Budimex Sa · GPW:BDX
Budimex Sa — H1 2021 Earnings Presentation
23 slides from Budimex Sa's earnings presentation, 2021
Slide 1: Investor Presentation 1H'21
Investor Presentation 1H’21
Slide 2: Market snapshot
Market snapshot
Slide 3: Macroeconomic forecasts for Poland
Macroeconomic forecasts for Poland ▪ COVID-19 pandemic caused deep decline in economic activity impacting Comment forecast of Polish GDP growth and inflation rate GDP growth and inflation rate (%, y-o-y) 5,4 5,4 5,3 4,8 4,8 5,0 4,7 4,2 3,7 3,7 3,4 3,4 3,3 3,4 4,3 3,1 4,2 2,3 2,0 2,6 1,6 1,3 1,1 0,0
Slide 4: Construction production by segment
Construction production by segment ▪ In 1H’21 construction production in Poland remained at the same level Comment ▪ In recent quarter the production was strongly impacted by COVID-19 pandemic, especially in general construction segment Construction and assembly production ’12 – ’21 (bn PLN, enterpr
Slide 5: Production vs. net profit margin in construction
Production vs.net profit margin in construction ▪ High cost inflation combined with no real indexation impacted strongly margins of Comment big construction companiesin in ’17-’18, but recent years have brought relief Construction production (companies > 9 employees) vs. net profit margin in constru
Slide 6: EBIT margin by size of construction company
EBIT margin by size of construction company 11,9% 10,6% 9,2% 8,7% 8,8% 8,2% 7,2% 7,5% 7,3% 7,1% 5,2% 7,4% 4,9% 5,1% 6,7% 4,1% 4,1% 4,1% 2,6% 2,4% 2,4% 1,5% 1,2% -0,5% '13 '14 '15 '16 '17 '18 '19 '20 10-49 employees 50-249 empoloyees >=250 employees Investor Presentation 1H’21 Source: CSO 6
Slide 7: Labour market
Labour market ▪ Wages in construction are still growing, in 2Q’21 the dynamics was higher compared Comment to 1Q’21 Unemployment rate (%) Employment in construction (thous. employees) 10,0 510 483 8,0 5,9 470 6,0 421 430 4,0 390 2,0 0,0 350 06'16 12'16 06'17 12'17 06'18 12'18 06'19 12'19 06'20 12'20
Slide 8: Prices of main materials
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 180 260 253 240 160 160 220 132 200 220 140 180 140 120 160
Slide 9: Budimex Group 1H'21 results
Budimex Group budim X 1H’21 results Xs
Slide 10: Group P&L – 1H'21 vs. 1H'20
Group P&L – 1H’21 vs. 1H’20 ▪ Our goal is to keep profitability above market rates that may be under pressure due to rising material costs Comment ▪ 1H’21 consolidated net profit included positive impact of sale of Budimex Nieruchomości (542 M PLN) 1H'21 1H'20* ∆ Sales 3 241 3 460 -219 0 y-o-y dynam
Slide 11: P&L - results by segment (sales)
P&L - results by segment ▪ Group’s sales decreased by 6% y-o-y, while sales in services increased by 30% y-o-y and in the construction decreased by 10% Comment ▪ Lower pace of construction works was mainly due to difficult weather conditions, schedule of design works on D&B contracts and lower produ
Slide 12: P&L - results by segment (EBIT)
P&L - results by segment ▪ New contracts that have been signed over last 2 years improved the Comment profitability of backlog and contributed to the decent margin in 1H’21 Quarterly EBIT in Budimex Group (M PLN) Construction Real estate 4,1% 6,1% 5,3% 161 Presented on net profit level as 112 discon
Slide 13: P&L – historical results
P&L – historical results ▪ Good financial results of Budimex Group in 1H’21 are in line with our expectations Comment ▪ Despite difficult market conditions, we have achieved significant increase in Group’s EBIT within continuing operations Sales in Budimex Group (M PLN, historical data w/o developer
Slide 14: Evolution of Net Treasury Position
Evolution of Net Treasury Position ▪ In 06’21 consolidated net cash amounted to 2,8 bn PLN and included cash Comment from the sale of Budimex Nieruchomosci Net Treasury Position in Budimex Group (M PLN, historical data w/o developer segment) 2,8 2,3 2,1 2,0 1,9 1,8 1,7 1,7 1,6 1,6 1,5 1,4 1,41,4 1,3
Slide 15: Budimex S.A. on WSE
Budimex S.A. on WSE ▪ In 06’21, for 13th year in a row, Budimex paid a dividend of 426 M PLN (16,7 PLN per share) Comment ▪ We plan to make an advance payment for dividend for ’21 of up to 381 M PLN (half of individual net profit of Budimex S.A. for 1H’21) Dividends paid (M PLN) ∑ = 3 149 123,3 M PL
Slide 16: Employment
Employment ▪ Generally, in 1H’21 the Group slightly decreased 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 7 692 7 324 7 123 7 126 7 093 934 989 1 006 1 045 1 029
Slide 17: Construction segment – 1H'21 results
Construction segment – 1H’21 results
Slide 18: Construction segment - P&L
Construction segment - P&L ▪ EBIT margin of construction sement amounted to 5,3% Comment ▪ Observed increase of material prices does not significantly affect the profitability of our backlog due to price indexation, as well as prudent approach to offers 1H'21 y-o-y dynamics Sales and EBIT margin (M
Slide 19: Construction segment – offers placed
Construction segment – offers placed ▪ Value of offers placed in 1H’21 decreased y-o-y, mainly due to lower activity of key Comment public clients (GDDKiA & PKP PLK) Offers placed in Budimex Group (bn PLN) 47,4 46,1 43,7 4,1 -12% 2,0 40,5 4,2 8,6 3,5 10,6 10,7 9,0 6,9 27,9 24,2 12,0 6,0 3,2 24,5 1,7
Slide 20: Construction segment – contracts signed
Construction segment – contracts signed ▪ In 1H’21, Budimex acquired contracts worth 2,9 bn PLN, while the value of contracts pending amounted to over 3 bn PLN Comment ▪ Top contracts signed in 1H’21 include Tricity Metropolitan ring road I (581 M PLN) and Waterway Vistula Lagoon – Gdansk Bay II (46
Slide 21: Construction segment - backlog
Construction segment - backlog ▪ Actual backlog ensures full use of resources Comment ▪ Taking into account the value of contracts pending, which we plan to sign in the coming months, works front is secured till the end of ’22 Backlog in Budimex Group (bn PLN) Share 12,7 13,0 0,8 7% 1,1 8% 10,8 10,3
Slide 22: Services segment – 1H'21 results
Services segment – 1H’21 results
Slide 23: FBSerwis – key financial data
FBSerwis – key financial data ▪ Sales structure in 1H’21: Waste Management – 77%, Infrastructure Maintenance – 15%, Comment Facility Management & Street Lightening – 8% ▪ FBSerwis Group goal is to generate yearly sales of at least 1,0 bn PLN in ’25 Sales (M PLN) EBIT (M PLN) 610 -1,3% -0,4% -0,1% 3,