July 21st 2023
Consolis delivered a second quarter with adjusted EBITDA of € 17.8 million, continuing to show resilience in a challenging market environment. During the quarter sales decline by 22 percent compared to same quarter last year but with improved adjusted EBITDA margin by 0.7 percentage points to 6.7% margin compared to same period last year. Book-to-bill ratio for the quarter was 0.9 (0.9) and we are experiencing a weak demand for residential buildings. We continue to put efforts in our Green Spine Line® product line. During the first half of 2023 some 30 percent of Consolis total produced volume was Green Spine Line® products.
Turbulent market conditions
Order intake in the second quarter amounted € 235 million, corresponding to a book to bill of 0.9.
We continue to experience similar market conditions as in recent quarters with a stable demand in the non-residential segment across our regions whereas we see less demand for residential buildings. The slowdown of order intake in residential is also visible in our operating segments. Emerging Markets and East Europe had stable order intake in the quarter. In West Europe, West- and East Nordic we have historically had a larger portion of residential order intake and are impacted by the lower volumes. By end of Q2 we had € 600 million (914) worth of sales in our order book.
In the second quarter Consolis net sales amounted € 265 million (338). Adjusted EBITDA amounted to 17.8 million, corresponding to 6.7 (6.0) percent in adjusted EBITDA margin. Free cash flow amounted to € -0.6 million (2.5).
During the quarter we improved our Adj. EBITDA margin compared to same quarter last year in a challenging environment where we simultaneously saw net sales drop by 74 million corresponding to 22 percent (of which -4.4 percent was currency effects). We also saw that our efforts in West Nordics continue to pay off as the segment delivered an adjusted EBITDA margin of 3.6 percent which was 5.0 percentage points better than last year, but impacted by lower volumes.
We are accelerating the adjustment of our operations to lower market demand of residential buildings in the Nordics. To address this we intend to, pursuant to consultations with relevant unions in local markets, launch a restructuring program addressing West- and East Nordics. We have the intention to book a one-time restructuring charge of € 11-13 million of were some 4.5 MEUR will be relating to write down of IFRS16 leasing contracts and majority of the rest will be related to reduction of direct and indirect costs, including personnel. We estimate the effect on EBITDA for 2023 to be in range of € 4-5 million, the cash out effect 2023 at € 5-6 million and with a full year EBITDA effect of € 5-6 million.
Taking the lead in low carbon concrete as a competitive advantage
During first half 2023, some 30 percent of Consolis total produced volume was Green Spine Line® products. This equals some 535,000 tons certified products with a direct saving of over 17,200 tons carbon dioxide emissions when compared to regular precast concrete. We continue to see a good increase of the proportion of our produced volume under the Green Spine Line®, as well as corresponding gradual increase in sales as we grow this offer in our more mature markets.
Highlights of the second quarter 2023:
- Net sales amounted to € 265 million (338), corresponding to a decrease of 22 percent. Currency effects had a negative impact of 4.4 percent
- Operating profit (EBIT) amounted to € 8.8 million (10.0)
- Adjusted EBITDA amounted to € 17.8 million (20.2), corresponding to a margin of 6.7 percent (6.0). Exchange rates had a negative impact of 5.2 percent
- Order book decreased 5 percent to € 600 million, compared to € 630 million at the beginning of the quarter. Order intake in the quarter totaled € 235 million, and the book to bill ratio corresponded to 0.9
- Free cash flow in the quarter amounted to € -0.6 million (2.5), primarily explained by working capital seasonality effects and the impact of inventory level reduction. LTM cash conversion was 72 percent.
Consolis will host a telephone conference at 10:00 CEST on Friday, July 21st.
The presentation will be held in English and also available as a recorded webcast on www.consolis.com, and the direct link:
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The quarterly earnings report and associated presentation will be available on www.consolis.com