Consti Oyj · OMXHEX:CONSTI
Consti Oyj — Q3 2016 Earnings Presentation
26 slides from Consti Oyj's earnings presentation, Nov 9, 2016
Slide 1: Consti Group Plc Interim Report 1.1.2016 – 30.9.2016
CONSTI GROUP PLC INTERIM REPORT 1.1.2016 – 30.9.2016 CEO Marko Holopainen CFO Esa Korkeela Building renovation specialist | www.consti.fi
Slide 2: Contents
Contents Highlights and Group performance Result, cash flow and financial position Market outlook and guidance Building renovation specialist | www.consti.fi
Slide 3: Highlights of the third quarter of 2016 – Net sales on par with last year, profitability improved
Highlights of the third quarter of 2016 – Net sales on par with last year, profitability improved Highlights of 7-9/2016 (y-o-y comparison in brackets) Net sales EUR 70.6 (70.4) million, growth +0.3% EBIT EUR 3.7 (3.0) million, EBIT margin 5.3% (4.2%) Number of Adjusted EBIT EUR 3.7 (3.2) million, a
Slide 4: Quarterly performance overview – Net sales on par with last year, order intake and backlog continued to grow
3 Q3/14 64.3 Q4/14 69.9 Q1/15 47.5 Q2/15 63.4 Q3/15 70.4 09/11/2016 Q4/15 74.9 Q1/16 51.4 Quarterly net sales (EUR m) Q2/16 64.8 Q3/16 70.6 Q3/14 49.4 Q4/14 52.3 Building renovation specialist Q1/15 46.8 | Q2/15 74.5 Q3/15 28.5 Q4/15 63.6 www.consti.fi Q1/16 51.2 Q2/16 75.6 Quarterly order intake (E
Slide 5: Consti quarterly net sales development – Third quarter net sales at last year's level
Consti quarterly net sales development – Third quarter net sales at last year’s level Quarterly net sales development Q3/2014 – Q3/2016 (EUR m) Comments ■ Q3/2016 net sales EUR 70.6m (70.4m), y-o-y 85 sales growth +0.3% 74.9 – Q3/16 organic growth -0.7% 75 69.9 70.4 70.6 Net sales affected by greate
Slide 6: Consti quarterly order intake development – Order intake continued to increase year-on-year
Consti quarterly order intake development – Order intake continued to increase year-on-year Quarterly order intake development Q3/2014 – Q3/2016 (EUR m) Comments ■ Q3/2016 order intake EUR 30.3 million 85 (28.5m), up by 6.3% y-o-y 74.5 75.6 75 – Order intake growth was strong in Technical Building S
Slide 7: Consti quarterly order backlog development – Backlog up y-o-y and from year-end 2015
Consti quarterly order backlog development – Backlog up by 7.7% y-o-y and +2.4% from year-end 2015 Quarterly order backlog development Q3/2014 – Q3/2016 (EUR m) Comments 250 ■ Q3/2016 order backlog at EUR 185.6 million (172.3m), year-on-year growth 212.6 +7.7% 199.8 200 191.7 – Backlog up by 2.4% fr
Slide 8: Result, Cash Flow and Financial Position
Result, Cash Flow and Financial Position 7 09/11/2016 Building renovation specialist | www.consti.fi
Slide 9: Consti quarterly adjusted EBIT development – Both absolute and relative profitability improved in Q3/2016
Consti quarterly adjusted EBIT1 development – Both absolute and relative profitability improved in Q3/2016 Quarterly EBIT development Q3/2014 – Q3/2016 (EUR m) Comments 10 8% ■ Q3/16 adjusted EBIT before IAC1 amounted to EUR 3.7 (3.2) million, or 9 7% 5.3% (4.5%) of net sales 6.2 % Quarterly adjuste
Slide 10: Consti quarterly cash conversion development – Strong free cash flow achieved in Q3/2016
Consti quarterly cash conversion development – Strong free cash flow achieved in Q3/2016 Quarterly free cash flow and EBITDA Q3/2014 – Q3/2016 (EUR m) Comments 10 ■ Q3/2016 Free cash flow amounted to Average cash conversion1) 112% EUR 6.6m (0.1m), clearly up y-o-y 9 126% Free cash flow and EBITDA (E
Slide 11: Consti quarterly net working capital development – Good progress in NWC during Q3/2016
Consti quarterly net working capital development – Good progress in NWC during Q3/2016 Quarterly net working capital1) Q3/2014 – Q3/2016 (EUR m) Comments Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 ■ Net working capital EUR -11.2m (-8.0m) 0 at the end of Q3/2016 -1.2 – NWC EUR 3.2m lower c
Slide 12: Consti quarterly balance sheet structure – Balance sheet strengthened in the third quarter
Consti quarterly balance sheet structure – Balance sheet strengthened in the third quarter Quarterly net debt, equity ratio and gearing Q3/2014 – Q3/2016 Comments 60 100% ■ Q3/2016 net debt at EUR 11.7m (19.4m) 88.6 % – Net debt was positively impacted by 50 76.1 % 80% strong cash flow in the third
Slide 13: Market Outlook and Guidance
Market Outlook and Guidance 12 09/11/2016 Building renovation specialist | www.consti.fi
Slide 14: Lead indicators for the Finnish construction continue to suggest a favourable market environment
Lead indicators for the Finnish construction continue to suggest a favourable market environment going forward Economic Sentiment and Construction Confidence / Finland (2007 – 10/2016) Comments 150 ■ Economic sentiment in Finland rose Economic Sentiment Indicator Construction Confidence Indicator ab
Slide 15: HPAC technical contractors report improving business conditions especially within new building
HPAC technical contractors report improving business conditions especially within new building Current business conditions Current business conditions Current business conditions Current business conditions New building Renovation Service Balance of opinion* 100 % 100 % 100 % 100% 90 % 90 % 90 % 80%
Slide 16: Stable growth in renovation to continue going forward, new building projected to grow strongly in 2016
Stable growth in renovation to continue going forward, new building projected to grow strongly in 2016 Finnish new building and renovation market development, 2011A – 2018O Comments EURbn Renovation volume (real) New building volume (real) ■ Both The Confederation of Finnish Construction Industries
Slide 17: Demand-driven renovation market growth supported by a number of key structural growth drivers
Demand-driven renovation market growth supported by a number of key structural growth drivers Ageing building stock Energy efficiency Finnish building stock by construction year Million Buildings achieve age of 50 years (approx): m2 Urbanisation and concentration of 100 ~2016 ~2025-2035 ~2045 renova
Slide 18: Pipeline and façade renovations of residential buildings as well as services came to the fore in Q3 order intake
Pipeline and façade renovations of residential buildings as well as services came to the fore in Q3 order intake TECHNICAL BUILDING RENOVATION BUILDING SERVICES CONTRACTING FACADES Q3/16 order intake: Q3/16 order intake: Q3/16 order intake: EUR 14.2m (+15.6% yoy) EUR 3.5m (-49.0% yoy) EUR 13.3m (+39
Slide 19: Slower than anticipated net sales realisation from order backlog during the second half of 2016
Slower than anticipated net sales realisation from order backlog during the second half of 2016 Quarterly order backlog and R12m net sales Q4/2014 – Q3/2016 (EUR m) Comments 300 ■ Rolling 12-month net sales flattening out in Q2/16 and Q3/16 R12m Net sales and order backlog (EUR million) 256 260 261
Slide 20: Guidance for 2016 was specified through a stock exchange release on 26 Oct 2016
Guidance for 2016 was specified through a stock exchange release on 26 Oct 2016 “The Company estimates that its total annual net sales will grow compared to 2015.” 19 09/11/2016 Building renovation specialist | www.consti.fi
Slide 21: HR issues emphasised in current market environment
HR issues emphasised in current market environment ─ Consti needs more competent personnel to support its growth going forward ─ Hence, efforts increased in for instance personnel recruitment, training, and career paths ─ In addition, Consti aims at strengthening its employer image, as the fight for
Slide 22: Realisation of Consti's long-term financial targets
Realisation of Consti’s long-term financial targets Growth Profitability Cash flow Capital structure Dividends Net debt to adjusted The Company’s aim EBITDA ratio of less is to distribute as Average annual Adjusted EBIT- Cash conversion than 2.5x while dividends at least 50 growth in net sales margi
Slide 23: Consti Group's strategic themes
Consti Group’s strategic themes 1 Exploit market position and expand full offering to Finland’s growth centers ─ Grow in businesses where Consti has long experience and a strong position ─ Expand full offering to the growth centers of Finland ─ Acquisitions to support growth 2 Strengthen the offerin
Slide 24: Active screening of M&A candidates - Consti's knock-out criteria used to shortlist potential M&A targets
Active screening of M&A candidates - Consti’s knock-out criteria used to shortlist potential M&A targets Demonstrated financial Consti Group’s strategy Good organisational fit Relevant M&A targets track record N=X N = X-Y N = X-Y-Z N = ~50 ■ Expansion in Finland’s ■ Established strong local ■ Minimi
Slide 25: Summary
Summary 1. Net sales on par with last year, slower than anticipated net sales realisation 2. Profitability improved both in absolute and relative terms 3. Strong development in cash flow during the third quarter 4. Fairly good market situation in Q3/2016, order intake grew year-on-year 5. Slower tha
Slide 26: Interim Report 1-9/2016 Consti Group Plc
INTERIM REPORT 1-9/2016 CONSTI GROUP PLC Q3 CONSTI GROUP PLC HOPEATIE 2 FI-00440, HELSINKI BUSINESS 25 ID 09/11/2016 2203605-05 Building renovation specialist | www.consti.fi WWW.CONSTI.FI