saferoad holding asa q3 2017 presentation · nokmillion 2017 2016 2017 2016...
TRANSCRIPT
Third quarter 2017Investor presentation
9 November 20171
Content
2
§ Highlights- Morten Holum, CEO
§ Results and financials- Svein Vestermo, CFO
§ The road ahead- Morten Holum, CEO
Highlights Q3 2017
3
§ Stable revenue – 2% growth adjusted for M&A
§ Lower earnings and margins
§ Weak performance in RRS Sweden and Road Infrastructure Nordic
§ Positive development in work zone protection and Road Infrastructure Europe
1 701 1 537 904
1 626 1 710
-
500
1 000
1 500
2 000
Q3 16 Q4 16 Q1 17 Q2 17 Q3 17
221 152
(56)
153 192
-100 -50 -50 100 150 200 250
Q3 16 Q4 16 Q1 17 Q2 17 Q3 17
Underlying revenue, NOK mill.
Underlying EBITDA, NOK mill.
Group earnings
4
Underlying EBITDA – change quarter-on-quarter Underlying EBITDA margin, rolling 12 months
221
192
-
50
100
150
200
250
Q3 16 RS Nordic RS Europe RI Nordic RI Europe Other & elim.
Q3 17
NOK million
9,1 % 9,3 % 9,5 % 9,5 %9,0 %
7,7 % 8,0 %7,3 %
6,7 %6,0 %
0%
2%
4%
6%
8%
10%
12%
Q3 16 Q4 16 Q1 17 Q2 17 Q3 17
NOK million
Road Safety Road InfrastructureRoad Safety Road Infrastructure
(7)
(14)
(7)(12)
4(11)5
Key developments in the quarter
5
§ Weak performance in the RRS business in Sweden – comprehensive turnaround initiated
§ Positive development in the RRS business in Norway
§ Successful expansion of the Nordic work zone protection business
§ Strong RRS market Poland§ Closure of the RRS business in Turkey completed
§ Lower demand in the Nordics, particularly for culverts and water & sewage
§ Soft pricing environment in Finland§ Positive market sentiment in CEE countries, including the Baltics and Turkey
§ Review of structural options for the business in Lithuania initiated
Road Safety Road Infrastructure
6
Results and financialsSvein Vestermo, CFO
Overview – Group and business areas
7
Amounts in NOK million
Third quarter 2017 Third quarter 2016 Last 12 m – Sept 2017 Last 12 m – Sept 2016
Operating revenues* EBITDA* Margin* Operating
revenues* EBITDA* Margin* Operating revenues* EBITDA* Margin* Operating
revenues* EBITDA* Margin*
Road Safety Nordic 763 101 13.3% 754 112 14.9% 2 677 221 8.3% 2 708 257 9.5%
Road Safety Europe 394 37 9.4% 427 49 11.4% 1 417 142 10.0% 1 465 115 7.9%
Total Road Safety 1 145 138 12.1% 1 157 161 13.9% 4 031 363 9.0% 4 094 373 9.1%
Road Infrastructure Nordic 232 19 8.0% 274 33 12.2% 777 34 4.3% 876 44 5.0%
Road Infrastructure Europe 361 40 11.1% 302 36 11.8% 1 060 74 7.0% 1 044 102 9.8%
Total Road Infrastructure 578 58 10.1% 555 69 12.5% 1 787 108 6.0% 1 854 144 7.7%
Other and Eliminations (12) (4) - (12) (9) - (40) (31) - (41) (37) -
Total Group 1 710 192 11.2% 1 701 221 13.0% 5 777 440 7.6% 5 920 480 8.1%
* Underlying figures
Road Safety Nordic – challenges in Sweden
8
§ Stable revenue
§ EBITDA declined mainly due to- Losses in the RRS business in Sweden- Increased raw material prices- Unfavourable operating conditions for road marking in September
§ Growth and margin expansion in work zone protection
3rd quarter Year to dateNOK million 2017 2016 2017 2016
Underlying operating revenue 763 754 1 981 1 952
Underlying EBITDA 101 112 168 184
Underlying EBITA 80 92 105 123
Reported EBITDA 101 112 155 179
Underlying EBITDA margin 13.3 % 14.9 % 8.5 % 9.4 %
112
53
(19)
86 101
-40 -20 -20 40 60 80 100 120
Q3 16 Q4 16 Q1 17 Q2 17 Q3 17
Underlying EBITDA, NOK million
Road Safety Europe – a mixed bag
9
§ Stable revenue - 1% increase adjusted for divestments
§ EBITDA declined mainly due to- Lower sales in the Czech Republic - Softer pricing in RRS product sales in Germany- Divestments (EBITDA effect of NOK 6 million)
§ Positive earnings development in RRS project sales in Germany and in export sales
3rd quarter Year to dateNOK million 2017 2016 2017 2016
Underlying operating revenue 394 427 981 1 002
Underlying EBITDA 37 49 76 71
Underlying EBITA 31 41 57 46
Reported EBITDA 39 49 89 71
Underlying EBITDA margin 9.4 % 11.4 % 7.7 % 7.1 %
49 66
1
38 37
-
10
20
30
40
50
60
70
Q3 16 Q4 16 Q1 17 Q2 17 Q3 17
Underlying EBITDA, NOK million
Road Infrastructure Nordic – lower activity level
10
§ 16 % drop in revenues- Lower sales of culverts and W&S in Sweden
§ Lower earnings and margin- Lower sales in the trading and culvert business in Sweden
- A more challenging pricing environment in Finland- Negative impact on operating leverage
§ Divestment of Water & Sewage business in Sweden completed
3rd quarter Year to dateNOK million 2017 2016 2017 2016
Underlying operating revenue 232 274 603 677
Underlying EBITDA 19 33 28 46
Underlying EBITA 18 32 26 43
Reported EBITDA 19 33 28 46
Underlying EBITDA margin 8.0 % 12.2 % 4.7 % 6.8 %
33 5
(9)
18 19
-20
-10
-
10
20
30
40
Q3 16 Q4 16 Q1 17 Q2 17 Q3 17
Underlying EBITDA, NOK million
Road Infrastructure Europe – solid development
11
§ 20% increase in revenues- Higher sales in several key markets- Acquisition of Elikopol contributed with ⅓ of growth
§ Earnings increase driven by higher sales§ Higher relative share of traded products led to somewhat lower margin
3rd quarter Year to dateNOK million 2017 2016 2017 2016
Underlying operating revenue 361 302 787 727
Underlying EBITDA 40 36 41 58
Underlying EBITA 33 29 23 38
Reported EBITDA 40 36 41 58
Underlying EBITDA margin 11.1 % 11.8 % 5.3 % 7.9 %
36 33
(18)
19 40
-30 -20 -10 -10 20 30 40 50
Q3 16 Q4 16 Q1 17 Q2 17 Q3 17
Underlying EBITDA, NOK million
Profit and loss statement
12
3rd quarter YTD
NOK million 2017 2016 2017 2016
Operating revenue 1 713 1 701 4 259 4 227
Total operating cost (1 519) (1 489) (4 032) (3 917)
EBITDA 194 212 227 310
Depreciation and impairment (39) (40) (113) (120)
EBITA 155 171 114 191
Amortisation and impairment (17) (19) (49) (60)
EBIT 138 152 65 131
Net financial income/expense (43) (89) 29 (251)
Income (loss) before tax 95 64 93 (120)
Income taxes (11) (26) 4 (6)
Net income (loss) 84 38 97 (127)
Of which non-controlling interests 3 6 (1) 21
Earnings per share (NOK) 1.20 0.32 1.47 (2.24)
EBITDA reported 194 212 227 310
Items excluded from underlying EBITDA (2) 9 51 16
EBITDA underlying 192 221 288 326
§ Minor adjustments made to reported earnings to align with underlying earnings in the quarter
§ Net financials for the quarter are significantly lower than last year due to lower net interest-bearing debt
§ Interest expenses decreased by NOK 39 million. Total interest expenses for the quarter were NOK 13 million
§ FX effects related to internal and external debt positions of NOK 24 million in the quarter
§ A tax cost of 12 % is reported for the quarter, due to utilisation of non-recognised tax loss carry forward
234187
192
45 160 5
35
83
-
50
100
150
200
250
300
350
400
450
Cash per 30.06.17 EBITDA underlying Changes in working capital
Other items Net CF from investment activities
Net proceeds from borrowings
Other financing activities and fx
Cash per 30.09.17
NOK million
Development in cash flow during Q3 2017
13
Cash flow from operations Cash flow from financing activities
Balance sheet
14
NOK million 30.09.2017 30.09.2016 31.12.2016
Total intangible assets 1 562 1 818 1 524
Total fixed assets 947 935 934
Other non-current assets 55 63 57
Total non-current assets 2 565 2 806 2 515
Inventories 1 157 931 910
Trade receivables 1 122 1 089 844
Other receivables 385 321 220
Cash and cash equivalents 187 198 329
Total current assets 2 851 2 539 2 302
Total assets 5 416 5 346 4 818
Share capital 7 0 2
Other equity 2 643 668 968
Non-controlling interests 32 253 252
Total equity 2 681 921 1 222
Provisions 52 80 56
Non-current liabilities 1 499 2 827 1 950
Total non-current liabilities 1 551 2 907 2 006
Accounts payables 660 660 496
Other current liabilities 523 858 1 093
Total current liabilities 1 183 1 518 1 589
Total shareholders' equity and liabilities 5 416 5 346 4 818
§ Equity ratio at the end of the quarter at a solid 50 %, up from 25% at year-end
§ Net interest bearing debt at NOK 1.3 billion. Net interest bearing debt to underlying EBITDA ratio of 3.0x at end of quarter
§ The Group’s financial position is good, with sufficient financial capacity to execute the current projects and initiatives
15
The road aheadMorten Holum, CEO
Comprehensive turnaround program in the Swedish RRS business launched
16
§ Consolidate the majority of production lines to other internal sites
§ Lower manning and opexin the RRS business
Significantly reducethe cost base
§ Positive annual EBITDA impact of NOK 20 million
§ Restructuring charges of approximately NOK 15 millionMerge three
companies in Sweden
§ Leverage existing competence to strengthen RRS sales organization
§ Extract further cost synergies
Short-term outlook
17
Road Safety Road Infrastructure
§ The turnaround program for RRS business in Sweden will contribute positively from 2018- Restructuring charges of NOK 15 million in coming two quarters
§ High activity level expected in Norway
§ High order book in the two main markets in Europe, Germany and Poland
§ Competitive situation in Germany is expected to remain tight
§ Raw material prices are increasing
§ No significant short-term improvements in the Nordics- Weaker project demand for technical products- Pricing environment in Finland is challenging
§ The Polish market remains strong
§ Solid Q4 order book in the European business
§ Review of structural options in Lithuania initiated
Summing up
18
§ Mixed performance in the quarter
§ Improvement measures launched
§ Medium-term outlook unchanged- Healthy market conditions
- Executing strategic agenda
The Queensferry crossing in Scotland, opened on 30 August 2017, is the largest infrastructure project in Scotland this decade. Saferoad delivered guardrails and bridge parapets to the project