May 4, 2024
CEO Comments
Consolis delivered a first quarter with adjusted EBITDA of € 4.2 million (20.3) corresponding to an adjusted EBITDA margin of 2.0 percent (7.0). During the first quarter market continued to deteriorate and sales declined by 26 percent. Order intake amounted to € 223 million, 10 percent below last year but with a book-to-bill at 1.0 for the first time since Q1 2022. LTM cash conversion by end of Q1 2024 was 59 percent (75).
Seperately to this report, the Group is pleased to announce that it has agreed a comprehensive recapitalisation transaction with its largest creditors and shareholders. The transaction is expected to significantly deleverage the Group’s balance sheet and provides the business with € 115 million of additional liquidity.
Challenging market conditions
Order intake in the first quarter amounted to € 223 million (249) where our residential exposed segments continued to see order intake drop compared to last year, whereas East Europe and Emerging Markets developed well (adjusted for the devaluation in Egypt during the quarter). The book-to-bill ratio amounted to 1.0.
Net sales for the first quarter amounted to € 216 million (291), a drop by 26 percent compared to last year. The decline in net sales is a reflection of the challenges seen in our three residential exposed segments in order intake where we saw West Europe, East- & West Nordics all drop significantly on net sales compared to last year. In East Europe and Emerging Markets the development was stable with sales growth seen in both segments.
Adjusted EBITDA for the first quarter amounted to € 4.2 million (20.3) corresponding to an adjusted EBITDA margin of 2.0 percent (7.0). This was clearly a drop in profitability and a consequence of the further drop in net sales. We continue to execute on the previously announced restructuring program across the two Nordics segments.
Significant actions for resilience
As press released separately the group, at level of Compact Bidco B.V. the parent company of Consolis SAS, has entered into a transaction with its largest stakeholders. This will provide well needed stability for the group in a challenging market and allow us to keep focus on developing our low carbon products and secure that we are well positioned to capitalize on the underlying pent-up demand for residential housing in our major markets, request for lower carbon dioxide building products and attractive precast industry tailwinds.
Compact Bidco B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands (the “Company”, and together with its subsidiaries, the “Group”) is pleased to announce that it has agreed a comprehensive recapitalisation transaction (the “Transaction”) with its largest creditors, including a majority of holders of its €300m 5.75 percent senior secured notes due 2026 (the “SSNs”) by value, all of its super senior Revolving Credit Facility (the “RCF”) lenders, all of the lenders under the PIK loan made to its indirect parent company (the “Holdco PIK Loan”), and certain affiliates of Bain Capital Private Equity, LP, the current ultimate shareholders of the Company (the “Sponsor”).
When completed, the recapitalisation is expected to refinance the Group’s existing capital structure, implement an extension of its super senior RCF, provide the Group with €115m of additional liquidity, and significantly deleverage its balance sheet.
The recapitalisation Transaction is expected to put the Group in a strong position with a robust capital structure to execute on its strategy and benefit from the market recovery.
The Transaction is currently expected to complete by Q3 of this year and will be subject to regulatory approvals and other customary conditions.
Highlights of the first quarter 2024
- Net sales amounted to € 216 million (291), corresponding to a decrease of 26 percent. Currency effects had a negative impact of 1 percent.
- Operating profit (EBIT) amounted to € 4.7 million (1.7).
- Adjusted EBITDA amounted to € 4.2 million (20.3), corresponding to a margin of 2.0 percent (7.0). Exchange rates had a positive impact of 2 percent.
- Order book decreased 1 percent to € 537 million, compared to € 542 million at the beginning of the quarter. Order intake in the quarter totaled € 223 million, and the book to bill ratio corresponded to 1.0 (0.9).
- Free cash flow in the quarter amounted to € 13.6 million (-10.3), primarily explained by the sale and leaseback transaction in the Netherlands. LTM cash conversion was 59 percent (75).
- After quarter closed, the Group announced that it has agreed a comprehensive recapitalisation transaction with its largest creditors and shareholders. The transaction is expected to significantly deleverage the Group’s balance sheet and provides the business with € 115 million of additional liquidity.
For more information, please contact:
Vilhelm Sund, Director Group Planning, Analysis & Investor Relations
vilhelm.sund@consolis.com
Daniel Warnholtz, Group CFO
daniel.warnholtz@consolis.com
About Consolis
Consolis is a European leading industrial group providing sustainable and smart precast concrete structures for the building and utilities sectors. With operations in 17 countries throughout the world, the group generated €1 billion of sales in 2023.
