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CONSTI GROUP PLCINTERIM REPORT
1.1.2016 – 31.3.2016
CEO Marko HolopainenCFO Esa Korkeela
Building renovation specialist | www.consti.fi
Contents
� Highlights and Group performance
� Cash flow and financial position
� Market outlook and guidance
Building renovation specialist | www.consti.fi
Highlights of the first quarter of 2016 – Net sales and order backlog continued to grow
2 11/05/2016 Building renovation specialist | www.consti.fi
Oulu
Turku
Helsinki
Lahti
HämeenlinnaTampere
Number of
personnel
3/2016: 904
� Net sales EUR 51.4 (47.5) million, growth +8.2%
� EBITDA EUR 0.6 (0.6) million, EBITDA margin 1.2% (1.2%)
� Adjusted EBITDA EUR 0.7 (0.9) million, adjusted EBITDA margin 1.3% (1.9%)
� EBIT EUR 0.2 (0.1) million, EBIT margin 0.4% (0.1%)
� Adjusted EBIT EUR 0.2 (0.4) million, adjusted EBIT margin 0.4% (0.8%)
� Order backlog EUR 191.7 (179.9) million, up by +6.6% year-on-year and +5.7% from year-end 2015
� Free cash flow EUR 3.4 (2.2) million, up by 55.4%
� Net interest-bearing debt EUR 15.0 (43.3) million
� Gearing at 61.4%
� Earnings per share EUR -0.01 (-0.26)
Highlights of 1-3/2016 (y-o-y comparison in brackets)
Porvoo
Performance by business segment – Growth in net sales, order intake and order backlog in Q1/2016
11/05/20163 Building renovation specialist | www.consti.fi
Quarterly net sales (EUR m) Quarterly order intake (EUR m) Quarterly order backlog (EUR m)
Technical Building Services Renovation Contracting Building Facades Eliminations
21,825,4 25,1
30,323,7
14,3
15,8 17,9
20,7
16,8
12,5
23,4
28,1
25,2
11,8
-1,2 -1,2 -0,7 -1,2 -1,0
47,5
63,4
70,474,9
51,4
Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
21,517,2
12,3
21,417,7
11,5
34,3
6,9
27,7
9,9
20,5
23,6
9,6
18,0
25,3
-6,7-0,7 -0,3
-3,5 -1,7
46,8
74,5
28,5
63,6
51,2
Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
73,5 70,3 66,5 69,2 67,5
37,457,0
48,057,1 54,7
68,9
72,6
57,855,0 69,5
179,9
199,8
172,3181,3
191,7
Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
169,6163,4
179,9
199,8
172,3181,3
191,7
0
50
100
150
200
250
Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
Ord
er
backlo
g a
nd
R12m
Ord
er
inta
ke (
EU
R m
illio
n)
Order backlog Order intake (Rolling 12 months)
Consti quarterly order backlog and intake development –Backlog up by 6.6% y-o-y and +5.7% from year-end 2015
11/05/20164
Quarterly order backlog and R12m order intake Q3/2014 – Q1/2016 (EUR m)
Building renovation specialist | www.consti.fi
Comments
■ Q1/2016 order backlog at EUR 191.7m
(179.9m), y-o-y growth +6.6%
– Backlog up by 5.7% from year-end
2015
– Order backlog grew particularly in
Renovation Contracting (+46% year-
on-year)
■ Q1/2016 order intake up by 9.2% y-o-y
– Order intake was especially good in
Building Facades during the period
– The amount of tender requests has
increased positively in the beginning of
the year
Realisation of Consti’s long-term financial targets inQ1/2016 (follow-up on a rolling 12-month basis)
5
1) Cash conversion defined as free cash flow divided by EBITDA. Free cash flow equals operating cash flow before net financial items and taxes less investments in tangible and intangible assets
2) While taking other factors such as financial position, cash flow and growth opportunities into consideration.
11/05/2016 Building renovation specialist | www.consti.fi
Growth Profitability Cash flow Capital structure Dividends
Average annual
growth in net sales
of at least 10%
Adjusted EBIT-
margin exceeding 5
percent
Cash conversion
ratio exceeding 90
percent1
Net debt to adjusted
EBITDA ratio of less
than 2.5x while
maintaining an
efficient capital
structure
The Company’s aim
is to distribute as
dividends at least 50
percent of the
Company’s annual
net profit2
Q1/2016 realisation Q1/2016 realisation Q1/2016 realisation Q1/2016 realisation FY 2015 realisation
� Growth continued in
Q1/16, target was
achieved on a R12m
basis
� Solid margin
development in
Q1/16, efforts
continue to meet the
target level
� NWC was released
in Q1/2016. Target
was achieved on a
R12m basis
� Target was clearly
achieved on a rolling
12-month basis
� AGM resolved
dividend of EUR
0.39 per share, or
64% of 2015 EPS
���� ���� ���� ����
+13.1% 4.0% 95.9% 1.2x 63.8%
64,3
69,9
47,5
63,4
70,4
74,9
51,4
0
10
20
30
40
50
60
70
80
90
Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
Quart
erly N
et sale
s (
EU
R m
illio
n)
Consti quarterly net sales development – Growth continued in the first quarter
11/05/20166
Quarterly net sales development Q3/2014 – Q1/2016 (EUR m)
Building renovation specialist | www.consti.fi
Comments
■ Q1/2016 net sales EUR 51.4m (47.5m),
y-o-y sales growth +8.2%
– Net sales growth was strong in
Renovation Contracting and Technical
Building Services
■ In Renovation Contracting, growth of
17.3% thanks to good order intake and
order backlog in late 2015. Growth was
strong in the Greater Helsinki area as
well as in Turku area
■ In Technical Building Services, growth of
8.8% supported by good demand in
service business and non-residential
sector
■ In Building Facades, decline of 5.6% in
its seasonally slowest quarter
3,3 3,1
0,1
2,33,0 3,1
0,2
0,0
0,3
0,0
0,2
1,6
0,0
3,3 3,1
0,4
2,4
3,2
4,6
0,2
5,1 %
4,5 %
0,8 %
3,7 %
4,5 %
6,2 %
0,4 %
0%
1%
2%
3%
4%
5%
6%
7%
8%
0
1
2
3
4
5
6
7
8
9
10
Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
Quarte
rly a
dju
ste
d E
BIT
marg
in (lin
e g
raph)Q
uart
erly E
BIT
(E
UR
mill
ion, bar
gra
ph)
Reported EBIT Impact of NRIs Adjusted EBIT margin
Consti quarterly adjusted EBIT1 development – Solid development in the seasonally slowest first quarter
11/05/20167
Quarterly EBIT development Q3/2014 – Q1/2016 (EUR m)
1) Adjusted EBIT = EBIT before items affecting comparability (IAC)
Building renovation specialist | www.consti.fi
Comments
■ Q1/16 adjusted EBIT before IAC1
amounted to EUR 0.2 (0.4) million, or
0.4% (0.8%) of sales
■ Q1/16 EBIT after IAC EUR 0.2 (0.1)
million, or 0.4% (0.1%) of sales
– In Q1/16, IAC of EUR 0.02m related to
preparation and execution of the IPO
■ Consti’s business volumes are typically
lowest during the first quarter of the year,
when changes in fixed costs reflect more
on the result than during other quarters
– In Q1/16, fixed costs were increased
by an acquisition as well as resourcing
and investments necessary for
operations as a stock-listed company
Cash Flow and Financial Position
11/05/20168 Building renovation specialist | www.consti.fi
3,2
6,8
2,2
4,9
0,1
1,8
3,43,8 3,7
0,6
2,8
3,6 3,5
0,60
1
2
3
4
5
6
7
8
Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
Fre
e c
ash
flo
w a
nd
EB
ITD
A (
EU
R m
illio
n)
Free cash flow EBITDA
Consti quarterly cash conversion development – Strong free cash flow for the first quarter
11/05/20169
Quarterly free cash flow and EBITDA Q3/2014 – Q1/2016 (EUR m)
Building renovation specialist | www.consti.fi
Comments
■ Q1/2016 free cash flow amounted to
EUR 3.4m (2.2m), up by +55.4% y-o-y
– Cash conversion ratio of 533% (373%)
in the first quarter
– Cash flow from release of net working
capital improved year-on-year
■ Average cash conversion ratio of 120% in
the period of Q3/2014 - Q1/2016
– Consti’s long-term target to achieve
cash conversion ratio in excess of 90
percent
1) The cash conversion is the amount of free cash flow divided by EBITDA. Free cash flow means net cash flow from operating activities before financial items and taxes, less capital used for purchase of intangible assets and property, plant and
equipment
Average cash conversion1) 120%
-1,2
-5,4
-7,7
-10,5
-8,0
-7,3
-10,0
-12
-10
-8
-6
-4
-2
0Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
Ne
t w
ork
ing
ca
pita
l a
t p
eri
od
-en
d (
EU
R m
illio
n)
Consti quarterly net working capital development – NWC was released in the first quarter
11/05/201610
Quarterly net working capital1) Q3/2014 – Q1/2016 (EUR m)
Building renovation specialist | www.consti.fi
Comments
■ Net working capital EUR -10.0m (-7.7m)
at the end of Q1/2016
– NWC EUR 2.3m lower compared to
end of Q1/2015
– Release of NWC from year-end 2015
EUR 2.6m (2.3m)
1) Net working capital calculated as follows: Inventories + Trade and other receivables + Deferred tax receivables – Trade and other payables - Provisions
49,144,2 43,3
38,5
19,4 17,4 15,0
-0,7 % 0,6 % -0,7 %1,8 %
30,6 % 31,4 % 33,4 %
88,6 %
70,9 %
61,4 %
-20%
0%
20%
40%
60%
80%
100%
0
10
20
30
40
50
60
Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
Net debt (EURm, LHS) Equity ratio (%, RHS) Gearing (%, RHS)
Consti quarterly balance sheet structure – Balance sheet continued to strengthen in the first quarter
11/05/201611
Quarterly net debt, Equity ratio and Gearing Q3/2014 – Q1/2016
Building renovation specialist | www.consti.fi
Comments
■ Q1/2016 net debt decreased from year-
end 2015 and was EUR 15.0m (43.3m)
– In September 2015, Consti changed
its capital structure and refinanced its
indebtedness which decreased
financing costs in 2015
– The impact will be seen especially in
2016
■ Q1/2016 equity ratio 33.4% (-0.7%)
■ Q1/2016 gearing at 61.4%
Market Outlook and Guidance
11/05/201612 Building renovation specialist | www.consti.fi
50
60
70
80
90
100
110
120
130
140
150
Jan-0
7M
ar-
07
Ma
y-0
7Jul-
07
Se
p-0
7N
ov-0
7Jan-0
8M
ar-
08
Ma
y-0
8Jul-
08
Se
p-0
8N
ov-0
8Jan-0
9M
ar-
09
Ma
y-0
9Jul-
09
Se
p-0
9N
ov-0
9Jan-1
0M
ar-
10
Ma
y-1
0Jul-
10
Se
p-1
0N
ov-1
0Jan-1
1M
ar-
11
Ma
y-1
1Jul-
11
Se
p-1
1N
ov-1
1Jan-1
2M
ar-
12
Ma
y-1
2Jul-
12
Se
p-1
2N
ov-1
2Jan-1
3M
ar-
13
Ma
y-1
3Jul-
13
Se
p-1
3N
ov-1
3Jan-1
4M
ar-
14
Ma
y-1
4Jul-
14
Se
p-1
4N
ov-1
4Jan-1
5M
ar-
15
Ma
y-1
5Jul-
15
Se
p-1
5N
ov-1
5Jan-1
6M
ar-
16
ES
I an
d C
CI
for
Fin
lan
d (
Ja
n 2
00
7 -
Ap
r 2
01
6)
Economic Sentiment Indicator
Construction Confidence Indicator
Lead indicators for the Finnish construction suggest a strengthening market environment going forward
11/05/201613
Economic Sentiment and Construction Confidence in Finland (2007 – 4/2016)
Note: Mean-adjusted figures
Source: European Commission, May 2016
Building renovation specialist | www.consti.fi
Comments
■ Economic sentiment in Finland remains
still below long-term average, but
moderate improvement since Q2/2015
■ Construction confidence has been
improving recently, surpassing long-term
average level in H2/2015
– Construction market is inherently late-
cyclical and should benefit from the
improved outlook with a certain delay
■ The Finnish Association of HPAC
Technical Contractors estimated in their
April review of business conditions that
the economic situation should improve for
technical building services by autumn
Long-term
average
Long-term
average
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
0% 1% 2% 3% 4% 5% 6% 7%
CA
GR
20
07
-15
Estimated growth for 2016
Stable growth in renovation to continue going forward, new building also to return to growth track in 2016
11/05/201614
Finnish building market split and growth statistics
Building renovation specialist | www.consti.fi
Comments
■ Stable growth in renovation expected to
continue in 2016 at a rate of 2.5%
■ Thanks to stable growth in the past,
renovation spending exceeded the value
of new building for the first time in 2013,
and has remained larger since then
■ Renovation’s share of the total Finnish
building market amounted to
approximately 54% in 2015
■ Improved outlook for new building in
2016 expected to benefit Consti
– Positive impact on the competitive
environment in general
– New growth opportunities for Technical
Building Services � to be materialised
with a certain delay
– For instance, Consti will provide
technical building services to REDI
projectSource: Rakennusteollisuus RT, April 2016 and Euroconstruct, December 2015
Renovation54% of total
New building46% of total
11,0 12,7
35,6 31,9
53,2 52,8
35,7 36,7
17,02,6
6,7 6,6
15,5 18,9
29,4 34,3
21,3 23,0
9,4
4,4
0
20
40
60
80
100
-1920 1921-39
1940-59
1960-69
1970-79
1980-89
1990-99
2000-09
2010-14
Other
Residential
Non-residential
Renovation market growth supported by a number of key structural growth drivers
11/05/201615
Source: Statistics Finland
Million
m2
~2015 ~2025-2035 ~2045
Buildings achieve age of 50 years (approx):
Construction year
Building renovation specialist | www.consti.fi
Finnish building stock by construction year
Ageing building stock Energy efficiency
Urbanisation and concentration of
renovation in growth centers
Modifications of the use of buildings
Increased need for building
technology and automation
Active screening of M&A candidates - Consti’s knock-out criteria used to shortlist potential M&A targets
11/05/201616
Consti Group’s strategy
Building renovation specialist | www.consti.fi
Relevant M&A targets
N = X-Y-ZN = X-YN = X N = ~50
Demonstrated financial track record
Good organisational fit
■ Expansion in Finland’s
growth centers
■ Strengthening of the
offering
■ Growth in Service
business
■ Established strong local
presence with good
customer relations and
healthy order backlog
■ Access to reliable
financial data
■ No specific limitations in
terms of size (net sales)
■ Minimised overlap with
Consti’s current
businesses
■ Committed management
with clear future roles
and responsibilities
■ Smooth integration to
attain scalable value
■ For instance:
– Roof renovation and
glass construction
companies
– Service businesses
– Pipeline renovation
and building
automation specialists
– New geograph. areas
11/05/201617 Building renovation specialist | www.consti.fi
Consti Group’s strategic themes
Exploit market position and expand full offering to Finland’s growth centers─ Grow in businesses where Consti has long experience and a
strong position
─ Expand full offering to the growth centers of Finland
─ Acquisitions to support growth
1
Strengthen the offering and continuously grow in Service business─ Strengthen and complement the service offering with
supplementary capabilities (building automation, roof renov.)
─ Further grow the service business
─ Acquisitions to support growth
2
Continue to strengthen customer relationships and innovation leadership─ Cross-selling across business areas and development of KAM
─ Growth in advanced project types
─ Modern renovation methods and technological innovations
3
Maintain and further improve operational excellence─ Development and optimisation of sales mix
─ Project management and procurement
─ Fixed expense control
─ Strengthening of HR operations
4
Guidance for 2016 reiterated
11/05/201618 Building renovation specialist | www.consti.fi
“The Company estimates that its total annual sales
for 2016 will grow compared to 2015.”
“The Company estimates that its total annual sales
for 2016 will grow compared to 2015.”
11/05/201619 Building renovation specialist | www.consti.fi
INTERIM REPORT
1-3/2016
CONSTI GROUP PLC
Q1CONSTI GROUP PLC
HOPEATIE 2
FI-00440, HELSINKI
BUSINESS ID 2203605-05
WWW.CONSTI.FI
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