Kreate Group Plc · OMXHEX:KREATE
Kreate — H1 2021 Earnings Presentation
21 slides from Kreate's earnings presentation, Jul 28, 2021
Slide 1: The recovered market strengthened the order backlog higher than the reference period
THE RECOVERED MARKET STRENGTHENED THE ORDER BACKLOG HIGHER THAN THE REFERENCE PERIOD TIMO VIKSTRÖM, PRESIDENT & CEO ANTTI HEINOLA, CFO 2 8 J U LY 2 0 2 1 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 1
Slide 2: H1 in brief
H1 IN BRIEF 1. 3. 5. Order backlog amounted to EBITDA was EUR 5.1 (6.0) Free cash flow from operating EUR activities was EUR -3.6 (+0.3) million, amounting to 5.5% 157.5 (144.4) million (5.6%) of revenue million Revenue was EUR EBITA was EUR 3.4 Kreate has won several significant 91.2 (108.0) millio
Slide 3: Kreate's markets developed favourably during the early part of the year
KREATE’S MARKETS DEVELOPED FAVOURABLY DURING THE EARLY PART OF THE YEAR BUSINESS FUNCTIONS MARKET SHARE OF KREATE’S KREATE’S POSITION AND MEASURES DEVELOPMENT BUSINESS* Q2/2021 * STRUCTURAL ENGINEERING Revenue decreased in Structural engineering construction due to the record-strong reference period
Slide 4: Investments on growing infrastructure segments
INVESTMENTS ON GROWING INFRASTRUCTURE SEGMENTS § During the review period, we strengthened our organisation further by recruiting competence in the execution of technically demanding projects. Systematic recruiting will reinforce our competitiveness and market leadership. § Investments in railway pr
Slide 5: Highlights for April–June 2021
HIGHLIGHTS FOR APRIL–JUNE 2021 The demanding “Veturitie ja Summer interns started learning at our Renovation of Sotunki landfill: Ratapihakorttelit” project started with the versatile infrastructure worksites. Our appropriate closure minimises development stage. online campaign was an excellent detr
Slide 6: An agile specialist is a desired partner in a changing operating environment
AN AGILE SPECIALIST IS A DESIRED PARTNER IN A CHANGING OPERATING ENVIRONMENT § Kreate has been heavily involved in the growth of railway construction during H1. We have improved our market position in railway bridge construction by winning six bridge skidding projects. § Our professional personnel a
Slide 7: Injury frequency and personnel survey 2021
I N J U RY PERSONNEL SURVEY 2021 FREQUENCY 1–6/2021 11.9 (3 accidents) Spontaneous employer image: • Trustworthy • Fair • Good • Competent • Flexible • Efficient PERSONNEL eNPS 68 (+4) ON AVERAGE 407 390 376 319 COMMENTS BY PERSONNEL: ”We have a good team at the worksite, everyone’s opinion is heard
Slide 8: End of June order backlog on a good level
END OF JUNE ORDER BACKLOG ON A GOOD LEVEL ORDER BACKLOG FROM Q2 2019 TO Q2 2021, EUR MILLION § At the end of June 2021, the order backlog 198 amounted to EUR 157.5 (144.4) million 200 § The expected order backlog profitability remained 158 at a normal level 144 150 § Projects carried out as joint ve
Slide 9: Revenue was EUR 91.2 million in January–June 2021
REVENUE WAS EUR 91.2 MILLION IN JANUARY–JUNE 2021 REVENUE, EUR MILLION REVENUE DISTRIBUTION 1–6/2021 (1–6/2020) 250 235.3 221.1 Q2 BY BUSINESS FUNCTION BY CLIENT GROUP 200 13 % (30%) 150 38 % (29%) 38 % 100 91.2 (42%) 58.0 -9% 12% 52.9 51.7 62 % 50 49 % (71%) (28%) 0 Cities and municipalities 2019 2
Slide 10: Project profitability remained at the normal level
PROJECT PROFITABILITY REMAINED AT THE NORMAL LEVEL EBITA ( EUR MILLION) § E B I TA w a s E U R 3 . 4 ( 4 . 3 ) m i l l i o n i n January–June 2021 12.0 11.7 10.5 § The flexible cost structure kept relative 10.0 profitability nearly at the level of the Q2 reference periods. 8.0 6.0 4.0 3.4 3.0 2.0 2.
Slide 11: Financial report
FINANCIAL REPORT ANTTI HEINOLA, CFO 11
Slide 12: Key figures: January–June 2021
KEY FIGURES: JANUARY–JUNE 2021 EUR million 4–6/2021 4–6/2020 1–6/2021 1–6/2020 1–12/2020 Order backlog 157.5 144.4 157.5 144.4 134.9 Revenue 52.9 58.0 91.2 108.0 235.3 EBITDA 3.4 3.9 5.1 6.0 14.0 EBITDA, % 6.3 6.7 5.5 5.6 6.0 EBITA 2.5 3.0 3.4 4.3 10.5 EBITA, % 4.7 5.1 3.7 3.9 4.5 Operating profit 2
Slide 13: Cash flow negative during the early part of the year
CASH FLOW NEGATIVE DURING THE EARLY PART OF THE YEAR FREE CASH FLOW FROM OPERATING ACTIVITIES, EUR MILLION § In January–June 2021, free cash flow from 18.0 operating activities was EUR –3.6 (0.3) million, of which net investments in operating activities 14.5 amounted to EUR 2.8 (2.1) million 14.0 9.
Slide 14: Working capital at target level
WORKING CAPITAL AT TARGET LEVEL WORKING CAPITAL, EUR MILLION § At the end of June 2021, the company’s working 7 capital was EUR -0.3 (-1,0) million 5.3 5 3.6 3 1.0 1 -1 -0.3 -0.8 -1.0 -3 -4.0 -5 -4.6 -5.4 -7 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2019 2019 2020 2020 2020 2020 2021 2021 14
Slide 15: 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 35 45 31.4 2021 was EUR 27.4 (18.4 on 30 June 2020) 40 30 35.8 % million 27.4 35 31.1 % § The net debt was materially affected by the loan 25 33.4 %
Slide 16: Interest-bearing debt – maturity and average interest
INTEREST-BEARING DEBT – MATURITY AND AVERAGE INTEREST LOAN PORTFOLIO ON 30 JUNE 2021 REPAYMENT SCHEDULE FOR INTEREST-BEARING DEBT ON 30 JUNE 2021, EUR MILLION 0.2 30 25 22.3 20 Average interest of interest-bearing debt, excluding lease liabilities recognised on the balance sheet 15 3.1%* 10 4.6 5 1.
Slide 17: Outlook for 2021 (remains unchanged)
OUTLOOK FOR 2021 (REMAINS UNCHANGED) Kreate estimates that the company’s revenue (2020: EUR 235.3 million) will decrease in 2021 compared to 2020. On 31 Dec 2020, Kreate’s order backlog amounted to EUR 134.9 million (31 Dec 2019: EUR 177.2 million). Of this sum, approximately EUR 111 million are exp
Slide 18: The future is built today
THE FUTURE IS BUILT TODAY
Slide 19: Clear strategy aiming at continuous profitable growth
CLEAR STRATEGY AIMING AT CONTINUOUS PROFITABLE GROWTH PROFITABLE AND ENTREPRENEURIAL GROWTH COMPANY THAT IMPLEMENTS THE MOST DEMANDING INFRASTRUCTURE CONSTRUCTION PROJECTS AND IS THE MOST ATTRACTIVE WORKPLACE IN THE INDUSTRY WITH DEVELOPMENT OPPORTUNITIES. STRENTHENING SUPPORTING 2 3 POSITIONING AND
Slide 20: Kreate's long term targets
KREATE’S LONG TERM TARGETS GR OWT H P R OF ITA B IL IT Y L E V E R A GE Revenue growth EBITA-margin Net debt/EBITDA EUR 300 million > 5% < 2.0 in 2024 in the medium term through a balanced combination of organic growth and selective bolt-on acquisitions K R E AT E ’S Kreate’s target is to distribute
Slide 21: Kreate's shareholders on 30 June 2021
Shareholder Shares % of Shares 1. Harjavalta Oy 1,378,689 15.34 2. Intera Fund II Ky 1,119,973 12.47 KREATE’S SHAREHOLDERS 3. Tirinom Oy 933,951 10.39 Valtonen Seppo Timo Johannes 412,101 4.59 ON 30 JUNE 2021 4. 5. Keskinäinen työeläkevakuutusyhtiö Varma 315,000 3.51 SHAREHOLDERS BY SECTOR 6. Rantal