In the public offering at the time of listing, shares were sold for 8.20 euros, so it’s not quite such a dramatic change in the share price curve.
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Good correction.
Btw, board member Timo Kohtamäki bought a small amount, a positive signal even if a very small purchase..
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There has been a lot of news about the jacking of Kirjalansalmi in recent days; the jacking will be completed by the end of January. However, the bridge repair costs probably won’t cross the news threshold, as Kreate itself hasn’t published any press release or news about it.
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Whether it’s tax-loss selling or something else, Kreate has also taken a big hit during the end of the year. I personally see a clear buying opportunity here. I believe the spring dividend will be 50 cents. Relative to the current share price, this translates to about a 7% dividend yield. In addition, the company’s order book is growing, and its profitability is improving quarter by quarter. I’m confident this will recover to around the €8 level during Q1.
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At the end of October, in Inderes’ analysis, the DCF calculation showed a value of 10.2 eur (at that time the share price was 8.80, ‘reduce’), and now the share price is indeed 7.04, meaning it has slid downhill. I wonder if other analyst firms have expressed their view. There could be grounds for the conclusion that a buying opportunity is starting to be at hand.
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Here is a fresh company report on Kreate from Olli. 
We lower Kreate’s target price to EUR 8.00 (previously EUR 8.80), but raise our recommendation to add (previously reduce). According to our forecasts, Kreate has succeeded in improving its margins in 2024, and in 2025, revenue growth will drive earnings growth. However, the short-term market outlook is subdued (H1’25), which slightly lowered our forecasts. After the share price drop, however, we see the return expectation as attractive given Kreate’s improving market and earnings level in the coming years.
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October-December in brief
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Order backlog was 176.6 (196.3) million euros, a decrease of 10.0%
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Revenue decreased from the comparison period and was 75.5 (80.2) million euros
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Change in revenue from the previous year was -5.9% (-3.5%)
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EBITDA was 4.9 (4.9) million euros, or 6.5 (6.1) percent of revenue
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EBITA was 2.8 (2.7) million euros, or 3.7 (3.4) percent of revenue
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Earnings per share were 0.20 (0.18) euros
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Operating free cash flow was 3.9 (19.7) million euros
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Interest-bearing net debt was 29.9 (16.8) million euros
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For the year 2025, the construction sector as a whole is anticipated to be an even more difficult year.
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The bottoming out of the infrastructure sector is estimated to be behind us: a 2 percent volume growth is anticipated for 2025.
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Cost development is stable, with certain construction costs even decreasing.
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In the short term, the development of the infrastructure market is limited by the timing of public project starts in the latter half of the year, the subdued development of the Finnish national economy, and the interest rate level.
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The longer-term outlook for infrastructure is very bright: The government’s investment program focused on transport routes, investments required by the geopolitical situation, and the green transition support business development.
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Kreate’s direct dependence on residential construction is minor. The entry of residential construction infrastructure players into the broader infrastructure market has intensified competition especially in less demanding and smaller infrastructure projects.
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Kreate’s market outlook in Finland is neutral in the applicable market, strengthening towards the latter half of the year.
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Kreate’s market outlook in Sweden is strong in the applicable market.
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I got a good feeling from this, even though it fell slightly short of expectations. Strong dividend, gradually improving market, and strengthening order book. As spring progresses, I believe the stock price will also recover to around the €8 level.
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Olli interviewed Kreate’s CEO Timo Vikström.
Kreate’s revenue decreased as expected at the end of the year, but margins and relative profitability were improved from the comparison period. However, competition in the market is fierce, which was also reflected in last year’s figures. By selecting the most suitable projects for itself, Kreate was able to improve its relative profitability.
Topics:
00:00 Introduction
00:10 Highlights of 2024 and Q4
00:39 Relative profitability improved
01:24 Property sale in Tuusula
02:16 Kirjalansalmi bridge sag
03:16 Order backlog
04:39 Private market
05:49 Public sector projects
06:48 Guidance
07:51 Competitive environment
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Here is a fresh company report on Kreate from Olli Koponen.
We reiterate Kreate’s target price at 8.00 euros and our ‘add’ recommendation after the Q4 report. In 2024, Kreate succeeded in improving its margin, and this year, revenue growth will drive earnings growth. Despite subdued short-term market outlook, the expected return on the stock is attractive due to earnings growth and dividends.
Quoted from the report:
For the full year, EBITA reached EUR 8.8 million and grew by 13% from the comparison period. Earnings per share grew from the comparison period to 49 cents (2023: 0.44 euros), and the dividend consequently increased moderately to 0.50 euros (2024e: 0.49 euros, 2023: 0.48 euros). The dividend yield % rises to a good level of 7% at the current share price.
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ROAST 
is one week away!
Tricky questions are welcome! Although Kreate’s track record so far has been good, things happen sooner or later in the project business.
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The classic question, why aren’t own shares being bought back already with great haste.
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One could also ask Timo how the green transition is currently visible at Kreate. For example, have more bids been submitted than usual, or the same amount as before.
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Sweden’s business outlook for 2025 and, on the other hand, Kreate’s long-term plans to expand operations.
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As part of preparing for ROAST, I looked into the backgrounds of the main owners. Perhaps this is familiar information to many here, but among the main owners, Timo Pekkarinen once founded Suomen Hoivatilat, which was a really high-quality company. Hoivatilat was sold to Belgium years ago. Perhaps veterans remember the company’s then clear-spoken and determined CEO, Jussi Karjula. In addition, Timo is the brother of Jarmo Pekkarinen, the CEO of Lapwall, which is a fan favorite on the forum (I’m also a fan of his stuff).
“Lapti had contracted the first care homes and kindergartens, and entrepreneurs started to inquire more and more about new rental premises. However, a construction company’s job is to build, not to own, so on a run, I realized that care facility arrangements needed to be incorporated.”
According to Pekkarinen, the company’s beginning around the financial crisis was not a walk in the park; growth came gradually, and there was a shortage of construction financing for new projects.
– Investing in care facilities was still a new thing back then, and it was difficult to get money and investors.
Pekkarinen has also led Kastelli Group and co-founded the Lapwall element factory in Pyhäntä with his brother. The new company was founded in response to the element needs of the construction company Lapti."
Karjula is indeed on Lapwall’s board, as is Elina Rahkonen, who is Wulff’s CEO. In addition, Elina also sits on Kreaten’s board. It’s a small world. 
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It’s hard to challenge when Kreate has performed quite okay in a challenging market, and Timo also seems like a nice and polite gentleman. But see if you can get some help for the Roast from these?
- Kreate has challenged the big players in the infrastructure market very well, but to my eyes, GRK has performed better in recent years. What differentiates GRK and Kreate in terms of operations and profitability?
- Should Kreate and GRK team up and challenge these bigger players, i.e., YIT, Skanska, and Destia?
- At the time of listing, there was talk about acquisition opportunities. Expansion into Sweden has happened through acquisitions, but one might have imagined more activity in this area in Finland, especially since, due to the market situation, suitable acquisition targets could presumably have been found at a reasonable price?
- At the time of listing, it was mentioned that employees own a large portion of the shares. However, several employee owners on the TOP 100 list have reduced their holdings. If employees have faith in the company, then surely bathroom renovations or car changes wouldn’t be financed by selling shares, but by something else entirely?
- Recently, even large projects have not been bid on. The justifications have been risk management or focusing on profitability instead of growth. Can’t risks and profitability be priced into bids?
- Large projects relative to company size = large risks. At some point, that mistake or failure will come, and the losses will be significant?
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The change of leadership in Sweden is, in my opinion, a logical step:
There is a need to move from being a subcontractor more strongly towards general contractor work and also to above-ground structures. The current organization has very strong experience and expertise in underground works, which is certainly still Kreate’s main product in Sweden at the moment.
However, the new leader Kenneth Wahqvist’s experience in above-ground infrastructure (concrete, foundation, and earthworks) is certainly an important factor at this stage. In addition, according to the press release, Wahqvist has an extensive network of contacts, which I consider perhaps an even more important factor for growth, in order to get to those “coffee table” discussions where decisions are made in Sweden.
Perhaps the question remains whether Kreate’s Swedish operations will lose their “can-do attitude” as they grow larger and different levels of leadership emerge. Is the quiet goal for Sweden still to achieve double the profitability compared to Finnish operations?
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A reminder through this channel as well.
Today, Wednesday, at 2:00 PM, the ROAST live stream begins. Timo Vikström is being grilled by Veppu.
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Petri’s comments on how Kreate has made a compensation claim against Solwers’ subsidiary.
The compensation claim made against Finnmap Infra is based on an alleged breach of contract. In our assessment, disagreements and disputes of this kind are somewhat common, but we note that the total amount of the claim is significant relative to Solwers’ current earnings and cash flow levels. For Kreate’s size, however, the amount is moderate.
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