Interim Report July–September 2022

Strong organic growth and a continuing good order intake

• Net sales increased by 26 percent to SEK 6,097 million (4,854)
• The order backlog rose by 17 percent to SEK 17,895 million (15,269)
• EBITA rose by 22 percent to SEK 357 million (294)
• The EBITA margin was 5.9 percent (6.1)
• Profit after tax was SEK 270 million (221)
• Cash flow from operating activities was SEK 78 million (-139)
• Net debt amounted to SEK -2,144 million (-1,906)
• Five acquisitions were made during the quarter, adding annual sales of approximately SEK 724 million
• Basic and diluted earnings per share were SEK 1.29 (1.09)

CEO statement
Total net sales increased by 26 percent, with 13 percent being organic growth. Earnings per share increased by 19 percent, despite major investments being made in the business. My assessment is that Bravida is well positioned for the coming quarter with a large service share and a record order backlog.

Net sales and EBITA
I am pleased with the good growth during the quarter and especially with the high organic growth of 13 percent. We continue to see good activity for service, which grew by 30 percent, and installation, which grew by 22 percent. EBITA increases by SEK 63 million to SEK 357 million, resulting in a 19 percent increase in earnings per share. Once again, we have a record order backlog.

The business in Sweden reports good growth and a continued stable margin. Our Norwegian and Danish businesses have experienced strong growth both organically and through acquisitions, particularly in the area of installation but also with regard to service. The change in the sales mix in Norway and Denmark, with more installation, puts pressure on margins, as installation has lower profitability than service. In Finland, we are growing through acquisitions and improving margins by achieving good profitability in all regional units.

The EBITA margin decreased by 0.2 percentage points to 5.9 percent. The deterioration of the margins is explained by lower margins in Norway and Denmark and higher costs. The lower margins in Norway and Denmark are, in addition to a change in the sales mix, mainly due to lower profitability in some of the project activities. The increase in administrative costs is attributed to the acquisitions made, as well as investments in the newly established business areas of Automation and Technical FM, a modernised IT platform and new digital tools. In summary, in 2022 we have had growth of 17 percent, been able to invest for the future and at the same time still delivered a stable margin.

Improved cash flow and secure financing
Operating cash flow and cash conversion improved during the quarter, with cash conversion increasing from 80 percent to 88 percent. Bravida renewed its loan of SEK 500 million from Svensk Exportkredit for another three years. Debt levels remain low.

Acquisitions
So far this year, 21 acquisitions have been completed, adding approximately SEK 1,565 million in sales, and five acquisitions were completed in this quarter. After a high pace of acquisition in the first half of the year, it is quite natural that the second half of the year will be quieter. We continue to work with potential acquisition candidates and also to replenish our pipeline, which is at a good level. With our low level of debt and good pipeline, we continue to see good opportunities to acquire companies; this will mainly be reflected next year.

Sustainability
It is very pleasing that the activities we are working on to reduce work-related injuries have borne fruit, as we note that work-related injuries have decreased by 20 percent over the last 12 months. We continue to convert our fleet of vehicles at a rapid pace. This year we have ordered 947 electric vehicles, which is more than 60 percent of the vehicles ordered. We continue to develop sustainable solutions for our customers. For example, our Automation business area develops standardised solutions for remotely controlling and optimising energy consumption in our customers’ buildings.

Outlook
I am of the opinion that market development will be uncertain over the next few quarters, while I see relatively stable demand at the moment. External factors are making the market more difficult to assess than usual in terms of its future development. We believe that the demand for service will remain strong while the demand for installation is more difficult to assess, as some segments are more sensitive to macroeconomic effects than others. 

To take the next step and accelerate our investment in new customer offerings, we will bring Technical FM, Automation and Energy Management together in a new division at Group level, Division Growth Segment. Magnus Hamerslag, member of the Group Management Team, has been assigned responsibility for these growth areas. Regardless of the market conditions, we consider these areas to be highly relevant, as society adjusts in order to reduce its climate impact and energy costs. Bravida’s decentralised business model provides significant flexibility in terms of cost adjustments and resource planning. 

We will probably see a slowdown in demand and also some pressure on margins going forward. However, I feel confident about the upcoming quarters as we currently have good demand, a strong order backlog and a good portfolio mix, which means we have a solid basis for continuing to deliver stable profitability. The high energy prices are likely to also be an advantage for us, as they will accelerate the green transition and the making of decisions about energy efficiency improvements in buildings.

Mattias Johansson
Stockholm, October 2022

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 on the phone. There will be room for questions in the telephone conference.
 

Link to webcast
https://ir.financialhearings.com/bravida-q3-2022

Telephone conference dial-in number
SE: +46-8-5051-6386
UK: +44-20-319-84884
US: +1-412-317-6300
Pin code: 3110500#

The report and presentation will be available on www.bravida.se/en/investors

For further information, please contact:
Peter Norström, Head of Investor Relations
peter.norstrom@bravida.se
+46 8 695 20 07

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 October 2022, 07:30 CET.

Good properties make a difference – that’s why Bravida exists. As the Nordic region’s leading supplier of end-to-end technical solutions in service and installation, we help our customers create effective and sustainable properties. 

Bravida’s long-term goal is to be carbon-neutral throughout the value chain by 2045. We have 12,000 employees and a presence in over 180 locations in Sweden, Norway, Denmark and Finland. Bravida’s shares are listed on Nasdaq Stockholm. www.bravida.se