To the Instalco Q1 Presentation for 2023. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now I will hand the conference over to CEO, Robin Boheman. Please go ahead. Hello, everyone. Welcome to this Q1 Presentation for Instalco. My name is Robin Boheman. I'm the CEO of Instalco. With me today, I have my CFO, Christina Kassberg, and Fredrik Trahn, Head of IR. Just to start off a little bit and give you an update this is Instalco. Instalco is one of the leading installation groups in the Nordic market so Sweden, Norway, and Finland. Our main business areas is installation, service, design, planning of electricity, heating and plumbing, ventilation, cooling system. Along with that we also have solutions for the industry and we also have a technical consultancy part of the group as well. The group consists of around 130 subsidiaries with a highly decentralized structure. As you can see on the map here we are plotted around the Nordics around 6,000 employees. This is basically Instalco in short. Going over to some numbers and looking at rolling 12 months as you can se we have a net sales of SEK 12.7 billion, an EBITDA of SEK 975 million meaning an EBITDA margin of 7.6%. We have a steady good cash flow of SEK 765 million and we have the last year done acquisitions with an estimated annual sales of around SEK 2 billion. Our order backlog is almost SEK 9 billion meaning that it is on record levels for us. Looking at some highlights for Q1 was a strong quarter for us. We had a strong sales growth of 26.4% with a high organic growth of 12.5%. We strengthen our profitability in the quarter compared to last year's Q1, so we are at 7.1% meaning that we have around or we have SEK 233 million in EBITDA and net sales of almost SEK 3.3 billion. We also had a strong cash flow SEK 222 million. As I mentioned before we have a solid order backlog of almost SEK 9 billion and very high activity when it comes to M&A, and I will come back to that later in the presentation. Somewhat increased level of debt due to that we did a lot of acquisitions in the end of the quarter meaning that we did not get the EBITDA but we paid the purchasing price. We'll come back to the M&A situation a little bit later in the presentation but I will hand over to you Christina to go through the numbers a little bit more in detail. Thank you Robin. In this slide, we can see the increase in the net sales with a comparison of Q1 present and prior year. Our strong position continued to generate robust growth in the quarter. Net sales increased by 26.4% compared to last year and amounted to SEK 3.3 billion. We have a stable and solid portion of installation service which is an excellent prereq for success on the year ahead. Growth is driven by the high demand of sustainable investments and energy optimization as well as our high rate of acquisitions. We are satisfied with our organic growth rat which was 12.5%. Both of our segments, Sweden and rest of the Nordic, contributed to this. Acquired growth amounted to 13.8%. This slide shows the quarterly trend of the EBITDA in both SEK millions and margin. Earnings tend to be lower in the Q1 of the year since many projects are wrapped up in the Q4 and new ones are just starting up in Q1. Overall, despite this seasonal effect our earnings performance was strong and the margin improved. It is, thus, a very nice improvement from the previous period, Q1 2022 and the downturn in the economy has thus far not given any significant negative impact. EBITDA increased in absolute number by 34.1% and amounted to SEK 233 millio which correspond to a margin of 7.1%. The business area industry generated many positive effects, and in combination we are working diligently to integrate our latest acquisitions and ensure that they quickly contribute to our continued growth in earnings. Overall, it was a strong earnings performance that improved compared to the previous period together with the positive effects from the business area industry. This slide shows the quarterly progression of the order backlog. We have a substantial order backlog which was further strengthened during the quarter. The composition and quality of the order backlog is good as well with variety in terms of types of projects and contract forms, all of which provides a balance and soundness in spreading the risks. For new production of residential property we've noticed a slowdown due to the new interest rate situation. Our exposure is relatively low approximately 13% and well compensated by other parts in the order backlog. Our order backlog all in all grew by 18.2% and is at a record high level in absolute numbers. In total, SEK 9.0 billion which corresponds to roughly 70% of annual sales. Organically, the order backlog grew by 0.8% and the order backlog of acquired companies contributed with growth of 17.4%. Over to a summary of segment Sweden in Q1. The business situation in Sweden remained strong. Inflation is impacting the industry and our companies have managed the market situation successfully, achieving both high profitability and strong growth. In general, the market for new construction, renovation, and energy efficiency is good in both the private and public sector. The supply of installation projects in certain region has declined somewhat. For new production of residential property we noticed a slowdown due to the interest rate situation. Investments in construction and basic industry are increasing the need for energy efficiency and investments in the grid. For our technical consultants short-term demand is good and this has a strong correlation with the demand for energy efficiency improvements. Overall, net sales increased by 17.2% to SEK 2.3 billion. Organically, 12% up acquired growth amounted to 5.3%. EBITDA was SEK 185 million, the margin was 8%. As already mentioned, business area industry generated many positive effects. Here we have a summary of rest of the Nordic. Rest of the Nordic is overall delivering a strong trend of growth in absolute numbers. The seasonal variation is obvious for Q1 with a lower margin because many new projects are starting up and not yet fully underway. The market in Norway remains stable in terms of both construction and renovation. The main driving forces are major investments in the public sector. The market in Finland is still somewhat tentative. In conjunction with Finland becoming a member of NATO, more military investments in construction and installation are expected this is a clear business opportunity for our Finnish companies. Overall, net sales increased by approximately 57% to SEK 0.9 billion. Organic growth amounted to 14.3 acquired growth amounted to 42.1% this is a clear confirmation of our focus to grow in rest of the Nordic. EBITDA amounted to SEK 48 million the margin was 5.1%. We are happy that we in this quarter do have an underlying positive trend among our Finnish companies, this is a recovery from previous quarter. To summarize our performance in relation to our financial targets all in all over a business cycle we are confident that we are delivering in line with our financial targets. EBITDA margin, we are pleased that it has improved compared with previous quarter and our companies, as said, are quickly adapting to challenges as well as opportunities. This is in the heart of our business model. Indebtedness the high rate of acquisition especially at the end of the quarter has raised our level of indebtedness but thanks to our strong earnings growth, we still manage to achieve our goal of net debt in relation to EBITDA of 2.5x. The group is having a good and healthy headroom to the stated bank covenants. We are secure of the rate of acquisitions, our cash flow, and the balance sheet. Sorry for that. Finally, board has proposed a dividend in line with the policy and decision will be taken at the AGM tomorrow. By that, Robin, over to you. Thank you Christina. Going into some acquisitions, as I said, the acquisition in Q1 started off with a flying start. We have acquired six companies so far in or in Q1 with around SEK 970 million in annual turnover. The majority of this was related to three major acquisitions, Lysteknikk, Enter Ställningar, and Processus. We also acquired three smaller companies, TelePatrol, RP Montage, and SMT. All of the acquired companies are very successful and specialized making them a good fit within Instalco business model and culture. We have had a dialogue underway for several years with a few of these companies we're happy that they could join now in Q1. We're looking forward to integrating them within the Instalco culture and together with the network that we have. We can also go into some examples. For instance, the first one here being Processus. We strive to expand our industrial area and we made three acquisitions in this area during this quarter. One of them being Processus, a company that we have had a long dialogue with, and they are also previously prior to the acquisition they're already collaborating a lot with the existing subsidiaries within the group for instance, Teampipe and Liab that we have owned for a few years. Processus is an engineering firm, which is specializing in project management, process design, automation, industrial IT. They also have a strong platform within the pharmaceutical industry which is also opening up new opportunities for us to expand this area. Very excited to have them join the group as well. One other acquisition which is also a good example of an industrial acquisition was the acquisition of Enter Ställningar, which was completed in the Q1. Enter Ställningar is a full service offering for industrial scaffolding business, servicing customers mainly in the southwest region of Swede and they have their head office in Gothenburg. By this acquisition, we also take the leading position in the scaffolding business in for the industry in Sweden, which is also an exciting place to be. The acquisition of Enter Ställningar is in line with the strategy of growing stronger in the industrial segment and it is also a great opportunity for synergies not only with our existing industrial companies but also with our existing scaffolding business, Highcon, which we see a lot of synergies and collaboration possibilities since they are in different geographical areas but they are also able to spread best practice to these companies. And once again, we position ourselves as a leader in the scaffolding business as well. Just to go into an example of a project that we took during the quarter just to give you some understanding. Instalco is always working a lot with energy-efficient project. This is one example of an assignment that was won in the last quarter by our subsidiary Calmarsunds VVS which will work together with Elovent for this client. The client is HSB, Sweden's largest cooperative house association. This is a partnering project where Calmarsunds VVS has been elected and assigned as general contractor for the renovation of basically two floors, floor apartments building in Kalmar. This household and complex is around 230 apartments and is part of what we in Sweden call Miljonprogrammet, a million project which was basically a lot of apartments was built in 1965-1974. These buildings are now in great need of renovation. This is a good example of where Instalco can come in as a general contractor and help the customer to generate a lot of energy efficient and lower energy bills in the future as well. The theme for this quarter is startup which is a theme we have gotten a lot of questions in the last years on our startup business and how we do it. We'll give you a little bit of an insight on how this is done and what type of companies we have. Basically to start off this is another way of growing. This is an more of an organic way of growing. When it comes to M&A we have strategic acquisitions meaning that we acquire companies that we, for instance, we want to go into a segment, for instance. Typical example of this would be Processus or Enter Ställningar which was a strategical acquisition. We have the more opportunistic acquisition where we see that, okay, there is a company that we like, we like the management team. It was maybe not on 100% on the map but we see a good opportunity here to do a good acquisitions within the installation market, so we go for it. We also have the add-on meaning that, for instance, a typical or a subsidiary finds a smaller company to acquire themselves and integrate to their company. Last but not least, we have the startup concept, which I will go into now. The startup concept was basically founded in 2016 when we were negotiating with an acquisition opportunity and we wanted to get into a specific market but couldn't kind of come to terms with the acquisition. Instead, we then started our own company. Since 2016, we have now started companies in Sweden or in Finland. This is all about finding the right entrepreneurs, making them join the team and together we will then co-own that company for a few years. Basically where we are interested in setting up operations but couldn't find basically suitable acquisition candidates we will go for the startup concept. A good example is on the right-hand side here we have Revcon, for instance, that also actually is a startup company and they also two days ago did add-on acquisition as well. That's quite unique. Looking into the major startups that we have done, we did during 2022, we did nine startups. Most of them were technical consultants which is basically Intec, which is our technical consultancy brand. Intec has now, I think, around 25 subsidiaries around Sweden and Norway. Basically Intec is an Instalco within Instalco but they run under one brand, Intec and consists of a lot of startups. On top of that we have done startups now, as I mentioned, two in Finland, one in Norway and a few in Sweden as well as you can see spread out along the map here. It's a very exciting way to grow the business as well, finding good entrepreneurs and building upon that. This is an example of the life cycle of a startup. Basically you could say that year one is a startup year, which we at the moment have four companies within. One to two years is like production, so meaning the first year you try to find projects. You might only be a few employees trying to establish yourself, offices and so forth, and then trying to find projects. Year one to two, you start production. You start to execute on the projects you've taken during the first year. Two to three years, we start talk about maturity meaning that you've done a few projects. You have a track record. You can start show customers that what type of projects you have done. The three to five years, you start to become sort of, say, ready in that sense. At the moment, we have around two companies there. The total turnover for these startups is around SEK 650 million. This is basically generated through organic growth where we find people within the market. We co-own these companies together. It's a very exciting model, I think, for the future as well. Going into the summary for the quarter we have a really strong quarter. I'm very proud of what we have achieved in this quarter compared to last year Q1. I think we have once again proved ourselves. We have some normal seasonality effects, but profitability is improving for the quarter. I'm very proud of the achievement of the team. We have really high M&A activities. Organic growth has also been great during the quarter. As I said, six acquisitions contributing to around SEK 970 million. Growth for this year is looking very promising. With that, I think I will leave and leave it to you and open up for questions. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Karl Bokvist from ABG Sundal Collier. Please go ahead. Thank you. Good morning. My first question is just on that it seems like, well, as you say, that margins are improving but it seems like there's an underlying improvement as well. Regarding the fixed price contract pressure that you have highlighted for a couple of quarters, is this starting to improve and how long do you think it will persist both maybe the cost inflation part and also some contracts you highlighted, I think two quarters ago, where there was perhaps a bit of a miscalculation, if we call it that? I think the issue with this fixed price product is, as I mentioned before, I mean, the big hit was maybe taken a few quarters ago. I wouldn't call it miscalculations. I would rather call it the little bit unexpected increase of prices to continue it in that rate. I think that the market wasn't prepared for that type of increases. That said, I mean, if we continue to see increases in this same level it will be hard for everybody to cope with that fast increases of prices. We do see that volatility in price increases are somewhat lower and we're seeing some positive trends that we are at levels that sort of stay at these levels. In that sense, we are a little bit positive but it all comes down to the market at the end of the day and you have to cope with it. I think we're better prepared than we were last year. I think the market overall as a construction market and an installation market especially is more prepared now than a year and a half ago. Understood. Then on just the seasonality, if we just take the seasonality impact itself it should, you know, historically at least implied a lower o let's call it a bigger decline in margins for Q1 versus Q4. Yet your margins in Q1 are very strong. Just looking ahead, seasonality should be a positive, then you also started the year in a strong fashion. How do, how should we think about the coming quarters given the strong margin start to the year? As you know Karl, we're not guiding for the future. I mean, we started the year good. I think you should continue to expect the seasonality to continue in the sense that even if industry showed a good result in Q1, it is somewhat more seasonality within the industrial market that they start a little bit slower in the beginning of the year and so forth. I think seasonality-wise I can only look at the history and I don't see any reason for the history not to repeat itself in that sense. Understood. My final one is just a bit more technicality but when you disclose the acquired companies, you highlight that there's was a one-off effect and if I understand correctly, a negative one-off effect of SEK 24 million impacting the acquisitions on a kind of run rate level. Did this have any impact on the Q1 earnings or the past quarters earnings? No, I know what you mean. You're referring to, like, I think a table on, what's it, page eight in our report on the last page there. Right. Basically that's a guidance for you guys to understand how much they have earned prior to joining Instalco. The reason for the note there is that you see that operating profit is quite low compared to the turnover, and that's. It's a guidance to helping you guys say that SEK 24 million roughly is one-offs taken. Largest part of that around SEK 15, I think SEK 15 and a half or something like that is due to that one of the companies that we acquired in Q1 had a management team that was entitled to exiting bonus. To say, what do you call it in English? I think you call it exit bonus, if they sell the company of around SEK 15 million to the management team. That affects the result of that company that year. That is, of course, we knew that and it was no strange things but that is one thing that shows that profitability for that company prior joining Instalco is very low, because they have to pay that out due to the exit. And then one other acquisition had a write-off in one project prior to joining Instalco in the beginning of the year of roughly SEK 10 million. That was also already known to us, but that's why we wanted to guide you guys with and say that there are SEK 24 million in one-offs. I think you need to kind of add that back to the SEK 5 million, if you see where those companies are typically at. Understood. If I may, I mean, also the kind of acquired contribution this quarter from those units should, in essence if we look at an adjusted earnings level, have been higher as well then? No. You said prior to joining. Prior to joining, I would argue that you should maybe look at that they should a typical be at around SEK 30 million. Okay. Meaning around 10%, basically. All right. Understood. Even a little bit above. Thank you. Yeah. Thank you. The next question comes from Carl Ragnerstam from Nordea. Please go ahead. Good morning it's Carl here from Nordea. A few questions. Firstly, I mean, if you look on the Swedish business, to what extent is the margin uplift driven by sort of improved utilization of the technical consultants and also if you could maybe, I mean also on raw material pricing normalizing a bit. You also sound pretty content with activity level for the technical consultants. What profitability level are you aiming for a full year 2023 for that segment? Okay, if we start with the technical consultants. Full year, once again, maybe the political answer here, Carl. It depends on the type of growth that we will see in the technical consultant. Once again, if we start growing FTEs in the rate that we did in 2021 then we won't see much profitability. We'll see, but we see a lot of growth. However, if we see that FTEs are not growing as fast, we see a positive trend, as I mentioned many times before, that, I mean once you've sort of say, worked for within Instalco for a, as a, as a technical consultant for maybe a year, you start to turn profitable. Of course, day one, you have zero projects. You need to, sort of say, start from scratch then you typically lose money. It all comes back to kind of the growth rate we see. However, we are very happy with the technical consultants this quarter because they were able to show profitability for the first time. However, I think it is a little bit early to say that, so to say, we will continue to show profitability. We had a really good start with technical consultants this quarter. That was very, very positive, showing that the model works which I've been very confident that it will but it showed in the numbers this quarter as well. It's a little bit early to say that this will continue for all quarters because it also has a lot to do with the growth rate. Please repeat. No, that's fine. Ah. It answers the question. Okay. What would you say is your base case balancing growth with profitability for 2023? I mean, we are maybe entering a bit more challenging macro situation. I mean, is it the right time to grow FTEs or is it better to sort of turn into profitability and then take it organically, slowly, or what's your view of that strategy? Maybe a little bit leading question there, Carl. Yeah. Maybe. As I mentioned before, I think that it is important to also consolidate the business. We had the opportunity to grow very fast in 2021 and I think it was a smart move to take that opportunity. As I think I said on last Q call or it was two quarters ago, I mentioned also that we have taken some FTEs away. I mean, when you recruit that many people that fast, you get people that are not very fit for the culture and fit for the way that we want to do business. A few of them have left the companies and we have also made a few leave the company. I think that it will depend a little bit on if we can establish ourselves in new regions. We are long-term on this investment. It is a solid investment. Also if the market starts to tremble a little bit I think it also a good opportunity for people to join Intec because we are long-term, we are investing in this. Long-term, we see a good profitability and we also see good growth and good synergies within Instalco. Almost sounding like an ad to join Intec, I think it is a good place to work and at the end of the day, I mean it will come down to what kind of competence we can recruit and if we can recruit them, we should if they're good. Okay. Sounds fair. On the back of this strike in Norway, would you say that the wage inflation might hinder your margin trajectory in the near term in a way? Or would you say that you've maybe taken the higher wage inflation into consideration into your projects, taken during the latter part of 2022? I think that we were, of course, hoping for maybe a little bit less wage increases. However, we were expecting roughly around this target or whatever you call the mark or whatever you wanna call it. Not too unexpected that we ended at this level. However, we would have hoped for maybe a little bit lower. Yeah, I think we can, I think the market has to cope. As I mentioned before, like with wage inflation, it's easier because it's the same for everybody. And it's also very, i t the number is very known, so it's also an easier discussion to have with your end customer because everybody knows the, so to say, wage inflation. Having that discussion is might be easier than having the material discussion, which is also more volatile. In last year, you had, what is it 46% of sales from fixed price contracts. I mean, are you satisfied with that level or are you willing to increase the level of fixed price contracts this year now that raw material prices are at least seemingly flattening out? I guess over time, if in a normalized environment, you could get quite good leverage on margins from fixed price contracts. Yeah that's, o nce again, sorry Carl, but it will become a little bit a political answer meaning that at the end of the day, it's also what comes out on the market. I mean, if the end customer wants fixed price they will at the end of the day get fixed price. We can always argue that we should have done it in partnering or so. I mean, we stick to our model that if it is larger, so to say, projects, we will take them in partnering. And if they are small, mid-sized project we are comfortable in taking them in a fixed price environment. And we are good at the mid-size segment. So I think that the 46% we have now, it's a good mix. if it changes up or down a little bit, it will depend on what type of projects come out. If it is larger projects, you will see the fixed price go down. If it's smaller projects are coming out or mid-sized project, you will see the percentage of fixed price going up. I think we stay true to our model and we'll continue to do that. Okay, very good. Thank you. Mm-hmm. The next question comes from Karl Norén from SEB. Please go ahead. Yes good morning. Third Karl Norén in line here. One question on the price competition here that was mentioned by one of your peers here yesterday. Just curious about if you could comment anything, if you've seen any more or any increase in the competition on price in some projects when some market segments are weaker. I mean, we haven't fully seen the whole effect. I think that there's always price pressure in the market in the sense that we have good competition. It is a market where competition is so to say on a decent or whatever you wanna call it, level all the time. There are no free lunches. However, of course, we see in some areas maybe so to say, more tenders on the same project. Let's say if for instance, you tender, you get a tender and a few people will reply. Now we see more people replying on the same tender, so to say. That's maybe what we see. We haven't seen so much yet on kind of price going down in a larger extent, but that could be the risk in the future, yes. Yeah. Sounds good. Just, one follow-up or you did one. You paid one acquisition with shares for SEK 50 million of worth. Yeah. I'm just wondering what acquisition and at what price were the share issues, issued at? I can't see that in your report that the number of share has increased. Basically it was for the acquisition, it was the Processus acquisition. The reason for using the shares this time was that the entrepreneurs wanted, if I remember correctly SEK 50 million in shares. We thought that that was a little bit hard to make them acquire that on the open market for three entrepreneurs. That was the reason. The share was issued at the market price, I think it was 10 rolling, what do you say? 10 days average, it was issued at the day we announced the acquisition. I don't have the price exactly that date, but it was at market price. Okay. Yeah. Okay, sounds good. That's all for me. Thanks. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. There are no more questions at this time. I hand the conference back to the speakers for any closing comments. Okay, thank you. We don't have any questions, either from the public and from the webcast. I guess you summarize it. We thank everybody for listening, and thank you for the questions. Once again, we come back to a good quarter, a solid order backlog, strong organic growth, and an improved profitability compared to Q1. Oh, sorry, there one question coming in a little bit late there. Sorry. Let's see if we can get it. The next question comes from Karl Bokvist from ABG Sundal Collier. Please go ahead. Thank you. Sorry, didn't want to steal your concluding remarks here. If I just may with some more boring technicality questions here but two of them, very simple ones. The net financial expenses, down a bit versus the prior quarters. Anything in particular worth mentioning there, given, you know, the debt level and the assumption of rising interest costs? On the higher cost side we have a higher cost for interest rates, obviously. On the plus side, we have value change connected with the Norwegian Krone that has decreased at the end of the Q1. Okay. Thank you. It was just another smaller remark, on the backlog growth in rest of the Nordic, you say that it grew strongly organically by roughly 9%, structure contributed 45%. It seems like the FX contribution was a very high negative number. I was just curious if there was something to highlight there. We have a combination here that the euro has increased in the Q1 and this Norwegian Krone decreased. It's a mix of these effects. Okay. Thank you. Thank you, Karl. We try again. Once again, thank you for listening in. Thanks for the questions. We summarize a good quarter, strong M&A, strong organic growth, and strength and profitability as well. We summarize a good quarter. Thank you, everybody, have a nice day. Bye.