Interim Report January–March 2023
Strong revenue growth, both organically and through acquisitions
- Net sales increased by 28 percent to SEK 7,429 million (5,826)
- The order backlog was SEK 16,243 million (17,334)
- EBITA rose by 25 percent to SEK 370 million (295)
- The EBITA margin was 5.0 percent (5.1)
- Profit after tax was SEK 276 million (227)
- Cash flow from operating activities was SEK 60 million (341)
- Net debt amounted to SEK -1,588 million (-829)
- Five acquisitions were made during the quarter, adding annual sales of approximately SEK 155 million
- Basic and diluted earnings per share were SEK 1.32 (1.12) and SEK 1.32 (1.11)
Net sales increased by 28 percent, with organic growth in all countries, while EBITA increased by 25 percent. My assessment is that Bravida is well positioned for the coming quarter, with a large service business and a good order backlog.
Net sales and EBITA
I am very pleased with the organic growth in all countries during the quarter, which totalled 20 percent. We have grown strongly in service as well as in installation, where we are producing from a good order backlog. The service business grew by an impressive 28 percent, largely based on recurring service assignments. The order intake increased overall during the quarter, based on high sales for service. As planned, the order backlog in Norway and Denmark is decreasing from very high levels, but the Group’s order backlog remains good and increased in Sweden and Finland. The EBITA margin remained stable. It was unchanged in Sweden and Finland, declined in Denmark and improved in Norway. Denmark and Norway have had very high growth in the past year, mainly in installation, which has led to some challenges in maintaining the margin.
Cash flow and cash generation decreased during the quarter, mainly due to the high growth, which ties up capital in increased trade receivables. In addition, several major projects for which we had already received advance payments caught up with these payments and entered the later stages, while only a few new major projects involving advance payments started up. We have also brought forward the purchase of materials in some projects to secure delivery and prices, which also tied up capital. However, I believe that the cash flow will gradually improve during the year. We currently see no significant payment problems among our customers, but our monitoring of credit has increased due to the deterioration in the economy.
We see further opportunities for acquisitions, as several market participants may need to sell off businesses operations. With its strong balance sheet and low debt, Bravida can utilise the acquisition opportunities that may arise in a tougher economic environment.
I am proud to report that, as one of the first operators to do so in our industry, we have taken an important step forward in our sustainability work by joining the Science Based Targets initiative. We have also agreed contracts for the supply of electricity from renewable energy sources to our offices in Sweden, Finland and Denmark. We are gradually replacing the existing electricity contracts for our offices with contracts that ensure renewable electricity. The switch from fossil-fuelled vehicles to electric vehicles is continuing and electric vehicles now make up 15 percent of the vehicle fleet. During the quarter, we unfortunately saw a slight increase in occupational injuries resulting in sick leave in Sweden and Denmark. The safety of our employees is our top priority and we are continuing our efforts to further strengthen our safety culture. We have invested in a new purchasing system, which has been launched in Finland and in parts of the Swedish business. The system will improve and simplify purchasing, sales and, in the future, the reporting of sustainable materials.
In April, Bravida began installation work on the Stockholm Bypass road tunnel project. Production is expected to take place between 2023 and 2028. Bravida’s contract includes installation of the electricity supply, lighting, heating and sprinkler systems. The remaining order value amounts to just over SEK 2.6 billion.
Macroeconomic factors such as high inflation, higher interest rates and a deteriorating economy 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.
We note that there is increased competition in the market. Due to continued inflation, there is a risk of cost increases being underestimated and projects being procured at prices that are too low. Bravida's focus on margin before volume means that we will be very strict in our project selection going forward.
Installation volumes relating to new residential construction will decrease significantly during the year, and installation work in offices, restaurants and retail is also expected to decrease. Installation work in new-build community properties, industrial and logistics premises is stabilising the market. The market for renovation and extension work 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.
Stockholm, May 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
Telephone conference dial-in number
Pin code: 5403368#
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 3 May 2023, 07:30 CET.