Efficiency work accelerated, after a quarter affected by delays in customers’ financing solutions in connection with infrastructure projects.
SECOND QUARTER
- Net sales amounted to EUR 50,075 thousand (61,091), a decrease of 18.0% compared with the corresponding period last year. Organic growth amounted to -14.3%.
- Operating earnings (EBIT) amounted to EUR 2,603 thousand (6,536), corresponding to an EBIT margin of 5.2% (10.7).
- Operating earnings before depreciation (EBITDA) amounted to EUR 4,151 thousand (7,898), corresponding to an EBITDA margin of 8.3% (12.9).
- Underlying earnings before depreciation (underlying EBITDA) amounted to EUR 5,398 thousand (9,209), corresponding to an underlying EBITDA margin of 10.8% (15.1).
- Order intake amounted to EUR 53,225 thousand (61,412), a decrease of 13.3% compared with the same period last year. Organic growth amounted to -10.2%.
- ViaCon intensified the efficiency work initiated in 2022. The initiative is expected to result in reduced costs, excluding non-recurring items, of approximately EUR 5-6 million in 2023, compared to the planned costs for the year.
JANUARY – JUNE 2023
- Net sales amounted to EUR 80,609 thousand (96,050), a decrease of 16.1% compared with the corresponding period last year. Organic growth amounted to -12.6%.
- Operating earnings (EBIT) amounted to
- EUR -998 thousand (3,779), corresponding to an EBIT margin of -1.2% (3.9).
- Operating earnings before depreciation (EBITDA) amounted to EUR 2,128 thousand (6,655), corresponding to an EBITDA margin of 2.6% (6.9).
- Underlying earnings before depreciation (underlying EBITDA) amounted to EUR 3,655 thousand (9,339), corresponding to an underlying EBITDA margin of 4.5% (9.7).
- Order intake amounted to EUR 96,555 thousand (125,631), a decrease of 23.1% compared with the same period last year. Organic growth amounted to -20.5%.
- As of January 1, 2023, the accounting currency and presentation currency is Euro.
COMMENTS FROM THE CEO
Interest rate increases and high inflation during the first half of the year have entailed delays in ViaCon’s customers’ financing solutions for infrastructure projects. This shift in the customers’ projects has had a negative impact on the quarter’s turnover and results. Demand for ViaCon’s solutions is still high and during the summer months ViaCon has had a clearly increasing order intake. To ensure that 2023 will also be a strong year, ViaCon has, during the quarter, intensified the efficiency work initiated in 2022.
Sales for the quarter amounted to EUR 50,075 thousand (61,091), a decrease of 18.0% on the previous year. The sales development was related to Bridges & Culverts Solutions and GeoTechnical Solutions. StormWater Solutions had a good organic growth of 8.7%. ViaCon’s acquired operations have contributed to a turnover of EUR 229 thousand, but we have also chosen to leave, and divest, non-core operations with a turnover of around EUR 1,148 thousand in the corresponding period previous year. By continuing to leave product groups with low profitability, we increase our product margins. Organic growth amounted to -14.3% adjusted for divestments and acquisitions.
The operating earnings (EBIT) amounted to EUR 2,603 thousand (6,536), corresponding to an EBIT margin of 5.2% (10.7). The adjusted operating earnings amounted to EUR 3,850 thousand (7,848), corresponding to an adjusted EBIT margin of 7.7% (12.8). The operating earnings were affected by the lower sales, mainly as a result of delays in customer financing solutions. The quarter’s cash flow was improved compared to the corresponding period last year, where mainly the efficiency work with improving the working capital contributed positively.
There are several infrastructure investments taking place around Europe as there is a great need to renew and expand an ageing infrastructure in many countries. Order intake during the quarter amounted to EUR 53,225 thousand (61,415), corresponding to an organic growth of -10.2 percent. Demand and order intake for 2022 was high, but unevenly distributed between the quarters.
In June, we decided to intensify the efficiency work initiated in 2022 with the aim of slimming the organization for increased agility and efficiency, which means that ViaCon will reduce the workforce by approximately 180 positions. Through this initiative we expect to reduce our costs, excluding non-recurring items, compared to the costs we had planned for in 2023 by approximately EUR 5-6 million in 2023. The savings will be visible to some extent already in the third quarter and at the end of the fourth quarter, we expect this initiative to result in sustainable efficiencies corresponding to approximately EUR 10 million on an annual basis. The non-recurring items linked to this initiative are expected to amount to EUR 2.5-3.0 million, of which EUR 1.0 million will be charged to the result in the second quarter and the remaining costs will be charged to the third and fourth quarter of 2023. These measures will strengthen ViaCon both in the short and long term.
The increase in order intake we saw during the summer combined with the ongoing efficiency work means that we, with confidence, look forward to a continued good development as the leading European supplier with more sustainable solutions compared to alternative types of materials.
Stefan Nordström,
President and CEO, ViaCon Group
Presentation of the report
A live presentation of the financial results and development for the period followed by a Q&A session will be held as follows:
Date: August 30, 2023
Time: 14:00 -15:00 CET
Presenters: CEO Stefan Nordström and CFO Philip Delborn
Link to webcast: https://www.finwire.tv/webcast/viacon-group/q2-2023/
The session will be recorded and available to watch on-demand via the link above.
The full report is published at www.viacongroup.com.