Consti Plc Financial Statements Bulletin for January – December 2024

7.2.2025 08:30:01 EET | Consti Oyj | Financial Statement Release

CONSTI PLC FINANCIAL STATEMENTS BULLETIN 7 FEBRUARY 2025, at 8.30 a.m.                                       

Consti Plc Financial Statements Bulletin for January – December 2024

A REASONABLE YEAR IN A CHALLENGING MARKET

10–12/2024 highlights (comparison figures in parenthesis 10–12/2023):

• Net sales EUR 92.3 (86.1) million; growth 7.2 %
• EBITDA EUR 4.6 (4.9) million and EBITDA margin 5.0 % (5.7 %)
• Operating result (EBIT) EUR 3.6 (3.9) million and EBIT margin 3.9 % (4.5 %)
• Order backlog EUR 240.1 (270.0) million; change -11.1 %
• Order intake EUR 67.2 (91.6) million; change -26.7%
• Free cash flow EUR 4.8 (2.8) million
• Earnings per share EUR 0.33 (0.37)

1–12/2024 highlights (comparison figures in parenthesis 1–12/2023):

• Net sales EUR 326.7 (320.6) million; growth 1.9 %
• EBITDA EUR 14.3 (15.9) million and EBITDA margin 4.4 % (5.0 %)
• Operating result (EBIT) EUR 10.2 (12.3) million and EBIT margin 3.1 % (3.9 %)
• Order intake EUR 259.0 (280.0) million; change -7.5%
• Free cash flow EUR 7.2 (13.1) million
• Earnings per share EUR 0.91 (1.17)
• The Board of Directors proposes a dividend of EUR 0.70 per share. The Board proposes that the dividend be paid in two instalments. The first instalment of EUR 0.35 per share be paid in April 2025 and the second instalment of EUR 0.35 per share be paid in November 2025.

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.

CEO Esa Korkeela’s comment

“In 2024, the overall market for building construction is estimated to have decreased by about 6 percent from the previous year. Although renovation is significantly less sensitive to economic cycles than new construction, renovation also continued to decline.

Despite the market situation, we succeeded in increasing our net sales during the financial year. The decline in net sales in the construction business areas was compensated by the 45.5 percent growth of our Building Technology business area compared to 2023. Our total net sales for the year grew by 1.9 percent and reached 326.7 (320.6) million euros. Our full-year operating result was 10.2 (12.3) million euros, which is 3.1 (3.9) percent of the net sales. Regardless of the prevailing market conditions and sharply intensified competition, we have managed to maintain a reasonable level of profitability in 2024.

Our net sales in October-December increased by 7.2 percent and amounted to 92.3 (86.1) million euros. Net sales grew in the Building Technology and Housing Companies business areas but contracted in the Corporations and Public Sector business areas. Our operating result for October-December was 3.6 (3.9) million euros, which is 3.9 (4.5) percent of the net sales. Operationally, the last quarter of the year proceeded in line with our expectations, and projects progressed predominantly as planned. Our balance sheet and liquidity position at the end of the review period remained at a good level.

During the whole year, our order intake amounted to 259.0 (280.0) million euros. During October-December, we received new orders worth 67.2 (91.6) million euros, which means a 26.7 percent decrease compared to the strong reference period. Order intake during the review period was affected by continued intense competition, continued weak demand in the private real estate investment company market, and disciplined tendering activities. The order intake was positively affected by new orders in our Housing Companies business area in the fourth quarter, as a result of which the order backlog of our Housing Companies business area was approximately 29 million euros higher at the end of the review period than in the comparison period. Overall, our order backlog decreased by 11.1 percent compared to the reference period and amounted to 240.1 (270.0) million euros.

The implementation of our strategy, published in February 2024, is ongoing. During the review period, we continued to invest in the growth of our Building Technology business area. Our operational efficiency improvement initiatives continued to focus on ensuring the performance of our business in the prevailing operating environment, emphasizing, among other things, tendering activities and improving the efficiency of our production.

In the fourth quarter, the readiness of housing companies and the public sector for renovation investments remained at a reasonable level in our operating areas. The sharp decline in demand for new construction has significantly increased competition for renovation projects and building technology contracts. 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 ranging from small service contracts to extensive construction projects.

We do not expect a significant improvement in the demand outlook for construction during the first half of 2025. Supported by our healthy order backlog, we aim to continue delivering solid results, while focusing on implementing our current strategy.

I would like to thank all our customers and partners for their good cooperation, as well as all Consti employees for their committed and determined contribution during 2024.”

Operating environment

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.

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. In its September review, the Confederation of Finnish Construction Industries RT estimated that the development of renovation in 2024 was -4 percent. Euroconstruct's estimate, published in December, is        -0.9 percent.

According to Euroconstruct's estimate, total housebuilding construction output, including both new construction and renovation, shrank by about 6 percent in 2024 compared to the previous year.

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.

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.

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.

New construction of non-residential buildings remained roughly on level with 2023 in 2024. Growth has been driven by large hospital and school projects. Office construction has also continued in the Helsinki metropolitan area. Industrial construction, on the other hand, decreased. Several planned energy-related projects are expected to boost industrial construction in the coming years.

Euroconstruct estimates the overall development of new construction to be about -11 percent 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.

However, residential renovation is estimated to have remained almost at the previous year's level in 2024. Euroconstruct's estimate is a -0.4 percent change from 2023, and the same message is conveyed by the Renovation Barometer published by the Finnish Real Estate Federation in November. The outlook for housing companies improved, especially at the end of the year, due to a clear decline in interest rates.

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.

Both total housebuilding construction and renovation are expected to return to a growth trajectory in 2025. Euroconstruct's forecast for housebuilding construction growth in 2025 is 5.3 percent. Following a weak comparison year, new housing construction is expected to grow by about 26 percent. Non-residential construction is expected to grow by about 2 percent.

The renovation market is projected to return to moderate growth. Euroconstruct's growth forecast is 0.3 percent, while RT's is 1.0 percent. The anticipated growth is primarily driven by residential building renovations.

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

According to forecasts, the renovation market is expected to return to moderate growth.

Euroconstruct's growth forecast is 0.3 percent, while RT's is 1.0 percent. According to Euroconstruct's forecast, the value of residential building renovations will grow slightly, while the value of other renovations will decrease slightly.

Euroconstruct forecasts a 5.3 percent growth for housebuilding construction in 2025. After a weak comparison year, new housing construction is expected to grow by about 26 percent. Non-residential construction is expected to grow by about 2 percent.

The continued weak demand for new construction has maintained tight competition for renovation projects and building technology contracts. Construction demand prospects are weakened by interest rates, persistently high construction costs, and tightened financing availability, and Consti does not expect a significant improvement in construction demand prospects during the first half of 2025.

Despite the market conditions, Consti aims to continue delivering solid results, supported by a healthy order backlog, while focusing on the implementation of its 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 7 February 2025, at 10:00 a.m. (EET). The meeting will be hosted by CEO Esa Korkeela and CFO Anders Löfman.

Financial reporting in 2025

Consti will publish its Financial Statements, Board of Directors’ Report, Auditors’ Report, and Corporate Governance Statement on the company website during week 11/2025.

Consti Plc’s Annual General Meeting shall be arranged on Thursday, 3 April 2025 in Helsinki. Invitation to the Annual General Meeting will be published later as a separate Stock Exchange release.

Consti Plc shall publish three interim reports during 2025:

• Interim report 1-3/2025 published 25 April 2025
• Half-year financial report 1-6/2025 published 18 July 2025
• Interim report 1-9/2025 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

Attachments

• Consti Financial Statements Bulletin 2024.pdf