Consti Oyj · OMXHEX:CONSTI
Consti Oyj — FY2018 Earnings Presentation
29 slides from Consti Oyj's earnings presentation, Feb 7, 2019
Slide 1: Consti Group Plc Financial Statements 1 January – 31 December 2018
CONSTI GROUP PLC FINANCIAL STATEMENTS 1 JANUARY – 31 DECEMBER 2018 CEO Esa Korkeela CFO Joni Sorsanen Building renovation specialist | www.consti.fi
Slide 2: Contents
Contents Highlights and Group performance Cash flow and financial position Market outlook, guidance and summary Appendix Building renovation specialist | www.consti.fi
Slide 3: Highlights of the financial year 2018
Highlights of the financial year 2018 Highlights of 10-12/2018 (y-o-y comparison in brackets) Net sales EUR 96.8 (86.3) million, growth 12.1% EBITDA EUR -1.7 (-2.1) million, EBITDA margin -1.8% (-2.4%) Number of EBIT EUR -2.2 (-2.6) million, EBIT margin -2.2% (-3.0%) personnel at the end Fre
Slide 4: Consti Group's sales overview – Diverse business and customer mix
Consti Group’s sales overview – Diverse business and customer mix with strong focus on growth centres 2018 Net sales: EUR 316m 2017 Net sales: EUR 300m 33% Technical Building Services Technical Building Services BUSINESS 40% Renovation Contracting 37% 37% Renovation Contracting SEGMENTS Building Fac
Slide 5: Net sales development in 2018
Net sales development in 2018: Net sales grew in Building Facades and Renovation Contracting but decreased in Technical Building Services Annual net sales development by business area 2014 – 2018 (EUR m) Comments ■ FY2018 net sales EUR 315.8 million • Y-o-y sales growth 5.2% (EUR 15.6 million) • Org
Slide 6: Quarterly performance overview
5 Q1/16 51,4 Q2/16 64,8 Q3/16 70,6 Q4/16 74,8 Q1/17 57,3 Q2/17 78,8 07/02/2019 Q3/17 77,8 Q4/17 86,3 Q1/18 62,3 Q2/18 77,8 Quarterly net sales (EUR m) Q3/18 78,9 Q4/18 96,8 Q1/16 51,2 Q2/16 75,6 Q3/16 Building renovation specialist 30,3 Q4/16 | 66,1 Q1/17 59,5 Q2/17 83,0 Q3/17 30,7 despite decrease
Slide 7: Quarterly net sales development
Quarterly net sales development Q4 net sales EUR 96.8m, growth of 12.1% year-on-year Quarterly net sales development Q1/2016 – Q4/2018 (EUR m) Comments ■ Q4/2018 net sales EUR 96.8m (86.3 m) 96,8 – Year-on-year growth 12.1% (EUR 10.5 million) 95 86,3 – Renovation Contracting net sales grew 25.2 77,8
Slide 8: Quarterly EBIT development
Quarterly EBIT development Q4 EBIT burdened by a building purpose modification project Quarterly EBIT development Q1/2016 – Q4/2018 (EUR m) Comments ■ Q4/18 EBIT amounted to EUR -2.2 (-2.6) 8 8% million, or -2.2% (-3.0%) of net sales – Operating result was negative due to 5,9 % weaker than expected
Slide 9: Actions to improve profitability were continued in the fourth quarter
Actions to improve profitability were continued in the fourth quarter CORRECTIVE ACTIONS IN Q4/2018 AND THEREAFTER • Due to profitability H1/2018 report: • Further actions Q3/2018 report: Targeted actions to restore the issues, • Actions initiated needed • Actions have performance of low-profita
Slide 10: Consti's new organisation structure and change program
Consti’s new organisation structure and change program Target to improve profitability and competitiveness going forward CONSTI’S CURRENT ORGANISATION AND PLANNED CONSTI’S NEW ORGANISATION AND TARGETED CHANGES BENEFITS CONSTI CONSTI GROUP PLC GROUP PLC COMMON SUPPORT FUNCTIONS New CONSTI operating 3
Slide 11: Means to improve project steering and management going forward
16% Means to improve project steering and management going forward, end-to-end view 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 beginning pre
Slide 12: Quarterly order intake development
Quarterly order intake development Q4 order intake decreased compared to strong comparison period Quarterly order intake development Q1/2016 – Q4/2018 (EUR m) Comments 104,9 ■ Q4/2018 order intake EUR 27.9 million 16,7 (104.9m), decreased by 73.4% y-o-y 95 88,7 83,0 – Order intake decreased in Build
Slide 13: Examples of new orders received in Q4/2018
Examples of new orders received in Q4/2018 TECHNICAL BUILDING RENOVATION BUILDING SERVICES CONTRACTING FACADES Q4/18 order intake: Q4/18 order intake: Q4/18 order intake: EUR 9.0m (-71.8% yoy) EUR 14.2m (-75.6 % yoy) EUR 8.0 m (-52.3% yoy) EXAMPLES OF NEW ORDERS: EXAMPLES OF NEW ORDERS: EXAMPLES OF
Slide 14: Quarterly order backlog development
Quarterly order backlog development Order backlog remained at previous year’s level Quarterly order backlog development Q1/2016 – Q4/2018 (EUR m) Comments 300 286,2 ■ Q4/2018 order backlog at EUR 225.1 270,1 million (225.7m) 250,2 250 – Year-on-year change -0.3% 227,9 225,7 225,1 Quarterly Order bac
Slide 15: Cash flow and financial position
Cash flow and financial position 14 07/02/2019 Building renovation specialist | www.consti.fi
Slide 16: Quarterly free cash flow development
Quarterly free cash flow development Q4 free cash flow positive despite negative result Quarterly free cash flow and EBITDA Q1/2016 – Q4/2018 (EUR m) Comments 10 ■ Q4/2018 free cash flow amounted to Average cash EUR 1.9m (2.6m) 8 conversion1) 88% – Cash flow was positive thanks to release Free cash
Slide 17: Quarterly net working capital development
Quarterly net working capital development Net working capital at EUR -9.8 million at the end of Q4/2018 Quarterly net working capital1) Q1/2016 – Q4/2018 (EUR m) Comments Q2/18 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q3/18 Q4/18 ■ Net working capital EUR -9.8m (-16.1m) at the end of Q4
Slide 18: Quarterly balance sheet structure
Quarterly balance sheet structure Financial position strengthened slightly compared to previous quarter Quarterly net debt, equity ratio and gearing Q1/2016 – Q4/2018 Comments 25 100% ■ Financial position strengthened 88,9 % somewhat from the previous quarter 83,6 % 90% due to positive cash flow in
Slide 19: Market outlook, guidance and summary
Market outlook, guidance and summary 18 07/02/2019 Building renovation specialist | www.consti.fi
Slide 20: Lead indicators for Finnish construction still on a good level
Lead indicators for the Finnish construction still on a good level, economic sentiment declining recently Economic Sentiment and Construction Confidence / Finland (2007 – 12/2018) Comments 150 ■ During the past few years Economic Sentiment Indicator Economic sentiment and 140 Construction Confidence
Slide 21: Stable growth in renovation expected to continue going forward
Stable growth in renovation expected to continue going forward Finnish new building and renovation market development 2011 – 2021O Comments ■ The economic cycle in construction EURb Renovation volume (real) New building volume (real) sector still strong 30 – Challenges in availability of certain 26,
Slide 22: The whole construction sector value chain currently under pressure
The whole construction sector value chain currently under pressure (illustrative) Challenges in availability of professionals are not limited to contractors Results in inefficiencies throughout the whole construction supply chain Designers Consultants Direct impact on projects’ schedules and c
Slide 23: Demand-driven renovation market growth supported by structural growth drivers
Demand-driven renovation market growth supported by a number of key structural growth drivers Ageing building stock Energy efficiency Million m2 Finnish building stock by construction year Buildings achieve age of 50 years (approx): 100 Urbanisation and concentration of ~2018 ~2025-2035 89,2 ~2045 9
Slide 24: Guidance for financial year 2019
Guidance for financial year 2019 “The Company estimates that its operating result for 2019 will improve compared to 2018.” 23 07/02/2019 Building renovation specialist | www.consti.fi
Slide 25: Summary
Summary Net sales grew but Q4 EBIT negative due to higher than expected costs of a building purpose 1. modification project related to a high-value property FY2018 result significantly weakened by the impact of negative results from two demanding 2. building purpose modification projects New Group-w
Slide 26: Appendix
Appendix 25 07/02/2019 Building renovation specialist | www.consti.fi
Slide 27: Building renovation specialist www.consti.fi
26 07/02/2019 Building renovation specialist | www.consti.fi
Slide 28: 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 Comments ■ In 2018, the company had 874 projects1) with a median project Median project size # of projects size of EUR 191 thousand ■ L
Slide 29: Financial Statements 1-12/2018
FINANCIAL STATEMENTS 1-12/2018 CONSTI GROUP PLC FY2018 CONSTI GROUP PLC HOPEATIE 2 FI-00440, HELSINKI BUSINESS ID 2203605-05 WWW.CONSTI.FI 28 07/02/2019 Building renovation specialist | www.consti.fi