Kreate Group Plc · OMXHEX:KREATE
Kreate — H1 2022 Earnings Presentation
21 slides from Kreate's earnings presentation, Jul 27, 2022
Slide 1: Revenue and result grew in the first half – order backlog remains on high level
REVENUE AND RESULT GREW IN THE FIRST HALF – ORDER BACKLOG REMAINS ON HIGH LEVEL TIMO VIKSTRÖM, PRESIDENT & CEO MIKKO LAINE, CFO 2 7 J U LY 2 0 2 2 K R E AT E G R O U P P L C / H A L F - Y E A R R E P O R T 1 - 6 / 2 0 2 2
Slide 2: H1 in brief
H1 IN BRIEF 1. 3. 5. Order backlog amounted to EBITDA was EUR 5.6 (5.1) Free cash flow from operating EUR million, amounting to 4.8% activities was EUR -1.6 (-3.6) 204.4 (157.5) million (5.5%) of revenue million Revenue was EUR EBITA was EUR 3.5 Revenue and operating profit rose 117.4 (91.2) million
Slide 3: Possible impacts of Russia's war in Ukraine on Kreate's operations
POSSIBLE IMPACTS OF RUSSIA’S WAR IN UKRAINE ON KREATE’S OPERATIONS Kreate’s specialisation in demanding and versatile infrastructure is significantly more sustainable If the situation drags on, financial growth may across business cycles and in challenging market be weaker. Any possible stimulus act
Slide 4: 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
Slide 5: Specialisation strengthens competitiveness
SPECIALISATION STRENGTHENS COMPETITIVENESS BUSINESS FUNCTIONS MARKET DEVELOPMENT SHARE OF KREATE’S POSITION AND MEASURES Q2/2022 AND 12-MONTH KREATE’S OUTLOOK* REVENUE* STRUCTURAL ENGINEERING The Structural engineering revenue was grown particularly by Bridge construction and repair large projects p
Slide 6: Highlights for April–June 2022
HIGHLIGHTS FOR APRIL–JUNE 2022 Kreate Rata won two contracts valued at EUR 5 Kreate won a transport infrastructure and bridge The large foundation and concrete construction million each: one for the new traffic sites between contract worth EUR 7.5 million in Hervanta, contract for the railway statio
Slide 7: Personnel
PERSONNEL ON AVERAGE 407 392 393 376 2 19 20 21 2 20 20 20 20 6/ 1- I N J U RY F R E Q U E N C Y R AT E 1 2 M O COMMENTS BY PERSONNEL: ROLLING “Kreate offers enjoyable work that matches my 8.8 competence. The proportion of challenging tasks is just right.” (4 7 accidents 4-6/2022)
Slide 8: The order backlog remains near record-levels
THE ORDER BACKLOG REMAINS NEAR RECORD-LEVELS ORDER BACKLOG Q2/2020–Q2/2022, EUR MILLION § At the end of June 2022, the order backlog amounted to EUR 204.4 (157.5) million and its 204 200 expected profitability was at a normal level § Largest additions during the reporting period: 158 Infrastructure
Slide 9: Revenue grew in January–June 2022
REVENUE GREW IN JANUARY–JUNE 2022 REVENUE, EUR MILLION REVENUE DISTRIBUTION 1-6/2022 (1-6/2021) 250 235.3 237.6 Q2 62.0 BY BUSINESS FUNCTION BY CLIENT GROUP 200 75.8 37 % 27 % 150 (38%) (13%) 117.4 38 % (38%) 100 -9% +27% 67.0 58.0 52.9 63 % 50 (62%) 35 % (49%) 0 Cities and municipalities 2020 2021
Slide 10: Year to date EBITA grew slightly year-on-year
YEAR TO DATE EBITA GREW SLIGHTLY YEAR-ON-YEAR EBITA (EUR MILLION) § In January–June 2022, EBITA grew compared 12.0 to the reference period, amounting to EUR 3.5 10.5 10.5 (3.4) million Q2 § Kreate’s flexible cost structure and measures 9.0 for preventing impacts from increased costs supported profit
Slide 11: Financial report
FINANCIAL REPORT MIKKO LAINE, CFO 11
Slide 12: Key figures: January–June 2022
KEY FIGURES: JANUARY–JUNE 2022 EUR million 4–6/2022 4–6/2021 1–6/2022 1–6/2021 1–12/2021 Order backlog 204.4 157.5 202.8 Revenue 67.0 52.9 117.4 91.2 237.6 EBITDA 3.5 3.4 5.6 5.1 14.2 EBITDA, % 5.3 6.3 4.8 5.5 6.0 EBITA 2.4 2.5 3.5 3.4 10.5 EBITA, % 3.6 4.7 3.0 3.7 4.4 Operating profit 2.4 2.4 3.4 3
Slide 13: 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 18.0 Q2 § Free cash flow from operating activities was EUR 12.0 9.7 -1.6 (-3.6) million in January–June 2022 4.0 6.0 § The company’s net investments in H1 were at the -0.4 pre
Slide 14: Interest-bearing net debt and equity ratio
INTEREST-BEARING NET DEBT AND EQUITY RATIO INTEREST-BEARING NET DEBT (EUR MILLION) AND EQUITY RATIO (%) § Kreate’s interest-bearing net debt on 30 June 2022 was EUR 29.4 million (30 June 2021: EUR 40 40% 35.8 % 27.4 million) 33.4 % 31.6 % 35 35% § During the reporting period, Kreate signed an 30 29.
Slide 15: Interest-bearing debt – maturity and average interest
INTEREST-BEARING DEBT – MATURITY AND AVERAGE INTEREST LOAN PORTFOLIO ON 30 JUNE 2022, EUR REPAYMENT SCHEDULE FOR INTEREST-BEARING MILLION DEBT ON 30 JUNE 2022, EUR MILLION 30 10.0 25 22.3 20 Average interest of interest- bearing debt, excluding lease liabilities recognised on the 15 13.5 balance she
Slide 16: New financing agreement signed on July 6 2022
NEW FINANCING AGREEMENT SIGNED ON JULY 6 2022 DEBT REPAYMENT SCHEDULE FOR THE NEW FINANCING AGREEMENT AT THE TIME OF WITHDRAWAL, EUR MILLION § The company has signed a new financing 20 arrangement after reporting period 19 § Total value EUR 52.5 million 15 § The new agreement includes EUR 15 million
Slide 17: Outlook for 2022
OUTLOOK FOR 2022 (PUBLISHED ON 26 JANUARY 2022) Kreate estimates that its revenue (2021: EUR 237.6 million) and EBITA (2021: EUR 10.5 million) will grow compared to 2021. Justifications: Kreate’s strong order backlog and specialisation in demanding construction as well as the stable infrastructure c
Slide 18: The future is built today
THE FUTURE IS BUILT TODAY
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
Slide 20: Kreate's long-term goals
KREATE’S LONG-TERM GOALS GR OWT H P R OF ITA B IL IT Y D E B T TO E QU IT Y R AT 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 K R E AT E ’S The aim is to distrib
Slide 21: Kreate's shareholders on 30 June 2022
KREATE’S SHAREHOLDERS ON 30 JUNE 2022 SHAREHOLDERS BY SECTOR 13 % 44 % 42 % 1% Companies Financial institutions Households Household services, NGOs total International Public organisations 21 * Nominee registered