July 22nd, 2022
Consolis delivered a solid second quarter despite a market environment that continues to be challenging. Order intake was soft in the early part of Q2 with the unfolding of the war in Ukraine, but improved through the quarter to end up at € 296 million, which equals a book-to-bill ratio of 0.87. The trend that we observed towards the end of Q1 continued into Q2 with non-residential holding up well whereas we experienced a weakening order intake in residential. Order book remained at a strong level at € 914 million at the end of the second quarter, down 6 percent since the last quarter, but 14 percent above same period last year.
Net sales in the second quarter amounted to € 338 million (280), up 21 percent vs. last year. Adjusted EBITDA in the quarter amounted to € 20.3 million (23.6) equal to an adjusted EBITDA-margin of 6.0 percent (8.4). Free cash flow in the quarter amounted to € 2.5 million (15.9), primarily explained by working capital seasonality effects, raw material price increases and higher inventories level needed to secure both raw material pricing and supply.
The war in Ukraine have had significant indirect impacts on Group performance in the second quarter with continuing volatility across the raw material prices. We see positive development on steel prices toward the end of the quarter, whereas energy costs remain at high level. We are therefore continuing our efforts to improve our ability to pass on the costs to customers and to mitigate the risk of supply shortages both through pricing actions, but also the inclusion of indexation clauses or pass through clauses or in some cases customer advances to secure raw materials The exact method use depends on the market practices in the various markets. The combined effects of steel price normalization and price renegotiations with customers should lead to gradual margin recovery during H2.
In previous quarterly reports, Consolis has indicated that as part of the Civil Work France business transaction closed on January 31st, 2022, it has an obligation to fund € 20 million in cash, main part being covered by the expected cash proceeds from the disposal of certain real estate assets. On June 30th 2022, a real estate asset sale has been completed for an amount slightly above € 20 million, hence removing the risk on the Group liquidity as the proceeds will be used to settle this liability.
On July 21st, 2022, Consolis entered into a new term facility by certain of its subsidiaries, in a principal amount of € 30 million, thus securing additional liquidity headroom for the Group. The new facility matures on May 31st 2025, and accrues interest at a floating rate based on EURIBOR, with a 700 basis points margin.
Highlights of the second quarter 2022:
- Net sales from continued operations amounted to € 338 million (280), corresponding to 21 percent sales growth. Currency effects had a negative impact of 0.9 percent.
- Operating profit (EBIT) amounted to € 10.0 million (11.9).
- Adjusted EBITDA amounted to € 20.2 million (23.6), corresponding to a margin of 6.0 percent (8.4). Exchange rates had a negative impact of 0.5 percent.
- Order book decreased 6 percent to € 914 million, compared to € 968 million at the beginning of the quarter. Order intake in the quarter totaled € 296 million, and the book to bill ratio corresponded to 0.87.
- Free cash flow from continued operations in the quarter amounted to € 2.5 million (16.0), primarily explained by seasonality effects in working capital and higher inventories level. LTM cash conversion was 30 percent.
- Real estate transaction completed on June 30th 2022 and covering the remaining liability of the Civil Work France business transaction.
Consolis will host a presentation with the possibility to attend through a telephone conference at 09.00 CET today. The presentation will be held in English and will also be available as a recorded webcast on: https://edge.media-server.com/mmc/p/cda3autv
To ensure that you are connected to the conference call, please dial in at least five minutes before the conference call starts to register your attendance.
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The Interim Report and the presentation are available on www.consolis.com.