This release is a summary of Kreate Group’s Half-year report January–June 2024. The complete Half-year report is attached, and also available on the company’s website at https://kreate.fi/en/investor/reports/.
Kreate’s Half-year Report: positive profitability development – revenue decreased as expected
April - June in brief
- Order backlog amounted to
EUR 200.1 (264.9) million, a decrease of 24.5%
- Revenue decreased compared to the reference period, amounting to
EUR 68.0 (85.7) million
- The year-on-year change in revenue was -20.7% (28.0%)
- EBITDA was
EUR 4.0 (4.0) million, amounting to 5.9 (4.7) per cent of revenue
- EBITA increased and was
EUR 2.6 (2.6) million, amounting to 3.8 (3.0) per cent of revenue
- Earnings per share were
EUR 0.16 (0.17)
- Free cash flow from operating activities was
EUR -6.5 (1.7) million
- Interest-bearing net debt was
EUR 31.7 (39.1) million
- Result guidance unchanged: Kreate estimates that its revenue in 2024 will decline and be in the range of EUR 270–300 million (2023:
EUR 320.0 million ) and EBITA will increase and be in the range of EUR 8–11 million (2023:EUR 7.8 million ).
January - June in brief
- Revenue decreased compared to the reference period, amounting to
EUR 122.4 (151.6) million
- The year-on-year change in revenue was (19.3)% (29.1%)
- EBITDA was
EUR 5.7 (5.0) million, amounting to 4.6 (3.3) per cent of revenue
- EBITA was
EUR 2.9 (2.2) million, amounting to 2.4 (1.4) per cent of revenue
- Earnings per share were
EUR 0.09 (0.10)
- Free cash flow from operating activities was
EUR -9.6 (-1.6) million
The operating environment of infrastructure construction in brief
- Finnish infrastructure market
EUR 9.5 billion , of which market suitable for KreateEUR 5 billion
- The Swedish infrastructure construction market
EUR 20 billion , of which Kreate's market suitable for its current business operations inSweden isEUR 1.5 billion
- Market outlook strong in
Finland andSweden in markets suitable for Kreate
- Normal competitive situation in demanding infrastructure
- There is activity for both private and public sector customers
- There is a lot to offer and Kreate is increasingly selective in what it offers
- Cost development has calmed down, certain construction costs are even falling
- There is a short delay in the start-up of projects, and projects can be launched quickly if necessary
- Long-term outlook bright in both
Finland andSweden
President & CEO Timo Vikström:
"The second quarter of 2024 was in line with our expectations and, above all, with our updated strategy: We won significant projects in the railway environment in
The highlights of the quarter are related to the determined implementation of the company's strategy. In May, we published an updated strategy and accordingly we will focus on improving profitability in 2024–2027 and aim to grow especially in the rail and light trail business and in
In
The market suitable for Kreate in both
Despite large projects and good tender calculation situation, 2024 will be lower in terms of volume than 2023. As previously estimated, the volumes of 2024, and thus also revenue and profit, will be weighted more strongly in the second half of the year than in the previous year. We have clearly made the right choice in deciding to focus on large and demanding projects, of which there are now several on the market. We have proven our competitiveness by winning the largest railway project in Kreate's history and several other demanding projects in
Thank you to our entire personnel for a great quarter. With solid expertise, we have done good work on all fronts – in tender calculations, administration and on construction sites. I'm proud of our whole team. Thank you for the first half of the year and let's make the second half even better."
Key figures
EUR million | 4-6/ | 4-6/ | 1-6/ | 1-6/ | 1-12/ |
Order backlog |
|
| 200.1 | 264.9 | 196.3 |
Revenue | 68.0 | 85.7 | 122.4 | 151.6 | 320.0 |
Year-on-year change in revenue, % | -20.7 | 28.0 | -19.3 | 29.1 | 16.8 |
EBITDA | 4.0 | 4.0 | 5.7 | 5.0 | 14.0 |
EBITDA, % | 5.9 | 4.7 | 4.6 | 3.3 | 4.4 |
EBITA | 2.6 | 2.6 | 2.9 | 2.2 | 7.8 |
EBITA, % | 3.8 | 3.0 | 2.4 | 1.4 | 2.4 |
Operating profit | 2.6 | 2.5 | 2.8 | 2.1 | 7.6 |
Operating profit, % | 3.8 | 2.9 | 2.3 | 1.4 | 2.4 |
Result for the period | 1.6 | 1.5 | 1.1 | 0.8 | 3.9 |
|
|
|
|
|
|
Capital employed |
|
| 73.4 | 80.8 | 59.6 |
Return on capital employed, % |
|
| 10.8 | 9.8 | 11.2 |
Return on equity, % |
|
| 9.8 | 10.4 | 9.1 |
Net investments in operating activities | -1.7 | -1.1 | -2.7 | -4.3 | -5.9 |
Free cash flow from operating activities | -6.5 | 1.7 | -9.6 | -1.6 | 26.1 |
Net working capital |
|
| 1.0 | 6.9 | -11.3 |
Net debt |
|
| 31.7 | 39.1 | 16.8 |
Net debt/EBITDA, rolling 12 months |
|
| 2.2 | 3.0 | 1.2 |
Net debt/EBITDA, rolling 12 months pro forma |
|
|
| 3,0* |
|
Equity ratio, % |
|
| 31.9 | 28.2 | 31.8 |
|
|
|
|
|
|
Earnings per share, diluted, € | 0.16 | 0.17 | 0.09 | 0.10 | 0.44 |
Earnings per share, undiluted, € | 0.16 | 0.17 | 0.09 | 0.10 | 0.44 |
|
|
|
|
|
|
Personnel at the end of the period |
|
| 512 | 504 | 472 |
Personnel on average | 496 | 460 | 501 | 424 | 454 |
*) Includes the EBITDA of the acquisition from 1 Jul 2022 to 31 Aug 2022
Result guidance for 2024 unchanged (published on 31 January 2024)
Kreate estimates that its revenue in 2024 will decline and be in the range of EUR 270–300 million (2023:
Justifications: The company's guidance is based on the order backlog expected to be realised in 2024 at the turn of the year. The company sees Kreate's characteristic demanding infrastructure construction continuing as stable due to the countercyclical nature of the business. The company offers projects more selectively, which is expected to decrease revenue and improve profitability.
Strategy 2024–2027: Sustainable profitability
During the review period, the company published new financial targets and presented an updated strategy at the Capital Markets Day organised by the company. During the strategy period lasting until 2027,
| TARGETS | PREVIOUS TARGETS |
PROFITABILITY |
|
|
EBITA margin | >5 % | >5 % in medium term |
|
|
|
GROWTH |
|
|
Revenue | 5–10% annual growth (2025 onwards) | over |
|
|
|
INDEBTEDNESS |
|
|
Net debt/EBITDA | < 2.5 | < 2.0 |
|
|
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DIVIDEND POLICY | The aim is to distribute at least half of Kreate's annual net profit as dividends, taking into account Kreate's financial position, cash flows and growth potential |
Financial targets: read the stock exchange release published on
Capital Markets Day: presentation material and recording of the event are available in Finnish only
We will attend several investor events (presentations held in Finnish) during 2024: please find our event calendar
Kreate Group’s financial reporting
25 October 2024 Interim Report for January–September 2024
Webcast event
A live webcast open to all will be held today,
Board of Directors
Distribution: Nasdaq Helsinki, key media and kreate.fi/en
Contacts
Mikko Laine , CFO, Kreate Group Oyj, +358 50 599 9201, mikko.laine@kreate.fiNiina Streng , Head of Investor Relations and ESG, Kreate Group Oyj, +358 41 732 3362, niina.streng@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 Plc Half-year Report for January-June 2024.pdf
© STT Info Finland, source