GRK Infra is planning an initial public offering and listing on the official list of Nasdaq Helsinki

GRK Infra is planning an initial public offering and listing on the official list of Nasdaq Helsinki

GRK Infra Plc ("GRK" or the "Company"), a Finnish infrastructure construction group operating in Finland, Sweden and Estonia, is planning to launch an initial public offering (the "IPO" or the "Offering") and to list its shares on the official list of Nasdaq Helsinki Ltd ("Nasdaq Helsinki").

The objectives of the contemplated IPO are to enable and accelerate the execution of GRK's strategy, including the pursuit of continued profitable growth, expansion into new infrastructure construction areas, particularly geographic expansion in Sweden, and the systematic execution of the Company's strategic action plans. The contemplated listing would also enable the Company to obtain access to capital markets and broaden its ownership base, which in turn would improve the liquidity of its shares. The increased visibility following the contemplated listing is also expected to enhance GRK's recognition among the public and its customers and as an employer, thereby improving its competitiveness. Additionally, the contemplated listing would enable GRK to utilise its shares more effectively in employee incentive programmes, for retaining employees and as consideration in potential acquisitions.

The contemplated IPO is expected to consist of a share issue by the Company of approximately EUR 30 million (gross proceeds) and of a share sale by existing shareholders of GRK. The Company's existing shareholders will remain as major owners also after the contemplated IPO.

The proceeds from the Company's share issue are intended to be used to implement the Company's strategy, including potential investments in machinery and personnel that support the Company's strategic objective of profitable growth. In line with its growth strategy, the Company also envisages to use the proceeds from the share issue to grow inorganically, particularly in Sweden. The Company also targets with the proceeds from the contemplated share issue, together with the Company's current net cash position, a capital structure in line with the Company's financial targets for the period until the end of 2028, i.e. net debt to Adjusted EBITDA (last 12 months) staying under 1.5. Additionally, the aim of the share issue is to fund the Company's net working capital needs as well as general corporate purposes.

Varma Mutual Pension Insurance Company, Elo Mutual Pension Insurance Company, Amundsen Investment Management, Aktia Fund Management Company Ltd for and behalf of mutual funds managed by it and certain funds managed by Sp-Fund Management Company Ltd (together the "Cornerstone Investors") have, subject to certain conditions, committed to subscribe for shares in the Company amounting, in total, to approximately EUR 36 million in the contemplated IPO at a pre money equity value of up to EUR 380.4 million.

Juha Toimela, GRK's President and CEO comments:

"GRK is a leading infrastructure construction company. We intend to continue on the path of profitable growth, and the objective of the contemplated listing is to accelerate the implementation of our strategy and to strengthen our market position in Finland, Sweden and Estonia. The infrastructure construction market is stable and there are strong growth opportunities in the market, which we intend to seize in all of our operating countries. GRK's way of working is based on entrepreneurial spirit, partnership-oriented mindset and high professionalism of employees, which allow us to utilize growth opportunities efficiently."

Kari Kauniskangas, Chairman of GRK's Board of Directors comments:

"GRK is in good shape and has operated like a public company for several years. Its business has grown strongly, especially in Sweden, and its profitability has been at a very good level. The infrastructure construction market is stable, and it has strong growth drivers, such as urbanisation, green transition related projects as well as safety economical investments in infrastructure and security of supply which enable GRK to continue to grow profitably. With skilled personnel, strong leadership, and committed owners, GRK is well-prepared for a public listing."

Keijo Haavikko, one of the founders of GRK in its current form and the largest shareholder comments:

"GRK's success will continue to be based on the company's ability to attract and retain the best talents in the industry. GRK has succeeded in constantly encouraging professionals to perform at their best. We have also been able to utilize their ability to think differently to build GRK's competitive advantage. The importance of this strength – skilled, committed and motivated staff – will continue to grow as the company grows. The listing will provide the company more tools to recruit and retain the best talent also in the future."

About GRK

GRK is a Finnish infrastructure construction group operating in Finland, Sweden and Estonia. GRK's core competencies include the execution of versatile infrastructure construction projects, project management of both small and large projects as well as extensive rail expertise. GRK's service offering can be divided into civil engineering and road construction, rail construction and environmental technology. In rail construction, GRK provides also design and maintenance services in addition to construction services. GRK's civil engineering and road construction business also includes paving. GRK's customers include, among others, the state administration, municipalities and cities, as well as the private sector. In addition, GRK works on several projects in alliance with other companies of the infrastructure construction sector.

The cornerstones of GRK's operations are its broad service offering and specialisation in infrastructure construction, allowing for special competencies and careful tendering and project management, committed and skilled personnel, a motivating incentive system, efficient execution and tight cost control and, in the view of the Company's management, a unique entrepreneurial working culture.

GRK operates in the stable infrastructure construction markets, which are supported by long-term megatrends, like green transition, urbanisation, investment needs in critical infra and repair debt. The Company's revenue growth has been strong when compared to the infrastructure construction market in general, having grown at an average annual rate of 19.5 per cent (CAGR)¹ between years 2019 and 2024, compared to 5.6 per cent of the overall market.² The Company's growth has been profitable, with an average EBIT margin of 4.6 per cent³ during the same period. In 2024, an average 1,098 professionals worked at GRK, the Company's revenue was EUR 728.6 million and adjusted EBIT was EUR 45.6 million⁴.

_{¹ Unaudited. Based on the Company's audited IFRS consolidated financial statements for the years 2021–2024, as well as the unaudited comparative figures from the 2021 IFRS consolidated financial statements for the years 2019–2020.}

_{² Source: Euroconstruct, Forecon.}

_{³ Unaudited.}

_{⁴ Unaudited.}

Strengths

GRK believes that its key strengths include, among others, the following:

• Operations in complementary markets with strong growth drivers
• A market position as one of the leading players, specialisation in infrastructure construction and a broad service offering
• Skilled, motivated and committed personnel
• An entrepreneurial culture
• Motivating incentive system
• Capabilities for strong growth, high profitability and consistent performance
  
  

Strategy

GRK's strategic vision spans until 2028 and it is culminated in three strategic cornerstones:

1. The most competitive team
   • The strategy aims to ensure that a bold, entrepreneurial culture is maintained and wellbeing at work is fostered.
2. Profitable growth
   • GRK's aim is to continue profitable growth and actively seek new business opportunities, with an ambition to have a healthy capital structure and be the most profitable company in the industry.
3. Forerunner in sustainable construction
   • An essential part of GRK's strategy and vision is to be a forerunner in sustainable infrastructure construction from the perspectives of economic, environmental and social responsibility.
     
     

In order to achieve the Company's strategic objectives, GRK's management has prepared six strategic action plans, which can be divided into two main themes:

• Strategic growth areas
  • We grow to new business areas in infrastructure construction, and geographically especially in Sweden
  • We strengthen our share of green transition projects
  • We succeed in projects related to critical infra and defence
• Way of working
  • We operate with an entrepreneurial spirit and have a common culture
  • We attract, grow and retain the best talent
  • We ensure healthy profitability consistently
    
    

Financial targets and dividend policy

The financial targets are forward-looking statements and are not guarantees of future financial performance. All financial targets presented in this announcement are solely targets and they do not constitute, and should not be treated as, forecasts or estimates of GRK's financial performance in the future.

The Company's strategy focuses on profitable growth and the Board of Directors of GRK has set the following financial targets for GRK for the strategy period ending at the end of 2028:

• Revenue over EUR 750 million by 2028
• Adjusted EBIT margin over 6 per cent over time
• Healthy capital structure with Net Debt / Adjusted EBITDA (last 12 months) < 1.5x
• Return on capital employed > 20 per cent over time
  
  

GRK aims to distribute a growing dividend of at least 40 per cent of the Company's annual net income over time.

Future outlook and guidance for 2025

The future outlook and guidance are forward-looking statements concerning the Company's view on possible development in its different markets. They are not guarantees of the development of the Company's revenue or result or future financial performance. The result of the Company's operations could differ materially from market development, and the Company's guidance or other forward-looking statements should not be considered as a promise of future performance or result, which may differ materially from those set forth below.

Future outlook for 2025

The economy is starting to recover from the recession. Inflation and interest rates are still gradually declining. However, market conditions remain uncertain. Public infrastructure construction is growing modestly in Finland, Sweden and Estonia. In Finland, growth will be driven by the government's EUR 3 billion support package. In Finland and Sweden, business opportunities and growth potential are seen in large cities', private sector, green transition as well as defence and border security projects. In Estonia, investments are strongly focused on Rail Baltica and the electrification of the Estonian rail network.

Financial guidance for 2025

GRK estimates that its revenue in 2025 will be EUR 650–730 million (in 2024: EUR 728.6 million) and adjusted EBIT will be EUR 36–45 million in 2025 (in 2024: EUR 45.6 million).

Background for the financial guidance

The profit guidance is based on estimate of revenue to be recorded from existing order backlog in 2025 based on order backlog margins. In addition, the guidance is based on assessment of new projects to be won as well as progress of the projects currently in the development phase and their recorded revenue in 2025.

GRK's key figures

GRK's revenue for the financial year ended 31 December 2024 was EUR 728.6 million and its adjusted EBIT was EUR 45.6 million, which represents an adjusted EBIT margin of 6.3 per cent.

The following table sets forth the key figures of GRK.

	1 January – 31 December or as at 31 December
Key figures	2024	2023	2022	2021	2020	2019
(EUR thousand, unless otherwise indicated)	(unaudited, unless otherwise indicated)
Revenue	728,550(1)	546,187(1)	450,459(1)	430,586(1)	387,259	298,596
Change in revenue, %	33.4	21.3	4.6	11.2	29.7	-
EBITDA	60,930	37,693	24,403	32,599	31,169	19,298
EBITDA margin, %	8.4	6.9	5.4	7.6	8.0	6.5
Adjusted EBITDA	61,295	38,048	26,285	33,961	32,402	19,510
Adjusted EBITDA margin, %	8.4	7.0	5.8	7.9	8.4	6.5
EBITA	45,527	24,689	11,858	20,904	21,705	12,468
EBITA margin, %	6.2	4.5	2.6	4.9	5.6	4.2
Adjusted EBITA	45,892	25,044	13,876	22,811	22,938	12,681
Adjusted EBITA margin, %	6.3	4.6	3.1	5.3	5.9	4.2
Operating profit (loss) (EBIT)	45,200(1)	24,162(1)	11,364(1)	20,724(1)	21,654	12,434
Operating profit margin (EBIT, %), %	6.2	4.4	2.5	4.8	5.6	4.2
Adjusted operating profit (Adjusted EBIT)	45,566	24,860	13,689	22,630	22,887	12,647
Adjusted operating profit (EBIT) margin, %	6.3	4.6	3.0	5.3	5.9	4.2
Profit (loss) for the period	36,885(1)	20,121(1)	6,983(1)	15,698(1)	18,576	8,890
Profit (loss) for the period, % of revenue	5.1	3.7	1.6	3.6	4.8	3.0
Basic earnings per share, EUR	0.93(1)	0.50(1)	0.18(1)	0.39(2)	0.47(2)	0.23(2)
Diluted earnings per share, EUR	0.93(1)	0.50(1)	0.18(1)	0.39(2)	0.47(2)	0.23(2)
Net debt	-88,024(1)	-59,866	-4,854	-13,779	-23,573	-2,466
Net debt / EBITDA	-1.4	-1.6	-0.2	-0.4	-0.8	-0.1
Net debt / Adjusted EBITDA	-1.4	-1.6	-0.2	-0.4	-0.7	-0.1
Net working capital	-52,985	-51,115	-3,719	-1,106	-14,837	2,835
Equity	119,262(1)	88,852(1)	77,040(1)	78,181(1)	65,056	50,632
Equity ratio, %	42.9	39.9	41.9	43.6	43.4	41.4
Return on capital employed, % (ROCE %)	150.1	47.8	16.6	39.1	48.3	29.9
Return on equity (ROE), %	35.4	24.3	9.0	21.9	32.1	18.6
Capital expenditure	16,586	13,765	19,106	17,959	12,423	12,411
Operating free cash flow	41,257	61,477	-1,477	-3,706	32,372	5,659
Order backlog at the end of the period	845,642	568,318	381,017	381,559	405,336	481,566
Accident frequency rate	7.9	13.1	11.6	7.9	10.7	15.7
Sickness absence rate	2.3	2.0	2.9	1.6	1.4	1.6
Average number of personnel during the year	1,098	1,012	946	888	741	572

_{(1)           Audited.}

_{(2)           Basic and diluted earnings per share for the financial years ended 31 December 2021, 31 December 2020 and 31 December 2019 have been adjusted to account for a correction related to the number of shares used in calculation.}

_{In its key figures, GRK presents certain performance measures, which in accordance with the "Alternative Performance Measures" guidelines by the European Securities and Markets Authority ("ESMA") are not accounting measures of historical financial performance, financial position and cash flows, defined or specified in IFRS, but which are instead alternative performance measures. In the Company's view, alternative performance measures provide meaningful supplemental information about the Company to the management, investors, securities market analysts and others regarding the Company's results of operations and financial position.
_______}

Information on the IPO

The contemplated IPO is expected to consist of a share issue by the Company of approximately EUR 30 million (gross proceeds) and a share sale by shareholders of GRK. The company, its Board of Directors and management, the selling shareholders, and GRK's employees participating in the contemplated personnel offering will be subject to customary lock-up arrangements. In addition to customary public offering and institutional offering, the contemplated IPO is expected to include an offering of shares to GRK's employees.

The Cornerstone Investors have, subject to certain conditions, committed to subscribe for shares in the Company amounting, in total, to approximately EUR 36 million in the contemplated IPO at a pre money equity value of up to EUR 380.4 million.

Carnegie Investment Bank AB (publ), Finland Branch and Nordea Bank Abp have been appointed to act as joint global coordinators and joint bookrunners for the contemplated IPO (jointly referred to as the "Joint Global Coordinators"). Krogerus Attorneys Ltd is acting as legal adviser to GRK. Roschier, Attorneys Ltd. is acting as legal adviser to the Joint Global Coordinators. Miltton Ltd is acting as communications adviser to the Company.

Press conference

GRK will arrange a company event (in Finnish) today, 11 March 2025 at 11 a.m. EET. Juha Toimela, President and CEO, Mika Mäenpää, CEO GRK Sverige AB (President and CEO of GRK from 1 October at the latest) and Markku Puolanne, CFO as well as Nasdaq Helsinki's CEO Henrik Husman will speak at the event. The event will be held in Helsinki at Epicenter, located at Mikonkatu 9. Attendees will be given the possibility to present questions after the presentation.

The event can also be followed as a webcast-broadcast from:

https://grk.videosync.fi/yhtioesittely.

Further announcements relating to the process will be made in due course.

Further inquiries

Juha Toimela, President and CEO, tel. +358 40 594 5473

Markku Puolanne, CFO, tel. +358 40 069 4114

Kari Kauniskangas, Chairman of the Board of Directors, contact information through GRK's communications, tel. +358 40 152 7213

Information about GRK

GRK designs, repairs and builds roads, highways, tracks and bridges in order to make everyday life run smoothly, promote people meeting each other and to create a more sustainable future. GRK's expertise also includes environmental technology. We operate in Finland, Sweden and Estonia with approximately 1,100 professionals. GRK's core competencies include the execution of versatile infrastructure construction projects, project management of both small and large projects as well as extensive rail expertise. GRK provides services from design to construction and maintenance.

Our customers include the state administration, municipalities and cities, as well as the private sector. GRK works on several projects in alliance with other companies of the infrastructure construction sector. In addition to the parent company of the group, GRK Infra Plc, the group consists of subsidiaries in each operating country: GRK Finland Ltd in Finland, GRK Eesti AS in Estonia and GRK Sverige AB in Sweden. The parent company of the group, GRK Infra Plc, is responsible for the administration and financing of the group. The subsidiaries GRK Finland Ltd, GRK Eesti AS and GRK Sverige AB carry out the operational activities of the group.

IMPORTANT INFORMATION

Neither this release nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or Singapore or any other jurisdiction in which publication or distribution would be unlawful. The information contained herein does not constitute an offer of securities for sale in the United States, nor may the securities of GRK Infra Plc (the "Company") be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. The Company does not intend to register any portion of the offering in the United States or to offer securities to the public in the United States.

The issue, offer, exercise and/or sale of securities are subject to specific legal or regulatory restrictions in certain jurisdictions. The Company or the Joint Global Coordinators assume no responsibility in the event there is a violation by any person of such restrictions.

The information contained herein shall not constitute an offer to sell or a solicitation of an offer to purchase or subscribe, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. Investors must neither accept any offer for, nor acquire, any securities to which this document refers, unless they do so on the basis of the information contained in the applicable prospectus published or offering circular distributed by the Company.

The Company has not authorised any offer to the public of securities in the United Kingdom or in any Member State of the European Economic Area other than Finland. With respect to each Member State of the European Economic Area other than Finland and which applies the Prospectus Regulation (each, a "Relevant Member State"), no action has been undertaken or will be undertaken to make an offer to the public of securities requiring publication of a prospectus in any Relevant Member State. As a result, the securities may only be offered in the Relevant Member States (a) to any legal entity, which fulfils the requirements of a qualified investor as defined in the Prospectus Regulation; or (b) in any other circumstances falling within Article 1(4) of the Prospectus Regulation. For the purposes of this paragraph, the expression "offer of securities to the public" means a communication to persons in any form and by any means, presenting sufficient information on the terms of the offer and the securities to be offered, so as to enable an investor to decide to purchase or subscribe for those securities. The expression "Prospectus Regulation" means Regulation (EU) 2017/1129 of the European Parliament and of the Council, as amended.

This communication is directed only at persons who are outside the United Kingdom or persons who are qualified investors within the meaning of the Prospectus Regulation as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 and are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as "Relevant Persons"). Any investment activity to which this communication relates will only be available to and will only be engaged with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

Full terms, conditions and instructions for the contemplated initial public offering will be included in the prospectus that will be prepared by the Company in connection with the contemplated initial public offering. The prospectus will be published on the website of the Company at grk.fi/ipo.

An investor is advised to read the prospectus before making an investment decision to fully understand the risks and rewards associated with the investment. The approval by the Finnish Financial Supervisory Authority of the prospectus shall not be considered as an endorsement of the securities offered.

Each of the Joint Global Coordinators is acting exclusively for the Company and the selling shareholders and no one else in connection with the Offering. They will not regard any other person as their respective clients in relation to the Offering and will not be responsible to anyone other person for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

The contents of this announcement have been prepared by, and are the sole responsibility of, the Company. None of the Joint Global Coordinators or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from this announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

FORWARD-LOOKING STATEMENTS

Certain statements in this release are "forward-looking statements." Forward-looking statements include statements concerning plans, assumptions, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, the Company's competitive strengths and weaknesses, plans or goals relating to financial position, future operations and development, its business strategy and the anticipated trends in the industry and the political and legal environment in which it operates and other information that is not historical information. In some instances, they can be identified by the use of forward-looking terminology, including the terms "believes," "intends," "may," "will" or "should" or, in each case, their negative or variations on comparable terminology.

Forward-looking statements in this release are based on assumptions. Forward-looking statements involve inherent risks, uncertainties and assumptions, both general and specific, and the risk exists that the predictions, forecasts, projections, plans and other forward-looking statements will not be achieved. Given these risks, uncertainties and assumptions, you are cautioned not to place undue reliance on such forward-looking statements. Any forward-looking statements contained herein speak only as at the date of this release. Save as required by law, the Company does not intend to, and does not assume any obligation to, update or correct any forward-looking statement contained in this release.

INFORMATION TO DISTRIBUTORS

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares have been subject to a product approval process, which has determined that the shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the shares may decline and investors could lose all or part of their investment; the shares offer no guaranteed income and no capital protection; and an investment in the shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to any offering of the shares.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the shares and determining appropriate distribution channels.