Kreate Group Plc · OMXHEX:KREATE

Kreate — Q3 2022 Earnings Presentation

22 slides from Kreate's earnings presentation, Oct 26, 2022

  1. Slide 1: Revenue and order backlog grew to record levels – cost inflation brought down operating profit

    REVENUE AND ORDER BACKLOG GREW TO RECORD LEVELS – COST INFLATION BROUGHT DOWN OPERATING PROFIT TIMO VIKSTRÖM, PRESIDENT & CEO MIKKO LAINE, CFO 26 OCTOBER 2022 K R E AT E G R O U P P L C / I N T E R I M R E P O R T 1 - 9 / 2 0 2 2

  2. Slide 2: January–September 2022 in brief

    JANUARY–SEPTEMBER 2022 IN BRIEF 1. 3. 5. Order backlog amounted to EBITDA was EUR 9.8 (10.1) Free cash flow from operating EUR activities was EUR -11.7 (-3.8) million, amounting to 5.2% 284.2 (202.8) million (6.3%) of revenue million Revenue was EUR EBITA was EUR 6.5 Revenue grew higher than the 190

  3. Slide 3: Specialisation improves competitiveness

    SPECIALISATION IMPROVES COMPETITIVENESS BUSINESS FUNCTIONS MARKET SHARE OF KREATE’S POSITION AND MEASURES DEVELOPMENT KREATE’S REVENUE Q3/2022 AND 12- MONTH OUTLOOK* STRUCTURAL ENGINEERING The Structural engineering revenue was grown particularly by large projects progressing according to plan. In t

  4. Slide 4: The operating environment is currently filled with insecurity – infrastructure has growth potential

    THE OPERATING ENVIRONMENT IS CURRENTLY FILLED WITH INSECURITY – INFRASTRUCTURE HAS GROWTH POTENTIAL IN THE FUTURE This year, construction will continue to grow due to a good work backlog. A decrease of 2% is estimated for next year, but the economy is anticipated to stay on a growth track. Growth is

  5. Slide 5: Highlights of July–September 2022

    HIGHLIGHTS OF JULY–SEPTEMBER 2022 Press release: Account Manager Antti Kakko In line with its strategy, Kreate reinforced its Largest contract in history, EUR 120 million, as promoted to head of Bridge Construction railway construction activities by launching the alliance project for the Kirjalansal

  6. Slide 6: On a strategic path to growth: business acquisition in Sweden

    ON A STRATEGIC PATH TO GROWTH: BUSINESS ACQUISITION IN SWEDEN SUPPORTS FUTURE GROWTH  In September, Kreate Infra Sverige AB purchased all the shares in the Swedish Bror Bergentreprenad AB which specialises in demanding underground infrastructure construction.  This strengthens Kreate Group, comple

  7. Slide 7: On a strategic path to growth: electric railway and safety device business

    ON A STRATEGIC PATH TO GROWTH: REINFORCED BY ELECTRIC RAILWAY AND SAFETY DEVICE BUSINESS  Expansion of the railway business area into electric railways and safety devices was started in September. The functions will be grown in a controlled manner, according to demand.  Profitable direction for de

  8. Slide 8: Personnel

    PERSONNEL ON AVERAGE 407 403 392 376 I N J U RY F R E Q U E N C Y R AT E 1 2 M O R O L L I N G COMMENTS BY PERSONNEL: 5.9 Kreate has an excellent public image and it feels good to say that I work at Kreate. We have the right tools and the right environment, and we didn’t even have to fight for them!

  9. Slide 9: Order backlog reached a new record

    ORDER BACKLOG REACHED A NEW RECORD ORDER BACKLOG Q3/2020 – Q3/2022, EUR MILLION 300  At the end of September 2022, the order backlog 284 amounted to EUR 284 (203) million and its expected profitability was at a normal level 250  The contract for renovating the Kirjalansalmi and 203 Hessundinsalmi

  10. Slide 10: Revenue continued to grow in July–September 2022

    REVENUE CONTINUED TO GROW IN JULY–SEPTEMBER 2022 REVENUE, EUR MILLION REVENUE DISTRIBUTION 1–9/2022 (1–9/2021) 250 235.3 237.6 Q3 62.0 190.8 BY BUSINESS FUNCTION BY CLIENT GROUP 200 75.8 26 % 37 % (13%) 150 73.3 (41%) 36 % 65.4 +4% (37%) +8% 70.6 100 58.0 67.0 63 % 52.9 (59%) 50 38 % (50%) Structura

  11. Slide 11: Cost inflation reduced profitability

    COST INFLATION REDUCED PROFITABILITY EBITA (EUR MILLION)  In January–September 2022, EBITA decreased 12.0 compared to the reference period as was 10.5 10.5 expected, amounting to EUR 6.5 (7.5) million Q3  Kreate’s flexible cost structure and measures 9.0 for preventing impacts from increased costs

  12. Slide 12: Financial report

    FINANCIAL REPORT MIKKO LAINE, CFO 12

  13. Slide 13: Key figures: January–September 2022

    KEY FIGURES: JANUARY–SEPTEMBER 2022 EUR million 7–9/2022 7–9/2021 1–9/2022 1–9/2021 1–12/2021 Order backlog 284.2 202.8 202.8 Revenue 73.3 70.6 190.8 161.8 237.6 EBITDA 4.2 5.1 9.8 10.1 14.2 EBITDA, % 5.7 7.2 5.2 6.3 6.0 EBITA 3.0 4.1 6.5 7.5 10.5 EBITA, % 4.1 5.8 3.4 4.6 4.4 Operating profit 2.9 4.

  14. Slide 14: The growth of working capital impacted the cash flow early in the year

    THE GROWTH OF WORKING CAPITAL IMPACTED THE CASH FLOW EARLY IN THE YEAR FREE CASH FLOW FROM OPERATING ACTIVITIES, EUR MILLION 15.0  Free cash flow from operating activities was EUR 9.7 Q3 9.0 -11.7 (-3.8) million in January–September 2022 4.0 3.0  The company’s net investments during the early 2.2

  15. Slide 15: Interest-bearing net debt and equity ratio

    INTEREST-BEARING NET DEBT AND EQUITY RATIO  Kreate’s interest-bearing net debt on 30 September INTEREST-BEARING NET DEBT (EUR MILLION) AND 2022 was EUR 46.8 million (30 September 2021: EQUITY RATIO (%) EUR 28.1 million) 38.7 % 60 40%  A new financing arrangement was signed in July 35% which replac

  16. Slide 16: Interest-bearing debt – maturity and average interest

    INTEREST-BEARING DEBT – MATURITY AND AVERAGE INTEREST LOAN PORTFOLIO ON 30 SEPTEMBER 2022, REPAYMENT SCHEDULE FOR INTEREST-BEARING EUR MILLION DEBT ON 30 SEPTEMBER 2022, EUR MILLION 6.0 30 25 23.7 20 Average interest of interest- bearing debt, excluding lease 15 12.5 liabilities recognised on the ba

  17. Slide 17: Outlook for 2022

    OUTLOOK FOR 2022 Published on 30 September 2022 Kreate estimates that the company’s revenue (2021: EUR 237.6 million) will grow compared to 2021 and will be approximately EUR 250–260 million. EBITA (2021: EUR 10.5 million) will decrease to a level of EUR 8.5–9.5 million. Justifications Kreate’s stro

  18. Slide 18: The future is built today

    THE FUTURE IS BUILT TODAY ‘THE FUTURE IS BUILT TODAY.

  19. Slide 19: A clear strategy with a view to continued profitable growth

    A CLEAR STRATEGY WITH A VIEW TO CONTINUED PROFITABLE GROWTH A PROFITABLE GROWTH COMPANY WITH AN ENTREPRENEURIAL MINDSET EXECUTES THE MOST DEMANDING INFRASTRUCTURE PROJECTS AND OFFERS THE MOST INTERESTING WORKING COMMUNITY IN THE BUSINESS AS WELL AS OPPORTUNITIES FOR DEVELOPMENT. EXPANDING AND SUPPOR

  20. Slide 20: Driving forces in the construction industry's operating environment

    DRIVING FORCES IN THE CONSTRUCTION INDUSTRY’S OPERATING ENVIRONMENT AND KREATE’S STRONGER ABILITY TO OPERATE IN A CHANGING ENVIRONMENT § € SOCIETY LEGISLATION POLITICS ECONOMY THE TECHNOLOGY ENVIRONMENT  Labour shortage  Zoning and construction  Public sector’s  Growing government  Production m

  21. Slide 21: Kreate's long-term goals

    KREATE’S LONG-TERM GOALS GROWTH PROFITABILIT Y DEBT TO EQUITY RAT IO Growing the revenue EBITA margin Net debt/EBITDA to EUR 300 million > 5% < 2.0 by 2024 in the medium term through a balanced combination of organic growth and selected acquisitions KREAT E’S The aim is to distribute at least half o

  22. Slide 22: Kreate's shareholders on 30 September 2022

    KREATE’S SHAREHOLDERS ON Shareholder Shares % of shares 1. Harjavalta Oy 1 783 689 19,9 30 SEPTEMBER 2022 2. Tirinom Oy 1 000 000 11,1 3. Ilmarinen Mutual Pension Insurance 425 000 4,7 SHAREHOLDERS BY SECTOR Company 13 % 4. Valtonen Seppo Timo Johannes 412 101 4,6 5. Varma Mutual Pension Insurance C

Kreate Group — Q3 2022 Earnings Presentation on 6ix