Consti Yhtiöt Oyj - Half Year financial report

CONSTI GROUP PLC HALF-YEAR FINANCIAL REPORT FOR JANUARY-JUNE 2017: NET SALES GROWING AND ORDER BACKLOG RECORD HIGH

CONSTI GROUP PLC HALF-YEAR FINANCIAL REPORT 10 AUGUST 2017, at 8.30 a.m.

Consti Group Plc Half-Year Financial Report for January - June 2017

NET SALES GROWING AND ORDER BACKLOG RECORD HIGH

4-6/2017 highlights (comparison figures in parenthesis 4-6/2016):
·       Net sales EUR 78.8 (64.8) million; growth 21.6%
·       EBITDA EUR 3.2 (3.1) million and EBITDA margin 4.1% (4.7%)
·       Adjusted EBITDA EUR 3.2 (3.1) million and adjusted EBITDA margin 4.1%
(4.7%)
·       Operating profit (EBIT) EUR 2.7 (2.6) million and operating profit
(EBIT) margin 3.4% (4.0%)
·       Adjusted EBIT EUR 2.7 (2.6) million and adjusted EBIT margin 3.4% (4.0%)
·       Order backlog EUR 227.9 (212.6) million; growth 7.2 %
·       Free cash flow EUR 4.0 (0.4) million
·       Earnings per share EUR 0.26 (0.25)

1-6/2017 highlights (comparison figures in parenthesis 1-6/2016):
·       Net sales EUR 136.1 (116.2) million; growth 17.1%
·       EBITDA EUR 4.0 (3.7) million and EBITDA margin 2.9% (3.2%)
·       Adjusted EBITDA EUR 4.0 (3.7) million and adjusted EBITDA margin 2.9%
(3.2%)
·       Operating profit (EBIT) EUR 3.0 (2.8) million and operating profit
(EBIT) margin 2.2% (2.4%)
·       Adjusted EBIT EUR 3.0 (2.8) million and adjusted EBIT margin 2.2% (2.4%)
·       Free cash flow EUR 3.5 (3.7) million
·       Earnings per share EUR 0.26 (0.24)

Guidance on the Group outlook for 2017:
The company estimates that its net sales for the entire year 2017 will grow
compared to 2016.

+--------------------+-------+------+---------+-------+-------+--------+-------+
|KEY FIGURES (EUR    | 4-6/  | 4-6/ | Change %| 1-6/  | 1-6/  |Change %| 1-12/ |
|1,000)              | 2017  | 2016 |         | 2017  | 2016  |        | 2016  |
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Net sales           | 78,811|64,813|   21.6 %|136,079|116,181|  17.1 %|261,558|
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Adjusted EBITDA     |  3,206| 3,069|    4.5 %|  3,978|  3,729|   6.7 %| 13,142|
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Adjusted EBITDA     |  4.1 %| 4.7 %|         |  2.9 %|  3.2 %|        |  5.0 %|
|margin, %           |       |      |         |       |       |        |       |
+--------------------+-------+------+---------+-------+-------+--------+-------+
|EBITDA              |  3,206| 3,069|    4.5 %|  3,978|  3,706|   7.3 %| 13,120|
+--------------------+-------+------+---------+-------+-------+--------+-------+
|EBITDA margin, %    |  4.1 %| 4.7 %|         |  2.9 %|  3.2 %|        |  5.0 %|
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Adjusted EBIT       |  2,697| 2,614|    3.2 %|  2,975|  2,829|   5.2 %| 11,004|
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Adjusted EBIT       |  3.4 %| 4.0 %|         |  2.2 %|  2.4 %|        |  4.2 %|
|margin, %           |       |      |         |       |       |        |       |
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Operating profit    |  2,697| 2,614|    3.2 %|  2,975|  2,806|   6.0 %| 10,982|
|(EBIT)              |       |      |         |       |       |        |       |
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Operating profit    |  3.4 %| 4.0 %|         |  2.2 %|  2.4 %|        |  4.2 %|
|(EBIT) margin, %    |       |      |         |       |       |        |       |
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Profit for the      |  1,996| 1,878|    6.3 %|  2,013|  1,801|  11.7 %|  7,978|
|period              |       |      |         |       |       |        |       |
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Order backlog       |       |      |         |227,907|212,590|   7.2 %|190,806|
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Free cash flow      |  3,980|   353| 1026.9 %|  3,502|  3,747|  -6.5 %| 10,865|
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Cash conversion, %  |124.1 %|11.5 %|         | 88.0 %|101.1 %|        | 82.8 %|
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Net interest-bearing|       |      |         | 15,514| 17,780| -12.7 %| 12,097|
|debt                |       |      |         |       |       |        |       |
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Gearing, %          |       |      |         | 55.0 %| 76.1 %|        | 40.8 %|
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Return on           |       |      |         | 23.7 %| 18.3 %|        | 22.7 %|
|investment, ROI %   |       |      |         |       |       |        |       |
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Number of personnel |       |      |         |  1,165|    990|  17.7 %|    935|
|at period end       |       |      |         |       |       |        |       |
+--------------------+-------+------+---------+-------+-------+--------+-------+
|Earnings per share, |   0.26|  0.25|    5.7 %|   0.26|   0.24|  11.2 %|   1.05|
|undiluted (EUR)     |       |      |         |       |       |        |       |
+--------------------+-------+------+---------+-------+-------+--------+-------+


CEO Marko Holopainen's comment

Net sales growing and order backlog record high

"Demand for renovation contracting and technical building services continued
good during the second quarter. New orders increased and our order backlog grew.
Our net sales grew 21.6 percent and was 78.8 (64.8) million euro. Net sales grew
in all our business areas and was particularly strong in our Building Facades
business area.

Despite the strong comparison period, we succeeded in increasing new orders and
our order backlog grew record high. At the end of the reporting period, our
order backlog in euro was 227.9 (212.6) million euro, which presents a good
footing from which to continue net sales growth. Due to acquisitions and strong
net sales growth, our personnel count grew nearly 18% compared to the
corresponding period last year. At the end of the reporting period we employed
1165 (990) people.

In the second quarter, we had an all-time-high operating profit in euro. Our
relative profitability did not, however, develop as we wanted during the
quarter. In April-June our operating profit was 2.7 (2.6) million euro, which is
3.4 (4.0) percent of net sales. Our relative profitability decreased mainly due
to the fall in profitability of our Technical Building Services business area,
which was caused by fluctuation in profitability in project deliveries, as well
as price competition in this business area.

The market situation continued good

The market situation has largely continued good. In April-June new order intake
grew approximately 10 percent and new orders amounted to 83.0 (75.6) million
euro. New orders grew in Renovation Contracting and Building Facades, but
decreased in Technical Building Services. New significant projects include for
example a purpose modification project at Koy Helsinki's Satamakatu 3, housing
corporation Riutoja's facade renovations, and housing corporation Merisoukka's
pipeline renovations.

Strategy 2017-2021 - prerequisites for growth

Consti's strategy update for years 2017-2021 was drawn up during the first half
of the year.

Our vision: "Consti professionals are passionate about renovating and developing
the built environment in a sustainable and sensible manner. This is why we are
number one in renovation construction."

Our strategic goals are 10% annual growth in our current businesses, improving
relative profitability, and achieving growth in new businesses.

Our strategic development projects are our chosen methods for reaching these
goals. For 2017-2021 our strategic development projects are:

  * Professional employees who enjoy their work - the key to growth is a
    competent and motivated staff whose operational preconditions and wellbeing
    are taken care of

  * Clear service concepts to meet customer needs - Consti has a broad offering,
    but services need to be productised into even clearer and more customer-
    focused service concepts

  * Efficient sales and customer relationship management

  * Profitable and competitive operations in projects and services, which are
    advanced e.g. by implementing Lean-principles.

  * Expansion in the renovation value chain - we wish to expand our services in
    the renovation value chain to cover even more ground, all the way from the
    planning phase to services and maintenance during use. This goal is strongly
    linked to operating in the forefront of developing new completion methods
    and technologies.
Growth and profitability are sought in all business areas, but especially in
strategic growth areas, which are to a large extent the same as before: Service,
various endeavours based on broader collaboration, geographic growth in Finnish
growth centres, pipeline renovations, and promising specialty renovation markets
such as balcony, concrete and glass structures.

Additionally, we also want new growth in areas we have not previously operated
in, or in which we have not had a strong enough foothold. These areas are, for
example, even stronger service productisation, indoor ventilation and energy
solutions, as well as solutions for row houses and small apartment buildings
that are approaching renovation age and require new service development.

Operating environment and outlook for the 2017

Renovation construction's portion of Finland's house construction market has
clearly grown during the past ten years. In 2016 Finland's renovation
construction market was 12.4 billion euro, which is the equivalent of
approximately 50 percent of the entire house construction market.

European construction business research group Euroconstruct estimated in its
June 2017 forecast that total building in 2017 will increase approximately 2.7
percent from the previous year, renovation construction will grow about 1.8
percent, and new building 3.5 percent from 2016. In renovation construction
demand growth is estimated to continue progressing steadily during upcoming
years and the growth is estimated to be faster than new building growth on
average.

The ageing building stock increases the demand for technical building
renovation, such as pipeline renovations and facade renovations. At the moment
mainly buildings from the 1960s and the early 1970s are being renovated in
Finland. Renovations will start next in the considerably larger building stock
of the later 1970s and 1980s. In renovation contracting the largest growth in
the next 10 years is still expected to come from renovation needs of apartment
buildings in cities. In the public sector especially municipality-owned real
estate such as hospitals and schools have considerable need for renovations.

In addition to ageing, buildings require more renovation, technical building
services and building technology maintenance services due to heightened energy
efficiency requirements, indoor air quality challenges, urbanisation,
modification of the use of buildings, the development of housing automatisation
and the ageing populations' need for barrier-free buildings.

In addition, there are currently a great number of buildings in Finland, which
would benefit from renovations modifying their use to match current needs. Such
renovations would improve both the buildings' usability and profitability.
Typical modifications of buildings include the altering of old office buildings
and industrial buildings in growth centres into hotels, apartments and assisted
living facilities. Modifications of the use of buildings are a central part of
Consti's services. One of the new significant work sites acquired during the
reporting period is a purpose modification project in a historical building in
the Katajanokka district of Helsinki (Koy Helsingin Satamakatu 3).

The company estimates that its net sales for the entire year 2017 will grow
compared to 2016.

Press conference

A press conference for analysts, portfolio managers and media will be arranged
on Thursday 10 August 2017 at 10.00 at Hotel Kämp's Paavo Nurmi -cabinet, at
Pohjoisesplanadi 29, Helsinki. The conference is hosted by CEO Marko Holopainen
and CFO Esa Korkeela

Financial communication in 2017

Consti Group Plc shall publish one more interim report during 2017:

  * Interim report 1-9/2017 published 9 November 2017


CONSTI GROUP PLC

Further information:

Marko Holopainen, CEO, Consti Group Plc, Tel. +358 400 458 158
Esa Korkeela, CFO, Consti Group Plc, Tel. +358 40 730 8568

Distribution:

Nasdaq Helsinki Ltd.
Major media
www.consti.fi

Consti  is a leading  Finnish company concentrating  on renovation and technical
services.  Consti offers comprehensive building technology, pipeline renovation,
renovation  contracting, façade renovation and  other demanding construction and
maintenance  services for residential and  commercial buildings. In 2016, Consti
Group's   net  sales  amounted  to  262 million  euro.  It  employs  over  1000
professionals in renovation construction and building technology.

Consti  Group Plc  is listed  on Nasdaq  Helsinki. The  trading code  is CONSTI.
www.consti.fi


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Priedai:

Consti Half-Year Financial Report 1-6 2017.pdf