Implenia significantly increases profit in a challenging market environment
Despite rising interest rates and inflation, Implenia significantly increased its EBIT in 2022 to CHF 138.9 million (adjusted for currency effects CHF 144.1 million), proving that the Group is on the right track. The transformation has been completed and Implenia has entered a new strategic phase with “Fit for Growth”. The Group will develop high-margin business areas through organic and inorganic growth. The focus is on sector-oriented specialisation and integration along the value chain. Implenia is excellently positioned for sustainable success.
André Wyss, CEO, and Hans Ulrich Meister, Chairman of the Board of Directors
“Now we’re in the ‘Fit for Growth’ strategic phase, we are further strengthening our competitiveness through organic and inorganic growth in high-margin business areas, sector-oriented specialization and integration along the value chain.”
Implenia completed its transformation earlier than planned in the first half of 2022. How was this possible?
Hans Ulrich Meister The consistent implementation and successful completion of the transformation is very gratifying from the point of view of the Board of Directors. This success would not have been possible without the extraordinary commitment of employees at all levels and the outstanding performance of the management. On behalf of the Board of Directors, I would like to thank everyone involved.
André Wyss We were able to implement the measures faster and with less funding than originally assumed. And these measures have had a rapid impact. I am very proud of what we have achieved. As “Team Implenia”, the Implenia Executive Committee and all the company’s employees have achieved great things in addition to taking care of operating business. This has only been possible thanks to intensive cooperation at all levels. I would also like to thank all our employees for their effort.
In 2022, Implenia once again significantly increased its EBIT compared to the previous financial year. How would you rate this result?
André Wyss Implenia significantly increased its EBIT to CHF 138.9 million (2021: CHF 114.8 million) or CHF 144.1 million adjusted for foreign currency effects. All Divisions improved their underlying performance and contributed to the strong result. Division Real Estate saw the biggest improvement in EBIT at CHF 81.1 million (2021: CHF 42.1 million). This was mostly based on above-average earnings in the first half of the year from the sale of large real estate projects following several years of successful development work.
What effects does the significant improvement in EBIT have on equity and how did the cash situation develop in 2022?
André Wyss We clearly improved these two key benchmarks as well in 2022: equity increased by CHF 136.8 million to CHF 482.7 million (2021: CHF 345.9 million). Our equity ratio rose from 11.6 % in the previous year to 17.5 % as of 31 December 2022. Operating cash flow turned clearly positive at CHF 128.1 million (2021: CHF – 69.2 million), helping us to achieve a free cash flow of CHF 124.0 million (2021: CHF –17.5 million).
What developments were there on the Board of Directors in 2022?
Hans Ulrich Meister The Board of Directors, with all its professional and personal diversity, works excellently as a team and is very good at fulfilling its responsibilities as a supervisory body. Its close cooperation with the Implenia Executive Committee was an important prerequisite for the successful transformation.
Judith Bischof was newly elected to the Board of Directors in 2022 and has already integrated very well. Her personality and her professional experience as general counsel for various listed companies provide an ideal complement to the existing skills and experience on the Board.
What does completion of the transformation mean for the Group’s future?
André Wyss We are excellently positioned for sustainable success. The “Fit for Growth” phase is being implemented in line with our four strategic priorities. We will develop high-margin business areas through organic and inorganic growth. Our focus is on sector-oriented specialisation and integration along the value chain.
We will continue to improve our profitability through systematic risk and performance management. And we are continuing to improve our Operational Excellence by means of digitalisation, BIM, Lean Construction and process optimisation, while also optimising our net working capital.
In terms of innovation, we are focusing on industrialisation, digitalisation and BIM, as well as sustainability. Implenia aims to be the industry leader in these areas. We are implementing our innovation strategy through our Innovation Hub, as well as by evaluating potential partners and acquisitions, and through research and innovation partnerships with universities and institutes.
Our fourth strategic priority, Talent and Organisation, is focused on attracting and developing the most talented people and retaining them within the organisation for the long term. By taking action in three areas – “Collaboration and Employee Engagement”, “Talent Management” and “Recruitment Excellence”, Implenia is working to position itself as a preferred employer.
All of Implenia’s Divisions won, executed and completed large and attractive projects last year. How do you see the market developing in 2023?
Hans Ulrich Meister Implenia’s portfolio of services is strategically oriented towards the demand that is being driven by population growth, urbanisation, infrastructure investment and renewable energy. Despite economic uncertainty and a challenging market environment, there is still high demand for large-scale real estate projects in attractive urban locations, as well as for complex infrastructure projects.
André Wyss This demand is reflected in our continuing healthy order intake. With its extensive expertise and many years of experience, Implenia is extremely well positioned in the relevant markets. We continue to monitor macroeconomic developments closely, of course, and we take appropriate measures to mitigate the associated risks.
What goals has Implenia set itself for 2023?
André Wyss We expect EBIT of CHF ~120 million for the financial year 2023 based on strong operating business at all Divisions. The EBIT contribution of Division Real Estate is likely to be considerably lower than in the previous year, especially in the first half of the year. We also expect to be able to increase Implenia’s equity ratio to over 20 % in 2023. The medium term goal is an equity ratio of 25 %.
The successful transformation has left the Group in a strong position for sustainable success. Can shareholders expect a dividend again in 2023?
Hans Ulrich Meister Implenia wants shareholders to participate in the company’s success now the transformation is complete. The Board of Directors will therefore propose paying a dividend of CHF 0.40 per share at the Annual General Meeting on 28 March 2023. We expect that Implenia will be able to continue distributing dividends in future.
“Demand is being driven by population growth, urbanisation, and investments in infrastructure and renewable energy. This is where Implenia’s portfolio of services is focused.”