Interim Financial Report 1 October to 31 March Investor relations presentation H1

Transcription

1 Interim Financial Report 1 October to 31 March 2016 Investor relations presentation H1

2 H1 2 Aarsleff Group 2015/2016 H1 Contents Aarsleff Group 2015/2016 H1 3 Revenue Results and EBIT Solvency ratio, cash flows and financial resources Construction Pipe Technologies Ground Engineering The financial year 2015/ Group Construction Pipe Technologies Ground Engineering Virtual Design & Construction 17 Long-term financial targets 20 Attractive and stable return on equity, significant financial resources and a high solvency ratio Growth and development Profit and return on equity Sound financial resources Dividend 23 Financial calendar 24

3 H1 Aarsleff Group 2015/2016 H1 Interim Financial Report 1 October to 31 March

4 H1 4 Aarsleff Group 2015/2016 H1 The Group DKK million 2014/2015 H1 2015/2016 H1 2014/2015 H1 2015/2016 H1 Revenue 4,798 4,891 EBIT EBIT % 4.2% 3.7% 31% 4,798 4,891 26% Number of employees 4,738 5,635 69% 74% Abroad Denmark Overall, the first half of the financial year progressed in line with expectations. As expected, the Group s total growth was 2% attributable to an increase in growth in Denmark of 11% and a decrease abroad of 14%. The first six months of last financial year was characterised by a high level of activity at Värtahamnen.

5 H1 5 Aarsleff Group 2015/2016 H1 Revenue Revenue in DKK million total and per segment 4,798 2% 4,891 8% 3,229 3,472-16% % /2015 H1 2015/2016 H1 Construction Pipe Technologies Ground Engineering Aarsleff The two acquired companies Istak hf. and Hansson & Knudsen A/S reported revenue of DKK 324 million. The revenue of the Group exclusive of the acquired companies declined by 5%. The revenue of the Pipe Technologies segment is affected by the difficult market conditions in Eastern Europe, Russia and Ukraine. The revenue of the Construction segment exclusive of the acquired companies declined by 3%.

6 H1 6 Aarsleff Group 2015/2016 H1 Results and EBIT EBIT in DKK million % 3.7% 3.2% 3.4% % % 6.5% 5.7% 2014/2015 H1 2015/2016 H1 Construction Pipe Technologies Ground Engineering Aarsleff Profit before tax came to DKK 171 million compared with DKK 190 million last financial year. Overall, the first half of the financial year progressed in line with expectations. Administrative expenses and selling costs amounted to 8.1% of revenue compared with 7.3% last financial year. Net profit ratio (pre-tax margin) is 3.5% against 4.0% last financial year.

7 H1 7 Aarsleff Group 2015/2016 H1 Solvency ratio and financial resources 50 Solvency ratio 1,200 Net interest-bearing debt 1, % of equity, beginning of FY Net interestbearing debt, year-end 10 Long-term target 0 Target 0 Realised / / / / / Cash flows from investing activities came to a negative amount of DKK 487 million, comprising e.g. the acquisition of Hansson & Knudsen A/S, investments in connection with the construction of a new office building and acquisition of machinery and equipment for the electrification project. Cash flows from financing activities came to a negative amount of DKK 168 million, comprising, among other things, repayment of mortgage loans.

8 H1 8 Aarsleff Group 2015/2016 H1 Construction DKK million 2014/2015 H1 2015/2016 H1 2014/2015 H1 2015/2016 H1 Revenue 3,229 3,472 15% 12% EBIT EBIT % 3.2% 3.4% 3,229 3,472 Number of employees 3,151 3,944 85% 88% Abroad Denmark Total growth came to 8% comprising an 11% increase of the Danish operations and a 14% decline of the foreign operations, compared with last financial year which was characterised by a high level of activity at Värtahamnen. The newly acquired companies Istak hf. and Hansson & Knudsen A/S were included with DKK 324 million in the first six moths. Overall, results were in line with expectations; above expectations in Per Aarsleff A/S, while the total results of the other companies fell short of expectations. Wicotec Kirkebjerg A/S and Aarsleff Rail A/S did not perform in line with expectations. Major tenders were postponed or not won to the expected degree in the first half of the financial year.

9 H1 9 Aarsleff Group 2015/2016 H1 Pipe Technologies DKK million 2014/2015 H1 2015/2016 H1 2014/2015 H1 2015/2016 H1 Revenue EBIT EBIT % 6.0% 3.4% Number of employees % % 38% 62% Abroad Denmark Total revenue declined by 16% a 15% increase in Denmark and a 27% decline abroad. Results are slightly below expectations. In the first six months of last financial year, the Russian subsidiary performed extraordinarily well. The internally developed LED curing system is used more and more, and an agreement with Uponor was made on the acquisition of the Omega-Liner. The level of activity in Denmark exceeded expectations, and earnings are in line with expectations. Export projects within drinking water and wastewater, primarily carried out in Eastern Europe, performed below expectations. Capacity adjustments have been made. Total results of the subsidiaries abroad are below expectations. Sweden, Finland and Lithuania are developing positively, while Poland, Russia and Ukraine are affected by the difficult market conditions. However, we are now seeing the first EU financed tenders in the Baltic countries and in Poland.

10 H1 10 Aarsleff Group 2015/2016 H1 Ground Engineering DKK million 2014/2015 H1 2015/2016 H1 2014/2015 H1 2015/2016 H1 Revenue EBIT EBIT % 6.5% 5.7% 43% % 45% 55% Number of employees Abroad Denmark Total revenue declined by 3% the Danish operations was on a par with last financial year and the foreign operations reported a 6% decline. The degree of collaboration between the companies of the segment has been intensified to standardise and improve the segment s central, market-leading precast pile system. In addition, other piling methods will be introduced with a view to meeting requests for complete supplies adjusted to the needs of the individual markets. The results of the Danish activities were above expec tations. Total results of the foreign subsidiaries fell short of expectations, due to the performance of the companies in Poland, Germany and the UK. However, significant improvements in results are expected in the second half of the financial year.

11 H1 The financial year 2015/2016 Interim Financial Report 1 October to 31 March

12 H1 12 The financial year 2015/2016 The Group 500 Profit for the year, before tax. DKK million / / / / /2016 Profit before tax of DKK 400 million is now expected compared with the previous expectations of DKK 430 million. The second half of the financial year will be influenced by the fact that major tenders have been postponed or not won to the expected degree and by the difficult markets conditions in Eastern Europe or Russia. Hansson & Knudsen A/S and Istak hf. are not expected to contribute positively to the 2015/2016 results. The market for civil works and building activities is stable at a high level allowing us to benefit from our expertise and business model. We expect to continue our progress and patiently implement our plans. We consider these circumstances as isolated or as conditions we can adjust to.

13 H1 13 The financial year 2015/2016 The Group Investments in property, plant and equipment and subsidiaries. DKK million / / / / /2016 Outlook Acquisition of subsidiaries Property, plant and equipment Investments are expected to amount to DKK 800 million, inclusive the investments in acquisitions and the investments of DKK 150 million in a new office building.

14 H1 14 The financial year 2015/2016 Construction 10 EBIT in % of revenue % 3.8% 3.5% 2.0% 2.0% 2011/ / / / /2016 Outlook Target Realised Expectations are now for an unchanged level of activity against previous expectations for a slightly increased level of activity. The market for civil works and building activities is stable, even though there is a small setback in some areas. Major tenders postponed or not won to the expected degree. The tender opportunities are still satisfactory, and the level of activity within submission of tenders will be high. This will result in relatively high tender costs during the rest of the financial year. Hansson & Knudsen A/S and Istak hf. are not expected to contribute positively to the annual results. EBIT margin of approx. 3.5% against previosly expectations of 4%.

15 H1 15 The financial year 2015/2016 Pipe Technologies 10 EBIT in % of revenue % 4.2% 4.0% 3.0% 2.3% 2011/ / / / /2016 Outlook Target Realised Expectations for a slightly lower level of activity against previous expectations for an unchanged level of activity. As a result of the continued difficult market conditions in Poland, Russia and Ukraine, EBIT is downward adjusted to 3% from previously 4%.

16 H1 16 The financial year 2015/2016 Ground Engineering 10 EBIT in % of revenue % 5.7% 5.3% 5.5% 7.0% Outlook Target / / / / /2016 Realised Expectations for a high level of activity in Denmark in the second half of the financial year. EBIT is expected to amount to 7%, an upward adjustment compared to previous expectations of 6%. Significant improvements in results of the companies in Poland, Germany and the UK are expected in the second half of the financial year. For the full financial year, the expectations for a higher level of activity are maintained.

17 H1 17 Virtual Design & Construction creates value to customer and contractor VDC constitutes a joint platform for the parties involved in projects through the entire process and is to increase Aarsleff s possibilities for industrialisation and efficiency improving as well as optimise the interaction between design, planning and execution. Agreement on and coordination of the project content between the customer and Aarsleff. Efficiency and quality will provide most value for money to the customer and profitable projects for Aarsleff. Efficiency will be created in the execution by means of direct application of data during construction. A good basis for optimisation of operation and maintenance.

18 H1 18 Virtual Design & Construction creates value to customer and contractor Agreement on and coordination of the project content between the customer and Aarsleff virtual construction before actual construction. When using different simulations, we can illustrate to the customer how we intend to carry out the project in details and make sure that the project content has been coordinated. Efficiency and quality will provide most value for money to the customer and profitable projects for Aarsleff simulations allow us to optimise the project design, while taking commercial management and time schedule into consideration. Optimisation of design and structures Reduction of design errors e.g. by means of collision control Seek opportunities for reuse of structures and thus reduce construction costs Improve the efficiency of building processes review buildability Procurement and supplies are optimised with the model Risk management Integration with calculation program Integration with scheduling. Efficiency will be created in the execution by means of direct application of data during construction. Construction is carried out according to the VDC model with 2D working drawings, generated from the model Production data for machine control, setting out and construction in digital production. A good basis for optimisation of operation and maintenance as-built documentation with detailed and updated specifications are supplied to the customer.

19 H1 19 Virtual Design & Construction a strategically important development area in Aarsleff Aarsleff will establish a VDC organisation of employees during the next three years. Another approx. 100 employees are trained in the basic use of VDC. The development will take place currently on actual projects and thus with an operational and practical approach. We will assess our projects in terms of size and complexity and use VDC where appropriate. In three years time, our goal is to use VDC on projects accounting for about half of Aarsleff s revenue.

20 H1 Long-term financial targets Interim Financial Report 1 October to 31 March

21 H1 21 Long-term financial targets Attractive and stable return on equity, significant financial resources and a high solvency ratio Financial year 2014/15 Long-term financial targets Return on equity (ROE) Equity ratio of the balance sheet (Solvency ratio) Net interest-bearing debt (Measured as quarterly average) 17.4% Minimum 12% p.a. 37.8% 40-45% Net deposit of DKK 199 million Net debt of DKK 0 million EBIT margins: Construction Pipe Technologies Ground Engineering The Aarsleff Group Profit share (Payout ratio) 4.3% 4.6% 6.4% 4.8% 4.5% 5% 6.5% Approx. 5% 17.0% 20-30% Revenue growth 20.0% 5-10%

22 H1 22 Long-term financial targets Growth and development Growth takes place through a combination of organic growth, acquisition of specialist contracting expertise and with a focus on profitability. In Construction, we are making the most of the current market potential which is subject to the amount of tenders for large projects while considering our policy of selective order intake. Within the industrial segments Pipe Technologies and Ground Engineering, our growth target is between 5% and 10% per year with the focus on international growth.

23 H1 Dividend Interim Financial Report 1 October to 31 March

24 H1 24 Dividend Achievement of the targeted return on equity will imply that the expected growth can be financed by future earnings and that liquidity is generated for payment of dividend which, in a long-term perspective, is assessed at 20-30% of the annual profit subject to growth. The decision as to the annual dividend distribution is made on the basis of the company s actual financial situation, comprising net interest-bearing debt, solvency ratio and outlook for the future financial year.

25 H1 25 Financial calendar Interim Financial Report 1 October to 31 March 2016

26 H1 26 Financial calendar 29 August 2016 Interim financial report for the period 1 October June December 2016 Preliminary announcement of financial statements for the financial year 2015/2016.