GRK Group Financial Statements 2020: Net sales increased significantly, and earnings continued to be strong
January–December 2020 in brief (compared to 2019):
• The order backlog was EUR 421 (481) million
• Net sales were EUR 387 (299) million
• EBITDA was EUR 28.7 (20.6) million, or 7.4 (6.9) per cent of net sales
• Operating profit was 22, EUR 3 (15.8) million, or 5.8 (5.3) per cent of net sales
• Return on equity was 34% (26%)
President and CEO Juha Toimela:
“In 2020, the GRK Group provided excellent evidence of its ability to grow profitably. Our net sales increased to a record EUR 387 million (299). Our relative profitability also rose strongly. The Group’s operating profit was EUR 22.3 million (15.8). Return on equity rose to 34% (26%). This is a great performance from our staff who showed a strong commitment to keeping the sites running despite the COVID-19 pandemic. Our responsible operations guaranteed the healthy and safe continuation of work, with the exception of minor disturbances.
It was particularly great that the result was generated extensively in all business areas. In Finnish infrastructure construction, our parent company GRK Infra Oy achieved a 13% increase in net sales and maintained its profitability at a good level. A significant leap in growth and profitability was made at GRK Rail Oy. Railway superstructure contracting grew strongly. During the year, GRK’s first large-scale multi-year railway maintenance assignment, the Kuura Alliance, was launched, which in turn was raising the business area’s volume to a new level. Our goal is to further increase the share of net sales from continuing operations to a higher level than at present. It was also very positive to see that last year our investments in new asphalt plants increased our market share and turnover in paving contracting, whose profitability clearly improved.
Our long-term investment in internationalization began to pay off. Internationalization has taken place in accordance with the teachings of the parent company through organic growth. This has been possible because we are now also a sought-after employer and partner in all market areas. In Estonia, we focused on efficient project management and improved operating profit. Additionally, the order backlog increased significantly. In Sweden, driven by new management, we saw strong growth in our infrastructure sales, and the result was positive. We also rapidly launched the track business in Sweden by establishing a new subsidiary, GRK Rail Ab, and winning the first contract there.
With the strongly positive cash flow from operations, we continued to invest in supporting future growth. We acquired new equipment, and, in addition, our circular economy unit invests in new service concepts that will enable even more diverse services in the future. Our high equity ratio of 47% guarantees the Group’s business operations’ planned development in the future.
Last year, we demonstrated our competitiveness by winning major contracts. Our order backlog was over EUR 420 million at the end of the year. However, the economic outlook is uncertain as the COVID-19 pandemic continues. Public finance recovery measures in 2021 will not significantly increase infrastructure construction in Finland. Only in rail projects is investment expected to increase. In Sweden and Estonia, investment in infrastructure is clearly rising, and the market outlook is encouraging. In all markets, however, rising prices for metal-based products, timber and oil are raising costs. Despite the uncertain outlook, we are confident about our future development. Thanks to our strong order backlog, extensive business portfolio and comprehensive geographical area of operation, we expect our net sales to remain at the same level in 2021 as last year.
I joined GRK’s winning team as the CEO of the parent company GRK Infra Oy at the beginning of March 2021. It is good to keep up the good work as Keijo Haavikko, who served as interim CEO, inspired our employees to perform so brilliantly over the past year. I warmly thank all our employees and partners for their determined work and work in accordance with our values. I would also like to thank our customers for their strong confidence in our performance.”
CEO Juha Toimela, GRK Infra Oy, email@example.com, +358 40 594 5473
CFO Mikko Sillman, GRK Infra Oy, firstname.lastname@example.org, +358 50 350 7879