Strong growth continued and profitability remained on a good level
Solwers Plc Half-Year Financial Report January-June 2022
Solwers Plc Company release 15 September 2022
Strong growth continued and profitability remained on a good level
This Company release is a summary of Solwers Plc's Half-Year Financial Report January-June 2022. The complete report is attached to this release and can also be found on the company website at solwers.fi/en/for-investors/company-releases
January - June 2022 in brief
The figures for the first half are unaudited (IFRS). The figures in brackets refer to the corresponding period in the preceding year and are expressed in the same unit, except where otherwise noted.
- Revenue grew 48,3 % to EUR 32,562 (21,962) thousand
- EBITA was EUR 3,801 (2,664) thousand, 11.7 (12.1) % of revenue
- EBIT was EUR 2,808 (2,018) thousand, which is 8.6 (9.2) % of revenue
- The company continued the implementation of its growth strategy by acquiring Arkkitehdit Sabelström Arkitektkontor in Finland in March and Establish Schening in Sweden in May
- The Annual General Meeting resolved on a dividend payment of EUR 0.040 (0.103) per share for the financial year 2021
- The company’s operating cash flow EUR +1,846 (+1,757) thousand remained on the level of the comparison period and the financial position continued to be good
- The financing agreement with the company’s principal bank was expanded and amended to support of execution of new business acquisitions
- The number of employees at the end of the reporting period was 601 (405).
Outlook and mid-term financial targets
The level of investment varies from one year to the next and in different ways in different sectors. Public and private sector investments affect employment and profitability in the entire design and engineering sector, including Solwers. The expansion of the service portfolio and the diversification of the business and the geographical scope of operations through the Solwers companies provides balance and supports the achievement of the set targets. The demand for infrastructure design and engineering services in Finland is stable, and the demand for industrial and infrastructure design and project management services in Northern Sweden is expected to remain strong.
The Solwers companies do not operate in Russia or Ukraine, but the weakening economic growth and rising inflation and interest rates may affect customers’ willingness to invest in Finland and Sweden. The business acquisitions made last year will increase Solwers’ full year revenue and strengthen the company’s expertise and market position. Solwers intends to make further acquisitions. The company’s focus areas are growth and profitability improvement.
The COVID-19 pandemic increased and may continue to increase the number of personnel sick leaves also in the future. This may affect the company's revenue and earnings if the higher-than-normal sickness absences caused by the coronavirus continue.
The Company will keep a close eye on the effects of the developing geopolitical situation, but nevertheless maintains its mid-term financial targets as set out in the prospectus published on 3 June 2021 in connection with the IPO. The targets are as follows:
- Growth: Revenue growth over 20 % (12 months)
- Profitability: EBITA margin over 12 %
- Equity ratio: Over 40 %
Key figures
|
Solwers Plc consolidated EUR Thousand |
H1/2022 | H1/2021 | 2021 |
| Revenue | 32 562 | 21 962 | 44 662 |
| EBITDA | 4 245 | 3 013 | 5 495 |
| EBITDA-% | 13,0 | 13,7 | 12,3 |
| EBITA | 3 801 | 2 664 | 4 708 |
| EBITA-% | 11,7 | 12,1 | 10,5 |
| EBIT | 2 808 | 2 018 | 3 371 |
| EBIT-% | 8,6 | 9,2 | 7,5 |
| Net profit | 1 919 | 840 | 1672 |
| Net profit-% | 5,9 | 3,8 | 3,7 |
| Earnings per Share (EPS) non-diluted, EUR | 0,21 | 0,15 | 0,20 |
| Earnings per Share (EPS) diluted, EUR | 0,21 | 0,15 | 0,20 |
| Revenue per employee | 56 | 54 | 112 |
| Revenue growth % | 48,3 | 58,1 | 36,8 |
| Billing rate, % | 81,8 | 81,7 | 82,2 |
| Adjusted equity | 32 895 | 28 884 | 31 908 |
| Net debt | 17 184 | 21 | 14 119 |
| Equity ratio, % | 43,9 | 51,4 | 45,4 |
| Adjusted equity ratio, % | 43,9 | 51,4 | 45,4 |
| Total assets | 74 949 | 59 196 | 70 354 |
| Headcount, average during period | 586 | 390 | 397 |
| Headcount, at end of period | 601 | 405 | 571 |
CEO Stefan Nyström’s review
Despite the general market uncertainty, the demand for our services remained stable and the performance of our company during the first six months was good. Our revenue increased by almost 50 percent to 32.6 million euros and profitability is on the mid-term target level.
Our order stock has also remained relatively stable, and the invoicing rate is on the same level compared to last year’s first six months. Of the new projects, an interesting example is the design project of the Raisio Tiedonpuisto school of Lukkaroinen Architects and their new subsidiary Sabelström Architects. Pontek’s refurbishment an old building to an interim school retaining the original structures is worth mentioning among the concluded projects Geounion's geotechnical survey work in the Turku One Hour Train project is in turn a fascinating example of the ongoing projects.
In Sweden, the demand for ELE Engineering’s services has been growing. They supplied Svenska Skogsplantor a complete, fully automated production line for handling 20 million forest plants per season and in northern Sweden they were responsible for primary engineering and documentation structure for substations at a windfarm project. Dreem architects designed an extensive residential and commercial block in Backa, Gothenburg, where the building integrates solar and geothermal energy to minimize energy losses. Solar energy can be stored in the geothermal system which provides both reduced energy consumption and greater autonomy from the general power grid. These types of solutions are becoming even more relevant in a fast-changing business environment.
In line with our growth strategy, we continuously expand our operations through business acquisitions. In May, we acquired the entire capital stock of the management consulting company Establish Schening AB in Sweden. The Stockholm based Establish Schening AB has 12 employees and its’ revenue in 2021 was SEK 20 million. The company's core competence is management consulting in logistics solutions, and the customer base consists of companies in the public transport, manufacturing, and retail sectors.
The expansion of the service portfolio, together with the diversified business and geographical presence of the Solwers companies, balances and reduces the risk of work shortages, but if the market situation suddenly changes, we are prepared to adjust the capacity. We have a wide customer base in different locations in two countries and in addition to large projects, we carry out thousands of small projects every year with services varying from different design services to project management, financial management and other expert services.
In addition to the Nordic countries, we explore growth opportunities also in the Eastern European countries, where the production costs for planning and design are clearly more competitive than in the Nordic countries. Companies to be acquired in this geographical area could support our operations in the Nordic countries while continuing their business in their home country.
Furthermore, in our home markets of Finland and Sweden, we may make local acquisitions with which we can strategically strengthen the competence, capacity, or geographical presence of the subsidiary. One example is Sabelström Arkitektkontor Architects in Turku, which was acquired by our subsidiary Lukkaroinen Architects in March. Sabelström's office has significant local references, knowledge of the area and established customer relationships in Southwest Finland.
When taking a view at the future outlook, it can be noted that the general uncertainty in the market may affect customers' willingness to invest. However, we are proceeding in line with our growth strategy by strengthening the organization's expertise and aim for a few business acquisitions during this year.
Solwers Plc
Board of Directors
For further information, please contact:
Solwers Plc, Taina Erkkilä, Head of Communications, tel. +358400153099
Certified Adviser: UB Securities Oy, Ville Väisänen, CEO, tel. +358405886769
Distribution:
Nasdaq Helsinki
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