Consti Oyj — Earnings Release 2017

Feb 15, 2018

Consti Group Plc Financial Statements Bulletin for January - December 2017

Consti Group Plc Financial Statements Bulletin for January - December 2017

CONSTI GROUP PLC FINANCIAL STATEMENTS BULLETIN 15 FEBRUARY 2018, at 8.30 a.m.

Consti Group Plc Financial Statements Bulletin for January - December 2017

Net sales grew, result was a disappointment

10-12/2017 highlights (comparison figures in parenthesis 10-12/2016):
* Net sales EUR 86.3 (74.8) million; growth 15.3 %
* EBITDA EUR -2.1 (4.9) million and EBITDA margin -2.4 % (6.5 %)
* Adjusted EBITDA EUR -2.1 (4.9) million and adjusted EBITDA margin -2.4 %
(6.5 %)
* Operating profit/loss (EBIT) EUR -2.6 (4.4) million and EBIT margin -3.0 %
(5.9 %)
* Adjusted EBIT EUR -2.6 (4.4) million and adjusted EBIT margin -3.0 % (5.9 %)
* Order backlog EUR 225.7 (190.8) million; growth 18.3 %
* Free cash flow EUR 2.6 (0.5) million
* Earnings per share EUR -0.30 (0.44)

1-12/2017 highlights (comparison figures in parenthesis 1-12/2016):
* Net sales EUR 300.2 (261.6) million; growth 14.8 %
* EBITDA EUR 1.7 (13.1) million and EBITDA margin 0.6 % (5.0 %)
* Adjusted EBITDA EUR 1.7 (13.1) million and adjusted EBITDA margin 0.6 % (5.0
%)
* Operating profit/loss (EBIT) EUR -0.4 (11.0) million and EBIT margin -0.1 %
(4.2 %)
* Adjusted EBIT EUR -0.4 (11.0) million and adjusted EBIT margin -0.1 % (4.2
%)
* Free cash flow EUR 8.9 (10.9) million
* Earnings per share EUR -0.14 (1.05)
* The Board of Directors proposes that no dividend will be paid for 2017

Guidance on the Group outlook for 2018:
The Company estimates that its operating result for 2018 will grow compared to
2017.

+------------------------------+------+------+--------+-------+-------+--------+
|KEY FIGURES (EUR 1,000) |10-12/|10-12/|Change %| 1-12/ | 1-12/ |Change %|
| | 2017 | 2016 | | 2017 | 2016 | |
+------------------------------+------+------+--------+-------+-------+--------+
|Net sales |86,300|74,823| 15.3 %|300,203|261,558| 14.8 %|
+------------------------------+------+------+--------+-------+-------+--------+
|Adjusted EBITDA |-2,050| 4,892|  | 1,714| 13,142| -87.0 %|
+------------------------------+------+------+--------+-------+-------+--------+
|Adjusted EBITDA margin, % |-2.4 %| 6.5 %|  | 0.6 %| 5.0 %|  |
+------------------------------+------+------+--------+-------+-------+--------+
|EBITDA |-2,050| 4,892|  | 1,714| 13,120| -86.9 %|
+------------------------------+------+------+--------+-------+-------+--------+
|EBITDA margin, % |-2.4 %| 6.5 %|  | 0.6 %| 5.0 %|  |
+------------------------------+------+------+--------+-------+-------+--------+
|Adjusted EBIT |-2,590| 4,447|  | -375| 11,004|  |
+------------------------------+------+------+--------+-------+-------+--------+
|Adjusted EBIT margin, % |-3.0 %| 5.9 %|  | -0.1 %| 4.2 %|  |
+------------------------------+------+------+--------+-------+-------+--------+
|Operating profit/loss (EBIT) |-2,590| 4,447|  | -375| 10,982|  |
+------------------------------+------+------+--------+-------+-------+--------+
|Operating profit/loss (EBIT) |-3.0 %| 5.9 %|  | -0.1 %| 4.2 %|  |
|margin, % | | | | | | |
+------------------------------+------+------+--------+-------+-------+--------+
|Profit/loss for the period |-2,294| 3,385|  | -1,074| 7,978|  |
+------------------------------+------+------+--------+-------+-------+--------+
|Order backlog |  |  |  |225,721|190,806| 18.3 %|
+------------------------------+------+------+--------+-------+-------+--------+
|Free cash flow | 2,581| 507| 408.7 %| 8,936| 10,865| -17.8 %|
+------------------------------+------+------+--------+-------+-------+--------+
|Cash conversion, % | n/a|10.4 %|  |521.4 %| 82.8 %|  |
+------------------------------+------+------+--------+-------+-------+--------+
|Net interest-bearing debt |  |  |  | 12,070| 12,097| -0.2 %|
+------------------------------+------+------+--------+-------+-------+--------+
|Gearing, % |  |  |  | 47.7 %| 40.8 %|  |
+------------------------------+------+------+--------+-------+-------+--------+
|Return on investment, ROI % |  |  |  | -0.7 %| 22.7 %|  |
+------------------------------+------+------+--------+-------+-------+--------+
|Number of personnel at period |  |  |  | 1,079| 935| 15.4 %|
|end | | | | | | |
+------------------------------+------+------+--------+-------+-------+--------+
|Earnings per share, undiluted | -0.30| 0.44|  | -0.14| 1.05|  |
|(EUR) | | | | | | |
+------------------------------+------+------+--------+-------+-------+--------+

CEO Esa Korkeela's comment

"Our net sales for 2017 grew 14.8 percent from the previous year and amounted to
300.2 million euro. Net sales grew in all business areas, and we had
particularly strong growth in our Building Facades business area.

Even with the growth of our net sales, our result did not reach a satisfactory
level. Our less than estimated performance in project deliveries was a
disappointment. Especially profitability problems relating to managing and
executing projects in Technical Building Services turned out to be greater than
initially expected. Additional inquiries showed clear challenges relating to
organising, managing and executing projects. We also identified project
personnel turnover and price competition in the field as factors contributing to
profitability problems.

In the last quarter of 2017 we started reorganising our Technical Building
Services business area, and we will finalise this work during the first quarter
of 2018. With the reorganising we aim to improve profit responsibility in all of
Technical Building Services' units, clarify our service offering, and enhance
project management. From the last quarter onwards we have increased our
requirements for gross margin on sales in Technical Building Services, and we
have also realigned requirements for selecting offered worksites. Additionally,
we have started several actions to improve project steering and monitoring, and
new operating models will be taken into use during the first quarter of 2018. We
have also clarified financial reporting responsibilities for projects in the
entire Group.

During the year Consti had approximately 900 ongoing projects. Although we
advanced as planned in the majority of these projects, we fell short of our
targets in several projects in 2017. In the last quarter we continued assessing
projects that were ongoing or at handover phase. Based on the assessments we
readjusted cost and profit estimates for our project base. Despite this, certain
ongoing projects in Technical Building Services and Renovation Contracting still
have open risks, which we have to the best of our ability taken into
consideration in our financial statement for 2017.

Consti's strategy was updated during spring 2017.  We will continue to carry out
our updated strategy, placing particular emphasis on actions to improve
profitability.

The market for renovations and technical building services has mainly remained
good. During the year Consti received new orders worth 278.1 million euro, which
is a 24.7 percent growth to the comparison period. Also our order backlog at the
end of December, 225.7 million euro, was 18.3 percent higher than in the
comparison period.

I believe that our strong order backlog and our actions to improve productivity
and profitability will help us return to the path of profitable growth."

Operating environment

In Finland, nearly six percent of the GNP is spent on renovations, which is
significantly more than the European average. An estimated 12.8 billion euro was
spent on renovations in Finland during 2017, of which 7.8 billion was used on
renovations of residential buildings and 5.0 billion on other renovations.

During recent years, renovations have increased their share of the total
construction market steadily. Due to our building stock's age, growth has been
rapid compared to the rest of Europe. New construction has picked up pace and
thus in 2017 renovations only amounted to approximately half of all
construction, whereas renovations amounted to over half of the total
construction in Finland during 2013-2015. In 2017, new construction reached peak
levels last seen in the 1970s. Renovation growth was also subdued by the
shortage of skilled personnel caused by the fast-paced new construction of
residential buildings.

In its October review of the business environment, the Confederation of Finnish
Construction Industries RT estimated that construction grew 4.4 percent in
2017. Euroconstruct projected 4.8 percent growth. RT approximated that
renovations had grown 1.5 percent and new construction about seven percent. New
construction was especially driven by new residential building projects, which
RT estimated to have grown by nine percent. In cubic meters, however,
construction levels remain under average, as the average size of apartments has
decreased. The construction of new office buildings grew by circa nine percent.
The growth is mostly coming from the Greater Helsinki area and school and
hospital projects.

Euroconstruct estimates that Finland's renovation markets grew 1.8 percent in
2017. Residential building renovation grew by an estimated two percent and
office premise renovation by 1.5 percent.

RT predicts that the market for new construction will grow 2.3 percent in 2018
and renovations will grow 1.5 percent. The corresponding estimates from
Euroconstruct are 1.8 and 1.5 percent. The general economic situation typically
has a significant impact on new construction, but a much lesser impact on
renovations.

In the near future, operational programs to improve public service facility
health should bring new orders to public facility renovations. According to the
Built Environment ROTI-report from 2017, one in five public buildings is
damaged. Also, the Ministry of the Environment estimates that 600 000-800 000
Finns are exposed to poor indoor air daily.

Outlook for 2018

Renovation growth is expected to continue in 2018. In its November outlook,
Euroconstruct estimated that Finland's renovation market will grow 1.5 percent
from the previous year. The general economic situation typically has a
significant impact on new construction, but a much lesser impact on renovations.

Consti estimates that its operating result for 2018 will grow compared to 2017.

Press conference

A press conference for analysts, portfolio managers, and media will be arranged
February 15th 2018 at 10:00 at Hotel Glo conference room at Kluuvikatu 4,
Helsinki. The conference is hosted by CEO Esa Korkeela.

Financial reporting in 2018

Consti will publish its Financial Statements, Board of Directors' Report,
Auditors' Report, and Corporate Governance Statement on the company website
during week 11/2018.

Consti Group Plc's Annual General Meeting shall be arranged on Wednesday April
4th 2018 in Helsinki. The complete invitation to the Annual General Meeting,
including the Board of Director's proposals to the Meeting, will be published as
a separate Stock Exchange release.

Consti Group Plc shall publish three interim reports during 2018:

* Interim report 1-3/2018 published April 27(th) 2018
* Half-year financial report 1-6/2018 published July 26(th) 2018
* Interim report 1-9/2018 published October 26(th) 2018

CONSTI GROUP PLC

Further information:

Esa Korkeela, CEO, Consti Group Plc, Tel. +358 40 730 8568

Distribution:

Nasdaq Helsinki Ltd.
Major media
www.consti.fi

Consti is a leading Finnish company concentrating on renovation and technical
services. Consti offers comprehensive building technology, pipeline renovation,
renovation contracting, façade renovation and other demanding construction and
maintenance services for residential and commercial buildings. In 2017, Consti
Group's net sales amounted to 300 million euro. It employs over 1000
professionals in renovation construction and building technology.

Consti Group Plc is listed on Nasdaq Helsinki. The trading code is CONSTI.
www.consti.fi

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