Interim report April – June 2016
April – June 2016
- Net sales increased by 4% to SEK 3,800 million (3,660)
- The order backlog increased by 16% to SEK 7,972 million (6,875).
- Operating profit increased by 22% to SEK 227 million (187)
- The operating margin improved to 6.0% (5.1)
- Adjusted operating profit was SEK 227 million (203). Specific costs were SEK – million (17). The adjusted operating margin was 6.0% (5.6)
- Profit after tax was SEK 163 million (61).
- Cash flow from operating activities was SEK 57 million (59)
- Net debt amounted to SEK 2,577 million (2,675)
- Two acquisitions were made in the quarter, adding annual sales of SEK 82 million
- Earnings per share were SEK 0.81 (0.30)
January – June 2016
- Net sales increased by 3% to SEK 7,227 million (6,985)
- Operating profit increased by 18% to SEK 401 million (339)
- The operating margin improved to 5.6% (4.9)
- Adjusted operating profit was SEK 401 million (375). Specific costs were SEK – million (36). The adjusted operating margin was 5.6% (5.4)
- Profit after tax was SEK 286 million (123)
- Cash flow from operating activities was SEK 70 million (347)
- Four acquisitions were completed in the period, adding annual sales of SEK 189 million
- Earnings per share were SEK 1.42 (0.61)
Good growth in service
Our net sales increased by 4 percent in the second quarter through higher service sales and acquisitions. Service sales rose by 10 percent, 6 percent of which was organic growth. Net sales from installation projects decreased by 1 percent in the quarter. The main reason for this is that during 2014 and 2015 there were a number of large installation projects that were completed at the end of 2015 and the start of 2016. The lower production in our project activities is also an explanation for a slightly lower cash flow. There are several large projects in our growing order backlog, such as a number of hospitals, that will replace the completed projects. We have previously had good experiences from hospital projects and the upcoming projects will start production in the second half of 2016.
Organic growth has also been adversely affected by weakening demand in south-west Norway owing to lower activity in the oil and gas sector. Organic growth for the whole Group was 0 percent in the quarter, although growth showed a positive trend in the quarter with organic growth in June.
Improved operating margin
Adjusted operating profit for the second quarter rose by 12 percent and amounted to SEK 227 million, while the adjusted operating margin improved from 5.6 percent to 6.0 percent.
The improvement in the operating margin is due to the Group’s Swedish operations, where we are seeing the results of our improvement initiatives that have contributed to higher project margins. Norway reported a lower operating margin owing mainly to costs for staff reductions in south-west Norway. The operating margin in Denmark is stable and operations in Finland broke even for the second quarter, which is in line with our plan for establishing the business in Finland. The organisation in Finland is being adapted to prevailing market conditions and the Group’s procedures have been implemented. Our assessment is that Finland will show positive performance in coming quarters.
Sustained good market conditions and record-high order backlog
We estimate the market to remain healthy in Sweden, stable in Norway and Denmark and will gradually improve in Finland. The market drivers are new-builds and renovation of hospitals, retail premises and housing, as well as increased demand for service. A lack of skilled labour has hampered our growth in Denmark, and a similar situation is increasingly evident in Sweden. To Bravida, margin is always more important than volume, and in view of this, project selection is important and resources need to be allocated to the right projects and utilized effectively.
Our order backlog improved significantly in the quarter, and once again we can note that our order backlog is all time high. An increase by 12 percent to just under SEK 8 billion. This contains lots of small and medium-sized orders, as well as some large orders, indicating stable performance and a good basis for sales performance over the coming quarter.
Mattias Johansson, Stockholm, July 2016
For further information, please contact:
Mattias Johansson, CEO and Group President of Bravida. Tel: +46 8 695 20 00
Nils-Johan Andersson, CFO of Bravida. Tel: +46 70 668 50 75
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 above, at 10:30 CET on 22 July 2016.
A webcasted telephone conference will be held at 13:30 CET on 22 July 2016.