Sitowise Group Plc, Financial Statement Release, 1 January - 31 December 2024,
12 February 2025 at 8:30 am EET
This release is a summary of Sitowise Group's financial statements release
January-December 2024. The complete financial statements release is attached,
and also available on the company's website at
www.sitowise.com/investors/reports-and-presentations
October-December in brief
· Net sales decreased by 7.6% to EUR 48.8 (52.8) million. In constant currency
net sales were down by 7.6%.
· Organic net sales growth was negative at -9.4% (-6.3%).
· Adjusted EBITA was EUR 1.2 (2.4) million, or 2.4% (4.6%) of net sales.
· Operating profit decreased to EUR -0.4 (0.3) million, or -0.7% (0.6%) of net
sales.
January-December in brief
· Net sales decreased by 8.5% to EUR 192.9 (210.9) million. In constant
currency net sales were down by 8.4%.
· Organic net sales growth was negative at -10.1% (0.7%).
· Adjusted EBITA was EUR 9.6 (17.0) million, or 5.0% (8.1%) of net sales.
· Operating profit decreased to EUR 2.5 (11.7) million, or 1.3% (5.5%) of net
sales.
· Cash flow from operating activities before financial items and taxes totaled
21.5 (23.9) million euros.
· The order book declined slightly during the quarter. Year-on-year the order
book decreased by 8.0% to 151 (164) million euros.
· Leverage (net debt / adjusted EBITDA) was 5.0x (3.0x).
· Sitowise finalized the acquisition of Ahlman Group Oy's expert business in
January, the acquisition of KM Project Oy's expert business in April and the
acquisition of LandPro Oy in September.
· The Board of Directors proposes to the Annual General Meeting, planned for 2
April 2025, that no dividend be paid for the financial year 2024.
The figures in the financial statements release are unaudited. Comparative
figures for the corresponding period of the previous year are in brackets. The
figures disclosed in the financial statements release are rounded so the sum of
individual figures can deviate from the reported sum. This report has been
published in Finnish and English. If there are any differences between the
English translation and the original Finnish version, the Finnish report shall
prevail.
EUR million 10 10 Change, 1-12/ 1-12/2 Change,
-12/ -12/ % 2024 023 %
2024 2023
Net sales 48.8 52.8 -7.6% 192.9 210.9 -8.5%
EBITA, adjusted 1.2 2.4 -50.6% 9.6 17.0 -43.8%
% of net sales 2.4% 4.6% 5.0% 8.1%
EBITA 0.9 1.3 -25.9% 7.4 15.1 -50.9%
Operating profit -0.4 0.3 -205.9% 2.5 11.7 -78.9%
Result for the period -1.6 -0.9 -89.9% -2.7 5.5 -148.8%
Cash flow from operating 10.9 11.3 -3.5% 21.5 23.9 -10.1%
activities before financial items
and taxes
Net debt 52.6 55.3 -5.0%
Net debt / EBITDA, adjusted 5.0x 3.0x 65,0%
Equity ratio, % 43.2% 42.9%
Earnings per share (EPS), EUR -0.05 -0.02 -103,2 -0.08 0.16 -148,0
% %
Number of personnel, average 2,066 2,169 -4.7% 2,097 2,211 -5.2%
CEO Heikki Haasmaa: We continue actions to improve profitability
"The market environment for Sitowise remained challenging in the last quarter of
2024. Our net sales decreased by 7.6 percent from the comparison period to 48.8
million euros, and the adjusted EBITA margin was below our expectations at 2.4
percent. However, our operative cash flow stayed healthy and was 10.9 million
euros.
The strong performance of the Infra and Digital Solutions business areas
continued, with profitability above target levels. The Infra business succeeded
particularly well in several important tenders, including the program alliance
for Helsinki's light rail projects. In the Digital Solutions business, key
successes included double-digit growth in the product business.
The Buildings and Sweden business areas showed some promising improvements too.
In the Buildings business, the fourth quarter was significantly stronger in
construction management and renovation services compared to the preceding one,
and in Sweden, sales improved in building services and infrastructure design.
However, structural engineering suffered from very low workloads in both
business areas, causing the Buildings business to fall short of expectations,
and the anticipated turnaround in Sweden to materialize only partially.
Structural engineering accounted for approximately 16 percent of Sitowise's net
sales in 2024 at the group level, and its situation has continued to weaken by
the nearly complete halt in new housing production in Finland and the low level
of new commercial property construction in Sweden. The recovery of new
construction is generally predicted to occur in late 2025, but the likelihood of
it being postponed to 2026 has increased significantly. During the quarter we
had clearly broader temporary layoffs and further reduced staff, and it is
necessary for us to continue additional adjustments going forward.
The performance in the Buildings and Sweden business areas was also burdened by
project related adjustments in certain projects that had been suspended for
longer term, and by some project overruns. These adjustments are unfortunate,
but I am pleased that our refined processes allow us to address these issues
more effectively.
In line with our Building for the future program we focus on improving our
profitability through measures we can influence ourselves. We have already made
significant progress in developing an active sales culture, enhancing project
management practices, and leveraging AI-based solutions, and we will continue to
put effort in these areas as well as in increasing customer understanding and
the expertise of employees.
To ensure our future competitiveness, we are selectively expanding our service
offering and customer base in areas with short-term growth opportunities. During
the review period, we decided to strengthen our service offering in
infrastructure, project management, and sustainability in Sweden. In Finland, we
are seeking growth particularly in sustainability services, energy, industry,
safety, and product business. In Digital Solutions, we also aim for
internationalization in the medium term and plan to double our Digital Solutions
business to approximately 70 million euros by 2030, with about half of this
coming from the product business.
We expect the markets to remain challenging in 2025. Although market conditions
are generally expected to improve in the second half of 2025, we are preparing
for a slower turnaround than this in the Buildings and Sweden business areas,
especially concerning new builds. The market environment in the Infra and
Digital Solutions business areas will continue to be variable, offering several
opportunities for profitable growth."
OUTLOOK, GUIDANCE, AND FINANCIAL TARGETS
Outlook for the year 2025
The long-term growth in the demand for design, consulting, and digital services
to create sustainable societies is supported by megatrends such as urbanization,
renovation backlog, sustainability, digitalization and security.
In recent years, weak macro-economic outlook and high interest rates have slowed
down growth in both Finland and Sweden and impacted the decision-making of
Sitowise's clients especially in the private sector and most of all in
residential building projects. Furthermore, general economic environment has
adversely impacted larger public sector investments, and central banks' interest
rate cuts have materialized later and on a more moderate scale than expected,
thus delaying the construction market recovery.
We expect the technical consulting market environment to remain mixed in 2025.
Growing demand for services related to green transition, security, and
digitalization will support business performance especially in the Infra and
Digital Solutions business areas. In the Buildings business area, the first half
of the year is still expected to be weak. Sitowise considers the timing of the
construction market recovery to be highly uncertain and anticipates the
construction market to start recovering gradually in the second half of 2025.
The likelihood of the recovery of new construction being postponed to 2026 has
increased significantly. In the Sweden business area, Sitowise has taken
decisive improvement measures and expects these to gradually enhance
performance. In Sweden the construction market recovery is also postponed from
earlier expectations and is now anticipated to take place only in the latter
half of 2025 or even only in 2026. However, the outlook for buildings services
and infra market is somewhat better.
At the end of 2024, order books were at good level in the Infra and Digital
Solutions businesses. In the Buildings and Sweden business areas, order books
and workloads were at insufficient levels and personnel adjustments are
necessary also from now on.
In addition to the market development, cost inflation (e.g. relating to salary
increases), potential currency fluctuations (EUR/SEK) and high interest expenses
are expected to impact Sitowise's financial performance in 2025. In 2025, the
number of working days in Finland is one less compared to 2024 (-1 in Q1, -1 in
Q2, +/- 0 in Q3 and +1 in Q4). In Sweden the number of working days remains the
same in 2025 as it was in 2024. In total, there will be 251 working days in
Finland and 247,5 in Sweden.
No guidance issued for 2025
Due to the unpredictable timing of construction market recoveries both in
Finland and Sweden there is significant uncertainty related to Sitowise's net
sales development in 2025. Therefore, Sitowise has decided not to give net sales
and profitability guidance for 2025 at this stage.
Long-term financial targets
The Board of Directors of Sitowise Group has set the following long-term
financial targets:
· Growth: Annual growth in net sales of more than 10 percent, including
acquisitions
· Profitability: Adjusted EBITA margin of at least 12 percent
· Leverage: Net debt / adjusted EBITDA should not exceed 2.5x, except
temporarily in conjunction with acquisitions
According to its dividend policy, Sitowise's objective is to pay annually a
dividend corresponding to 30-50 percent of net profit to its shareholders. When
distributing a possible dividend, business acquisitions, the company's financial
situation, cash flow and future growth opportunities are taken into account.
Market outlook and current profitability
Share of net sales Market Current
outlook profitability
Infra 37% Stable Above target
Buildings 28% Weak Negative
Digital 16% Stable Above target
Solutions
Sweden 20% Weak Negative
Timeframe: Q4 2024 Next 12 Q4 2024
months
Definitions: Percentage of Strong / Adj. EBITA-%:
consolidated net Stable / Above: >12%;
sales Weak In line: 10-12%;
Below: 5-10%;
Clearly below: 0
-5%; Negative
<0%
SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
Proposals of the Shareholders Nomination Board of Sitowise for the Annual
General Meeting 2025
On 27 January 2025, the proposals of the Shareholders' Nomination Board for the
Annual General Meeting 2025 were published. The Annual General Meeting is
planned to be held on 2 April 2025. According to the proposal the members of the
Board of Directors and its committees will be paid the same fees for the term of
office ending at the Annual General Meeting 2025 as for their previous term of
office. The Shareholders' Nomination Board further proposes that for the term of
office ending at the Annual General Meeting 2026, the current members of the
company's Board of Directors Eero Heliövaara, Mirel Leino-Haltia, Elina
Piispanen, Niklas Sörensen and Tomi Terho be re-elected and Rodolfo Zeidler be
elected as a new member to the Board of Directors. Proposals in full are
available on Sitowise's investor site at Annual General Meeting 2025 |
Sitowise (https://www.sitowise.com/investors/governance/general-meeting
-shareholders/annual-general-meeting-2025)
Espoo, 12 February 2025
Sitowise Group Plc
Board of Directors
Additional information
Heikki Haasmaa, CEO, heikki.haasmaa@sitowise.com, tel. +358 50 304 7765
Hanna Masala, CFO, hanna.masala@sitowise.com, tel. +358 40 558 1323
Mari Reponen, Head of IR, mari.reponen@sitowise.com, tel. +358 40 702 5869
Financial calendar 2025
The planned publication dates for Sitowise Group Plc's financial reports in 2025
are as follows:
· The audited financial statements and the report of Board of Directors 2024:
Week 13, 2025
· Interim Report for January-March 2025: 13 May 2025
· Half-year report for January-June 2025: 13 August 2025
· Interim Report for January-September 2025: 6 November 2025
Webcast for analysts, media and investors
Sitowise's Q4 2024 earnings webcast will be held today, 12 February 2025 at 12
pm EET. The webcast can be accessed either live or as a replay available at
https://rajucast.tv/sitowise/q4-2024-result
-webcast/ (https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fraju
cast.tv%2Fsitowise%2Fq4-2024-result
-webcast%2F&data=05%7C02%7Cmari.reponen%40sitowise.com%7C16e2e71543a642b4e5ec08dd
44f59f1f%7Cb67da565e2fb4473b9db83695070d988%7C0%7C0%7C638742543928718297%7CUnknow
n%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOI
joiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=6dAaXxaGuN%2FY%2BULjnQFvb9SKo0HcqQ
j8fO9h52UXazk%3D&reserved=0)
Distribution:
Nasdaq Helsinki Ltd
Key media
www.sitowise.com
SITOWISE IN BRIEF:
Sitowise is a Nordic expert in the built environment and forestry with strong
focus on digitality. We provide design and consulting knowhow to enable more
sustainable and smarter urban development as well as smooth transportation.
Sitowise offers services related to real estate and buildings, infrastructure,
and digital solutions both in Finland and in Sweden. Global megatrends drive
huge changes that require a re-evaluation of the smartness in the built
environment - therefore we have set our vision to be Redefining Smartness in
Cities. The Group's net sales were EUR 193 million in 2024 and the company
employs more than 2,000 experts. Sitowise Group Plc is listed on Nasdaq Helsinki
under the trading symbol SITOWS.