November 16th 2023
CEO Comments:
Consolis delivered a third quarter with adjusted EBITDA of € 14.6 million (17.8) and with an improved adjusted EBITDA margin of 6.1 percent (5.6) in a challenging market environment. Sales declined by 24 percent and book-to-bill ratio was 0.8 (0.7) in the quarter continuously impacted by very low volumes of new residential order intake and sales. As cash is a priority for us at Consolis we were happy to see our LTM cash conversion continue to improve in the third quarter at 80 percent (46).
Resilience
In the third quarter Consolis net sales amounted to € 240 million (317) corresponding to a sales decline of 24 percent of which currency effect was minus 5 percent. These sales generated an adjusted EBITDA of € 14.6 million (17.8) corresponding to an adjusted EBITDA margin of 6.1 percent (5.6). The declining revenue is a direct consequence of the lower market activity also impacting absolute EBITDA. Despite significant headwinds on topline the cost measures we are taking partly helped us to mitigate the impact on EBITDA and we continued to improve margin compared to last year.
Turbulent market conditions
Order intake in the third quarter amounted € 190 million (223), corresponding to a book to bill ratio of 0.8 (0.7). We continued to see low volumes of new order intake in the third quarter driven primarily by residential markets but also our non-residential demand was partly impacted by the overall economic sentiment.
Order book by end of Q3 closed at € 565 million (828), a decline by 6 percent compared to last quarter. We continue to be firm on keeping commercial terms in contracts added to order book and being thorough on evaluating risks in these contracts as the market pressure for existing volumes are higher than historically.
During the third quarter we booked a restructuring charge of € 10.5 million to accelerate our efforts in aligning cost structure to the changing market dynamics by a restructuring program primarily addressing East- and West Nordics. We have in relation to this closed down one factory and mothballed one factory during the quarter and will continue execution in the coming quarter.
Positioning for future recovery
Whilst customers’ decision-making processes remain slower, we continue to see good tender activity in our markets. We are still firm that the underlying trend for our market is strong with a pent-up demand for residential housing in our major markets, requests for lower carbon dioxide building products and attractive precast industry tailwinds. In November we signed a cooperation agreement with one of our large clients in Sweden, NCC, where we together will expand cooperation to develop climate-improved products. By prioritizing our Green Spine Line® concept and the area of low carbon concrete also in a downturn market we aim to secure that we long-term are in a place to capitalize from the unquestionable demand for low carbon precast concrete elements.
Highlights of the third quarter 2023:
- Net sales amounted to € 240 million (317), corresponding to a decrease of 24 percent. Currency effects had a negative impact of 5 percent
- Operating profit (EBIT) amounted to € -8.3 million (6.3)
- Adjusted EBITDA amounted to € 14.6 million (17.8), corresponding to a margin of 6.1 percent (5.6). Exchange rates had a negative impact of 13 percent
- Order book decreased 6 percent to € 565 million, compared to € 600 million at the beginning of the quarter
- Free cash flow in the quarter amounted to € 1.8 million (-2.8)
Telephone conference
Consolis will host a presentation with the possibility to attend through a telephone conference at 10.00 CET today. 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/mie2foza
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.
https://register.vevent.com/register/BI20678d55c5d64fba8ca703b7a42bd1d5
The quarterly earnings report and associated presentation will be available on www.consolis.com
