Q4 & YEAR-END 2018 | FEBRUARY 2019 CO COMPAN ANY PRESENTATIO ION 1 |
Today’s presenters and agenda In brief ”COMMON SENSE FROM DALARNA” FREDRIK LEO, CEO HELENA BLOM, CFO & Joined in 2017 as EVP EVP Services & Construction, Scaffolding ByggPartner is a Swedish background from NCC Joined in 2018, Constructions. backgrund from ABB construction company with the CEO from August and SSAB. 2018. competence to serve its customers Q4 & YEAR-END 2018 throughout the entire construction § Business Update process, creating value through § Financial Update personal commitment, sound § Q&A expertise and common sense. 2 |
Snapshot of ByggPartner CUSTOMER ORIENTED – EFFICIENT CU 1. 1. OVERHEAD FREE – OPERATIONAL DE DEBT FR 48% 48% 2. 2. EXCELLENCE 52% (64%) (6 %) (36%) (3 %) CTION – CORE CO CO CONSTRUCT ü Market leader 3. 3. Up Uppsala 14 14% Dalarna Da NO PROPERTY DEVELOPMENT incl. in . (2 (28%) %) 9% 9% Ar Arboga ga Stockholm St lm 25% 25% (1 (10%) %) FLOW – STRONG CASH-FL ST 4. 4. (25%) (2 %) FINANCIAL MODEL PARTNERING STRATEGY – PA Mäla Mä lardale len 5. 5. SUSTAINABLE BUSINESS MODEL 3 | | 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. 4 | | BUSINESS UPDATE
Core Construction – Projects 30-300 MSEK Ongoing projects in Q4 | examples Arboga Kommun – Pre school Arboga Kommun – Care homes Rodret Bostads AB – Student housing Sala Kommun – Sport facility Hefab – Housing Sala Kommun – School Stockholms hem – Housing Fastighets AB L E Lundberg – Social properties Micasa – Social property Stiftelsen Danvikshem – Social properties New orders in Q4 | examples Specialfastigheter – Commercial and social properties Gamla Byn AB – Commercial and social properties Stora Tunbyggen AB – Housing Ludvika Lasarett – Social property 5 | | BUSINESS UPDATE
Q4 & Year-End 2018 | Key Ratios § It was a stable quarter § Continued strong cash generation - the board propose an increased dividend § Our partnering strategy provides the right conditions for sustainable construction 6 | | BUSINESS UPDATE
Performance 2018 vs Mid-Term Financial Targets MID ID-TERM T TARGETS PERFORMANCE 2 2018 SALES G GROWTH SALES G GROWTH Organic growth in focus markets 10-15 10 15 % 26 26 % - Leverage market leading position in Dalarna, grow in Stockholm, Uppsala and Mälardalen - Convert our orderbook into profitable growth MID ID-TERM T TARGET 2018 2018 - (Opportunistic acquisitions) EBIT IT M MARGIN IN EBIT IT M MARGIN IN 5 % 3 % Strengthen partnering position - Continue to build on strong position and reputation in partnering MID ID-TERM T TARGET 2018 2018 - Develop our partnering model, organization & core processes OVER OV OVER OV 50 50 % 50 % 50 Leverage brand recognition - Increased awareness and reputation among clients and suppliers TARGET P PAYOUT R RATIO IO 2018 2018 PAYOUT R RATIO IO - Strengthen recruitment proposition among prospective employees 7 |
Our financial track record – Revenues & EBIT-margin § Strong order intake § Record high order book is driving revenues § Stabilization of EBIT-margin MSEK 9% 1 800 10% 1 656 1 600 7% 8% 7% 6% 1 247 1 317 1,294 1 400 5% 5% 6% 5% 4% 1,168 4% 1 200 3% 3% 3% 4% 1,126 1 000 949 695 1,045 2% 800 871 2% 601 561 0% 789 600 474 418 -3% -2% 400 -5% IFRS -4% 200 0 -6% 2003/ 2004/ 2005/ 2006/ 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2004 ² 2005 ² 2006 ² 2007 (18mth) ³ Revenue EBIT margin 8 | 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
Turning the order book into profitable growth Q1 § Picking the right projects § Improving our core processes § Developing our organization Q1 2019 § Strengthen project steering – start-up of the educational program ”Lyftet” § Re-organization Uppsala & Mälardalen Q4 2018 Strengthen project steering – decision to implement educational program ”Lyftet” § Professionalizing of procurement of purchases § Close dialogue with our customers – the sustainability day § § New operational support group focused on processes, quality and risk Q3 2018 § 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 9 | | BUSINESS UPDATE
Core construction - no property development 2.0 .043 M MSEK § Order book analysis § High activity in social properties § Focus on partnering projects Pr Proj ojects Cu Customers Partneri Pa ring pr proje ject Arboga Kommun Social Properties 55% Rodret Bostads AB Housing 32% (BRF 5%) 60% Sala Kommun Commercial incl. service and HEFAB renovation 13% Stockholmshem Falu Kommun Geogr Ge graphy Gamla Byn AB Dalarna 50% LudvikaHem Stockholm/Uppsala/ Micasa 40% Mälardalen 50% Danviks Hospital Partnering Regular contracts Lundbergs Specialfastigheter 10 | | BUSINESS UPDATE
Our partnering strategy provides the right conditions for sustainable construction § The foundation for sustainable entrepreneurship is profitability. § We take environmental and social issues into account during the entire process of the construction process. § We are building for a sustainable society § During Q4 | Close dialogue with our customers and stakeholders ”Sustainability Day” 11 | | BUSINESS UPDATE
Scaffholdings Working environment and quality is key • • Increased revenues with profitability Focus on continued growth • • Continue to focus on efficiency in material management 12 | | BUSINESS UPDATE
Construction services Strong revenue growth in 2018 and • maintained profitability Stable quarter • • Focus is on increased profitability Avesta and Hedemora merged • 13 | | BUSINESS UPDATE
Financials Jan-Dec 2018 in summary • Strong order intake 2 098 MSEK (1 453) +44% Orderbook 2 043 MSEK (1 601) +28% • Sales Growth 1 655 MSEK (1 317) +26% • • Increased operating profit EBIT 45,8 MSEK (40,8) +12% • Stable EBIT-margin 2,8% (3,1) • Robust cash-flow 124,0 MSEK (78,1) 14 | | FINANCIAL UPDATE
Order intake & Order Book Q4 | MSEK YEAR ON YEAR | MSEK 396 400 2500 2500 2500 394 2098 390 2000 2000 2000 380 1597 1452 1500 1500 1500 370 360 353 1000 1000 1000 350 500 500 500 340 330 0 0 0 2016 2017 2018 2016 2017 2018 Order intake MSEK Order book MSEK Order intake MSEK Order book MSEK Revenues Q4 | MSEK YEAR ON YEAR | MSEK 600 1800 1655 1600 550 514 1317 1400 1247 500 1200 450 414 1000 400 800 336 350 600 300 400 250 200 200 0 2016 2017 2018 2016 2017 2018 15 | | FINANCIAL UPDATE
Profitability & Operating result YEAR ON YEAR | MSEK Q4 | MSEK 20 6 60 4,5 18 50,5 18 16,4 4 5 50 45,8 16 3,5 40,8 13 14 4 40 3 12 2,5 10 3 30 2 8 2 20 1,5 6 1 4 1 10 0,5 2 0 0 0 0 2016 2017 2018 2016 2017 2018 EBIT MSEK Gross Margin (%) EBIT MSEK Gross Margin (%) Cash-flow Q4 | MSEK YEAR ON YEAR | MSEK 60 53 52 140 124 50 120 40 100 78 30 80 18 60 20 40 10 27 20 0 2016 2017 2018 0 2016 2017 2018 16 | | FINANCIAL UPDATE
Efficient Capital Management Net working capital end of quarter, MSEK| Average -33 MSEK 40 20 19 20 0 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 DIVIDEND POLICY -20 The goal is to deliver a dividend corresponding -22 -24 -24 -27 -40 to 50 percent of net profit given no need to -60 -51 finance further investments in operations. -80 -77 Board proposal 2,75 SEK per share (2,50) -100 -120 -111 Earnings per share NWC Q4 | MSEK YEAR ON YEAR | MSEK 1,31 1,4 4 3,53 3,5 1,2 1,03 2,88 3 1 2,57 0,8 2,5 0,8 2 0,6 1,5 0,4 1 0,2 0,5 0 0 2016 2017 2018 2016 2017 2018 EPS SEK EPS SEK 17 | | FINANCIAL UPDATE
Low capital requirement increasing returns Strong return on capital… ROCE 1 ROE ROE ROE ROCE 1 ROCE 1 ROCE 1 ROE 34% 24% 27% 33% 52% 48% 36% 29% SEKm SEKm 160 142 140 139 132 129 140 132 127 140 120 120 100 100 100 80 80 63 51 52 60 46 60 41 43 35 31 40 40 20 20 0 0 2015 2016 2017 2018 2015 2016 2017 2018 Capital Employed² (avg) EBIT Equity (avg) Net Income 18 | Note: (1 (1) ROCE defined as EBIT/average of period’s opening and closing capital employed; (2 (2) Defined as equity plus interest bearing liabilities | FINANCIAL UPDATE
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