Consti Oyj : Financial Statements Bulletin 1-12 2022

CONSTI'S FINANCIAL STATEMENTS BULLETIN JANUARY - DECEMBER 2022

NET SALES GREW AND PROFITABILITY IMPROVED

3 February 2023 at 8:30 am

10-12/2022 highlights (comparison figures in parenthesis 10-12/2021):

• Net sales 93.3 (82.6) million euro; growth 12.9 %
• EBITDA 5.7 (4.0) million euro and EBITDA margin 6.1 % (4.9%)
• Adjusted operating result (EBIT) EUR 4.8 (3.0) million and Adjusted EBIT margin 5.2% (3.6%)
• Operating result (EBIT) 4.8 (3.0) million and operating result (EBIT) margin 5.2 % (3.6%)
• Order backlog 246.7 (218.6) million euro; growth 12.8 %
• Order intake EUR 109.1 (66.9) million; growth 63.1%
• Free cash flow 10.4 (6.1) million euro
• Earnings per share 0.49 (0.30) euro

1-12/2022 highlights (comparison figures in parenthesis 1-12/2021):

• Net sales 305.2 (288.8) million euro; growth 5.7 %
• EBITDA 14.9 (9.2) million euro and EBITDA margin 4.9 % (3.2%)
• Adjusted operating result (EBIT) EUR 11.4 (9.5) million and Adjusted EBIT margin 3.7% (3.3%)
• Operating result (EBIT) 11.4 (5.7) million and operating result (EBIT) margin 3.7 % (2.0%)
• Order intake EUR 283.7 (275.1) million; growth 3.1%
• Free cash flow 18.0 (5.5) million euro
• Earnings per share 1,10 (0.47) euro
• The Board of Directors proposes a dividend of EUR 0.60 per share

Guidance on the Group outlook for 2023:

The Company estimates that its operating result for 2023 will be in the range of EUR 9.5-13.5 million.

	KEY FIGURES (EUR 1,000)		10-12/			10-12/			Change %		1-12/			1-12/			Change
		2022			2021				2022			2021			%
Net sales	93,264		82,605	12.9 %	305,217		288,773	5.7 %
EBITDA	5,674		4,014	41.3 %	14,927		9,202	62.2 %
EBITDA margin, %	6.1 %		4.9 %				4.9 %		3.2 %
Adjusted operating result (EBIT)	4,827		3,011	60.3 %	11,428		9,535	19.9 %
Adjusted EBIT margin, %	5.2 %		3.6 %				3.7 %		3.3 %
Operating result (EBIT)	4,827		3,011	60.3 %	11,428		5,705	100.3 %
Operating result (EBIT) margin, %	5.2 %		3.6 %				3.7 %		2.0 %
Profit/loss for the period	3,739		2,290	63.2 %	8,491		3,717	128.4 %
Order backlog									246,650		218,578	12.8 %
Free cash flow	10,413		6,136	69.7 %	18,000		5,458	229.8 %
Cash conversion, %	183.5 %		152.9 %				120.6 %		59.3 %
Net interest-bearing debt									3,871		14,262	-72.9 %
Gearing, %									10.7 %		44.7 %
Return on investment, ROI %									18.3 %		9.2 %
Number of personnel at period end									975		961	1.5 %
Earnings per share, undiluted (EUR)	0.49		0.30	63.3 %	1.10		0.47	134.0 %

Q4 | 1

CEO's Review

"Consti's solid development continued during the last quarter of the year. Our net sales for October-December increased by 12.9 percent and amounted to 93.3 (82.6) million euro. Our net sales for the reporting period 2022 increased by 5.7 percent and amounted to 305.2 (288.8) million euro. 75.1 (70.0) percent of our net sales were generated in the Greater Helsinki area.

Our operating result for October-December was 4.8 (3.0) million euro, which is 5.2 (3.6) percent of our net sales. The last quarter advanced according to our expectations, and our projects predominantly progressed as planned. Our profitability improved, although cost inflation had a negative impact on our result through both increased construction costs and increased indirect costs. Our operating profit for the reporting period doubled and was 11.4 (5.7) million euros, which is 3.7 (2.0) percent of our net sales. Our adjusted operating result for the reporting period before items affecting comparability was 11.4 (9.5) million euros, which is 3.7 (3.3) percent of net sales.

Thanks to improved profitability and released working capital, our free cash flow for October-December improved compared to the previous year and was 10.4 (6.1) million euro. With the positive cash flow development, our balance sheet and liquidity positions strengthened during the last quarter. Our January- December free cash flow improved significantly compared to the previous year and was 18.0 (5.5) million euro, which means a cash conversion ratio of 120.6 (59.3) percent.

During October-December, our order intake amounted to 109.1 (66.9) million euro, which means an increase of 63.1 percent compared to the comparison period. The most significant orders of the last quarter were the renovation of Taivallahti elementary school, the renovation and new construction project of Oulunkylä elementary school and kindergarten, and the alliance project for the implementation phase of the new ward building of Jorvi Hospital, where Consti will carry out the HVAC and sprinkler work. Our order intake for January-December increased by 3.1 percent year-on-year and amounted to 283.7 (275.1) million euro. Thanks to the strong order intake, our order backlog at the end of the reporting period increased by 12.8 percent compared to the comparison period and was 246.7 (218.6) million euro.

We made progress in our strategic projects in accordance with our plans. Our long-term work to improve profitability continued. We achieved growth in the segments we wanted among renovation, building technology as well as in Service business. The expansion of our operations into new construction continued both in the Greater Helsinki area and regionally. During the year, we also strengthened our abilities in, for example, project development, design management and energy efficiency. In corporate social responsibility, our work progressed in accordance with our chosen responsibility themes for the strategy period. As part of environmentally friendly services, we developed, among other things, the Consti OPTIMI multi-energy system, which can be used to even halve the energy consumption of properties.

Based on our current market view, we believe that the demand for renovation and building technology services will remain reasonably good in 2023. According to forecasts, renovation will be the only area of construction that will grow in 2023. Growth is expected from both residential renovation and other renovation. The forecasts reflect the needs-oriented nature of renovation. However, strong inflation and the rapid rise of both energy costs and the price of financing may postpone construction projects in the short term. Uncertainty in the outlook for construction is also brought about by the rise in the prices and availability of building materials and products, intensified by the war in Ukraine.

Our strong order backlog, the progress of our strategic projects, and our steadily improved performance put us in a good position to continue our positive and solid development in 2023."

Operating environment

In recent years, the Finnish house building market has been divided almost equally between new construction and renovation.

In 2022, new construction grew more than renovation. New construction growth was driven by residential construction. Estimates of the growth of residential new construction vary from the Confederation of Finnish Construction Industries RT's seven percent to Euroconstruct's around ten percent. RT estimates that non- residential new construction increased by 2.5 percent, while Euroconstruct estimates that it increased 3.5 percent.

Renovation grew an estimated 0.8-1.5 percent in 2022 and were worth approximately 14 billion euro.

In 2023, both residential construction and non-residential construction are predicted to decrease clearly.

Q4 | 2

Renovation, on the other hand, will continue to grow steadily according to estimations.

Renovation has grown relatively steadily for the last 20 years. Growth is projected to remain steady for years to come, as renovation is more need-based and less sensitive to economic cycles than new construction.

Nearly two-thirds of renovation is conducted in residential buildings, and more than half of this volume is estimated to be professional renovation. Just over one third of all renovation is conducted in non-residential buildings. In 2022, renovation of non-residential buildings grew more than renovation of residential buildings.

In the renovation of residential buildings, the emphasis is still on building technology, which accounts for approximately 40 percent of the value of renovation. It has been estimated that building technology renovation will increase more strongly than other renovation also in the next few years. The growth of building technology renovation is maintained by the large number of residential buildings that have reached the age where they require pipeline renovation.

The higher prices of heating and the green transition will also bring growth to the building technology market. Until now, energy efficiency has been improved largely in connection with other renovation, but rapidly rising energy prices have made energy renovation profitable as independent projects as well. Energy efficiency and a building's ability to withstand increasing extreme weather conditions are improved with building technology and construction solutions such as facade renovation. Renovation plays a central role in reducing the carbon footprint of the built environment, as the number of new buildings is growing by only about one per cent per year.

In the short term, however, building technology companies' expectations for the future have darkened. Future prospects are overshadowed by uncertainty regarding the prices and availability of supplies and equipment, and the price of energy, caused by the war in Ukraine. According to a survey conducted by Statistics Finland, renovation prices had risen by more than ten percent in the fall of 2022 from the previous year. The prices for pipeline and roof renovation had risen the most.

In addition to building technology renovation, many housing companies have a growing need for facade renovation, which they have postponed due to financial reasons, to make way for pipeline renovation. Approximately one fifth of all renovation projects are maintenance and repair projects.

In the building technology market, Consti also operates in all other areas of new construction apart from housing construction. In new construction, the construction of business premises started to pick up after the COVID-19 pandemic at the end of 2022. The construction of hospital and teaching facilities also increased clearly.

According to forecasts, renovation will be the only area of construction that will grow in 2023. Growth is expected from both residential renovation and other renovation.

In 2023, the new construction of residential buildings is predicted to decrease by approximately 10-13 percent, and the new construction of non-residential buildings by approximately 1-2 percent. However, the ongoing hospital and school projects keep service construction at a good level. There is more uncertainty associated with the growth of commercial and office construction.

It is expected that renovation will continue on a growth path of around one per cent also in 2023. Growth is expected from the renovation of both residential and non-residential buildings.

The age of Finland's building stock is a primary driver of the need for renovation. Housing construction was at its peak in the 1970s, and the building technology and structures of that time now require thorough renovation. Along with the need for building technology renovation, expectations for living comfort have risen. In addition, the need for renovation in business premises is also driven by changes in space needs.

However, strong inflation and the rapid rise of both energy costs and the price of financing may postpone renovations in the short term, especially renovations commissioned by housing companies. General meetings held in housing companies during the spring will, to a large extent, determine their readiness for renovation investments. Uncertainty in the outlook for construction is also brought about by the rise in the prices and availability of building materials and products, intensified by the war in Ukraine.

In addition to the age of the building stock, renovation needs are increased by many phenomena named as megatrends, such as urbanisation, the aging of the population, changes in working methods, the growth of e-commerce and climate change. Both new construction and renovation remain heavily concentrated in growth centres.

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Group structure

Consti is one of Finland's leading companies focused on renovation contracting and technical building services. Consti offers comprehensive renovation and building technology services and selected new construction services to housing companies, corporations, investors and the public sector in Finland's growth centres.

Consti has four business areas: Housing Companies, Corporations, Public Sector and Building Technology. All these also contain Servicing and maintenance services which is not reported as its own business area. Consti however reports its Service operations' sales per financial year. Consti's Service business includes service contracting as well as technical repair and maintenance services to contract customers.

Business areas are reported in one segment. In addition, Consti reports net sales for each business area.

The Group's parent company is Consti Plc. The business areas operate in subsidiaries completely owned by the parent company: Consti Korjausrakentaminen Oy (Housing Companies, Corporations and Public Sector), Consti Talotekniikka Oy (Building Technology) and RA-Urakointi Oy.

Long term goals

Consti's mission is to improve the value of the building stock and people's quality of life. Consti's vision is to be "Our customer's number one partner and expert in multiple types of construction". To achieve its vision and goals, Consti has defined strategic focus areas, which are: growth in current businesses, new businesses, improving relative profitability, improving production efficiency, people and management and corporate social responsibility and sustainable development.

The company's long-term financial goals are to achieve:

• Growth: net sales growing faster than the market
• Profitability: EBIT margin exceeding 5 percent
• Free cash flow: Cash conversion ratio exceeding 90 percent
• Balance sheet structure: Net debt to adjusted EBITDA ratio of less than 2.5x
• The Company's aim is to distribute as dividends at least 50 percent of the Company's annual net profit

Sales, result and order backlog

10-12/2022

Consti Group's October-December net sales were 93.3 (82.6) million euro. Net sales increased 12.9 percent. Housing Companies net sales were 32.4 (27.3), Corporations net sales were 33.8 (27.6) Public Sector net sales were 12.4 (12.1) and Building Technology net sales were 19.1 (19.5) million euro.

Net sales grew in Housing Companies, Corporations and Public Sector but decreased in Building Technology. Housing Companies' net sales grew by 18.7 percent and growth was particularly strong in the Greater Helsinki area. Net sales in the Corporations business area grew in Greater Helsinki area. The net sales of Building Technology business area increased in service business but decreased in building technology installations business.

Operating result (EBIT) for October-December was 4.8 (3.0) million euro. Operating result from net sales was 5.2 (3.6) percent. Adjusted operating result (EBIT) for October-December was 4.8 (3.0) million euro. Adjusted operating result from net sales was 5.2 (3.6) percent. Operationally the last quarter of the year advanced as expected and projects largely progressed as planned. Profitability improved, although cost inflation weakened the result through both increased construction costs and higher indirect costs.

The order backlog at the end of the reporting period increased 12.8 percent and was EUR 246.7 (218.6) million euro. In October-December, the order intake increased by 63.1 percent and was 109.1 (66.9) million euro.

1-12/2022

Consti Group's January-December net sales were 305.2 (288.8) million euro. Net sales increased 5.7

Q4 | 4

percent. Housing Companies net sales were 104.0 (90.0), Corporations net sales were 104.9 (101.0), Public Sector net sales were 42.1 (37.7) and Building Technology net sales were 69.1 (72.9) million euro. These figures include Service Business's net sales amounting to 41.8 (37.8) million euro resulting a growth of 10.4 percent.

Net sales grew in Housing Companies, Corporations and Public Sector but decreased in Building Technology. Housing Companies' net sales grew by 15.5 percent and growth was particularly strong in the Greater Helsinki area. New construction projects that started in the summer of 2021 boosted net sales in the Public Sector business area. Net sales in the Corporations business area grew in Greater Helsinki area. The net sales of Building Technology business area increased in service business but decreased in building technology installations business.

Operating result (EBIT) for January-December was 11.4 (5.7) million euro. Operating result from net sales was 3.7 (2.0) percent. Adjusted operating result (EBIT) for January-December was 11.4 (9.5) million euro. Adjusted operating result from net sales was 3.7 (3.3) percent. Operationally January-December advanced as expected and projects largely progressed as planned. Profitability improved, although cost inflation weakened the result through both increased construction costs and higher indirect costs. Items affecting comparability in the comparison period relate to the arbitral tribunal's award received in June 2021, and the legal costs of the procedures.

The order backlog at the end of the reporting period increased 12.8 percent compared to the end of the previous financial year and was 246.7 (218.6) million euro. The order intake value during January-December increased 3.1 percent and was 283.7 (275.1) million euro.

Investments and business combinations

Investments into intangible and tangible assets in October-December were 0.4 (0.2) million euro, which is

0.4 (0.3) percent of the company's net sales. Investments into tangible and intangible assets in January- December were 1.5 (1.4) million euro, which is 0.5 (0.5) percent of net sales. The largest investments were made into property, plant and equipment, which primarily include machinery and equipment purchases. Investments into right-of-use assets (IFRS 16) during January-December were EUR 1.3 (4.9) million. The majority of investments into right-of-use assets during the reporting period were related to renewed leasing contracts of vans used in project and service business as well as to the accounting of business premises and warehouses lease agreements that are valid until further notice, in accordance with the IFRS 16 - standard.

In 2022 investments related to business combinations were 0.0 (1.7) million euro.

Cash flow and financial position

The operating cash flow in October-December before financing items and taxes was 10.8 (6.4) million euro. Free cash flow was 10.4 (6.1) million euro. The cash flow ratio in October-December was 183.5 (152.9) percent. October-December cash flow was positively affected by the improvement of operating result and the higher amount of released working capital compared to comparison period. The cash flow effect of change in working capital in October-December was 4.9 (2.2) million euro.

The January-December operating cash flow before financing items and taxes was 19.5 (6.9) million euro. Free cash flow was 18.0 (5.5) million euro. The cash flow ratio in January-December was 120.6 (59.3) percent. The cash flow in January-December was positively affected by the improvement of operating result and the change in working capital. The cash flow effect of change in working capital in FY 2022 was 4.4 (- 2.9) million euro.

Consti Group's cash and cash equivalents on 31 December 2022 were 20.9 (18.1) million euro. In addition, the company has undrawn revolving credit facilities and unused credit limits amounting to 8.0 (8.0) million euro in total. The Group's interest-bearing debts were 24.8 (32.3) million euro. External loans are subject to two financial covenants based on the ratio of the Group's net debt to adjusted EBITDA and gearing. On the balance sheet date, the interest-bearing net debt was 3.9 (14.3) million euro and the gearing ratio 10.7 (44.7) percent. At the balance sheet date, the Group's interest-bearing net debt to adjusted EBITDA ratio was under the covenant's maximum level according to the confirmed calculation principles.

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