Strategic move into Germany and continued strong cash flow
October - December 2024
- Net sales decreased by 6.8 percent and amounted to SEK 3,610 (3,873) million. The organic change, adjusted for currency effects, amounted to -7.4 (-2.6) percent.
- EBITA amounted to SEK 195 (310) million, corresponding to an EBITA margin of 5.4 (8.0) percent. Adjusted for non-recurring costs of SEK 65 million, the margin amounted to 7.2 percent.
- Operating profit (EBIT) amounted to SEK 126 (271) million. Adjusted for non-recurring costs of SEK 94 million, EBIT amounted to SEK 220 million.
- Cash flow from operating activities amounted to SEK 471 (432) million.
- Earnings per share before dilution were SEK 0.14 (0.71) and after dilution were SEK 0.14 (0.71).
January - December 2024
- Net sales decreased by 4.1 percent and amounted to SEK 13,690 (14,279) million. The organic change, adjusted for currency effects, amounted to -6.5 (4.6) percent.
- EBITA amounted to SEK 879 (1,085) million, corresponding to an EBITA margin of 6.4 (7.6) percent. Adjusted for non-recurring costs of SEK 65 million, the margin amounted to 6.9 percent.
- Operating profit (EBIT) amounted to SEK 690 (899) million. Adjusted for non-recurring costs of SEK 94 million, EBIT amounted to SEK 784 million.
- Cash flow from operating activities amounted to SEK 946 (999) million.
- Earnings per share before dilution were SEK 1.31 (2.29) and after dilution were SEK 1.31 (2.26).
- Three acquisitions were made during the year, which, on an annual basis, contribute an estimated total sales of SEK 69 million.
- The Board proposes a dividend of SEK of 0.68 (0.68) per share.
Comments from CEO Robin Boheman:
As we summarise 2024, we look back on a period of challenges and adaptations. The underlying need for installation services remains strong, but short-term market conditions have varied widely across regions. Our decentralised business model is a significant strength and key to our relative resilience. A clear example is how our subsidiaries have rapidly shifted parts of their business towards services, which for the full year grew by 10% in absolute numbers, rising from 30% to 35% of our net sales. In addition, we have during the year continuously taken measures in various subsidiaries to meet the changing conditions and gradually adapted operations through efficiency improvements and cost savings.
Those efforts intensified during the fourth quarter when we implemented more comprehensive structural measures to strengthen our long-term competitiveness. In addition to redundancies, which we have already made in instalments during the year, we have taken certain project write-downs and initiated the mergers and closures of eight loss-making subsidiaries. These initiatives resulted in non-recurring costs of SEK 65 million, as well as impairment of goodwill and other intangible assets of SEK 29 million during the quarter.
Adjusted for the non-recurring costs, our EBITA margin amounted to 7.2 (8.0) percent in the quarter and 6.9 (7.6) percent for the full year. This reflects the temporarily suppressed demand and price pressure that we faced in 2024.
Although our customers in the construction industry encountered similar challenges during the year, we see that the number of installation projects in the market is now starting to cautiously increase. This is visible in the positive trend shift in the development of the order backlog during the quarter. We continue to pursue our set strategy of careful order selection, with a focus on winning the right projects for the right customers - where margins over volume remains our guiding principle.
New markets and disciplines
Despite the challenging conditions, Instalco continues to expand and invest in the future. We continue to build on our investment in automation via Inmatiq which is showing good progress and our technical consultants at Intec are reporting both growth and margins above the Group's. Besides that, the most important strategic milestone of the quarter was our entry into Germany, one of the largest markets in Europe for installation services. We have signed an agreement for a minority investment in Fabri Gruppe, a decentralised, acquisition-driven installation group and we have a long-term plan to achieve majority ownership.
Fabri was established in 2020. It is a rapidly growing group that is geographically represented at several locations in Germany via its 14 subsidiaries, which is two more than when we announced the investment. The investment provides us with a platform for growth in the German market, where local expertise and contacts are crucial. The culture at Fabri is similar to Instalco's and we see great opportunities for collaboration, where we can contribute best practice and knowledge based on our 10-year history of M&A, strategy and operational development within the installation industry. We look forward to our collaboration with Fabri and creating new opportunities together.
On the way to net zero
In December, we published Instalco's climate targets, which are a key component of our long-term sustainability efforts. We have committed to achieving net zero emissions in the entire value chain by 2045 and decreasing the emissions intensity of greenhouse gas emissions in Scope 1 and 2 by 50 percent by 2030, with 2020 as the base year of comparison.
As one of the leading players in northern Europe for installations, our energy and resource-efficient solutions are already helping our customers lower their climate impact. The climate targets are a natural next step for us and it strengthens our position as a reliable partner for the green transition.
Ready for future opportunities
We conducted our annual employee survey during the quarter and are proud of having improved on last year's result. Our Employee Net Promoter Score (eNPS) is now 31 for the Group which is very strong compared to other players in our industry. I am proud of our unique culture. Our employees are our most important asset and I would like to take this opportunity to thank each and every one of them, along with our customers, for the past year.
The theme of the year has been adaptation and streamlining, combined with important strategic steps to ensure that we are well-positioned for the next growth cycle. At the same time, we deliver a strong cash flow whereby the Board proposes a divided of 0.68 SEK per share, in line with the previous year.
Once the market conditions improve Instalco stands stronger than ever, ready to act on opportunities that arise.
Report presentation
Instalco's CEO Robin Boheman and CFO Christina Kassberg will present the report in a conference call/audiocast today, 13 February at 09:30 CET via
https://instalco.events.inderes.com/q4-report-2024
To participate by phone, register via
https://conference.inderes.com/teleconference/?id=50051422
For further information:
Robin Boheman, CEO
Christina Kassberg, CFO, christina.kassberg@instalco.se
Mathilda Eriksson, Head of IR, mathilda.eriksson@instalco.se +46 (0)70-972 34 29
Instalco is one of the leading installation companies in Northern Europe for electrical, heating & plumbing, ventilation, industrial solutions and technical consulting. We offer system design, installation and service & maintenance of buildings and facilities in Sweden, Norway, Finland and Germany. The business is run through our 150+ subsidiaries, with support from a small, central organisation. Instalco is listed on Nasdaq Stockholm under the ticker INSTAL. For more information, visit www.instalco.se
This information is information that Instalco is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2025-02-13 07:30 CET.
