Instalco : Presentation kvartal 3 2020

Instalco Q3

presentation

November 9 2020

1

This is Instalco

• A leading Nordic installation group within heating and plumbing, electrical, ventilation and cooling
• 79 subsidiaries - highly specialiced local companies
• 3 600 employees
• Highly decentralised structure
• Supported by a small central organisation
• Strong profitability with high margins over time

2

Key financials, LTM

Net sales, million SEK

6.696

Adjusted EBITA, million SEK

589

No of employees (30 September)

3,630

Order backlog, million SEK

6.263

Adjusted EBITA margin, %

8,8

Acquired annual sales, million SEK

1.441

3

Q3 2020 Highlights

• Stable quarter despite covid-19 situation
• Higher sick leave than normal
• Net sales growth 16.1%
• Solid order backlog over 6 billion
• Segment Sweden very strong - segment Rest of Nordic somewhat slow
• Growth in ventilation discipline
• Six acquisitions

Key financials Q3 2020

Net sales

SEK 1,643million

Adjusted EBITA

SEK 150million

Adjusted EBITA margin

SEK 9.2%

4

Managing the covid-19 situation

• Strong result despite covid-19 situation
• Acquisitions pace unaffected
• Higher sick leave than normal - impact on production
• Flexible if market change
• Carefully monitoring the situation
• Very difficult to assess the future market

5

Net sales

• Net sales growth (SEK million)

20,8%-2,7%

-2,1%

6

EBITA

• Adj. EBITA (SEK million) and adj. EBITA margin (%)

180																																12%
160
														10%
140
120																																8%
100
														6%
80
60																																4%
40
														2%
20																																	0%
0
			Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020
													Adjusted EBITA				Adjusted EBITA margin

7

Order backlog

• Growth of 41.8% (compared with Q3 2019)
• Continued stable order backlog ratio of 0.94x (relative to 12 months rolling net sales)

7000

6000

5000

4000

3000

2000

1000

0

Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020

8

Examples of projects i Q3

Hovrätten 28, Kristanstad, Sweden

• First "Sustainable Classified Instalco Project"
• Renovation of 50 apartments - heating & plumbing
• Replacement of old pumps with efficient circulating pumps
• Partnering with Skanska

Fortnox Head Office, Växjö, Sweden

• Installation of efficient LED lightning appliances and systems
• 10 000 m2 new built office buildning
• ELUB

Tangvall skolecenter, Kristiansand, Norway

• First "Sustainable Instalco Project" in Norway
• New built school
• Heating & plumbing installations
• Geothermal heat pumps
• Installation of low- flow sanitary system

9

Segment development - Sweden

• Strong and solid results by the Swedish operations
• Stable demand for technical installations
• Net sales growth 20.6%
• Organic growth 1.3%
• Order backlog growth of 53.4% whereof 34.4% in comparable units

Key financials Q3 2020

Net sales

SEK 1,252million

EBITA	EBITA margin
SEK 117million	9.3%

Order backlog

SEK 5,054million

10

Segment development - Rest of Nordics

• Net sales growth 3.6%
• Result below desired level - partly due to Corona pandemic
• Action plan for higher margins
• Implementation of new Sustainability program

Key financials Q3 2020

Net sales

SEK 391million

EBITA	EBITA margin
SEK 26million	6.7%

Order backlog

SEK 1,209million

11

Acquisitions 2020

Acquisition	Discipline	Segment	Estimated yearly sales (SEKm)	Acquired
ELUB AB	Electrical	Sweden	69	Q1
Haug og Ruud VVS AS	Heating & Plumbing	Rest of Nordics	71	Q1
Östersjö Elektriska AB	Electrical	Sweden	25	Q1
Avent Group	Ventilation	Sweden	108	Q2
Norrtech VVS och Industri AB	VS	Sweden	36	Q2
Teampipe Sweden AB	VS	Sweden	49	Q2
Miljöventilation AB	Ventilation	Sweden	60	Q2
Sähkö-Arktia Oy	VS	Rest of Nordics	83	Q2
FTX Teknik & Service AB	Ventilation	Sweden	45	Q3
Uudenmaan Lämpötekniikka Oy	Heating & Plumbing	Rest of Nordics	75	Q3
VentPartner Group	Ventilation	Sweden	250	Q3
Boman El och Larmtjänst AB	Electrical	Sweden	73	Q3
Tornby El AB	Electrical	Sweden	18	Q3
MR Rör i StorStockholm AB	Heating & Plumbing	Sweden	35	Q3
Total			997

12

Examples of acquired companies in Q3

VentPartner, Örebro, Sweden

• Heating, ventilation and cooling solutions
• First larger ventilation company in Instalco
• Largest customers: NCC and PEAB
• Annual sales of approx. SEK 250 million

MR Rör, Stockholm, Sweden

• Heating, cooling and plumbing
• Specialized towards governmental and municipal companies
• Strong offering in service
• Annual sales of approx. SEK 35 million

13

Financial targets and dividend policy

Area

Growth

Margin

Capital structure

Cash conversion

Target

• Average sales growth should be at least 10% per year over a business cycle
• Growth will take place both organically and through acquisitions
• Instalco aims to deliver an adjusted EBITA margin of 8.0%
• Instalco's net debt in relation to adjusted EBITDA shall not exceed a ratio of 2.5
• Instalco aims to achieve a cash conversion ratio of 100%, measured over a rolling twelve-month period over a business cycle

Comment

Status

Acquired sales and EBITA in line with plan

8,6% YTD

1.4x September 2020

100% YTD

Dividend policy	• Instalco targets a dividend payout ratio of 30% of net profit	30% of net profit

14

Summary

Strong and solid quarter despite covid-19 situation

Stable demand for technical installations in the construction area, both for new built and renovation

High acquisition pace with six new companies in the group

Difficult to assess the future market

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