Bravida Holding — Interim / Quarterly Report 2019

Nov 6, 2019

INTERIM REPORT July–September 2019

JULY–SEPTEMBER 2019

• Net sales increased by 5% to SEK 4,638 million (4,437)
• Organic growth was -3% (6)
• The order backlog was 35% higher at SEK 14,507 million (10,746)
• EBITA increased by 3% to SEK 276 million (267)
• The EBITA margin was 6.0% (6.0)
• Profit after tax was SEK 202 million (202)
• Cash flow from operating activities was SEK 65 million (-132)
• Net debt amounted to SEK -2,735 million (-2,062)
• Four acquisitions were completed in the quarter, adding annual sales of approximately SEK 265 million
• Basic and diluted earnings per share were SEK 0.99 (1.00)

JANUARY–SEPTEMBER 2019

• Net sales increased by 7% to SEK 14,737 million (13,784)
• Organic growth was 1% (4)
• EBITA increased by 4% to SEK 802 million (774)
• The EBITA margin was 5.4% (5.6)
• Profit after tax was SEK 581 million (581)
• Cash flow from operating activities was SEK 610 million (244)
• 16 acquisitions were completed in the period, adding annual sales of SEK 950 million
• Basic earnings per share were SEK 2.86 (2.88) and diluted earnings per share were SEK 2.86 (2.87)

Financial overview	Jul–Sep	Jul–Sep	Jan–Sep	Jan–Sep	Jan–Dec	Oct 2018–
SEK MIL.	2019	2018	2019	2018	2018	Sep 2019
Net sales	4,638	4,437	14,737	13,784	19,305	20,258
Operating profit (EBIT)	276	267	800	771	1,207	1,236
Operating margin (EBIT), %	6.0	6.0	5.4	5.6	6.3	6.1
EBITA	276	267	802	774	1,211	1,240
EBITA margin, %	6.0	6.0	5.4	5.6	6.3	6.1
Profit/loss after tax	202	202	581	581	956	956
Cash flow from operating activities	65	-132	610	244	1,052	1,418
Cash conversion,* % 12 m	104	98	104	98	105	104
Net debt/adjust. EBITDA, 12 m	1.8	1.7	1.8	1.7	1.1	1.8
Order intake	5,055	4,046	16,988	14,023	20,652	23,617
Order backlog	14,507	10,746	14,507	10,746	11,992	14,507
*See definitions, IAS 17.

STRONG ORDER INTAKE AND SOLID MARGIN

Demand for technical service and installations remains good on our markets. Sales increased in the third quarter and Bravida is continuing to grow in the area of service. The EBITA margin was at the same level as last year. The order backlog continued to rise and is at a new record level. The high pace of acquisitions has persisted, with four acquisitions completed in the quarter.

SALES GROWTH THROUGH ACQUISITIONS

Bravida continued to grow in the quarter, with sales rising by 5 percent, of which 7 percent was as a result of acquisitions. Service sales increased by 10 percent in the quarter. This is pleasing as our strategy is to increase service assignments, which have a lower level of risk and help improve profitability. The market generally remains good, as reflected in strong order intake, which rose by 25 percent on the same quarter last year. Our order backlog increased by just over SEK 600 million to a new record high of SEK 14.5 billion.

Selective tendering in Finland and the Stockholm area is the main reason for the negative organic growth in the quarter. In Norway we have also been very restrictive in tendering from the business we acquired from Oras. This has improved profitability but has temporarily reduced sales and the order backlog. We are seeing a growing trend of partnering agreements in Norway and we have a number of large projects that are at the design phase and have not yet resulted in any production and are not included in the order backlog until the production phase has been contracted.

UNCHANGED EBITA MARGIN AND GOOD CASH FLOW

The EBITA margin has improved in Norway as a result of systematic work in the business acquired from Oras. In Denmark the margin was unchanged, while in Sweden the margin decreased because of project writedowns in Stockholm. The Stockholm business has experienced negative earnings performance for an extended period. A number of measures such as closing unprofitable departments, selective tendering and a greater emphasis on project management and control have been taken to improve earnings in Stockholm. In Finland, the EBITA margin declined because of some unprofitable projects and low volumes in some areas. We have also implemented measures to improve profitability in Finland.

Cash flow remained good and cash conversion was 104 percent.

BRAVIDA CONTINUES TO STRENGTHEN THROUGH ACQUISITIONS

Our growth and market position in both service and installation continue to strengthen through acquisitions. So far this year we have completed 17 acquisitions, four of which were in the third quarter and one after the end of the period, adding annual sales of almost SEK 1,000 million. These acquisitions bolster Bravida's local market positions, complement our business and expand our offering.

There is still a long list of potential acquisitions that are a good fit for Bravida, and our robust financial position with low

indebtedness and strong cash conversion means we are wellpositioned to carry on growing through acquisitions.

OUTLOOK

As part of our sustainability work we have decided to drastically reduce our CO2 emissions. The goal is for 30 percent of Bravida's service vehicles to be fossil-free by 2025. We are also altering the terms for selecting company cars, making it much more advantageous to use environmentally sustainable alternatives and cut emissions from our company cars. Reducing our carbon footprint is a priority and we are placing significant emphasis on reorienting the company's efforts to help achieve global climate targets.

Our order backlog remains at a record high and the bulk of it consists of lots of small and medium-sized installation projects. In the short term, I expect organic growth to remain low. However, order levels have never been better for Bravida, and together with our large service business the order backlog will contribute to solid sales performance in the long term. Underlying profitability also remains good, so I am positive about our performance going forward.

Mattias Johansson, Stockholm, November 2019

CONSOLIDATED EARNINGS OVERVIEW

NET SALES

July–September

Net sales increased by 5 percent to SEK 4,638 million (4,437). Organic growth was -3 percent. Currency fluctuations had a positive 1 percent impact, while acquisitions increased net sales by 7 percent. Sales increased by 6 percent in Sweden, by 20 percent in Denmark and by 4 percent in Finland. In Norway sales decreased by 5 percent. Organic growth was positive in Denmark, while it was negative in other countries.

Compared with the third quarter of 2018, net service sales increased by 10 percent while net installation sales were unchanged. The service business accounted for 47 percent (45) of total net sales.

Order intake was SEK 5,055 million (4,046), an increase of 25 percent on the same period last year. Order intake increased in Sweden, Denmark and Finland, but was slightly lower in Norway.

The order backlog at 30 September was 35 percent higher than at the same point last year and amounted to SEK 14,507 million (10,746). The order backlog, including acquisitions, rose by SEK 602 million in the quarter. The order backlog rose in Sweden, Denmark and Finland. The order backlog does not include service assignments.

January–September

Net sales increased by 7 percent to SEK 14,737 million (13,784). Organic growth was 1 percent. Currency fluctuations had a positive 1 percent impact, while acquisitions increased net sales by 5 percent. Net sales increased in all countries. They rose by 4 percent in Sweden, by 5 percent in Norway, by 20 percent in Denmark and by 12 percent in Finland.

Compared with the same period in 2018, net service sales increased by 10 percent while net installation sales rose by 5 percent. The service business accounted for 47 percent (45) of total net sales.

The order intake, which includes both installation and service, totalled SEK 16,988 million (14,023), an increase of 21 percent. Order intake for service assignments is recorded at the time of billing.

EARNINGS

July–September

Operating profit was SEK 276 million (267). EBITA increased by 3 percent to SEK 276 million (267), resulting in an EBITA margin of 6.0 percent (6.0).

EBITA increased in Norway and Denmark and was unchanged in Sweden. In Finland EBITA decreased. The EBITA margin improved in Norway, it was unchanged in Denmark, and it was lower in Sweden and Finland. Group-wide profit was SEK 8 million (5).

Financial items were SEK -16 million (-10), with the decline due to the introduction of IFRS 16. Profit after financial items was SEK 259 million (256). Profit after tax was SEK 202 million (202). Basic and diluted earnings per share decreased by 1 percent to SEK 0.99 (1.00).

January–September

Operating profit was SEK 800 million (771). EBITA increased by 4 percent to SEK 802 million (774), resulting in an EBITA margin of 5.4 percent (5.6). EBITA rose in Sweden, Denmark and Finland. The EBITA margin improved in Sweden and Finland, but was lower in Denmark and Norway. Group-wide profit was SEK 28 million (16).

Net financial items totalled SEK -56 million (-26), with the decrease due to negative foreign exchange effects in the Group's cash pool and the impact of the introduction of IFRS 16. Profit after financial items was SEK 744 million (745). Profit after tax was SEK 581 million (581). Basic earnings per share were SEK 2.86 (2.88) and diluted earnings per share were SEK 2.86 (2.87).

DEPRECIATION AND AMORTISATION

Depreciation and amortisation in the quarter totalled SEK 105 million (8), SEK 97 million of which related to the depreciation of right-of-use assets under IFRS 16. Depreciation and amortisation in the January–September period totalled SEK 306 million (24), SEK 281 million of which related to the depreciation of right-ofuse assets under IFRS 16.

NET SALES (SEK MIL.)

ORDER INTAKE (SEK MIL.) NET SALES BY COUNTRY, JAN–SEP 2019

TAX

The tax expense for the quarter was SEK -58 million (-55). Profit before tax was SEK 259 million (256). The effective tax rate was 22 percent (21). Tax paid amounted to SEK 6 million (28).

The tax expense for January to September was SEK -162 million (-164). Profit before tax was SEK 744 million (745). The effective tax rate was 22 percent (22). Tax paid was SEK 100 million (189), while last year was affected by settled tax liabilities from previous financial years.

CASH FLOW

July–September

Cash flow from operating activities was SEK 65 million (-132). The improved cash flow was due to the change in working capital and a positive impact from the introduction of IFRS 16, and lower tax payments.

Cash flow from investing activities was SEK -130 million (-29), of which acquisitions of subsidiaries and businesses totalled SEK -125 million (-28).

Cash flow from financing activities was SEK -12 million (0) and was affected by a change in borrowing and the repayment of a lease liability.

Cash flow for the quarter was SEK -77 million (-161).

12-month cash conversion was 104 percent (98). Cash flow from operating activities for the last 12 months was SEK 1,418 million (895).

January–September

Cash flow from operating activities was SEK 610 million (244). The improved cash flow was due to a positive impact from the introduction of IFRS 16, and lower tax payments.

Cash flow from investing activities was SEK -425 million (-140), while acquisitions of subsidiaries and businesses totalled SEK -406 million (-132).

Cash flow from financing activities was SEK -496 million (-514) and was affected by a change in borrowing and the repayment of a lease liability.

Cash flow for the period was SEK -311 million (-410).

ACQUISITIONS

During the quarter, four acquisitions were completed in Sweden, adding SEK 265 million in annual sales. The acquired companies operate in the HVAC, heating and plumbing, and sprinkler segments.

For the January–September 2019 period, a total of 16 acquisitions were completed, adding annual sales of SEK 950 million. In Sweden, an agreement has been signed for the acquisition of a HVAC company, with completion in November 2019.

FINANCIAL POSITION

Bravida's net debt at 30 September was SEK -2,735 million (-2,062), which corresponds to a capital structure (net debt/ adjusted EBITDA) ratio of 1.8 (1.7). The higher net debt was due to amended accounting policies on leasing under IFRS 16. Lease liabilities included in net debt totalled SEK 922 million (–). EBITDA has been affected by IFRS 16 for nine months and by IAS 17 for three months. Consolidated cash and cash equivalents were SEK 467 million (438). Interest-bearing liabilities amounted to SEK 3,202 million (2,500), of which SEK 1,180 million (1,000) was commercial paper and SEK 922 million (–) was lease liabilities. Total credit facilities amounted to SEK 2,700 million (3,500), of which SEK 1,568 million (1,994) was unused at 30 September. Total credit facilities only include credit agreements with credit institutions.

At the end of the period, equity totalled SEK 5,355 million (4,988). The equity/assets ratio was 33.5 percent (35.4).

EMPLOYEES

The average number of employees at 30 September was 11,584 (11,180), an increase of 4 percent.

PARENT COMPANY

Revenues for the quarter were SEK 41 million (39) and profit after net financial items was SEK 5 million (27). Revenues for the January–September period were SEK 133 million (123) and earnings after net financial items were SEK 12 million (32).

SHAREHOLDER INFORMATION

Bravida Holding AB's ordinary shares are listed on the Nasdaq Stockholm Large Cap list. At 30 September Bravida had 9,569 shareholders, according to Euroclear. At 30 September the largest shareholders were Mawer Investment Management funds, Capital Group funds, Swedbank Robur funds, Lannebo funds and the Fourth National Pension Insurance Fund (AP4). Mawer Investment Management funds hold just over 10 percent of the votes.

The listed price for Bravida's ordinary shares at 30 September 2019 was SEK 86.35, which equates to a market capitalisation of SEK 17,497 million. Total shareholder return, including dividends, over the past 12 months was 21.2 percent.

NET SALES AND GROWTH

SEK MIL.	Jul–Sep 2019	Jul–Sep 2018	Jan–Sep 2019	Jan–Sep 2018	Jan–Dec 2018
Net sales	4,638	4,437	14,737	13,784	19,305
Change	200	511	953	1,418	2,012
Change, %	4.5	13.0	6.9	11.5	11.6
Of which
Organic growth, %	-3	6	1	4	4
Acquisitions, %	7	4	5	6	6
Currency effects, %	1	3	1	2	2

Share capital amounts to SEK 4 million divided among 203,316,598 shares, of which 202,625,490 are ordinary shares and 691,108 are class C shares.

OTHER EVENTS DURING THE PERIOD

There were no other events to report during the period.

FINANCIAL GOALS

• Sales growth: Over 10 percent a year, comprising 5 percent organic growth and 5 to 7 percent through acquisitions
• EBITA margin: Over 7 percent, adjusted for any specific costs and including a dilutive effect from acquisitions
• Cash conversion: Over 100 percent
• Capital structure: In line with 2.5x net debt/adjusted EBITDA
• Dividend policy: A minimum of 50 percent of net earnings while also taking account of other factors such as financial position, cash flow and growth opportunities.

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. 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 ongoing business process.

Recognition over time (previously the percentage-ofcompletion method) 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. These material risks and uncertainties apply to both parent company and the consolidated Group.

TRANSACTIONS WITH RELATED PARTIES

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

EVENTS SINCE THE END OF THE PERIOD

A refinancing agreement for a loan and credit facility was signed on 14 October, with a facility of SEK 2.5 billion.

The acquisition of NPI Ventilation AB was completed on 1 November. The company has annual sales of around SEK 45 million and 16 employees.

Bravida has signed an agreement to acquire AM Elektriska AB with completion due on 2 December 2019.

Bravida has signed an agreement to acquire ICS Industrial Cooling System A/S. The acquisition requires the approval of the Danish competition authorities.

In a press release on 6 November, Bravida's management announced that a decision regarding restructuring in the Stockholm business has been taken.

EBITA (SEK MIL.) CASH FLOW FROM OPERATING ACTIVITIES (SEK MIL.)*

EBITA MARGIN

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

OPERATIONS IN SWEDEN

MARKET

The service and installation market remains healthy. Important drivers include the upgrade and refurbishment of public-sector buildings, housing and offices, as well as investment in infrastructure and energy efficiency measures. Confidence indicators for the construction industry are above the normal level.

NET SALES AND EARNINGS

July–September

Net sales in Sweden increased by 6 percent to SEK 2,385 million (2,250). The growth was due to acquisitions. Organic growth was negative at -1 percent. Service business increased by 8 percent and installation business by 4 percent. Project selection in the Stockholm business was the reason for the negative organic growth.

EBITA was SEK 150 million (150), resulting in an EBITA margin of 6.3 percent (6.7). EBITA was negatively affected by lower earnings in the Stockholm business.

January–September

Net sales increased by 4 percent to SEK 7,683 million (7,394). The growth was due to acquisitions. Organic growth was negative at -1 percent. Service business increased by 5 percent and installation business by 3 percent.

EBITA increased by 6 percent to SEK 472 million (445), resulting in an EBITA margin of 6.1 percent (6.0).

ORDER INTAKE AND ORDER BACKLOG July–September

Order intake rose by 23 percent compared with the corresponding period last year, and amounted to SEK 2,476 million (2,012). Order intake mainly related to small and medium-sized installation projects and service assignments.

The order backlog at the end of the quarter was 61 percent higher than at the same point last year and amounted to SEK 8,380 million (5,215); the order backlog increased by SEK 264 million over the quarter. The order value of the Stockholm Bypass Project amounted to approximately SEK 2.7 billion at 30 September.

January–September

Order intake rose by 22 percent compared with the same period last year to SEK 8,794 million (7,237). The second order for the Stockholm Bypass Project, valued at SEK 1,144 million, was recorded in the period.

NET SALES (SEK MIL.)

Net sales by quarter Net sales, rolling 12 months

EBITA (SEK MIL.)

SEK MIL. Jul–Sep 2019 Jul–Sep 2018 Jan–Sep 2019 Jan–Sep 2018 Jan–Dec 2018 Net sales 2,385 2,250 7,683 7,394 10,279 EBITA 150 150 472 445 692 EBITA margin, % 6.3 6.7 6.1 6.0 6.7 Order intake 2,476 2,012 8,794 7,237 11,978 Order backlog 8,380 5,215 8,380 5,215 7,094 Average number of employees 5,854 5,774 5,854 5,774 5,971

A new station and new municipality offices are being built under one roof in Växjö. Bravida has been commissioned by Skanska and Vöfab to carry out all installation work on this 16,400 square-metre building, due for completion in 2021. The building is being constructed entirely from wood and glass and complies with Miljöbyggnad Gold certification.

OPERATIONS IN NORWAY

MARKET

The service and installation market remains healthy. Key drivers are investment in and maintenance of road and transport infrastructure, new construction and refurbishment of healthcare facilities and new construction of housing. There is also good demand for investments relating to the shift towards greener sources of energy such as wind power, solar energy and electric car charging.

NET SALES AND EARNINGS July–September

Net sales decreased by 5 percent to SEK 1,089 million (1,151). The negative growth was due to lower net sales in the installation business. Organic growth was negative at -5 percent. Installation business decreased by 12 percent, while the service business increased by 2 percent. Lower sales were due to project selection in the business that was part of the Oras acquisition, which also reduced order intake and the order backlog. Currency fluctuations had some negative impact on net sales. EBITA was SEK 65 million (64), resulting in an EBITA margin of 5.9 percent (5.6).

January–September

Net sales increased by 5 percent to SEK 3,544 million (3,384). Growth is attributable to both service and installation business. Service business increased by 5 percent and installation busi-

300

ness by 4 percent. Organic growth was 5 percent. Currency fluctuations had a positive 1 percent impact on net sales. EBITA decreased by 19 percent to SEK 157 million (193), resulting in an EBITA margin of 4.4 percent (5.7). The lower earnings were due to a write-down on two large projects that were included in the order backlog when Oras was acquired. These projects were completed during the second quarter of 2019.

ORDER INTAKE AND ORDER BACKLOG July–September

Order intake decreased by 1 percent compared with the same period last year, and amounted to SEK 939 million (947). Order intake mainly related to small and medium-sized installation projects and service assignments.

The order backlog at the end of the quarter was 9 percent lower than at the same point last year and amounted to SEK 2,828 million (3,093), while the order backlog decreased by SEK 149 million over the quarter. Project selection in the business acquired from Oras reduced the order backlog.

January–September

Order intake increased by 4 percent compared with the same period last year, and amounted to SEK 3,820 million (3,672).

NET SALES (SEK MIL.)

Net sales by quarter Net sales, rolling 12 months

SEK MIL.	Jul–Sep 2019	Jul–Sep 2018	Jan–Sep 2019	Jan–Sep 2018	Jan–Dec 2018
Net sales	1,089	1,151	3,544	3,384	4,777
EBITA	65	64	157	193	285
EBITA margin, %	5.9	5.6	4.4	5.7	6.0
Order intake	939	947	3.820	3,672	4,525
Order backlog Average number of employees	2,828 2,999	3,093 3,024	2,828 2,999	3,093 3,024	2,552 2,994

Norway's new national museum is taking shape on the site of the former Oslo West Station. Bravida is responsible for security-related work on the museum, which involves installing around 2,000 alarms and detectors, 600 cameras and access control systems for 350 doors The new museum is due to open in 2020, making it the largest art museum in the Nordic region, covering an area of 54,000 square metres.

OPERATIONS IN DENMARK

MARKET

The service and installation market remains healthy. The housing market is growing, which is contributing to increased demand for technical installations in housing new-builds and upgrades. New-builds and the upgrade of public-sector buildings are contributing to a healthy market. Demand from the business sector has grown for premises and the installation of new technical solutions for automation and energy optimisation. Confidence indicators for the construction industry are slightly below the normal level.

NET SALES AND EARNINGS

July–September

Net sales increased by 20 percent to SEK 942 million (784). The increase in net sales was mainly attributable to the service business and was due to both acquisitions and organic growth. Organic growth was 3 percent. Currency translation had a positive 2 percent impact on net sales.

EBITA increased by 20 percent to SEK 53 million (44), resulting in an EBITA margin of 5.6 percent (5.6).

January–September

Net sales increased by 20 percent to SEK 2,715 million (2,269). The growth in net sales, which was due to acquisitions and organic growth, was attributable to both service and installation business. Organic growth was 4 percent. Currency translation had a positive 3 percent impact on net sales.

EBITA increased by 17 percent to SEK 136 million (116), resulting in an EBITA margin of 5.0 percent (5.1).

ORDER INTAKE AND ORDER BACKLOG July–September

Order intake rose by 57 percent compared with the same period last year, and amounted to SEK 1,240 million (790). In the third quarter Bravida won an order to carry out all installations in a new faculty building in Odense, at an order value of approximately SEK 350 million. Order intake generally related to small and medium-sized installation projects and service assignments.

The order backlog at the end of the quarter was 29 percent higher than at the same point last year and amounted to SEK 2,507 million (1,951); the order backlog increased by SEK 309 million over the quarter.

January–September

Order intake increased by 36 percent to SEK 3,343 million (2,467).

NET SALES (SEK MIL.)

Net sales by quarter Net sales, rolling 12 months

EBITA (SEK MIL.)

SEK MIL. Jul–Sep 2019 Jul–Sep 2018 Jan–Sep 2019 Jan–Sep 2018 Jan–Dec 2018 Net sales 942 784 2,715 2,269 3,171 EBITA 53 44 136 116 185 EBITA margin, % 5.6 5.6 5.0 5.1 5.8 Order intake 1,240 790 3,343 2,467 3,164 Order backlog 2,507 1,951 2,507 1,951 1,787 Average number of employees 2,038 1,780 2,038 1,780 1,830

The University of Southern Denmark is expanding with a new Health Faculty building, which will house laboratories, offices and teaching spaces, as well as stables and forensic medicine offices. Bravida is carrying out all installation of heating and plumbing, HVAC, electricity, sprinklers, fire alarms and control systems in the new building. The new faculty building will be located right next to the university hospital in Odense.

OPERATIONS IN FINLAND

MARKET

The service and installation market is stable. Construction firms are reporting solid sales, which is contributing to stable demand for technical installations. Key drivers are the new construction and refurbishment of housing and business premises. Confidence indicators for the construction industry are above the normal level.

NET SALES AND EARNINGS July–September

Net sales increased by 4 percent to SEK 270 million (258). The increase in net sales is attributable to the service business. The growth in service business is both organic and based on acquisitions. Total organic growth was negative, at -8 percent. Currency translation had a positive 2 percent impact on net sales.

EBITA was SEK 1 million (5), resulting in an EBITA margin of 0.5 percent (1.8). The decrease in profit was due to project writedowns and low volumes in some departments.

January–September

Net sales increased by 12 percent to SEK 859 million (769), which was attributable to acquisitions. The sales growth was mainly attributable to the service business. Organic growth was negative at -5 percent. EBITA was SEK 8 million (3), resulting in an EBITA margin of 1.0 percent (0.4). Currency translation had a positive 3 percent impact on net sales.

ORDER INTAKE AND ORDER BACKLOG July–September

Order intake rose by 48 percent compared with the same period last year, and amounted to SEK 448 million (303). Order intake related to small and medium-sized installation projects and service assignments.

The order backlog at the end of the quarter was 63 percent higher than at the same point last year and amounted to SEK 793 million (488); the order backlog increased by SEK 178 million over the quarter.

January–September

Order intake rose by 61 percent compared with the same period last year, and amounted to SEK 1,094 million (679).

NET SALES (SEK MIL.)

Net sales by quarter Net sales, rolling 12 months

EBITA (SEK MIL.)

SEK MIL.	Jul–Sep 2019	Jul–Sep 2018	Jan–Sep 2019	Jan–Sep 2018	Jan–Dec 2018
Net sales	270	258	859	769	1,114
EBITA	1	5	8	3	22
EBITA margin, %	0.5	1.8	1.0	0.4	2.0
Order intake	448	303	1,094	679	1,022
Order backlog	793	488	793	488	559
Average number of employees	605	521	605	521	599

In Helsinki, the Aleksis Kivi School is being refurbished and Bravida is responsible for replacing the electricity and HVAC systems. The school has previously had indoor climate issues and is therefore replacing the entire HVAC system, while the electricity system is being upgraded and digitalised.

FINANCIAL REPORTING

CONSOLIDATED INCOME STATEMENT, SUMMARY

SEK MIL.	Jul–Sep 2019	Jul–Sep 2018	Jan–Sep 2019	Jan–Sep 2018	Jan–Dec 2018	Oct 2018– Sep 2019
Net sales	4,638	4,437	14,737	13,784	19,305	20,258
Production costs	-4,004	-3,823	-12,760	-11,926	-16,502	-17,337
Gross profit/loss	634	615	1,978	1,859	2,803	2,922
Selling and administrative expenses	-358	-348	-1,178	-1,088	-1,596	-1,686
Operating profit/loss	276	267	800	771	1,207	1,236
Net financial items	-16	-10	-56	-26	-16	-46
Profit/loss before tax	259	256	744	745	1,191	1,190
Tax	-58	-55	-162	-164	-235	-234
Profit/loss for the period	202	202	581	581	956	956
Profit/loss for the period attributable to:
Owners of the parent company	201	200	579	579	951	951
Non-controlling interests	1	1	3	3	5	5
Profit/loss for the period	202	202	581	581	956	956
Basic earnings per share, SEK	0.99	1.00	2.86	2.88	4.73	4.70
Diluted earnings per share, SEK	0.99	1.00	2.86	2.87	4.72	4.69

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, SUMMARY

SEK MIL.	Jul–Sep 2019	Jul–Sep 2018	Jan–Sep 2019	Jan–Sep 2018	Jan–Dec 2018	Oct 2018– Sep 2019
Profit/loss for the period	202	202	581	581	956	956
Other comprehensive income
Items that have been or can be transferred to profit/loss for the period
Translation differences for the period from the translation of foreign operations	6	-33	98	100	44	42
Items that cannot be transferred to profit/loss for the period
Revaluation of defined-benefit pensions	–	–	-223	-74	-172	-322
Tax attributable to the revaluation of pensions	–	–	48	16	37	69
Other comprehensive income for the period	6	-33	-78	42	-91	-211
Comprehensive income for the period	208	168	504	623	865	746
Comprehensive income for the period attributable to:
Owners of the parent company	207	167	501	620	860	740
Non-controlling interests	1	1	3	3	5	5
Comprehensive income for the period	208	168	504	623	865	746

CONSOLIDATED BALANCE SHEET, SUMMARY

SEK MIL.	30/09/2019	30/09/2018	31/12/2018
Goodwill	8,743	8,153	8,210
Right-of-use assets	913	–	–
Other non-current assets	173	152	168
Total non-current assets	9,828	8,306	8,378
Trade receivables	3,301	3,262	3,378
Income accrued but not invoiced	1,788	1,424	1,235
Other current assets	607	677	598
Cash and cash equivalents	467	438	735
Total current assets	6,164	5,802	5,946
Total assets	15,992	14,107	14,324
Equity attributable to owners of the parent company	5,338	4,976	5,223
Non-controlling interests	17	12	15
Total equity	5,355	4,988	5,238
Non-current liabilities	2,062	2,039	1,967
Lease liabilities	586	–	–
Total non-current liabilities	2,648	2,039	1,967
Lease liabilities	336	–	–
Trade payables	1,960	1,952	2,058
Income invoiced but not accrued	1,963	1,801	1,803
Other current liabilities	3,729	3,327	3,259
Total current liabilities	7,988	7,081	7,120
Total liabilities	10,636	9,119	9,086
Total equity and liabilities	15,992	14,107	14,324
Of which interest-bearing liabilities	3,202	2,500	2,100

CHANGES IN EQUITY

SEK MIL.	Jan–Sep 2019	Jan–Sep 2018	Jan–Dec 2018
Consolidated equity
Amount at start of period	5,238	4,662	4,662
Comprehensive income for the period	504	623	865
Dividend	-404	-312	-312
Cost of long-term incentive programmes	18	16	23
Amount at end of period	5,355	4,988	5,238

CONSOLIDATED CASH FLOW STATEMENT, SUMMARY

SEK MIL.	Jul–Sep 2019	Jul–Sep 2018	Jan–Sep 2019	Jan–Sep 2018	Jan–Dec 2018
Cash flow from operating activities
Profit/loss before tax	259	256	744	745	1,191
Adjustments for non-cash items	107	-1	303	6	105
Income taxes paid	-6	-28	-100	-189	-219
Change in working capital	-295	-359	-336	-318	-25
Cash flow from operating activities	65	-132	610	244	1,052
Investing activities
Acquisitions of subsidiaries and businesses	-125	-28	-406	-132	-237
Other	-5	-1	-18	-8	-12
Cash flow from investing activities	-130	-29	-425	-140	-249
Financing activities
Repayment of loans	-600	–	-970	-200	-600
New loans	680	–	1,150	–	–
Repayment of lease liabilities	-92	–	-272	–	–
Change in utilisation of overdraft facility	–	0	–	-1	-1
Dividend paid	–	–	-404	-312	-312
Cash flow from financing activities	-12	0	-496	-514	-914
Cash flow for the period	-77	-161	-311	-410	-111
Cash and cash equivalents at start of period	545	604	735	839	839
Translation difference on cash and cash equivalents	-1	-4	42	8	7
Cash and cash equivalents at end of period	467	438	467	438	735

PARENT COMPANY INCOME STATEMENT, SUMMARY

SEK MIL.	Jul–Sep 2019	Jul–Sep 2018	Jan–Sep 2019	Jan–Sep 2018	Jan–Dec 2018
Net sales	41	39	133	123	173
Selling and administrative expenses	-30	-5	-97	-77	-111
Operating profit/loss	11	34	35	46	63
Net financial items	-6	-6	-24	-14	-5
Profit/loss after net financial items	5	27	12	32	57
Net Group contributions	–	0	–	-1	275
Appropriations	4	–	4	–	-84
Profit/loss before tax	8	27	15	31	248
Tax	-1	–	-1	0	-55
Profit/loss for the period	8	27	14	31	193

PARENT COMPANY BALANCE SHEET, SUMMARY

SEK MIL.	30/09/2019	30/09/2018	31/12/2018
Shares in subsidiaries	7,341	7,341	7,341
Total non-current assets	7,341	7,341	7,341
Receivables from Group companies	1,865	1,754	1,608
Current receivables	29	210	61
Total current receivables	1,894	1,965	1,668
Cash and bank balances	345	375	624
Total current assets	2,239	2,339	2,292
Total assets	9,580	9,681	9,634
Restricted equity	4	4	4
Non-restricted equity	4,433	4,635	4,804
Equity	4,437	4,639	4,809
Untaxed reserves	471	390	474
Liabilities to credit institutions	1,100	1,500	1,300
Provisions	1	0	1
Total non-current liabilities	1,101	1,500	1,301
Short-term loans	1,180	1,000	800
Liabilities to Group companies	2,357	2,012	2,212
Current liabilities	35	139	39
Total current liabilities	3,572	3,151	3,051
Total equity and liabilities	9,580	9,681	9,634
Of which interest-bearing liabilities	2,280	2,500	2,100

QUARTERLY DATA

The IFRS 16 Leases standard has been introduced from 1 January 2019. The financial statements for previous periods, quarterly data and key performance indicators presented in this report have not been restated. Comparable financial figures, quarterly data and key performance indicators are set out in Note 1 and in quarterly data and alternative performance measures as per IAS 17 on subsequent pages.

INCOME STATEMENT, SEK MIL.	Jul–Sep 2019	Apr–Jun 2019	Jan–Mar 2019
Net sales	4,638	5,087	5,013
Production costs	-4,004	-4,401	-4,355
Gross profit/loss	634	686	658
Selling and administrative expenses	-358	-413	-407
Operating profit/loss	276	274	250
Net financial items	-16	-16	-24
Profit/loss after financial items	259	257	227
Tax	-58	-56	-49
Profit/loss for the period	202	201	178
Profit/loss for the period attributable to:
Owners of the parent company	201	200	178
Non-controlling interests	1	1	1
Profit/loss for the period	202	201	178
BALANCE SHEET, SEK MIL.	30/09/2019	30/06/2019	31/03/2019
Goodwill	8,743	8,586	8,347
Other non-current assets	1,085	1,120	1,149
Current assets	5,697	5,470	5,329
Cash and cash equivalents	467	545	595
Total assets	15,992	15,720	15,421
Equity	5,355	5,141	5,488
Borrowings	1,100	1,100	1,100
Non-current liabilities	1,548	1,568	1,347
Current liabilities	7,988	7,911	7,487
Total equity and liabilities	15,992	15,720	15,421
CASH FLOW, SEK MIL.	Jul–Sep 2019	Apr–Jun 2019	Jan–Mar 2019
Cash flow from operating activities	65	131	414
Cash flow from investing activities	-130	-168	-127
Cash flow from financing activities	-12	-24	-460
Cash flow for the period	-77	-61	-172
	Jul–Sep	Apr–Jun	Jan–Mar
KEY FIGURES	2019	2019	2019
Operating margin (EBIT), %	6.0	5.4	5.0
EBITA margin, %	6.0	5.4	5.0
Return on equity*, %	18.2	18.0	18.0
Net debt	-2,735	-2,612	-2,115
Net debt/adjusted EBITDA*	1.8	1.8	1.6
Cash conversion****, % 12 m	104	98	124
Interest coverage, multiple	19.7	19.9	20.9
Equity/assets ratio, %	33.5	32.7	35.6
Order intake	5,055	5,467	6,465
Order backlog	14,507	13,905	13,474
Average number of employees	11,584	11,339	11,252
Administration costs as % of sales	7.7	8.1	8.1
Working capital as % of sales**	-3.1	-4.3	-5.3
Basic earnings per share, SEK***	0.99	0.99	0.88
Diluted earnings per share, SEK	0.99	0.99	0.88
Equity per share, SEK***	26.34	25.29	27.07
Cash flow from operating activities per share, SEK*** Share price at balance sheet date, SEK	0.32 86.35	0.65 82.30	2.05 81.95

*Calculated on rolling 12-month earnings. **Calculated on rolling 12-month sales. ***Calculated on the number of outstanding ordinary shares. ****Under IAS 17.

QUARTERLY DATA, AS PER IAS 17

INCOME STATEMENT, SEK MIL.	Jul–Sep 2019	Apr–Jun 2019	Jan–Mar 2019	Oct–Dec 2018	Jul–Sep 2018	Apr–Jun 2018	Jan–Mar 2018	Oct–Dec 2017
Net sales	4,638	5,087	5,013	5,521	4,437	4,790	4,557	4,927
Production costs	-4,006	-4,403	-4,356	-4,577	-3,823	-4,131	-3,972	-4,113
Gross profit/loss	632	684	657	944	615	659	585	815
Selling and administrative expenses	-361	-415	-410	-508	-348	-380	-360	-426
Operating profit/loss	271	269	247	436	267	279	225	389
Net financial items	-10	-10	-18	10	-10	-7	-9	-15
Profit/loss after financial items	261	258	229	446	256	273	216	373
Tax	-58	-56	-49	-71	-55	-61	-48	-53
Profit/loss for the period	203	203	181	375	202	212	168	320

BALANCE SHEET, SEK MIL.	30/09/2019	30/06/2019	31/03/2019	31/12/2018	30/09/2018	30/06/2018	31/03/2018	31/12/2017
Goodwill	8,743	8,586	8,347	8,210	8,153	8,150	8,002	7,844
Other non-current assets	172	168	171	168	152	157	154	154
Current assets	5,698	5,470	5,329	5,211	5,363	5,154	4,684	4,523
Cash and cash equivalents	469	546	595	735	438	604	660	839
Total assets	15,082	14,770	14,443	14,324	14,107	14,065	13,500	13,360
Equity	5,360	5,144	5,490	5,238	4,988	4,804	4,921	4,662
Long-term loans	1,100	1,100	1,100	1,300	1,500	1,500	1,500	1,700
Non-current liabilities	962	943	698	667	539	515	395	356
Current liabilities	7,660	7,583	7,155	7,120	7,081	7,246	6,684	6,642
Total equity and liabilities	15,082	14,770	14,443	14,324	14,107	14,065	13,500	13,360

CASH FLOW, SEK MIL.	Jul–Sep 2019	Apr–Jun 2019	Jan–Mar 2019	Oct–Dec 2018	Jul–Sep 2018	Apr–Jun 2018	Jan–Mar 2018	Oct–Dec 2017
Cash flow from operating activities	-25	41	325	807	-132	319	58	650
Cash flow from investing activities	-130	-168	-127	-109	-29	-66	-45	-12
Cash flow from financing activities	80	66	-370	-400	0	-313	-201	-201
Cash flow for the period	-75	-61	-172	298	-161	-60	-188	437

KEY FIGURES	Jul–Sep 2019	Apr–Jun 2019	Jan–Mar 2019	Oct–Dec 2018	Jul–Sep 2018	Apr–Jun 2018	Jan–Mar 2018	Oct–Dec 2017
Operating margin (EBIT), %	5.8	5.3	4.9	7.9	6.0	5.8	4.9	7.9
EBITA margin, %	5.9	5.3	5.0	7.9	6.0	5.9	5.0	7.9
Return on equity*, %	18.3	18.0	18.1	18.7	18.4	17.8	17.5	18.3
Net debt	-1,811	-1,654	-1,135	-1,365	-2,062	-1,896	-1,841	-1,862
Net debt/adjusted EBITDA*	1.4	1.3	0.9	1.1	1.7	1.7	1.6	1.7
Cash conversion*, %	104	98	124	105	98	99	79	109
Interest coverage, multiple	35.1	34.4	39.0	58.2	34.3	30.0	32.7	30.0
Equity/assets ratio, %	35.5	34.8	38.0	36.6	35.4	34.2	36.5	34.9
Order intake	5,055	5,467	6,465	6,629	4,046	5,102	4,875	4,620
Order backlog	14,507	13,905	13,474	11,992	10,746	11,139	10,825	10,271
Average number of employees	11,584	11,339	11,252	11,475	11,180	10,893	10,709	10,643
Administration costs as % of sales	7.8	8.2	8.2	9.2	7.8	7.9	7.9	8.6
Working capital as % of sales**	-3.2	-4.3	-5.3	-4.9	-3.1	-5.2	-4.7	-5.5
Basic earnings per share, SEK***	1.00	1.00	0.89	1.85	1.00	1.05	0.83	1.59
Diluted earnings per share, SEK	1.00	0.99	0.89	1.85	1.00	1.05	0.83	1.58
Equity per share, SEK***	26.37	25.31	27.08	25.91	24.67	23.76	24.41	23.13
Cash flow from operating activities per share, SEK***	-0.12	0.20	1.61	3.99	-0.65	1.58	0.29	3.23
Share price at balance sheet date, SEK	86.35	82.30	81.95	61.30	72.90	71.15	59.70	54.85

*Calculated on rolling 12-month earnings. **Calculated on rolling 12-month sales. ***Calculated on the number of outstanding ordinary shares.

Reconciliation of performance measures, 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 measures provide valuable additional information for investors and the company's management as they allow relevant trends to be assessed. Bravida's definitions of these measures 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. Below are definitions of measures that are not defined under IFRS and that are not mentioned anywhere else in this interim report. Reconciliation of these measures is provided in the table below. Calculations do not always tally because amounts in the table below have been rounded to the nearest million Swedish kronor. See page 23 for definitions of key performance indicators.

RECONCILIATION OF KEY PERFORMANCE MEASURES, NOT DEFINED UNDER IFRS.	Jul–Sep 2019	Apr–Jun 2019	Jan–Mar 2019
Net debt
Interest-bearing liabilities	-3,202	-3,157	-2,710
Cash and cash equivalents	467	545	595
Total net debt	-2,735	-2,612	-2,115
EBITA
Operating profit, EBIT	276	274	250
Amortisation and impairment of non-current intangible assets	1	1	1
EBITA	276	274	251
EBITDA
Operating profit, EBIT	276	274	250
Depreciation, amortisation and impairment losses	105	101	101
EBITDA	380	374	351
Working capital
Current assets	6,164	6,015	5,925
Cash and cash equivalents	-467	-545	-595
Current liabilities	-7,988	-7,911	-7,487
Financial lease, current liability	336	332	332
Short-term loans	1,180	1,100	630
Provisions	142	152	147
Total working capital	-633	-858	-1,048
Interest coverage ratio
Profit/loss before tax	259	257	227
Interest expense	14	14	11
Total	273	271	238
Interest expense	14	14	11
Interest coverage, multiple	19.7	19.9	20.9
Cash conversion*
12-month EBITDA	1,258	1,253	1,263
Non-cash items in EBITDA in last 12 months	81	70	58
Change in working capital, last 12 months	-44	-108	218
Investments in machinery and equipment, last 12 months	-23	-19	-18
Total operating cash flow	1,272	1,196	1,521
Operating profit/loss, last 12 months	1,223	1,219	1,229
Cash conversion, last 12 months, %	104	98	124

*Under IAS 17.

Reconciliation of key performance indicators under IAS 17

RECONCILIATION OF KEY PERFORMANCE MEASURES, Jul–Sep Apr–Jun Jan–Mar Oct–Dec Jul–Sep Apr–Jun NOT DEFINED UNDER IFRS. 2019 2019 2019 2018 2018 2018	Jan–Mar Oct–Dec 2018 2017
Net debt
Interest-bearing liabilities -2,280 -2,200 -1,730 -2,100 -2,500 -2,500	-2,500 -2,701
Cash and cash equivalents 469 546 595 735 438 604	660 839
Total net debt -1,811 -1,654 -1,135 -1,365 -2,062 -1,896	-1,841 -1,862
EBITA
Operating profit, EBIT 271 269 247 436 267 279	225 389
Amortisation and impairment of non-current intangible assets 1 1 1 2 1 1	1 1
EBITA 272 269 248 438 267 280	226 390
EBITDA
Operating profit, EBIT 271 269 247 436 267 279	225 389
Depreciation, amortisation and impairment losses 8 8 9 10 8 8	8 9
EBITDA 279 277 256 446 274 287	233 397
Working capital
Current assets 6,167 6,016 5,925 5,946 5,802 5,758	5,344 5,362
Cash and cash equivalents -469 -546 -595 -735 -438 -604	-660 -839
-7,660 -7,583 -7,155 -7,120 -7,081 -7,246 Current liabilities	-6,684 -6,642
Short-term loans 1,180 1,100 630 800 1,000 1,000	1,000 -1,001
Provisions 142 152 147 169 135 153	162 172
Total working capital -640 -861 -1,048 -940 -583 -939	-837 -946
Interest coverage ratio
Profit/loss before tax 261 258 229 446 256 273	216 373
Interest expense 8 8 6 8 8 9 Total 269 266 235 454 264 282	7 13 223 386
Interest expense 8 8 6 8 8 9	7 13
Interest coverage, multiple 35.1 34.4 39.0 58.2 34.3 30.0	32.7 30.0
Cash conversion
12-month EBITDA 1,258 1,253 1,263 1,241 1,192 1,148	1,123 1,107
Non-cash items in EBITDA in last 12 months 81 70 58 69 6 7	17 17
Change in working capital, last 12 months -44 -108 218 -25 -49 -35	-260 63
Investments in machinery and equipment, last 12 months -23 -19 -18 -12 -15 -17	-20 -21
Total operating cash flow 1,272 1,196 1,521 1,273 1,134 1,103	860 1,166
Operating profit/loss, last 12 months 1,223 1,219 1,229 1,207 1,160 1,116	1,089 1,072
Cash conversion, last 12 months, % 104 98 124 105 98 99	79 109

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 IAS 34 Interim Reporting and appropriate sections of Chapter 9, Interim Reporting, of the Swedish Annual Accounts Act. The parts of the interim report that relate to the parent company have been prepared in accordance with Chapter 9, Interim Reporting, of the Swedish Annual Accounts Act.

Amounts in the Group's financial reporting are in millions of Swedish kronor (SEK MIL.) unless stated otherwise. Rounding differences may occur.

IFRS 16 Leases

Bravida has applied IFRS 16 Leases since 1 January 2019. This standard replaces the previous rules for the accounting of leases, such as IAS 17 Leases and IFRIC 4 Determining Whether an Arrangement Contains a Lease. The Group has opted for a simplified transition method that involves the comparative year, 2018, not being recalculated as though IFRS 16 had been applied. This means that comparative figures for 2018 and earlier periods are recognised according to previously applied accounting policies. The effects of the transition to IFRS 16 are recognised at 1 January 2019.

IFRS 16 mainly affects lessees, with the main effect being that all leases previously recognised as operating leases are now recognised in a way that is similar to the previous recognition financial leases. This means that assets and liabilities are also recognised for operating leases, with related recognition of costs for depreciation/amortisation and interest, in contrast to the previous situation in which leased assets and related liabilities were not recognised and lease payments were accrued on a straight-line basis as a lease expense.

The Group has chosen to apply the options in IFRS 16 not to recognise rightof-use assets and lease liabilities for leases with an assessed lease term of 12 months or less (short-term leases) and for low-value assets (SEK 50,000). Upon transition to IFRS 16, leases ending in 2019 that were not short-term leases when they were entered into are included. In addition, Bravida has chosen to carry out entries and adjustments relating to IFRS 16 at group level. Segment reporting will therefore not be affected and is reported under previous accounting policies.

The Group's leases that will be capitalised mainly relate to leased premises and vehicles. The lease liability has been calculated as the net present value of remaining lease payments, less margin loan interest at 1 January 2019. Margin loan interest has been set per country. The Group has used weighted average margin loan interest of 2 percent in establishing the lease liability in the opening balance at 1 January 2019.

Right-of-use assets have been calculated as the value of the liability at 1 January 2019 plus prepaid lease payments, which were recognised in the balance sheet at 31 December 2018.

Upon transition to IFRS 16 the Group recognised right-of-use assets of SEK 1,045 million and lease liabilities of SEK 1,018 million, SEK 326 million of which are current lease liabilities. The difference between assets and liabilities is due to prepaid lease payments that were recognised as current assets at 31 December 2018, which were classified as right-of-use assets at 1 January 2019. Under IAS 17 operating leases were not recognised in the balance sheet; instead, the disclosure was made in the notes. The recognised lease liabilities under IFRS 16 at the point of transition exceeds the net present value of the minimum lease payments for operating leases, about which information was provided in Note 26 to the 2018 annual accounts. In Note 26 'Lease payments under operating leases' the nominal value of future lease payments amounts to SEK 927 million. Lease liabilities recognised in the balance sheet at the point of transition at 1 January 2019 amount to SEK 1,018 million. The main reason is that the assessment of the length of the lease terms in accordance with IFRS 16 in some cases included extension periods, whereas the Note 26 only includes the non-cancellable term. The difference is also due to future lease payments in Note 26 being recognised at nominal value.

The recognised right-of-use assets are attributable to the following types of asset:

SEK MIL.	30/09/2019	01/01/2019
Property	521	654
Vehicles	392	391
Total right-of-use assets	913	1,045

IFRS 16 transition effects on assets and liabilities at 1 January 2019

SEK MIL.	Recognised balance sheet items 1 January 2019	Restatement to IFRS 16	Restated balance sheet items 1 January 2019
Non-current assets	8,378	1,045	9,423
Current assets	5,946	-27	5,919
Total assets	14,324	1,018	15,342
Equity	5,238	–	5,238
Non-current liabilities	1,967	692	2,659
Current liabilities	7,120	326	7,446
Total liabilities	9,086	1,018	10,104
Total equity and liabilities	14,324	1,018	15,342

NOTE 1. ACCOUNTING POLICIES, CONT.

Comparative figures if IAS 17 had been applied in 2019 CONSOLIDATED INCOME STATEMENT, SUMMARY, SEK MIL.	IFRS 16 Jul–Sep 2019	IAS 17 Jul–Sep 2019	IAS 17 Jul–Sep 2018	IFRS 16 Jan–Sep 2019	IAS 17 Jan–Sep 2019	IAS 17 Jan–Sep 2018
Net sales	4,638	4,638	4,437	14,737	14,737	13,784
Production costs	-4,004	-4,006	-3,823	-12,760	-12,765	-11,926
Gross profit/loss	634	632	615	1,978	1,973	1,859
Selling and administrative expenses	-358	-361	-348	-1,178	-1,185	-1,088
Operating profit/loss	276	271	267	800	787	771
Net financial items	-16	-10	-10	-56	-39	-26
Profit/loss before tax	259	261	256	744	749	745
Tax	-58	-58	-55	-162	-163	-164
Profit/loss for the period	202	203	202	581	586	581
EBITDA	380	279	274	1,106	812	795
EBITA	276	272	267	802	790	774

CONSOLIDATED BALANCE SHEET, SUMMARY, SEK MIL.	IFRS 16 30/09/2019	IAS 17 30/09/2019	IAS 17 30/09/2018
Goodwill	8,743	8,743	8,153
Right-of-use assets	913	–	–
Other non-current assets	173	173	152
Total non-current assets	9,828	8,915	8,306
Total current assets	6,164	6,167	5,802
Total assets	15,992	15,082	14,107
Total equity	5,355	5,360	4,988
Non-current liabilities	2,062	2,062	2,039
Lease liabilities	586	–	–
Total non-current liabilities	2,648	2,062	2,039
Lease liabilities	336	–	–
Other current liabilities	7,652	7,660	7,081
Total current liabilities	7,988	7,660	7,081
Total liabilities	10,636	9,722	9,119
Total equity and liabilities	15,992	15,082	14,107

CONSOLIDATED CASH FLOW STATEMENT, SEK MIL.	IFRS 16 Jul–Sep 2019	IAS 17 Jul–Sep 2019	IAS 17 Jul–Sep 2018	IFRS 16 Jan–Sep 2019	IAS 17 Jan–Sep 2019	IAS 17 Jan–Sep 2018
Cash flow from operating activities
Profit/loss before tax	259	261	256	744	749	745
Adjustments for non-cash items	107	15	-1	303	29	6
Income taxes paid	-6	-6	-28	-100	-100	-189
Change in working capital	-295	-295	-359	-336	-336	-318
Cash flow from operating activities	65	-25	-132	610	341	244
Cash flow from investing activities	-130	-130	-29	-425	-425	-140
Change in loans	80	80	–	180	180	-200
Repayment of lease liabilities	-92	–	–	-272	–	–
Change in utilisation of overdraft facility	–	–	0	–	–	-1
Dividend paid	–	–	–	-404	-404	-312
Cash flow from financing activities	-12	80	0	-496	-224	-514
Cash flow for the period	-77	-75	-161	-311	-308	-410

NOTE 2. SEGMENT REPORTING AND REVENUE DISTRIBUTION

NET SALES BY COUNTRY

SEK MIL.	Jul–Sep 2019	distri bution	Jul–Sep 2018	distri bution	Jan–Sep 2019	distri bution	Jan–Sep 2018	distri bution	Jan–Dec 2018	distri bution
Sweden	2,385	51%	2,250	51%	7,683	52%	7,394	54%	10,279	53%
Norway	1,089	23%	1,151	26%	3,544	24%	3,384	25%	4,777	25%
Denmark	942	20%	784	18%	2,715	18%	2,269	16%	3,171	16%
Finland	270	6%	258	6%	859	6%	769	6%	1,114	6%
Groupwide and
eliminations	-48		-6		-64		-31		-36
Total	4,638		4,437		14,737		13,784		19,305

EBITA, EBITA MARGIN AND PROFIT/LOSS BEFORE TAX

SEK MIL.	Jul–Sep 2019	EBITA margin	Jul–Sep 2018	EBITA margin	Jan–Sep 2019	EBITA margin	Jan–Sep 2018	EBITA margin	Jan–Dec 2018	EBITA margin
Sweden	150	6.3%	150	6.7%	472	6.1%	445	6.0%	692	6.7%
Norway	65	5.9%	64	5.6%	157	4.4%	193	5.7%	285	6.0%
Denmark	53	5.6%	44	5.6%	136	5.0%	116	5.1%	185	5.8%
Finland	1	0.5%	5	1.8%	8	1.0%	3	0.4%	22	2.0%
Groupwide	8		5		28		16		27
EBITA	276	6.0%	267	6.0%	802	5.4%	774	5.6%	1,211	6.3%
Amortisation of intangible assets	-1		-1		-2		-3		-4
Net financial items	-16		-10		-56		-26		-16
Profit/loss before tax (EBT)	259		256		744		745		1,191

DISTRIBUTION OF REVENUES	Jul–Sep 2019			Jul–Sep 2018
REVENUE PER CATEGORY, SEK MIL.	Service	Installation	Total	Service	Installation	Total
Sweden	1,188	1,197	2,385	1,100	1,150	2,250
Norway	563	526	1,089	553	598	1,151
Denmark	413	528	942	287	497	784
Finland	70	200	270	49	209	258
Eliminations	-36	-12	-48	6	-11	-6
Group	2,198	2,440	4,638	1,994	2,443	4,437

		Jan–Sep 2019		Jan–Sep 2018
	Service	Installation	Total	Service	Installation	Total
Sweden	3,788	3,895	7,683	3,602	3,792	7,394
Norway	1,747	1,797	3,544	1,658	1,726	3,384
Denmark	1,159	1,555	2,715	879	1,390	2,269
Finland	209	650	859	132	637	769
Eliminations	-38	-25	-64	-3	-28	-31
Group	6,865	7,873	14,737	6,268	7,517	13,784

AVERAGE NUMBER OF EMPLOYEES	Jan–Sep 2019	Jan–Sep 2018	Jan–Dec 2018
Sweden	5,854	5,774	5,971
Norway	2,999	3,024	2,994
Denmark	2,038	1,780	1,830
Finland	605	521	599
Groupwide	88	80	81
Total	11,584	11,180	11,475

NOTE 3. ACQUISITION OF OPERATIONS

Bravida completed the following acquisitions in the January–September period:

						Estimated annual
Acquired unit	Country	Technical area	Type	Date	of votes	Employees	sales, SEK MIL.
Insight Building Automation A/S		Denmark Automation	Company	January	100%	22	35
Carrier Refrigeration Sweden	Sweden	Cooling	Assets and liabilities	January	–	37	50
Elbolaget Glödlampan AB	Sweden	Electrical	Company	January	100%	18	20
Cura VVS A/S		Denmark Heating and plumbing, HVAC	Company	March	100%	60	130
H. Helbo Hansen A/S		Denmark Electrical	Company	March	100%	75	110
Bylunds Elektriska AB	Sweden	Electrical	Company	April	100%	43	40
Buchreitz A/S		Denmark Electrical	Company	April	100%	45	55
San Tek Kameraövervakning AB	Sweden	Security	Company	May	100%	20	30
MIH VVS ApS		Denmark Heating and plumbing, HVAC	Company	May	100%	70	100
Jyväskylän LVI-Palvelu Oy	Finland	Heating and plumbing, HVAC	Company	May	100%	10	20
Herberts Rör AB	Sweden	Heating and plumbing, HVAC	Company	June	100%	37	55
El-teknik i Gävle AB	Sweden	Electrical	Company	June	100%	34	40
AB Venair	Sweden	HVAC	Company	July	100%	11	200
Karby VVS AB	Sweden	Heating and plumbing, HVAC	Company	September	100%	14	40
Sprinklerinstallationer Sverige AB	Sweden	Sprinklers	Company	September	100%	9	5
Östervåla VVS AB	Sweden	Heating and plumbing, HVAC	Assets and liabilities	September	–	14	20

Effects of acquisitions in 2019

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 79 million. The contingent considerations are due for payment within three 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 2019 are preliminary.

Assets and liabilities included in acquisition	Fair value recognised in the Group, SEK mil.
Intangible assets	0
Property, plant and equipment	10
Trade receivables*	82
Income accrued but not invoiced	17
Other current assets	58
Cash and cash equivalents	75
Non-current liabilities	-14
Trade payables	-52
Income invoiced but not accrued	-13
Other current liabilities	-63
Net identifiable assets and liabilities	102
Consolidated goodwill	429
Consideration	531
Cash and cash equivalents, acquired	75
Net effect on cash and cash equivalents	456
Cash consideration paid	413
Consideration recognised as a liability**	118
Consideration	531

*There were no material impairments of trade receivables.

**Of the total consideration recognised as a liability, SEK 79 million is contingent consideration.

Acquisitions after the end of the reporting period

Bravida has acquired three companies since the end of the period. In September an agreement was entered into to acquire NPI Ventilation AB with 16 employees and annual sales of approximately SEK 45 million, with completion due in November. In October an agreement was entered into to acquire AM Elektriska AB with 29 employees and annual sales of approximately SEK 50 million, with completion due in December. In October an agreement was entered into to acquire ICS Industrial Cooling Systems A/S with 67 employees and annual sales of approximately SEK 170 million. The acquisition requires approval from the Danish competition authorities.

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, 6 November 2019 Bravida Holding AB

Mattias Johansson CEO and Group President

THE AUDITOR'S REPORT ON THE REVIEW OF THE INTERIM REPORT

TO THE GENERAL MEETING OF THE SHAREHOLDERS OF BRAVIDA HOLDING AB (PUBL), CORPORATE IDENTITY NUMBER 556891-5390

INTRODUCTION

We have reviewed the condensed interim financial information (interim report) of Bravida Holding AB (publ) as of 30 September 2019 and the nine-month period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

SCOPE OF REVIEW

We conducted our review in accordance with International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing practices and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.

Stockholm, 6 November 2019

KPMG AB Anders Malmeby Authorised Public Accountant

INFORMATION

This information is information that Bravida Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, at 07:30 CET on 6 November 2019.

This report contains information and opinions on future prospects 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.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Mattias Johansson, CEO and Group President Email: mattias.p.johansson@bravida.se Telephone: +46 8 695 20 00

Åsa Neving, CFO E-mail: asa.neving@bravida.se Telephone: +46 8 695 22 87

FINANCIAL REPORTING DATES

Interim report October–December	13 February 2020
Interim report January–March	8 May 2020
Interim Report April–June	17 July 2020
Interim Report July–September	6 November 2020

The AGM will be held on 24 April 2020.

FINANCIAL DEFINITIONS

NUMBER OF EMPLOYEES

Calculated as the average number of employees during the year, taking account of the percentage of full-time 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 figure 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 ITEMS

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

ADJUSTED EBITDA*

EBITA adjusted for specific costs. Adjusted EBITA item improves the ability to make comparisons over time by excluding items that are irregular in frequency or size.

ADJUSTED EBITA MARGIN*

EBITA excluding specific costs as a percentage of net sales. The adjusted EBITA margin excludes the effect of specific costs, which improves the ability to make comparisons over time by excluding items that are irregular in frequency or size.

ADJUSTED EBITDA*

Earnings before interest, taxes, depreciation, and amortisation, adjusted for specific costs. Improves the ability to make comparisons over time by excluding items that are irregular in frequency or size.

CAPITAL STRUCTURE

Average net debt divided by EBITDA excluding specific costs, based on a rolling 12-month calculation.

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*

12-month EBITDA +/- change in working capital and investment in machinery and equipment and adjustment for non-cash items in EBITDA in relation to 12-month EBIT (operating profit/loss; under IAS 17).

This key figure 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 percentage-of-completion method. These revenues are recognised in proportion to the degree of completion of projects.

NET DEBT/EBITDA ADJUSTED FOR

SPECIFIC COSTS Average net debt divided by EBITDA excluding specific costs, based on a rolling 12-month calculation.

NET DEBT*

Interest-bearing 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.

OPERATING CASH FLOW*

EBITDA 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 does not include service operations, only installation projects.

DILUTED EARNINGS PER SHARE

Profit/loss for the period attributable to owners 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 figure 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 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 before financial items and taxes.

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 figures.

*See page 16 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 through heat recovery, heat pumps, etc.

HEATING & PLUMBING

Water, waste water, 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

Relates to other technical areas such as security, sprinklers, cooling, power, and lifts, as well as project management and service management.

THIS IS BRAVIDA

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.

Our mission

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

Our vision

Bravida is the best in the Nordics at providing sustainable service and installation of the functions that bring buildings to life. We are the first choice for customers and the most attractive employer in the industry.

Targets

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

THE BRAVIDA WAY

Our corporate culture and way of working make us unique in the market

ENTREPRENEURSHIP

Our approach is based on an important principle: each local branch is responsible for its own earnings. Branch managers are responsible for creating, together with their employees, a successful business with stable profitability, growth and good local market relations. It's the combined commitment of the branches and employees that drive Bravida forward.

FOLLOW-UP AND SUPPORT

Together, the branches create economies of scale, supported by Bravida's shared tools and working methods. Employees are responsible for continually making use of these. Regular follow-ups together help us create the stable profitability that is distinctive for our organisation. The business is supported by central Group departments.

CONTINUOUS IMPROVEMENT

We have established shared best-practice working methods. We aim to constantly improve and simplify the way we operate. Our working model, which is designed to create constant improvement, helps local branches continually share experiences and learn from each other.

BRAVIDA'S STRATEGIES

Profitable growth

Bravida's objective is to be the largest or second-largest player in all the locations where we choose to operate. We aim to grow both organically and via acquisitions in our various key geographical markets. To ensure long-term stable growth, we are increasing our focus on service and proactive sales.

ORGANIC GROWTH

• Focus on:
• Growth within service
• Proactive sales
• Comprehensive solutions More cooperation involving multiple technical areas

GROWTH THROUGH ACQUISITIONS

• Continual acquisition process
• We acquire companies that help us become the local
• market leader in selected regions. Acquisitions should contribute at least one of the

• Continual financial monitoring at all levels of the

• Long-term efforts to maintain strong cash flow and a

following:

company.

• •Strengthening our local offering
• •Complementing our technical offering
• •Providing geographical expansion

Continual financial monitoring

STABLE CASH FLOW Focus on cash flow

healthy capital structure.

Financial stability

Maintaining good financial stability is essential to Bravida. Margin always takes precedence over volume in our operations, cost-effectiveness is a cornerstone of our business and we continually endeavour to maintain stable cash flow.

Bravida's sustainability work is an integral part of our business. Our priority sustainability issues are good health and safety, sustainable use of resources and good business ethics. These are supported by our working

GOOD PROFITABILITY

• Margin over volume
• Growth, but not at any price. We only take on assignments with a healthy margin and calculable risks.
• Focus on cost-effectiveness
• Minimise fixed costs. We adapt production capacity

and administrative expenses according to sales. • Coordination of purchasing generates economies of scale and cost-effectiveness.

Sustainable company GOOD HEALTH AND SAFETY

Active health and safety work • Focus on employee safety, and physical and mental health.

• A culture promoting good health and safety
• Collective responsibility to contribute to a pleasant and safe work environment.

SUSTAINABLE USE OF RESOURCES

Efficient production

• Greater efficiency in our own operations and resource usage.

Energy efficiency in customer properties

• Cooperation with customers to reduce the consumption of energy and resources in their properties and industrial facilities.

Sustainable products

• Environmental assessment of materials and products.

GOOD BUSINESS ETHICS

Internal culture

• Suppliers
• Continual sustainability assessment of suppliers.

Attractive employer

methods and values.

Access to capable employees is vital to Bravida's success and growth, but competition for labour is tough. That's why we're focusing more on recruiting, retaining and developing the best leaders and employees.

DEVELOPING EMPLOYEES AND LEADERS

Employees

• Professional development through work. The Bravida School supports our employees. Career paths in the Group.

Leaders and leadership

• Bravida's activities to recruit, assess, develop and support its leaders.

RECRUITMENT AND INTEREST IN THE INDUSTRY

Coordinated activities

• Workforce management, coordinated recruitment activities, development of Bravida's employer brand

Market leader

Bravida's objective is to be the largest or second-largest player in all the locations where we choose to operate. To achieve this we need a well-organised and profitable business at each of our branches. Our recipe for success is called the Bravida Way.

BRAVIDA WAY GENERATES SATISFIED CUSTOMERS

• Shared working methods
• Provide a systematic way of monitoring and improving each aspect of our business.
• Good organisation in our projects and assignments leads to satisfied customers.

A STRONG BRAND

• Strong branches make for a strong brand
• The same high quality in all locations. We want each branch to be considered the best local provider.

PROACTIVE STEPS TOWARDS THE FUTURE Continued growth in installation

• Systematic sales-related measures, cooperation
• between technical areas
• Focus on service.
• Strengthen our position as the Nordic leader in
• service
• Digitalisation

• Increased digitalisation of customer relationships, offerings and internal processes will make us the industry leader.

• Active measures to maintain a healthy corporate culture with good values.
  -
  • Boosting interest in the industry
  • Presence at institutes of technology.
  • Apprentice programmes.

DIVERSITY AND INCLUSIVE CULTURE

Policies, goals and action for gender equality and

• diversity
• Zero tolerance of harassment and discriminatory treatment
• Code of Conduct
• Whistleblower function

BRINGING BUILDINGS TO LIFE

HEADQUARTERS

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

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 Ajomiehentie 1 00390 Helsinki Finland Telephone: +358 10 238 8000 www.bravida.fi