Interim report January–March 2020

Organic growth and strong cash flow

• Net sales increased by 8% to SEK 5,401 million (5,013)

• Organic growth was 2% (5)
• The order backlog was 11% higher at SEK 14,985 million (13,474)
• EBITA increased by 8% to SEK 272 million (251)
• The EBITA margin was 5.0% (5.0)
• Profit after tax was SEK 196 million (178)
• Cash flow from operating activities was SEK 560 million (414)
• Net debt amounted to SEK -1,698 million (-2,115)
• Four acquisitions were completed in the quarter, adding annual sales of approximately SEK 239 million
• Basic earnings per share were SEK 0.97 (0.88) and diluted earnings per share were SEK 0.96 (0.88)

CEO statement

Bravida’s first quarter of 2020 was characterised by organic growth, healthy order intake and strong cash flow. The COVID-19 pandemic has so far had a limited impact on the Group as a whole. However, some individual branches have been affected and the market outlook is uncertain.

Organic growth and solid earnings

Bravida reported positive organic growth of 2 percent for the first quarter. Servicing sales increased by 11 percent. Since servicing assignments are generally recurring, the increase contributes to the long-term stability of our business.

The order backlog also developed well, rising by SEK 500 million in the quarter as a result of healthy order intake in Sweden, Denmark and Finland. The overall EBITA margin was 5.0 percent, unchanged from the same period last year. The margin improved in Norway but was lower in Denmark and Finland.

Strong cash flow and low debt

Cash flow for the quarter was strong and cash conversion was 127 percent, which is well above our target. Our net debt decreased in the quarter by SEK 365 million and is now at a record low.

Acquisitions continue to strengthen Bravida 

So far this year we have carried out eight different acquisitions, four of which were after the end of the reporting period. The acquisitions add annual sales of approximately SEK 483 million. Bravida aims to be an industry leader on sustainability. In April we acquired 51 percent of the shares in Solkraft EMK AB, providing a useful addition in the area of low-carbon solutions. The acquisition expands our customer offering and expertise in a rapidly growing area of technology. Our strong cash flow and low debt will continue to provide us with opportunities to make acquisitions going forward, although we believe that the intensity of acquisitions will be temporarily lower because of uncertainties over the impact of the ongoing pandemic.

Sustainability

From 2020 we will be reporting the change in occupational injuries at Bravida on a quarterly basis. Our ultimate aim is to eliminate occupational injuries, while our medium-term goal is a lost time injury rate (LTIR) of below 5.5. The basis for our work environment-related measures is the Bravida Way, which ensures good organisation and safety at our workplaces. We are strengthening our safety culture through leadership and information for employees: we must speak up when we see a risk! Bravida is also continually endeavouring to improve injury prevention measures.

The LTIR is still too high and progress on this differs from country to country. Over the past 12 months occupational injuries at Bravida have decreased by 20 percent to a LTIR of 9.2.

Another key sustainability goal is the reduction of carbon dioxide emissions from our vehicles. In 2019 we decided to increase the percentage of zero-emissions vehicles by gradually replacing our servicing vehicles and changing our company car policy. Our emissions per kilometre driven decreased by more than 6 percent in 2019.
 
Outlook

Bravida has a well-balanced level of risk and our business is diversified. We have a presence in around 160 locations in the Nordic region and more than 55,000 customers across different segments. Our geographical diversification, our broad offering and our solid and differentiated customer base provide us with low exposure to individual markets and customers.

The market development is uncertain because of the coronavirus pandemic in spring 2020. Given the situation, it is great that we have a healthy order backlog, strong cash flow and a solid balance sheet. In order to further strengthen liquidity, in April Bravida signed a new one-year credit agreement for SEK 500 million. In these times it is particularly important to prioritise margin before volume. There will always be business opportunities and we are well positioned to respond to them. Our main focus at present is to deliver for our customers on important projects without putting the health of our employees at risk.

Mattias Johansson, Stockholm, May 2020

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 
[IRcontact@bravida.com]

This information is information that Bravida Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07:30 CET on 8 May 2020.

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.

Telephone conference - please register in advance

To participate in the telephone conference and Q&A session, please register in advance: http://emea.directeventreg.com/registration/9080869 

After registration, you will receive an e-mail with conference telephone numbers, participant ID and password. 

Link to webcast

https://digital.vevent.com/rt/fronto2~bravida-q1-2020

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

Bravida is the leading end-to-end servicing and installation provider in the Nordics, with over 11,700 employees. Bravida provides both specialist services and end-to-end solutions within electrical, heating and plumbing, HVAC, security, cooling, sprinklers, technical service management and power supply. Bravida is present in around 160 locations in Sweden, Norway, Denmark and Finland. www.bravida.se