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Year-end report 2022

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High growth and good profitability

October – December 2022

  • Net sales increased by 35.6 percent and amounted to SEK 3,590 (2,648) million. Organic growth, adjusted for currency effects, amounted to 10.7 (7.0) percent.
  • EBITA increased by 28.9 percent and amounted to SEK 292 (227) million.
  • The EBITA margin was 8.1 (8.6) percent.
  • The EBITA margin strengthened to 8.1 (7.7) percent, not excluding items affecting comparability of SEK 22 million from last year, which was related to the lump sum payment from AFA Försäkring.
  • Depreciation/amortisation of property, plant and equipment and intangible assets increased by SEK 40 million and amounted to SEK 103 (63) million.
  • Operating profit (EBIT) amounted to SEK 261 (212) million.
  • Cash flow from operating activities for the period was SEK 376 (383) million.
  • Earnings per share before dilution were SEK 0.67 (0.61) and after dilution were SEK 0.66 (0.60).
  • Three acquisitions were made during the quarter, which, on an annual basis, contribute an estimated total sales of SEK 132 million.

January – December 2022

  • Net sales increased by 35.7 percent and amounted to SEK 12,063 (8,890) million. Organic growth, adjusted for currency effects, amounted to 7.9 (4.2) percent.
  • EBITA increased by 22.5 percent and amounted to SEK 916 (748) million.
  • The EBITA margin was 7.6 (8.4) percent.
  • The EBITA margin strengthened to 7.6 (8.2) percent, not excluding items affecting comparability of SEK 22 million from last year, which was related to the lump sum payment from AFA Försäkring.
  • Depreciation/amortisation of property, plant and equipment and intangible assets increased by SEK 183 million and amounted to SEK 381 (198) million.
  • Operating profit (EBIT) amounted to SEK 784 (722) million.
  • Cash flow from operating activities for the period was SEK 753 (610) million.
  • Earnings per share before dilution were SEK 1.99 (2.10) and after dilution were SEK 1.96 (2.06).
  • A total of 16 acquisitions were made during the period, which on an annual basis contribute an estimated total sales of SEK 1,141 million.
  • The Board proposes dividends of SEK 0.66 (0.65) per share.

Comments from CEO Robin Boheman:

Net sales increased during the quarter by 35.6 percent to SEK 3,590 million, with organic growth of 10.7 percent. EBITA increased during the quarter and amounted to SEK 292 million, which corresponds to an EBITA margin of 8.1 percent. Despite the high inflationary pressure, we were able to defend our margins very well during the quarter. Our underlying margin for Q4 2022 was comparatively stronger after having adjusted for the lump sum payment from AFA Försäkring of SEK 22 million received in Q4 2021 (7.7%). We can see that there is a strong demand for our installation services and overall, investment willingness remains at a high level. The order backlog increased by 23.3 percent to SEK 8,376 million at year end.

We can sum up 2022 as a strong year, with total net sales of SEK 12,063 million and an EBITA margin of 7.6 percent, which is confirmation of our strength and resilience in difficult circumstances like those we faced this year.

Niche acquirer of quality companies

Instalco is a niche acquirer in the installation industry, exclusively focused on quality companies. Our direction is primarily to grow and widen our scope in the Industrial, Technical Consulting and Other Nordic segments. We made 16 acquisitions during the past year, of which nine were in Norway and Finland. In total, their assessed annual sales are SEK 1,141 million. We are comfortable with the rate of acquisitions and are maintaining both a balanced level of indebtedness and strong balance sheet.

During the last quarter of the year, all of the acquisitions we made were in the Other Nordic region. In Norway, we now have a full-range offering in the Lillehammer region having acquired Bakke El-Installasjon and we anticipate many synergy opportunities with our other companies in the area that offer heating & plumbing and ventilation solutions. We have also expanded our offering in the northern region of Norway with the acquisition of Imes in Tromsö. It is established in the niche of electrical installations for the fishing industry. During the quarter, we continued growing in the technology area in Finland with the acquisition of Dymont Installation. In collaboration with Dymont, we are now seriously building up our offering of industrial installations in Finland.

During the quarter, we also made several interesting add-on acquisitions and in Finland, we established our second start-up. In total, the acquisitions during the quarter contribute around SEK 132 million in sales.

Leading position in the hospital construction

For several years already, Instalco has been one of the leading providers of electrical, heating & plumbing and ventilation installations for hospital construction projects in Sweden. We solidified that position further during the quarter with our new, comprehensive assignment associated with the expansion of Falu Hospital. It is a partnering project involving Byggdialog, Regionfastigheter Dalarna and three of our Instalco companies. We have extensive experience with these types of projects and can offer the customer a complete solution, from design to installation.

New vision

During the year, there has been an interactive process within the Group to arrive at a new vision, which we have now launched. In conjunction with that, we developed a roadmap to 2027, where there is a clear focus on employees, customers, sustainability and continued growth. We are also taking the opportunity to adapt our organisation so that it is able to work in the most optimal way towards achieving the new vision.

The underlying driving forces for growth in the installation markets are quite strong. Nevertheless, we are impacted over the short term by business cycle fluctuations. Although the demand for our services is high, we remain cautious given all the uncertainty in the world around us. We have a strong order backlog and a good composition of both services and contract forms. We also continue growing in the service area. All of it provides us with good prerequisites for delivering continued stable profitability.

I am very proud that Instalco can sum up 2022 in such a positive way. Our decentralised model has enabled us to manage the circumstances we have faced extremely well and it is strong evidence that the Instalco model works well even in challenging times.

Report presentation

Instalco’s CEO Robin Boheman and CFO Christina Kassberg will present the report in a conference call/audiocast today 16 February at 09.30 CET:

https://conference.financialhearings.com/teleconference/?id=500512

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-q4-2022

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 16 February 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 125 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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