25.4.2025 08:30:00 EEST | Consti Oyj | Interim report (Q1 and Q3)
CONSTI PLC INTERIM REPORT 25 APRIL 2025, at 8.30 a.m.
Consti Plc Interim Report for January - March 2025
NET SALES AND OPERATING RESULT AT PLANNED LEVEL
1-3/2025 highlights (comparison figures in parenthesis 1-3/2024):
- Net sales EUR 65.6 (65.5) million; growth 0.1%
- EBITDA EUR 0.8 (1.3) million and EBITDA margin 1.2% (2.0%)
- Operating result (EBIT) EUR -0.1 (0.2) million and EBIT margin -0.2% (0.3%)
- Order backlog EUR 246.4 (244.4) million; growth 0.8%
- Order intake EUR 60.1 (36.3) million; growth 65.5%
- Free cash flow EUR -0.5 (-0.5) million
- Earnings per share EUR -0.04 (-0.00)
Guidance on the Group outlook for 2025:
Consti estimates that its operating result for 2025 will be in the range of EUR 9-12 million.
KEY FIGURES (EUR 1,000) | 1-3/ | 1-3/ | Change % | 1-12/ |
Net sales | 65,606 | 65,525 | 0.1 % | 326,692 |
EBITDA | 765 | 1,284 | -40.4 % | 14,275 |
EBITDA margin, % | 1.2 % | 2.0 % | 4.4 % | |
Operating result (EBIT) | -129 | 214 | 10,184 | |
Operating result (EBIT) margin, % | -0.2 % | 0.3 % | 3.1 % | |
Profit/loss for the period | -288 | -36 | 7,143 | |
Order backlog | 246,373 | 244,371 | 0.8 % | 240,108 |
Free cash flow | -475 | -517 | 8.0 % | 7,205 |
Cash conversion, % | n/a | n/a | 50.5 % | |
Net interest-bearing debt | 3,575 | 1,299 | 175.2 % | 2,681 |
Gearing, % | 8.3 % | 3.1 % | 6.1 % | |
Return on investment, ROI % | 16.9 % | 20.6 % | 17.4 % | |
Number of personnel at period end | 1,026 | 1,031 | -0.5 % | 1,012 |
Earnings per share, undiluted (EUR) | -0.04 | -0.00 | 0.91 |
CEO Esa Korkeela's comment
"Our seasonally low net sales for January-March were at the same level as last year, totalling EUR 65.6 (65.5) million. Our net sales grew in the Housing Companies and Building Technology business areas and decreased in the Corporations and Public Sector business areas.
Our operating result for January-March was EUR -0.1 (0.2) million, or -0.2 (0.3) percent of net sales. During the first quarter, projects progressed mostly as planned, and the profitability of our project business was broadly in line with our expectations. Our operating result was negatively impacted by lower-than-expected net sales and profitability in our Service business. Our balance sheet and liquidity position remained strong at the end of the review period.
Our order intake for January-March totalled EUR 60.1 (36.3) million, representing a 65.5 percent increase compared to the reference period. The order intake was positively influenced by new orders in the Housing Companies and Corporations business areas. Our first-quarter order intake did not include any individually large projects but consisted of several smaller-scale projects. Our order backlog remained at a good level at the end of the review period, growing by 0.8 percent compared to the reference period and amounting to EUR 246.4 (244.4) million.
During the review period, we published Consti's first sustainability report in accordance with the Corporate Sustainability Reporting Directive (CSRD), and the implementation of the goals and plans described in the report is underway. In line with our transition plan, our objective is to achieve carbon neutrality in our operations by 2035 and to halve the emissions generated across our value chain by 2050. Our initiatives to improve operational efficiency have focused on safeguarding the competitiveness and performance of our business amid the prolonged downturn in the construction sector.
In the first quarter, the readiness for renovation investments in housing companies and the public sector continued at a reasonable level in our operating areas. Demand for new construction has remained weak, and private real estate investment companies have continued to show caution in launching new construction projects. Competition in the construction and building technology market remained tight. We do not expect a significant improvement in the demand outlook for construction in the first half of 2025.
However, we believe that the prevailing market situation favours a versatile construction and building technology expert like Consti, which has a strong financial position and the ability to deliver diverse projects from small service contracts to large construction projects. Supported by our good order backlog, we aim to continue solid performance and focus on implementing our current strategy."
Operating environment
Construction market 2025
The Confederation of Finnish Construction Industries CFCI estimates in its April economic review that the construction market as a whole will grow by approximately 4 percent in 2025. According to RT's forecast, the renovation market is expected to grow by about one percent in 2025, and new housing construction is expected to grow by 10 percent.
In its April economic review, RT states that despite pent-up demand and increasing renovation debt, annual growth in renovation activity will remain slow as availability of financing increasingly hinders recovery.
The renovation market in general
Renovation is needs-based and thus less sensitive to economic cycles than new construction. However, the steady growth of renovation over the past 20 years came to a halt in 2023, and the decline continued in 2024. Renovation has been reduced partly by the same reasons as new construction, such as rising interest rates, inflation, and repair costs, as well as increased maintenance costs for properties, such as the rising cost of heating.
In 2024, building construction continued to decline, but the decrease levelled off from the previous year. The sharp decline in building construction is primarily due to the halt in new housing production after an exceptionally intense period of housing construction. Residential new construction decreased by approximately 30 percent for the second consecutive year. In other building construction, the changes have been far less significant.
The sharp drop in new construction has meant that more money is currently being spent on renovating existing homes than on building new ones. At the same time, competition for renovation projects and building technology contracts has intensified significantly. In 2024, the value of residential building renovations remained almost on level with 2023, i.e. around nine billion euros. The value of other renovations was about six billion euros.
Nearly two-thirds of renovation work is focused on residential buildings, and more than half of this is estimated to be professional renovation. In residential renovations, building technology plays a key role, accounting for about 35 percent of the value of renovations.
In non-residential buildings, in addition to technical age-related repairs, renovations include a great deal of building purpose modifications, such as converting old, underutilized office buildings into hotels or apartments, or improving them to better meet current needs.
About one-fifth of all renovation is maintenance and upkeep, with a higher-than-average share in non-residential buildings.
According to the Finnish Real Estate Federation's Renovation Barometer, water and sewer systems remain the top renovation priority for apartment buildings. The next most common renovations are roof and facade repairs, as well as heating system modernisations. The rising cost of district heating in many cities is a key factor driving heating system upgrades.
Renovations of commercial and office spaces have also been postponed due to the rapid rise in costs. In addition, the oversupply of commercial spaces and the decline in property prices have slowed down repairs. As the economic situation improves, the oversupply is expected to encourage property owners to improve the competitiveness and rentability of their spaces.
The demand for renovation is supported by the large number of residential buildings that are reaching the age for pipeline renovations. Properties built in the 1970s, which have the largest amount of residential floor space, are now in need of renovation. Additionally, many properties from the 1980s, a significant portion of which are row houses, are also reaching renovation age, with 1980s apartments representing the largest share in terms of quantity.
In addition to building technology renovations, many housing companies have an increasing need for facade repairs, which have often been overshadowed by pipeline renovations for financial reasons. The importance of facade repairs and maintenance continues to grow as winters become increasingly wet. Alongside technical repair needs, expectations for living comfort have risen. The repair needs of commercial spaces are also driven by changing space requirements.
The EU's Energy Efficiency Directive, which came into force in May 2024, is driving the need for energy renovations. The directive aims to reduce the energy consumption and greenhouse gas emissions of buildings. In commercial properties, the demand for energy renovations is also influenced by user requirements - including both financial considerations and environmental certification standards. The need for energy renovations applies to both residential housing companies and various commercial spaces.
Overall, the need for renovation is maintained by both the aging building stock and societal changes such as urbanisation, population aging, changes in working methods and retail, and sustainability goals. Renovation plays a central role in reducing the carbon footprint of the built environment, as the number of new buildings grows by only about one percent per year.
Both new construction and renovations are strongly concentrated in growth centres in Finland.
Outlook for 2025
The Confederation of Finnish Construction Industries CFCI estimates in its April economic review that the construction market as a whole will grow by approximately 4 percent in 2025. According to RT's forecast, the renovation market is expected to grow by about 1 percent in 2025, and new housing construction is expected to grow by 10 percent.
In its April economic review, RT states that despite pent-up demand and increasing renovation debt, annual growth in renovation activity will remain slow as availability of financing increasingly hinders recovery.
The weak demand for new construction and private real estate investment companies' caution in launching new construction projects has continued. Competition in the construction and building technology market remains intense. The demand outlook for construction is weakened by prolonged economic uncertainty, interest rates, high construction costs, and tightening availability of financing, and Consti does not expect a significant improvement in the demand outlook for construction in the first half of 2025.
Despite the market situation, Consti aims to continue solid performance supported by a good order backlog and focus on implementing the updated strategy.
Consti estimates that its operating result for 2025 will be in the range of EUR 9-12 million.
Press conference
Microsoft Teams meeting for analysts, portfolio managers and media representatives, will take place 25 April 2025, at 10:00 a.m. (EET). The meeting will be hosted by CEO Esa Korkeela and CFO Anders Löfman.
Analysts, portfolio managers and media representatives are kindly requested to register for the meeting no later than Thursday 24 April 2025 at 12.00 p.m. by sending an email to IR@consti.fi. A link to the meeting will be sent to registered participants during the afternoon of Thursday 24 April 2025.
Financial communication in 2025
Half-year report 1-6/2025 will be published 18 July 2025
Interim report 1-9/2025 will be published 24 October 2025
CONSTI PLC
Further information:
Esa Korkeela, CEO, Consti Plc, Tel. +358 40 730 8568
Anders Löfman, CFO, Consti Plc, Tel. +358 40 572 6619
Distribution:
Nasdaq Helsinki Ltd.
Major media
www.consti.fi
Consti is a leading Finnish company concentrating on renovation and technical services. Consti offers comprehensive renovation and building technology services and selected new construction services to housing companies, corporations, investors and the public sector in Finland's growth centres. Company has four business areas: Housing Companies, Corporations, Public Sector and Building Technology. In 2024, Consti Group's net sales amounted to 327 million euro. It employs approximately 1000 professionals in construction and building technology.
Consti Plc is listed on Nasdaq Helsinki. The trading code is CONSTI. www.consti.fi
