May 17th 2023
CEO Comments
Consolis had a good start to the year of 2023, confirming the trajectory initiated in Q3 2022. Profitability improved, especially in West Nordic which confirmed its turnaround. Order intake held up well and improved during Q1, even though the weak demand in residential negatively affected the performance of our East Nordic segment. We continued to see a solid traction from our Green Spine Line® product and an increased interest from our customers.
Resilience in turbulent times
In a complex market environment, Consolis continued its trajectory and delivered a profitability improvement for the third consecutive quarter, thus restoring the margin level from Q1 2021, before the adverse impact of raw material prices increase.
The efforts during 2022 to improve commercial terms in our order book is now materializing as we now execute on a high-quality order book. This is particularly true in our West Nordic segment which confirmed its turnaround and delivered a second consecutive quarter with positive margins after several quarters of negative performance.
On order intake, the trend observed towards end of 2022 continued into Q1. Non-residential holds up well, whereas the residential segment continued to slowdown. This translated into an order intake at € 249 million in the quarter, equaling a book-to-bill ratio of 0.9. Tender activity remains good.
Our order book, which totaled € 630 million at the end of the first quarter, continue to offer the group good visibility for the months to come.
Net sales in the first quarter amounted to € 291 million (319), down 9 percent vs. last year, and strongly impacted by the drop of the residential segment in East Nordic. Adjusted EBITDA in the quarter amounted to € 20.3 million (16.8) equal to an adjusted EBITDA-margin of 7.0 percent (5.3). Our cash generation continues to improve, reaching a cash conversion of 75 percent on a last twelve month basis.
Taking the lead in low carbon concrete as a competitive advantage
At end of 2022, Green Spine Line® products represented 9% of Consolis total produced volume, and product roll-out continued in Q1 2023 with Sweden certifying their green walls.
Beyond the solid traction on Group revenues, we see an increased interest for low- CO2 products from our customers to reach the ambitious CO2 reduction targets they are committed to. Our Green Spine Line® continues to deliver higher than average margins, which we believe is good evidence of a willingness among our most advanced customers to pay for competence in material technology.
We are working to further extend our competitive advantage, which is not limited to manufacturing products that generate a strong interest from our customers. Green Spine Line® paves the way for structural and more conceptual collaborative discussions with our customers, opening for cooperation which are not limited to just individual projects.
Precast concrete set for increased relative competitiveness
In Q1 2023, order intake held up quite well across most of our segments. Combined with a high-quality backlog and a tendering activity which remains high in most of our geographies provides a good visibility for the months to come. Long term we believe the trend for our market to be strong with a pent-up demand for residential housing in our major markets and attractive pre-cast industry tailwinds. We are cautious and systematically try to the balance the different cost reduction measures to ensure our ability to restart with suitable capacities.
Consolis is set to meet the need for sustainable construction, and helping the construction industry address its environmental challenges.
Highlights of the first quarter 2023
- Net sales from continued operations amounted to € 291 million (319), corresponding to a decrease of 9 percent. Currency effects had a negative impact of 4.1 percent.
- Operating profit (EBIT) amounted to € 1.7 million (6.7)
- Adjusted EBITDA amounted to € 20.3 million (16.8), corresponding to a margin of 7.0 percent (5.3). Exchange rates had a negative impact of 8.4 percent
- Order book decreased 7 percent to € 630 million, compared to € 674 million at the beginning of the quarter. Order intake in the quarter totalled €249 million, and the book to bill ratio corresponded to 0.9.
- Free cash flow in the quarter amounted to € -10.3 million (-10.8), primarily explained by working capital seasonality effects and the impact of inventory level reduction. LTM cash conversion was 75 percent.
Telephone Conference
Consolis will host a telephone conference at 10:00 CEST on Wednesday, May 17th. The presentation will be held in English and also available as a recorded webcast on www.consolis.com, and the direct link:
https://edge.media-server.com/mmc/p/phioykg2
To ensure that you are connected to the conference call, please use the following link at least five minutes before the start of the conference call to register your attendance. Follow link for conference registration here:
https://register.vevent.com/register/BI785a31671ee84d32a01c9064baec62dc
The quarterly earnings report and associated presentation will be available on www.consolis.com
