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Bravida Holding

Quarterly Report Apr 26, 2021

2897_10-q_2021-04-26_03200be3-64ff-46cc-adac-af0c6fad4e92.pdf

Quarterly Report

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INTERIM REPORT FOR JANUARY–MARCH 2021

January–March 2021

  • Net sales decreased by 3% to SEK 5,233 million (5,401)
  • The order backlog was SEK 14,397 million (14,985)
  • EBITA decreased by 2% to SEK 266 million (272)
  • The EBITA margin was 5.1% (5.0)
  • Profit after tax was SEK 202 million (196)
  • Cash flow from operating activities was SEK 144 million (560)

  • Net debt amounted to SEK -1,134 million (-1,698)

  • Four acquisitions were completed in the quarter, adding annual sales of approximately SEK 300 million
  • Basic earnings per share were SEK 1.02 (0.97) and diluted earnings per share were SEK 1.02 (0.96)

Financial overview

SEK MILLION Jan–Mar
2021
Jan–Mar
2020
Jan–Dec
2020
Apr 2020–
Mar 2021
Net sales 5,233 5,401 21,147 20,979
Operating profit (EBIT) 266 271 1,348 1,343
Operating margin (EBIT), % 5.1 5.0 6.4 6.4
EBITA 266 272 1,351 1,345
EBITA margin, % 5.1 5.0 6.4 6.4
Profit/loss after tax 202 196 997 1,004
Cash flow from operating activities 144 560 2,171 1,755
Cash conversion, % 12 m 121 127 153 121
Net debt/EBITDA, 12 m 0.6 1.0 0.6 0.6
Order intake 5,801 5,732 20,242 20,311
Order backlog 14,397 14,985 13,791 14,397

We bring buildings to life

Improved EBITA margin and growing order backlog

The EBITA margin increased to 5.1 percent. Order intake improved and the order backlog increased by SEK 606 million in the quarter.

Net sales and EBITA margin

Given the conditions, I am satisfied with sales and profit for the quarter, and the result was better than I had expected in view of the shutdowns in the quarter. Net sales decreased by 3 percent in the quarter due to lower production in the Norwegian service and installation business. In Sweden and Denmark sales were stable, whereas they increased in Finland.

Net installation sales decreased in Norway and Denmark. Organic growth was -4 percent and acquisitions contributed 3 percent growth. Exchange rate fluctuations had a negative impact of -2 percent on growth.

In the quarter, service demand increased in Sweden och Denmark. However, the service business continued to be adversely affected by the pandemic, mainly in Norway and southern Sweden, as demand fell and in a number of cases we were unable to access service properties because of precautionary measures.

Demand for technical installations is stable, but the ongoing pandemic has led to customers postponing project planning and investment decisions, which was the reason for lower activity in the installation business.

We are seeing improved order levels in the installation business as a result of an increased order backlog in Norway and Sweden. The order backlog rose by SEK 606 million in the quarter, SEK 372 million of which was in Norway.

The EBITA margin improved in Denmark and Finland, contributing to an improved EBITA margin of 5.1 percent (5.0). This is despite the fact that, as planned, we had higher costs for starting to implement our new business plan and digital strategy, while the cost of our performance-based incentive programme, LTIP, increased due to the rise in the share price.

Solid cash conversion and low debt

Cash conversion was 121 percent, which is above our target of 100 percent. Bravida's net debt remains at a record low of 0.6x EBITDA and well below our target of 2.5x EBITDA. Cash flow in the quarter declined compared with last year, due to lower production and fewer newly started projects in the installation business. Cash flow is impacted positively by start-up of large projects.

Acquisitions continue to strengthen Bravida

In 2021, Bravida has so far completed five acquisitions with combined annual sales of more than SEK 300 million. We have also signed an agreement for two acquisitions in Sweden with a total sales of approximately SEK 125 million.

Our assessment is that acquisition opportunities remain very good.

increased in Sweden and Denmark."

Sustainability

Bravida has developed an end-to-end solution, Bravida Charge, to meet the growing need for electric-vehicle charging infrastructure for both corporate customers and private individuals. We make it easy to go fossil free by offering our customers an end-to-end charging and administration solution. Bravida Charge is one of the initiatives in Bravida's long-term strategy to reduce both our customers' and our own carbon footprint.

Outlook

My assessment is that demand in the Nordic service and installation market will gradually see a slight increase during 2021. As we return to a more normal situation, there will be a greater need for service that has been neglected during the pandemic. The installation business is seeing growing demand for new-builds and the refurbishment of residential, industrial and warehouse buildings, as well as the remodelling and upgrading of office space. We do not see any problems with the material supply at present, but we will be affected by rising raw material prices, which we take into account in the pricing of future customer deliveries.

Despite the short-term market outlook remaining uncertain, there will always be demand for our services and our business will also benefit from our customers' ambitions to find sustainable, low-carbon solutions.

Mattias Johansson Stockholm, April 2021

Consolidated earnings overview

Net sales

January–March

Net sales decreased by 3 percent to SEK 5,233 million (5,401). Organic growth was negative at -4 percent. Acquisitions boosted net sales by 3 percent and currency effects had a negative impact of -2 percent. Net sales rose in Sweden and Finland.

Compared with the first quarter of 2020, net service sales were unchanged while installation sales decreased by 6 percent. The service business accounted for 48 percent (46) of total net sales.

Order intake amounted to SEK 5,801 million (5,732), an increase of 1 percent. Compared with the same quarter last year, order intake was higher in Sweden and Norway, but was lower in Denmark and Finland. The order backlog was 4 percent lower than the same period last year and amounted to SEK 14,397 million (14,985). The order backlog, including acquisitions, rose by SEK 606 million in the quarter.

The order backlog only includes installation projects.

Earnings January–March

Operating profit was SEK 266 million (271). EBITA decreased by 2 percent to SEK 266 million (272), resulting in an EBITA margin of 5.1 percent (5.0). The EBITA margin improved in Denmark and Finland, whereas it was unchanged in Norway and lower in Sweden. Group-wide income was SEK 2 million (10). Net financial income/expense amounted to SEK -9 million (-21). Profit after financial items was SEK 256 million (250). Profit after tax was SEK 202 million (196). Basic earnings per share increased by 5 percent to SEK 1.02 (0.97) and diluted earnings per share were SEK 1.02 (0.96).

Depreciation and amortisation

Depreciation and amortisation in the quarter totalled SEK -107 million (-106), SEK -98 million (-97) of which related to the amortisation of right-of-use assets.

Tax

The tax expense for the quarter was SEK -54 million (-54). Profit before tax was SEK 256 million (250). Tax paid totalled SEK -65 million (-72).

Cash flow

January–March

Cash flow from operating activities before changes in working capital totalled SEK 302 million (294). The change in working capital reduced cash flow by SEK -158 million (266). Current receivables increased by SEK 283 million (165), current liabilities rose by SEK 127 million (431) and inventory increased by SEK 2 million (0). Cash flow from operating activities was SEK 144 million (560).

Cash flow from investing activities was SEK -142 million (-81), of which acquisitions of subsidiaries and businesses totalled SEK -136 million (-78). Cash flow from financing activities, which refers to the net change in borrowing and amortisation of lease liabilities, was SEK -448 million (-270). Cash flow for the quarter was SEK -446 million (208). 12-month cash conversion was 121 percent (127).

Financial position

Bravida's net debt was SEK -1,134 million (-1,698), which corresponds to a capital-structure ratio (net debt/EBITDA) of 0.6 (1.0). Consolidated cash and cash equivalents were SEK 1,367

Net sales (SEK MIL.)

Order intake (SEK MIL.) Net sales by country,

Order intake by quarter Order intake, rolling 12 months

Jan–Mar 2021

Net sales, rolling 12 months

million (1,131). Interest-bearing liabilities totalled SEK -2,501 million (-2,830), of which SEK -1,000 million (-820) was commercial paper and SEK -1,001 million (-1,010) was leases.

Total credit facilities amounted to SEK 2,500 million (2,500), of which SEK 2,500 million (2,000) was unused at 31 March. At the end of the period, equity totalled SEK 6,186 million (5,758). The equity/assets ratio was 35.8 percent (34.0).

Acquisitions

Four acquisitions were completed in the quarter, adding a total of SEK 300 million in annual sales. The acquired companies operate in the electrical, sprinklers, HVAC, and heating and plumbing segments.

Employees

The average number of employees was 11,731 (11,811), a decrease of 1 percent.

Occupational injuries

Reported occupational injuries in the first quarter resulting in at least one day's sick leave amounted to a LTIR (lost time injury rate) of 9.3 (9.4). The LTIR was 9.8 in Sweden, 2.8 in Norway, 14.3 in Denmark and 15.3 in Finland. Our target is a LTIR of <5.5, with an ultimate goal of zero workplace accidents.

Parent company

Revenues for the quarter were SEK 47 million (49) and income after net financial items was SEK 8 million (0).

Shareholder information

Bravida Holding AB's ordinary shares are listed on the Nasdaq Stockholm Large Cap. At 31 March Bravida had 9,606 shareholders. The five largest shareholders were Mawer Investment Management Funds, Swedbank Robur Funds, the Fourth Swedish National Pension Fund (AP4), Lannebo Funds and Didner & Gerge Funds. Mawer Investment Management funds hold 11.1 percent of the votes.

The listed share price at 31 March was SEK 120.30, which corresponds to a market capitalisation of SEK 24,418 million based on the number of ordinary shares. Total shareholder return over the past 12 months was just over 72 percent.

Share capital totals SEK 4 million, divided among 203,816,598 shares, of which 202,975,544 are ordinary shares and 841,054 are class C shares, which are held by Bravida Holding AB. Ordinary shares entitle holders to one vote and a dividend payment, while C shares entitle holders to one-tenth of a vote and no dividend.

Financial goals

  • Sales growth: over 5 percent a year
  • EBITA margin: over 7 percent
  • Cash conversion: over 100 percent
  • Net debt/EBITDA: under 2.5x
  • Dividend: over 50 percent of net profit

Net sales and growth

SEK MILLION Jan–Mar
2021
Jan–Mar
2020
Jan–Dec
2020
Net sales 5,233 5,401 21,147
Change -168 388 743
Change, % -3.1 7.7 3.6
Of which
Organic growth, % -4 2 1
Acquisition-based growth, % 3 7 5
Currency effects, % -2 -1 -2

Other events during the period

On 11 February the Board took the decision to issue and repurchase 500,000 C shares to ensure the supply of ordinary shares for employees participating in the LTIP 2020 performance-based incentive programme.

Significant risks

Changes in market conditions, financial turmoil and political decisions are the external factors that mainly affect demand for new construction of housing and commercial property, as well as investment from industry and the public sector. Demand for service and maintenance is less sensitive to economic fluctuations.

The impact of the Covid-19 pandemic on our business remains uncertain, with a risk to the health of employees, customers and suppliers and of a decline in the financial position.

Operating risks are related to day-to-day business operations such as tendering, price risks, capacity utilisation and revenue recognition. Management of these risks is part of Bravida's business process. Recognition over time is applied and is based on the extent of completion of each project and the expected date of completion. A well-developed process for the monitoring of projects is essential in limiting the risk of incorrect revenue recognition. Bravida continually monitors the financial status of each project to ensure that individual project calculations are not exceeded. The Group is also exposed to impairment loss risks in fixed-price contracts and various types of financial risk such as currency, interest rate and credit risk.

Transactions with related parties

No transactions with related parties outside the Group took place during the period.

Events since the end of the period

There are no material events to report.

EBITA (SEK MIL.)

EBITA by quarter

EBITA, rolling 12 months

EBITA margin, %

EBITA margin, rolling 12 months

Cash flow from operating activities (SEK MIL.)*

Cash flow from operating activities by quarter

Cash flow from operating activities, rolling 12 months

*Cash flow affected by IFRS 16 from 1 January 2019.

Operations in Sweden

Market

The Covid-19 pandemic has resulted in lower service demand. The ongoing pandemic is making it hard to assess market development in the near term. The confidence indicator for the construction industry remains below normal. External market assessments for 2021 indicate an improvement in the service market, a weaker installation market and a slight decrease in the overall market.

Net sales and earnings

January–March

Net sales in Sweden increased by 1 percent to SEK 2,839 million (2,806). The increase in net sales was attributable to both service and installation business. Organic growth was negative at -2 percent.

EBITA decreased by 1 percent to SEK 155 million (156). The EBITA margin decreased to 5.5 (5.6) percent.

Order intake and order backlog January–March

Order intake increased by 9 percent to SEK 3,154 million (2,897). Order intake related to small and medium-sized installation projects and service assignments.

The order backlog at the end of the quarter was 4 percent lower than for the same period last year and amounted to SEK 8,715 million (9,111). The order backlog rose by SEK 315 million in the quarter.

Net sales (SEK MIL.)

Net sales by quarter Net sales, rolling 12 months

EBITA (SEK MIL.)

SEK MILLION Jan–Mar
2021
Jan–Mar
2020
Jan–Dec
2020
Net sales 2,839 2,806 11,313
EBITA 155 156 801
EBITA margin, % 5.5 5.6 7.1
Order intake 3,154 2,897 10,677
Order backlog 8,715 9,111 8,400
Average number of employees 5,635 5,885 5,831

Installations in Geely's new hotel in Gothenburg

The Lindholmen district is the location for a new meeting place with a real sense of innovation and technology. 'Uni3 by Geely' is part of Gothenburg's major urban development project, consisting of five buildings, including a hotel. The hotel will be 11 storeys high, with a total area of approximately 13,500 square metres. Bravida has been commissioned to fit heating and plumbing, HVAC and control systems in the project, which is expected to be completed by spring 2022.

Operations in Norway

Market

Pandemic-related infection control measures have reduced demand for both service and installation. The ongoing pandemic is making it hard to assess market development in the near term. External market assessments for 2021 indicate an improvement in the service market, a weaker installation market and a slight decrease in the overall market.

Net sales and earnings January–March

Net sales decreased by 19 percent to SEK 981 million (1,214). The decrease in net sales was attributable to both service and installation business. Currency fluctuations had a negative -3 percent impact on net sales. Organic growth was negative at -16 percent.

EBITA decreased by 19 percent to SEK 44 million (54). The EBITA margin was unchanged at 4.5 percent.

Order intake and order backlog January–March

Order intake increased by 35 percent to SEK 1,353 million (1,001), while in local currency order intake was unchanged. Order intake mainly relates to small and medium-sized installation projects and service assignments.

The order backlog at the end of the quarter was 6 percent higher than for the same period last year and amounted to SEK 2,469 million (2,339). The order backlog rose by SEK 372 million in the quarter.

Net sales (SEK MIL.)

Net sales by quarter Net sales, rolling 12 months

EBITA (SEK MIL.)

SEK MILLION Jan–Mar
2021
Jan–Mar
2020
Jan–Dec
2020
Net sales 981 1,214 4,304
EBITA 44 54 245
EBITA margin, % 4.5 4.5 5.7
Order intake 1,353 1,001 3,848
Order backlog 2,469 2,339 2,097
Average number of employees 2,950 2,969 2,997

Installation work for the world's most sustainable building

Bravida was commissioned to fit heating and plumbing, HVAC and sprinkler installations in the ZEB laboratory in Trondheim, which opened in early March. The laboratory is the world's most sustainable building and will be used by the Norwegian University of Science and Technology ('NTNU') and the SINTEF research institute for research into and testing of new zero-emissions technology. Through our expertise, we developed cost-effective, reliable installation solutions with the smallest possible environmental and carbon footprint.

Operations in Denmark

Market

The Covid-19 pandemic has resulted in lower service demand. The ongoing pandemic is making it hard to assess market development in the near term. Demand for refurbishment work is expected to remain good, stabilising market performance. The confidence indicator for the construction industry remains below normal but improved during the quarter. External market assessments for 2021 indicate an improvement in the service market, a weaker installation market and a slight decrease in the overall market.

Net sales and earnings January–March

Net sales were virtually unchanged at SEK 1,064 million (1,067). Organic growth was 0 percent. Net sales increased in the service business and decreased in installation. Currency fluctuations had a negative -5 percent impact on net sales.

EBITA increased by 10 percent to SEK 56 million (51), while the EBITA margin rose to 5.2 percent (4.7).

Order intake and order backlog January–March

Order intake decreased by 17 percent to SEK 1,044 million (1,256). Order intake related to small and medium-sized installation projects and service assignments.

The order backlog at the end of the quarter was 5 percent lower than for the same period last year and amounted to SEK 2,431 million (2,555). The order backlog decreased by SEK 20 million in the quarter.

Net sales (SEK MIL.)

Net sales by quarter Net sales, rolling 12 months

EBITA (SEK MIL.)

SEK MILLION Jan–Mar
2021
Jan–Mar
2020
Jan–Dec
2020
Net sales 1,064 1,067 4,217
EBITA 56 51 220
EBITA margin, % 5.2 4.7 5.2
Order intake 1,044 1,256 4,277
Order backlog 2,431 2,555 2,451
Average number of employees 2,341 2,257 2,315

A national service agreement covering 240 fuel stations

At the beginning of the year, we won an extensive service and installation contract for electrical, heating and plumbing, cooling and HVAC at all Q8 and F24 stations in Denmark. These various projects are handled by technicians at our local branches and all cases go through Bravida's national service centre. The agreement runs until 2023.

Operations in Finland

Market

The Covid-19 pandemic has resulted in lower service demand. The ongoing pandemic is making it hard to assess market development in the near term. The confidence indicator for the construction industry remains below normal. External market assessments for 2021 indicate an improvement in the service market, a weaker installation market and a slight decrease in the overall market.

Net sales and earnings January–March

Net sales increased by 18 percent to SEK 383 million (325). The increase in net sales was attributable to both service and installation business. Organic growth was 18 percent. Currency fluctuations had a negative -5 percent impact on net sales.

EBITA rose by SEK 9 million to SEK 10 million (1). The EBITA margin increased to 2.6 (0.4) percent.

Order intake and order backlog January–March

Order intake decreased by 52 percent to SEK 285 million (589). The lower order intake was due to Bravida receiving a large order from Wärtsilä last year. Order intake related to small and medium-sized installation projects and service assignments.

The order backlog at the end of the quarter was 20 percent lower than for the same period last year and amounted to SEK 783 million (980). The order backlog decreased by SEK 59 million in the quarter.

Net sales (SEK MIL.)

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Net sales by quarter Net sales, rolling 12 months

EBITA (SEK MIL.)

EBITA, rolling 12 months

SEK MILLION Jan–Mar
2021
Jan–Mar
2020
Jan–Dec
2020
Net sales 383 325 1,392
EBITA 10 1 56
EBITA margin, % 2.6 0.4 4.0
Order intake 285 589 1,518
Order backlog 783 980 842
Average number of employees 702 607 666

Service and maintenance at Hatanpää Hospital in Tampere During the quarter, Bravida was commissioned to service and maintain the electrical, HVAC and cooling systems at Hatanpää Hospital, which is part of Tampere University Hospital. In total, it includes 15 buildings with an area of 50,000 square meters. The agreement runs until February 2022.

PHOTOS: ARKKITEHDIT KONTUKOSKI OY AND RAAMI ARKKITEHDIT OY

Financial reporting

Consolidated income statement, summary

SEK MILLION Jan–Mar
2021
Jan–Mar
2020
Jan–Dec
2020
Apr 2020–
Mar 2021
Net sales 5,233 5,401 21,147 20,979
Production costs -4,520 -4,688 -18,093 -17,926
Gross profit/loss 713 713 3,054 3,053
Selling and administrative expenses -447 -442 -1,706 -1,711
Operating profit/loss 266 271 1,348 1,343
Net financial income/expense -9 -21 -74 -63
Profit/loss before tax 256 250 1,274 1,280
Tax -54 -54 -276 -276
Profit/loss for the period 202 196 997 1,004
Profit/loss for the period attributable to:
Owners of the parent company 207 196 1,002 1,013
Non-controlling interests -4 0 -5 -10
Profit/loss for the period 202 196 997 1,004
Basic earnings per share, SEK 1.02 0.97 4.94 4.99
Diluted earnings per share, SEK 1.02 0.96 4.93 4.98

Consolidated statement of comprehensive income, summary

Jan–Mar Jan–Mar Jan–Dec Apr 2020–
SEK MILLION 2021 2020 2020 Mar 2021
Profit/loss for the period 202 196 997 1,004
Other comprehensive income
Items that have been or can be transferred to profit/loss for the year
Translation differences for the period from the translation of foreign
operations 98 -40 -150 -12
Items that cannot be transferred to profit/loss for the year
Revaluation of defined-benefit pensions 10 10
Tax attributable to the revaluation of pensions -2 -2
Other comprehensive income for the period 98 -40 -142 -4
Comprehensive income for the period 301 156 855 1,000
Comprehensive income for the period attributable to:
Owners of the parent company 305 156 860 1,005
Non-controlling interests -4 0 -5 -5
Comprehensive income for the period 301 156 855 1,000

Consolidated balance sheet, summary

SEK MILLION 31 Mar 2021 31 Mar 2020 31 Dec 2020
Goodwill 9,081 8,807 8,904
Right-of-use assets 980 998 1,002
Other non-current assets 203 184 179
Total non-current assets 10,264 9,989 10,084
Trade receivables 3,396 3,451 3,391
Contract assets 1,710 1,820 1,257
Other current assets 549 537 574
Cash and cash equivalents 1,367 1,131 1,748
Total current assets 7,021 6,938 6,969
Total assets 17,285 16,928 17,053
Equity attributable to owners of the parent company 6,170 5,748 5,855
Non-controlling interests 17 9 21
Total equity 6,186 5,758 5,876
Non-current liabilities 1,589 1,843 1,770
Lease liabilities 662 673 679
Total non-current liabilities 2,250 2,517 2,449
Lease liabilities 339 336 343
Trade payables 1,984 2,229 2,123
Contract liabilities 2,264 2,258 2,049
Other current liabilities 4,261 3,831 4,213
Total current liabilities 8,848 8,653 8,728
Total liabilities 11,099 11,170 11,177
Total equity and liabilities 17,285 16,928 17,053
Of which interest-bearing liabilities 2,501 2,830 2,872

Changes in equity

SEK MILLION Jan–Mar 2021 Jan–Mar 2020 Jan–Dec 2020
Consolidated equity
Amount at start of period 5,876 5,596 5,596
Comprehensive income for the period 438 156 855
Non-controlling interests' put option -137 -136
Dividend -457
Long-term incentive programme 9 5 17
Amount at end of period 6,186 5,758 5,876

Consolidated cash flow statement, summary

Jan–Mar Jan–Mar Jan–Dec
SEK MILLION 2021 2020 2020
Cash flow from operating activities
Profit/loss before tax 256 250 1,274
Adjustments for non-cash items 111 116 569
Income taxes paid -65 -72 -244
Change in working capital -158 266 572
Cash flow from operating activities 144 560 2,171
Investing activities
Acquisitions of subsidiaries and businesses -136 -78 -281
Other -6 -4 -34
Cash flow from investing activities -142 -81 -316
Financing activities
Net change in borrowing -350 -175 -145
Repayment of lease liabilities -98 -95 -388
Dividend paid -457
Cash flow from financing activities -448 -270 -990
Cash flow for the period -446 208 866
Cash and cash equivalents at start of period 1,748 972 972
Translation difference on cash and cash equivalents 65 -49 -90
Cash and cash equivalents at end of period 1,367 1,131 1,748

Parent company income statement, summary

SEK MILLION Jan–Mar
2021
Jan–Mar
2020
Jan–Dec
2020
Net sales 47 49 192
Selling and administrative expenses -36 -40 -154
Operating profit/loss 10 9 38
Net financial income/expense -2 -9 -21
Profit/loss after net financial items 8 0 17
Net Group contributions 140
Appropriations -40
Profit/loss before tax 8 0 117
Tax -26
Profit/loss for the period 8 0 91

Parent company balance sheet, summary

SEK MILLION 31 Mar 2021 31 Mar 2020 31 Dec 2020
Shares in subsidiaries 7,341 7,341 7,341
Deferred tax asset 0 0 0
Total non-current assets 7,341 7,341 7,341
Receivables from Group companies 1,679 1,790 1,225
Current receivables 37 38 45
Total current receivables 1,715 1,827 1,270
Cash and bank balances 1,221 987 1,626
Total current assets 2,936 2,814 2,897
Total assets 10,278 10,156 10,238
Restricted equity 4 4 4
Non-restricted equity 4,113 4,449 4,096
Equity 4,117 4,453 4,100
Untaxed reserves 520 480 520
Liabilities to credit institutions 300 800 500
Provisions 1 1 1
Total non-current liabilities 301 801 501
Short-term loans 1,200 1,020 1,350
Liabilities to Group companies 4,092 3,356 3,708
Current liabilities 47 46 60
Total current liabilities 5,339 4,422 5,118
Total equity and liabilities 10,278 10,156 10,238
Of which interest-bearing liabilities 1,500 1,820 1,850

Quarterly data

Jan–Mar Oct–Dec Jul–Sep Apr–Jun Jan–Mar Oct–Dec Jul–Sep Apr–Jun
INCOME STATEMENT, SEK MILLION 2021 2020 2020 2020 2020 2019 2019 2019
Net sales 5,233 5,614 4,750 5,382 5,401 5,667 4,638 5,087
Production costs -4,520 -4,671 -4,103 -4,632 -4,688 -4,743 -4,004 -4,401
Gross profit/loss 713 943 647 750 713 924 634 686
Selling and administrative
expenses -447 -466 -364 -433 -442 -500 -358 -413
Operating profit/loss 266 477 283 317 271 424 276 274
Net financial income/expense -9 -28 -12 -13 -21 -17 -16 -16
Profit/loss after financial items 256 449 271 303 250 407 259 257
Tax -54 -99 -58 -66 -54 -105 -58 -56
Profit/loss for the period 202 351 213 238 196 303 202 201
BALANCE SHEET 31 Mar 2021 31 Dec 2020 30 Sep 2020 30 Jun 2020 31 Mar 2020 31 Dec 2019 30 Sep 2019 30 Jun 2019
Goodwill 9,081 8,904 8,957 8,908 8,807 8,731 8,743 8,586
Other non-current assets 1,183 1,180 1,045 1,110 1,182 1,208 1,085 1,120
Current assets 5,654 5,221 5,675 5,710 5,807 5,599 5,697 5,470
Cash and cash equivalents 1,367 1,748 1,129 1 103 1,131 972 467 545
Total assets 17,285 17,053 16,807 16,830 16,928 16,510 15,992 15,720
Equity 6,186 5,876 6,033 5,819 5,758 5,596 5,355 5,141
Borrowings 300 500 1,012 1,018 800 500 1,100 1,100
Non-current liabilities 1,950 1,949 1,717 1,760 1,717 1,700 1,548 1,568
Current liabilities 8,848 8,728 8,045 8,233 8,653 8,714 7,988 7,911
Total equity and liabilities 17,285 17,053 16,807 16,830 16,928 16,510 15,992 15,720
Jan–Mar Oct–Dec Jul–Sep Apr–Jun Jan–Mar Oct–Dec Jul–Sep Apr–Jun
CASH FLOW 2021 2020 2020 2020 2020 2019 2019 2019
Cash flow from operating activities 144 873 10 728 560 989 65 131
Cash flow from investing activities -142 -62 -27 -146 -81 -79 -130 -168
Cash flow from financing activities -448 -172 43 -590 -270 -385 -12 -24
Cash flow for the period -446 639 26 -8 208 525 -77 -61
Jan–Mar Oct–Dec Jul–Sep Apr–Jun Jan–Mar Oct–Dec Jul–Sep Apr–Jun
KEY RATIOS 2021 2020 2020 2020 2020 2019 2019 2019
Operating margin (EBIT), % 5.1 8.5 6.0 5.9 5.0 7.5 6.0 5.4
EBITA margin, % 5.1 8.5 6.0 5.9 5.0 7.5 6.0 5.4
Return on equity, % 16.6 16.7 16.0 16.2 15.9 16.1 18.2 18.0
Net debt -1,134 -1,124 -1,230 -1,185 -1,698 -2,063 -2,735 -2,612
Net debt/EBITDA 0.6 0.6 0.7 0.7 1.0 1.3 1.8 1.8
Cash conversion*, % 121 153 167 149 127 115 104 98
Interest coverage, multiple 25.4 32.9 29.8 24.5 25.0 34.6 19.7 19.9
Equity/assets ratio, % 35.8 34.5 35.9 34.6 34.0 33.9 33.5 32.7
Order intake 5,801 5,140 4,024 5,346 5,732 5,546 5,055 5,467
Order backlog 14,397 13,791 14,274 14,952 14,985 14,485 14,507 13,905
Average number of employees 11,731 11,906 11,972 11,940 11,811 11,722 11,584 11,339
Administrative expenses as % of sales 8.5 8.3 7.7 8.1 8.2 8.8 7.7 8.1
Working capital as % of sales -6.8 -7.5 -6.7 -8.1 -6.5 -5.6 -3.1 -4.3
Basic earnings per share, SEK 1.02 1.73 1.07 1.17 0.97 1.50 0.99 0.99
Diluted earnings per share, SEK 1.02 1.73 1.07 1.17 0.96 1.50 0.99 0.99
Equity per share, SEK 30.40 28.85 29.72 28.64 28.37 27.57 26.34 25.29
Cash flow from operating activities per
share, SEK
0.71 4.30 0.05 3.59 2.76 4.88 0.32 0.65
Share price at balance sheet date, SEK 120.30 109.50 109.20 89.05 70.15 90.95 86.35 82.30

Reconciliation of key ratios, not defined under IFRS.

The company presents certain financial measures in this interim report that are not defined under IFRS. The company considers that these indicators provide valuable additional information for investors and the company's management as they allow relevant trends to be assessed. Bravida's definitions of these indicators may differ from other companies' definitions of the same terms. These financial measures should therefore be regarded as complementary rather than replacing the measures defined under IFRS. See page 20 for definitions of key performance indicators.

Reconciliation of key performance
measures, not defined under IFRS.
SEK MILLION
Jan–Mar
2021
Oct–Dec
2020
Jul–Sep
2020
Apr–Jun
2020
Jan–Mar
2020
Oct–Dec
2019
Jul–Sep
2019
Apr–Jun
2019
Net debt
Interest-bearing liabilities -2,501 -2,872 -2,359 -2,288 -2,830 -3,035 -3,202 -3,157
Cash and cash equivalents 1,367 1,748 1,129 1,103 1,131 972 467 545
Total net debt -1,134 -1,124 -1,230 -1,185 -1,698 -2,063 -2,735 -2,612
EBITA
Operating profit, EBIT 266 477 283 317 271 424 276 274
Amortisation and impairment of non-current
intangible assets
0 0 1 1 1 1 1 1
EBITA 266 478 284 317 272 425 276 274
EBITDA
Operating profit, EBIT 266 477 283 317 271 424 276 274
Depreciation, amortisation and impairment
losses
107 121 102 104 106 111 105 101
EBITDA 372 599 385 421 377 535 380 374
Working capital
Current assets 7,021 6,969 6,804 6,813 6,938 6,571 6,164 6,015
Cash and cash equivalents -1,367 -1,748 -1,129 -1,103 -1,131 -972 -467 -545
Current liabilities -8,848 -8,728 -8,045 -8,233 -8,653 -8,714 -7,988 -7,911
Lease, current liability 339 343 308 322 336 340 336 332
Short-term loans 1,200 1,350 465 320 1,020 1,495 1,180 1,100
Provisions 220 226 173 172 141 144 142 152
Total working capital -1,434 -1,587 -1,424 -1,709 -1,349 -1,136 -633 -858
Interest coverage ratio
Profit/loss before tax 256 449 271 303 250 407 259 257
Interest expense 11 14 9 13 10 12 14 14
Total 267 463 281 316 260 419 273 271
Interest expense 11 14 9 13 10 12 14 14
Interest coverage, multiple 25.4 32.9 29.8 24.5 25.0 34.6 19.7 19.9
Cash conversion*
12-month EBITDA 1,357 1,363 1,316 1,308 1,264 1,244 1,258 1,253
Non-cash items in EBITDA, last 12 months 130 135 55 50 30 -2 81 70
Change in working capital, last 12 months 148 572 800 560 298 179 -44 -108
Investments in machinery and equipment,
last 12 months
-36 -34 -40 -27 -28 -34 -23 -19
Total operating cash flow 1,599 2,036 2,131 1,891 1,564 1,387 1,272 1,196
Operating profit/loss, last 12 months 1,321 1,328 1,279 1,272 1,228 1,209 1,223 1,219
Cash generation, last 12 months, % 121 153 167 149 127 115 104 98

*Excluding IFRS 16 Leases.

Notes

NOTE 1. Accounting policies

This is a translation of the Swedish Interim Report of Bravida Holding AB. In the event of inconsistency between the English and the Swedish versions, the Swedish version shall prevail.

This interim report for the Group has been prepared in accordance with International Reporting Standards (IFRS) using IAS 34 Interim Reporting. The parent company applies Recommendation RFR 2 Accounting for Legal Entities and Chapter 9 of the Swedish Annual Accounts Act regarding interim reports. The accounting policies applied are consistent with what is set out in the 2020 annual report.

The IASB has published supplements to standards effective from 1 January 2021 or later. Such supplements have not had any material impact on Bravida's financial statements.

All amounts in this interim report are stated in millions of Swedish kronor (SEK), unless specified otherwise, and rounding differences may therefore occur.

NOTE 2. Segment reporting and revenue distribution

Net sales by country

SEK MILLION Jan–Mar
2021
distri
bution
Jan–Mar
2020
distri
bution
Jan–Dec
2020
distri
bution
Sweden 2,839 54% 2,806 52% 11,313 53%
Norway 981 19% 1,214 22% 4,304 20%
Denmark 1,064 20% 1,067 20% 4,217 20%
Finland 383 7% 325 6% 1,392 7%
Group-wide and eliminations -35 -12 -79
Total 5,233 5,401 21,147

EBITA, EBITA margin and profit/loss before tax

SEK MILLION Jan–Mar
2021
EBITA
margin
Jan–Mar
2020
EBITA
margin
Jan–Dec
2020
EBITA
margin
Sweden 155 5.5% 156 5.6% 801 7.1%
Norway 44 4.5% 54 4.5% 245 5.7%
Denmark 56 5.2% 51 4.7% 220 5.2%
Finland 10 2.6% 1 0.4% 56 4.0%
Group-wide 2 10 29
EBITA 266 5.1% 272 5.0% 1,351 6.4%
Amortisation of intangible assets 0 -1 -2
Net financial income/expense -9 -21 -74
Profit/loss before tax (EBT) 256 250 1,274

NOTE 2. Segment reporting and revenue distribution, cont.

Distribution of revenues Jan–Mar 2021 Jan–Mar 2020
Revenue per category, SEK MIL. Service Installation Total Service Installation Total
Sweden 1,429 1,410 2,839 1,404 1,403 2,806
Norway 551 430 981 600 615 1,214
Denmark 442 622 1,064 423 644 1,067
Finland 91 292 383 66 259 325
Eliminations -8 -27 -35 -3 -9 -12
Group 2,505 2,728 5,233 2,490 2,911 5,401
Average number of employees Jan–Mar
2021
Jan–Mar
2020
Jan–Dec
2020
Sweden 5,635 5,885 5,831
Norway 2,950 2,969 2,997
Denmark 2,341 2,257 2,315
Finland 702 607 666
Group-wide 103 103 98
Total 11,731 11,811 11,906

NOTE 3. Acquisition of operations

Bravida made the following acquisitions in the January–March period:

Acquired unit Country Technical area Type Date Percentage
of votes
Employees Estimated
annual
sales,
SEK million
Profire Sprinkler AB Sweden Sprinklers Company January 100% 35 70
J Beese VVS & Blik Denmark Heating and plumbing,
ventilation
Assets and
liabilities
February 12 14
Fiberkom ApS Denmark Electrical Company February 100% 8 11
SKM Service Oy Finland Heating & plumbing Company March 100% 20 205

NOTE 3. Acquisition of operations, cont.

Effects of acquisitions in 2021

Bravida normally uses an acquisition structure with a fixed purchase price and contingent consideration. The contingent consideration is initially valued at the likely final amount, which for the year's acquisitions is SEK 14 million. The contingent considerations are due for payment within three to five years. The acquisitions are reported in aggregate form in the table below as individually they are not of sufficient size to justify separate recognition of each acquisition.

The acquisition analyses of acquired companies in 2021 are preliminary.

Assets and liabilities included in
acquisition
Fair value recognised in the
Group, SEK million
Intangible assets 2
Property, plant and equipment 4
Trade receivables* 27
Income accrued but not invoiced 2
Other current assets 20
Cash and cash equivalents 44
Non-current liabilities -3
Trade payables -14
Income invoiced but not accrued -3
Other current liabilities -14
Net identifiable assets and liabilities 66
Consolidated goodwill 111
Consideration 176
Cash and cash equivalents, acquired 43
Net effect on cash and cash equivalents 133
Cash consideration paid 125
Consideration recognised as a liability** 51
Consideration 176

*There are no material impairments of trade receivables.

**Of the total consideration recognised as a liability, SEK 14 million consists of contingent consideration.

Acquisitions after the end of the reporting period

Bravida has made three acquisitions since the end of the period. In April, Volt Elektro AS was acquired in Norway with 6 employees and sales of approximately SEK 11 million. April also saw the acquisition in Sweden of Sverige IEAB with 23 employees and annual sales of around SEK 75 million, and Runevads VVS Teknik AB with 30 employees and annual sales of approximately SEK 50 million, with completion in May and June respectively.

NOTE 4. Seasonal variations

Bravida's business is affected by seasonal variations in the construction industry and employees' annual holiday. Bravida usually has a lower level of activity in the third quarter as it is the main holiday period. The fourth quarter normally has the highest earnings because many projects are completed during this period.

NOTE 5. Financial instruments, fair value

The fair value of the Group's financial assets and liabilities is not materially different from carrying amounts. No items other than the contingent consideration are recognised at fair value in the balance sheet.

Stockholm, 26 April 2021 Bravida Holding AB

Mattias Johansson CEO and Group President

Information

This information is information that Bravida Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out below, at 12:00 CET on 26 April 2021.

This interim report has not been reviewed by Bravida's auditors. This report contains information and opinions on future prospects

For further information, please contact:

Mattias Johansson, President and CEO Email: [email protected] Telephone: +46 8 695 20 00

Åsa Neving, CFO Email: [email protected] Telephone: +46 8 695 22 87

for Bravida's business activities. The information is based on Group management's current expectations and estimates. Actual future outcomes may vary considerably from the forward-looking statements in this report, partly because of changes in economic, market and competitive conditions.

Financial reporting dates

Interim Report April–June 2021 16 July 2021
Interim Report July–September 2021 26 October 2021

Financial definitions

Average number of employees

Calculated as the average number of employees during the year, taking account of the percentage of fulltime employment.

Return on equity

12-month rolling net profit/loss as a percentage of average equity.

EBITA*

Operating profit excluding amortisation and impairment of non-current intangible assets. EBITA is the key ratio and performance indicator that is used for internal operational monitoring. EBITA provides an overall view of profit generated by operating activities.

EBITA margin*

EBITA as a percentage of net sales.

EBITDA*

Earnings before interest, taxes, depreciation, and amortisation. EBITDA is a measure that the Group regards as relevant for investors who want to understand earnings generation before investments in non-current assets.

Effective tax rate

Recognised tax expense as a percentage of profit/loss before tax.

Equity per share, SEK

Equity attributable to equity holders of the parent company divided by the number of ordinary shares outstanding at period end.

Net financial income/expense

Total exchange differences on borrowing and cash and cash equivalents in foreign currency, other financial revenue and other finance costs.

Capital structure

acquisitions.

(Net debt/EBITDA) Net debt divided by EBITDA excluding specific costs, based on a rolling 12-month calculation. A good capital structure provides a solid basis for continued business operations. The capital structure should provide a high degree of financial flexibility and enable

Cash flow from operating

activities per share Cash flow from operating activities for the period, divided by the number of shares at period end.

Cash conversion*

(excluding IFRS 16 Leases) Total 12-month EBITDA, change in working capital and investment in plant and equipment, as well as adjustment for non-cash items in EBITDA in relation to 12-month EBIT (operating profit).

This key ratio measures the percentage of profit that is converted into cash flow. The purpose is to analyse what percentage of earnings can be converted into cash and cash equivalents and, in the longer term, the opportunity for investments, acquisitions and dividends, with the exception of interest-related cash flows.

Net sales

Net sales are recognised in accordance with the principle of recognition over time, rather than using the previous percentage-of-completion method. These revenues are recognised in proportion to the degree of completion of projects.

Net debt*

Interest-bearing liabilities (including lease liabilities, excluding pension liabilities), less cash and cash equivalents. This key figure is a measure to show the Group's total interest-bearing debt.

Organic growth

The change in sales adjusted for currency effects, as well as acquisitions and disposals compared with the same period of the previous year. Sales from acquisitions and divestments are eliminated for a period of 12 months from the date of acquisition or divestment.

Operating cash flow*

Operating profit/loss adjusted for non-cash items, investments in machinery and equipment and changes in working capital.

Order intake

The value of new projects and contracts received, and changes in existing projects and contracts over the period in question. Includes both installation and service business.

Order backlog

The value of remaining, not yet accrued project revenues from orders on hand at the end of the period. Order backlog only includes installation projects, not service operations.

Diluted earnings per share

Profit/loss for the period attributable to shareholders of the parent company divided by the average number of outstanding ordinary shares after dilution.

Basic earnings per share

Profit/loss for the period attributable to owners of the parent company divided by the average number of outstanding ordinary shares.

Interest coverage ratio*

Profit/loss after financial items plus interest expense, divided by interest expense. This key ratio is a measure of how much earnings may fall by without interest payments being jeopardised or how much interest on borrowing may increase without operating profit turning negative.

Working capital*

Total current assets, excluding cash and cash equivalents, minus current liabilities excluding current provisions and interest-bearing short-term borrowing, and current lease liabilities. This measure shows how much working capital is tied up in the business and may be set in relation to sales to understand how efficiently tied-up working capital is being used.

Operating margin

Operating profit/loss as a percentage of net sales.

Operating profit/EBIT

Earnings net financial income/ expense and tax.

Equity/assets ratio

Equity including non-controlling interests as a percentage of total assets.

Specific costs

Transactions and items that are irregular in occurrence and size and consequently have an impact on earnings and key ratios.

*See page 15 for reconciliation of performance measures.

Operational definitions

Installation/contracting

The installation and refurbishment of technical systems in properties, facilities and infrastructure.

Service

Operation and maintenance, as well as minor refurbishment of installations in buildings and facilities.

Electrical

Power supply, lighting, heating, control and surveillance systems. Telecom and other low-voltage installations. Fire and intruder alarm products and systems, access control systems, CCTV and integrated security systems.

HVAC (heating, ventilation and air conditioning)

Comfort ventilation and comfort cooling through air treatment, air conditioning and climate control. Commercial cooling in freezer and cold rooms. Process ventilation, control systems. Energy audits and energy efficiency work through heat recovery, heat pumps, etc.

Heating & Plumbing

Water, wastewater, heating, sanitation, cooling and sprinkler systems. District heating and cooling. Industrial piping with expertise in all types of pipe welding. Energy saving through integrated energy systems.

Other

Refers to other technical areas such as power, security, cooling, solar panels, energy optimisation, sprinklers and technical service management.

Other definitions

LTIR (Lost Time Incident Rate)

Occupational injuries that lead to at least one day of sickness absence per million working hours.

This is Bravida

Vision

Bravida enables customers leverage the full potential of their buildings. Through service and installation, we bring buildings to life – leading the way towards sustainable and resilient society.

Mission

We offer technical end-to-end solutions over the life of a property, from consulting and project design to installation and service. We are a large company with local presence throughout the Nordics. We have a local presence for customers and take long-term responsibility for our work. Our employees are our most important asset. With shared values, working methods and tools, together we create sustainable and profitable business for us and our customers.

Target

We manage our business according to a number of key goals that reflect our aims regarding sustainable growth, stability and leadership in the sector.

Bravida helps customers with the service and installation of technical functions in properties and industrial facilities. Our aim is for each service and installation project to make a property better and more energy efficient.

The Bravida Way

Bravida is a large company with a local presence throughout the Nordics. We operate as ONE company, drawing on the same culture, working methods and strategies. Together we provide the market's best customer experience.

➀ We have a local presence, but we are ONE company

We approach and interact with our customers on local markets. Bravida's group-wide corporate culture, working methods and strategy ensure each branch creates the market's best customer offering and a profitable business.

➁ Shared culture

Together, we are Bravida. Our entire company shares the same corporate culture, values and leadership.

➂ Shared working methods and tools

Bravida develops group-wide working methods and tools that all branches use to lead and enhance their business.

➃ Group-wide strategy

Our managers' most important task is to implement Bravida's strategy. Each branch is proactive in creating the best customer offering, the best team, efficient operations and a sustainable business.

Our vision is our ultimate objective, and our strategies help us get there. Our aim is to be the best in the Nordic region, the first choice for customers and the most attractive employer in the industry. To achieve this, we work actively to implement our strategies every day.

"We aim to be the best on a number of levels."

⊕ Best customer offering

Bravida has the best customer offering on the market. Our customers choose us because we create end-to-end solutions that make the complex simple. We listen to our customers and proactively suggest solutions for the entire life cycle of a property. We assist in making sustainable choices and creating sustainable solutions. We provide customers with feedback after completing assignments, and always ask if we can help with anything else. Above all, we keep our promises, take responsibility for our work and care about our customers.

⊕ The best team

Bravida has the best team in the industry. What unites us is our passion for constant improvement. That is why the best managers and employees choose to work with us. We actively promote gender equality and diversity with a view to becoming a stronger company. We are passionate about service and are experts in project management and delivering assignments. We work as a team, we help each other and we enjoy working together. And there are lots of opportunities to grow and develop professionally within the company.

⊕ Efficient delivery

Bravida takes a highly professional approach to everything it does. All our employees work hard every day to provide a great customer experience. We are efficient, cost conscious and ensure our workplaces are well run. We always apply our group-wide working methods and ensure purchasing is carried out correctly. We also plan meticulously, monitor our productivity and have control over all aspects of our assignments.

⊕ Sustainable business

We take responsibility for our business and take a proactive approach to longterm sustainability. We ultimately aim to eliminate all occupational injuries, and each branch works systematically to create a safe, pleasant work environment. We endeavour to achieve sustainable use of resources and a small carbon footprint. We set high standards for both our suppliers and ourselves on business ethics, legal requirements and human rights.

⊕ Profitable growth: margin over volume

Margin over volume. Bravida constantly endeavours to improve profitability and achieve the full potential of each branch. We do this by ensuring we provide the best customer offering, the best team, efficient delivery of assignments and a sustainable business. We only take on assignments and projects with a good margin. We are cost conscious and use resources efficiently. We always use Bravida's group-wide resources and systems, and aim to achieve low fixed costs. Licence to grow. When a branch is profitable and has firm foundations in place, we focus on growth. We grow organically by developing our offering and by increasing our emphasis on sales and recruitment. We also grow through acquisitions. Our profitable branches and regions are always on the lookout for good local businesses, and we acquire companies that we would like to be part of our own business. Bravida also makes strategic acquisitions to establish itself on new markets or in new technical areas.

Bravida's objective is to be the largest or second-largest player in those places where we choose to operate.

We bring buildings to life

Headquarters

Bravida Holding AB Stockholm 126 81 Sweden Street address: Mikrofonvägen 28 Telephone: +46 8 695 20 00 www.bravida.com

Norway

Bravida Norge AS Postboks 313 Økern 0511 Oslo Norway Street address: Østre Aker vei 90 Telephone: +47 2404 80 00 www.bravida.no

Denmark

Bravida Danmark A/S Park Allé 373 2605 Brøndby Denmark Telephone: +45 4322 1100 www.bravida.dk

Finland

Bravida Finland Oy Valimotie 21 00380 Helsinki Finland Telephone: +358 10 238 8000 www.bravida.fi

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