Interim Report July–September 2021
Strong order intake and improved margin in the quarter
• Net sales increased by 2 percent to SEK 4,854 million (4,750)
• The order backlog was SEK 15,269 million (14,274)
• EBITA increased by 4 percent to SEK 294 million (284)
• The EBITA margin was 6.1% (6.0)
• Profit after tax was SEK 221 million (213)
• Cash flow from operating activities was SEK -139 million (10)
• Net debt amounted to SEK -1,906 million (-1,230)
• Three acquisitions were completed in the quarter, adding annual sales of
approximately SEK 118 million
• Basic and diluted earnings per share were SEK 1.09 (1.07)
Order intake increased by 30 percent in the quarter and the EBITA margin improved to 6.1 percent. An improvement in demand for installation projects boosted the order backlog and puts Bravida in a good position for the next few quarters.
Sales and EBITA
It’s pleasing to see a recovery to more normal conditions in the past quarter. Sales growth was 2 percent. The pandemic impacted installation order intake last year, which resulted in lower production volume this year. Some delays in project planning and start-up by customers also contributed to lower activity. The order backlog for installation projects has improved by SEK 1.5 billion in 2021, which will boost production volumes over the next few quarters.
Order intake rose by 30 percent, driven by installation projects. All countries contributed to this increase and the order backlog grew in all countries, apart from Finland. Service sales increased during the quarter by 6 percent, with good growth in Norway, Denmark and Finland.
The EBITA margin, which improved to 6.1 percent, rose in Sweden, Norway and Denmark and was unchanged in Finland. These solid earnings demonstrate the strength of our business and that we can maintain and even improve the margin in more challenging times. This is despite investments in areas such as digital tools and the recruitment of new skills, which support our long-term strategy.
Operating cash flow decreased compared with the previous year, largely due to higher trade receivables. We still have two large outstanding receivables in Denmark from two public sector customers and they have had a negative impact on cash flow during the year. These projects are in their final phase of production and the receivables will be settled by an arbitral tribunal. Our assessment is that this will take time but these are not expected to have any significant impact on earnings.
So far in 2021, we have completed 15 acquisitions, with total annual sales of around SEK 750 million. We have acquired three businesses in the building automation sector, which is a priority growth area for Bravida. Competition for acquisitions targets increased slightly and we have strengthened the capacity of our operating business to increase our acquisition pace. This has resulted in significantly higher activity and an excellent pipeline of possible acquisitions. In addition, we are continuing to bolster our Finnish business and have agreed the acquisition of an HVAC company with sales of around SEK 110 million, which will expand our customer offering in Southern Finland.
During the quarter, we launched Green Hub, our fossil-free service concept in large cities, which has received significant customer interest. We have also developed our sustainability work, which is a key part of our long-term strategy. Bravida is investing in new growth areas such as technical facility management and building automation, in which our significant technical expertise will contribute to sustainable solutions and lower energy consumption for our customers. The key factor for reducing our own climate impact is converting our vehicle fleet of almost 7,000 vehicles to fossil-free fuel. Its a challenge, but the percentage of electric and hybrid vehicles on order is growing as new models of vehicle appear on the market that are suitable as service vehicles, and these now account for 42 percent of all vehicles ordered in 2021.
The market outlook has gradually improved over the year and there is a clear recovery in both our service and installation businesses. As we announced previously, raw material prices are rising sharply and there is a risk of materials shortages in some areas. Bravida is following matters closely and we have good systems for handling this.
Our strength is that we can carry out both small and medium-sized projects, but also that we are one of the few players who can handle large complex projects. We are seeing increased demand for large infrastructure projects and I am proud that Bravida among other things is part of a consortium that is one out of four pre-qualified tenderer for the Fehmarn belt tunnel between Denmark and Germany. Our strong order intake and order backlog indicate improved sales growth over the next few quarters.
Stockholm, October 2021
For further information, please contact:
Peter Norström, IR contact
Tel: +46 8 695 20 07
The report will be presented at 09:30 CET by CEO and Group President Mattias Johansson and CFO Åsa Neving. This is followed by a presentation of Bravida's updated sustainability strategy, approx. at 10.30. 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 dial-in number
SE: +46856642704 (Local call)
UK: +443333009263 (Local call)
US: +1 6319131422 (Local call PIN: 1345 1744#)
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 26 October 2021.