Investor Presentation • Feb 10, 2022
Investor Presentation
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Investor presentation Q4 2021
Industrial buildings
Public buildings
Residential buildings
Commercial buildings
Other infrastructure Environmental engineering Utility networks
Specialist engineering Bridges, viaducts Port construction Rail construction
Road construction and maintenance Road construction Road maintenance
The Group will grow, mostly organically, with a focus on more efficient use of its existing resources.
In Estonia, we will operate, as market leader, in both the building and infrastructure construction segments.
In Sweden, we will focus on general contracting in Stockholm and the surrounding area.
In Finland, we will focus on general contracting and concrete works in Helsinki and the surrounding area.
In Ukraine, we will focus on general contracting and concrete works, primarily in Kiev and the surrounding area.
Improving profitability through more precise planning of our design and construction operations.
Increasing our design and digitalisation capabilities.
Simplifying and automating work and decision-making processes.
Monitoring the balance between the contract portfolios of different business segments.
Valuing balanced teamwork where youthful energy and drive complement long-term experience.
Noticing and recognising each employee's individual contribution and initiative.
Revenue will grow at least 10% per year.
The contribution of foreign markets will increase to 20% of revenue.
Real estate development revenue will grow to at least 10% of revenue earned in Estonia.
Operating margin per year will be consistently above 3%.
Operating profit per employee will increase to at least 10 thousand euros per year.
On average, at least 30% of profit for the year will be distributed as dividends.
ACTIVITIES
LOCATION Narva, Ida-Viru county
CUSTOMER Academy of Security Sciences
ARCHITECT 3+1 architects
CONSTRUCTION PERIOD February 2019 - August 2020
CONTRACTOR Nordecon AS
PROJECT MANAGER Viljo Niit
| The group's revenue for 2021 was $\epsilon$ 288,534 thousand, 2.5% down from a year earlier when revenue amounted to €296,082 thousand. Revenue decline is attributable to a decrease in foreign revenues, whereas revenue generated in Estonia grew by 13% compared with a year earlier. In segment terms, revenue from the Buildings segment decreased by 5%, primarily due to the revenue change in the Swedish market, while revenue from the Infrastructure segment grew by 7% year on year. |
The Nordecon group ended 2021 with a gross profit of €4,021 thousand (2020: €10,996 thousand) and a gross margin of 1.4% (2020: $3.7\%$ ). The gross margin of the Buildings segment was 2.0% for the year and a negative 0.7% for the fourth quarter (2020: 3.6%; Q4 2020: 0.7%). The figures of the Infrastructure segment were 1.0% for the year and a negative 1.4% for the fourth quarter (2020: 5.1%; Q4 2020: 6.1%). The gross margin was mainly influenced by growth in input prices, supply chain disruptions and one-off losses in Swedish market. |
The group's administrative expenses for 2021 were €6,053 thousand. Compared with 2020, administrative expenses decreased by around $14\%$ (2020: $\epsilon$ 7,073 thousand), mainly through a decline in personnel expenses. The ratio of administrative expenses to revenue (12 months rolling) was 2.1% (2020: 2.4%). |
|---|---|---|
| The group ended 2021 with an operating loss of €4,336 thousand (2020: operating profit of $\epsilon$ 3,575 thousand), including recognition of credit losses of €2,144 thousand of the Swedish subsidiary. EBITDA was negative at $\epsilon$ 797 thousand and EBITDA margin was negative at 0.3% (2020: positive at €7,003 thousand and 2.4%). |
The group's order book stood at $\epsilon$ 266,856 thousand at 31 December 2021, a 24% increase year on year. In 2021, we signed new contracts of $\epsilon$ 314,758 thousand (2020: €236,577 thousand), including contracts of €37,612 thousand signed in the fourth quarter ( $Q4$ 2020: €55,511 thousand). The group was equally successful in winning both public and private contracts. |
Operating activities produced a net cash inflow of €7,365 thousand in 2021 (2020: €2,443 thousand). Operating cash flow is strongly influenced by the fact that the contracts signed with most public and private sector customers do not require them to make advance payments while the group has to make prepayments to subcontractors and suppliers. |
LOCATION Saue, Harju county
CUSTOMER Saue Municipal Government
ARCHITECT molumba
CONSTRUCTION PERIOD June 2019 - June 2020
CONTRACTOR Embach Ehitus OÜ
PROJECT MANAGER Lauri Tomp
The gross margin of the Buildings segment was 2.0% for the year and a negative 0.7% for the fourth quarter (2020: 3.6%; Q4 2020: $0.7\%$ ).
The figures of the Infrastructure segment were 1.0% for the year and a negative 1.4% for the fourth quarter (2020: 5.1%; Q4 2020: $6.1\%$ ).
| Figure / Ratio | 12M 2019 12M 2020 | 12M 2021 | |
|---|---|---|---|
| Revenue (EUR '000) | 234 071 | 296 082 | 288 534 |
| Revenue change | 4.7% | 26,5% | $-2.5%$ |
| Net profit/loss (EUR (000) |
4 1 4 9 | 4 1 1 8 | -5 506 |
| Gross margin | 5.0% | 3,7% | 1.4% |
| EBITDA margin | 3.1% | 2.4% | $-0.3%$ |
| Net margin | 1.8% | 1.4% | $-1.9%$ |
| Administrative expenses to revenue (12 month rolling) |
2.9% | 2.4% | 2.1% |
LOCATION Sillamäe, Ida-Viru county
CUSTOMER Sillamäe Town Government
DESIGNER Selektor Projekt OÜ
CONSTRUCTION PERIOD August 2019 - December 2020
CONTRACTOR Nordecon AS
PROJECT MANAGER
Ivo Lõhmus
| 12M 2019 | 12M 2020 | 12M 2021 | |
|---|---|---|---|
| Estonia | 89% | 82% | 94% |
| Ukraine | 2% | $1\%$ | 2% |
| Finland | 4% | 6% | 3% |
| Latvia | O% | $O\%$ | $1\%$ |
| Sweden | 5% | 11% | 0% |
Revenue earned Estonia decreased substantially in 2021, accounting for 6% of the group's total revenue.
markets declined primarily due to the impact of the Swedish market where sales decreased previously started because projects were being completed and no new contracts were signed.
outside The contribution of foreign The share of Finnish revenues Still, conditions in some of our decreased as well. Revenue chosen foreign markets are earned in Ukraine remained stable year on year. The group also does project-based work in Latvia where we were building a wind farm in 2021.
volatile and strongly affect our current results.
The group's order book stood at $\epsilon$ 266,856 thousand at 31 December 2021, a 24% increase year on year.
Buildings segment continues to The dominate with 87% while the share of the Infrastructure segment is 13% (31 December 2020: 81% and 19%, respectively).
Compared with 31 December 2020, the order book of the Buildings segment has grown by 37% and the order book of the Infrastructure segment had decreased by 34%.
The decline in the Infrastructure order book is attributable to a lack of large-scale contracts with the Transport Administration.
LOCATION Tallinn
CUSTOMER AS Tallinna Sadam
DESIGNER R-Konsult OÜ
CONSTRUCTION PERIOD June 2018 - July 2020
CONTRACTOR Nordecon AS
PROJECT MANAGER Marek Sööt
In 2021, the Buildings and the Infrastructure segment generated revenue of €216.070 thousand and €72,115 thousand, respectively. The corresponding figures for 2020 were €228.515 thousand and €67.142 thousand.
In Buildings segment, revenue from the commercial and the industrial and warehouse facilities subsegments grew by 21% and 13% year-on-year, respectively. Revenue from the apartment buildings subsegment remained stable and revenue from the public buildings subsegment decreased by around 23%.
In the Infrastructure segment, the largest revenue contributor is the road construction and maintenance subsegment, which increased its revenue by around 11% year on year.
LOCATION Tiskre, Harju County
CUSTOMER Tiskreoja OÜ
ARCHITECT PIN Arhitektid OÜ
CONSTRUCTION PERIOD October 2019 - October 2020
CONTRACTOR Nordecon Betoon OÜ
PROJECT MANAGER Harry Rööpson
Largest shareholders in Nordecon AS at 31 December 2021
| AS Nordic Contractors Luksusjaht AS |
16 933 515 4 278 403 |
52,30 |
|---|---|---|
| 13,22 | ||
| Toomas Luman | 651500 | 2,0.2 |
| Olegs Radcenko | 584 867 | 1,8 |
| SEB Pank AS kliendid | 425 000 | 1,31 |
| Lembit Talpsepp | 364 239 | 1,13 |
| Mati Kalme | 271 000 | 0,84 |
| SEB Life and Pension Baltic SE Eesti filiaal | 255 000 | 0,79 |
| Genadi Bulatov | 250 600 | 0,7 |
Nordecon AS Tel: +372 615 4400 www.nordecon.com Toompuiestee 35, Tallinn 10149 Estonia
Head of Investor Relations Andri Hõbemägi Tel: +372 615 4400 [email protected]
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