Interim Report Oktober–December 2020
Improved EBITA margin and strong cash flow
Regulatory press release
• Net sales decreased by 1% to SEK 5,614 million (5,667)
• The order backlog decreased by 5% to SEK 13,791 million (14,485)
• EBITA increased by 13% to SEK 478 million (425)
• The EBITA margin was 8.5% (7.5)
• Profit after tax was SEK 351 million (303)
• Cash flow from operating activities was SEK 873 million (989)
• Net debt amounted to SEK -1,124 million (-2,063)
• Two acquisitions were completed in the quarter, adding annual sales of approximately SEK 57 million
• Basic and diluted earnings per share were SEK 1.73 (1.50)
Profit improved and the EBITA margin increased to 8.5 percent in the fourth quarter. Cash flow remained strong.The Board proposes an 11 percent increase in the dividend to SEK 2.50 per share.
Net sales and EBITA margin
Despite a highly challenging climate in 2020, I can conclude that our decentralised business model works very well. Our branch managers have taken significant responsibility for their businesses, enabling us to maintain growth, profitability and cash flow at a good level. Our growth in 2020 was 6 percent, adjusted for currency effects, our EBITA margin improved to 6.4 percent and operating cash flow rose by 36 percent.
In the fourth quarter, service demand continued to decrease, resulting in negative growth. A good order backlog contributed to positive growth in the installation business. Organic growth was -2 percent and acquisitions contributed 4 percent of growth. Exchange rate fluctuations had a negative 3 percent impact on growth.
The service business continued to be negatively affected by the pandemic, particularly 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.
The EBITA margin rose to 8.5 percent, with the margin improving in Sweden and Finland. The earnings improvement in Sweden was due to positive earnings performance in the Stockholm business, but also in Sweden overall. The restructuring of the Finnish business has allowed us to take on larger, more advanced assignments, which has contributed to the earnings improvement.
Strong cash flow and proposed higher dividend
Cash flow for the quarter was strong. Cash conversion was 153 percent, and our net debt remains at a record low.
The Board proposes raising the dividend by 11 percent to SEK 2.50 per share for 2020, which corresponds to 51 percent of earnings per share. Since listing publicly in 2015, Bravida has increased its dividend from SEK 1 to SEK 2.50 per share. Total dividends since the IPO amount to SEK 2,133 million, while debt has decreased from 3.4x EBITDA to 0.6x EBITDA.
Acquisitions continue to strengthen Bravida
Although the ongoing pandemic has resulted in a lower pace of acquisitions for a period of time, Bravida made 16 acquisitions in 2020. The acquisitions have added annual sales of approximately SEK 788 million.
In 2021, Bravida has so far entered into three acquisitions, with total annual sales of just under SEK 100 million. We have signed an agreement in Norway for an acquisition in the electricity sector with a turnover of approximately SEK 600 million. In February, SKM Service Oy was acquired in Finland, which specialises in industrial pipes with a turnover of EUR 13 million.
Our balance sheet is strong and I see continued opportunities for acquisitions in the future.
Our new business plan increases our emphasis on being a sustainable company that aims to take a leading position in priority areas. One of our highest priorities is a safe work environment. We take a systematic approach to preventing and reducing occupational injuries at our workplaces. The LTIR (lost time injury rate) remains high, but it is encouraging that it has improved by 17 percent over the past 12 months.
Our ultimate aim is to eliminate occupational injuries, while our medium-term goal is an LTIR of below 5.5.
Another priority area is reducing our own carbon footprint. As previously announced, we have started restructuring our vehicle fleet to ensure that at least 30 percent of our approximately 7 000 vehicles are fossil-free by 2025.
Bravida is sticking to its strategy of margin always taking precedence over volume, even in worse market conditions; we do not take on unprofitable projects and we prioritise stable profitability. During times of uncertainty like the Covid-19 pandemic, customers prefer to sign service agreements with and commission installation projects from reliable suppliers, which could generate good business opportunities for Bravida. I believe that, 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’ sustainability efforts.
Stockholm, February 2021
For further information, please contact:
Mattias Johansson, CEO and Group President of Bravida. Tel: +46 8 695 20 00
Åsa Neving, CFO. Tel: +46 8 695 22 87
The report will be presented at 09:30 CET by CEO and Group President Mattias Johansson and CFO Åsa Neving. The presentation will be held in English and can be followed on the web or over the phone. There will be room for questions.
Link to webcast:
Telephone conference numbers:
SE: 0856618430 (Participant LocalCall)
UK: 08448228902 (Participant LocalCall)
US: 19177200181 (Participant LocalCall)
International Dial-In Number: +44 (0) 2071 928501
Conference ID: 2230449#
This disclosure contains information that Bravida Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 12-02-2021 07:30 CET.