Slide 1: Instalco Q2 presentation
Instalco Q2 presentation 22 August 2023 1
Slide 2: This is Instalco
This is Instalco A leading Nordic group within heating and plumbing, electrical, ventilation, industry and technical consulting Project planning, installation, service and maintenance of systems installed at properties and facilities Highly decentralised structure 130 subsidiaries – specialised loca
Slide 3: Key financials, LTM
Key financials, LTM Net sales, million SEK Order backlog, million SEK 13,474 9,185 EBITA, million SEK EBITA margin, % 1,022 7.6 Cash flow from operations, million SEK Acquired annual sales, million SEK 839 1,488 3
Slide 4: Q2 Highlights
Q2 Highlights • Continued strong sales growth 23.5% Key financials Q2 2023 – Organic growth 5.5% Net sales 3,832 • Strengthened profitability – despite impact of one-off provisions • Strong cash flow at SEK 225 (151) million SEK million • Solid order backlog EBITA 296 • Two strategic acquisitions SE
Slide 5: Net sales development (SEK million)
Net sales development (SEK million) 5.5% 0% 18.1% • Net sales growth 23.5% to SEK 3,832 (3,102) million • Organic growth of 5.5%, with both segments contributing • Acquired growth of 18.1%, an effect of the successful M&A agenda 5
Slide 6: EBITA development (SEK million and margin %)
EBITA development (SEK million and margin %) • EBITA of SEK 296 (250) million 350 10% 9% • EBITA margin 7.7% (8.1) 300 8% • There was a negative impact 8.1% on EBITA during the quarter of 250 7.7% 7% SEK 15 (0) million, which is a 6% provision for projects where 200 there is uncertainty about 5% cus
Slide 7: Order backlog development (SEK million)
Order backlog development (SEK million) • Order backlog growth YoY of 10,000 13.1%, to SEK 9,185 (8,120) 9,000 million 8,000 • Ratio of ≈0.7x, relative to 12 months rolling net sales 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q
Slide 8: Segment Sweden Q2 development
Segment Sweden Q2 development Key financials Q2 2023 • Organic growth and high profitability Net sales • Strong performance despite pressures from inflation • High order backlog SEK 2,720 million • Net sales growth 11.2% to SEK 2,720 (2,447) EBITA EBITA margin million • Organic growth 2.2% • Acquire
Slide 9: Segment Rest of Nordic Q2 development
Segment Rest of Nordic Q2 development • Strongest quarter so far for the Key financials Q2 2023 segment, with both countries contributing Net sales • Continued positive signs from the Finnish market • Net sales growth 69.7% to SEK 1,112 SEK 1,112 million (655) million EBITA EBITA margin 75 6.7 • Org
Slide 10: Financial targets and dividend policy
Financial targets and dividend policy Area Target Comment Status • Average sales growth should be at least 10% per year over a Growth business cycle 24.8% YTD • Growth will take place both organically and through acquisitions Margin • Instalco aims to deliver an EBITA margin of 8.0% 7.5% YTD Capital
Slide 11: Acquisitions 2023
Acquisitions 2023 Company Discipline Segment Est. Sales (SEKm) 1 Q1 Telepatrol Oy Electrical Rest of Nordic 48 2 Q1 Rörprodukter Montage Sverige AB Heating & Plumbing Sweden 24 3 Q1 Lysteknikk Entreprenør AS Electrical Rest of Nordic 325 4 Q1 Processus AB Industry Sweden 193 5 Q1 SMT Norrbotten AB I
Slide 12: Acquisitions: Growth in Umeå
Acqusitions: Growth in Umeå • Acquisition of Swedish company Elektro Västerbotten AB • Offers electrical installations to both commercial and private customers and it does both contract work and service • Largest customers include Peab, Skanska and Selbergs Entreprenad • A nice match with the Instal
Slide 13: Project: Ilmalan Aura
Project: Ilmalan Aura • Two Instalco companies: Uudenmaan Lvi-Talo and Milvent • Piping, heating, cooling and ventilation in Ilmalan Aura in close collaboration • The assignment is to be carried out during 2023-2024 and has an order value of approximately SEK 60 million • The five-story office build
Slide 14: Service
CEO’s theme Service r UP as
Slide 15: A more resilient part of our business
A more resilient part of our business • Expanded our offering in service and Sales per contract type FY'22 maintenance – service contracts, facilities management and starting to sign multidisciplinary agreements • Further strengthening our existing 23% relationships with customers and benefitting fr
Slide 16: Defining service
Defining service • No set standard in the industry for the classification of service, which makes comparisons between companies difficult • Service revenue reported separately by our companies’ according to a number of criteria: • Revenue that does not Smaller, ongoing fall under the need for assign
Slide 17: A steady increase to a healthy service level
A steady increase to a healthy service level Service, % of sales 35% 30% 25% 20% 15% 10% 5% 0% FY'18 FY'19 FY'20 FY'21 FY'22 Q1'23 Q2'23 FY, % of sales Quarterly, % of sales 17
Slide 18: How we have grown our service business
How we have grown our service business • Shifted to acquiring companies with a proven service track record • Established service departments at companies where it has never been a focus • Started a service manager branch of the Instalco Academy where they are offered training in behavioural change,
Slide 19: Summary
Summary • Strong development with continued good profitability despite a challenging market • Continued positive signs in Finland • EBITA margin 7.7% (8.1) – or 8.1% adjusted for buffer reserve • Solid order backlog • Service has grown to a healthy level • We remain committed to our M&A strategy 19
Slide 20: Q&A - session
Q&A - session Climate-smart, sustainable installations enable us to lower our energy consumption.