Company Presentation
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Q1 INTERIM REPORT 2019 | MAY 2019 COMPANY PRESENTATION 1 | Today’s presenters and agenda In brief FREDRIK LEO, CEO HELENA BLOM, CFO & ”COMMON SENSE FROM DALARNA” Joined in 2017 as EVP EVP Services & Construction, Scaffolding background from NCC Joined in 2018, ByggPartner is a Swedish Constructions. backgrund from ABB CEO from August and SSAB. construction company with the 2018. competence to serve its customers Q1 INTERIM REPORT 2019 throughout the entire construction ▪ Business Update process, creating value through ▪ Financial Update personal commitment, sound ▪ Q&A expertise and common sense. 2 | Fredrik Leo, CEO BUSINESS UPDATE 3 | Jan-Mar 2019 in summary • Order intake 325 MSEK (605) - 44% (RTM +25%) • Orderbook 1 877 MSEK (1 838) +2% • Sales Growth 491,5 MSEK (367,3) +34% • Increased operating profit EBIT 17,0 MSEK (12,0) +42% • Increased EBIT-margin 3,5% (3,3) • Cash-flow -13,7 MSEK (7,3) 4 | | BUSINESS UPDATE No changes in our view of our market ▪ So far, the construction industry is stable in most of our segments and markets we focus on ▪ The public sector, mainly municipalities, county councils and public housing rental companies continue to order ▪ We see resources being moved into construction of social, commercial and rental properties. We expect the competition to increase in our segments. ▪ Business as usual in Stockholm, Dalarna and Mälardalen. One exception, we experience a lower level of activity in Uppsala. 5 | | BUSINESS UPDATE Core construction - no property development ▪ Order book analysis ▪ High activity in social properties ▪ Focus on partnering projects 1.877 MSEK Projects Customers Partnering project Social Properties 51% Arboga Kommun Housing 39% (BRF 5%) Rodret Bostads AB Sala Kommun 57% Commercial incl. service and renovation 10% HEFAB Svenska Bostäder Geography Falu Kommun Gamla Byn AB Dalarna 40% LudvikaHem Stockholm/Uppsala/ Mälardalen 60% Micasa 43% Danviks Hospital Partnering Regular contracts Lundbergs Specialfastigheter 6 | | BUSINESS UPDATE Core Construction – Projects 50-300 MSEK Ongoing projects in Q1 | examples Arboga Kommun – Pre school Arboga Kommun – Care homes Rodret Bostads AB – Student housing Sala Kommun – Sport facility Hefab – Housing Sala Kommun – School Svenska Bostäder – Housing Fastighets AB L E Lundberg – Social properties Micasa – Social property Stiftelsen Danvikshem – Social properties New orders in Q1 | examples Gamla Byn Avesta | Housing News in Q2 | so far Falu Kommun – Care homes Surahammars Kommun – Care homes EcoDataCenter - Commercial 7 | | BUSINESS UPDATE Turning the order book into profitable growth ▪ Picking the right projects Q1 ▪ Improving our core processes Q22019 ▪ Developing our organization ▪ Strengthen project steering – educational program ”Partner”: training in contract law and forecasting projects ▪ Continued focus on profitability throughout the entire organization Q12019 ▪ Strengthen project steering – start-up of the educational program ”Partner”; training in cost-planning and timetable for production ▪ Re-organization Uppsala & Mälardalen Q42018 ▪ Continued development of our Partnering concept ▪ Strengthen project steering – decision to implement educational program ”Partner” ▪ Professionalizing of procurement of purchases ▪ Close dialogue with our customers – the sustainability day ▪ New operational support group focused on processes, quality and risk Q32018 ▪ Increased focus on Scaffolding, merged Avesta and Hedemora in Construction services ▪ Increased awareness, frequency and accountability within the organization ▪ Increased focus on project management & business skills ▪ New organization in Stockholm, new procurement manager – 80% of business is outsourced ▪ New executive management – accountability Construction Services & Scaffholding 8 | | BUSINESS UPDATE Performance Q1 2019 vs Mid-Term Financial Targets MID-TERM TARGETS PERFORMANCE STRATEGIES FOR INCREASED AND SUSTAINABLE PROFITABILITY SALES GROWTH SALES GROWTH 10-15% 34% Organic growth in focus markets MID-TERM TARGET Q1 2019 EBIT MARGIN EBIT MARGIN 5% 3,5% Strengthen partnering position MID-TERM TARGET Q1 2019 OVER OVER 50% 50% Increased focus on project management TARGET PAYOUT RATIO 2018 PAYOUT RATIO 9 | | BUSINESS UPDATE Our financial track record – Revenues & EBIT-margin ▪ Strong order intake ▪ Record high order book is driving revenues ▪ Stabilization of EBIT-margin MSEK 2 000 9% 10% 1 780 1 800 1 655 7% 7% 8% 1 600 6% 5% 6% 5% 1 317 1 400 1,294 1,126 1 247 1,168 1,045 3% 3% 3% 4% 1 200 871 5% 4% 4% 1 000 949 695 2% 2% 3% 800 0% 561 789 601 600 474 418 -3% -2% 400 -5% -4% 200 IFRS 0 -6% 2003/ 2004/ 2005/ 2006/ 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 LTM 2004² 2005² 2006² 2007 2019 (18mth)³ Revenue EBIT margin 10 | Source: ByggPartner’s audited financial and annual reports and reviewed interim reports | BUSINESS UPDATE Note: (2) Financial year from July 1–June 30; (3) Financial year includes 18 months, from July 1, 2006–December 31, 2007 Stable order intake and backlog development Growing order intake and backlog… MSEK SEK 2 300 2 1392 098 2 100 Order intake, LTM¹ 1 818 1 900 1 8012 205 Order book¹ 1,3841 615 1 616 2 098 1,877 m 1 700 1 500 2 010 1,468 1,3831,3341 384 1 4541 4521 838 1 877 order book 1 500 3 1,150 1 704 1,225 1 616 1 6211 601 1 300 1,018 1,094 1,086 1,4041,4041,465 1 100 877 873 1,2921,286 1,213 900 735 1,0881,130 1,115 700 1,006 Q4 2013 – Q1 2019 500 646 794 770 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Order intake 14 % 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 CAGR Order book 21 % … provides stable revenue growth over time MSEK 2 000 Revenue, LTM² 1 780 1 800 1 656 1 555 1 600 1 495 1 394 1 317 1 400 1 265 1,247 1 238 14% CAGR 1,176 1,223 1 212 1 200 1 200 1,045 1,062 1,090 1,069 1,101 Q4 2013 – Q1 2019 950 1 000 871 889 927 800 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS 11 | Source: ByggPartner’s audited annual reports 2013-2015 adjusted for comparison reporting principles and disclosed interim and year-end reports 2016- 2018 (including auditors reviews and audited annual report for 2016 and 2017. | BUSINESS UPDATE Scaffholdings ▪ Stable revenues in Q1 ▪ Customer loss of 0,5 MSEK in Q1 ▪ Focus on continued growth and profitability ▪ Digitalization for increased efficiency in material management ▪ Working environment is a top priority 12 | | BUSINESS UPDATE Construction services ▪ Strong quarter, increased revenues and all time high operating profit, EBIT ▪ Focus on increased profitability ▪ Avesta and Hedemora merged as Södra Dalarna 13 | | BUSINESS UPDATE Helena Blom, CFO & EVP FINANCIAL UPDATE 14 | Order intake & Order Book Q1 | MSEK YEAR ON YEAR | MSEK 700 2000 2500 2500 605 1800 2098 600 1600 2000 1818 2000 500 1597 1453 423 441 1400 400 1200 1500 1500 325 1000 300 800 1000 1000 200 600 400 500 500 100 200 0 0 0 0 2016 2017 2018 2019 2016 2017 2018 2019 LTM Order intake MSEK Order book MSEK Order intake MSEK Order book MSEK Revenues Q1 | MSEK YEAR ON YEAR | MSEK 600 2000 1780 550 1800 1655 492 1600 500 1317 1400 1247 450 1200 400 367 1000 800 350 325 290 600 300 400 250 200 200 0 2016 2017 2018 2019 2016 2017 2018 2019 LTM 15 | | FINANCIAL UPDATE Profitability & Operating result Q1 | MSEK YEAR ON YEAR | MSEK 17 18 16,4 6 60 4,5 16 50,5 50,8 4 5 50 45,8 14 3,5 12 40,8 12 4 40 3 10 8,7 2,5 3 30 8 2 6 2 20 1,5 4 1 1 10 2 0,5 ▪ Cash-flow depends on 0 0 0 0 project portfolio, both 2016 2017 2018 2019 2016 2017 2018 2019 LTM EBIT MSEK Gross Margin (%) EBIT MSEK Gross Margin (%) character and phase ▪ Strong cash of 134,7 MSEK Cash-flow (March 31st) Q1 | MSEK YEAR ON YEAR | MSEK ▪ Continued strong internal 10 7 140 focus on cash-flow 124 5 3 120 1 103 0 100 2016 2017 2018 2019 LTM 78 80 -5 60 -10 40 27 -15 -14 20 -20 0 2016 2017 2018 2019 LTM 16 | | FINANCIAL UPDATE Revenues per segment EBIT per segment Jan – Mar 2019 Jan – Mar 2019 2% 0% 9% 21% 79% 89% Construction Services Scaffolding Construction Services Scaffolding 2019 2019 2019 2019 SEK millions Jan-Mar Jan-Mar Change SEK millions Jan-Mar Jan-Mar Change Revenues Operating Profit Construction 439,1 316,5 39% Construction 13,5 12,8 6% Construction Services 46,4 43,9 6% Construction Services 3,6 1,1 227% Scaffolding 10,4 10,2 2% Scaffolding 0 0,6 -100% 17 | | FINANCIAL UPDATE Efficient Capital Management Net working capital end of quarter, MSEK| Average -38 MSEK 40 19 20 20 0 DIVIDEND POLICY 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 The goal is to deliver a dividend -20 -22 corresponding to 50 percent of net -24 -24 -27 -40 profit given no need to finance -60 -51 further investments in operations. -80 -77 -100 -85 -120 -111 Earnings per shareNWC Q1 | MSEK YEAR ON YEAR | MSEK DIVIDEND YEAR ON YEAR | SEK 2,8 1,2 1,1 4 3,53 2,75 1,0 2,75 3,5 3,22 1,0 2,88 2,7 3 2,57 0,8 0,8 2,65 2,5 0,6 2,6 0,6 2 2,55 2,5 2,5 1,5 0,4 2,5 1 2,45 0,2 0,5 2,4 0,0 0 2,35 2016 2017 2018 2019 2016 2017 2018 2019 LTM 2016 2017 2018 EPS SEK 2016 2017 2018 2019 LTM DIVIDEND SEK 18 | | FINANCIAL UPDATE Low capital requirement increasing returns Strong return on capital… ROE ROE ROE ROE ROCE1 ROCE1 ROCE1 ROCE1 52% 34% 24% 30% 48% 36% 29% 36% SEKm SEKm 160 140 142 127 132 130 139 140 140 129 140 120 120 100 100 80 80 51 46 51 60 43 60 41 35 39 40 31 40 20 20 0 0 2016 2017 2018 2019 LTM 2016 2017 2018 2019 LTM Capital Employed² (avg) EBIT Equity (avg) Net Income 19 | Note: (1) ROCE defined as EBIT/average of period’s opening and closing capital employed; (2) Defined as equity plus interest bearing liabilities | FINANCIAL UPDATE ByggPartner as an investment 1.