Interim report April–June 2018
CONTINUED GOOD PERFORMANCE
- Net sales increased by 11% to SEK 4,790 million (4,325)
- Organic growth was 4% (0)
- The order backlog was 6% higher at SEK 11,139 million (10,493)
- EBITA increased by 10% to SEK 280 million (255)
- The EBITA margin was 5.9% (5.9)
- Adjusted EBITA was SEK 280 million (263)
- The adjusted EBITA margin was 5.9% (6.1)
- Profit after tax was SEK 212 million (186)
- Cash flow from operating activities was SEK 319 million (150)
- Net debt amounted to SEK -1,896 million (-2,343)
- Three acquisitions were completed in the quarter, adding annual sales of approximately SEK 68 million
- Basic earnings per share were SEK 1.05 (0.92) and diluted earnings per share were SEK 1.05 (0.92)
Sales growth, both organically and through acquisitions
Bravida continued to grow in the second quarter, with sales rising by 11 percent and organic growth of 4 percent, along with a record-high order backlog. In Norway, we grew by 10 percent in the past quarter, this despite the ongoing implementation of the Bravida Way in Oras which is inhibiting growth as we are prioritising margin over volume. In Sweden, the business is performing well overall with a growth at 4 percent in the quarter and Denmark as well as Finland are reporting significant growth. Our service business is developing well with a growth at 11 percent in the period.
Improvement in EBITA and operating cash flow
EBITA increased by 10 percent. The EBITA margin in Sweden remained unchanged but improved in Norway. It’s pleasing to see the acquired Oras performing in line with our plans and also turning a profit in the second quarter. In Denmark, we achieved a slightly lower margin owing to large projects that are at an early stage of production. In Finland, our new Head of Division initiated a review of the project portfolio, which affected earnings for the quarter.
Operating cash flow was strong in the quarter and cash conversion has improved from 75 percent to 94 percent.
Implementation of new business plan
During the quarter we continued rolling out the 2018–2020 business plan to all Bravida branches. The business plan is based on a sustained focus on margin and growth, both organically and through acquisitions.
The new business plan emphasises profitability in each branch. Branches with weak or negative profitability must improve and principally focus on achieving a higher margin, while branches with good profitability should aim to grow while maintaining or improving their margin. Growth in service is a priority in order to achieve improved profitability and stability within the business. Our aim is to be the leading service partner for our customers. A raft of initiatives are being undertaken to achieve this long-term objective. The service business generally has a higher margin than the installation business, with regular customers and recurring assignments, which will provide good stability over the next few years.
Acquisitions continue to strengthen Bravida
Bravida’s growth and market position within both service and installation is developed through acquisitions. So far this year we have completed eight acquisitions, including two in July. All acquisitions strengthen our local market position and expand our customer offering.
We established an acquisition strategy in 2014, which has so far resulted in over 50 acquisitions and added SEK 5 billion in sales with good profitability. Bravida now has an effective acquisition model that creates shareholder value and enhances our customer offering. I believe we can continue growing through acquisitions in line with our financial targets going forward.
The technical service and installation market will remain good in Sweden, Norway and Denmark, and stable in Finland. The order backlog which does not include service assignments, only installation projects, is once again at a record level. The bulk of the order backlog consists of lots of small and medium-sized installation projects, which together with our large service operations, will support growth over the coming quarters.
Mattias Johansson, Stockholm, July 2018
For further information, please contact:
Mattias Johansson, CEO and Group President of Bravida. Tel: +46 8 695 20 00
Nils-Johan Andersson, CFO of Bravida. Tel: +46 70 668 50 75
This information is information that Bravida Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 07:30 CET on 20 July 2018.
The report will be presented at 09:30 CET by CEO and Group President Mattias Johansson and CFO Nils-Johan Andersson. The presentation will be held in English and can be followed on the web or over the phone. There will be room for questions.
Link to the webcast:
Telephone numbers for telephone conference:
SE: +46 8 5664 27 01
UK: +44 20 3008 9810
US: +1 85 5831 5945
The report and the presentation are available on bravida.se/en/investors/.