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Adapteo Oyj Earnings Release 2020
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Earnings Release
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FINANCIAL STATEMENTS RELEASE
January–December 2020
Adapteo is a leading Northern European company for adaptable buildings. We offer premium solutions to schools, daycare centres, offices, accommodation and events for temporary and permanent needs.
Adapteo.
High activity and geographic expansion
October–December 2020
- Rental sales amounted to EUR 36.1 (35.1 in Q4 2019) million. In constant currencies, rental sales increased by 1%.
- Net sales amounted to EUR 65.3 (49.6) million. In constant currencies, net sales increased by 29%.
- Comparable EBITDA was EUR 24.2 (20.6) million. Comparable EBITDA margin was 37.0% (41.6%).
- Operating profit (EBIT) was EUR 8.6 (-3.9) million, representing 13.2% (neg) of net sales. Operating profit (EBIT) included items affecting comparability of EUR -2.3 (-1.0) million.
- Operating cash flow before growth capex was EUR 18.4 (19.0) million.
- Growth capex was EUR 6.3 (4.3) million.
- Earnings per share was EUR 0.13 (-0.17).
January–December 2020
- Rental sales amounted to EUR 133.1 (132.7 in Jan–Dec 2019) million. In constant currencies, rental sales were unchanged.
- Net sales amounted to EUR 231.4 (216.2) million. In constant currencies, net sales increased by 7%.
- Comparable EBITDA was EUR 88.3 (88.5) million. Comparable EBITDA margin was 38.2% (40.9%).
- Operating profit (EBIT) increased to EUR 36.8 (22.1) million, representing 15.9% (10.2%) of net sales. Operating profit (EBIT) included items affecting comparability of EUR -4.9 (-12.4) million.
- Operating cash flow before growth capex was EUR 63.9 (65.7) million.
- Growth capex was EUR 36.7 (29.1) million.
- Operative return on capital employed (ROCE) amounted to 9.1% (8.5%).
- Net debt to comparable EBITDA was 4.9.
- Earnings per share was EUR 0.42 (0.19).
- The Board of Directors proposes a dividend of EUR 0.12 (0.0) per share.
- For January–December 2020, as pro forma, including Dutch Cabin Group, net sales were EUR 270.4 million, pro forma operating profit (EBIT) EUR 42.6 million, and pro forma comparable EBITDA EUR 98.2 million.
Net sales
Jan–Dec, %
Comparable EBITDA
Jan–Dec, EUR millions
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY–DECEMBER 2020
Significant events during the fourth quarter
- On 29 October the company completed its acquisition of the Dutch Cabin Group ("DCG"). DCG manufactures, rents out, and sells both temporary and permanent buildings to customers within the governmental, educational, industrial and healthcare sectors. It had 146 employees on 31 December and is headquartered in Klundert, the Netherlands. DCG operates with six brands in the Netherlands and Germany. A purchase price of EUR 63 million was paid in cash upon the completion of the acquisition.
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On 9 December the company announced its intention to acquire Stord Innkvartering ("Stord"), a Norwegian company with a leading position in the worker accommodation segment. This acquisition was completed on 29 January 2021. A purchase price of NOK 677 million (approximately EUR 64 million) was paid in cash, and potential additional considerations may become payable in the future depending on Stord's future financial performance. A majority of Stord's customers are in the infrastructure industry and public sector. Stord's building portfolio consists of approximately 4,000 units with approximately 110,000 square meters.
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In November Adapteo refinanced its loan facilities agreements. After the refinancing, the company has available long-term, 36 months, facilities of EUR 530 million and a revolving credit facility of EUR 100 million.
- Adapteo made a directed issue of 4.4 million shares. Net proceeds amounted to approximately SEK 386 million from the placing which was significantly oversubscribed and attracted a considerable number of large institutional investors. The number of shares in the company amounts to 49.1 million after the issue.
- Adapteo launched a new sustainability strategy with a focus on climate-smart buildings, innovation for sustainability and inclusive societies. The strategy aims for Adapteo to become a driving force in the transition to a circular and sustainable construction and real estate industry.
- Adapteo entered into the world's largest corporate sustainability initiative, the United Nations Global Compact. Its content is summarised in ten principles, regarding the topics of human rights, labour, environment, and anti-corruption.
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
Key figures
During 2019, Adapteo presented certain key figures and other financial information for 2019 on a pro forma basis to illustrate the impacts of the formation of Adapteo on 30 June 2019 through a demerger and related refinancing. Since the pro forma impact on 2019 figures is not material, all key figures and financial information for comparative year 2019 have been presented in this report as actual/curve-out financial information, unless otherwise stated.
| EUR millions or as indicated | Oct-Dec 2020 | Oct-Dec 2019 | Full Year 2020 | Full Year 2019 |
|---|---|---|---|---|
| Net sales | 65.3 | 49.6 | 231.4 | 216.2 |
| Net sales growth in constant currency, % | 29.2 | -8.5 | 6.8 | -0.2 |
| Rental sales | 36.1 | 35.1 | 133.1 | 132.7 |
| Rental sales growth in constant currency, % | 0.9 | 1.6 | 0.0 | 4.6 |
| Comparable EBITDA | 24.2 | 20.6 | 88.3 | 88.5 |
| Comparable EBITDA margin, % | 37.0 | 41.6 | 38.2 | 40.9 |
| EBITDA | 21.9 | 19.6 | 83.4 | 76.1 |
| EBITDA margin, % | 33.5 | 39.6 | 36.0 | 35.2 |
| Comparable EBITA | 11.7 | -2.2 | 44.4 | 37.2 |
| Comparable EBITA margin, % | 17.8 | -4.4 | 19.2 | 17.2 |
| Operating profit (EBIT) | 8.6 | -3.9 | 36.8 | 22.1 |
| Operating profit (EBIT) margin, % | 13.2 | -7.8 | 15.9 | 10.2 |
| Profit for the period^{1} | 5.7 | -7.5 | 18.9 | 8.4 |
| Earnings per share, EUR | 0.13 | -0.17 | 0.42 | 0.19 |
| Comparable earnings per share, EUR^{1} | 0.17 | 0.04 | 0.51 | 0.60 |
| Net debt/comparable EBITDA | - | - | 4.9 | 4.5 |
| Operative ROCE, % | - | - | 9.1 | 8.5 |
| Operating cash flow before growth capex | 18.4 | 19.0 | 63.9 | 65.7 |
| Cash conversion before growth capex, % | 76.2 | 92.0 | 72.4 | 74.2 |
| Growth capex | 6.3 | 4.3 | 36.7 | 29.1 |
| Total sqm in building portfolio | 1,132,320 | 1,009,986 | 1,132,320 | 1,009,986 |
| Utilisation rate, % | 77.1 | 82.6 | 78.7 | 84.4 |
1 On a pro forma basis profit for the period and comparable earnings per share were EUR 8.6 million and EUR 0.61 for full year 2019.
Acquisition of Dutch Cabin Group
On 5 October 2020, Adapteo entered into an agreement with George Holding B.V. to acquire Dutch Cabin Group ("DCG") by acquiring 100% of the shares. The closing of the acquisition took place on 29 October 2020. DCG contributed to Adapteo's net sales by EUR 9.6 million and to operating profit by EUR 1.4 million for the period from 29 October to 31 December 2020.
The pro forma key figures below illustrate the financial impact of the acquisition of Dutch Cabin Group on the Adapteo's business performance for January-December 2020 as if the transaction had taken place on 1 January 2020. The illustrative pro forma figures are prepared based on the historical results of Adapteo and DCG and are presented in accordance with IFRS. Adapteo's net sales for January-December 2020 would have amounted to EUR 270.4 million, operating profit to EUR 42.6 million and comparable EBITDA to EUR 98.2 million if the acquisition had been completed on 1 January 2020.
Key figures, pro forma
| EUR millions | Full Year 2020 |
|---|---|
| Net sales | 270.4 |
| Operating profit (EBIT) | 42.6 |
| Comparable EBITDA | 98.2 |
See note 5 for additional information.
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
CEO Comments
High activity and geographic expansion
The fourth quarter of 2020 was characterised by a stable performance in Adapteo's continued business and by a high activity for increasing the Group's footprint and position in new geographies and market segments. Despite the adverse effects from covid-19, our company has gained in competitiveness and created a solid foundation for future growth. In addition to our circular business model being part of our DNA, we have sharpened our sustainability strategy and made further commitments for progress in the areas of environment, human rights, labour and anti-corruption.
In the fourth quarter, Adapteo's continued business ("Old Adapteo") posted higher earnings than in the last quarter of 2019. This stable development has been achieved in a quarter when a global pandemic has had a significantly adverse effect on many market segments. In addition, we saw already for November and December a positive contribution from our new colleagues in the Dutch Cabin Group (DCG).
Market development
The fourth quarter is a period of relatively low activity among our public-sector customers and the effects of the ongoing pandemic has not had a material impact on us compared to the last quarter of 2019 within this sector, though the rental portfolio is affected by lower activity in the previous quarters. Many private-sector segments still show a very low activity. Due to the covid-19 pandemic, in many of our markets there is an industry-wide overcapacity of available square meters which continues to put a downward pressure on prices.
In addition to our geographic expansion, we have sharpened our offering in several customer segments, like elderly care and worker accommodation, and achieved increased competitiveness from our systematic work with commercial excellence.
Geographic and market segment expansion
In the fourth quarter we announced the acquisitions of DCG and Stord Innkvartering (Stord). With DCG being a part of Adapteo since 29 October we have established a good position in the Netherlands, strengthened our presence in the German market, and seen a highly competent and dynamic management team joining us. DCG is thus a cornerstone in our ambition for future growth in continental Europe.
With Stord we made a leap forward in Norway, especially in the important customer segment of worker accommodation, adding a sizeable building portfolio and new management expertise in a customer segment with infrastructure-like dynamics with long and stable customer contracts.
Industry leader in sustainability
In October, we launched a new sustainability strategy focusing on climate-smart buildings, innovation for sustainability, and inclusive societies. The strategy draws up the guidelines for future activities to become a driving force in transitioning to a circular and sustainable construction and real estate industry. The sustainability strategy originates in the UN's Sustainable Development Goals. Based on the three strategic pillars of climate-smart buildings, innovation for sustainability, and inclusive societies, Adapteo will measure and report on its sustainability work on an annual basis in the sustainability report.
In November 2020, Adapteo was accepted to the world's largest corporate sustainability initiative, the UN Global Compact. The UN Global Compact's ten principles are in line with Adapteo's concept of ethical business practice, which is an integrated part of our operations. A concrete result from the actions taken in 2020 was Morgan Stanley Capital International's (MSCI) upgrading of Adapteo to AA status, rating us a leader in our industry in Environmental, Social, and Governance performance. Adapteo plans to release its sustainability targets during the first half of 2021.
Financial strength and flexibility
In the fourth quarter we refinanced the Group. Long-term credit facilities now amount to EUR 530 million and on top of this we have a EUR 100 million unused revolving credit facility. We also used the mandate from the last Annual General Meeting to make a share issue which contributed with more than EUR 37 million to cash and equity. This adds to our financial stability and gives us a platform for initiatives for continued growth.
Positioned for profitable growth
I am very proud of being part of a team that has achieved so much during the last quarter, a team which has been further strengthened by new colleagues in the Netherlands and Norway. With our larger geographic footprint, increased commercial competitiveness, upgraded portfolio, operational efficiency, financial stability, and growth ambitions,
I am confident that we have a strong momentum and solid foundation to meet a new year to deliver on our ambition to build a resource-efficient and adaptable societies.
Philip Isell Lind af Hageby President and CEO
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
Group performance
Geographical distribution of Net sales Jan-Dec, %
Comparable EBITDA margin Jan-Dec, %
Net sales
| EUR millions | Oct-Dec 2020 | Oct-Dec 2019 | Full Year 2020 | Full Year 2019 |
|---|---|---|---|---|
| Rental sales | 36.1 | 35.1 | 133.1 | 132.7 |
| Assembly and other services | 15.8 | 12.4 | 58.6 | 55.8 |
| Sales, new building units | 13.5 | 2.1 | 39.7 | 27.7 |
| Total | 65.3 | 49.6 | 231.4 | 216.2 |
October-December 2020
Adapteo's rental sales in the fourth quarter grew to EUR 36.1 (35.1) million. In constant currencies, rental sales increased by 1%. Net sales increased to EUR 65.3 (49.6) million. In constant currencies, net sales increased by 29%. Both sales numbers saw an impact from the inclusion of the Dutch Cabin Group, which contributed with EUR 2.4 million of rental sales and EUR 9.6 million of net sales for November-December.
Market activity was significantly lower in the private sector while public sector activity was lower in Sweden and Finland but showed high activity in Germany and Norway. Adapteo saw its share of orders taken in the public sector increasing. Adapteo's building portfolio grew by 8% from 30 September due to the inclusion of Dutch Cabin Group and stood at 1,132 thousand square meters as of 31 December. Utilisation rate for the total building portfolio was 77.1% during the quarter on the back of the building portfolio expansion in Q2-Q4.
January-December 2020
Adapteo's rental sales were EUR 133.1 (132.7) million. In constant currencies, rental sales were unchanged. Net sales increased to EUR 231.4 (216.2) million. In constant currencies, net sales increased by 7%. Both sales numbers saw an impact from the inclusion of the Dutch Cabin Group for November-December. In Business Area Rental Space, additional rental and other revenue from DCG compensated for a slower year-on-year development in "Old Adapteo". In Business Area Permanent Space the contribution from DCG was larger in absolute numbers and added significantly to the favourable development in "Old Adapteo".
Result
October-December 2020
Adapteo's comparable EBITDA for October-December increased by 17% to EUR 24.2 (20.6) million. The comparable EBITDA margin decreased to 37.0% (41.6%). Compared to Q4 2019, comparable EBITDA increased in business area Rental Space, both in "Old Adapteo" and by the contribution for November-December from Dutch Cabin Group. In Permanent Space the DCG impact was even more pronounced.
Depreciation, amortisation and impairment on property, plant, and equipment and on intangibles totalled EUR 13.3 (23.5) million during the quarter. There was an increase from the inclusion of DCG in 2020, but in Q4 2019 there was a EUR -8.7 million net impact from write-downs of old modules.
Operating profit (EBIT) amounted to EUR 8.6 (-3.9) million. Operating profit (EBIT) included items affecting comparability of EUR -2.3 (-1.0) million, of which most was from acquisition-related activities.
Net financial expenses were EUR -2.1 (-1.5) million as a result of new refinancing arrangements and the acquisition of DCG and Stord Innkvartering. October-December profit before taxes totalled EUR 6.5 (-5.4)
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
million and profit for the period was EUR 5.7 (-7.5) million.
January–December 2020
Adapteo’s comparable EBITDA for the year was unchanged at EUR 88.3 (88.5) million. The comparable EBITDA margin decreased to 38.2% (40.9%). Compared to 2019, comparable EBITDA increased in business area Rental Space by the contribution for November–December from Dutch Cabin Group. In Permanent Space the DCG impact was even more pronounced though for the full year earnings decreased. Lower costs for Group functions contributed positively.
Depreciation, amortisation and impairment on property, plant, and equipment and on intangible assets totalled EUR 46.6 (54.0) million during the year. There was an increase from the inclusion of DCG in 2020 and from the increased building portfolio, but in Q4 2019 there was a significant impact from write-downs of old modules.
Operating profit (EBIT) amounted to EUR 36.8 (22.1) million. Operating profit (EBIT) included items affecting comparability of EUR -4.9 (-12.4) million, of which most was from acquisition-related activities.
Net financial expenses were EUR -10.2 (-7.8) million as a result of new refinancing arrangements and the acquisition of DCG and Stord Innkvartering. Full year profit before taxes totalled EUR 26.6 (14.4) million and profit for the period was EUR 18.9 (8.4) million. Earnings per share was EUR 0.42 (0.19).
Capital expenditure
Adapteo’s October–December net capex totalled EUR 18.7 (27.9) million. Net fleet capex amounted to EUR 17.5 (27.9) million, of which growth capex was EUR 6.3 (4.3) million and maintenance capex was EUR 11.2 (23.6) million. In addition to growth capex, which adds to the net amount of square meters of the building portfolio, maintenance capex was primarily destined for upgrading the fleet to a higher standard to meet specifications in signed projects.
Adapteo’s January–December net capex totalled EUR 66.3 (69.2) million. Net fleet capex amounted to EUR 63.8 (59.4) million, of which growth capex was EUR 36.7 (29.1) million.
Cash flow, financing and balance sheet
In January–December, net cash inflow from operating activities was lower at EUR 77.9 (80.1) million, mainly due to a lower decrease of net working capital, by EUR 5.2 (17.2) million. Year-to-date 2020 has seen decreases of both accounts receivable and payable, while the corresponding period last year saw a significant increase in payables.
On 31 December 2020, borrowings totalled EUR 496.1 million (on 30 September 2020 EUR 412.6 million). Net debt totalled EUR 434.8 million (on 30 September 2020 EUR 405.4 million). Net debt to comparable EBITDA was 4.9. Pro forma, including Dutch Cabin Group for January–December 2020, net debt to comparable EBITDA was 4.4.
In November 2020 Adapteo signed a refinancing agreement with a consortium of commercial banks. This consists of a EUR 530 million term loan and a EUR 100 million committed revolving credit facility. The loan agreement contains quarterly monitored financial covenants which the company is fully compliant with. The EUR 530 million term loan was not fully drawn down as of 31 December 2020 and has a maturity of three years. At the end of 2020 the EUR 100 million RCF was fully undrawn.
In December 2020 the Board used the mandate from the 2020 Annual General Meeting to make a share issue. 4.4 million shares were sold at SEK 89 per share, adding approximately net EUR 37 million to Adapteo’s cash and cash equivalents and approximately EUR 38 million to equity.
Adapteo’s liquidity and funding position is thus good. Cash and cash equivalents amounted to EUR 54.8 million (on 30 September 2020 EUR 1.8 million). In addition, Adapteo has a EUR 20 million overdraft facility until further notice, which was fully unused as of 31 December 2020.
Property, plant and equipment amounted to EUR 528.6 million (on 30 September 2020 EUR 463.9 million). Total assets were EUR 928.2 million (on 30 September 2020 EUR 737.3 million). Operative return on capital employed (ROCE) amounted to 9.1% in 2020, compared to 8.5% in 2019. Pro forma, including Dutch Cabin Group for January–December 2020, operative return on capital employed (ROCE) amounted to 10.5%.
Business area performance
Adapteo has two primary reporting segments: Business Area Rental Space and Business Area Permanent Space. It has operations in six geographical areas: in Sweden, Finland, Norway, Denmark, Germany, and the Netherlands. Business Area Rental Space includes the rental of adaptable buildings as well as the provision of assembly and other services. Business Area Permanent Space includes sales and long-term leasing of adaptable buildings.
Business Area Rental Space
In Business Area Rental Space, Adapteo provides adaptable buildings to different types of customers, predominantly public-sector customers such as municipalities, regions, and government bodies, as well
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY–DECEMBER 2020
as to private-sector customers such as industrial companies and private enterprises. Adapteo addresses demand for space primarily in social infrastructure such as schools, daycare centres, and health and social care, as well as for offices, exhibitions and other temporary needs. The majority of Business Area Rental Space's customers operate in the public sector.
Comparable EBITDA
Jan-Dec, EUR millions
Comparable EBITDA margin
Jan-Dec, %
Rental Space
| EUR millions or as indicated | Oct-Dec 2020 | Oct-Dec 2019 | Full Year 2020 | Full Year 2019 |
|---|---|---|---|---|
| Rental sales | 34.8 | 32.1 | 130.3 | 129.2 |
| Assembly and other services | 15.5 | 12.4 | 54.3 | 55.8 |
| Sales, new building units | 0.0 | 0.2 | 1.7 | 1.0 |
| External sales | 50.4 | 44.6 | 186.3 | 186.0 |
| Inter-segment sales | 0.0 | - | 0.1 | - |
| Net sales | 50.4 | 44.6 | 186.4 | 186.0 |
| Comparable EBITDA | 24.1 | 22.6 | 91.3 | 92.3 |
| EBITDA | 23.9 | 22.6 | 90.9 | 91.2 |
| Comparable EBITDA margin, % | 47.8 | 50.7 | 49.0 | 49.7 |
| EBITDA margin, % | 47.4 | 50.7 | 48.8 | 49.0 |
Performance in October-December 2020
Net sales in Business Area Rental Space increased by $13\%$ to EUR 50.4 (44.6) million. Rental sales increased by $9\%$ , while revenue from assembly and other services increased by $26\%$ . Comparable EBITDA increased by $6\%$ to EUR 24.1 (22.6) million, excluding EUR -0.2 (0.0) million of items affecting comparability.
Finland and Germany saw higher rental revenue in Q4 2020 than in the corresponding quarter last year. Rental revenue decreased in Denmark and in Norway. Sweden had a slight decline in local currency but made a positive contribution in euros. The Netherlands posted $30\%$ higher rental revenue than Q4 2019 on the back of high business activity through the year. Competition on price sharpened year-on-year in the Nordic markets, not least due to general overcapacity among suppliers of adaptable buildings. Private-sector demand was low while public-sector demand did not see any major negative impact on volumes. In Sweden the 2020 number of new delivered projects and corresponding number of square meters for public-sector contracts were lower than last year, with a continued pressure on prices.
In Finland, Adapteo had fewer new projects starting than last year. The whole second half of 2020 was positively affected by prolongations of some large contracts. In Germany a good rental sales growth development was driven by healthy market demand in public sector projects. Prices remain at a good level, not least for Adapteo's high-end solutions. In Denmark, rental revenue was down on Q4 last year. Revenue was lower from worker accommodations and the number of square meters on rent suffered from a low market activity earlier in the year. Norway saw a negative impact from a low number of new projects earlier in the year.
Throughout the whole business area, earnings saw a positive impact from lower indirect costs as profit protection measures and covid-related restraints on activity had a significant impact.
Performance in January-December 2020
Net sales in Business Area Rental Space remained constant at EUR 186.4 (186.0) million. Rental sales increased by $1\%$ , while revenue from assembly and other services decreased by $3\%$ . Comparable EBITDA
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
decreased by 1% to EUR 91.3 (92.3) million, excluding EUR -0.4 (-1.2) million of items affecting comparability. Primarily Finland and Germany, to some extent also Sweden, contributed to higher rental sales than in the January-December 2019 period. Germany saw a steady increase of new projects delivered throughout the year with growth being led by a very positive market response
to the new Hybrid model. Finland had a positive impact from many projects delivered in the first half-year and from prolongations of a number of large projects in the second half-year. Denmark and Norway had a declining development throughout the year with projects being returned at a faster pace than tough market conditions allowed for new projects.
Business Area Permanent Space
In Business Area Permanent Space, Adapteo provides mainly tailor-made prefabricated adaptable buildings for sale or long-term leasing to public and private sector customers. Adapteo provides turnkey solutions, built with a modular construction technique and manufactured in a
controlled indoor environment with a short time to delivery. The adaptable buildings in this business area are equal to site-built buildings in their characteristics and comply with permanent building requirements.
External net sales
Jan-Dec, EUR millions
Comparable EBITDA
Jan-Dec, EUR millions
Permanent Space
| EUR millions or as indicated | Oct-Dec 2020 | Oct-Dec 2019 | Full Year 2020 | Full Year 2019 |
|---|---|---|---|---|
| Rental sales | 1.2 | 3.0 | 2.8 | 3.5 |
| Assembly and other services | 0.3 | - | 4.3 | - |
| Sales, new building units | 13.4 | 1.9 | 38.0 | 26.7 |
| External net sales | 14.9 | 5.0 | 45.1 | 30.3 |
| Inter-segment sales | 4.9 | 7.6 | 11.5 | 22.2 |
| Net sales | 19.9 | 12.6 | 56.6 | 52.5 |
| Comparable EBITDA | 1.2 | -0.7 | 0.9 | 1.4 |
| EBITDA | 0.7 | -0.7 | 0.0 | 0.8 |
| Comparable EBITDA margin, %¹ | 8.1 | -13.9 | 2.1 | 4.7 |
| EBITDA margin, %¹ | 4.5 | -14.1 | 0.1 | 2.6 |
¹External sales
Performance in October-December 2020
External net sales in Business Area Permanent Space increased significantly due to the inclusion of November-December sales from Dutch Cabin Group to EUR 14.9 (5.0) million. For the same reason, comparable EBITDA increased to EUR 1.2 (-0.7) million, excluding EUR -0.5 (0.0) million of items affecting comparability.
The market has been characterised by continued slow decision-making during Q4 due to covid-19, and competition for tenders has increased. There has, however, been an uptick in tenders under the SKR frame
agreement in Sweden. In Sweden external net sales increased markedly in the quarter compared to last year.
In the Anneberg production facility, labour absence in Q4 was high due to sickness with a negative impact on volumes and unit costs. The operational efficiency program is giving effects and more are expected going forward.
In Finland, sales of new buildings were below last years. Price pressure in the market had a significant negative impact on margins and earnings.
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
Performance in January–December 2020
For the full year 2020, external net sales in Business Area Permanent Space increased significantly due to the inclusion of November–December sales from Dutch Cabin Group to EUR 45.1 (30.3) million. Comparable EBITDA decreased to EUR 0.9 (1.4) million, excluding EUR -0.9 (-0.6) million of items affecting comparability.
Full-year external net sales increased significantly in both Sweden and Finland, though pricing conditions remain very challenging. The Netherlands had an increase in net sales compared to last year, with market conditions not being severely impacted by the ongoing pandemic.
Personnel
At the end of 2020, the number of employees in Adapteo Group was 505 (372 on 31 December 2019), of which Dutch Cabin Group contributed with 146 persons.
Significant events after the reporting period
The acquisition of Stord Innkvartering was completed on 29 January 2021. A purchase price of NOK 677 million (approximately EUR 64 million) was paid in cash, and potential additional considerations may become payable in the future depending on Stord's future financial performance.
According to Morgan Stanley Capital International's (MSCI) latest set of ESG ratings, Adapteo has been upgraded to AA status, rating the company a leader in its industry. An MSCI ESG rating is designed to measure a company's resilience to long-term, industry material environmental, social and governance (ESG) risks. Adapteo has thus taken a significant leap from its previous BBB rating.
Governance
Pursuant to the provisions of the Finnish Companies Act and Adapteo's Articles of Association, the management and governance of Adapteo are divided between the shareholders, the Board of Directors, and the President and CEO of the company. In addition, the Group Management Team assists the President and CEO in the operations of the company.
The shareholder participates in the governance of the company through resolutions passed at the General Meetings of Shareholders. A General Meeting of Shareholders is convened upon notice given by the Board of Directors. In addition, a General Meeting of Shareholders is held when requested in writing by the company's auditor or by shareholders representing at least one-tenth of all the shares in order to discuss a certain matter.
The number of members of the Board of Directors of Adapteo is currently seven; Peter Nilsson as Chairman, and Carina Edblad, Outi Henriksson, Sophia Mattsson-Linnala, Andreas Philipson, Joakim Rubin, and Ulf Wretskog as members.
Current incentive schemes
On 13 February 2020 the Board of Directors of Adapteo resolved on launching a new long-term incentive plan for the performance period 2020–2022 (LTI 2020–2022). The LTI 2020–2022 is cash-based with a total length of three years and the maximum earning opportunity for the participants is expressed as a percentage of the individuals' annual base salary. Each possible cash reward corresponds to 1/3 of a participant's maximum LTI outcome under the performance period. Performance is evaluated based on Adapteo Group's Earnings Per Share ("EPS") in relation to a performance range from threshold to max level. Participants have the possibility to earn annual cash rewards following each evaluation period. To continuously be eligible for participation in any future LTI plans, the Board of Directors have expressed an expectation that the participants must invest any net cash rewards in Adapteo shares.
The LTI plan 2020–2022 consists of three evaluation periods:
I. First evaluation period 2020: EPS for financial year 2020
II. Second evaluation period 2020–2021: EPS for financial year 2021
III. Third evaluation period 2020–2022: EPS for financial year 2022.
In the spring 2020, the Board of Directors of Adapteo announced its decision to utilise the authorisation given by the Annual General Meeting of 2020 to repurchase own shares, the repurchased shares being intended for honouring share-based incentive programs for employees of the company, granted before the carve-out from Cramo Plc. The repurchases ended on 4 June 2020. During this period, Adapteo repurchased 51,000 shares, corresponding to about 0.1 per cent of the total number of shares and votes.
On 11 June 2020 Adapteo transferred a net amount of 663 of its own shares held by the company as treasury shares without consideration to the participants of the employee share savings plan introduced for Cramo Group employees in 2016. After the share delivery, Adapteo held a total of 50,337 treasury shares on 30 June 2020, corresponding to about 0.1 per cent of the total number of shares and votes.
In addition, one of the Cramo's performance share plans was settled during the second quarter. The rewards were paid in both in Adapteo shares and cash. The participants were entitled to receive a gross amount of shares, but a portion of shares was withheld to cover
applicable taxes arising from the rewards to the participants. Taxes were paid on behalf of the participants and the participants received a net amount of shares. No Cramo shares were paid to the participants, instead the value of those Cramo shares were paid as cash to the participants based on the bidding price of Cramo of EUR 13.75 per share. The net amount of 9,685 Adapteo shares were purchased from the market by an outside service provider and paid to the plan participants on 15 April 2020.
Old employee share savings plans (One Cramo 2017-2018, One Cramo 2019) transferred from Cramo are treated as equity-settled and partly as cash-settled and the rewards are paid in both Adapteo and Cramo shares. During the second quarter 2020, it was decided that the part of rewards settled as Cramo shares were paid out to the participants on an accelerated schedule to the participants of Cramo's employee share savings plans. Cramo share part in the other old performance shares plans transferred from Cramo will be paid in cash according to the bid price EUR 13.75 per share according to the original plan schedule.
Risks and uncertainties
The fourth quarter of 2020 still saw Adapteo's customers being affected by the effects of the covid-19 pandemic. The overall picture is that all of Adapteo's business units have seen negative effects but that the impact on sales and earnings have not been significant. This reflects the resilience of Adapteo's business model with long-term rental contracts and the underlying demand, especially in the public sector, for adaptable buildings.
In business area Rental Space, all geographical markets have seen very low demand from the private sector. The events business came to a halt in mid-March and has shown very little activity since then. Demand for workers accommodation and office space has been low as many projects have been postponed or cancelled. Public-sector demand is normally at its lowest in the fourth quarter.
Adapteo has received orders for Rental Space due to the covid-19 situation from hospitals and care providers. Such orders have not had a significant impact on the Group's financial performance in the fourth quarter.
In business area Permanent Space, demand has been slower than anticipated with many customers postponing previously decided projects. In Sweden, however, Adapteo has seen a positive impact from its frame agreement with Sweden's Municipalities and Regions (Swe: SKR). Activity in Finland has felt the impact of the budgetary constraints that many municipalities face.
Since the outbreak of the covid-19 pandemic in Northern Europe in March 2020, Adapteo is monitoring its impact on markets, employees and business processes. Continuity plans are being continuously reviewed, processes are being optimised, and every activity is evaluated from a cost and risk perspective to mitigate the negative financial effects associated with the outbreak of covid-19 in the best possible way.
Adapteo makes financial forecasts on a monthly basis for all of its cash-generating units. These forecasts have not resulted in any asset impairments being identified. Nor have cashflow projections for the Group resulted in any doubt about the Group's ability to meet its future payment obligations.
Adapteo is consistent in its enterprise risk management with risk identification, risk assessment, risk management, risk monitoring and risk reporting. Further information on risks and risk management can be found in Annual Report 2019 or at www.adapteogroup.com. An update to these risks includes the continued impact of covid-19, which has been identified after the publication of the Annual Report 2019.
Dividend proposal
The Board of Directors proposes to the Annual General Meeting to decide on a dividend of EUR 0.12 (0.0) per share.
Auditors' review
The condensed financial information in this report is unaudited.
Financial calendar
- Annual Report 2020: 26 March 2021
- Annual General Meeting 2021: 19 April 2021
- Business Review Jan-Mar 2021: 4 May 2021
- Half-Yearly Report Jan-Jun 2021: 3 August 2021
- Business Review Jan-Sep 2021: 9 Nov 2021
Q4 presentation on 18 February 2021
A conference call with a presentation for investors, analysts, and media will be held at 09.00 CET (10.00 EET) on 18 February 2021. For details, please refer to www.adapteogroup.com/investors/financial-report/.
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
Annual report
The Annual Report will be available on the company's investor web pages (adapteogroup.com/investors/financial-report/) on 26 March 2021.
Annual general meeting
The Annual General Meeting of Adapteo Plc will be held on 19 April 2021, at 12 am CET (1 pm EET). To ensure compliance with the restrictions imposed by Finnish authorities due to the coronavirus, all shareholders are asked to follow the Annual General Meeting through a live webcast and to exercise their voting rights by using a centralized proxy representative service. The aim of the precautionary measures is to achieve resolutions from the
Annual General Meeting, while securing the health and safety of individual shareholders.
The agenda for the meeting and the proposed decisions and other documents submitted to the Annual General Meeting of Shareholders will be made available on Adapteo's website at least three weeks before the meeting.
Stockholm, 18 February 2021
On behalf of the Board of Directors of Adapteo Plc
Philip Isell Lind af Hageby
President and CEO, Adapteo Plc
Further information:
Philip Isell Lind af Hageby, President and CEO, tel. +46 73 022 19 36
Erik Skånsberg, CFO, tel. +46 702 647 035
Distribution:
Nasdaq Stockholm
Main media
www.adapteogroup.com
Adapteo in brief
Adapteo is a leading Northern European company for adaptable buildings. We build, rent out, and sell buildings for schools, daycare centres, offices, elderly care, worker accommodation, and events for both temporary and permanent needs.
Whatever the future brings, we believe that adaptability is the best solution. With our buildings, we can transform, repurpose, scale up and scale down in a matter of weeks by using a modular and circular building concept. Our buildings can be used for a few days or indefinitely, always optimised for current needs. That is how we build adaptable societies.
Adapteo is listed on Nasdaq Stockholm and operates in Sweden, Finland, Norway, Denmark, Germany, and the Netherlands. In 2020, Adapteo's net sales were EUR 231 million.
www.adapteogroup.com
12
FINANCIAL INFORMATION
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
13
Condensed annual financial information
Consolidated income statement
| EUR thousands | Note | Oct-Dec 2020 | Oct-Dec 2019 | Full Year 2020 | Full Year 2019 |
|---|---|---|---|---|---|
| Net sales | 4 | 65,344 | 49,579 | 231,351 | 216,213 |
| Other operating income | 1,218 | 2,801 | 3,521 | 5,395 | |
| Materials and services | -28,992 | -15,719 | -97,225 | -78,901 | |
| Employee benefit expenses | -7,199 | -8,857 | -28,821 | -33,089 | |
| Other operating expenses | -8,512 | -8,172 | -25,447 | -33,538 | |
| Depreciation, amortisation and impairment | -13,266 | -23,485 | -46,603 | -53,954 | |
| Share of profit of joint ventures | 15 | -5 | 5 | 16 | |
| Operating profit (EBIT) | 8,607 | -3,859 | 36,780 | 22,142 | |
| Finance income | 3,233 | 2,048 | 6,829 | 3,037 | |
| Finance costs | -5,304 | -3,588 | -16,983 | -10,787 | |
| Finance costs, net | -2,071 | -1,540 | -10,154 | -7,750 | |
| Profit before taxes | 6,536 | -5,399 | 26,626 | 14,392 | |
| Income taxes | -787 | -2,118 | -7,701 | -6,001 | |
| Profit for the period | 5,749 | -7,516 | 18,925 | 8,392 | |
| Attributable to owners of the parent | 5,749 | -7,516 | 18,925 | 8,392 | |
| Earnings per share, basic, EUR | 0.13 | -0.17 | 0.42 | 0.19 | |
| Earnings per share, diluted, EUR | 0.13 | -0.17 | 0.42 | 0.19 |
Consolidated statement of comprehensive income
| EUR thousands | Oct-Dec 2020 | Oct-Dec 2019 | Full Year 2020 | Full Year 2019 |
|---|---|---|---|---|
| Profit for the period | 5,749 | -7,516 | 18,925 | 8,392 |
| Other comprehensive income | ||||
| Items that may be reclassified subsequently to profit or loss: | ||||
| Translation differences | 15,554 | 5,423 | 11,632 | -3,814 |
| Other comprehensive income for the year, net of tax | 15,554 | 5,423 | 11,632 | -3,814 |
| Total comprehensive income for the period | 21,303 | -2,093 | 30,557 | 4,578 |
| Attributable to owners of the parent | 21,303 | -2,093 | 30,557 | 4,578 |
The above consolidated income statement and statement of comprehensive income should be read in conjunction with the accompanying notes.
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
Consolidated balance sheet
| EUR thousands | Note | 31 December 2020 | 31 December 2019 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment | 7 | 528,631 | 451,057 |
| Goodwill | 230,210 | 171,019 | |
| Other intangible assets | 29,550 | 24,858 | |
| Investments in joint ventures | 1,295 | 1,239 | |
| Deferred tax assets | 5,081 | 7,414 | |
| Finance lease receivables | 8 | 3,725 | 3,919 |
| Loan receivables | 8 | 154 | 220 |
| Other receivables | 13,605¹ | 746 | |
| Total non-current assets | 812,251 | 660,471 | |
| Current assets | |||
| Inventories | 7,243 | 4,372 | |
| Finance lease receivables | 8 | 2,698 | 4,314 |
| Trade and other receivables | 49,820¹ | 70,707 | |
| Income tax receivables | 585 | 3,181 | |
| Derivative financial instruments | 810 | 201 | |
| Cash and cash equivalents | 8 | 54,804 | 3,760 |
| Total current assets | 115,960 | 86,537 | |
| TOTAL ASSETS | 928,211 | 747,008 | |
| EQUITY AND LIABILITIES | |||
| Total equity | 6 | 258,068 | 190,186 |
| Non-current liabilities | |||
| Borrowings | 8 | 489,042 | 410,488 |
| Deferred tax liabilities | 50,473 | 48,025 | |
| Derivative financial instruments | 474 | - | |
| Provisions | 1,258 | 263 | |
| Other liabilities | 15,964¹ | 406 | |
| Total non-current liabilities | 557,212 | 459,182 | |
| Current liabilities | |||
| Borrowings | 8 | 7,097 | 1,564 |
| Trade and other payables | 94,635¹ | 91,828 | |
| Income tax liabilities | 8,766 | 3,530 | |
| Derivative financial instruments | 2,434 | 718 | |
| Total current liabilities | 112,932 | 97,639 | |
| Total liabilities | 670,143 | 556,822 | |
| TOTAL EQUITY AND LIABILITIES | 928,211 | 747,008 |
¹ Contract assets and contract liabilities were presented earlier as current receivables and liabilities. Starting from 30 Sep 2020 they have been classified as either current or non-current according to their maturity. In addition, contract assets and liabilities have been netted according to IFRS 15. Earlier periods have not been restated.
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
Consolidated statement of changes in equity
Attributable to owners of the parent
| EUR thousands | Invested equity | Share capital | Treasury shares | Reserve for invested unrestricted equity | Retained earnings | Translation differences | Total equity |
|---|---|---|---|---|---|---|---|
| At 1 January 2019 | 214,487 | - | - | - | - | 140 | 214,627 |
| Profit for the period | 8,380 | - | - | - | - | - | 8,380 |
| Other comprehensive income: | |||||||
| Translation differences | - | - | - | - | - | -6,022 | -6,022 |
| Other comprehensive income | - | - | - | - | - | -6,022 | -6,022 |
| Total comprehensive income | 8,380 | - | - | - | - | -6,022 | 2,358 |
| Share-based payments | -770 | - | - | - | - | - | -770 |
| Equity transactions with Cramo Group | 19,712 | - | - | - | - | - | 19,712 |
| Demerger at 30 June 2019 | -241,809 | 10,000 | - | 67,799 | 115,513 | - | -48,497 |
| At 30 June 2019 | - | 10,000 | - | 67,799 | 115,513 | -5,881 | 187,431 |
| Changes after the demerger (1 July – 31 December 2019) | |||||||
| Profit for the period | - | - | - | - | 11 | - | 11 |
| Other comprehensive income: | |||||||
| Translation differences | - | - | - | - | - | 2,206 | 2,206 |
| Other comprehensive income | - | - | - | - | - | 2,206 | 2,206 |
| Total comprehensive income | - | - | - | - | 11 | 2,206 | 2,217 |
| Share-based payments | - | - | - | - | 536 | - | 536 |
| At 31 December 2019 | - | 10,000 | - | 67,799 | 116,060 | -3,674 | 190,186 |
| At 1 January 2020 | - | 10,000 | - | 67,799 | 116,060 | -3,674 | 190,186 |
| Profit for the period | - | - | - | - | 18,925 | - | 18,925 |
| Other comprehensive income: | |||||||
| Translation differences | - | - | - | - | - | 11,632 | 11,632 |
| Other comprehensive income | - | - | - | - | - | 11,632 | 11,632 |
| Total comprehensive income | - | - | - | - | 18,925 | 11,632 | 30,557 |
| Share-based payments | - | - | - | - | 17 | - | 17 |
| Purchase of treasury shares | - | - | -376¹ | - | - | - | -376 |
| Share issue | - | - | - | 38,547² | -863² | - | 37,685 |
| At 31 December 2020 | - | 10,000 | -376 | 106,347 | 134,140 | 7,958 | 258,068 |
¹During Apr-Jun 2020 Adapteo repurchased own shares which were used for honouring share-based incentive plans for employees of the company. Shares were acquired through on Nasdaq Stockholm at the market price prevailing at the time of repurchase.
²Directed share issue in December 2020 increased the reserve for unrestricted equity reserve by EUR 38,547 thousand and costs related to share issue decreased the retained earnings, net of taxes, by EUR 863 thousand.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
Consolidated statement of cash flows
| EUR thousands | Full Year 2020 | Full Year 2019 |
|---|---|---|
| Cash flow from operating activities | ||
| Profit before taxes | 26,626 | 14,392 |
| Adjustments | ||
| Depreciation, amortisation and impairment | 46,603 | 53,954 |
| Share of profit of joint ventures | -5 | -16 |
| Other non-cash adjustments | 62 | -669 |
| Net gain on sale of property, plant and equipment | -1,915 | -3,267 |
| Share-based payments | 17 | 342 |
| Finance costs, net | 10,154 | 7,750 |
| Cash generated from operations before changes in working capital | 81,541 | 72,486 |
| Change in working capital | ||
| Change in inventories | -1,773 | 2,342 |
| Change in trade and other receivables | 23,778 | -16,083 |
| Change in trade and other payables | -16,793 | 30,973 |
| Change in working capital | 5,212 | 17,232 |
| Change in finance lease receivables | 3,477 | 2,271 |
| Cash generated from operations before financial items and tax | 90,230 | 91,989 |
| Interest paid | -11,953 | -6,677 |
| Interest received | 70 | 411 |
| Other financial items, net | 2,075 | -2,983 |
| Income taxes paid | -2,531 | -2,614 |
| Net cash inflow from operating activities | 77,891 | 80,126 |
| Cash flow from investing activities | ||
| Payments for property, plant and equipment | -69,959 | -76,604 |
| Payments for intangible assets | -1,514 | -424 |
| Proceeds from sale of property, plant and equipment and intangible assets | 7,407 | 12,392 |
| Repayment of loan receivable from joint venture | 72 | - |
| Acquisition of subsidiaries and business operations, net of cash acquired | -56,427 | -751 |
| Net cash (outflow) from investing activities | -120,422 | -65,386 |
| Cash flow from financing activities | ||
| Share issue | 37,469 | - |
| Purchase of treasury shares | -376 | - |
| Proceeds from bank loans | 461,075 | 453,000 |
| Repayment of bank loans | -400,354 | -439,832 |
| Change in other current borrowings | - | -5,012 |
| Lease payments | -4,238 | -3,817 |
| Repayments of demerger related liabilities to Cramo Plc | - | -28,514 |
| Repayment of loans from Cramo Group | - | -12,248 |
| Equity financing with Cramo Group, net | - | 23,136 |
| Net cash inflow from financing activities | 93,576 | -13,287 |
| Change in cash and cash equivalents | 51,045 | 1,453 |
| Cash and cash equivalents at beginning of period | 3,760 | 2,377 |
| Exchange differences | -1 | -70 |
| Cash and cash equivalents at end of period | 54,804 | 3,760 |
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
Notes to the condensed annual financial information
1. Background
Adapteo Plc was established through the partial demerger of Cramo Plc on 30 June 2019 when all the assets, debts and liabilities belonging to Cramo's Modular Space business transferred to Adapteo Plc.
Financial information for January-December 2020 is based on the actual consolidated figures. The consolidated financial information for the year ended 31 December 2019 is a combination of actual consolidated financial information as from the demerger date 30 June 2019 and carve-out financial information prior to the demerger date.
The consolidated financial information is presented in thousands of euros except when otherwise indicated. Rounding differences may occur.
This condensed annual financial information is unaudited.
2. Basis of preparation and significant changes during the reporting period
This condensed annual financial information for 1 January to 31 December 2020 has been prepared in accordance with IAS 34 Interim Reporting, applying the same accounting policies, critical accounting estimates and judgements as in the audited consolidated financial statements as at and for the year ended 2020.
The financial position and performance of Adapteo as at and for the year ended 31 December 2020 were particularly affected by the following events and transactions:
- Acquisition of Dutch Cabin Group (DCG) completed on 29 October 2020 (see note 5).
- Operating expenses for the year ended 2020 include items affecting comparability of EUR 4.9 million consisting of costs related to preparations for the dual listing in Helsinki of EUR 0.6 million, acquisition and integration related expenses of EUR 2.8 million and restructuring costs of EUR 1.5 million.
- On 26 November 2020 Adapteo refinanced its loan facilities agreements. After the refinancing, the company has available long-term (36 months) facilities of EUR 530 million and a revolving credit facility of EUR 100 million.
- Adapteo made a directed issue on 10 December 2020 of 4.4 million shares. Net proceeds amounted to approximately SEK 386 million, approximately EUR 37 million, from the share issue. The number of shares in the company amounts to 49.1 million after the issue.
3. Covid-19 impacts on accounting
The fourth quarter of 2020 saw Adapteo's customers being affected by the effects of the covid-19 pandemic. The overall picture is that all of Adapteo's business units have seen negative effects but that the impact on sales and earnings have not been significant. This reflects the resilience of Adapteo's business model with long-term rental contracts and the underlying demand, especially in the public sector, for adaptable buildings.
Since the outbreak of the covid-19 pandemic in Northern Europe in March 2020, Adapteo is monitoring its impact on markets, employees and business processes. Continuity plans are being continuously reviewed, processes are being optimised, and every activity is evaluated from a cost and risk perspective in order to mitigate the negative financial effects associated with the outbreak of covid-19 in the best possible way.
Adapteo makes financial forecasts on a monthly basis for all of its cash-generating units. These forecasts have not resulted in any asset impairments being identified. Nor have cashflow projections for the Group resulted in any doubt about the Group's ability to meet its future payment obligations.
Adapteo is consistent in its enterprise risk management with risk identification, risk assessment, risk management, risk monitoring and risk reporting. Further information on risks and risk management can be found in Annual Report 2019 or at www.adapteogroup.com. An update to these risks includes the continued impact of covid-19, which has been identified after the publication of the Annual Report 2019.
4. Segment information
Adapteo offers rental of premium adaptable buildings and rental related services and sells new adaptable buildings. Adapteo's operations and profitability is reported as two operating segments, Business Area Rental Space and Business Area Permanent Space, which is consistent with the internal reporting and the way that operative decisions related allocation of resources and assessment of performance have been made by the Adapteo's group management team as Adapteo's chief operating decision maker. Adapteo has not aggregated its operating segments.
Adapteo reports its business area results using EBITDA and comparable EBITDA as the main operating measures. Business Area Rental Space includes the rental of adaptable buildings as well as the provision of assembly and other services. Business Area Permanent Space includes sales and long-term leasing of adaptable buildings.
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
The information below summarises financial information for both business areas:
| EUR thousands | Rental Space | Permanent Space | Group functions | Eliminations | Group total |
|---|---|---|---|---|---|
| Oct-Dec 2020 | |||||
| Net sales by business area | |||||
| Rental sales | 34,847 | 1,208 | - | - | 36,055 |
| Assembly and other services | 15,523 | 300 | - | - | 15,823 |
| Sales, new building units | 46 | 13,420 | - | - | 13,466 |
| Total external net sales | 50,416 | 14,938 | - | - | 65,344 |
| Inter-segment sales | 19 | 4,941 | - | -4,960 | - |
| Net sales | 50,435 | 19,879 | - | -4,960 | 65,344 |
| Comparable EBITDA | 24,131 | 1,213 | -1,359 | 239 | 24,195 |
| Total items affecting comparability | -225 | -537 | -1,561 | - | -2,322 |
| EBITDA | 23,907 | 676 | -2,950 | 239 | 21,873 |
| Depreciation, amortisation and impairment | -13,266 | ||||
| Operating profit (EBIT) | 8,607 | ||||
| EUR thousands | Rental Space | Permanent Space | Group functions | Eliminations | Group total |
| --- | --- | --- | --- | --- | --- |
| Oct-Dec 2019 | |||||
| Net sales by business area | |||||
| Rental sales | 32,097 | 3,049 | - | - | 35,146 |
| Assembly and other services | 12,362 | - | - | - | 12,362 |
| Sales, new building units | 150 | 1,921 | - | - | 2,071 |
| Total external net sales | 44,609 | 4,970 | - | - | 49,579 |
| Inter-segment sales | - | 7,647 | - | -7,647 | - |
| Net sales | 44,609 | 12,617 | - | -7,647 | 49,579 |
| Comparable EBITDA | 22,602 | -692 | -1,250 | - | 20,659 |
| Total items affecting comparability | 33 | -10 | -1,047 | - | -1,023 |
| EBITDA | 22,635 | -702 | -2,307 | - | 19,626 |
| Depreciation, amortisation and impairment | -23,485 | ||||
| Operating profit (EBIT) | -3,859 |
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
| EUR thousands | Rental Space | Permanent Space | Group functions | Eliminations | Group total |
|---|---|---|---|---|---|
| Full Year 2020 | |||||
| Net sales by business area | |||||
| Rental sales | 130,292 | 2,767 | - | - | 133,059 |
| Assembly and other services | 54,298 | 4,279 | - | - | 58,578 |
| Sales, new building units | 1,666 | 38,048 | - | - | 39,714 |
| Total external net sales | 186,256 | 45,104 | - | - | 231,351 |
| Inter-segment sales | 96 | 11,528 | - | -11,624 | - |
| Net sales | 186,352 | 56,632 | - | -11,624 | 231,351 |
| Comparable EBITDA | 91,265 | 943 | -3,788 | -129 | 88,262 |
| Total items affecting comparability | -403 | -911 | -3,564 | - | -4,878 |
| EBITDA | 90,862 | 33 | -7,383 | -129 | 83,383 |
| Depreciation, amortisation and impairment | -46,603 | ||||
| Operating profit (EBIT) | 36,780 | ||||
| EUR thousands | Rental Space | Permanent Space | Group functions | Eliminations | Group total |
| --- | --- | --- | --- | --- | --- |
| Full Year 2019 | |||||
| Net sales by business area | |||||
| Rental sales | 129,182 | 3,546 | - | - | 132,728 |
| Assembly and other services | 55,774 | - | - | - | 55,774 |
| Sales, new building units | 998 | 26,713 | - | - | 27,711 |
| Total external net sales | 185,954 | 30,259 | - | - | 216,213 |
| Inter-segment sales | - | 22,209 | - | -22,209 | - |
| Net sales | 185,954 | 52,468 | - | -22,209 | 216,213 |
| Comparable EBITDA | 92,342 | 1,409 | -5,220 | - | 88,531 |
| Total items affecting comparability | -1,179 | -610 | -10,646 | - | -12,435 |
| EBITDA | 91,163 | 799 | -15,866 | - | 76,096 |
| Depreciation, amortisation and impairment | -53,954 | ||||
| Operating profit (EBIT) | 22,142 |
Net sales by geographical area¹
| EUR thousands | Full Year 2020 | Full Year 2019 |
|---|---|---|
| Finland | 54,807 | 55,275 |
| Sweden | 120,163 | 114,499 |
| Norway | 6,475 | 9,448 |
| Denmark | 23,548 | 21,510 |
| Germany | 18,369 | 15,481 |
| The Netherlands | 7,891 | - |
| Other | 97 | - |
| Total | 231,351 | 216,213 |
¹ Net sales are presented based on the location of customers.
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
Assets by geographical area¹
| EUR thousands | 31 December 2020 | 31 December 2019 |
|---|---|---|
| Finland | 136,794 | 116,459 |
| Sweden | 442,053 | 429,004 |
| Norway | 23,646 | 17,904 |
| Denmark | 51,223 | 51,362 |
| Germany | 68,155 | 38,109 |
| The Netherlands | 85,145 | - |
| Total | 807,016 | 652,837 |
¹ Non-current assets other than deferred tax assets and loan receivables are presented based on the location of assets.
Net sales
The following table summarises the net sales breakdowns:
| EUR thousands | Full Year 2020 | Full Year 2019 |
|---|---|---|
| Rental sales | 133,059 | 132,728 |
| Assembly and other services | 58,578 | 55,774 |
| Sales, new building units | 39,714 | 27,711 |
| Total | 231,351 | 216,213 |
Timing of IFRS 15 revenue recognition:
| EUR thousands | Full Year 2020 | Full Year 2019 |
|---|---|---|
| Products and services transferred at point in time | 40,312 | 29,253 |
| Services transferred over time | 57,979 | 54,232 |
| Total | 98,291 | 83,485 |
Rental sales (IFRS 16)
The majority of revenue in Adapteo consists of rental sales generated from leases of adaptable building solutions with contract lengths varying from short-term event business rentals to longer-term, several year contracts to both municipalities and private customers. The primary customer segments include schools, daycares, offices, health and social care and exhibitions and fairs. Rental sales are derived from both adaptable buildings and accessories.
Assembly and other services (IFRS 15)
Assembly and other services include short-term services related to on- and off-site transportations, assembly and disassembly of building units, customisations as well as design, planning activities and other smaller service components such as seasonal services during the rental period. The duration of assembly and disassembly services of adaptable buildings varies from a few days to several months. Other revenue-generating services include repair and maintenance services.
Sales, new building units (IFRS 15)
Sales, new building units consist of sale of new adaptable buildings. Adapteo provides tailor-made turnkey adaptable building solutions to both public and private customers. Customers can either buy or enter into a long-term leasing contract with an option to buy the adaptable building solution after the lease period. Sales, new building units also include the sale recognised in connection with these long-term rental agreements, fulfilling the criteria for finance leasing. Interest income related to finance leasing is presented as other operating income.
5. Acquisition of Dutch Cabin Group
On 5 October 2020, Adapteo entered into an agreement with George Holding B.V. to acquire Dutch Cabin Group ("DCG") by acquiring 100% of the shares. The closing of the acquisition took place on 29 October 2020.
The acquisition allows Adapteo to increase its pace of growth within Continental Europe. In addition, the increased geographic diversification and less dependency on the Nordic markets are considered as benefits from the transaction.
Dutch Cabin Group is a provider of rental and permanent building structures with more than 60 years of experience. DCG uses both internal and external supply sources. DCG's main market is Benelux countries and Northern Germany.
The purchase consideration is EUR 76.6 million of which EUR 62.5 million was paid in cash at the closing. The present value of the contingent component (earn-out) of the purchase price is EUR 14.0 million and it has
21
been recognised as a liability in the consolidated balance sheet. The contingent consideration is linked to the actual EBITDA in 2021 and 2022. The earn-out can result in a total payment ranging from nil to EUR 18.0 million in total.
Purchase consideration:
EUR thousands
| Purchase price paid at closing | 62,545 |
|---|---|
| Contingent consideration | 14,028 |
| Purchase consideration | 76,573 |
EUR thousands
Opening balance sheet
ASSETS
Non-current assets
| Property, plant and equipment | 44,998 |
|---|---|
| Other intangible assets | 5,478 |
| Finance lease receivables | 1,355 |
| Total non-current assets | 51,831 |
Current assets
| Inventories | 929 |
|---|---|
| Finance lease receivables | 141 |
| Trade and other receivables | 11,811 |
| Cash and cash equivalents | 6,118 |
| Total current assets | 18,999 |
| TOTAL ASSETS | 70,830 |
LIABILITIES
Non-current liabilities
| Borrowings | 18,828 |
|---|---|
| Deferred tax liabilities | 4,126 |
| Total non-current liabilities | 22,954 |
Current liabilities
| Borrowings | 2,860 |
|---|---|
| Trade and other payables | 19,759 |
| Income tax liabilities | 1,560 |
| Total current liabilities | 24,179 |
| TOTAL LIABILITIES | 47,133 |
| Net assets | 23,697 |
| --- | --- |
| Purchase consideration | 76,573 |
| Goodwill | 52,877 |
The table below represents details of the outflow of cash to acquire DCG:
EUR thousands
| Cash consideration at closing | 62,545 |
|---|---|
| Acquired cash and cash equivalents | -6,118 |
| Total | 56,427 |
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
The fair value of acquired identifiable intangible assets at the date of acquisition was EUR 5.5 million comprising of customer relationships. The gross value of the acquired trade receivables was EUR 9.1 million, of which EUR 9.0 million is considered to be collectable. Residual goodwill amounts to EUR 52.9 million. Goodwill is not tax-deductible. The goodwill consists of workforce, market position, geographical coverage and expected future profits.
Acquisition related costs of EUR 1.9 million are included in other operating expenses in the consolidated income statement and in net cash flow from operating activities in the statement of cash flows.
The acquired businesses contributed net sales of EUR 9.6 million and operating profit of EUR 1.4 million to Adapteo for the period from 29 October to 31 December 2020.
Adapteo's revenue would have been EUR 270.4 million and operating profit would have been EUR 42.6 million if the acquisition had been completed on 1 January 2020.
6. Equity
Adapteo announced on 10 December 2020 the result of the offering of new shares in a directed share issue to institutional and other qualified investors. Adapteo issued a total of 4,442,025 new shares and the shares were registered with the Finnish Trade register on 11 December 2020. Following the registration of the new shares, the total number of registered shares in the company is 49,124,722. Adapteo holds a total of 50,337 treasury shares on 31 December 2020.
Number of shares, share capital and reserve for invested unrestricted equity:
| EUR thousands | Outstanding shares (pcs) | Share capital (EUR thousands) | Reserve for invested unrestricted equity (EUR thousands) |
|---|---|---|---|
| At 1 January 2020 | 44,682,697 | 10,000 | 67,799 |
| Share issue | 4,442,025 | 10,000 | 38,547 |
| At 31 December 2020 | 49,124,722 | 10,000 | 106,347 |
7. Changes in property, plant and equipment
Adapteo's property, plant and equipment ("PPE") mainly consists of rental equipment including building units used in adaptable building leases and rental accessories. Other property, plant and equipment assets comprise buildings including offices and production facilities, capitalised costs of leasehold improvements, other machinery and equipment including mainly production machinery, office equipment as well as assets under construction. Right-of-use assets (RoU assets) according to IFRS 16 have been reported within property, plant and equipment.
| EUR thousands | Rental equipment | Other PPE assets | Total PPE |
|---|---|---|---|
| Net book value at 1 January 2020 | 425,537 | 25,521 | 451,057 |
| Additions | 62,644 | 15,334 | 77,978 |
| Business acquisitions | 26,895 | 18,103 | 44,998 |
| Disposals | -5,977 | -114 | -6,091 |
| Adjustments of RoU assets | -45 | -1,232 | -1,277 |
| Depreciation | -38,013 | -5,108 | -43,121 |
| Impairment | -262 | -33 | -295 |
| Reclassifications | 4,881 | -8,213 | -3,332 |
| Exchange differences | 8,270 | 445 | 8,715 |
| Net book value at 31 December 2020 | 483,928 | 44,703 | 528,631 |
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
8. Net debt
The carrying values of Adapteo's borrowings and net debt:
| EUR thousands | 31 December 2020 | 31 December 2019 |
|---|---|---|
| Non-current | ||
| Bank loans | 479,166 | 398,171 |
| Collateralised loan | - | 405 |
| Lease liabilities | 9,876 | 11,912 |
| Total non-current borrowings | 489,042 | 410,488 |
| Current | ||
| Bank loans | 3,224 | - |
| Collateralised loan | - | 45 |
| Lease liabilities | 3,873 | 1,519 |
| Total current borrowings | 7,097 | 1,564 |
| Total borrowings | 496,139 | 412,052 |
| Less: | ||
| Loan receivables | -154 | -220 |
| Finance lease receivables | -6,423 | -8,233 |
| Cash and cash equivalents | -54,804 | -3,760 |
| Net debt | 434,758 | 399,839 |
For borrowings, the fair values are not materially different to their carrying amounts since the contractual interest on borrowings is close to current market rates. For other financial assets and liabilities, carrying values correspond to fair values.
In November 2020 Adapteo signed a EUR 530 million term loan and a EUR 100 million revolving credit facility. The committed facility was used to refinance EUR 400 million term loan as well as EUR 63 million drawn revolving credit facility. The new loan agreement contains quarterly monitored financial covenants which the company is fully compliant with. The EUR 530 million term loan was not fully drawn down as of 31 December 2020 and has a maturity of three years. At the end of 2020 the EUR 100 million RCF was fully undrawn.
Adapteo's liquidity and funding position remains to be at a good level. Cash and cash equivalents amounted to EUR 54.8 million. In addition, Adapteo has a EUR 20 million overdraft facility until further notice which was unused as of 31 December 2020.
In December 2020 the Board used the mandate from the 2020 Annual General Meeting to make a share issue. 4.4 million shares were sold at SEK 89 per share, adding approximately net EUR 37 million to Adapteo's cash and cash equivalents.
9. Commitments and contingent liabilities
Adapteo had the following off-balance sheet commitments:
| EUR thousands | 31 December 2020 | 31 December 2019 |
|---|---|---|
| Guarantees and commitments given on behalf of Group companies | 2,693 | 1,254 |
| Investment commitments | 11,325 | 12,260 |
| Buy-back obligations | 3,511 | - |
| Collateral given | ||
| Pledges | 14,614 | - |
| Other collateral | 5,062 | 482 |
| Debts, secured by collateral | ||
| Loans | 19,676 | 450 |
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
10. Related party transactions
Adapteo Plc's related parties include its subsidiaries as well as a joint venture. Related parties also include key management personnel and their close family members as well as entities controlled by these persons. Key management personnel include Adapteo's group management team and the members of the Board of Directors.
Prior the demerger date 30 June 2019 Adapteo's related parties included Cramo Plc and Cramo Group companies other than Adapteo entities. Transactions with Cramo Group before the demerger date are presented as related party transactions. At the date of the demerger and after the demerger, transactions with Cramo Group are not classified as related party transactions. Related party transactions were:
| EUR thousands | Full Year 2020 | Full Year 2019 |
|---|---|---|
| Interest income on loan receivable from joint venture | 8 | 11 |
| Net sales (Cramo Group companies) | - | 100 |
| Purchases (Cramo Group companies) | - | 333 |
| Interest expenses (Cramo Group companies) | - | -865 |
| EUR thousands | 31 December 2020 | 31 December 2019 |
| Loan receivable from joint venture | 154 | 220 |
11. Share-based incentive plans
In the spring 2020, the Board of Directors of Adapteo Plc announced that its decision to utilise the current authorisation given by the Annual General Meeting (AGM) to repurchase own shares and the repurchased shares will be used for honouring share-based incentive programs for employees of the company, granted before the demerger from Cramo Plc. The repurchases ended on 4 June 2020. During this period, Adapteo repurchased 51,000 shares, corresponding to about 0.1 per cent of the total number of shares and votes.
On 11 June 2020 Adapteo Plc transferred a net amount of 663 of its own shares held by the company as treasury shares without consideration to the participants of the employee share savings plan introduced for Cramo Group employees in 2016. After the share delivery, Adapteo holds a total of 50,337 treasury shares on 30 June 2020, corresponding to about 0.1 per cent of the total number of shares and votes.
In addition, one of the Cramo's performance share plans was settled during the second quarter. The rewards were paid in both in Adapteo shares and cash. The participants were entitled to get a gross amount of shares, but a portion of shares was withheld to cover
applicable taxes arising from the rewards to the participants. Taxes were paid on behalf of the participants and the participants received a net amount of shares. No Cramo shares were paid to the participants, instead the value of those Cramo shares were paid as cash to the participants based on the bidding price of Cramo of EUR 13.75 per share. The net amount of 9,685 Adapteo shares were purchased from the market by an outside service provider and paid to the plan participants on 15 April 2020.
Old employee share savings plans (One Cramo 2017-2018, One Cramo 2019) transferred from Cramo are treated as equity-settled and partly as cash-settled and the rewards are paid in both Adapteo and Cramo shares. During the second quarter 2020, it was decided that the part of rewards settled as Cramo shares were paid out to the participants on an accelerated schedule to the participants of Cramo's employee share savings plans. Cramo share part in the other old performance shares plans transferred from Cramo will be paid in cash according to the bid price EUR 13.75 per share according to the original plan schedule.
12. Events after the reporting period
The acquisition of Stord Innkvartering was completed on 29 January 2021. A purchase price of NOK 677 million (approximately EUR 64 million) was paid in cash, and potential additional considerations may become payable
in the future depending on Stord's future financial performance.
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
Appendix 1 – Reconciliation of certain key figures
| Specification of Items affecting comparability | Oct-Dec 2020 | Oct-Dec 2019 | Full Year 2020 | Full Year 2019 |
|---|---|---|---|---|
| EUR thousands | ||||
| Items affecting comparability | ||||
| Costs related to the listing | -9 | 70 | 606 | 8,078 |
| Acquisition and integration related expenses | 1,569 | 659 | 2,772 | 2,278 |
| Restructuring costs | 762 | 294 | 1,500 | 2,079 |
| Items affecting comparability in operating profit (EBIT) | 2,322 | 1,023 | 4,878 | 12,435 |
| Total items affecting comparability | 2,322 | 1,023 | 4,878 | 12,435 |
| Reconciliation of Comparable EBITDA | Oct-Dec 2020 | Oct-Dec 2019 | Full Year 2020 | Full Year 2019 |
| --- | --- | --- | --- | --- |
| EUR thousands | ||||
| Operating profit (EBIT) | 8,607 | -3,859 | 36,780 | 22,142 |
| Depreciation, amortisation and impairment | 13,266 | 23,485 | 46,603 | 53,954 |
| EBITDA | 21,873 | 19,626 | 83,383 | 76,096 |
| Items affecting comparability in EBIT | 2,322 | 1,023 | 4,878 | 12,435 |
| Comparable EBITDA | 24,195 | 20,649 | 88,262 | 88,531 |
| Reconciliation of Comparable EBITA | Oct-Dec 2020 | Oct-Dec 2019 | Full Year 2020 | Full Year 2019 |
| --- | --- | --- | --- | --- |
| EUR thousands | ||||
| Operating profit (EBIT) | 8,607 | -3,859 | 36,780 | 22,142 |
| Amortisation of intangible assets resulting from acquisitions | 732 | 656 | 2,708 | 2,639 |
| EBITA | 9,339 | -3,203 | 39,488 | 24,781 |
| Items affecting comparability in EBIT | 2,322 | 1,023 | 4,878 | 12,435 |
| Comparable EBITA | 11,661 | -2,180 | 44,366 | 37,216 |
| Reconciliation of Operating cash flow before growth capex | Oct-Dec 2020 | Oct-Dec 2019 | Full Year 2020 | Full Year 2019 |
| --- | --- | --- | --- | --- |
| EUR thousands | ||||
| Comparable EBITDA | 24,195 | 20,649 | 88,262 | 88,531 |
| Change in net working capital | 6,575 | 21,980 | 5,212 | 17,232 |
| Maintenance capex | -11,177 | -23,594 | -27,137 | -30,256 |
| Non-fleet capex | -1,163 | -39 | -2,470 | -9,854 |
| Operating cash flow before growth capex | 18,429 | 18,996 | 63,867 | 65,653 |
| Calculation of Earnings per share | Oct-Dec 2020 | Oct-Dec 2019 | Full Year 2020 | Full Year 2019 |
| --- | --- | --- | --- | --- |
| Profit for the period, EUR thousands | 5,749 | -7,516 | 18,925 | 8,392 |
| Average number of shares, pcs¹ | 45,635,398 | 44,682,697 | 44,904,000 | 44,682,697 |
| Earnings per share, EUR | 0.13 | -0.17 | 0.42 | 0.19 |
¹ Number of Adapteo shares issued as demerger consideration of 44,682,697 used for all periods presented prior to the demerger. Treasury shares are excluded in average number of shares.
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
Reconciliation of Comparable earnings per share
Oct-Dec 2020 Oct-Dec 2019 Full Year 2020 Full Year 2019
| EUR thousands or as indicated | ||||
|---|---|---|---|---|
| Profit for the period | 5,749 | -7,516 | 18,925 | 8,392 |
| Total items affecting comparability | 2,322 | 1,023 | 4,878 | 12,435 |
| Impairment loss on property, plant and equipment | - | 8,691 | - | 8,691 |
| Related income tax impact | -476 | -207 | -997 | -2,514 |
| Comparable profit for the period | 7,596 | 1,991 | 22,806 | 27,004 |
| Average number of shares, pcs¹ | 45,635,398 | 44,682,697 | 44,904,000 | 44,682,697 |
| Comparable earnings per share, EUR | 0.17 | 0.04 | 0.51 | 0.60 |
¹ Number of Adapteo shares issued as demerger consideration of 44,682,697 used for all periods presented prior to the demerger. Treasury shares are excluded in average number of shares.
Reconciliation of Net debt/Comparable EBITDA
31 December 2020 31 December 2019
| EUR thousands or as indicated | ||
|---|---|---|
| Net debt | 434,758 | 399,839 |
| Comparable EBITDA | 88,262 | 88,531 |
| Net debt/Comparable EBITDA | 4.9 | 4.5 |
Reconciliation of Operative ROCE
31 December 2020 31 December 2019
| EUR thousands or as indicated | ||
|---|---|---|
| Net working capital | -41,189 | -16,672 |
| Property plant and equipment | 528,631 | 451,057 |
| Investments in joint ventures | 1,295 | 1,239 |
| Operative capital employed total | 488,737 | 435,624 |
| Comparable EBITA | 44,366 | 37,216 |
| Operative ROCE, % | 9.1 | 8.5 |
Pro forma
Reconciliation of Comparable EBITDA, pro forma
Full Year 2020
| EUR thousands | |
|---|---|
| Operating profit (EBIT) | 42,601 |
| Depreciation, amortisation and impairment | 49,745 |
| EBITDA | 92,346 |
| Items affecting comparability in EBIT | 5,885 |
| Comparable EBITDA | 98,231 |
27
Appendix 2 – Calculation of key figures
| Key figure | Definition | Reason for the use |
|---|---|---|
| Net sales growth in constant currency | Net sales growth between financial years in reporting period's foreign exchange rates. | Net sales growth in constant currency presents the development of Adapteo's net sales excluding the effect of foreign exchange rate fluctuations. |
| Rental sales growth in constant currency | Rental sales growth between financial years in reporting period's foreign exchange rates. | Rental sales growth in constant currency presents the development of Adapteo's rental sales excluding the effect of foreign exchange rate fluctuations. |
| Operating profit (EBIT)^{1} | Operating profit (EBIT) as presented in the consolidated income statement | Operating profit (EBIT) shows result generated by the operating activities. |
| EBITDA^{1} | Operating profit (EBIT) + depreciation, amortisation and impairment | EBITDA is the indicator to measure the performance of Adapteo. EBITDA also provides a proxy for cash flow generated by operations. |
| Comparable EBITDA^{1} | EBITDA + items affecting comparability | Comparable EBITDA is presented in addition to EBITDA to reflect the underlying business performance and to enhance comparability from period to period. The Company believes that this comparable performance measure provides meaningful supplemental information by excluding items outside normal business, which reduce comparability between the periods. Additionally, comparable EBITDA is one of Adapteo's long-term financial targets. |
| Items affecting comparability | Material items outside ordinary course of business, such as costs related to the listing, acquisition and integration related expenses, restructuring expenses including redundancy payments, impairment losses on goodwill and intangible assets recognised in business acquisitions, and gains and losses on business disposals. | |
| Comparable EBITA^{1} | Operating profit (EBIT) + amortisation and impairment on intangible assets resulting from acquisitions + items affecting comparability | |
| Net capex | Additions to property, plant and equipment + additions to other intangible assets - disposals of rental equipment and rental accessories at net book value | Net capex presents the net amount of investments made. |
| Net fleet capex | Additions to rental equipment + additions to rental accessories - disposals of rental equipment and rental accessories at net book value | Net fleet capex presents investments into new building units, net of disposals. |
| Growth capex | Additions to rental equipment + additions to rental accessories - reinvestment capex - capex relating to building unit upgrades | Growth capex distinguishes investments related to growing the rental portfolio. Maintenance capex distinguishes the portion of net investments to the building portfolio required to maintain the size of the building portfolio after disposals, as well as to maintain technical quality to meet regulatory and customer requirements. |
| Maintenance capex | Reinvestment capex + capex relating to building unit upgrades - disposals of rental equipment and rental accessories at net book value | |
| Non-fleet capex | Additions to land, buildings, other machinery and equipment and assets under construction + additions to other intangible assets | Non-fleet capex distinguishes investments into the operating platform. Reinvestment capex distinguishes the portion of investments made to maintain the size of fleet. Capex breakdowns provide further transparency and enable better evaluation of company's cash flows and earnings. |
| Reinvestment capex | Disposed square meters of building units multiplied by average investments in building units per square meter for the period | |
| Operating cash flow before growth capex | Comparable EBITDA +/- change in net working capital as presented in | Operating cash flow before growth capex indicates the amount of operational cash flow |
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
| Key figure | Definition | Reason for the use |
|---|---|---|
| cash flow statement – maintenance capex – non-fleet capex | that is largely available for value creative investments, such as growing the building portfolio. | |
| Cash conversion before growth capex | Operating cash flow before growth capex / comparable EBITDA | Cash conversion before growth capex indicates the proportion of comparable EBITDA, which remains after maintenance capex, non-fleet capex and investments to working capital are accounted for. |
| Net debt | Non-current and current borrowings - cash and cash equivalents – loan receivables - non-current and current finance lease receivables | Net debt is an indicator to measure the total external debt financing of Adapteo. |
| Net debt / Comparable EBITDA | Net debt as at the balance sheet date / comparable EBITDA for the last 12 months | The ratio of net debt to comparable EBITDA helps to show financial risk level and it is a useful measure for management to monitor the company’s indebtedness in relation to its earnings and is one of Adapteo’s long-term financial targets. |
| Operative ROCE | Comparable EBITA for the last 12 months / (property, plant and equipment + investment in joint ventures + net working capital as at the balance sheet date) | |
| Net working capital = Non-current other receivables + inventories + trade and other receivables – non-current other liabilities – non-current and current provisions – trade and other payables | Internal measure to evaluate return on capital employed and to analyse and compare different businesses and opportunities taking into account capital required. This ratio is also one of Adapteo’s long-term financial targets. | |
| Utilisation rate | Average rented building units during the period divided by total building units available | Utilisation rate presents how large a portion of the portfolio has on average been on rent. Utilisation rate is a useful indicator to monitor the efficiency of fleet management. |
| Total sqm in building portfolio | - | Total square meters in building portfolio is a useful indicator to monitor the size of the rental portfolio. |
| Earnings per share | Profit for the period / average number of Adapteo’s outstanding shares (number of Adapteo shares issued as a demerger consideration (44,682,697 pcs) used for all periods presented prior to the demerger date) | |
| Comparable earnings per share | Profit for the period excluding items affecting comparability, net of taxes and material impairment losses on property, plant and equipment, net of taxes / average number of Adapteo’s outstanding shares (number of Adapteo shares issued as a demerger consideration (44,682,697 pcs) used for all periods presented prior to the demerger date) |
1 Corresponding margin has been calculated by dividing the measure with net sales
ADAPTEO PLC FINANCIAL STATEMENTS RELEASE JANUARY-DECEMBER 2020
Adapteo.