THIRD QUARTER

• Net sales amounted to EUR 57,710 thousand (62,607), a decrease of 7.8% compared with the corresponding period last year. Organic growth amounted to -1.5%.
• Operating earnings (EBIT) amounted to EUR 8,557 thousand (6,441), corresponding to an EBIT margin of 14.8% (10.3).
• Operating earnings before depreciation (EBITDA) amounted to EUR 10,246 thousand (7,842), corresponding to an EBITDA margin of 17.8% (12.5).
• Underlying earnings before depreciation (underlying EBITDA) amounted to EUR 11,492 thousand (8,937), corresponding to an underlying EBITDA margin of 19.9% (14.3).
• Order intake amounted to EUR 61,205 thousand (55,052), an increase of 11.2% compared with the same period last year. Organic growth amounted to 26.8%.
• During the quarter, the operating earnings were affected by the strong sales development in the Bridges & Culverts business unit, as well as by the ongoing efficiency improvement work in all three business units.

JANUARY - SEPTEMBER

• Net sales amounted to EUR 138,319 thousand (158,657), a decrease of 12.8% compared with the corresponding period last year. Organic growth amounted to -8.2%.
• Operating earnings (EBIT) amounted to EUR 7,559 thousand (10,221), corresponding to an EBIT margin of 5.5% (6.4).
• Operating earnings before depreciation (EBITDA) amounted to EUR 12,374 thousand (14,496), corresponding to an EBITDA margin of 8.9% (9.1).
• Underlying earnings before depreciation (underlying EBITDA) amounted to EUR 15,147 thousand (18,275), corresponding to an underlying EBITDA margin of 11.0% (11.5).
• Order intake amounted to EUR 157,760 thousand (180,683), a decrease of 12.7% compared with the same period last year. Organic growth amounted to -6.1%.
• The year’s operating earnings have been negatively affected by lower sales mainly due to delays in customers’ financing of their projects during the first half of the year. The situation improved during the third quarter, with increased order intake and earnings improvement.
• As of January 1, 2023, the accounting currency and presentation currency is Euro.

COMMENTS FROM THE CEO

During the third quarter, activity increased in most of ViaCon’s markets compared to the first half of the year. This is reflected in the group’s sales, results and order intake. The situation with delays in ViaCon’s customers’ financing solutions, which had a negative impact on the first and second quarters, improved in the third quarter. In addition, the intensified efficiency work launched at the end of the second quarter has had a positive effect on our costs during the period.

Sales for the quarter amounted to EUR 57,710 thousand (62,607), a decrease of 7.8% on the previous year. The sales development was related to GeoTechnical Solutions and StormWater Solutions, where we still have some effects from delays in customers financing solutions. Bridges & Culverts Solutions had a very good organic growth of 27.6%. ViaCon has chosen to leave, and divest, non-core operations with sales of around EUR 972 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 -1.5% adjusted for currency effects, divestments and acquisitions.

The operating earnings (EBIT) amounted to EUR 8,557 thousand (6,441), corresponding to an EBIT margin of 14.8% (10.3). The adjusted operating earnings amounted to EUR 9,802 thousand (7,537), corresponding to an adjusted EBIT margin of 17.0% (12.0). The operating earnings have been affected by the strong sales development in the Bridges & Culverts business unit as well as by the ongoing efficiency work in all three business units. Cash flow for the quarter was positive, mainly driven by operating profit and changes in working capital.

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 was strong and amounted to EUR 61,205 thousand (55,052), corresponding to an organic growth of 26.8%. Our expectation is that order intake will remain at a good level during the autumn.

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. During the quarter,

the initiative progressed according to plan and by the end of September, the reduction of most of these positions was completed. The reduction of the remaining positions will be implemented during the fourth quarter. During the third quarter, the initiative has reduced our costs excluding non-recurring items, compared to the costs we had planned for, by approximately EUR 2.7 million. For the full year 2023, the initiative is expected to contribute to cost savings excluding non-recurring items of approximately EUR 6 million. 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 1.2 million have burdened the result in the third quarter. These measures will strengthen ViaCon both in the short and in the long term.

With an increasing order intake and with the ongoing streamlining work, we confidently look forward to a good end to the year.

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: November 17, 2023
Time: 10:00 -11:00 CET
Presenters: CEO Stefan Nordström and CFO Philip Delborn
Link to webcast: https://www.finwire.tv/webcast/viacon-group/q3-2023/

The session will be recorded and available to watch on-demand via the link above.

The full report is published at www.viacongroup.com.