Jesper Göransson Deputy CEO Finance & Treasury

Transcription

1 Jesper Göransson Deputy CEO Finance & Treasury

2 Disposition Long-term growth strategy January September 2011 Profits and orders Financial position Financial goals Peab s financing

3 Long-term growth strategy

4 Peab s development MSEK 45,000 MSEK 2,500 40,000 35,000 2,000 30,000 25,000 1,500 20,000 15,000 1,000 10, ,000 0 * * * Proforma incl. Peab Industri Net sales Operating profit

5 50 years of growth Business-minded investments independent of the business cycle Offensive in a slow economy Quick decisions Active in structural processes in the industry We invest if it s the right thing to do in the long-term!

6 Peab s development MSEK 2,500 2,000 Enrichment phase 1,500 1,000 Enrichment phase ,000-1,500 Expansion phase Expansion phase - 2,000-2,500 Investments and working capital changes Operating profit Expansion phase

7 Current expansion phase The Nordic community builder In all our operations with a Nordic perspective: Acquisitions New establishments Building up Property Development Investments in associated companies Investments in wholly owned projects Strategic investments Industrial construction Current investments Housing developments Machines

8 Peab s development Mkr MSEK 45,000 6% 40,000 35,000 5% 30,000 4% 25,000 20,000 3% 15,000 2% 10,000 5,000 1% 0 * * % * Proforma incl. Peab Industri Proforma inkl. Peab Industri Net sales Operating margin %

9 January September 2011 Profits and orders

10 MSEK 45,000 Orders received rolling 12 months 40,000 35,000 30,000 25,000 20,000 15,000 Q Q Q Q Q Q Q Q Q Q Orders received Q Q Q Q Net sales Q Q Q Q Q Q Q Q Q3 2011

11 Orders received BSEK Jan Sep 2011 Jan Sep 2010 Jul Sep 2011 Jul Sep 2010 Orders received % %

12 Order backlog, remaining production per BSEK Percentual change Current fiscal year % Coming fiscal year % Thereafter % Total order backlog % Increase by 22 percent since beginning of the year Increase in all product segments and markets Construction operations are BSEK 22.2, Civil Engineering BSEK 10.7 Swedish operations amount to BSEK 28.4

13 Profit effects in current expansion phase Group Our vision of being the Nordic community builder puts higher demands on us and requires investments in expertise and organization Operative Acquisitions» Costs in connection with acqusitions» Usually begin to generate profits a few years after acquisition New establishments» Establishment costs» Organization built ahead of order backlog Strategic investments» Industrial construction Affects profitability in all business areas!

14 Construction Jan - Sep Net sales grew by +14%, adjusted for acquisitions and divestitures +11% The period has been characterized by good market conditions Project write-downs in ongoing production Cautious revenue recognition in big projects where production will continue for quite some time Cost of winter in the first quarter Majority of the operations generate good income! MSEK Jan Sep 2011 Jan - Sep 2010 Oct - Sep 2010/2011 Jan - Dec 2010 Net sales 1) 18,901 16,634 26,453 24,186 Operative operating profit 1) Operative operating margin (%) ) According to percentage of completion method (IAS 11)

15 Construction Q3 Operating margin 1) rolling 12 months 5.0% 4.0% 3.0% 2.4% 2.0% 1.0% 0.0% ) According to percentage of completion method (IAS 11)

16 Housing production Own housing developments Amounts to 11% of operative net sales in a rolling 12 month period per 30 September (9% for the entire year 2010) Jan Sep 2011 Jan Sep 2010 Percentual change Production starts in homes 1,427 1,810-21% Sold homes 1,222 1,755-30% Good situation over time but the mortgage ceiling and financial unrest have negative effects

17 Share of own homes sold in production % Jan Mar Maj Jul Sep Nov Jan Mar Maj Jul Sep Nov Jan Mar Maj Jul Sep Nov Jan Mar Maj Jul Sep

18 Civil Engineering Jan - Sep Net sales growth by +11 % Growth in all product areas Cost of winter affects profits Continued tough competition with many players MSEK Jan - Sep 2011 Jan - Sep 2010 Oct - Sep 2010/2011 Jan - Dec 2010 Net sales 1) 8,141 7,345 11,460 10,664 Operating profit 1) Operating margin (%) ) According to percentage of completion method (IAS 11)

19 Civil Engineering Operating margin 1) rolling 12 months 6.0% 5.0% 4.0% 3.3% 3.0% 2.0% 1.0% 0.0% ) Enligt successiv vinstavräkning (IAS 11)

20 Industry Jan - Sep Net sales growth by +18%, adjusted for acqusitions and divestitures +17% Generally good demand Strong growth in transportation Rental operations are doing very well Among others Asphalt was affected negatively by winter climate MSEK Jan - Sep 2011 Jan - Sep 2010 Oct - Sep 2010/2011 Jan - Dec 2010 Net sales 7,387 6,243 9,652 8,508 Operating profit Operating margin (%)

21 Industry Operating margin rolling 12 months 9.0% 8.0% 7.0% 6.5% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%

22 From three business areas to four External reporting starting Q Property Development is a new business areas Consists of listed and unlisted holdings, wholly owned companies and projects Our ambition is to be the Nordic leader in acquiring, enriching, managing and selling commercial property as well as housing property for rent Report structure: BA Construction BA Civil Engineering BA Industry BA Property Development Group functions Total operative Adjustment for housing reporting Total legal Recalculation of comparable numbers for 2011 will be presented in connection with Q1 2012

23 Group Net sales Jan - Sep MSEK Jan Sep 2011 Jan Sep 2010 Percentual change Operative net sales 30,360 26,615 14% Adjustments in housing reporting Legal net sales 30,295 26,507 14%

24 Group Operating profit Jan - Sep MSEK Jan Sep 2011 Jan Sep 2010 Percentual change Operating profit 962 1,094-12% Adjustments in housing reporting Operating profit 1,001 1,067-6%

25 January September 2011 Financial position

26 Financial items and tax Income statement Net financial income MSEK -236 (-18) Market value of Brinova MSEK -81 (110) Net interest was MSEK -181 (-130) Dividends amounted to MSEK 20 (18) Tax MSEK -201 (-263) 26.3% (25%)

27 Financial items and tax Balance sheet Net dept BSEK -7.9 (-5.7 at year-end 2010) Equity/assets ratio 24.6% (27.8 at year-end 2010)

28 Financial items and tax Liquid funds Cash flow before financing MSEK -1,790 (-408) Unapporpriated liquid funds BSEK 3.6 (5.3 at year-end 2010) Predominantly long loan promises

29 Cash flow MSEK Cash flow from current operations before working capital changes Cash flow from changes in working capital Cash flow from investment operations Net sales +14% Jan - Sep 2011 Jan - Sep ,386 1,083-1, , Cash flow before financing -1, Group liquid funds 30 September SEK 3.6 billion Net sales +4% Operations generate cash flow! Project and development property MSEK -616 (-263) Increase in net sales ties up working capital Strategic company acquisition Housing developments Property developments Investments in machines Financial investment in a block of shares in Lemminkäinen

30 Conclusions Jan Sep 2011 Good order levels High growth Operative operating profit on par with 2010 Offensive investments

31 Financial goals

32 External financial goals Based on construction and civil engineering companies with complementary industrial operations Adjusted in 2007 Long-term perspective

33 External financial goals Equity/assets ratio Return on equity Dividend

34 Internal financial goals External financial goals set the parameters Peab consists of operations with different business models Different project types Divided into internal operative goals: Profitability; Margins Costs Return on working capital Cash flow Payment saldo in the projects Credit times and invoicing patterns Tied up capital Parameters per division Return on working capital

35 Peab s financing

36 Peab s debt Key ratios? Peab s debt!? Refinancing risk?

37 Peab s debt Key ratios? Peab s debt!?

38 Debt Expansion phase Acquisitions Acquisition of housing Acquisition of property developments Acquisition of machines Other investments (i.e. industrial construction) Tie up working capital Increased net debt

39 Debt Enrichment phase Produces projects from our portfolio of development properties Liberates operating capital Relatively few investments Decreased net debt

40 Conclusion Net debt is directly related to the phase the business is currently in Can be rapid shifts in certain key ratios Equity/assets ratio goal sets the parameters over time and we are on top of it

41 Peab s debt Peab s debt!? Refinancing risk?

42 Loan maturity 30/ Gross debt, SEK m Total > 9,623 1,099 2, , % 27% 4% 43% 4% 11% 38% of Peab s gross debt matures < % of Peab s gross debt matures >2012

43 Loan maturity 30/ Gross debt, SEK m Total > 9,623 1,099 2, , % 27% 4% 43% 4% 11% Certificate Personnel convertibles Project credits Bank overdraft Leasing Long loans Leasing

44 Available credit 30/ Available funds Available funds 3,588 Cash/short-term holdings -975 Available credit 2, ,816 27% 4% 69% Peab has secure and long-term access to funds! 69% 2014 Continuous work on refinancing

45 Financing 2 November 2011 Bond loans 3 years MSEK 200 Bond loans 4 years MSEK 100 Bond loans 5 years MSEK 700 Facility loan DNB 5 years MSEK 200 Amortized loan 2.5 years MSEK -300 Total increase in liquid funds MSEK 900

46 Prices Long-term available credit from banks Currently In the future Base interest rates Low Falling? Spreads High Rising? Fee structures High Rising? Advantage; Connected to total business between customer/bank Disadvantage; Unstable and uncertainties regarding regulations makes it more expensive

47 Prices Long-term bonds Currently In the future Base interest rates Low Falling Spreads High Rising Fee structures Low Low Advantage; Spreads financing to other sources than banking system, competitive total cost Disadvantage; Volatile market

48 Total cost of financing is what is interesting Total cost of loans is currently on the same level as in November 2007 Total cost of company bonds is competitive at the moment Bonds are a good complement to bank loans

49 Loan maturity 30/9-2011* Gross debt, SEK m Total > 9,623 1,099 2, , ,662 11% 27% 4% 35% 5% 18% (43%) (4%) (11%) New financing has further extended loans * Adjusted for new financing

50 Promised credit 30/9-2011* Available funds Available funds 4,488 Cash/short-term funds Available credit 3, , % 3% 72% 6% (27) ( 4) (69) ( -) New financing has generated a further SEK 900 m in long-term funds * Adjusted for new financing

51 MTN program Loan framework Organizer Dealers SEK 3,000 m Nordea Nordea, Swedbank, SEK, Carnegie, DnB, Danske Bank, Handelsbanken Time plan 29/ Prospectus to FI Purpose 30/ Info Capital Market Day Dec 2011/ Jan 2012 Prospectus released Reduce dependence on banks, issue at right price

52 Peab s debt - Conclusions Nyckeltal Key ratios? Peab s debt!? Expansion phase! Our financial goals set parameters We are on target!

53 Peab s debt - Conclusions Key ratios? Peab s debt!? Refinancing risk? Expansion phase! Our financial goals set parameters We are on target! Must dare to invest strategically! Long-term perspective builds values! Good access to long-term financing! Good bank relations Bonds are a competitive complement.

54 Peab The Nordic community builder Stable financial basis Peab The Nordic community builder