Consti Yhtiöt Oyj - Interim report (Q1 and Q3)

Consti Group Plc Interim Report for January - September 2017

CONSTI GROUP PLC INTERIM REPORT 9 NOVEMBER 2017, at 8.30 a.m.

Consti Group Plc Interim Report for January - September 2017

NET SALES GREW, RESULT WAS A DISAPPOINTMENT

7-9/2017 highlights (comparison figures in parenthesis 7-9/2016):
  * Net sales EUR 77.8 (70.6) million; growth 10.3%
  * EBITDA EUR -0.2 (4.5) million and EBITDA margin -0.3% (6.4%)
  * Adjusted EBITDA EUR -0.2 (4.5) million and adjusted EBITDA margin -0.3%
    (6.4%)
  * Operating profit/loss (EBIT) EUR -0.8 (3.7) million and operating
    profit/loss (EBIT) margin -1.0% (5.3%)
  * Adjusted EBIT EUR -0.8 (3.7) million and adjusted EBIT margin -1.0% (5.3%)
  * Order backlog EUR 198.8 (185.6) million; growth 7.1 %
  * Free cash flow EUR 2.9 (6.6) million
  * Earnings per share EUR -0.10 (0.37)


1-9/2017 highlights (comparison figures in parenthesis 1-9/2016):
  * Net sales EUR 213.9 (186.7) million; growth 14.5%
  * EBITDA EUR 3.8 (8.2) million and EBITDA margin 1.8% (4.4%)
  * Adjusted EBITDA EUR 3.8 (8.3) million and adjusted EBITDA margin 1.8% (4.4%)
  * Operating profit/loss (EBIT) EUR 2.2 (6.5) million and operating profit/loss
    (EBIT) margin 1.0% (3.5%)
  * Adjusted EBIT EUR 2.2 (6.6) million and adjusted EBIT margin 1.0% (3.5%)
  * Free cash flow EUR 6.4 (10.4) million
  * Earnings per share EUR 0.16 (0.60)


Guidance on the Group outlook for 2017:
Consti specified the outlook for 2017 with a stock exchange release on September
15th 2017, in which it stated that the company estimates that its total annual
net sales for 2017 will grow compared to 2016 but operating profit will be lower
than in 2016. The company previously estimated that "its total annual net sales
for 2017 will grow compared to 2016."

+---------------------+------+-------+--------+-------+-------+--------+-------+
|KEY FIGURES (1 000€) | 7-9/ | 7-9/  |Change %| 1-9/  | 1-9/  |Change %| 1-12/ |
|                     | 2017 | 2016  |        | 2017  | 2016  |        | 2016  |
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Net sales            |77,824| 70,554|  10.3 %|213,903|186,735|  14.5 %|261,558|
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Adjusted EBITDA      |  -214|  4,521|        |  3,764|  8,250| -54.4 %| 13,142|
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Adjusted EBITDA      |-0.3 %|  6.4 %|        |  1.8 %|  4.4 %|        |  5.0 %|
|margin, %            |      |       |        |       |       |        |       |
+---------------------+------+-------+--------+-------+-------+--------+-------+
|EBITDA               |  -214|  4,521|        |  3,764|  8,227| -54.2 %| 13,120|
+---------------------+------+-------+--------+-------+-------+--------+-------+
|EBITDA margin, %     |-0.3 %|  6.4 %|        |  1.8 %|  4.4 %|        |  5.0 %|
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Adjusted EBIT        |  -760|  3,729|        |  2,215|  6,558| -66.2 %| 11,004|
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Adjusted EBIT margin,|-1.0 %|  5.3 %|        |  1.0 %|  3.5 %|        |  4.2 %|
|%                    |      |       |        |       |       |        |       |
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Operating profit/loss|  -760|  3,729|        |  2,215|  6,535| -66.1 %| 10,982|
|(EBIT)               |      |       |        |       |       |        |       |
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Operating profit/loss|-1.0 %|  5.3 %|        |  1.0 %|  3.5 %|        |  4.2 %|
|(EBIT) margin, %     |      |       |        |       |       |        |       |
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Profit/loss for the  |  -793|  2,791|        |  1,220|  4,593| -73.4 %|  7,978|
|period               |      |       |        |       |       |        |       |
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Order backlog        |      |       |        |198,759|185,614|   7.1 %|190,806|
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Free cash flow       | 2,852|  6,610| -56.9 %|  6,354| 10,357| -38.6 %| 10,865|
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Cash conversion, %   |   n/a|146.2 %|        |168.8 %|125.9 %|        | 82.8 %|
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Net interest-bearing |      |       |        | 13,402| 11,667|  14.9 %| 12,097|
|debt                 |      |       |        |       |       |        |       |
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Gearing, %           |      |       |        | 48.6 %| 44.6 %|        | 40.8 %|
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Return on investment,|      |       |        | 14.0 %| 21.2 %|        | 22.7 %|
|ROI %                |      |       |        |       |       |        |       |
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Number of personnel  |      |       |        |  1,117|    931|  20.0 %|    935|
|at period end        |      |       |        |       |       |        |       |
+---------------------+------+-------+--------+-------+-------+--------+-------+
|Earnings per share,  | -0.10|   0.37|        |   0.16|   0.60| -73.6 %|   1.05|
|undiluted (€)        |      |       |        |       |       |        |       |
+---------------------+------+-------+--------+-------+-------+--------+-------+





Interim CEO Esa Korkeela's comment

"Our third quarter net sales increased 10.3 percent from the comparison period
and were 77.8 million euro. Net sales grew in all our business areas and growth
was particularly strong in our Building Facades business area.

Our performance during the third quarter was not satisfactory. Disappointing was
that we needed to adjust project cost assessments in the Technical Building
Services business area, which lessen the Group's operating result in the third
quarter. The Company's operating result is weakened by profitability problems
relating to project management and execution in the Technical Building Services
business area. In part the profitability problems relating to projects were also
due to the staff renewal rate in project personnel and price competition in the
industry. Going forward, we will need to focus on improving our efficiency and
project management capabilities.

We have started planning of reorganising the Technical Building Services
business area. With the planned reorganisation, our aim is to improve the
accountability of our businesses and ability to response to market needs as well
as to clarify service offering and to improve project management. I am convinced
that these actions will help us to get the most out of the current market
situation and to achieve profitable growth.

Demand for renovation contracting and technical building services has largely
continued good. Order intake remained on par with last year and end of September
order backlog was 7.1 percent higher than in the comparison period. New
significant work sites that have increased order backlog during the reporting
period include for example repair and refurbishment work at HOAS's Arentikuja
1, the technical building services installations and wet area renovation carried
out as a joint repair project at housing corporation Yliskyläntie 6 & 7, as well
as facades repair and space modifications for Suomen Yliopistokiinteistöt Oy in
Oulu.

We continue work according to our strategy that was updated during the spring,
however focusing on actions that improve profitability in the short-term. All of
our business areas include operational units which have strong order backlog and
in which profitability has developed as planned."

Operating environment and outlook for the 2017

The Confederation of Finnish Construction Industries RT (CFCI) estimates in its
October review of business conditions that housing construction will grow in
2017 by approximately 4 percent compared to the previous year. Renovation
construction is estimated to grow 1.5 percent and new construction is estimated
to grow 7 percent from last year.

CFCI estimates that this year, the renovation industry will grow somewhat slower
than before. While the rekindled pace of the new construction market has
decreased demand for renovations to a degree, the existing building stock should
uphold steady growth, albeit at a slightly slower pace than previously.
Furthermore, there is considerable need for renovations in the public sector,
especially in municipality owned properties such as hospitals and schools. In
its October review of business conditions, CFCI improved outlook for office
building renovations, as economic growth is enabling more and more renovation
projects. The review also brought attention to a positive turn in the
willingness of households to finance complete renovations.

The Finnish Association of HPAC Technical Contractors estimated in their October
review that business conditions for technical building services have improved,
especially in new construction. Approximately 79 percent of HPAC-contractors
felt that the economic conditions were at least satisfactory. In renovation
construction about 91 percent of respondents said that conditions were at least
satisfactory, as did 90 percent of respondents from maintenance services.

The relative portion of renovations in the Finnish building market has grown
during the past decade. The Confederation of Finnish Construction Industries RT
(CFCI) estimates that renovation amounted to approximately 50 percent of the
building market's total value in 2016.

The ageing building stock particularly increases the demand for renovation
construction. As buildings age, they require more technical renovations such as
pipeline and façade renovations. At the moment, mainly buildings from the 1960s
and the early 1970s are being renovated in Finland. In renovation construction,
the largest growth during the next decade is expected to come from residential
buildings in large cities. In housing association renovations approximately one
third of the renovations are pipelines, one third façades and the rest other
structures.

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

Renovation construction markets are focused on growth areas, akin to new
construction. The Confederation of Finnish Construction Industries RT (CFCI)
published in August a theme overview on renovation construction, which showed
that Helsinki, Tampere, Turku, Oulu and Lahti areas comprise total of 68 percent
of renovation needs of apartment buildings for years 2016-2025.

Consti specified the outlook for 2017 with a stock exchange release on September
15th 2017, in which it stated that the company estimates that its total annual
net sales for 2017 will grow compared to 2016 but operating profit will be lower
than in 2016. The company previously estimated that "its total annual net sales
for 2017 will grow compared to 2016."

Press conference

A press conference for analysts, portfolio managers and media will be arranged
on Thursday 9 November 2017 at 10.00 at Hotel Lilla Roberts Emmy conference
room, at Pieni Roobertinkatu 1-3, Helsinki. The conference is hosted by Interim
CEO Esa Korkeela.

Financial reporting in 2018

Consti Group Plc's Financial Statements for 2017 will be published February
15th 2018.

The electronic version of the annual report, which includes the full financial
statements for 2017, will be published in week 11/2018.

Consti Group Plc's Annual General Meeting for 2018 is scheduled to take place on
Wednesday, April 4th 2018 in Helsinki.

Consti Group Plc shall publish three interim reports during 2018:

  * Interim report 1-3/2018 published April 27th 2018
  * Half-year financial report 1-6/2018 published July 26th 2018
  * Interim report 1-9/2018 published October 26th 2018



CONSTI GROUP PLC

Further information:

Esa Korkeela, Interim CEO, 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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Attachments:

Consti Interim Report 1-9/2017.pdf