Consti Oyj · OMXHEX:CONSTI
Consti Oyj — Carnegie Construction Seminar 2019
29 slides from Consti Oyj's conference presentation, Aug 23, 2019
Slide 1: Consti Group Plc Carnegie Construction Seminar
CONSTI GROUP PLC CARNEGIE CONSTRUCTION SEMINAR CEO Esa Korkeela 23 AUGUST 2019
Slide 2: Contents
CONTENTS 1. Q2 2019 in brief 2. Turnaround program 3. Market environment and competitive landscape 4. Appendix 1 23 August 2019 Consti Group Plc / Carnegie Construction Seminar
Slide 3: Highlights of the second quarter of 2019
Highlights of the second quarter of 2019 Net sales grew, EBIT turned positive EUR EUR EUR +3.5m -1.5m +0.5m y-o-y y-o-y y-o-y NET SALES: EBIT: FREE CASH FLOW: EUR 81.2m EUR +0.1m EUR +2.7m EUR EUR No. +3.6m -59.4m -56 y-o-y y-o-y y-o-y NET DEBT: ORD. BACKLOG: PERSONNEL: EUR 22.0m EUR 226.8m 1,097 2
Slide 4: Quarterly performance overview
Quarterly performance overview Net sales grew by 10.5%, order intake and order backlog declined year-on-year QUARTERLY NET SALES (EUR m) QUARTERLY ORDER INTAKE (EUR m) QUARTERLY ORDER BACKLOG (EUR m) FY’17 NET SALES: FY’18 NET SALES: FY’17 ORD. INTAKE: FY’18 ORD. INTAKE: EUR 300.2m EUR 315.8m EUR 27
Slide 5: EBIT development
EBIT development Q2 2019 EBIT turned positive Quarterly EBIT development Q1/2017 – Q2/2019 (EUR m) Comments 8 8% ■ Q2/19 EBIT amounted to EUR 0.1 (1.7) million, or - FY 2017 EBIT: FY 2018 EBIT: EUR -0.4m EUR -2.1m 0.1% (2.1%) of net sales Quarterly EBIT (EUR million, bar graph) 6 6% – EBIT improved
Slide 6: Quarterly balance sheet structure
Quarterly balance sheet structure Q2 financial position improved compared to Q1 thanks to positive cash flow in April-June Quarterly net debt, equity ratio and gearing Q1/2017 – Q2/2019 Comments 30 100% ■ Financial position as per 30 June 2019 improved from 92,0 % 88,9 % previous quarter-end thanks
Slide 7: Maturity distribution of interest-bearing debt (30 June 2019)
Maturity distribution of interest-bearing debt (30 June 2019) No significant bank loan redemptions in 2019-2021. Turnaround plays an important role in development of financial position Maturity profile of interest-bearing debt1) as per 30 June 2019 (EUR m) Comments 30 ■ Consti’s gross interest-beari
Slide 8: Contents
CONTENTS 1. Q2 2019 in brief 2. Turnaround program 3. Market environment and competitive landscape 4. Appendix 7 23 August 2019 Consti Group Plc / Carnegie Construction Seminar
Slide 9: Overview of Consti's turnaround program and activities
Overview of Consti’s turnaround program and activities The main focus in 2019 is on implementing the new organisation structure 1 • Group level • Reorganization of • Chief Legal changes in Technical Building Officer Targeted Service and Services business area appointed reorganisations & HR mgmt new
Slide 10: Consti Group consists of four complementary operating segments
1 Consti Group consists of four complementary operating segments New organisation effective as of 18 February 2019 HOUSING BUILDING CORPORATIONS 39% PUBLIC SECTOR 28% COMPANIES TECHNOLOGY 33% • Renovation services for • Renovation services for • Renovation services for • Building technology housing
Slide 11: New organisation structure to bring multiple benefits for Consti
1 New organisation structure to bring multiple benefits for Consti TARGETED BENEFITS OF THE NEW ORGANISATION CONSTI’S NEW ORGANISATION STRUCTURE Enhanced strategy implementation throughout the CONSTI 1 GROUP PLC Group COMMON SUPPORT FUNCTIONS New organisation drives customer-centric, effective 2 New
Slide 12: Implementation of new organisation structure progressing
1 Implementation of new organisation structure progressing Q2 2019 UPDATE ON THE PROGRESS IN IMPLEMENTATION CONSTI’S NEW ORGANISATION ■ Implementation work progressing according to CONSTI plan GROUP PLC COMMON SUPPORT – New business areas have developed their FUNCTIONS operations in line with expect
Slide 13: Managing the tail of loss-making projects (whale curve)
2 16% In Consti’s business, the single most important factor determining profitability is the management of the tail of loss-making projects Whale curve (illustrative) 25 In project business, there will always be projects with minor or even negative contribution to profits 20 One of the most imp
Slide 14: Practical implications for managing the tail of loss-making projects
2 3 16% Practical implications for managing the tail of loss-making projects ■ Solid internal project tendering and risk management process: – Three stages: (1) Tender calculation approval, (2) Bid approval, and (3) Contract approval – Strict approval limits – Cut out clear no-go projects – Identifi
Slide 15: Implementation of harmonised project steering and management processes to be continued
2 3 16% Implementation of harmonised project steering and management processes to be continued 1 2 3 4 Tendering Planning and Construction Finalisation and negotiation preparation • Enhanced risk management • Standardised planning and • Standardised process • Finalisation procedures from the very be
Slide 16: Contents
CONTENTS 1. Q2 2019 in brief 2. Turnaround program 3. Market environment and competitive landscape 4. Appendix 15 23 August 2019 Consti Group Plc / Carnegie Construction Seminar
Slide 17: Construction confidence still strong in Finland but trend downwards
Construction confidence still strong in Finland but the recent trend is downwards, economic sentiment fell below long-term avg. during H1 2019 Economic Sentiment and Construction Confidence / Finland (2007 – 07/2019) Comments 150 ■ Since summer 2015, construction confidence in Economic Sentiment Ind
Slide 18: Stable growth in renovation expected to continue
Stable growth in renovation expected to continue Finnish new building and renovation market development 2011 – 2021 Comments EUR b Renovation volume (real) New building volume (real) ■ The amount of professional renovation has grown nearly continuously for the past 20 years in Finland 30 28,0 28,2 2
Slide 19: Construction value chain under pressure, decline in new building likely to bring relief
The whole construction sector value chain lately under pressure, but the expected decline in Finnish new building likely to bring relief Current challenges in availability of professionals are not limited to contractors As a result, inefficiencies throughout the whole construction value chain De
Slide 20: Renovation market supported by key structural growth drivers
Renovation market supported by a number of key structural growth drivers Ageing building stock the single most important growth driver Ageing building stock Energy efficiency Million m2 Finnish building stock by construction year Buildings achieve age of 50 years (approx): 100 Urbanisation and conce
Slide 21: Finnish renovation market highly fragmented
Finnish renovation market highly fragmented Consti continued to be the largest player in Finnish renovation in 2018 Operators in the Finnish renovation market (based on revenue in 2018) Overall renovation market (excl. households) 300 8 ~7.4 BEUR 250 7 EUR 145b EUR 130b EUR 45b EUR 40b > 200 MEUR, n
Slide 22: Outlook and guidance for 2019
Outlook and guidance for 2019 The economic cycle in construction continues to be on a high level Still challenges in availability of certain sub-contractors However, recent statistics on the building permits and starts suggest that construction is likely to slow down after a long upswing as th
Slide 23: Contents
CONTENTS 1. Q2 2019 in brief 2. Turnaround program 3. Market environment and competitive landscape 4. Appendix 22 23 August 2019 Consti Group Plc / Carnegie Construction Seminar
Slide 24: Consti is one of the leading renovation and technical services providers in Finland
Consti is one of the leading renovation and technical services providers in Finland Net sales development since the foundation year 2008 (EUR m) Consti in brief • Consti is one of Finland’s leading companies offering comprehensive building technology, pipeline renovation, renovation contracting, faç
Slide 25: Consti Group's sales and order backlog overview
Consti Group’s sales and order backlog overview – Diverse business and customer mix with strong focus on growth centres BUSINESS SEGMENTS1 GEOGRAPHICAL LOCATIONS CUSTOMER GROUPS 2018 10% 2018 2018 17% 2017 13% 10% 2017 15% 2017 27% 33% 40% 11% 32% 37% Net sales 37% 17% EUR 316m (300m) 78% 33% 26% 35
Slide 26: Diverse customer and project mix protects against market fluctuations
Diverse customer and project mix protects against market fluctuations and dependency on single customer Net sales by customer groups in 2018 Selected recent and ongoing reference projects Oy Ässäkeskus Ab and KOy Scandic Hotel Marski, Helsinki Espoonlahden kirkko, Espoo Vallilan toimisto, Helsinki I
Slide 27: Consti Group's project overview – dispersed project base
Consti Group’s project overview – Dispersed project base with a relatively small median project size Diversified project base and a fairly small median project size Project types: payment basis / performance obligation Median project size (lhs) # of projects (rhs) Fixed price Target price Cost + fee
Slide 28: March 2019 Debt Investor Presentation
27 March 2019 Debt Investor Presentation
Slide 29: Thank you
CONSTI GROUP PLC 23 AUGUST 2019 THANK YOU CONSTI GROUP PLC HOPEATIE 2 FI-00440, HELSINKI BUSINESS ID 2203605-05 WWW.CONSTI.FI 28 26 April 2019 Consti Group Plc / Interim Report 1-3/2019