Interim Report January–March 2024
Strong order intake, growing order backlog and improved cash conversion
Regulatory press release
• Net sales decreased 2 percent to SEK 7,275 million (7,429)
• The order backlog was SEK 17,835 million (16,243)
• EBITA decreased by 21 percent to SEK 294 million (370)
• The EBITA margin was 4.0 percent (5.0)
• Profit after tax was SEK 202 million (276)
• Cash flow from operating activities was SEK 399 million (60)
• Net debt amounted to SEK -2,071 million (-1,588)
• One acquisition was completed during the quarter, adding annual sales of approximately SEK 30 million
• Basic and diluted earnings per share were SEK 0.98 (1.32)
CEO statement
The strong order intake and improved cash conversion continued from the previous quarter. In line with our expectations, net sales decreased and the EBITA margin deteriorated compared to the previous year. In order to adapt our business operations to the lower turnover and improve margins, we have taken extensive cost-cutting measures and are aligning our resources with the current market environment.
Net sales and EBITA
Net sales decreased by 2 percent and organic growth was -6 percent, which was in line with previous estimates. The proportion of service turnover increased slightly, compared to the first quarter of 2023. We still have a strong order intake and this increased in all countries, by a total of 16 percent compared to the first quarter of 2023. Our order backlog remains high, but the order situation varies between the different geographical areas. The market was robust in Norway and in large parts of Sweden and in Denmark, while it remains weaker in southern Sweden and Finland.
During the quarter, the EBITA margin improved in Norway. The Thunestvedt acquisition which develops according to plan is included in the entire quarter. The acquisition has resulted in a dilution of the EBITA margin by 0.3 percentage points in Norway. In Sweden, there is weaker development in the southern parts of the country whereas other parts of the country are stable. In the quarter, we included the cost of discontinuing the Growth Segment division, which totalled approximately SEK 9 million.
The previously reported challenges in Denmark reduced the overall margin as expected, and we have continued write downs in the quarter. As planned, we carried out a thorough review of the Danish business operations and have initiated significant measures in the business, including hiring Christian Alsø as new CEO of Denmark. As stated previously, I expect us to reach a normal EBITA margin in Denmark by the end of this year. The weak construction market in Finland resulted in a lower margin in the installation business, and a fall in turnover in the service business had a negative impact on the margin.
To improve profitability, we took a number of measures in the quarter. We wound down the Growth Segment division, and the business has been integrated into our other operations. We have also reduced resources centrally and in local branches based on demand.
Improved cash flow
Cash flow from operating activities improved compared with the first quarter of 2023. Cash conversion rose to 90 percent, which is the highest level since the first quarter of 2022. Net debt remains low at 0.9 times EBITDA, which enables continued profitable acquisition activities.
Acquisitions
We continue to see good opportunities to make acquisitions and are actively working with several potential candidates. As always, we are focused on selecting the right targets with strong cultural fit and value creation. We prioritise service businesses and businesses in new technology areas.
Sustainability
Our employees' working environment is always our highest priority, it is therefore very gratifying that the LTIFR decreased to 5.6 (7.5). We continue to electrify our vehicle fleet and during the quarter the share of electric vehicles increased from 25 percent to 28 percent of the total fleet. The electrification shows results and we have reduced the actual emissions and emissions in relation to turnover.
The reported incident of over-billing in Region Skåne was dealt with decisively, see the summary report on our website.
Outlook
For Bravida, my assessment is that demand for service will remain stable while installation volumes will be affected by the market challenges we experienced in 2023, although this may vary locally. We expect to have a good market for projects in the areas of infrastructure, industry, defence facilities and civil engineering. It is of the utmost importance that we maintain strict project selection and cost controls in all our business operations, in order to ensure a stable margin.
Mattias Johansson
Stockholm, May 2024
The report will be presented at 13:00 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
https://ir.financialhearings.com/bravida-q1-report-2024
Telephone conference
Register via the link: https://conference.financialhearings.com/teleconference/?id=5002662 to participate in the telephone conference. After registration, you will receive a phone number and a conference ID to log in to the conference.
The report and presentation will be available at:
https://investors.bravida.com/en/reports-and-presentations
For further information, please contact:
Peter Norström, Head of Investor Relations
peter.norstrom@bravida.se
+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 7 May 2024, 12:00 CET.