This release is a summary of Kreate Group’s Interim Report January–March 2024. The complete Interim Report is attached, and also available on the company’s website at https://kreate.fi/en/investor/reports/.
January - March in brief
- Order backlog amounted to
EUR 183.6 (265.7) million, a decrease of 30.9%
- Revenue decreased compared to the reference period, amounting to
EUR 54.4 (65.8) million
- The year-on-year change in revenue was -17.4% (30.5%)
- EBITDA was
EUR 1.6 (1.0) million, amounting to 3.0 (1.5) per cent of revenue
- EBITA increased and was
EUR 0.3 (-0.4) million, amounting to 0.5 (-0.6) per cent of revenue
- Earnings per share were
EUR -0.06 (-0.08)
- Free cash flow from operating activities was
EUR -3.1 (-3.3) million
- Interest-bearing net debt was
EUR 20.9 (38.0) 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 ).
The operating environment of infrastructure construction in brief
- Volume decreased by 5 per cent during 2023
- The volume is expected to decrease by 2% in 2024
- Cost development has calmed down, certain construction costs are even falling
- Public and private customers are now active for new projects in a market suitable for Kreate
- There is a short delay in the start-up of projects, and projects can be launched quickly if necessary
- Long-term outlook bright
President & CEO
“The year 2024 has started in line with our expectations. In January, we provided guidance for full-year 2024 revenue decline and EBITA increase – first-quarter revenue decreased by 17% year-on-year, but despite this, we managed to turn EBITA positive and improve our profitability.
This is now the second consecutive quarter in which we have improved our profitability compared to the comparison period, both in euros and in relative terms. We believe that we have now been able to turn the profitability trend for the better.
Improving profitability with revenue lower than
The market situation in infrastructure construction is very good – the slowdown in building construction is not visible in
Our revenue and EBITA guidance remain unchanged. Revenue for the full year are estimated to be in the range of EUR 270–300 million and EBITA in the range of EUR 8–11 million. We estimate that revenue will accumulate more strongly in the second half of the year than in the first half of the year compared to the revenue distribution in 2023.
With the new legislation, responsibility work, sustainability issues and reporting will be on the agenda of many listed companies and alongside financial reporting in a completely new way. We are also preparing for the new reporting requirements and at our Annual General Meeting we selected a sustainability reporting assurer. This interim report also includes its own responsibility section for the first time, under which we present quarterly development with regard to selected sustainability targets.
We have largely achieved the objectives of our strategy period ending this year ahead of time, and during the first half of the year we have finalised our strategy update and targets for the coming years. We have today published our long-term financial targets and accordingly target an EBITA margin of over 5 percent, annual revenue growth of 5–10 percent and maintaining net debt to EBITDA below 2.5. Ten-year-old Kreate is in good operational and financial shape, and together with our committed and competent personnel, I believe that we will reach these targets.
We will present our updated strategy at the Capital Markets Day on 6 May (in Finnish only), to which we welcome everyone. In addition to our strategy and financial targets, we will open up our rail business and rock and concrete construction in the Swedish market in more detail.”
Key figures
EUR million | 1-3/2024 | 1-3/2023 | 1-12/2023 |
Order backlog | 183.6 | 265.7 | 196.3 |
Revenue | 54.4 | 65.8 | 320.0 |
Year-on-year change in revenue, % | -17.4 | 30.5 | 16.8 |
EBITDA | 1.6 | 1.0 | 14.0 |
EBITDA, % | 3.0 | 1.5 | 4.4 |
EBITA | 0.3 | -0.4 | 7.8 |
EBITA, % | 0.5 | -0.6 | 2.4 |
Operating profit | 0.2 | -0.4 | 7.6 |
Operating profit, % | 0.4 | -0.7 | 2.4 |
Result for the period | -0.6 | -0.7 | 3.9 |
|
|
|
|
Capital employed | 63.5 | 79.9 | 59.6 |
Return on capital employed, % | 11.5 | 9.9 | 11.2 |
Return on equity, % | 9.4 | 10.3 | 9.1 |
Net investments in operating activities | -1.0 | -3.2 | -5.9 |
Free cash flow from operating activities | -3.1 | -3.3 | 26.1 |
Net working capital | -7.0 | 5.6 | -11.3 |
Net debt | 20.9 | 38.0 | 16.8 |
Net debt/EBITDA, rolling 12 months | 1.4 | 3.0 | 1.2 |
Net debt/EBITDA, rolling 12 months pro forma* |
| 3,1* |
|
Equity ratio, % | 34.9 | 32.1 | 31.8 |
|
|
|
|
Earnings per share, diluted, € | -0.06 | -0.08 | 0.44 |
Earnings per share, undiluted, € | -0.06 | -0.08 | 0.44 |
Dividend per share, € |
|
|
|
|
|
|
|
Personnel at the end of the period | 445 | 455 | 472 |
Personnel on average | 447 | 453 | 454 |
*) The pro forma includes the EBITDA of the acquisition from 1 Apr 2022 to
Result guidance for 2024 unchanged (published on
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 stable continuity in Kreate's characteristic demanding infrastructure construction due to the countercyclical nature of the business, despite the prevailing level of interest rate and cost inflation and the general market outlook. The company offers projects more selectively, which is expected to decrease revenue and improve profitability.
Kreate Group’s financial reporting
16 July 2024 Half Year Financial Report for January–June 2024
25 October 2024 Interim Report for January–September 2024
Webcast event
A live webcast open to all will be held today,
Invitation to the Capital Markets Day (in Finnish only)
We invite investors, capital market representatives, analysts and media representatives to the Capital Markets Day on Monday
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's interim report Q1 2024.pdf
© STT Info Finland, source