Sitowise Group Oyj · OMXHEX:SITOWS
Sitowise Group Oyj — Investor Presentation (June 2024)
57 slides from Sitowise Group Oyj's investor presentation, June 2024
Slide 1: Redefining smartness in cities
Redefining smartness in cities IR presention June 2024 HEIKKI HAASMAA, CEO HANNA MASALA, CFO
Slide 2: Our talking points today
Our talking points today 01 02 03 04 Sitowise is a Q1 Financial ESG in Sitowise Appendix: leading player performance with competitive Digital advantages and clear Solutions strategic direction offering
Slide 3: Summary
Summary 1 Awith leading player in a growing technical consulting market clear strategic targets and implementation plans 2 Broad technical consulting service offering with unique opportunities to combine capabilities in different business areas 3 Broad customer base that provides a solid platform fo
Slide 4: Sitowise is a Nordic expert in the built environment with a strong focus on digitality
Sitowise is a Nordic expert in the built environment with a strong focus on digitality Strong track record of net sales growth with industry leading profitability Local client relations in 32 locations 204.4 210.9 12.9% +2,100 employees 11.8% 179.3 10.8% 160.1 10.0% NPS 32 143.0 20.6 21.1 20.4 8.1 %
Slide 5: Four established Business Areas
Four established Business Areas Infrastructure Buildings Digital Solutions Sweden 33% of net sales 31% of net sales 14% of net sales 22% of net sales ◼ A leading player in Finland with ◼ A leading player in Finland with ◼ Nordic excellence in geospatial ◼ A competent challenger with steady growth an
Slide 6: Broad and diverse client base
Broad and diverse client base Mixed demand environment with green transition, security, and digitalization of the built environment offering growth opportunities Energy and Industry Municipalities High demand for services related to Overall stable demand with tightened energy, environment, security
Slide 7: Megatrends continue to drive demand for technical consulting
Megatrends continue to drive demand for technical consulting URBANISATION MAINTENANCE DIGITALISATION CLIMATE CHANGE SECURITY BACKLOG Urbanisation will increase The maintenance backlog of Digitalization Climate change will force the demand for new buildings and infrastructure grows the demand for cit
Slide 8: New and tightening regulation impacts us and our clients and brings opportunities
New and tightening regulation impacts us and our clients and brings opportunities The new Building Act + EU green finance regulation • The act incorporates measures to combat • EU Taxonomy regulation climate change comprehensively into the building legislation. • EU Sustainable Finance Disclosure Re
Slide 9: Sitowise strategy 2025
Sitowise strategy 2025 ratios We understand our clients The most innovative Weworkas “)x a , a one team al 0 é OUR PURPOSE » Ya) Wetrust . d each other Empowering £5 The most . passionate experts “sustainable ' eo to solve complex : challenges. WE WILL FOCUS ON > + Creating new smart + Becoming a th
Slide 10: Long-term financial targets
Long-term financial targets Growth Profitability Leverage Annual net sales growth, Adjusted EBITA margin of at Net debt in relation to adjusted EBITDA including acquisitions, over least should not exceed 10% 12% 2.5x except temporarily in conjunction with acquisitions Dividend policy Sitowise target
Slide 11: Additional targets supported by the ongoing strategic initiatives
Additional targets supported by the ongoing strategic initiatives • to grow our • to double our recurring revenue sustainability to be 10% services revenue of Sitowise’s annual net sales to exceed 10 million euros by the end of 2025 by the end 2025 TARGET TARGET 2022 2023 … 2025 2022 2023 … 2025 4%
Slide 12: Margin increase driven by growth in attractive sub-segments and further operational efficiencies
Margin increase driven by growth in attractive sub-segments and further operational efficiencies Operational efficiencies M&A • Sales excellence Organic • Smartest ways to work growth • Cost efficiency • M&A aligned with our • Value from data ≥12% strategic priorities • Focus on accelerating 8.1% •
Slide 13: Our talking points today
Our talking points today 01 02 03 04 Sitowise is a Q1 Financial ESG in Sitowise Appendix: leading player performance with competitive Digital advantages and clear Solutions strategic direction offering
Slide 14: Q1 2024 Result Presentation
Net sales decreased, stable order book during the quarter SITOWISE GROUP PLC Q1 2024 RESULT PRESENTATION 8 MAY 2024 14
Slide 15: Q1: Net sales decreased, stable order book during the quarter
Q1: Net sales decreased, stable order book during the quarter • Infra continued to outperform the market, and Infra and Digi defended their profitability successfully. • Net sales down by 8.1%* to EUR 51.5 (56.0) million, organic growth -8%. • Adjusted EBITA EUR 3.4 (6.6) million. Adjusted EBITA-% 6
Slide 16: Market offered a few growth opportunities
Market offered a few growth opportunities • The weak macro-economic situation in our home markets impacted clients’ investment volumes. • Excess capacity led to tight pricing both in traditional technical consulting and IT consulting. • Public sector demand remained stable. • First positive signals
Slide 17: Focus directed to growth sectors
Focus directed to growth sectors • Growing demand for services related to renewable energy, sustainability and security. • Sales focus on further diversification of client base in energy and industrial sectors. For example, Suomen Voima’s Energy Storage Project Noste (pumped storage hydropower plant
Slide 18: Building our competitive edge
Building our competitive edge • New Smart Services: Planect and CO2 Roadmap sales to start, Smartlas selling well. Digital Solutions made its first deal in Baltics. • AI: Sitowise AI Center of Excellence established, international Hackathon win. • Ecosystems: new partnership with Ponsse for AI-drive
Slide 19: Infra
siTowise
Slide 20: Infra continued to outperform the market
Infra continued to outperform the market Net sales per quarter, Factors impacting Q1 Outlook for 2024 figures in EUR million + / – The division of the market into weaker and + As a whole the outlook for Infra stronger segments continued: remains good. 8% + Strong demand for energy and 17.8 17.5 +/–
Slide 21: Buildings
Buildings siTowise
Slide 22: Still a weak market for Buildings, but with some positive signs in order intake
Still a weak market for Buildings, but with some positive signs in order intake Net sales per quarter, Factors impacting Q1 Outlook for 2024 figures in EUR million ─ The underlying Finnish new construction market ─ The first half of 2024 will still be -19% continued to be very weak challenging, and
Slide 23: Digital Solutions
Digital Solutions | . , = id | no siTowise
Slide 24: Digi's business portfolio helped to outperform competition, continued focus on SaaS/DaaS
Digi’s business portfolio helped to outperform competition, continued focus on SaaS/DaaS Net sales per quarter, Factors impacting Q1 Outlook for 2024 figures in EUR million -8%* +/– Mixed market environment with weakened + As a whole the outlook for Digital private sector demand Solutions remains go
Slide 25: Sweden
Sweden
Slide 26: Anticipated results from the more focused sales efforts in Sweden are yet to be realized
Anticipated results from the more focused sales efforts in Sweden are yet to be realized Net sales per quarter, Factors impacting Q1 Outlook for 2024 figures in EUR million +/– Mixed market environment +/– Mixed market environment -8% expected to continue + Local infra market growing fast 12.4 +/– C
Slide 27: Group performance
Infra Group Digi Digital Solutions performance
Slide 28: Net sales down on mixed market environment and lower number of employees
Net sales down on mixed market environment and lower number of employees Net sales Adjusted organic growth by Factors impacting Q1 EUR million business area -8% + Adjusted organic growth clearly 8% ahead of the market in Infra. 6.2 % 6.7% + Public sector demand stable. 0.3% - Continued weak market i
Slide 29: EBITA margin bridge Q1/23 vs Q1/24
EBITA margin bridge Q1/23 vs Q1/24 The timing of 2023 wage increases impacted both Q1 2023 and Q1 2024 margins Carry over from 2023 wage inflation • Wage impact high due to both 2023 and 2024 increases in February-March 2024 11.8% • Negative calendar effect • Pricing and cost containment have 6.6% p
Slide 30: Order book stable in Q1
Order book stable in Q1 Order intakes up in Infra, Buildings and Sweden for the second consecutive quarter Order book and order intake EUR million -8% 176 163 51 50 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Order book Order intake 30
Slide 31: The utilization rate further pressed by increased time used for sales and learning curve
The utilization rate further pressed by increased time used for sales and learning curve related to the new ERP and CRM systems FTEs Utilization rate -2.8% -5.2% 76.8% 76.3% 76.0% 76.0% 2 113 74.4% 74.7% 72.6% 72.3% 1977 1977 1987 2018 1989 1902 1906 1883 Q222 Q322 Q422 Q123 Q223 Q323 Q423 Q124 Q222
Slide 32: Cash flow at a good level and financial position stable
Cash flow at a good level and financial position stable Cash flow from Net debt Leverage operating activities EUR million Net debt / Adjusted EBITDA (LTM) multiple Before financial items and taxes, EUR million 3.8x 62.9 62.2 58.3 56.6 55.5 55.1 55.3 56.7 13.1 2.9x 3.0x 2.9x 2.7x 2.6x 11.3 2.4x 2.4x
Slide 33: Q1 2024 performance behind the strong comparison period
Q1 2024 performance behind the strong comparison period EUR million Q1 2024 Q1 2023 Change 2023 Q1 2024 FTEs Net sales 51.5 56.0 -8.1 % 210.9 EBITA, adjusted 3.4 6.6 -49.1 % 17.0 -4.8% % of net sales 6.6 % 11.8 % 8.1 % YoY EBITA 3.1 6.2 -51.1 % 15.1 2024 NET SALES Operating profit 2.0 5.5 -64.4 % 11
Slide 34: Our priority in 2024 is to improve our profitability
Our priority in 2024 is to improve our profitability FACTORS IMPACTING OUR ACTIONS • Market environment: 1. Sales and pricing excellence • Continued construction industry weakness, macro-driven slowness in some other parts of the business, and tight price competition 2. Cost awareness • Demand for s
Slide 35: Wage inflation and higher number of working days y-on-y will impact performance in 2024
Wage inflation and higher number of working days y-on-y will impact performance in 2024 Q2 2024 vs. Q2 2023 Q2-Q4 2024 vs. Q2-Q4 2023 • +1 working day in Finland and Sweden • Q3: +1 working day both in Finland and Sweden in Q2 • Annual wage increases of 2.5% in Finland • Q4: Equal amount of working
Slide 36: Outlook for 2024 / Guidance 2024
Outlook for 2024 Guidance 2024 • The stable long-term growth in the demand for Sitowise’s services is supported by megatrends. • The timing, and the possible consequences of, the Sitowise Group’s net sales is expected to anticipated central banks’ decisions to lower interest slightly decline in 2024
Slide 37: Daniel Doeser to lead Sitowise's Swedish operations
Daniel Doeser to lead Sitowise’s Swedish operations CV Year of birth: 1971 Education: Mechanical Engineering, Royal Institute of Technology Swedish citizen Primary career 2019 – 2024 Ramboll Sweden, Nordic Director 2016 – 2019 RSM & Co Managing Director 2015 – 2016 Askegren & Co, Managing Director 1
Slide 38: Strategy execution
Strategy execution
Slide 39: Sitowise strategy 2025
Sitowise strategy 2025 ratios We understand our clients The most innovative Weworkas “)x a , a one team al 0 é OUR PURPOSE » Ya) Wetrust . d each other Empowering £5 The most . passionate experts “sustainable ' eo to solve complex : challenges. WE WILL FOCUS ON > + Creating new smart + Becoming a th
Slide 40: Strategy execution in Q1 2024
Strategy execution in Q1 2024 The most Innovative The most Sustainable The most Efficient • Good progress in New Smart • Sustainability Services: • Focus on sales excellence. Services: Development of Sitowise biodiversity offerings in energy • Experimenting generative AI • Plannect in smart decision
Slide 41: Our talking points today
Our talking points today 01 02 03 04 Sitowise is a Q1 Financial ESG in Sitowise Appendix: leading player performance with competitive Digital advantages and clear Solutions strategic direction offering
Slide 42: We use lifecycle thinking to create sustainable built environments
We use lifecycle thinking to create sustainable built environments Strategic consultation • Expert services and solutions for Planning and sustainable living environment, mobility design and natural asset management Circular throughout the life-cycle economy and Sustainability, sustainability digita
Slide 43: Sitowise Sustainability Program 2025 goals
Sitowise Sustainability Program 2025 goals: 1 We are carbon neutral in 2025 We are the most equitable 2 workplace with best employee wellbeing in the industry 3 We aim for sustainable economic growth 4 We actively contribute to making our industry more sustainable
Slide 44: We are carbon neutral in 2025
1 We are carbon neutral in 2025 We will continuously reduce our own emissions towards carbon neutrality by 2025 44
Slide 45: We are the most equitable workplace with best employee wellbeing in the industry
2 We are the most equitable workplace with best employee wellbeing in the industry +2,200 employees with over 100 different degree titles Key KPIs 3.8 My employer supports the wellbeing of employees 4.1 At my workplace, everyone is treated equally 4.1 I feel that I am appreciated in my work communit
Slide 46: We aim for sustainable economic growth
3 We Weare aimthe formost equitable sustainable workplace economic with growth best employee wellbeing in the industry SET GOALS* 01 02 We want to double our sustainability services revenue to exceed 10 million euros by the end 2025 Developing Growing existing expertise, new services We want to grow
Slide 47: Our sustainability services focus areas
Our sustainability services focus areas RENEWABLE ENERGY CLIMATE CHANGE MITIGATION CASE: Optimizing the carbon footprint of building materials as well as the CASE: Impact assessments of renewable energy. Client: Ministry of construction costs. Client: SKANSKA, 2021. Employment and the Economy, Energ
Slide 48: Future growth opportunities from new sustainable innovations
Future growth opportunities from new sustainable innovations OUR INNOVATION PIPELINE* SOME RESEARCH TOPICS • Smart cyber security • Climate risk and adaptation analytics • IOT-based quality assurance • Data-driven circularity in landmass NEW tool or 50+ 200+ ~40 management • ESG Due Diligence risk a
Slide 49: We will expand and diversify our sustainability service offering also with targeted acquisitions
We will expand and diversify our sustainability service offering also with targeted acquisitions ACQUISITIONS WITH FOCUS ON SUSTAINABILITY SERVICES IN 2021–2023 In addition to these four, Sitowise has made 13 acquisitions between 2021-2023. Business transaction Municipal emissions A digital service
Slide 50: We actively contribute to making our industry more sustainable
4 We actively contribute to making our industry more sustainable Shaking up your thinking Educating our employees and Driving a positive change about the future of cities. challenging our clients with our in collaboration with others SDG-based Sitowise Read more Sustainability Tool
Slide 51: Key takeaways
KEY TAKEAWAYS • Technical consultants drive positive environmental impact. Our work can be seen everywhere you look. The world of tomorrow is planned today. • Megatrends and new legistlation provide us several growth opportunities. Additional opportunity from new smart and sustainable services. • ES
Slide 52: Our talking points today
Our talking points today 01 02 03 04 Sitowise is a ESG in Sitowise Financial Appendix: leading player performance with competitive Digital advantages and clear Solutions strategic direction offering
Slide 53: Software, Data and Consulting with a profound customer understanding
NORDIC EXCELLENCE IN GEOSPATIAL SOLUTIONS Software, Data and Consulting with a profound customer understanding Customer-oriented Software Development Software Products, SaaS and Data Services Specialist Services and Strategic Consulting Sami Head of Innovation Turku
Slide 54: Sitowise Digital Products
Sitowise Digital Products Routa is an ERP solution enabling Infracontrol Online is a unique Smartlas provides AI and satellite- transparency and cost-efficiency in web-based traffic monitoring based data, risk estimates, and infrastructure management. service that integrates independent future predi
Slide 55: Examples of use cases: All climate effects in one place
Example 1: Examples of use cases All climate effects in one place • Pre-construction (1) • Carbon stocks of soil and vegetation • Traffic • Construction and maintenance of buildings What? Why? Clients (B-to-B) • A comprehensive urban planning platform that • Whole insight easily from ”one door” • Mu
Slide 56: Examples of use cases: Smarter data, more sustainable land use
Example 2: Examples of use cases Smarter data, more sustainable land use • Satellite monitoring of forest cuttings • Mapping potential for solar/wind power • Estimating CO2 and biodiversity • Assessment of environmental impacts of land use projects (YVA) • Detecting estate damages and risks What? Wh
Slide 57: Thank you!
Thank you! Questions? Please contact: ir@sitowise.com 57