Interim Report January–March 2022
A strong quarter with good organic growth
• Net sales increased by 11 percent to SEK 5,826 million (5,233)
• The order backlog rose by 20 percent to SEK 17,334 million (14,397)
• EBITA rose by 11 percent to SEK 295 million (266)
• The EBITA margin was 5.1 percent (5.1)
• Profit after tax was SEK 227 million (202)
• Cash flow from operating activities was SEK 341 million (144)
• Net debt amounted to SEK -829 million (-1,134)
• Six acquisitions were made during the quarter, adding annual sales of approximately SEK 217 million
• Basic and diluted earnings per share were SEK 1.12 (1.02) and SEK 1.11 (1.02)
During the quarter, total net sales increased by 11 percent, of which 4 percent was organic. The order intake increased by 13 percent and the order backlog is now at its highest level ever. With a record order backlog and increased demand for services, Bravida remains well positioned for the coming quarters in increasingly unsettled times.
Net sales and EBITA
In the first quarter, the outside world was marked by Russia's invasion of Ukraine and we are deeply touched by the suffering it causes. Bravida condemns these acts of violence and supports humanitarian actions through grants to the UNHCR. In a time of geopolitical concerns and pandemic, as well as rising inflation and interest rates, I feel a sense of pride and security that Bravida’s business model is solid and that we can look back on a successful quarter. Total growth in the quarter was 11 percent, of which four percent was organic growth and acquisitions contributed five percent. I am particularly pleased with the organic growth, which was achieved despite the high absence rate at the beginning of the quarter due to Covid-19. Sales increased in all countries and the EBITA margin was unchanged at 5.1 percent and increased in Norway and Finland. It is pleasing to see that the hard work to improve profitability in Finland is continuing to pay off. The order intake was good and the order backlog grew by SEK 815 million in the quarter to its highest level ever.
Improved cash flow and low debt
Cash flow improved in the quarter, leading to a record low level of debt. Cash generation continued to improve, to 92 percent.
Acquisition work continues with good intensity. During the quarter, we completed six acquisitions with total annual sales of SEK 217 million. In addition, acquisition agreements have been signed for three further companies with annual sales of SEK 414 million. Looking to the future, we see good opportunities to increase the pace of acquisitions as we have a good pipeline of potential companies, a strong balance sheet and a stable price level for the additional acquisitions we make.
We continue to make progress with our sustainability work. Our products and services make it possible for customers to have climate-smart installation, energy renovation of old buildings and servicing that maintains the lifespan of the property. We are still in a market that is not quite ready to make the investments that are required, but my assessment is that this will change in due course. At the same time, the Group’s shift towards electric vehicles is going in a positive direction, with 207 ordered so far this year. Unfortunately, delivery times are long, which means we are not seeing an immediate impact on our carbon emissions. Absence rate due to work-related injuries, LTIFR, has decreased by 22 percent. Norway remains well below the target maximum level and improvements have been made in the other countries as well. In April, Bravida linked sustainability criteria to the existing credit facility of SEK 2.5 billion. Sustainability criteria are linked to the number of electric vehicles ordered and the reduction of LTIFR.
We entered 2022 with a positive outlook for both the service and installation markets. My view basically remains positive, but the consequences of the war in Ukraine and the sanctions against Russia, as well as pandemic restrictions in China, have further negatively affected the flow of materials to the construction industry. Bravida does not have ongoing operations directly affected by the war, but we are now seeing significant cost increases and the risk of material shortages in the construction industry, which could affect the construction and installation market going forward. At Bravida, we are following developments closely and have a good system for managing material price and other cost increases. So far, the impact has been limited and we have been able to compensate for it accordingly.
Our services business is much less sensitive to cyclical fluctuations and material cost increases. In addition the EU Green Deal and Taxonomy will be stabilising factors in the event of an economic downturn. A Europe that wants to be less dependent on Russian energy is also an opportunity for Bravida. This is likely to mean that our customers will increasingly demand more energy-efficient solutions in the future. It is difficult to predict how the various external factors will affect the future, but I am confident that we have a strong order backlog, good demand for service and a solid business model that has proven its strength in past crises.
Stockholm, April 2022
The report will be presented at 09:30 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 on the phone. There will be room for questions in the telephone conference.
Link to webcast
Telephone conference dial-in number
US: +1 6319131422
The report and presentation will be available on www.bravida.se/en/investors
For further information, please contact:
Peter Norström, Head of Investor Relations
+46 8 695 20 07
This disclosure contains information that Bravida Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 29 April 2022, 07:30 CET.