Quarterly Report • Oct 20, 2022
Quarterly Report
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The green share
Stable 9-month growth with normalisation in the third quarter
Natural building products for healthier living
9M 2022 2021 9M 2021
| 1. | Total operating revenue in € millions | € 358.7 million | € 395.6 million | € 290.0 million |
|---|---|---|---|---|
| 2. | EBITDA margin as a percentage of total operating revenue | 21.1 % | 23.1 % | 22.6 % |
| 3. | EBIT margin as a percentage of total operating revenue | 16.0 % | 17.1 % | 17.3 % |
| 4. | Equity ratio (as of Sept. 30 or Dec. 31) | 50.1 % | 54.5 % | 53.4 % |
Percentage increases and margins calculated based on non-rounded figures.
With a nine-month increase of 20.9% to € 348.9 million in sales, the STEICO Group was able to continue its growth despite the gloomy economic outlook. The 9-month EBITDA was € 75.6 million (+15.5%), the EBIT was € 57.5 million (+14.7%). The margins were also kept pleasingly stable. The 9-month EBITDA margin is 21.1%, the EBIT margin is 16.0%.
Following successful capacity expansions and predominantly short-term availability of goods, ordering behaviour normalised in many cases in the third quarter. Q3 turnover increased by 9.4% to € 111.4 million. EBITDA amounted to € 25.1 million in the third quarter and was thus 4.3% above the previous year. EBIT grew by 0.2% to € 19.0 million. The EBIT margin in the third quarter is 16.4%.
As before, the majority of companies in the construction industry have a clear order backlog, which is having a stabilising effect. At the same time, management expects a significant shift in activity towards the refurbishment sector. However, the normalisation of ordering behaviour is likely to slightly weaken the growth dynamic in the fourth quarter as well. Therefore, the management expects a growth in turnover of around 18% for the full year. The EBIT margin is still expected to be in a range between 13% and 15% (compared to total operating revenue).
The STEICO Group develops, produces and markets ecological construction products made of renewable raw materials. STEICO is the European market leader in the wood-fibre insulation materials segment.
STEICO is positioned as a system provider for ecological residential construction and is the only manufacturer in the industry to offer an integrated wooden construction system in which insulation material and construction components supplement each other.
Laminated veneer lumber and I-joists form the structural components of the system. Insulation materials include flexible and stable wood fiber insulation panels, composite thermal insulation systems, insulation panels with a
reinforcing effect, as well as cavity wall insulation made of wood fibers and cellulose. Sealing products for the building shell round off the overall system.
The STEICO Group offers its customers a unique range of products up to the prefabrication of complete building components for wood element construction.
The Munich-based company's products are used in new construction and when renovating roofs, walls, ceilings, floors and facades. STEICO's products allow the construction of future-proof, healthy buildings with a particularly high quality of living and a healthy atmosphere. STEICO's products offer reliable protection against cold, heat and also noise, and they permanently improve the building's energy efficiency.
This document is a translated version of the German original document. The translation has been prepared with utmost care. However, only the German original document is binding.
Rising interest rates and high inflation are beginning to impact construction activity in the euro area. Eurostat estimates annual inflation in the euro area at 10.0%1 as of September 2022 and expects house prices to rise by 9.3%2 in the second quarter of 2022 compared to the same quarter of the previous year. As a result, output in the construction sector is reduced. In June 2022, construction output in the EU fell by 1.3%. In July 2022, seasonally adjusted production in the construction sector increased by 0.2% in the EU compared to June 2022.3
In Germany, the STEICO Group's most important market, construction activity has also been affected. For example, building permits for single-family homes declined by 16.1% from January to July 2022 compared to the same period in the previous year. In contrast, an increase of 7.1% in building permits was observed for multi-family houses.4
While it is expected that the downward trends will affect the new construction sector in particular, the refurbishment sector is likely to benefit significantly from the current situation, according to management estimates. This is illustrated, among other things, by the planned increase in the funding volume for energy-efficient refurbishment. According to the draft budget, an increase of 75.6% has been budgeted for the "promotion of energy efficiency and renewable energy measures in the building sector". The total amount for 2023 would then be €16.87 billion compared to €9.61 billion in 2022.5
At the same time, timber construction is resisting the economic slowdown. According to the Bundesverband deutscher Fertigbau (German Prefabricated Construction Association), the market share of prefabricated houses (mostly timber construction) increased slightly in the first half of 2022 compared to the same period last year: from 22.6% to 22.8%. In 2021 as a whole, the prefabricated construction rate had stood at 23.1% after a historically strong second half of the year.6
1 Source: Eurostat Euroindikatoren; 107/2022; 30.09.2022
Comparable figures were published by Holzbau Deutschland in the 2022 status report. The rate of approved residential buildings in timber construction rose from 20.4% in 2020 to 21.3% in 2021.7
In the first nine months, turnover in Germany increased by 16.1% from € 122.6 million to € 142.4 million.
Despite the restrained development of the leading indicators, many timber construction and craft companies still have wellfilled order books with a visibility of up to one year in some cases. The management assumes that this order backlog will have a stabilising effect in the medium term as well.
In the first nine months, turnover in France increased by 14.1% from € 37.6 million to € 42.9 million.
The market in France is currently largely characterised by renovation activity. This is supported by government subsidy programmes, among other things.
In the first nine months, turnover in the UK increased by 37.3% from € 25.1 million to € 34.6 million.
The increase is due in particular to increased sales of web beams and is still largely a consequence of the recovery after the restrictions caused by the COVID pandemic..
2 Source: Eurostat Euroindikatoren; 113/2022; 07.10.2022
3 Source: Eurostat Euroindikatoren; 106/2022; 19.09.2022
4 Source: Destatis, Pressemitteilung Nr. 292, 16.09.2022
5 Source: Deutscher Bundestag, Pressemitteilung, 15.08.2022
6 Source: Bundesverband deutscher Fertigbau e.V., 29.08.2022
7 Source: Holzbau Deutschland; Lagebericht 2022
In Australia, turnover increased by 58.5% from € 11.0 million to € 17.4 million in the first nine months.
The increase is mainly due to the positive development of the export business with web beams and laminated veneer lumber.
In the first nine months, turnover in Italy increased by 70.8% from € 8.7 million to € 14.9 million. Among other things, this is due to catch-up effects and government subsidy programmes.
Turnover in the United States increased by 21.7% from € 5.5 million to € 6.7 million in the first nine months.
Sales in the USA are predominantly characterised by industrial products and not by the classic insulation business.
Sales of wood-fibre insulation materials increased by 16.1% from € 198.2 million to € 230.1 million in the first nine months.
Thanks to successful capacity increases, the demand situation was clearly normalised so that most insulation products are now available again at short notice.. Q1 2022: Development Sales by Markets in € million
In the first nine months, turnover of I-joists increased by 38.6% from € 37.2 million to € 51.5 million. 142.4
The positive development is supported by the catch-up effects in the UK as well as by the strong Australian business. In addition, the I-joist has increasingly established itself as a standard component in continental Europe. 122.6 +37.3% +13.8% +12.4% +14.1% 42.9
Sales of laminated veneer lumber increased by 19.6% from € 28.4 million to € 34.0 million in the first nine months.
The production facilities for laminated veneer lumber continue to operate at full capacity. It should be taken into account that part of the production is used internally as a component of the web beams and the sales are then reported in this segment. Germany France United Kingdom Poland Remaining Western and Southern Europe (incl. BeNeLux) Remaining Eastern Europe (without Poland)
Southern Europe 5.8%
In the first nine months, an increase in turnover of 58.9% from € 8.6 million to € 13.7 million was achieved in the Others segment. 21 22 21 22 21 22 21 22 21 22 21 22 21 22 21 22 21 22 21 22 21 22 21 22 2.4 8.7 1.5 5.5 6.7 Rest of World 0.7% 9M 2022: Umsatzverteilung nach Märkten
The Others segment mainly comprises system articles that are sold as merchandise and round off the business with the core products. Scandinavian Countries Rest of World Alpine Region (Austria, Switzerland, Liechtenstein) Italy 4.3% Alpine Region 4.0% USA 1.9%
In the special products segment, a 26.2% increase in turnover from € 10.4 million to € 13.1 million was recorded in the first nine months.
The special products segment includes goods manufactured in-house for industrial applications.
Both segments stem from the STEICO Group's history and no longer represent strategically important business areas.
In the prefabrication of construction elements, turnover increased by 112.3% from € 1.0 million to € 2.1 million in the first nine months.
The increase illustrates that this is a future-oriented and scalable segment.
The new production plant for wood fibre insulation materials from the dry process at the Casteljaloux site (France) has meanwhile started regular operations.
The new production plant for wood fibre insulation materials from the wet process at the Czarna Woda site (Poland) is still in the commissioning phase.
At the new Gromadka site, work on the construction of the new STEICO insulation plant is progressing. Commissioning is expected to start in mid-2023.
In the first nine months of 2022, the STEICO Group generated a total increase in sales of 20.9 % to € 348.9 million (previous year € 288.6 million). Total operating revenues was € 358.7 million (previous year € 290.0 million).
Gross profit after nine months was €147.8 million, which corresponds to an increase of 9.3% compared to the previous year's value (9M 2021: €135.2 million).
After nine months, EBITDA amounted to €75.6 million, which corresponds to an increase of 15.5% compared to the previous year's value (9M 2021: €65.4 million).
EBIT amounted to €57.5 million after nine months, which corresponds to an increase of 14.7% compared to the previous year's value (9M 2021: €50.1 million).
EBT amounted to €56.6 million after nine months, which corresponds to an increase of 14.8% compared to the previous year's value (9M 2021: €49.3 million).
After nine months, the net profit for the period amounted to € 41.2 million, which corresponds to an increase of 17.0 % compared to the previous year's value (9M 2021: € 35.2 million).
In the third quarter of 2022, the STEICO Group generated a 9.4% increase in revenue to € 111.4 million (previous year: € 101.8 million).
Gross profit in the third quarter was €46.9 million, 4.3% below the previous year's figure (Q3 2021: €49.0 million).
EBITDA amounted to €25.1 million in the third quarter and was thus 4.5% higher than in the previous year (Q3 2021: €24.1 million). The EBITDA margin in the third quarter was 21.6% (previous year: 23.1%).
EBIT in the third quarter was €19.0 million, an increase of 0.2% (Q3 2021: €19.0 million). The EBIT margin in the third quarter is 16.4% (previous year 18.2%).
8 As a result of reclassifications there may be minor differences compared to the previous year's figures.
EBT in the third quarter was €18.6 million, which represents a decrease of 0.6% (Q3 2021: €18.7 million).
Net profit for the period in the third quarter was €14.3 million, up 1.2% year-on-year (Q3 2021: € 14.1 million).
As before, the majority of companies in the construction industry have a clear order backlog, which is having a stabilising effect. At the same time, management expects a significant shift in activity towards the refurbishment sector. However, the normalisation of ordering behaviour is likely to slightly weaken the growth dynamic in the fourth quarter as well. Therefore, the management expects a growth in turnover of around 18% for the full year. The EBIT margin is still expected to be in a range between 13% and 15% (compared to total operating revenue).
We spend approx. 80 % of our lives in enclosed rooms. But are we always aware what we are surrounding ourselves with? STEICO has set itself the target of developing building products which consider the needs of both man and nature. Our products are therefore produced using sustainable natural materials. They help reduce energy use and add considerably to a natural healthy internal climate.
Steico insulation and construction materials, carry a number of distinguished 'seals of approval' which is a sign of high quality, healthy and functional building products. The raw materials used in Steico products are certifi ed by FSC® (Forest Stewardship Council®) and PEFC® (Programme for the Endorsement of Forest Certifi cation®), ensuring a traceable and fully sustainable usage of the raw materials. STEICO, the number 1 choice for your sustainable building solutions.
Natural Insulation and Construction Systems for New Builds and Renovations – Roof, Ceiling, Wall and Floor
Renewable raw materials without harmful additives
Weather tight and breathable
Light and easy to handle
Insulation for healthy living
Excellent cold protection in winter
Excellent Fire Protection
Excellent summer
Excellent sound protection
Strong quality control
heat protection
Energy Saving and increased property worth
Environmentally friendly and recyclable
Compatible insulation and structural building systems
Management ISO 14001:2015
STEICO SE • Otto-Lilienthal-Ring 30 • 85622 Feldkirchen (GER) Tel.: +49-89-99 15 51-0 • Fax: +49-89-99 15 51-700 Internet: www.steico.com • E-Mail: [email protected]
07 / 2022
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