Interim report October–December 2018

A strong finish to 2018

  • Net sales increased by 12% to SEK 5,521 million (4,927)
  • Organic growth was 4% (6)
  • The order backlog was SEK 11,992 million (10,271), an increase of 17%
  • EBITA increased by 12% to SEK 438 million (390)
  • The EBITA margin was 7.9% (7.9)
  • Profit after tax was SEK 375 million (320)
  • Cash flow from operating activities was SEK 807 million (650)
  • Net debt amounted to SEK -1,365 million (-1,862)
  • Four acquisitions were completed in the quarter, adding annual sales of approximately SEK 420 million
  • Basic earnings per share were SEK 1.85 (1.59) and diluted earnings per share were SEK 1.85 (1.58)

CEO statement

The fourth quarter of 2018 was another record quarter for Bravida. We are reporting our best earnings ever, with high growth and lots of good acquisitions, but we are still not satisfied. We have a business model that works, and our organisation retains significant potential.


Sales growth of 12 percent
We are seeing continued good demand and growth in the fourth quarter was strong. Growth was well in line with our financial target of 12 percent, and organic growth was 4 percent. The order backlog rose by 17 percent. In Denmark and Finland growth was good, owing to high production in Denmark and acquisitions completed in Finland. Growth was also good in Sweden and Norway.

Profit up by 12 percent
EBITA rose by 12 percent and the EBITA margin was unchanged at 7.9 percent.

The acquisitions we have made in Finland have meant we are close to achieving critical mass and have increased the quality of our operations, resulting in significantly improved profitability.

In Denmark we improved the EBITA margin through more efficient operations and administration.

The EBITA margin remains at a high level in Sweden. However, the margin was slightly lower than in the previous year owing to a positive non-recurring effect in the fourth quarter of 2017.

The level of production in Oras’ old projects remained high in the quarter, which had a negative impact on the EBITA margin. My assessment is that the unprofitable projects that Oras had when it was acquired in May 2017 will be completed in the first quarter of 2019.

Cash flow strong and dividend to be raised by 29 percent
Cash flow for the fourth quarter reduced our net liabilities to SEK -1,365 million. Our cash conversion was 102 percent, which is above our financial target. The Board proposes that the dividend be raised by 29 percent SEK 2.00 per share. Since our IPO in 2015 we have raised the dividend by an average of 26 percent a year. For me, this proves we have a business model that generates cash flow through profitable growth.

Stockholm Bypass Project
Bravida has signed two agreements with the Swedish Transport Administration as part of the Stockholm Bypass Project. These agreements relate to the contracts awarded to Bravida in the third quarter of 2018. One contract for SEK 1,597 million has been recorded in the order backlog for the fourth quarter. The second contract, for SEK 1,144 million, will be recorded in the order backlog in the first quarter of 2019.

The period 2019–2020 will cover project design and planning, which will generate some income. The bulk of production operations will be carried out during 2021–2023, after which Bravida will be responsible for maintenance and service for another two years.

The Stockholm Bypass Project is an important project that we are proud to be involved in. Bravida has extensive experience from previous infrastructure projects and we have the scale and capabilities to manage large and complex projects. We have been working on preparations relating to the Stockholm Bypass Project for the past few years and we’re now focusing on establishing a strong delivery organisation.

Acquisitions continue to strengthen Bravida
Over the course of the year we completed 12 acquisitions and signed agreements for another three acquisitions, which were completed in January 2019. The acquisitions made in 2018/19 increase annual sales by around SEK 900 million. These acquisitions strengthen our local market position and expand our customer offering.

During the autumn we strengthened the acquisition team to ensure a continued high pace of acquisitions and good integration of future acquisitions. We see a continued good pipeline of potential acquisitions and are pursuing a number of interesting acquisition discussions.

Outlook
Bravida has a well-balanced level of risk as a result of being based in around 160 locations in the Nordic region and having over 55,000 customers across different segments. Our geographical diversification, our broad offering and our solid and differentiated customer base provides us with low exposure to individual markets and customers.

2018 was our best ever year but there is still lots we can improve on, including in operations, purchasing and on costs. Demand for service and installation is good in our markets and I look forward with confidence to 2019.

Mattias Johansson, Stockholm, February 2019

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
IRcontact@bravida.com

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 15 February 2019.

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 webcast:
https://tv.streamfabriken.com/bravida-q4-2018

Telephone numbers for telephone conference:
SE: +46 8 5664 27 06 
UK: +44 33 3300 9031 
US: +1 646 722 49 02


The report and the presentation are available on bravida.se/en/investors/.