Interim Report April-June 2023

Good revenue growth and order intake

Regulatory press release

• Net sales increased by 14 percent to SEK 7,306 million (6,434)
• The order backlog was SEK 16,597 million (17,436)
• EBITA increased by 8 percent to SEK 407 million (376)
• The EBITA margin was 5.6 percent (5.9)
• Profit after tax was SEK 302 million (286)
• Cash flow from operating activities was SEK 134 million (62)
• Net debt amounted to SEK -2,512 million (-1,760)
• Five acquisitions were made during the quarter, adding annual sales of approximately SEK 190 million
• Basic and diluted earnings per share were SEK 1.45 (1.39) and SEK 1.45 (1.38)


CEO statement
Net sales increased by 14 percent, via both organic growth and acquisitions in all countries, while EBITA increased by 8 percent and earnings per share by 5 percent. The order backlog improved during the quarter, and in a still uncertain market my assessment is that Bravida is well positioned for the coming quarters due to its low exposure to the housing segment, a large service business and a stable order backlog.

Net sales and EBITA
I am pleased that we have continued to have good growth, with organic growth of five percent during the period. We have recorded organic growth in all countries both in this quarter and during the first half of the year. Both service and installation have contributed to the growth. Order intake increased by 14 percent, which resulted in a continued stable order backlog that increased by SEK 354 million during the quarter.

The EBITA margin was 5.6 percent for the quarter. We can note that margins have been under pressure in all countries. We have not fully succeeded in passing on increased material prices to customers, which has had a negative impact on our margins. Despite this, the Swedish business reported a slightly improved margin and Norway delivered in line with the previous year. The Danish business continued to face challenges in its project work, and project impairments in Finland also had an impact on earnings. In addition to higher material prices, the strong growth in the Danish and Norwegian project business had a negative impact on the margin during the first half of the year.

As previously communicated, we have also incurred significant costs in making our business more efficient, via measures such as digitalisation and the development of new business areas. Among other things ongoing implementation of a new purchasing system, project management tool, CRM system and FM system. We consider these initiatives to be important for future-proofing and further improving our profitability.

Cash flow
Cash flow from operating activities improved in the quarter and cash generation was at the same level as in the previous quarter. We currently see somewhat more reluctance to make payments but no significant payment problems among our customers, but our monitoring of credit has increased due to the deterioration in the economy.

We continue to see good opportunities to make acquisitions and are actively working with several potential candidates. In a tougher economic climate, market participants will need to sell parts of their business operations, and with its strong balance sheet Bravida can take advantage of any acquisition opportunities that may arise in the market.

Transitioning to a sustainable business remains one of our priority areas and we continue to have a high level of activity in making our vehicle fleet fossil-free. So far this year, over 600 electric vehicles have been put on the road to replace fossil-fuelled vehicles.

Macroeconomic factors such as high inflation, higher interest rates and a deteriorating economy continue to make the market difficult to assess going forwards. For Bravida, however, I believe that the demand for service will remain good. Demand for installation work is more influenced by the macroeconomic environment, for example high interest rates and high inflation could result in investment decisions being postponed.

There is continuing price pressure in the market. Price pressure combined with increased material and labour costs could lead to continued pressure on margins for the industry and also for Bravida. Bravida has managed both the pandemic and inflationary pressures well for a long time, but we have also lost some margin due to costs increasing too rapidly. This means Bravida's focus on margins over volume is now even more important, so we will be even stricter in our project selection, customer selection and pricing. It is also of the utmost importance that we maintain strict cost controls in all our business operations in order to be able to maintain a stable margin.

Installation volumes for new residential construction will decrease significantly this year and in the coming years. However, Bravida has a relatively low exposure, around 8 percent to new construction of housing. Installation work in new-build community properties, as well as industrial and logistics premises, is stabilising the market. The market for renovation and extension work (ROT) is expected to remain stable, with support from energy and climate adaptation measures. The green transition and digitalisation of society are creating good business opportunities for us. Electrification, digitalisation and the need for energy efficiency in buildings are creating a demand for our services, which means Bravida is well positioned for the future.

Mattias Johansson
Stockholm, July 2023

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

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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 14 July 2023, 07:30 CET.