Kreate Group Plc Half-year report January–June 2021
This release is a summary of Kreate Group’s Half-year report January–June 2021. The complete Interim Report is attached, and also available on the company’s website at https://kreate.fi/en/investor/releases-and-reports/reports/.
Kreate’s Half-year report January-
April–June in brief
- Order backlog amounted to EUR 157.5 (144.4) million
- Revenue decreased to EUR 52.9 (58.0) million
- EBITDA was EUR 3.4 (3.9) million, amounting to 6.3 (6.7) per cent of revenue
- EBITA was EUR 2.5 (3.0) million, amounting to 4.7 (5.1) per cent of revenue
-
Earnings per share were
EUR 0.20 (0.28) - Free cash flow from operating activities was EUR –3.7 (2.5) million
-
Interest-bearing net debt was
EUR 27.4 (18.4) million
January–June in brief
- Kreate Group Plc’s shares were listed on Nasdaq Helsinki, and the company received more than 18,600 new shareholders. Trading in Kreate’s shares started on the pre-list of
Nasdaq Helsinki Ltd on19 February 2021 and on the stock exchange list on23 February 2021 . - Revenue decreased to EUR 91.2 (108.0) million.
- EBITDA was EUR 5.1 (6.0) million, amounting to 5.5 (5.6) per cent of revenue.
- EBITA was EUR 3.4 (4.3) million, amounting to 3.7 (3.9) per cent of revenue.
-
The company’s IPO expenses were
EUR 2.3 million . Of this sum,EUR 0.9 million encumber the result before tax for the reporting period. -
Earnings per share adjusted with IPO expenses were
EUR 0.28 -
Earnings per share were
EUR 0.17 (0.40) - Free cash flow from operating activities was EUR –3.6 (0.3) million
Operating environment in 2021
In
Historically, the Finnish infrastructure construction market has grown steadily. In 2020, the total size of the market was approximately
In 2020, the COVID-19 pandemic postponed the start of certain infrastructure construction projects, which also affected the development of Kreate’s 2021 order backlog. The normalisation of request for quotation volumes and customer activity in Q4 2020 is particularly seen in the growth of the number of quotation requests in bridge construction, which is part of structural engineering. Q2 2021 also saw a recovery in the railway construction and transport infrastructure construction segments. The large, future railway investments that have received lots of publicity will not yet be reflected on the construction volume, but smaller railway construction projects are expected in the market. Investments planned in the private sector, including the repurposing of old buildings and making investments in business premises, are slowly showing signs of progress. On the other hand, the continued rise of material costs and a shortage of materials and labour may limit housing production in the near future. However, in the short term, particularly urbanisation, the infrastructure maintenance backlog and public sector projects are expected to drive growth and further strengthen Kreate’s position in executing demanding projects.
The National Transport System Plan is expected to bring long-term developments exceeding individual governments’ terms in office to the development of the transport network, which will also have positive impacts on the infrastructure construction market. The Plan involves a 12-year action programme, which includes actions by the government and municipalities and a government funding programme for the transport system. However, one problem with the plan is the municipalities’ growing share of construction costs, which may mean, at worst, that projects are not executed and the condition of the road and street network and railways deteriorates, for example. Furthermore, the budget cuts affecting the development of the transport system and basic transport infrastructure maintenance proposed during the government’s mid-term policy review would reduce the funding for 2023 and 2024.
The supplementary budget published by the government in
Despite the slight reduction in the overall market forecasted for 2021, Kreate believes that the applicable structural engineering and transport infrastructure markets will at least remain on the 2020 level.
Result guidance for 2021 (remains unchanged)
Kreate estimates that the company revenue (2020:
On
President & CEO Timo Vikström:
“The market picked up in Q2, which raised our order backlog higher than the reference period to
In Q2, we announced the “Crown Bridges” project, the largest in Kreate’s history, which we won in a joint venture with YIT. Kreate’s share, half of the
In addition to the Crown Bridges project, I would like to highlight two other significant projects in whose tendering we have succeeded after the review period, but they are not yet recorded in the order backlog. We won a contract of approximately
In the coming years, the Crown Bridges, Sulkavuori treatment plant and
This year, we have further strengthened our market-leading position in railway bridge construction projects. We have already signed contracts for six bridges, which are built by using the skidding method. We completed the first demanding construction and relocation operation under a very tight schedule already in June. Our skilful tender calculation, own equipment and experienced employees have helped us win contracts and complete them on time. In order to strengthen our organisation even further, we continued hiring new experts. This will also benefit us in the coming years as expertise in railway and track construction and structural engineering becomes more significant in projects.
In the review period, we also conducted a personnel survey that describes the status quo and provides guidelines for further improving our personnel well-being and group operations. Investing in our employees is a priority for us because a good employee experience impacts both the effectiveness of our operations and the customer experience. Accordingly, the personnel survey results highlighted our employees’ commitment and high standards of quality. Kreate Group’s Net Promoter Score (NPS), which indicates how likely our employees would recommend our products and services, had once again increased from an already excellent level to 68. Moreover, our employees find it positive that we focus on what matters: completing projects efficiently, with high quality and minimal bureaucracy. Our success factors include a strong project focus and project management.
The positive developments in the market together with Kreate’s strong competitiveness, particularly in demanding construction, lay a solid foundation for our strategic growth and success. We are facing the future with confidence, as the infrastructure market is developing at a stable pace, we have retained our accounts and have a clearer visibility into the market.”
Key figures
EUR million | 4-6/2021 | 4-6/2020 | 1-6/2021 | 1-6/2020 | 1-12/2020 |
Order backlog |
|
| 157.5 | 144.4 | 134.9 |
Revenue | 52.9 | 58.0 | 91.2 | 108.0 | 235.3 |
Year-on-year change in revenue, % | -8.8 | 12.3 | -15.5 | 34.1 | 6.4 |
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 | 2.4 | 2.9 | 3.3 | 4.2 | 10.4 |
Operating profit, % | 4.6 | 5.0 | 3.6 | 3.9 | 4.4 |
Result for the period | 1.8 | 2.1 | 1.4 | 2.9 | 7.8 |
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Capital employed |
|
| 63.0 | 57.7 | 54.5 |
Return on capital employed, % |
|
| 15.7 | 21.6 | 19.2 |
Return on equity, % |
|
| 16.6 | 29.0 | 24.7 |
Net investments in operating activities | -2.1 | -1.0 | -2.8 | -2.1 | -4.6 |
Free cash flow from operating activities | -3.7 | 2.5 | -3.6 | 0.3 | 9.7 |
Net working capital |
|
| -0.3 | -1.0 | -5.4 |
Net debt |
|
| 27.4 | 18.4 | 27.9 |
Net debt/EBITDA |
|
| 2.1 | 1.1 | 2.0 |
Equity ratio, % |
|
| 33.4 | 35.8 | 26.3 |
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Earnings per share, € | 0.20 | 0.28 | 0.17 | 0.40 | 0.88 |
Earnings per share adjusted with IPO expenses, € |
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| 0.28 |
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Personnel at the end of the period |
|
| 412 | 441 | 383 |
Personnel on average | 396 | 427 | 390 | 413 | 407 |
Kreate Group’s financial reporting in 2021
The planned publication dates for Kreate Group Plc’s financial reports in 2021 are as follows:
- Interim report for January–September 2021:
27 October 2021
Webcast event for analysts and media
A live webcast for analysts and media will be held today,
The webcast can be followed live in Finnish at kreate.videosync.fi/2021-q2-tulos. A recording of the webcast will be made available later at kreate.fi/sijoittajille/tiedotteet-ja-raportit/raportit-ja-esitykset/ and a summary in English will become available at kreate.fi/en/investor/releases-and-reports/reports/.
Kreate Group Plc
Kirsi-Marjut Dickman
Communications Manager
Distribution: Nasdaq Helsinki, media ja kreate.fi/en
Contacts
Antti Heinola , CFO, Kreate Group Oyj, +358 40 352 1033, antti.heinola@kreate.fi- Timo Vikström, President & CEO, Kreate Group Oyj, +358 400 740 057, timo.vikstrom@kreate.fi
About Kreate Group Oyj
Attachments
- Download announcement as PDF.pdf
- Kreate Group Half-year report 1-6-2021.pdf
© STT Info Finland, source