Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Strong performance in Industrial Services with a nearly 10% increase in sales compared to the previous year.
- Successful restructuring and efficiency measures in Facility Services Finland, leading to improved profitability.
- Expansion in the north of Sweden, strengthening the company's position in the Swedish market.
- Significant improvement in customer satisfaction (NPS score) across all business lines.
- Notable advancements in occupational safety and a reduction in sick leaves, reflecting positive sustainability efforts.
Negative Points
- Overall economic slowdown in Finland, particularly affecting the construction industry and other customer segments.
- Decline in Environmental Services sales by 1%, impacted by market conditions and economic slowness.
- Loss of a large customer in Sweden at the end of 2023, resulting in a significant decline in top-line development.
- Negative cash flow impact in the first half of 2024, with net cash flow after investments amounting to minus EUR3.7 million.
- Decrease in capital expenditure from EUR31.8 million in H1 2023 to EUR21.7 million in H1 2024, mainly in machinery and equipment.
Q & A Highlights
Q: How big was the timing impact on sales and EBIT in Q2 for Industrial Services?
A: It is impossible to say exactly, as every year is different with varying scopes in planned maintenance breaks. However, we do not expect a dramatic drop in Q3, but the seasonality is slightly different this year.
Q: How significant was the impact of projects transferred from Q1 to Q2 due to strikes?
A: The impact was quite small.
Q: Has your outlook for Facility Services changed compared to your expectations at the start of 2024?
A: The first half was a disappointment with a larger-than-expected decline in the top line, leading to more extensive restructuring. However, significant reductions in personnel and cost base should show clear improvement in the second half of 2024.
Q: Under what conditions would you raise the high end of your EBIT guidance?
A: If everything goes as planned, we might be at the upper end of our guidance. Unexpected negative surprises could push us towards the lower end. The current guidance is based on our present view of the development.
Q: Have plans to potentially divest the Facility Services divisions been discarded?
A: The strategic review is still ongoing. We will report any updates as soon as we have something concrete.
Q: What drove the significant drop in Facility Services Sweden sales in Q2 compared to Q1?
A: The main driver was the loss of a large customer, along with a slight change in customer behavior, leading to lower sales of additional services.
Q: Can you specify the one-off cost amount and timing related to the new operating model?
A: The one-off costs related to the strategic review were EUR3.4 million, mainly external adviser costs, and we expect them to continue into Q3.
Q: Are the new efficiency methods and actions minor changes, or are there plans for major changes in company culture or management?
A: These plans are still in the initial phases. Once we have further developed and made decisions, we will report on them. Our strategy will focus on circular economy and recycling, which will be reflected in our eventual decisions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
