February 22, 2024
CEO Comments
Consolis delivered a fourth quarter with adjusted EBITDA of € 14.7 million (21.1) corresponding to an adjusted EBITDA
margin of 5.9 percent (6.6). The market continued to be challenging and sales declined by 22 percent. Order intake amounted to € 223 million, an increase of 19 percent compared to last year but with a book-to-bill for seventh consecutive quarter below 1, at 0.9 in the quarter. LTM cash conversion by end of 2023 was 66 percent (64).
Challenging market conditions
During the fourth quarter we saw market conditions deteriorate further as trends seen in previous quarters strengthened. The slowdown in our markets continues to be clearly driven by weak demand for new residential buildings, but since Q3 also a softening in new non-residential buildings.
Unbalanced Performance
As seen in group performance, we are currently navigating in a very challenging market environment. However, the impact varies significantly between our markets and regions, with markets exposed to the residential segment being significantly more challenged. This is most clearly seen in the two Nordic segments (West- and East) and the Netherlands in West Europe that are mainly exposed to the residential market. Sales have dropped significantly in these markets during 2023 without any sign of improved order intake.
The challenging development in order intake, net sales and as a consequence profitability in these regions are also impacting our cash generating ability locally.
Significant actions for resilience
In the end, cash is what matters in a challenging environment. To keep our resilience also on liquidity we have during 2023 completed one sale and leaseback in Denmark and then an additional transaction during the first days of January 2024 in the Netherlands. These have in total added some € 42 millions of liquidity to the group. But, as the current market environment prolongs we continue to monitor the market for potential additional strategic transactions to strengthen group liquidity. The liquidity outlook is uncertain, with considerable scope for variability given the challenging macro picture and the typical seasonality of the business pressuring liquidity in the coming quarters.
Positioning for future recovery
During 2023, some 30 percent (9) of Consolis total produced volumes was Green Spine Line®. This equals some 1.0 million tons (0.4) of certified products with a direct saving of over 33,000 tons of CO2 (12,000) when compared to regular precast concrete. Green Spine Line® is a high priority for us and we see large potential in this going forward.
Highlights of the fourth quarter 2023:
- Net sales amounted to € 249 million (321), corresponding to 22 percent sales decline. Currency effect was 2 percent negative
- Operating profit (EBIT) amounted to € -6.7 million (-4.6).
- Adjusted EBITDA amounted to € 14.7 million, with corresponding margin of 5.9 percent (6.6). Currency effected positive by 1 percent
- Order book decreased 4 percent to € 542 million, compared to € 565 million at the beginning of the quarter. Order intake in the quarter amounted to € 223 million, and with a book to bill ratio of 0.9 (0.6).
- Free cash flow in the quarter was € 32.7 million (45.2) and with an LTM cash conversion of 66 percent (64).
Next communication to the market will be with the release of Consolis Annual financial and sustainability report April 25.
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/k2qddjem
Dial-in details:
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/BI00ee16ced8f141778b613c4e5e52cf62
The quarterly earnings report and associated presentation will be available on www.consolis.com
