Instalco Ab · OMXSTO:INSTAL
Instalco Ab — Q4 2017 Earnings Presentation
23 slides from Instalco Ab's earnings presentation, Feb 16, 2018
Slide 1: Q4 2017 presentation
Q4 2017 presentation 16 February 2017 INSTALCO
Slide 2: Per Sjöstrand, Group CEO; Lotta Sjögren, Group CFO
Per Sjöstrand Lotta Sjögren Group CEO Group CFO 1
Slide 3: Leading multi-disciplinary technical installation company in the Nordics
A leading multi-disciplinary technical installation company active in the Nordic region Focus on mid-size projects Decentralised structure – “The Instalco model” Key financials 2017 Net sales Order backlog SEK 3,114 million SEK 3,194 million Adjusted EBITA Adjusted EBITA margin SEK 264 million
Slide 4: 2017 highlights
• Executed acquisition strategy according to plan • 18 companies acquired with combined estimated annual sales of approx. SEK 1,031 million (whereof SEK 716m post IPO) • Expansion in all markets and most technical disciplines • Establishment in growth regions in Norway and Finland • New electrical i
Slide 5: Q4 sales and profitability
Sales and profitability • Record-high margin Net sales • Net sales growth of 20% SEK 935 million • Strong order backlog increase of 60% Adjusted EBITA • Acquired annual sales of SEK 484 million SEK 101 million • Board proposes dividend of SEK 1.1 Adjusted EBITA margin • Continued strong market 10.8
Slide 6: Net sales growth and adjusted EBITA
Net sales growth (SEK million) Adj. EBITA (SEK million) and adj. EBITA margin (%) 120 12% -5.5% -0.5% 26.4% 100 10% 80 8% 60 6% 101 40 4% 69 55 61 20 45 48 2% 15 0 0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2016 2016 2017 2017 2017 2017 5
Slide 7: Organic growth per unit, Sweden, 2017
Organic growth per unit, Sweden, 2017 40% 32% 30% 30% 19% 20% 16% 14% 14% 13% 9% 8% 10% 3% 0% -2% -10% -11% -20% -30% -26% -31% -40% -41% -50% Extraordinary project related to one unit in Q4/16 had significant impact on total organic growth The chart excludes the consultancy company Inkon (started o
Slide 8: Order backlog
• Growth of 59.8% Order backlog (SEK million) • Record-high order backlog ratio 3 500 of 1x (relative to 12 months 3 000 rolling net sales) 2 500 2 000 3 194 1 500 2 496 2 611 2 189 1 000 1 999 500 0 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 7
Slide 9: Contract wins: European Spallation Source and Rinkeby police station
Renewed contract at European Spallation Source New police station in Rinkeby Rörläggaren and ORAB Rörgruppen and Ohmegi Heating, plumbing and process Heating, plumbing and electrical installations installations Subcontract from Skanska Subcontract from NCC Order value SEK 220 million
Slide 10: Key financials Q4 2017
• Favourable market demand Key financials Q4 2017 • Limited exposure to housing market Net sales • Unchanged net sales Y/Y, whereof -8.7% SEK 663 million organic and 8.7% acquired growth EBITA EBITA margin • Strong margin SEK 72 million 10.8 % • Order backlog growth of 53.6% Y/Y whereof 27.4% was ac
Slide 11: Key financials Q4 2017
• Overall stable markets Key financials Q4 2017 • Net sales growth of 158% whereof Net sales 13.1% organic and 128.7% acquired growth SEK 273 million • Strong margin improvement EBITA EBITA margin • Order backlog growth of 93% fully SEK 33 million 12.3 % related to acquisitions Order backlog SEK 607
Slide 12: Acquisitions pre and post IPO
Acquisition Discipline Market / Region Estimated yearly sales Acquired (SEKm) Pre IPO SwedVVs Heating & Plumbing Sweden - West 26 Feb Andersen og Aksnes Heating & Plumbing Norway 102 Feb Uudenmaan Sähkötekniikka Electrical Finland 42 Mar Rodens Värme & Sanitet Heating & Plumbing Sweden - East 38 Mar
Slide 13: Acquisitions: Elkontakt and Kannosto companies
Elkontakt Kannosto companies Complete provider of electrical, Providers of heating, plumbing and telecommunications and data installation ventilation services Operations in the growth regions of Operations in West, South and East Tampere and Seinäjoki Speciality expertise in installations
Slide 14: Financial targets and outcome
Area Target Comment Adjusted EBITA pro forma1 shall reach SEK 450m not later than Acquired sales and EBITA in line the end of 2019 with plan Growth Average yearly organic sales of The average organic sales growth shall amount to 5% over time 16% since 20143 Margin Instalco aims to deliver
Slide 15: The Instalco model
• Decentralised structure secures the entrepreneurial spirit in the company • High degree of specialisation supports margins Local units • Continuous improvement through the IFOKUS program and best practice sharing • Increased cross-selling Cooperation Central support 14
Slide 16: Market outlook in the Nordic region
The Nordic region experiences a strong economy, which provides high potential for public and infrastructure investments – Sweden and Norway have committed to infrastructure investments of SEK 600 billion and NOK 500 billion respectively Housing shortage in a clear majority of cities and municipa
Slide 17: Q4 summary and looking ahead
Q4 • Record-high margin • Record-strong order backlog • Acquisition execution according to plan Looking ahead • Attractive acquisition pipeline • SEK 170 million acquired YTD • Organic growth to stabilise over the year as more companies become part of basis for calculation 16
Slide 18: Instalco
INSTALCO »”
Slide 19: Instalco
INSTALCO +8
Slide 20: Local or functional market leaders
Local or functional market leaders Limited Decentralised overhead layers culture with in holding strong company and leadership local units Multi- Competency to disciplinary coordinate solutions, cross technical sales and disciplines national/regiona l contracts Coordinated purchasing 19
Slide 21: Local and common responsibilities
Local responsibilities Customer and sales responsibility – strong relationships maintained at the local unit level Production responsibility – completion and monitoring of projects is done locally Personnel responsibility – each unit is responsible for maintaining a motivated and skilled workf
Slide 22: Market and customer structure
Balanced risk is fundamental to Instalco’s business model. This foundation is based on the following ten strategic principles for risk management, applicable since the company started: Focus on Sweden, Norway and Finland Large share of recurring customers (~80%) Acquired companies are profitable and
Slide 23: Quarterly financial summary
SEKm 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 Net sales 487 474 599 556 777 689 781 708 935 Growth, % n.a. 95.8% 97.1% 65.6% 59.7% 45.2% 30.5% 27.3% 20.3% EBITDA 39 23 49 12 60 38 62 54 94 EBITDA margin, % 8.0% 4.9% 8.2% 2.2% 7.7% 5.5% 8.0% 7.6% 10.2% Adjusted EBITDA 3