Slides
Page 1
ORDER BACKLOG 40% AND Q2 REVENUE 8% HIGHER YEAR -ON-YEAR M I K K O L A I N E , C F O K R E A T E G R O U P P L C / J A N U A R Y - J U N E 2 0 2 515 J U LY 2025
Page 2
▪ Q2 EBITA profitability 3.0% (3.8%) ▪ EBITA EUR 2.2 (2.6) million ▪ Project profitability at the level of the comparison period ▪ We are preparing for growth – we have recruited and trained personnel and invested in facilities and equipment, especially in Sweden ▪ Q2 revenue grew by 8.1% from the comparison period ▪ Revenue in Sweden EUR 9.0 million, growth 35% ▪ Order backlog EUR 281 million, up 40% year-on-year and 25% compared to the end of the previous quarter ▪ Additions to the order backlog are in line with the strategy ▪ The order backlog does not include implementation phases of projects currently in development (totalling over EUR 260 million) ▪ Sweden’s share of the order backlog EUR 27.5 million ▪ EUR 169 million of the order backlog is estimated to be realised in 2025 ▪ The company’s earnings guidance remains unchanged. ORDER BACKLOG HAS GROWN FOR THREE CONSECUTIVE QUARTERS M€ 1-3/2025 1-3/2024 1-12/2024 Tilauskanta 176,6 Liikevaihto 52,4 54,4 275,5 EBITA-% 0,1 % 0,5 % 3,2 % Operatiivinen vapaa kassavirta 6,0 -3,1 0,3
Page 3
HIGHLIGHTS FROM THE SECOND QUARTER 3 At Kirjalansalmi, cables installed The cables of the Kirjalansalmi cable-stayed bridge were successfully installed. The installation of the bridge’s 76 stay cables took a total of 10 weeks. Similar cable-stayed bridges have not been built in Finland for nearly 30 years. Reinforcements for the work came from the Kruunuvuorensilta project. New rail crane taken into use Kreate’s newly modernised rail crane has been taken into use at worksites. The rail crane is one of a kind, and its range of applications is wide — from placing large rail elements to clearing railway infrastructure in disruption and crisis situations. The rail crane has a lifting capacity of 92 tonnes. Lovön tunnels interior contract Kreate Sverige and Trafikverket have agreed on the interior contract for the Lovön tunnels, which is part of the large Stockholm bypass project. The contract is worth approximately SEK 144 million, or about EUR 13 million. This is the largest contract in Kreate Sverige’s history.
Page 4
INTEREST RATE DEVELOPMENT SUPPORTS INVESTMENTS MEGATRENDS DRIVE DEMAND IN THE LONG TERM 4 INDUSTRIAL INVESTMENTS The private sector is very active in both the green transition and industrial projects. TRANSPORT INVESTMENTS State’s approximately EUR 4 billion transport investments– tendering in H2/2025 and implementation in 2026 → INFLATION AND INTEREST RATE Cost level stable. Interest rates have declined throughout the first half of the year. The key policy rate at the end of June was 2.0%. LONG TERM AND MEGATRENDS Military mobility – Urbanisation – Green transition
Page 5
MARKET OUTLOOK IMPROVING IN THE SHORT TERM, POSITIVE IN THE LONG TERM DEVELOPMENT OF THE MARKET SUITABLE TO KREATE (MANAGEMENT ASSESSMENT) MARKET Q/25 OUTLOOK < 6 MONTHS OUTLOOK > 6 MONTHS FINLAND Bridge construction Foundation and engineering construction Special foundation construction Rail and tramway construction Road and street construction SWEDEN Rock construction Concrete construction Earth construction Foundation construction Market situation Market outlook Very strong Stronger than usual Normal Weaker than usual Very weak Strongly improving Improving Stable Weakening Strongly weakening
Page 6
ORDER BACKLOG HAS GROWN FOR THREE CONSECUTIVE QUARTERS ▪ Order backlog at the end of June EUR 281.0 million ▪ Change from the end of March 24.5% ▪ Change from a year earlier 40.4% ▪ Q2 2025 new projects worth EUR 116 million, including among others ▪ the Lovön tunnel interior contract in Stockholm ▪ street and water supply construction in Oulu ▪ bridge projects in various parts of Finland ▪ EUR 169 (125) million of the order backlog is estimated to be realised during the 2025 financial year, of which Sweden’s share is EUR 25 million. ▪ The order backlog does not include potential implementation phases of projects currently in development (over EUR 260 million) 6 169 *125 *128 * * Expected to be realised during the financial year Order backlog Q2/23 – Q2/25, EUR million
Page 7
STRATEGY EXECUTION IN THE SECOND QUARTER 1 2 3 4 BE AMONG THE LEADERS IN ALL OUR BUSINESSES WE MUST: BE THE BEST PLACE FOR THE BEST INFRASTRUCTURE EXPERTS KEEP OUR PROCESSES AGILE BE THE MOST DESIRABLE INFRASTRUCTURE PARTNER The number of personnel continued to grow – there are already over 600 Kreate employees, in addition to our professionals at the KFS joint venture in Finland. We have successfully increased our project staff in both Finland and Sweden. In the summer, we also have dozens of trainees. Kreate is trusted, which is often reflected for example in follow-up contracts. In June we were awarded a new contract for the interior work of the Stockholm bypass tunnels – a project in which we had previously progressed from a subcontractor to the role of main contractor. Our customer satisfaction (NPS) is at a top level of 86. In Sweden, operations have expanded and now cover rock, concrete, foundation and earth construction. In Finland, we have a strong position in all our business areas. The commissioning of our new rail crane further strengthens our competitiveness in the railway environment. We are selective and precise in our tendering process. The administration in Sweden has been strengthened to support growth. SUSTAINABLE PROFITABILITY EBITA margin > 5 % Annual revenue growth of 5-10 % Net debt/EBITDA < 2,5
Page 8
SUSTAINABILITY IN OUR OPERATIONS GREAT PROGRESS IN OCCUPATIONAL SAFETY OBSERVATIONS 8 Building with passion Highlights Q2 2025 Employee satisfaction Occupational safety and safety culture Increasing competence Responsible employer Reducing our footprint Minimizing the impact of construction Tackling climate change Increasing our handprint Sustainable and safe solutions Infrastructure projects supporting megatrends Corporate responsibility 8.8 Combined accident frequency +6% Greenhouse gas emissions from own operations (scope 1+2) relative to revenue (last 12 months vs 2023) 86 Client NPS 37 % share of Group’s revenue from the rail environment operations 10.5 observations per person 29 % observations from projects
Page 9
Kreate estimates that its revenue in 2025 will grow and be in the range of EUR 290–310 million (2024: EUR 275.5 million) and EBITA will increase and be in the range of EUR 9–11 million (2024: EUR 8.8 million). Justifications: The company's guidance is based on the order backlog expected to be realised in 2025 at the turn of the year and the company's estimate of the likely transfer of projects under development to the order backlog starting from spring 2025. The company will continue to offer projects selectively and grow in the Swedish market, which is expected to improve profitability. GUIDANCE FOR 2025 UNCHANGED 9
Page 10
10 REVENUE WEIGHTED TOWARDS THE END OF THE YEAR -20.7 % 8.1 % Revenue, EUR million change from the same quarter in the previous year Revenue distribution 1-6/2025
Page 11
▪ In April–June, EBITA-% declined from the comparison period and was 3.0% (3.8%) ▪ in euros EUR 2.2 (2.6) million ▪ In January–June, EBITA-% was 1.8 (2.4) ▪ EBITA profitability ▪ Project profitability at the level of the comparison period as expected ▪ Efficient operational activities ▪ Selectivity in tendering ▪ We are preparing for growth – we have recruited and trained personnel and made new facility agreements and equipment updates EBITA SLIGHTLY LOWER THAN IN THE COMPARISON PERIOD AS A RESULT OF GROWTH INVESTMENTS 11 EBITA, EUR million
Page 12
FAVOURABLE WORKING CAPITAL DEVELOPMENT SUPPORTED STRONG CASH FLOW ▪ Good operational cash flow ▪ April–June: EUR 9.3 (-6.5) million ▪ January–June: EUR 15.3 (-9.6) million ▪ The change in net working capital improved cash flow by EUR 7.4 million during the second quarter and by EUR 11.7 million compared to a year ago. ▪ Net investments in April–June were EUR 2.0 (1.7) million and in January–June EUR 2.4 (2.7) million. ▪ At the end of June 2025, net working capital was at an excellent level of EUR -10.7 (1.0) million. The company’s long-term goal is to keep net working capital close to zero. ▪ Net working capital is managed systematically at all project stages from contract negotiations through to project completion. 12 Free cash flow from operating activities, EUR million Net working capital, EUR million
Page 13
INTEREST-BEARING NET DEBT DECREASED TO BELOW EUR 20 MILLION ▪ Kreate’s interest-bearing net debt on 30 June 2025 was EUR 19.0 million (30 June 2024: 31.7) ▪ The release of working capital is the single largest factor behind the decrease in net debt compared to both a year ago and the previous quarter. ▪ Net debt/EBITDA was 1.2 (2.2) ▪ Interest-bearing debt on 30 June 2025 was EUR 33.7 million ▪ Equity ratio on 30 June 2025 was 31.0% (30 June 2024: 31.9%) 13 Interest-bearing net debt (EUR million) and equity ratio (%)
Page 14
SUCCESSFUL REFINANCING COMPLETED AT THE BEGINNING OF JULY – SUPPORTS STRATEGY EXECUTION IN FINLAND AND SWEDEN 14 Loan portfolio on 30 June 2025, EUR million Repayment schedule for interest-bearing debt*, EUR million Average interest of interest- bearing debt, excluding lease liabilities recognised in the balance sheet 5.1 % * excluding lease liabilities recognised in the balance sheet, situation after refinancing
Page 15
KEY FIGURES 15 EUR million 4-6/2025 4-6/2024 1-6/2025 1-6/2024 1-12/2024 Order backlog 281.0 200.1 176.6 Revenue 73.5 68.0 125.9 122.4 275.5 EBITDA 4.0 4.0 5.7 5.7 15.3 EBITDA, % 5.4 % 5.9 % 4.5 % 4.6 % 5.5 % EBITA 2.2 2.6 2.3 2.9 8.8 EBITA, % 3.0 % 3.8 % 1.8 % 2.4 % 3.2 % Operating profit 2.2 2.6 2.2 2.8 8.7 Operating profit, % 3.0% 3.8% 1.7% 2.3% 3.2% Result for the period 1.0 1.6 1.2 1.1 4.6 Return on capital employed, % 12.0% 10.8% 13.1% Free cash flow from operating activities 9.3 -6.5 15.3 -9.6 0.3 Net working capital -10.7 1.0 2.7 Net debt 19.0 31.7 29.9 Net debt/EBITDA, rolling 12 months 1.2 2.2 2.0 Equity ratio, % 31.0% 31.9% 33.2% Earnings per share, diluted, € 0.14 0.16 0.14 0.09 0.49 Personnel at the end of the period 605 512 511