Interim report April–June 2020

Organic growth, improved EBITA margin and strong cash flow

  • Net sales increased by 6% to SEK 5,382 million (5,087)

  • Organic growth was 3% (-1)
  • The order backlog was 8% higher at SEK 14,952 million (13,905)
  • EBITA increased by 16% to SEK 317 million (274)
  • The EBITA margin was 5.9% (5.4)
  • Profit after tax was SEK 238 million (201)
  • Cash flow from operating activities was SEK 728 million (131)
  • Net debt amounted to SEK -1,185 million (-2,612)
  • Six acquisitions were completed in the quarter, adding annual sales of  approximately SEK 363 million
  • Basic and diluted earnings per share were SEK 1.17 (0.99)
 

CEO statement

Bravida had a strong second quarter of 2020, with positive earnings performance, organic growth and good cash flow. Installation
operations have been largely unaffected by the pandemic, but servicing sales have decreased.

 

The ongoing Covid-19 pandemic has had a bearing on Bravida’s second quarter of 2020, as it has on society in general. So far the overall impact of the pandemic on our business has been surprisingly small.

The level of production within installation has been good, and only a few worksites have been closed because of the pandemic. The servicing business, however, has been negatively affected, as in many cases we have not had access to servicing sites because of precautionary measures in place. In most cases, cancelled servicing jobs have only been postponed and will be carried out at later date.

 

Organic growth and improved EBITA margin

It is really positive that, despite the Covid-19 pandemic, we have achieved our estimate from 2019 for organic growth in the first half of 2020. Net sales increased by 6 percent in the quarter, which is above Bravida’s growth target. Organic growth was 3 percent and acquisitions contributed 6 percent growth, while the weaker Norwegian krone had a negative effect of 3 percentage points.

The EBITA margin increased to 5.9 percent in the quarter. Margins improved in Norway, Denmark and Finland.

Order intake was slightly lower than last year, which was entirely due to lower activity in the servicing business as well as currency effects. Our strong order backlog, which only contains installation projects, remains solid. The order backlog increased slightly in Sweden and Norway, but decreased somewhat in Denmark and Finland.

Strong cash flow and low debt
Cash flow for the quarter was strong and cash conversion was 149 percent, which is well above our target. Our net debt decreased
in the quarter by SEK 513 million and is now at a record low.

 

Acquisitions continue to strenghthen Bravida
So far this year we have made thirteen acquisitions, six of which were in the second quarter and three were in July. The acquisitions add annual sales of approximately SEK 725 million. During the quarter Bravida acquired two solar cell companies, one each in Sweden and Finland. The acquisitions expand our customer offering in low-carbon solutions and our expertise in a rapidly growing area of technology. Our strong cash flow and low debt will provide us with continued opportunities to make acquisitions in future. However, because of the uncertainty in the market we believe that acquisition activity will temporarily be less intensive.

Sustainability
Minimising occupational injuries is one of our key objectives. Occupational injuries have decreased by 18 percent over the last 12 months and LTIR (lost time injury rate) was 9.6 (11.7). The LTIR is still too high and progress on this differs from country to country. Our ultimate aim is to eliminate occupational injuries, while our medium-term goal is an LTIR of below 5.5. Bravida is continually endeavouring to improve injury prevention measures.

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.

During times of uncertainty like the Covid-19 pandemic, customers prefer to sign service agreements and commission installation projects from reliable suppliers, which could generate good business opportunities for Bravida.

Market development is uncertain because of the ongoing Pandemic. My expectation over the next few quarters, however, is that the installation business will remain solid and that the servicing business will gradually return to normal levels, as I am confident that our customers see the value in well-maintained properties.

Mattias Johansson, Stockholm, July 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 and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 12:00 CET on 17 July 2020.

The report will be presented at 13:30 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.

 

Link to the webcast:
https://digital.vevent.com/rt/fronto2~bravida-q2-2020

 

Telephone conference: 
SE:  0850692180     
UK:  08445718892 
US:  16315107495   
International Dial-In Number: +44 (0) 2071 928000
Conference ID: 9576695#