Stable cash flow and improvement in earnings in Denmark
• Net sales were unchanged, at SEK 8,108 million (8,106)
• The order backlog was SEK 14,929 million (17,000)
• EBITA increased by 1 percent to SEK 604 million (597)
• The EBITA margin was 7.5 percent (7.4)
• The EBITA margin excluding items affecting comparability of SEK 71 million, was 8.3 percent
• Profit after tax was SEK 423 million (413)
• Cash flow from operating activities was SEK 756 million (1,435)
• Net debt amounted to SEK -2,192 million (-2,193)
• One acquisition was completed, adding annual sales of approximately SEK 116 million
• Basic earnings per share were SEK 2.07 (2.03) and diluted earnings per share were SEK 2.06 (2.03)
CEO statement
Profitability in Denmark developed in line with our expectations and we report a solid result for the quarter. It is pleasing that our actions are having an impact and I look forward with confidence to further improvements in profitability in 2025.
Group net sales were at the same level as in the previous year, despite the weak market in southern Sweden, where sales fell by 20 percent. The EBITA margin improved in all countries (before items affecting comparability) and we continued to adapt the business to the weak market situation in southern Sweden.
Cash conversion and low debt were better than our targets and the Board proposes an increased dividend. Our service business continued to grow in the quarter and I can conclude that market activity has improved in many places and several interesting discussions are ongoing.
Net sales and EBITA
It has been a challenging quarter, but despite problems in the Danish operations and extensive staff reductions and closed branches in southern Sweden, I think we have been very resilient. Bravida's results have also been affected by some significant bad debts and bankruptcies. The above costs impacted earnings during the year.
Group sales were unchanged in the quarter, despite the challenging market situation for installation projects and the extensive staff reductions in southern Sweden. It is a strength that we managed to compensate for this with increased sales from services, acquisitions and infrastructure projects.
The weaker order intake in the installation business is explained by our careful project selection, as we prioritise margin over volume and want to avoid having unprofitable projects in the order book when the market most likely improves during 2025. In the fourth quarter of 2023, a large order of approximately SEK 1,300 million was received for the expansion of the Stockholm metro, which affects the comparison.
In southern Sweden, the market remains challenging. In other parts of Sweden, the situation is more stable and we note organic growth and a good margin. Costs for the completed restructuring in southern Sweden affected earnings by approximately SEK 41 million during the quarter. In addition, a final provisions for trade receivables relating to Northvolt had a negative impact of approximately SEK 30 million on profit for the period, thus we have taken the total bad debt of approximately SEK 100 million.
Our Danish business developed in a positive direction. The EBITA margin for the quarter was 4.0 percent, which is most certainly acceptable and in line with my previously communicated expectations. I expect a continued improvement in profitability, as new orders have a good margin and we are increasing our sales in the service area. However, there are still some unprofitable projects in the order backlog that will be completed in 2025, but my assessment is that we now have a robust foundation upon which we can further develop our business in Denmark.
The Norwegian business improved its earnings performance. The integration of the Thunestvedt acquisition is proceeding according to plan and is strengthening our position in the Bergen area. The order backlog is a little weaker, but at the same time we have good customer dialogue in the early stages about projects.
Our Finnish business is stable; sales have increased as a result of the acquisitions made over the past year, and profitability is improving.
A stable cash flow, a low level of debt and a proposed increase in the dividend
Cash flow from operating activities was strong throughout the year and cash conversion was 105 percent. Net debt remains low, at 1.0 times EBITDA, which enables continued profitable acquisition activities. Based on the overall financial strength, Bravida's Board of Directors proposes an increase in the dividend of SEK 0.25 per share to SEK 3.75 per share, which equates to 73 percent of earnings per share.
Acquisition
In the current market conditions, we have been more selective in terms of acquisitions, but we continue to see good opportunities and are actively working with several potential candidates. We prioritise service businesses and businesses in strategic technology areas. During 2024, we completed ten acquisitions, of which six were in Sweden and four in Finland, with total sales of approximately SEK 580 million.
Sustainability
At Bravida, we take a long-term approach to sustainability in order to be a good supplier to our customers, a good employer and a leading stakeholder in the industry. I am proud that the hard work we are putting into reducing workplace injuries is paying off. In 2024, the LTIFR was 5.9 (6.6), an improvement of 11 percent. The electrification of our vehicle fleet is reducing our carbon footprint and during the year we reduced emissions from our vehicles by 14 percent, and by 36 percent from 2020 in proportion to sales.
Outlook
For Bravida, I believe that the demand for service activities will remain stable with a degree of growth. The volume in installation will gradually improve, and benefits from the lower interest rates and the need for renovations, infrastructure and, to some extent, new build construction. I note much better activity in the market, with more enquiries and interesting discussions, not least relating to infrastructure.
However, there are considerable geographical differences in the demand for installation work relating to building construction. The markets in southern Sweden and Finland are weak, whereas the market situation in the rest of Sweden, Denmark and Norway is generally better. Overall, we expect an uncertain market and continuing weak demand in the first half of 2025. We are therefore continuing to take steps to increase internal efficiency, adapt the organisation and boost underlying profitability. In addition to cutting back in southern Sweden, we have reviewed our support functions and are pursuing a number of initiatives to further improve the efficiency of our business operations.
The demand for installation projects in the infrastructure, industrial, defence and civil engineering sectors remains stable. Other market drivers are the ongoing electrification and digitalisation of society, such as automation in buildings, where Bravida has invested heavily and strengthened our market position in the Nordic region in recent years.
To summarise, 2024 was a challenging year. We worked hard to build an even stronger Bravida. Our customers, suppliers and employees value our strong financial position, which benefits our business activities. I am confident that we are well positioned to continue creating value for our shareholders when the market improves.
Mattias Johansson
Stockholm, February 2025
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 online or by phone. There will be room for questions in the telephone conference.
Link to webcast
https://bravida.events.inderes.com/q4-report-2024/register
Telephone conference
To participate in the conference call, please register via this link: https://conference.inderes.com/teleconference/?id=50050313
After registration, you will be provided with telephone numbers and a conference ID to access the conference. There will be room for questions in the telephone conference.
The report and presentation will be available at: https://investors.bravida.com/en/reports-and-presentations
For further information, please contact:
Peter Norström, Head of Investor Relations
peter.norstrom@bravida.se
+46 8 695 20 07
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 11 February 2025, 07:30 CET.
Good properties make a difference - that's why Bravida exists. As one of the Nordic region's leading suppliers of end-to-end technical solutions in service and installation, we help our customers create effective and sustainable properties.
Bravida's long-term goal is to be carbon-neutral throughout the value chain by 2045. We have 14,000 employees and a presence in about 190 locations in Sweden, Norway, Denmark and Finland. Bravida's shares are listed on Nasdaq Stockholm. www.bravida.com
