Interim report July – September 2016
July – September 2016
- Net sales amounted to SEK 3,289 million (3,302)
- The order backlog increased by 19% to SEK 8,475 million (7,099)
- Operating profit increased by 13 % to SEK 189 million (168)
- The operating margin improved to 5.8% (5.1)
- Adjusted operating profit was SEK 200 million (195) Specific costs were SEK 11 million (27). The adjusted operating margin was 6.1% (5.9).
- Profit after tax was SEK 133 million (109)
- Cash flow from operating activities was SEK -57 million (-201)
- Net debt amounted to SEK 2,783 million (2,972)
- One acquisition was completed in the quarter, adding annual sales of SEK 290 million
- Earnings per share were SEK 0.66 (0.54)
January – September 2016
- Net sales increased by 2% to SEK 10,515 million (10,287)
- Operating profit increased by 16% to SEK 591 million (507)
- The operating margin improved to 5.6% (4.9)
- Adjusted operating profit was SEK 602 million (571) Specific costs were SEK 11 million (64). The adjusted operating margin was 5.7% (5.5).
- Profit after tax was SEK 419 million (231)
- Cash flow from operating activities was SEK 13 million (146)
- Five acquisitions were completed in the period, adding annual sales of SEK 479 million
- Earnings per share were SEK 2.08 (1.15)
“Continued improvement in margins, better cash flow and a strong order backlog”
Continued improvement in margins and better cash flow
Bravida’s operating margin improved in the third quarter from an underlying 5.9 percent to 6.1 percent. Sales and earnings performance in the quarter show that our ‘margin over volume’ strategy is sustainable.
Operating margins have improved in Sweden, Denmark and Finland as a result of our improvement initiatives and careful selection of projects. The operating margin in the Norwegian business has decreased but is still the highest in the Group. Operations in Finland are developing according to plan.
Considering our seasonal fluctuation our operating cash flow in the quarter was acceptable, an improvement of approximately SEK 150 million.
Unchanged net sales
Our net sales were unchanged in the quarter. This was due to certain factors that are independent of one another. Faced with tough competition in Stockholm, we have according to Bravida’s strategy ’margin over volume’, decided to not accept projects with low margins, which resulted in lower net sales in the region. We have also taken action on the cost side in Stockholm. In recent months, the order backlog in Stockholm has been built up to an acceptable level with good margins, which will increase our growth in the region. In 2014 and 2015, Bravida had several high volume projects in production which have now been completed. This contributed to a high growth and high comparative figures.
It is pleasing that we are growing within service at some 7 percent over the period January to September and by 2 percent in the quarter.
Acquired business contributed with a 5 percent growth, which is in line with Bravida’s financial targets. Continued good pipeline for acquisitions at attractive multiples.
Record-high order backlog
Our order backlog, which only includes installations, is continuing to increase and by the end of the third quarter it was once again at a new record level of SEK 8.5 billion, which represents an increase of SEK 500 million over the past quarter. In recent years, Bravida has successfully carried out a number of major installation assignments as part of various hospital projects. More recently, these have resulted in several new major orders relating to new-builds, redevelopments and refurbishments of other hospitals, such as projects in Uppsala University Hospital and Kungälv Hospital in Sweden, and a hospital in Gødstrup in Denmark, which will lead to future growth.
Continued competition for labour
Bravida will grow and we will need more employees. We are working intensively with our resource issues and we are gradually strengthening our employer brand to be able to compete for skilled employees in the future.
Gradual improvement in demand
Several of our large construction company customers are also improving their order backlogs, which is positive for our own business going forward. We will see continued good demand for Bravida’s services, and our growth will gradually improve. The demand will be balanced against shortage in resources and price pressure which will continue our focus on ’margin over volume’.
Mattias Johansson, Stockholm, October 2016
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 28 October 2016.
A webcasted telephone conference will be held at 09:30 CET on 28 October 2016.
Bravida is a leading multi-technical service provider i the Nordics, with about 9,000 employees. Bravida delivers specialist services as well as complete electrical, heating and plumbing, and HVAC solutions, offering everything from design and project planning to installation, operation and maintenance. Bravida is represented in around 140 locations in Sweden, Norway, Denmark and Finland. www.bravidagroup.com/en/