Merko Ehitus As · OMXTSE:MRK1T
Merko Ehitus As — Investor Presentation (April 2014)
26 slides from Merko Ehitus As's investor presentation, Apr 24, 2014
Slide 1: Merko Ehitus
MERKO EHITUS Construction, Engineering & Real Estate 24 April 2014
Slide 2: Contents
Contents 1. About the Group 2. Market Overview 3. Business Activities 4. 2013 Results 5. Market Outlook and 2014 Focus 2 Aruküla 330/110/20 kW substation, 2013
Slide 3: Group In Brief
Group In Brief Construction services: Operates in • General construction Estonia (81% of revenue), • Civil engineering Latvia (17%) and • Road construction Lithuania (2%) Own developed real estate projects The largest construction company in the Baltics 31.12.2013: EBITDA 2013 Share quoted on 860 em
Slide 4: Value Offering
Value Offering Integrated project management and general contracting service across the full life cycle of construction projects. From idea to planning to engineering design to site works to warranty: full responsibility to deliver the project. We mainly contract subcontractors, but also use own
Slide 5: Market Overview
merko MARKET OVERVIEW
Slide 6: Baltic Construction Market
Baltic Construction Market 2013 growth +11.3% y-o-y Construction works with own resources totaled EUR 5,652m in Baltics representing an increase of 11.3% y-o-y (2012: EUR 5,076m and +13.1%). Estonia: EUR 1,998m Strongest growth in Lithuania 15.9% (2012: -4.1%), in Latvia 10.4% (2012: 27.2%) and
Slide 7: Residential Real Estate Market Position
Residential Real Estate Market Position Real estate prices (apartments) and transaction volumes have increased in all Baltic capitals during 2013. Balance of housing loans has continued to decrease in Latvia (-5,8%), Estonia and Lithuania have shown a slight increase (0,9% and 0,4% respectively)
Slide 8: Business Activities
merko BUSINESS ACTIVITIES
Slide 9: General Construction
General Construction Construction of buildings and facilities 33% of 2013 revenues (+40% y-o-y) Decrease since 2009 (2009: 43% of total revenues) due to increasing share of infra projects in recent years Markets: Tornimäe residential building, 2007 9
Slide 10: Civil Engineering
Civil Engineering Infrastructure and engineering projects. Including water, environmental and electrical projects. 36% of 2013 revenues ( -17% y-o-y) EU funding is key Markets: Puurmani traffic knot, 2008 10
Slide 11: Road Construction
Road Construction Road construction and long-term road maintenance contracts 19% of 2013 revenues (+10% y-o-y) EU funding key Since 2010 large scale projects Market: Reconstruction of Ülemiste traffic junction, 2013 11
Slide 12: Real Estate Development
Real Estate Development Own development of residential apartments Merko has become the flagship of Baltics residential development 12% of 2013 revenues (+14% y-o-y) 2009-2011 downturn years Markets: Tartu mnt apartment buildings, 2012 12
Slide 13: 2014 Largest Projects In Progress Estonia
2014 Largest Projects In Progress Estonia Own development Kentmanni apartment building Hilton Hotel (2015) - €31.2 mln (2014) - €28 mln Design and renovation of the infrastructure of Tondiraba Ice Arena (2015) – 21.7 mln Tallinn tram line no. 4 (2015) - €26 mln, consortium 13 13
Slide 14: 2014 Largest Projects In Progress Latvia
2014 Largest Projects In Progress Latvia Polipaks manufacturing and logistics center Liepaja Concert Hall (2015) - €28.3 mln (2015) - €17.8 mln Jurmala apartment buildings (2015) - €13.7 mln Riga State Technical School (2015) - €4.8 mln 14 14
Slide 15: 2014 Largest Projects In Progress Lithuania
2014 Largest Projects In Progress Lithuania Own development Mokslininku II stage, 54 apartments (2014) Vilnius and Kaunas train terminals (2014) - €3.6mln Vilnius Balsiai Secondary School – PPP (2011 – 2035) 15 15
Slide 16: 2013 Results
merko 2013 RESULTS
Slide 17: 2013: Key Highlights
2013: Key Highlights EUR millions 2013 2012 Variance Revenue 262.7 249.1 +5.5% Gross profit 22.7 17.9 +26.8% Gross profit margin, % 8.6 7.2 +20.3% EBITDA 15.1 11.4 +32.4% Net profit, attributable to equity holders of the parent 10.4 7.6 +36.3% Earnings per share (EPS), in euros 0.59 0.43 +36.4% Secu
Slide 18: Stable Secured Order Book
Stable Secured Order Book Secured order book at EUR 213.7m (+12.5% compared to 2012). Order book is still dominated by public orders, however about half of new signed contracts during 2013 are related to private orders. Challenge for next 12 months to maintain the volume of new contracts. 18
Slide 19: Real Estate Development Apartments
Real Estate Development Apartments 300 apartments on active sale (2012: 326). Construction of 409 apartments launched during 2013 (2012: 308 apartments). Keep the adequate level of inventory to meet the market demand. Focus to acquire new plots in Lithuania and Estonia. 19
Slide 20: Dividend proposal: EUR 0.41 per share
Dividend proposal: EUR 0.41 per share 70% pay-out ratio Dividend pay-out ratio according to long- term financial objectives: 50-70% of the annual profit. Dividend payment of EUR 5.3m in July 2013 (EUR 0.3 per share). The Management Board proposes to pay the shareholders the total amount of EUR
Slide 21: Market Outlook and 2014 Focus
MARKET OUTLOOK AND 2014 FOCUS 21
Slide 22: Market Outlook
Market Outlook Construction market A decrease of 10-15% in construction volumes is expected in the Baltic States during 2014 and 2015. Continuing decrease of public sector procurements due to the end of EU funding period 2007-2013 and uncertainties around distribution of fund in EUs budget perio
Slide 23: 2014 Focus
2014 Focus Mitigation of project management risks Active positioning in residential real- estate. Improving quality and continuously introducing new and innovative housing solutions for consumers Work with private sector client relationships Improving efficiency. Structural changes and conso
Slide 24: Thank you!
merko Thank you! 24
Slide 25: Contacts
Contacts Andres Trink Signe Kukin Chief Executive Officer Chief Financial Officer E-mail: andres.trink@merko.ee E-mail: signe.kukin@merko.ee AS Merko Ehitus Delta Plaza, 7th floor Pärnu mnt. 141, 11314 Tallinn, Estonia Phone: +372 6501 250 www.merko.ee 25
Slide 26: Disclaimer
Disclaimer This presentation has been prepared by AS Merko Ehitus (the Company) solely for your use and benefit for information purposes only. By accessing, downloading, reading or otherwise making available to yourself any content of the presentation, in whole or in part, you hereby agree to be b