The Nordic countries have enjoyed strong government finances in recent years, making for considerable public investment in infrastructure and housing. In addition, demand for energy efficiency and complex installations is growing. This means excellent prospects for the Nordic service and installation sector.
We have excellent growth prospects, but we don’t want to grow at any price. We only take on assignments with calculable risks and we always prioritise margins over growth. This generates results. Over the past years we have achieved annual organic growth of around 4 percent, and our operating margin has remained at over 6 percent.
Our market in the Nordic region largely consists of lots of small companies, giving us a basis for long-term growth through acquisitions. Bravida has acquired a large number of companies in recent years and has become a major player in the consolidation taking place in the industry. We mainly acquire companies that complement our offering locally. Our objective is to achieve economies of scale and synergies between our companies.
Bravida has significant risk diversification. Most of our approximately 50,000 customers are small and no single customer accounts for more than 5 percent of our sales. Around half of our business consists of service and maintenance work, making us less dependent on economic fluctuations. And much of our operations consist of recurring business. That provides a high degree of predictability and stability for sales.
Bravida’s clear and decentralised approach provides a basis for continual improvement and profitability. Our branches are the real engine of the business, with their entrepreneurial spirit, local market knowledge and proactive approach. And they receive support from the Group both in terms of operations and follow-up.
Bravida’s cash conversion has remained stable for many years. One of Bravida’s financial targets is to distribute at least 50 percent of net profit as dividends to shareholders.
*12-month cash conversion = 12-month EBITDA +/- change in working capital and investments in machinery and equipment in relation to EBIT.
Read more - Risks and uncertainties for Bravida