Kreate Group Plc · OMXHEX:KREATE
Kreate — Q2 2024 Earnings Presentation
18 slides from Kreate's earnings presentation, Jul 16, 2024
Slide 1: Positive profitability development – revenue decreased as expected
POSITIVE PROFITABILITY DEVELOPMENT – REVENUE DECREASED AS EXPECTED MIKKO LAINE, CFO 1 6 J U LY 2 0 2 4 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 J A N U A R Y- J U N E 2 0 2 4
Slide 2: On the road to sustainable profitability
ON THE ROAD TO SUSTAINABLE PROFITABILITY ▪ Q2 EBITA increased in euros and profitability improved ▪ Efficient operational activities ▪ Flexible cost structure ▪ Third consecutive quarter of EBITA growth ▪ Q2 revenue decreased by 21% year-on-year ▪ The biggest factor in the decrease in the volume of
Slide 3: Strong performance in tendering and on sites
STRONG PERFORMANCE IN TENDERING AND ON SITES 4 5 6 Kreate Sweden signed with AF Anläggning The foundation stone of the extension of the We won over 34 MEUR railway contract AB over 6 MEUR contract for the National Museum of Finland was laid in between Kytömaa and Järvenpää as part of the constructio
Slide 4: The updated strategy is reflected in our actions
THE UPDATED STRATEGY IS REFLECTED IN OUR ACTIONS W E M U S T: The average number of employees in H1/2024 has grown to over 1 BE THE BEST PLACE FOR THE BEST INFRASTRUCTURE EXPERTS 500 experts – we have succeeded in key recruitments and are growing talent through internships. Winning the third major p
Slide 5: Tender activity is still very active
TENDER ACTIVITY IS STILL VERY ACTIVE INFLATION AND INTEREST INDUSTRIAL INVESTMENTS TRANSPORT INVESTMENTS RATES Industrial companies are willing to The Government has about Cost inflation has levelled off and invest, and the level of activity has 3 BEUR transport investment the markets have started t
Slide 6: 12-month market outlook is exceptionally strong
12-MONTH MARKET OUTLOOK IS EXCEPTIONALLY STRONG MARKET DEVELOPMENT Q-ON-Q SHARE OF 12-MONTH BUSINESS FUNCTIONS KREATE’S OUTLOOK* REVENUE Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 STRUCTURAL ENGINEERING Bridge construction Market development Weaker Foundation and engineering construction Unchanged 72% Improved S
Slide 7: Long-term outlook is positive
LONG-TERM OUTLOOK IS POSITIVE MILITARY MOBILITY URBANIZATION GREEN TRANSITION The need for and importance of Urbanisation means denser and Investment plans rail, road, port and airport more challenging construction amounting to ~ 270 infrastructure to the northern and and more rail traffic. BEUR in
Slide 8: Order backlog increased from previous quarter
ORDER BACKLOG INCREASED FROM PREVIOUS QUARTER Order backlog Q2/22 – Q2/24, EUR million ▪ The order backlog at the end of June 2024 was EUR 200.1 million. ▪ Change from the end of the previous quarter +9.0% ▪ Change year-on-year -24.5% ▪ If realised, the won Tampere passenger rail yard project of alm
Slide 9: Third consecutive quarter of EBITA growth
THIRD CONSECUTIVE QUARTER OF EBITA GROWTH ▪ Q2 EBITA-% improved clearly from the comparison EBITA, EUR million period and was 3.8% (3.0%) ▪ Slight growth also in euros: 2.6 (2.6) MEUR ▪ H1 EBITA-% improved by 2.4% (1.4%) ▪ Growth also in euros: 2.9 (2.2) MEUR ▪ Third consecutive quarter of EBITA gro
Slide 10: Revenue decreased – volume weighted more on H2/2024
REVENUE DECREASED – VOLUME WEIGHTED MORE ON H2/2024 FULL-YEAR GUIDANCE UNCHANGED Revenue, EUR million Revenue distribution 1-6/2024 28.0% -20.7% change from the same quarter in the previous year 10
Slide 11: Safety campaign boosted safety observations in April
SAFETY CAMPAIGN BOOSTED SAFETY OBSERVATIONS IN APRIL Q2/24 vs Q2/24 vs Building with passion Metrics and target at the end of 2024 Q1 / 2024* Q2 / 2024* Q1/24 target • Combined accident frequency – target level to be 9.6 10,2 decided during 2024 Occupational safety and • Occupational safety observat
Slide 12: Key figures
KEY FIGURES EUR million 4-6/2024 4-6/2023 1-6/2024 1-6/2023 Order backlog 200.1 264.9 Revenue 68.0 85.7 122.4 151.6 EBITDA 4.0 4.0 5.7 5.0 EBITDA, % 5.9 % 4.7 % 4.6 % 3.3 % EBITA 2.6 2.6 2.9 2.2 EBITA, % 3.8 % 3.0 % 2.4 % 1.4 % Operating profit 2.6 2.5 2.8 2.1 Operating profit, % 3.8 % 2.9 % 2.3 % 1
Slide 13: Net working capital returned to normal level
NET WORKING CAPITAL RETURNED TO NORMAL LEVEL Free cash flow from operating activities, EUR million ▪ Q2 Operating cash flow amounted to -6.5 (1.7) MEUR and in H1 it amounted to -9.6 (-1.6) MEUR. ▪ Cash flow was weakened by the return of net working capital to a normal level from a very good situatio
Slide 14: Interest-bearing net debt increased in Q2
INTEREST-BEARING NET DEBT INCREASED IN Q2 ▪ Kreate’s interest-bearing net debt on 30 June 2024 was Interest-bearing net debt (EUR million) and equity ratio (%) EUR 31.7 (30 June 2023: 39.1) million ▪ The change in working capital is the most significant factor in the growth of net debt ▪ Net debt/EB
Slide 15: Interest-bearing debt – maturity and average interest
INTEREST-BEARING DEBT – MATURITY AND AVERAGE INTEREST Loan portfolio on 30 June 2024, EUR million Repayment schedule for interest-bearing debt on 30 June 2024, EUR million Average interest of interest- bearing debt, excluding lease liabilities recognised in the balance sheet 6.2 % 15
Slide 16: Result guidance unchanged
RESULT GUIDANCE UNCHANGED Kreate estimates that its revenue in 2024 will decline and be in the range of EUR 270–300 million (2023: EUR 320.0 million) and EBITA will increase and be in the range of EUR 8–11 million (2023: EUR 7.8 million). Justifications: The company's guidance is based on the order
Slide 17: The future is built today
THE FUTURE IS BUILT TODAY
Slide 18: Kreate's shareholders on 30 June 2024
KREATE’S SHAREHOLDERS ON 30 JUNE 2024 Shareholder Shares % of shares SHAREHOLDERS BY SECTOR 1 Harjavalta Oy 1 783 689 19,9 2 Tirinom Oy 1 000 000 11,1 Public org. 3 Ilmarinen Mutual Pension Insurance Company 425 000 4,7 12,7 % 4 Valtonen Seppo Timo Johannes 412 101 4,6 International 5 Varma Mutual P