Interim Report January–March 2021
Improved EBITA margin and growing order backlog
• Net sales decreased by 3% to SEK 5,233 million (5,401)
• The order backlog was SEK 14,397 million (14,985)
• EBITA decreased by 2% to SEK 266 million (272)
• The EBITA margin was 5.1% (5.0)
• Profit after tax was SEK 202 million (196)
• Cash flow from operating activities was SEK 144 million (560)
• Net debt amounted to SEK -1,134 million (-1,698)
• Four acquisitions were completed in the quarter, adding annual sales of approximately SEK 300 million
• Basic earnings per share were SEK 1.02 (0.97) and diluted earnings per share were SEK 1.02 (0.96)
The EBITA margin increased to 5.1 percent. Order intake improved and the order backlog increased by SEK 606 million in the quarter.
Net sales and EBITA margin
Given the conditions, I am satisfied with sales and profit for the quarter, and the result was better than I had expected in view of the shutdowns in the quarter. Net sales decreased by 3 percent in the quarter due to lower production in the Norwegian service and installation business. In Sweden and Denmark sales were stable, whereas they increased in Finland.
Net installation sales decreased in Norway and Denmark. Organic growth was -4 percent and acquisitions contributed 3 percent growth. Exchange rate fluctuations had a negative impact of -2 percent on growth.
In the quarter, service demand increased in Sweden and Denmark. However, the service business continued to be adversely affected by the pandemic, mainly in Norway and southern Sweden, as demand fell and in a number of cases we were unable to access service properties because of precautionary measures.
Demand for technical installations is stable, but the ongoing pandemic has led to customers postponing project planning and investment decisions, which was the reason for lower activity in the installation business.
We are seeing improved order levels in the installation business as a result of an increased order backlog in Norway and Sweden. The order backlog rose by SEK 606 million in the quarter, SEK 372 million of which was in Norway.
The EBITA margin improved in Denmark and Finland, contributing to an improved EBITA margin of 5.1 percent (5.0). This is despite the fact that, as planned, we had higher costs for starting to implement our new business plan and digital strategy, while the cost of our performance-based incentive programme, LTIP, increased due to the rise in the share price.
Solid cash conversion and low debt
Cash conversion was 121 percent, which is above our target of 100 percent. Bravida's net debt remains at a record low of 0.6x EBITDA and well below our target of 2.5x EBITDA. Cash flow in the quarter declined compared with last year, due to lower production and fewer newly started projects in the installation business. Cash flow is impacted positively by start-up of large projects.
Acquisitions continue to strengthen Bravida
In 2021, Bravida has so far completed five acquisitions with combined annual sales of more than SEK 300 million. We have also signed an agreement for two acquisitions in Sweden with a total sales of approximately SEK 125 million. Our assessment is that acquisition opportunities remain very good.
Bravida has developed an end-to-end solution, Bravida Charge, to meet the growing need for electric-vehicle charging infrastructure for both corporate customers and private individuals. We make it easy to go fossil free by offering our customers an end-to-end charging and administration solution. Bravida Charge is one of the initiatives in Bravida’s long-term strategy to reduce both our customers’ and our own carbon footprint.
My assessment is that demand in the Nordic service and installation market will gradually see a slight increase during 2021. As we return to a more normal situation, there will be a greater need for service that has been neglected during the pandemic. The installation business is seeing growing demand for new-builds and the refurbishment of residential, industrial and warehouse buildings, as well as the remodelling and upgrading of office space. We do not see any problems with the material supply at present, but we will be affected by rising raw material prices, which we take into account in the pricing of future customer deliveries.
Despite the short-term market outlook remaining uncertain, there will always be demand for our services and our business will also benefit from our customers’ ambitions to find sustainable, low-carbon solutions.
Stockholm, April 2021
For further information, please contact:
Mattias Johansson, CEO and Group President of Bravida
Phone: +46 8 695 20 00
Åsa Neving, CFO
Phone: +46 8 695 22 87
IR Contact: peter.norström@bravida.se
The report will be presented at 15:00 CET by CEO and Group President Mattias Johansson and CFO Åsa Neving. 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:
Telephone conference numbers:
SE: 0856618430 (Participant LocalCall)
UK: 08448228902 (Participant LocalCall)
US: 19177200181 (Participant LocalCall)
International Dial-In Number: +44 (0) 2071 928501
Conference ID: 3136593#
This disclosure contains information that Bravida Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 26-04-2021 12:00 CET.