CONSTI PLC FINANCIAL STATEMENTS BULLETIN 4 FEBRUARY 2022, at 8.30 a.m.                        

Consti Plc Financial Statements Bulletin for January – December 2021

SOLID PERFORMANCE CONTINUED

10–12/2021 highlights (comparison figures in parenthesis 10–12/2020):

  • Net sales EUR 82.6 (78.1) million; growth 5.8 %
  • EBITDA EUR 4.0 (3.7) million and EBITDA margin 4.9 % (4.8 %)
  • Adjusted operating result (EBIT) EUR 3.0 (3.5) million and Adjusted EBIT margin 3.6% (4.5%)
  • Operating result (EBIT) EUR 3.0 (3.0) million and EBIT margin 3.6 % (3.8 %)
  • Order backlog EUR 218.6 (177.9) million; growth 22.9 %
  • Order intake EUR 66.9 (54.3) million; growth 23.1%
  • Free cash flow EUR 6.1 (3.6) million
  • Earnings per share EUR 0.30 (0.27)

1–12/2021 highlights (comparison figures in parenthesis 1–12/2020):

  • Net sales EUR 288.8 (274.6) million; growth 5.1 %
  • EBITDA EUR 9.2 (11.4) million and EBITDA margin 3.2 % (4.2 %)
  • Adjusted operating result (EBIT) EUR 9.5 (9.5) million and Adjusted EBIT margin 3.3% (3.5%)
  • Operating result (EBIT) EUR 5.7 (8.2) million and EBIT margin 2.0 % (3.0 %)
  • Free cash flow EUR 5.5 (18.3) million
  • Earnings per share EUR 0.47 (0.70)
  • The Board of Directors proposes a dividend of EUR 0.45 per share

Guidance on the Group outlook for 2022:
The Company estimates that its operating result for 2022 will be in the range of EUR 9-13 million.

KEY FIGURES (EUR 1,000)10-12/
2021		10-12/
2020		Change %1-12/
2021		1-12/
2020		Change %
Net sales82,60578,0985.8 %288,773274,6465.1 %
EBITDA4,0143,7297.7 %9,20211,440-19.6 %
EBITDA margin, %4.9 %4.8 % 3.2 %4.2 % 
Adjusted operating result (EBIT)3,0113,522-14.5 %9,5359,4780.6 %
Adjusted EBIT margin, %3.6 %4.5 % 3.3 %3.5 % 
Operating result (EBIT)3,0112,9541.9 %5,7058,237-30.7 %
Operating result (EBIT) margin, %3.6 %3.8 % 2.0 %3.0 % 
Profit/loss for the period2,2902,1426.9 %3,7175,675-34.5 %
Order backlog   218,578177,85722.9 %
Free cash flow6,1363,64168.5 %5,45818,334-70.2 %
Cash conversion, %152.9 %97.7 % 59.3 %160.3 % 
Net interest-bearing debt   14,2624,737201.1 %
Gearing, %   44.7 %14.1 % 
Return on investment, ROI %   9.2 %13.6 % 
Number of personnel at period end   9619273.7 %
Earnings per share, undiluted (EUR)0.300.2711.1 %0.470.70-32.9 %


CEO Esa Korkeela’s comment

“Consti's solid performance continued in the last quarter of the year. In October-December, our net sales grew by 5.8 percent and were 82.6 (78.1) million euro. In the financial year 2021, our net sales returned to a growth path. Our net sales for January-December grew by 5.1 percent to 288.8 (274.6) million euro.

Our adjusted operating result for October-December before items affecting comparability was 3.0 (3.5) million euro, which is 3.6 (4.5) percent of our net sales. In October-December, our operating result was 3.0 (3.0) million euro, which is 3.6 (3.8) percent of our net sales. Operationally, the last quarter of the year was twofold for us. Our best business units performed excellently, but the performance of two regional business units with poor profitability was weaker than we expected. Our adjusted operating result for the financial year before items affecting comparability remained on level with last year and was 9.5 (9.5) million euro, which is 3.3 (3.5) percent of our net sales.

Due to our solid profitability and released working capital, our free cash flow in October-December improved significantly compared to the previous year and was 6.1 (3.6) million euro. As a result of the positive cash flow development, our balance sheet and liquidity position also strengthened during the last quarter.

During October-December, our order intake was 66.9 (54.3) million euro, which is an increase of 23.1 percent compared to the comparison period. Our order intake for January-December grew by 28.4 percent compared to the comparison period and were 275.1 (214.3) million euro. Thanks to strong order accumulation, our order backlog at the end of the review period increased by 22.9 percent compared to the comparison period and was 218.6 (177.9) million euro. Our good order intake for the financial year, strengthened order backlog, and the increase in net sales are a good indication that our strategy has been well received by our customers.

In 2021, we focused on implementing our strategy which was announced in February, focusing on exploiting attractive growth opportunities in the company's existing businesses, expanding into new construction, sustainability, and expanding the value created for customers. During the financial year, we made progress on our strategic projects as planned. In June, we recorded two new construction projects in accordance with our strategy, and in August we carried out the acquisition of RA-Urakointi Oy in order to meet the increased demand in the housing company market. In addition, we strengthened our capabilities in project development, design management and energy efficiency in a targeted manner during the year. In sustainability, our work progressed consistent with our sustainability themes selected for the strategy period: environmental friendliness, occupational safety and well-being at work, supply chain and customer satisfaction.

The market environment for construction and technical building services remained at an adequate level in the last quarter of the year. In October-December, the increase in construction costs had a somewhat greater impact on our business than in the beginning of the year in ongoing projects where a rapid increase in material costs has not been sufficiently considered at the tendering phase. The coronavirus pandemic (covid-19) as a whole did not have a significant impact on our business during the financial year 2021.

Based on our current market view, we believe that demand for renovations and building services will remain at an adequate level in 2022. The most significant uncertainties in the operating environment are related to the increase in construction costs and the availability of materials. In addition, the coronavirus pandemic continues to create uncertainty in the operating environment, especially due to the large number of coronavirus cases. However, our strong order backlog gives us good opportunities to continue our positive and solid performance in 2022.”

Operating environment

Professional renovations have increased almost continuously in Finland for the past 20 years. Growth has been relatively steady, as renovations are more need-driven and less cyclical than new construction. In addition to the age of the building stock, the need for renovations is increased especially by climate change and energy efficiency requirements, as well as urbanisation and changes in working methods.

In 2021 the renovation market grew an estimated 1–1.5 percent. At the same time, it is estimated that the new construction market grew as much as 7.8 percent and that the entire building construction market grew about 4.7 percent. The corona pandemic did not have a significant impact on construction in 2021. The renovation market in Finland is very fragmented and there are numerous small companies working in the sector.

The value of professional renovations was approximately 14 billion euro in 2021, of which residential buildings accounted for about 8.1 billion euro. The majority of renovations are conducted in apartment buildings and terraced houses.

Renovations have made up approximately half of all housing construction projects in recent years. In 2021 the share was about 45 percent. Forecon’s market analysis estimates that the number of renovations tripled in Finland between 1980-2020. Although the growth rate of renovations is expected to slow down somewhat, it is estimated that renovations have better growth prospects than new construction, when looking at the 2020s as a whole. New construction growth has been driven by residential building, and also numerous public service construction projects, especially schools and hospitals. Despite the growth in new school construction, public construction is expected to slow down in the next few years, and this will have a significant impact on the volume of construction.

In Finland renovations are driven primarily by the age of the building stock. Housing construction peaked in the 1970s and building technology, facades and structures from that era now require substantial renovations. Thus far, the greatest number of renovations have been conducted on housing companies built in the 1960s and renovations have focused on building technology. Building technology has been the fastest growing renovation type. Forecon estimates that building technology renovations increased about 4–5 percent annually in the 2020s, while the number of renovations as a whole has grown approximately 1–2 percent per year. Building technology has accounted for about half of all housing company renovations in recent years, and about 40 percent of all the renovations of the building stock. Exterior surfaces and structures have been the second largest renovation type, making up nearly 40 percent of all renovations. Facade renovations have had to be postponed in many housing companies for financial reasons, to make way for pipeline renovations. Consequently, housing company renovations will focus more strongly on facade renovations in upcoming years. In addition, strong weather fluctuations and wind driven rain brought forth by climate change put facades under greater duress than before and add to maintenance needs. Approximately one fifth of all renovation projects are maintenance and repair projects.

The demand for renovations in Finland is also driven by the growing need for commercial and office building renovations. Commercial and office building construction was especially rapid in Finland in the 1980s and also in the early 1990s and 2000s. Buildings from this time period do not often meet current needs. For example, the increase in remote work and e-commerce have set new challenges for the efficient use of these premises.

Renovation needs are also increased by many phenomena classified as megatrends such as population aging, urbanisation, and climate change. Climate change mitigation necessitates better energy efficiency in buildings, which increases the need to renovate both residential buildings and commercial and office premises.

Renovations are expected to increase in 2022 by about 1.3–2.0 percent. The Confederation of Finnish Construction Industries RT and the construction trends group led by the Ministry of Finance estimate that the growth will be about 2.0 percent and Euroconstruct forecasts a growth of 1.3 percent. Renovations are expected to increase in both residential buildings and office premises. The growth forecasts for the entire construction industry for 2022 vary between 2.0 and 2.5 percent.

General risks to growth include increased construction costs and the availability of both personnel and materials. The shortage of skilled personnel particularly affects growth centres, where both new construction and renovations are increasingly concentrating.

Outlook for 2022

The Finnish building market is estimated to grow by around 2.0 percent in 2022 from the previous year. The renovation market is estimated to grow by approximately 1.3 percent in 2022. Renovations of both residential buildings and business premises are expected to increase.

The most significant uncertainties in the operating environment in 2022 are related to rising construction costs and the availability of materials. In addition, the coronavirus pandemic may have a negative impact on the company’s ability to carry out ongoing projects due to the large number of coronavirus cases.

The Company estimates that its operating result for 2022 will be in the range of EUR 9-13 million.

Press conference

Microsoft Teams meeting for analysts, portfolio managers and media representatives, will take place 4 February 2022, at 10:00 a.m. (EET). The meeting will be hosted by CEO Esa Korkeela and CFO Joni Sorsanen.

Financial reporting in 2022

Consti will publish its Financial Statements, Board of Directors’ Report, Auditors’ Report, and Corporate Governance Statement on the company website during week 11/2022

Consti Plc’s Annual General Meeting shall be arranged on Tuesday 5 April 2022 in Helsinki. Invitation to the Annual General Meeting will be published later as a separate Stock Exchange release.

Consti Plc shall publish three interim reports during 2022:

  • Interim report 1-3/2022 published 29 April 2022
  • Half-year financial report 1-6/2022 published 22 July 2022
  • Interim report 1-9/2022 published 27 October 2022

CONSTI PLC

Further information:

Esa Korkeela, CEO, Consti Plc, Tel. +358 40 730 8568
Joni Sorsanen, CFO, Consti Plc, Tel. +358 50 443 3045

Distribution:

Nasdaq Helsinki Ltd.
Major media
www.consti.fi

Consti is a leading Finnish company concentrating on renovation and technical 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. Company has four business areas: Housing Companies, Corporations, Public Sector and Building Technology. In 2021, Consti Group’s net sales amounted to 289 million euro. It employs approximately 1000 professionals in renovation construction and building technology.

Consti Plc is listed on Nasdaq Helsinki. The trading code is CONSTI. www.consti.fi

Attachment

  • Consti Financial Statements Bulletin 2021

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