2 nd Quarter and first half year 2017

Transcription

1 2 nd Quarter and first half year August

2 Today s presenters Harald Rafdal Chief Executive Officer Audun Røneid Chief Financial Officer 2

3 Agenda Update on current situation Highlights, market, operations and financials Summary and outlook Q & A 3

4 Update on current situation 4

5 Overview Continued focus on improving our operations, tender process and start-up planning The onerous contracts are still very influential and represents a substantial risk to the Norwegian operations. Two onerous contracts terminated, one renegotiated Denmark still challenging Sweden and Finland acceptable results In breach of financial covenant, close dialogue with the lending banks M&A initiated 5 5

6 External consultancy report In April PwC was engaged to analyze potential improvements of the operations in Denmark and Norway PwC finalized it s report in July The report supported the measures already being implemented by management PwC also concluded that the indirect/overhead costs in RenoNorden is low, compared to industrial standards (logistic business-segment) 6 6

7 Stockholm Illegal strike started in July, due to negotiations on local payment and registration of keys to the rooms/sheds were the waste bins are placed The Labor Court ruled the strikers to return to work. About 45 out of 70 waste collectors chose instead to cancel their employment These have been replaced by new employees. Other RenoNorden employees and subcontractors have taken care of the waste collection in Stockholm in these difficult circumstances Waste collection and key registration now delivered according to customer expectation Threats to our waste collectors have been reported to the police New contract starts October 1, and RenoNorden will operate 7 of Stockholm's 11 areas 7 7

8 Onerous contracts Norway Negotiations with customers about termination of onerous contracts in June and July. Achieved agreement with two customers; Kragerø (contract ended ) and RIR (contract ends ) and one contract improved Special focus on reducing the losses on onerous contracts We evaluate different options regarding future solutions to the onerous contracts Denmark Dialogue with customers on the onerous contracts 8 8

9 Covenant Breach In breach with the financial covenant (EBITDA/NIBD) at end of second quarter In compliance with the other financial covenant (Interest Coverage) Close dialogue with the lending banks Market will be kept updated 9 9

10 M&A process In July the Company received conditional bidding interest for the whole or parts of RenoNorden The Company has engaged Carnegie to facilitate a broader process leading up to a sale of the whole or parts of the Company Teaser will be made public next week, followed by a standard M&A process We have registered substantial interest in the market There is no certainty that the M&A process will result in any transaction, but the process is expected to be concluded before the end of

11 Highlights, market, operations, financials 11

12 Q Half year Company presentation Q2 and 1 half year 2017 Financial snapshot - Group Revenue (NOKm) EBITDA (NOKm) EBITDA margin (%) ,8% ,3% H H H H H H ,9% ,7% Q Q Q Q Q Q

13 Development in order backlog in Q Order backlog (NOKm) Comments Options Firm The order backlog now includes the new Stockholm since court appeals are now final. Other new contracts - Österäker (SE) - Mobilsug (Copenhagen) - Odsherred (DK) Backlog at Won/Confirmed in Q Realized in Q Backlog at

14 Distribution of order backlog by year and country Distribution of order backlog by year Distribution of order backlog by country Options Firm Finland 8% Norway 25% Denmark 34% % Sweden

15 Key P&L items Group Q Q H H FY 2016 Revenue ,915.5 EBITDA EBITDA margin 4.7% 12.9% 5.3% 11.8% 12.0% EBIT 19.3 (459.7) (355.5) (449.8) (414.1) Adj. EBIT (0.2) 17.3 (23.6) Adj. EBIT margin Profit before tax P&L (NOKm) n.a. 3.5% n.a. 2.9% 3.2% 2.2 (466.3) (384.1) (462.7) (444.7) Net profit 1.8 (410.8) (324.9) (406.9) (396.6) Comments Revenue growth driven by start-up of new contracts EBITDA affected by: Continued shift from high-margin to lowmargin contracts in Norway. In addition numerous of onerous contracts. Start-up cost related to these contracts. Still operational issues in two onerous contracts in Denmark EBIT affected by: Provision for onerous contracts Goodwill impairment EPS (0.10) (301.52) (24.94) (298.67) (291.13) Adj. EPS (0.69) 8.20 (2.75)

16 Financial performance by geography Norway Denmark Revenue (NOKm) EBITDA (NOKm) Revenue (NOKm) EBITDA (NOKm) Q Q Q Q Q Q Q Q Sweden Finland Revenue (NOKm) EBITDA (NOKm) Revenue (NOKm) EBITDA (NOKm) Q Q Q Q Q Q Q Q

17 Key balance sheet items and capex Group Balance sheet (NOKm) Q Q YE 2016 Total assets 2, , ,163.1 Non-current liabilities , ,396.8 Current liabilities 1, Total equity Equity ratio 11.3% 12.1% 11.8% NIBD 1, , ,229.3 Comments Increase in total assets driven by investments in new trucks and cash raised in the rights issue, partially offset by write downs on goodwill Due to breach of leverage covenant, bank loan is reclassified from non-current to current liability NIBD/EBITDA 1 7.0x 4.7x 4.9x Capex ) EBITDA excludes special items 17

18 Provisions and impairment of goodwill Total provisions (NOKm) Impairment of goodwill (NOKm) NOK 372m Provisions - YE 2016 Provisions - H Reversals - H Total provisions Goodwill Write-down - Q Write-down - Q Currency Goodwill Note: (1) Includes exchange rate effect 18

19 Key cash flow items Group Q Q YE 2016 Opening cash balance Cash from operations (46.7) (14.1) Cash from investing (68.7) (1.7) (21.2) Cash from financing (33.1) (78.9) (151.6) Cash flow in the period Cash flow (NOKm) (144.6) (97.4) 27.1 Closing cash balance Comments Cash from operations negative with NOK 46.7m mainly due to negative development in profits, increased working capital and prepayments. Cash from investing activities negative with NOK 68.7m due to CapEx in quarter related to new contracts. Cash from financing activities covers repayment of finance lease obligation, and dividend paid in

20 Summary and outlook 20

21 Focus for the coming months Solutions for onerous contacts Long term financial solution M&A process Operational improvements Winning new tenders 21 21

22 Upcoming events 2017: Q4 report Investor contact: Audun Røneid - CFO a.roneid@renonorden.com Tel:

23 Q & A 23

24 Disclaimer This presentation contains forward-looking statements that reflect RenoNorden s current views with respect to future developments and performance. These forward-looking statements may be identified by the use of forward-looking terminology, such as the terms anticipates, assumes, believes, can, could, estimates, expects, forecasts, intends, may, might, plans, projects, should, will, would or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements are not historic facts. The forward-looking statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management s examination of historical operating trends, data contained in RenoNorden s records and data available from third parties. Although RenoNorden believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control, and many factors can therefore lead to actual developments and performance deviating substantially from what has been expressed or implied in such statements. Accordingly, no assurance can be given with respect to such developments and performance. RenoNorden disclaims any obligation to update or revise any forward-looking statements, unless required to do so by applicable law or listing rules. 24