Interim report January – June 2023

Good profitability and strong growth

Comments from CEO Robin Boheman:

Sales for the second quarter were SEK 3,832 (3,102) million, which corresponds to a growth rate of 23.5 percent. EBITA for the quarter was SEK 296 (250) million, corresponding to an EBITA margin of 7.7 (8.1) percent. Overall, our earnings performance was strong, with continued good profitability despite a challenging market. Both of our segments, Sweden and Rest of Nordic, contributed to the development. Thanks to our active efforts to improve profitability, we were able to maintain our margins despite the deterioration from inflationary pressure in our industry. Going forward, the market is difficult to assess in a weaker economic situation. This provides challenges that increases the importance of staying close to the customers, which we handle through our decentralized Instalco model.

There was a negative impact on EBITA during the quarter of SEK 15 (0) million, which is a provision for projects where there is uncertainty about customer solvency in segment ­Sweden. Not including the provision, EBITA would have amounted to SEK 311 (250) million, corresponding to an EBITA margin of 8.1 (8.1) percent.

Organic growth, adjusted for currency effects, was good and amounted to 5.5 percent for the Group. Segment Sweden grew organically by 2.2 percent and Rest of Nordic by 18.1 percent. During the first quarter, for the first time in quite a while, there were positive signals from Finland and it is satisfying to see that the trend continued in the second quarter as well. Norway and Finland are equally responsible for the strong growth in Rest of Nordic. Another positive development occurred in the area of service, which represented 30 percent of our revenue in the quarter. It is a healthy level and something we have been working strategically with that increases the stability of our earnings capacity. Our order backlog also grew and remains stable at SEK 9,185 (8,120) million.

Unchanged acquisition strategy
After a high pace of acquisition in the first quarter, our focus during the second quarter was on integrating the new companies into the Group. Besides the three add-on acquisitions during the quarter, Halvard Thorsen, EVG Pipe and Zenisk, we also acquired Elektro Västerbotten, which was important to our representation in Umeå. We have been interested in acquiring a traditional electrical company with the right qualities and expertise in the area for quite some time. Elektro Västerbotten is a nice match with the Instalco model and the acquisition brings us one important step closer to becoming multidisciplinary for installations in Umeå.

In total, acquisitions during the quarter added approximately SEK 92 million in annual sales. During the quarter, we have focused on further consolidating our relatively new companies while continuing to engage in discussions with possible acquisition candidates. We are continuing to pursue our strategy of actively acquiring the best companies in a market that is still quite fragmented.

Focus on job satisfaction, team spirit and health
For us, sustainability is a key component of our business model. Important elements of that are culture-building, team spirit and exercise. Job satisfaction is a priority for us and we want everyone to thrive, both physically and mentally.

During the quarter, we tested new solutions in our decentralized model. All employees were invited to participate in digital workout sessions, were we walked or ran together using an app, no matter the actual location. The initiative has thus offered us an excellent way of encouraging more exercise and strengthening the bonds between coworkers.

At our best when we work together
While digital meeting forums certainly are great, it is difficult to replicate the benefits that can be derived from traditional, in-person meetings. In May, we organized our annual segment meeting. This time, it was held in Västerås and there were around 150 participants representing more than 100 subsidiaries. It was an opportunity to share knowledge and experience on many important topics, where the overall theme was energy efficiency. It is an area that continues to grow in importance and is critical to our competitiveness. Meeting in this way is inspiring. It boosts energy and provides a forum for finding new ways to collaborate and do business. A good example of this is the collaboration between PoB:s Elektriska and El-Pågarna. They have signed a new joint three-year framework agreement with JM for electrical installations in conjunction with future residential construction projects. Both have been working with JM for many years and we are very proud that the collaboration will continue.

It is obvious to me that our decentralized Instalco model remains strong, particularly in what has become a more challenging market. Collaboration within Instalco will continue to be an important success factor for us.

Report presentation
Instalco’s CEO Robin Boheman and CFO Christina Kassberg will present the report in a conference call/audiocast today 22 August at 09.30 CET.

To participate by phone, register via:

https://conference.financialhearings.com/teleconference/?id=200930

The presentation can also be followed at https://ir.financialhearings.com/instalco-q2-2023

This information is information that Instalco is required to disclose under the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was made public by the contact person listed below, on 22 August 2023 at 07:30 CET.

For further information:
Robin Boheman, CEO
Christina Kassberg, CFO, christina.kassberg@instalco.se
Mathilda Eriksson, IR, mathilda.eriksson@instalco.se +46 (0)70-972 34 29

Instalco is one of the leading installation companies in the Nordic region, active in the areas of heating, plumbing, electricity, cooling, industrial solutions and technical consulting. We offer project planning, installation, service and maintenance of systems installed at properties and facilities throughout Sweden, Norway and Finland. The operations are conducted through approximately 130 leading and highly specialised local companies, with the support of a small central organisation. Instalco is listed at Nasdaq Stockholm under the ticker INSTAL. For further information, visit www.instalco.se