Interim Report April-June 2021

Recovery in the service business generated growth in the quarter

• Net sales increased by 3% to SEK 5,570 million (5,382)
• The order backlog was SEK 14,908 million (14,952)
• EBITA rose by 3% to SEK 327 million (317)
• The EBITA margin was 5.9% (5.9)
• Profit after tax was SEK 246 million (238)
• Cash flow from operating activities was SEK 317 million (728)
• Net debt amounted to SEK -1,600 million (-1,185)
• Five acquisitions were completed in the quarter, adding annual sales of approximately SEK 349 million  
• Basic and diluted earnings per share were SEK 1.23 (1.17)
   

CEO statement
Organic growth in Sweden, Denmark and Finland. Order intake grew by 12 percent, fuelled by good service demand, which grew in the quarter. Improved demand for installation projects increased the order backlog by SEK 510 million.    

Net sales and EBITA margin 
Given strong comparative figures and a continued negative impact from the pandemic, mainly in Norway, I am satisfied with performance in the quarter.

Net sales increased by 3 percent in the quarter. Sales within service increased in all countries, while installation project volumes decreased in Norway and Denmark. However, we note a positive trend at the end of the quarter mainly in Denmark.

The service business grew by 13 percent, contributing to organic growth of almost half a percentage point. We are reporting organic growth in all countries apart from Norway, which was affected by increased lockdowns at the start of the quarter. 

The lower production rate in the installation business was due to the weaker order intake in 2020. Some delays in project planning and start-up by customers also contributed to lower activity. The order backlog for installation projects grew by SEK 1.1 billion in the first half of the year, which will lead to increased production volumes over the next few quarters. 

The EBITA margin, which was unchanged at 5.9 percent, improved in Sweden and Finland and was unchanged in Norway and Denmark. Our Finnish operations continue to move in a positive direction as a result of good project selection and increased service activities, as well as a stronger market position.

Cash flow 
Operating cash flow decreased in the quarter. Last year cash flow reached a historic high, which was due to very low levels of working capital. This year we see a normalisation in the working capital in the first two quarters compared with last year, which is leading to lower cash flow from operating activities. Working capital in relation to net sales remains at a good level of -6.8 percent. 

We also have some large outstanding receivables in Denmark from two public sector customers, which have had a negative impact on cash flow during the year. These projects are in their final phase of production and the disputes will be settled by an arbitral tribunal. Our assesment is that these are not expected to have any significant impact on earnings.

Acquisitions 
So far in 2021, we have completed 10 acquisitions, including one in July, with total annual sales of around SEK 584 million. 

As previously announced, we have signed a letter of intent to acquire the Minel Group in Norway. The letter of intent is valid until 30 September 2021, but both parties agree that the preconditions for completing the deal do not currently exist.

Our assessment is that acquisition opportunities generally remain very good.

Sustainability
Our increased focus on sustainable services has resulted in the launch of GreenHub and Bravida Charge. GreenHub is a fossil-free service concept that we offer our customers in nine cities across the Nordic region. March saw the introduction of Bravida Charge, a complete solution for electric car charging and payment management. Demand is good and the first  deliveries were made in the second quarter.

Our own climate footprint has the highest focus and as part of that, our fleet will consist of at least 30 percent fossil-free vehicles by 2025. More than 160 electric vehicles have been ordered so far this year.

Outlook
We are seeing a clear recovery in the service business and demand has normalised in the quarter, following a considerable decline in 2020 due to the pandemic. Demand for installations improved in the spring. 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.

As everyone is aware and as previously announced, raw material prices are rising sharply and there is a risk of material shortages in some areas. Bravida has a good system for dealing with this. We work with both contracts and long-term partnerships on the supplier side and with price increases in respect of customers. We therefore see no significant risk that higher commodity prices will affect our margin in the longer term. 

The market outlook improved during the quarter and demand for sustainable low-carbon solutions will contribute to a growing market.

Mattias Johansson
Stockholm, July 2021

For further information, please contact: 

Mattias Johansson, CEO and Group President of Bravida
Tel: +46 8 695 20 00
Åsa Neving, CFO Tel: + 46 8 695 22 87
IR Contact: peter.norstrom@bravida.se


The report will be presented at 09:30 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
https://tv.streamfabriken.com/bravida-q2-2021

Telephone conference dial-in number
SE:  +46850558356    (Local call) 
UK:  +443333009264  (Local call) 
US:  +1 6319131422   (Local call PIN: 22491044#)
 

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 16-07-2021 07:30 CET.

Bravida is the Nordic region’s leading provider of sustainable end-to-end solutions for electrical systems, heating and plumbing, HVAC and other technical functions in properties and facilities. We have 12,000 employees and branches in around 180 locations across Sweden, Norway, Denmark and Finland. www.bravida.com