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Interim report January – March 2023

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High organic growth and strengthened profitability

January – March 2023

  • Net sales increased by 26.4 percent and amounted to SEK 3,264 (2,583) million. Organic growth, adjusted for currency effects, amounted to 12.5 (7.8) percent.
  • EBITA increased by 34.1 percent and amounted to SEK 233 (173) million.
  • The EBITA margin was 7.1 (6.7) percent.
  • Depreciation/amortisation of property, plant and equipment and intangible assets increased by SEK 40 million and amounted to SEK 112 (72) million.
  • Operating profit (EBIT) amounted to SEK 190 (151) million.
  • Cash flow from operating activities for the period was SEK 222 (210) million.
  • Earnings per share before dilution were SEK 0.48 (0.38) and after dilution were SEK 0.47 (0.37).
  • Six acquisitions were made during the period, which, on an annual basis, contribute an estimated total sales of SEK 970 million.

Comments from CEO Robin Boheman:

Sales in the first quarter were SEK 3,264 (2,583) million, which corresponds to a growth rate of 26.4 percent. EBITA for the quarter was SEK 233 (173) million, which corresponds to an EBITA margin of 7.1 (6.7) percent.

Organic growth, adjusted for currency effects, amounted to 12.5 percent. Both of our segments contribute to the strong growth, with Sweden contributing 12.0 percent and Rest of Nordic 14.3 percent. Acquired growth amounted to 13.8 percent.

Many acquisitions
The year started with a lot of activity on the acquisition front and we acquired around SEK 970 million in sales, of which three major acquisitions: Lysteknikk, Enter Ställningar and Processus accounts for the major part. We also acquired three smaller companies: Telepatrol, RP Montage and SMT. All of the acquired companies are very successful and specialised and therefore a good fit with Instalco’s business model and culture. We have had a dialogue underway with several of the companies for quite some time before arriving at the point where the time was ripe for us to join forces and follow a shared path.

The high pace of acquisition has raised our level of indebtedness but due to our strong earnings growth, we still managed to achieve our goal of a net debt in relation to EBITDA of 2.5 times. For the 12-month rolling period, our debt-to-equity ratio is slightly lower. We are secure with the rate of acquisition, our cash flow and the balance sheet.

Building a network between our subsidiaries
In 2023 we will focus on integrating our latest acquisitions and making sure that they quickly will contribute to our continued growth in earnings and cash flow. We will also continue pursuing our acquisition agenda, looking to acquire the best companies in our industry.

Instalco’s ambition is to always be the best harbour for entrepreneurial companies in the fields of installation, industry and technical consulting. We are working in a focused way to integrate our acquisitions and ensure that our employees and companies understand and embrace our vision and the Instalco spirit. We are building a network between our companies as a means of deriving the greatest possible benefits and synergies from their cumulative expertise. Instalco also puts a lot of emphasis on coaching and further developing the companies of these entrepreneurs, along with ensuring that they remain profitable as part of the Instalco Group. We are also actively pursuing dialogue with companies that are interesting candidates for future acquisition.

Positive signals from Finland
Order backlog is strong and stable, amounting to SEK 8,987 (7,602) million, which is an increase of 18.2 percent. We are getting positive signals from Finland and for the first time in quite a while, the order backlog there is increasing.

Many exciting new contracts were signed during the quarter, with projects starting up throughout the Nordic region, most of which are focused on making properties more energy efficient in various ways. As we’ve grown the industrial side of the business, the number of projects in that area has grown as well. During the quarter, for example, we signed a contract with SSAB via our Finnish subsidiary, Pohjanmaan Talotekniikka in Uleåborg. The work involves installation of heating, plumbing and ventilation systems in conjunction with the expansion of their facilities in Brahestad.

Safe employees the foundation of Instalco
We are continuing to develop our work with sustainability and reported some good results on our sustainability goals towards the end of the quarter. The social and physical work environment for our employees is a high priority and employee satisfaction for the Group remains at a very high level. 85 percent of our employees responded that they are satisfied or very satisfied with their work situation overall.

Our Safe Employee training is one aspect of Instalco's internal work with sustainability. During the quarter, we updated and developed the training to cover the social ­perspective and psychosocial workplace, thereby supplementing the rules and routines for avoiding physical injury and accidents in the workplace. Safe Employee is also part of our certification system, Sustainable Instalco Project, which we have high ambitions for in 2023.

Report presentation

Instalco’s CEO Robin Boheman and CFO Christina Kassberg will present the report in a conference call/audiocast today 4 May at 09.30 CET:

https://conference.financialhearings.com/teleconference/?id=200716

If you wish to participate via teleconference, please register on the link above. After registration you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference.

The presentation can also be followed at https://ir.financialhearings.com/instalco-q1-2023

This information is information that Instalco is required to disclose under the EU Market Abuse Regulation. The information was made public by the contact person listed below, on 4 May 2023 at 07:30 CET.

For further information:
Robin Boheman, CEO
Christina Kassberg, CFO, christina.kassberg@instalco.se
Fredrik Trahn, IR, fredrik.trahn@instalco.se +46-70-913 67 96

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

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