5 1,3 1,4 1,3 1,2 1,2 1,1 0,9 0,9 0,8 0,7 0,7 0,
Slide 14: Construction segment – 1Q'20 results
Construction segment – 1Q’20 results
Slide 15: 2.4.1 Construction segment
2.4.1 Construction segment ▪ Improvement of EBIT margin in 1Q’20 Comment ▪ The share of sales generated in railway segment increased due to further execution of record railway backlog 1Q'20 y-o-y dynamics Sales and EBIT margin (M PLN) Sales 1 426 12% 8,4% 8,3% 3,9% 2,9% 1,8% 2,3% Gross margin 98 37%
Slide 16: 2.4.1 Construction segment – offers placed
2.4.1 Construction segment ▪ Slight y-o-y drop of value of offers placed in 1Q’20, mainly due to lower Comment activity in general construction and railway Offers placed in Budimex Group (bn PLN) 31 58 95 120 113 139 47,4 average value 43,7 4,1 (M PLN) 2,0 40,5 -9% 8,6 3,5 10,6 9,0 6,9 24,2 12,0 1,7
Slide 17: 2.4.1 Construction segment – contracts signed
2.4.1 Construction segment ▪ Strong value of contracts signed in road, hydro & energy segment Comment ▪ Top contracts signed in 1Q’20 include: S61 Suwałki - Budzisko (833 M PLN), S11 Koszalin - Bobolice part I (471 M PLN) and Vistula collector (349 M PLN) Contracts signed in Budimex Group (bn PLN) 7
Slide 18: 2.4.1 Construction segment – backlog
2.4.1 Construction segment ▪ Strongly diversified backlog Comment ▪ Record backlog value at the end of 1Q’20: 12,0 bn PLN Backlog in Budimex Group (bn PLN) 12,0 Share 10,8 1,1 9% 10,3 10,1 0,8 7% 1,0 10% 0,6 6% 8,9 2,5 21% 2,4 22% 1,1 13% 2,5 25% 2,7 26% 2,6 3,4 28% 29% 1,3 13% 1,2 12% 3,6 33% 2% 0,
Slide 19: Real estate segment – 1Q'20 results
Real estate segment – 1Q’20 results
Slide 20: 2.4.2 Real estate segment
2.4.2 Real estate segment ▪ The decrease in sales and profitability results from the schedule of notary deeds signing Comment ▪ Presales level was increased, mainly due to high sale of flats in Warsaw (+167 flats y-o-y) and launching new projects in Gdańsk and Wrocław 1Q'20 y-o-y dynamics Sales and
Slide 21: 2.4.2 Real estate segment – market offer
2.4.2 Real estate segment ▪ Market offer in 03’20 was higher than in 12’19 Comment ▪ In 03’20 land bank amounted to 7 451 flats Market offer as at 03’20 (flats) presold 4 372 4 383 not presold Gdansk 264 2 379 2 385 Poznan Warsaw 679 623 Wroclaw Cracow 107 325 1 993 1 998 11 6 5 Finished flats Under
Slide 22: Services segment – 1Q'20 results
Services segment – 1Q’20 results
Slide 23: 2.4.3 Services
2.4.3 Services ▪ Services results in 1Q’20 encompassed Bx Parking Wroclaw and FBSerwis Comment ▪ Since 07’19 Budimex began full consolidation of FBSerwis Group’s results Group’s services segment composition 1Q'20 Sales 132 ▪ environmental services, ▪ construction & administration Gross margin 24 inf
Slide 24: 2.4.3 FBSerwis – key financial data
2.4.3 FBSerwis – key financial data ▪ Sales structure in 1Q’20: Waste Management – 68%, Infrastructure Maintenance – 21%, Comment Facility Management & Street Lightening – 11% ▪ FBSerwis Group reported attractive margin in 1Q’20 Sales (M PLN) EBIT (M PLN) 498 -1,3% -0,4% -0,1% 3,9% 8,9% 8,9% 16,8% 3
Slide 25: 2.5 Employment
2.5 Employment ▪ Generally, in 1Q’20 the Group maintained 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 7 446 7 256 934 989 1 029 1 006 6 054 5 313 635
Slide 26: 3. Budimex S.A. on WSE
3. Budimex S.A. on WSE Comment ▪ At the end of ’19 Budimex’s share prices faced a rebound Shareholders structure P/E ratio Budimex P/E ratio WIG_Budownictwo P/E 22,7 20,7 20,7 Ferrovial Group 29,5% 17,8 15,5 Aviva OFE 13,8 12,4 11,2 55,1% 10,3 7,7 15,3 5,4% NN OFE 12,4 6,7 11,1 10,6 10,9 10,0% 8,4 8
Slide 27: 3. Budimex S.A. on WSE – market value
3. Budimex S.A. on WSE ▪ Due to COVID-19 pandemic, all significant construction companies in Comment Poland noted drop of market value in 1Q’20 Market value as at 03’20 (M PLN) -8% -39% -18% -26% -13% -30% -22% -24% -21% -50% -37% 4 029 % change vs. 31.12'19 WIG20: -30% WIG-BUD.: -15% 311 236 181 13
Slide 28: 3. Budimex S.A. on WSE – dividends
3. Budimex S.A. on WSE ▪ Budimex has been paying dividends for over 10 years and belongs to WIGdiv index Comment ▪ As at mid-Apr’20, Management Board did not publish the recommendation concerning dividend payout in ’20 Dividends paid (M PLN) ∑ = 2 606 102,1 M PLN PLN per share 450 383 303 280 Divide