Bravida interim report january-june 2012

CEO Mats O Paulsson’s comments on the period Scandinavia’s leading installation and service company Bravida continues to show robust growth. Net sales in the first six months of the year grew by 12 per cent to SEK 5,796 million and the operating profit increased to SEK 291 million (280). We are entering the second half of the year with a very strong order backlog, thanks to a surge in new orders over the past year.

All countries contributed to our growth. Improved margins in our Norwegian business strengthened our result, while the reduced profitability is due to weaker margins in Sweden in the second quarter. This was partly due to the strike which affected the Swedish heating and plumbing market, including Bravida, in the second quarter of the year. Margins in Denmark were stable.

Our backlog of orders is very strong. We won a number of large installation contracts in both the first and second quarters. Particularly encouraging are the significant orders which Bravida received in the health sector in the second quarter. In June Bravida was awarded the contract for the HVAC installations at NKS (Nya Karolinska Solna, Sweden) as well as the contract for all electrical, heating & plumbing and HVAC installations in the construction of the new university hospital in Aarhus in Denmark. After the reporting period Division Norway received its largest order to date in connection with the building of the new central hospital in Østfold. Together, these contracts resulted in a significant increase in our order backlog. Activity in our service business also remained high, although demand faltered somewhat over the period. Overall, the service business has seen a high level of activity.

Stable public-sector investments, particularly in infrastructure, have been a key driver behind the growth of the market. Supply also increased in the industrial sector and in commercial new builds. As Bravida operates in a competitive market, a continued selective approach to high-risk installation projects with poor profitability is necessary. Bravida has therefore continued the work to maintain a balance between service and installation revenues. Coupled with a strong focus on costs and production planning, we have succeeded in generating growth while maintaining a good level of profitability.

Our assessment is that the economy as a whole has weakened but Bravida, which is a late-cyclical company, has not yet been significantly affected. The actions that we have taken and continue to take are gradually strengthening Bravida’s offering and position in several key markets.

Mats O Paulsson

CEO and Group President