Sitowise Group Oyj · OMXHEX:SITOWS
Sitowise Group Oyj — Investor Presentation (March 2024)
68 slides from Sitowise Group Oyj's investor presentation, March 2024
Slide 1: Redefining smartness in cities
Redefining smartness in cities Investor presentation March 2024 H E I K KI H A A S M A A , C E O HANNA MASALA, CFO
Slide 2: Our talking points today
Our talking points today 01 02 03 04 Sitowise is a ESG in Sitowise Financial Appendix: leading player performance with competitive Digital advantages and clear Solutions strategic direction offering
Slide 3: Summary
Summary 1 Awith leading player in a growing technical consulting market clear strategic targets and implementation plans 2 Broad technical consulting service offering with unique opportunities to combine capabilities in different business areas 3 Broad customer base that provides a solid platform fo
Slide 4: Sitowise is a Nordic expert in the built environment
Sitowise is a Nordic expert in the built environment with a strong focus on digitality Strong track record of net sales growth with industry leading profitability Local client relations in 32 locations 204.4 210.9 12.9% +2,100 employees 11.8% 179.3 10.8% 160.1 10.0% NPS 32 143.0 20.6 21.1 20.4 8.1 %
Slide 5: Four established Business Areas
Four established Business Areas Key drivers for growth are increasing demand for services related to green transition, security, and digitalization of the built environment BUILDINGS SWEDEN A leading player in Finland with A competent challenger in the extensive services for the entire life cycle Sw
Slide 6: Buildings: Extensive design and technical consulting for the entire lifecycle
Buildings: Extensive design and technical consulting for the entire lifecycle Strong organic and M&A Net sales evenly split Diverse clientele Key success factors based growth until 2023 between new builds and – we serve all but M€ renovations private individuals • Multidisciplinary expertise Net sal
Slide 7: Infra: A leading player in Finland with steady growth
Infra: A leading player in Finland with steady growth and stable cashflows Net sales growth The widest service Key success factors outperforming the market offering in the industry Loyal client base M€ Net sales split Net sales split (2023 PF) (2023 PF) • A well-known player with more than 600 infra
Slide 8: Digital Solutions: Nordic excellence in geospatial solutions
Digital Solutions: Nordic excellence in geospatial solutions Organic growth and Diversified offering with Balanced and loyal Key success factors M&As driving net sales SaaS driving growth client base M€ Net sales split Net sales split (2023) (2023) • Over 20 years experience from digital business •
Slide 9: Sweden: Industry leading expertise in selected segments
Sweden: Industry leading expertise in selected segments Net sales growth Services focused in 3/4 of our clients in Key success factors driven by M&A three segments private sector Net sales split Net sales split M€ • Established platform with (2023) (2023) Sitowise’s brand • Leverage of our strong co
Slide 10: Megatrends continue to drive demand for technical consulting
Megatrends continue to drive demand for technical consulting URBANISATION MAINTENANCE DIGITALISATION CLIMATE CHANGE SECURITY BACKLOG Urbanisation will increase The maintenance backlog of Digitalization Climate change will force the demand for new buildings and infrastructure grows the demand for cit
Slide 11: New and tightening regulation impacts us and our clients
New and tightening regulation impacts us and our clients and brings opportunities The new Building Act + EU green finance regulation • The act incorporates measures to combat • EU Taxonomy regulation climate change comprehensively into the building legislation. • EU Sustainable Finance Disclosure Re
Slide 12: Sitowise strategy 2025
Sitowise strategy 2025 ratios We understand our clients The most innovative Weworkas “)x a , a one team al 0 é OUR PURPOSE » Ya) Wetrust . d each other Empowering £5 The most . passionate experts “sustainable ' eo to solve complex : challenges. WE WILL FOCUS ON > + Creating new smart + Becoming a th
Slide 13: Long-term financial targets
Long-term financial targets Growth Profitability Leverage Annual net sales growth, Adjusted EBITA margin of at Net debt in relation to adjusted EBITDA including acquisitions, over least should not exceed 10% 12% 2.5x except temporarily in conjunction with acquisitions Dividend policy Sitowise target
Slide 14: Additional targets supported by the ongoing strategic initiatives
Additional targets supported by the ongoing strategic initiatives • to grow our • to double our recurring revenue sustainability to be 10% services revenue of Sitowise’s annual net sales to exceed 10 million euros by the end of 2025 by the end 2025 14
Slide 15: Margin increase driven by growth in attractive sub-segments
Margin increase driven by growth in attractive sub-segments and further operational efficiencies Operational efficiencies M&A • Sales excellence Organic • Smartest ways to work growth • Cost efficiency • M&A aligned with our • Value from data ≥12% strategic priorities • Focus on accelerating 8.1% •
Slide 16: Our talking points today
Our talking points today 01 02 03 04 Sitowise is a Sustainability Financial Appendix: leading player in Sitowise performance with competitive Digital advantages and clear Solutions strategic direction offering
Slide 17: We use lifecycle thinking to create sustainable built environments
We use lifecycle thinking to create sustainable built environments Strategic consultation • Expert services and solutions for Planning and sustainable living environment, mobility design and natural asset management Circular throughout the life-cycle economy and Sustainability, sustainability digita
Slide 18: Sitowise Sustainability Program 2025 goals
Sitowise Sustainability Program 2025 goals: 1 We are carbon neutral in 2025 We are the most equitable 2 workplace with best employee wellbeing in the industry 3 We aim for sustainable economic growth 4 We actively contribute to making our industry more sustainable
Slide 19: We are carbon neutral in 2025
1 We are carbon neutral in 2025 We will continuously reduce our own emissions towards carbon neutrality by 2025 19
Slide 20: We are the most equitable workplace with best employee wellbeing
2 We are the most equitable workplace with best employee wellbeing in the industry +2,200 employees with over 100 different degree titles Key KPIs 3.8 My employer supports the wellbeing of employees 4.1 At my workplace, everyone is treated equally 4.1 I feel that I am appreciated in my work communit
Slide 21: We aim for sustainable economic growth
3 We Weare aimthe formost equitable sustainable workplace economic with growth best employee wellbeing in the industry SET GOALS* 01 02 We want to double our sustainability services revenue to exceed 10 million euros by the end 2025 Developing Growing existing expertise, new services We want to grow
Slide 22: Our sustainability services focus areas
Our sustainability services focus areas RENEWABLE ENERGY CLIMATE CHANGE MITIGATION CASE: Optimizing the carbon footprint of building materials as well as the CASE: Impact assessments of renewable energy. Client: Ministry of construction costs. Client: SKANSKA, 2021. Employment and the Economy, Energ
Slide 23: Future growth opportunities from new sustainable innovations
Future growth opportunities from new sustainable innovations OUR INNOVATION PIPELINE (JUNE 2023) SOME RESEARCH TOPICS • Smart cyber security • Climate risk and adaptation analytics • IOT-based quality assurance 31 200+ 37 • Data-driven circularity in landmass management • ESG DD risk assessment cust
Slide 24: Expand sustainability service offering with targeted acquisitions
We will expand and diversify our sustainability service offering also with targeted acquisitions ACQUISITIONS WITH FOCUS ON SUSTAINABILITY SERVICES IN 2021–2023 In addition to these four, Sitowise has made 13 acquisitions between 2021-2023. Business transaction Municipal emissions A digital service
Slide 25: We actively contribute to making our industry more sustainable
4 We actively contribute to making our industry more sustainable Shaking up your thinking Educating our employees and Driving a positive change about the future of cities. challenging our clients with our in collaboration with others SDG-based Sitowise Read more Sustainability Tool
Slide 26: Key takeaways
KEY TAKEAWAYS • Technical consultants drive positive environmental impact. Our work can be seen everywhere you look. The world of tomorrow is planned today. • Megatrends and new legistlation provide us several growth opportunities. Additional opportunity from new smart and sustainable services. • ES
Slide 27: Our talking points today
Our talking points today 01 02 03 04 Sitowise is a ESG in Sitowise Financial Appendix: leading player performance with competitive Digital advantages and clear Solutions strategic direction offering
Slide 28: Resilience and growth in the challenging market environment in 2023
Resilience and growth in the challenging market environment in 2023 SITOWISE GROUP PLC Q 4 / F Y 2 0 2 3 R E S U L T P R E S E N T A TI ON 27 FEBRUARY 2024 28
Slide 29: Q4: Net sales down by 8.3%, adjusted EBITA margin 4.6%
Q4: Net sales down by -8.3, adjusted EBITA margin 4.6% • Strong performance in Infra and Digi, steps to right direction in Sweden, Buildings facing challenges. • Net sales down by 8.3%* to EUR 52.8 (57.6) million, organic growth -6%. • Adjusted EBITA EUR 2.4 (5.3) million. Adjusted EBITA-% 4.6% (9.2
Slide 30: EBITA margin bridge Q4/22 vs Q4/23
EBITA margin bridge Q4/22 vs Q4/23 • Good underlying business performance ~ -2.5% • The adverse impacts of external factors successfully mitigated ~ -1.5% with pricing, cost control and adapting operations to existing markets in the 9.2% ~ -0.6% Buildings business. • The ERP and CRM 4.6% implementat
Slide 31: Q4: we expanded our sustainability services offering with acquisitions
Q4: we expanded our sustainability services offering with targeted acquisitions 11/2023 Carbon footprint calculators, carbon handprint studies, sustainability programs, climate roadmaps, and software related to sustainability. 2022 net sales 0.4 million, 7 experts joining Sitowise. Business transact
Slide 32: FY 2023: Net sales up by 3.2%, adjusted EBITA margin 8.1%
FY 2023: Net sales up by 3.2%, adjusted EBITA margin 8.1% • Market environment continued to be mixed. Strong year in Infra and Digi. • Net sales up by 3.2%* to EUR 210.9 (204.4) million, organic growth was 1%. • Adjusted EBITA totaled EUR 17.0 (20.4) million. Adjusted EBITA margin 8.1% (10.0%). • Op
Slide 33: EBITA margin bridge 2022 vs 2023
EBITA margin bridge 2022 vs 2023 ~ -0.6% ~ -1.0% ~ -0.3% • Also for the full year 2023, the decline in 10.0% adjusted EBITA margin 8.1% decline was heavily impacted by the negative calendar effect and the ERP and CRM implementations. Adjusted EBITA ERP and Calendar effect Other factors Adjusted EBIT
Slide 34: Buildings
Buildings
Slide 35: Continued headwind from markets
Continued headwind from markets Net sales per quarter, Factors impacting Q4 Outlook for 2024 figures in EUR million ─ The underlying Finnish new construction ─ The first part of 2024 will still be market continued to deteriorate challenging, and the market is -24% expected to show signs of recovery
Slide 36: Infra
Infra
Slide 37: Continued strong performance measured with all KPIs
Continued strong performance measured with all KPIs Net sales per quarter, Factors impacting Q4 Outlook for 2024 figures in EUR million + / – The division of the market into weaker + As a whole the outlook for Infra and stronger segments continued: remains good. +4% + Strong demand for energy and +
Slide 38: Digital Solutions
Digital Solutions Infra Digi
Slide 39: Good ending for a great year
Good ending for a great year Net sales per quarter, Factors impacting Q4 Outlook for 2024 figures in EUR million + / – Mixed market environment with private + As a whole the outlook for Digital sector demand slowing down Solutions remains good. 2% + Public sector investments still at good + / – Grow
Slide 40: Sweden
Sweden Infra Digi Digital Solutions
Slide 41: Steps towards the right direction
Steps towards the right direction Net sales per quarter, Factors impacting Q4 Outlook for 2024 figures in EUR million + / – Slightly softer, but overall still + / – Mixed market environment expected to In constant currency +0% reasonably good market continue. + Local infra market growing fast + / –
Slide 42: Group performance
Infra Group Digi Digital Solutions performance
Slide 43: Good sales growth especially in Digi and Infra
Good sales growth especially in Digi and Infra Net sales Adjusted organic growth by Factors impacting Q4 EUR million business area + Adjusted organic growth clearly 14.5% ahead of the market in Infra and in Digi 9.2% - Continued market deterioration 5.2% in Buildings 4.1%4.1% 0.7% 0.7% - Impact from
Slide 44: Healthy order books in Infra, Digital Solutions and Sweden
Healthy order books in Infra, Digital Solutions and Sweden Order book Examples of recent tenders won EUR million -10% 181 172 169 175 176 175 167 164 2. Renovation of prime Laakso Hospital 5-year agreement Design of the second property owned by rock construction with the Finnish phase of Tvärbanan S
Slide 45: Weaker construction market and ERP&CRM visible in key KPIs
Clearly weaker construction market and the ERP&CRM implementations visible in key KPIs FTEs Sickness absences Utilization rate -0.3%-point 76.3% 76.8% 76.0% -4% 4.0% 75.7% 76.0% 74.4% 74.7% 3.7% 72.6% 3.6% 2,223 2,213 2,232 2,219 2,236 2.205 2,143 3.2% 2,054 2.9% 2.9% 2.6% 2.3% 1977 1977 1987 2018 1
Slide 46: Strong cashflow, leverage remained high
Strong cashflow, leverage remained high Cash flow from Net debt Leverage operating activities EUR million Net debt / Adjusted EBITDA multiple Before financial items and taxes, EUR million 62.9 62.2 3.0x 13.1 2.9x 2.9x 58.3 56.6 55.5 55.1 2.7x 11.3 55.3 2.6x Target <2.5x 2.4x 2.4x 9.6 7.0 5.7 33.6 1.
Slide 47: FY 2023 performance ahead of comparison year
FY 2023 performance ahead of comparison year EUR million Q4 2023 Q4 2022 Change 2023 2022 Change Net sales 52.8 57.6 -8.3% 210.9 204.4 3.2% EBITA, adjusted 2.4 5.3 -54.6% 17.0 20.4 -16.5% 2023 NET SALES % of net sales 4.6% 9.2% 8.1% 10.0 % +3.2% EBITA 1.3 4.7 -73.5% 15.1 16.1 -5.9% YoY growth Operat
Slide 48: Towards a more balanced business portfolio
Towards a more balanced business portfolio Q4/2022 Q4/2023 21 % 22 % 31 % 37 % The shares of Infra and Digi increasing, while Share of net sales share of Buildings by Business Area 13 % 14 % declining. 33 % 29 % Share of FTEs in 18 % 19 % Number of FTEs significantly down in Business Areas 36 % Buil
Slide 49: Our priority in 2024 is to improve our profitability
Our priority in 2024 is to improve our profitability FACTORS IMPACTING OUR ACTIONS • Market environment: construction industry and 1. Sales and pricing excellence macro-driven slowness in some other parts • Demand for services related to green transition, 2. Cost awareness security and digitalizatio
Slide 50: Our priority in 2024 is to improve our profitability
Our priority in 2024 is to improve our profitability FACTORS IMPACTING OUR ACTIONS • Market environment: construction industry and 1. Sales and pricing excellence macro-driven slowness in some other parts • Demand for services related to green transition, 2. Cost awareness security and digitalizatio
Slide 51: Wage inflation and working days will impact performance in 2024
Wage inflation and higher number of working days y-on-y will impact performance in 2024 Q1 2024 vs. Q1 2023 Q2-Q4 2024 vs. Q2-Q4 2023 • -1 working day in Finland, • Q2 and Q3: +1 working day both in -1.5 days in Sweden y-on-y Finland and Sweden in Q2 • Q4: Equal amount of working days in • Annual wa
Slide 52: Outlook for 2024
Outlook for 2024 Guidance 2024 • The stable long-term growth in the demand for Sitowise’s services is supported by megatrends. • The timing, and the possible consequences of, the Sitowise Group’s net sales is expected to anticipated central banks’ decisions to lower interest slightly decline in 2024
Slide 53: Strategy implementation in 2023
Strategy implementation in 2023
Slide 54: The most Innovative
The most Innovative Some highlights from 2023 Direction 2024 → ✓ Innovation Model updated for more focused ✓ Create innovative culture that enables and customer-centric to generate ideas that are selectively accelerated and developed into new solutions ✓ Each Business Area has new Smart services wit
Slide 55: The most Sustainable
The most Sustainable Some highlights from 2023 Direction 2024 → ✓ We have organized around sustainability ✓ Bring sustainability as an integral part of all services to drive further the development our projects, developing existing expertise, and sales in the recognized areas and understanding clien
Slide 56: The most Efficient
The most Efficient Some highlights from 2023 Direction 2024 → ✓ New sales organization with specific sales ✓ Focus on sales excellence and customer- groups for the strategic sales growth areas centricity ✓ New ERP (Unit4) and CRM (Salesforce) ✓ Ensure competitive advantage through systems rollout ri
Slide 57: Good progress in our strategic ambitions
Good progress in our strategic ambitions • to grow our • to double our recurring revenue sustainability to be 10% services revenue of Sitowise’s annual net sales to exceed 10 million euros by the end of 2025 by the end 2025 TARGET TARGET 2022 2023 … 2025 2022 2023 … 2025 4% 6% 10% 5 M€ 8 M€ >10 M€ 5
Slide 58: Our talking points today
Our talking points today 01 02 03 04 Sitowise is a ESG in Sitowise Financial Appendix: leading player performance with competitive Digital advantages and clear Solutions strategic direction offering
Slide 59: Software, Data and Consulting with a profound customer understanding
NORDIC EXCELLENCE IN GEOSPATIAL SOLUTIONS Software, Data and Consulting with a profound customer understanding Customer-oriented Software Development Software Products, SaaS and Data Services Specialist Services and Strategic Consulting Sami Head of Innovation Turku
Slide 60: LOUHI | Comprehensive GIS Platform
LOUHI | Comprehensive GIS Government | Municipalities| Construction projects| Energy Industry| Telecom Industry Platform The Louhi GIS platform brings together up-to- date data from different sources and makes the information understandable. • A comprehensive spatial data platform for asset manageme
Slide 61: ROUTA | Solution for Infrastructure Management
ROUTA | Solution for Infrastructure Management Routa software can be used to streamline the execution of infrastructure work and automate the documentation of all work phases. The software is specifically designed for mobile work data management. • The most versatile infrastructure maintenance manag
Slide 62: FORESTA | Forestry Solution for Professionals
FORESTA | Forestry Solution for Professionals Foresta is a solution for forest management and forest resource information management tasks, from forest plan preparation to sustainability reporting. The user is supported by open forest resource information and comprehensive geospatial data. • Tools f
Slide 63: INFRACONTROL ONLINE | Smart City Platform
INFRACONTROL ONLINE | Smart City Platform Infracontrol Online is a smart city platform cloud service for monitoring, control and issue management. Infracontrol Online combines IoT data, citizen feedback and infrastructure management and reporting into a single entity. • A smart city platform for mai
Slide 64: AINO | One-stop data service for the built environment
AINO | One-stop data service for operators of the built environment Aino data solution manages spatial data sets that support our customers' operations. In addition Aino creates spatial data analyses. Aino offers the most comprehensive single- source access to both commercial and open geospatial dat
Slide 65: MayorsIndicators | Sustainable Development Monitoring
MayorsIndicators | Sustainable Development Monitoring for Cities and Municipalities MayorsIndicators offers city-specific data and ranks cities according to their performance in sustainable development. MayorsIndicators helps local authorities track their sustainability performance, making sustainab
Slide 66: Our Work Built Environment and Traffic
Our Work Built Environment and Traffic FINNISH TRANSPORT INFRASTRUCTURE GEOSPATIAL SOLUTIONS FOR FINLAND'S DATA TO WIND POWER PROJECTS AGENCY: KEY IT PROJECTS TRANSMISSION SYSTEM OPERATOR Property and contract register | GIS Services Operation FINGRID Construction company YIT utilizes Sitowise Aino
Slide 67: Our Work Forest Sector
Our Work Forest Sector METSÄÄN.FI LEAFPOINT ROUTA SOLUTION FOR Finnish Forest Centre’s renewed online service for forest Operational management system for all Finnish Forestry METSÄHALLITUS owners. Approximately 100 000 users. Management Associations: 56 associations, Operational management system f
Slide 68: Thank you!
Thank you! Questions? Please contact: [email protected] 68