Earnings Call: Q4 2020

Feb 12, 2021

Thank you very much, and welcome, everyone, to this presentation. Actually, the best quarter ever in BARDA's history. So today, I'm happy to do this presentation together with Asana Irving, our CFO. And I think you will hear quite many positive things during this session. And I think that during 2020, we pruned our business model and that our way of managing the Bermuda way is actually working very well. In 2020, we had 6% growth adjusted for the currency. We had improved EBITA, up 10% and actually during the whole year in organic growth plus 1% and this despite of 10 months of pandemic. And this is actually explained by that we're having many customers in many different places or geographies. We have a KPI driven following up, and we are really good and closed our costs. We have good cost control. And maybe the most important thing, we have a really strong team all over Rarita. On the next slide, I will take you through the highlights for the Q4 of 2020. Net sales, minus 1%, and we had the sales at $5,600,000,000 slightly lower compared to last year. And again, we have, of course, been affected by the pandemic and the lockdown in the society. So we have a net that's minus 1% when at the same time as a service goes down with 7%. And that part of the business is, as you all know, normally very stable. But this year, it has been affected quite a lot. Installation grows by 5%, which is a really strong proof of the business model, but also actually the demand in the market, I would say. Order backlog is at a strong level, close to $14,000,000,000 It is down 5% year on year. Order intake, minus 7%, dollars 5,100,000,000 Last year, Q4 2019, we had a large order received in Sweden at €680,000,000 which is, of course, affecting of the numbers we're comparing to. I will take you through a deeper analyze about this later on. We see a good order intake in Denmark and Finland. And I would say that in Sweden and Norway, we have a really strong position from before as well. So it's good to see that the order intake is strong in Denmark and Finland. EBITDA increased by 13% to $478,000,000 in the quarter, and the margin is improved despite the fact that the service is going down. Service is normally having higher margins than installation. And despite that fact, we can improve the margin to 8.5% compared to 7.5% last year. EBITA margin improved in Sweden and Finland and mainly explained by earlier restructuring works in both these areas. EBITA margin is slightly lower in Denmark and Norway, and is explained by lower earnings in some projects and lower sales in Norway. Cash flow, I would say, is extremely strong. We had a cash conversion is 153 percent. Working capital, minus $1,600,000,000 almost, which is same as minus 7.5% of the sales. And that is something that gives all of our managers in the read are confident strong confidence for the future as well. Net set is 0.6 times EBITDA. And we also can improve the dividend by 11%, which is well in line with the financial target. M and A, slightly lower activity in the Q4, adding $57,000,000 And I think that is an effect of that we took down the pace regard in the second and the third quarter. After the summer, we started up process again, we really want to meet the management in the companies we're acquiring to make sure that we have the synergies we want to see. And as you have seen probably seen the last couple of days, there is some deals that have been closed as well. So we have been starting off the yes, this year 2021 in a really good way. On the next slide, impact from the COVID is the same as earlier. We still see stable demand in installation business. There is some delayed projects planning and investments decisions, but the demand is so far good. There are slightly lower demand in some geographies, but not very much as we see. There is, of course, a negative impact in the service business due to the temporary lower demand and closed sites. We have an increase again regarding the sick leave rates. We have a good visibility in our order backlog that is strong, which means that we can adjust the cost where it's needed. And of course, the market conditions head is a bit uncertain. But I think in some areas that is actually close to 1 year ago, did some services. And we're getting closer and closer to the critical phase where they actually need to do something about the systems, so they're not risking some higher values in their buildings, etcetera. Margin over volume is always important, and we will always defend the margin even if the volumes decreases. So shifting to the next slide and the group sales and EBITDA development. As I said earlier, service is down 7%, and still we are able to grow our sales in the quarter with 2% in local currency. We improved the EBITA margin from 7.5% to 8.5%. And we grew the EBITDA with 13% to 478,000,000 and my opinion is that we have a better business and a stronger organization today than we had a year ago. Sales increased in Sweden, Denmark and Finland and EBITA margin we saw an EBITA margin improvement in Sweden and Finland, mainly explained by earlier restructuring measures. On the next slide, I will take you through the order intake. First, I want to emphasize the fact that we still had a very high order backlog. We still see a good demand in the market, but with some price pressure in some geographies. Our order intake is also affected by lower service sales due to the corona situation, of course. Order backlog is down minus 5% year on year and order intake decreased by 7%, explained by lower demand in service. Or actually, it's not a lower demand, but there are, for practical reasons, not possible to actually deliver the services or the customers are not in the building, etcetera. Yes, you heard it before and you understand the practical reasons behind that. So the demand is still there, I would say. And then we had a large order in Sweden, close to $700,000,000 in the Q4 of 2019. And just to give you some more flavor on the order intake, we have done a bridge on the next slide. Order intake first is higher in Denmark and Finland in the quarter. We, as I see it, have a strong order position in Sweden. So if we look to the left, we had an order intake in 2019 that were slightly above €5,500,000,000 If we adjust regarding the large order in 2019, which is a contract which is much, much larger than we normally have in a quarter, we have an adjusted order intake in 2019 at $4,900,000,000 approximately. Then we have been able to grow the order on installations with $400,000,000 plus. And then the order intake is also affected by the service sales in the quarter. And in the quarter, we had a negative development on the service sales, meaning that, that is actually taking down the order intake with €139,000,000 So the adjusted order intake actually grows from $4,900,000,000 to $5,140,000,000 and that is actually growth of 5.6%. So again, we think that we have a strong order backlog. We have the visibility in the order backlog, and I think that we have shown in the 2020 that we actually can manage the margins as well. So acquisition on the next slide. I said that we had a slightly lower we're not happy with the performance in the Q4, but it is a result of that we during Q2 and Q3 actually paused our M and A activities due to the pandemic. Now we are back to speed again. Even if we post some of the activities we did 16 acquisitions last year, adding almost SEK 800,000,000. We have a strong pipeline, and we do these M and As to attractive multiples so far. And if you have seen the press releases the last week, we have already, yes, today done a couple of acquisitions that will add some nice volumes for the coming years as well. One. And now over to Orsa and some financials. Thank you, Mattias. So Let's look into the performance of our country segment and starting with Sweden on Page 10. Starting with the top line, we had a growth of 3% in the quarter. This was all due to acquisitions. The organic growth was 0. We did have growth in some of our divisions, but we had a slowdown in service, mainly in the southern part of Sweden. So that ended up in an organic flat growth. All in all, we had a growth on installation. The year to date growth was 6%, while the organic growth was 2% and this is a growth both in service and installation. The EBITDA for Q4 was strong SEK 291,000,000 that is an increase of 16%, leading up margin of 9.5% compared to 8.4% last year. Very we had a very strong performance in all Swedish divisions, and we are especially happy that the Stockholm division performed well as through the restructuring that we did last year. We had well, the EBITDA year to date ended up at 7.1%. The order intake was weaker in the quarter, minus 24%. But as Matthias said, we had a high comparative number due to a large order that we received in Q4 2019. And the weak service sales in the quarter also led to the weak order intake then. The order backlog at the end of the year was 7% lower year on year. Moving to Slide 11, Norway. Norway is a country that has been most affected by the pandemic. And in Q2, the sales decreased by 15%, in local currency by 6%, and this is to a large extent, there is a decrease in both installation and service, but to a large extent, is it service that is going down substantially. Year to date, we had a sales decrease by 12% in local currency by 3%, Going forward, looking at the EBITDA, we had a decrease in Q4 and the margin was 6.4% compared to 6.7%. This is due to lower sales in service we talked about before and a few adjustments in a few projects at the end of the year. Year to date, the EBITDA was on the same level, but with a higher margin, 5.7% versus 5.0% last year. The order intake was weak at minus 15% and year on year Let me see now. And year on year in sorry, the order intake was 15% year on year and in local currency minus 12%. The order backlog decreased by 18%, and it decreased by 9% in local currency. So we also had a big currency effect in Norway. And as I said, the Norwegian business has been affected by the pandemic in both Norway and Denmark has been affected from March onwards, while it has been shown in Sweden mainly in the last two quarters. Moving to Denmark, Slide 12. Turnover in Q4, sales increased by 3%. It was all due to acquisitions. The organic growth was negative by 3%. Denmark, as I said, has been affected by the pandemic during the year, which is shown in the figure then. Year to date sales grew by 12%. The EBITDA was slightly lower with the margin on 6.3% in the quarter compared to 6 point 6%. This is also due to a lower volume in some areas and due to a service decrease and also lower earnings in some of the projects. We had a very strong order intake in Denmark, plus 73% year on year and a order backlog that ended up 12% higher than last year. And then Finland, so the really good performance during the quarter. We had a strong growth. We had a sales that increased by 25 21% to SEK 389 1,000,000. It was an increase in both service and installation, and the organic growth was a strong 18%. We also had a growth year to date by 18%, where the organic growth was 13%. A strong improvement in EBITDA, SEK 32,000,000 versus SEK 14,000,000 in the quarter, leading up to a high margin of 8.1% compared to 4.2% last year. And it's really good to see that our efforts in improving project management and being very selective in which project we are taking on together with the restructuring that we did last year and have been doing now also in this year is showing results. For the full year, we ended up with a margin of 4% compared to 1.9% last year. Finland also showed a strong order intake, plus 54% in the quarter, and the backlog increased 18% year on year. If we look at our financial position question on Slide 14, and we can start with the graph in the middle. You can see that we have a very strong cash flow. Leontyne cash flow was SEK 2,200,000,000. This is, of course, due to a strong result for the year and also due to an improved working capital. And the working capital is mainly improving because the net between contract liabilities and contract assets is improving. And if you look at the financial position to the left, You can see that we had a cash balance of SEK 1,700,000,000. We had a financing of SEK 1,900,000,000 and a leasing debt of SEK 1,000,000,000. This is ending up at the net debt, so 1.1. And the net debt EBITDA ratio is then 0.6. And as Mattias said, a strong cash conversion and of course at a high level of 153%. So by going through this result, now turning to Page 15. The Board proposed an increased dividend payout of SEK 2.5 per share. This is 51% of net profit and in line with our financial targets. And as you can see in the graphs, we have increased earnings per share and we have increased dividend each year's dividend payout this year since the IPO. The financial targets on Slide 16, If we're starting with sales, we have a sales growth target of more than 5%. And the actual this year is 4%, but we have had some FX effects in this year. So if we adjust for the currency, we end up at 6% at the 6% growth. Looking at cash conversion, the target is more than 100%. We had a cash conversion of $153,000,000 and the target dividend payout ratio is more than 50%, and we are now paying out 51%. We have an EBITDA margin target of 7%, And I am where we are never satisfied, but we are proud to say that this year, we have actually reached The highest margin ever unadjusted at 6.4%. And we did this in a very challenging year. So that shows that we are well positioned for the future and that this target is of 7% is reachable. The net debt target is less than 2.5. And the actual leverage ratio is 0.6 color. And I have to say that I agree to what Matthias said earlier that we have a stronger company today than we had a year ago. And with these strong results and the very strong balance sheet as we have now, we are very well positioned for 2021. So by saying that, I'm handing over to you, Matthias. Thank you very much, Arthur. Well said and many great numbers, of course. And we meet many of the financial targets, most of them actually, and it's still the margin we have to beat. So but we're getting closer, as you said. So turning to the next slide and probably the slide that shows, if you take a step back, that shows the history and that our way of running our business is working. The picture is clear. We have constantly been able to increase sales and improve our beta. And now our business model has been tested fit in a very challenging market environment as well. Even in a year with lockdowns, with 3 quarters with pandemic, we have continued the positive trend with higher sales, better EBITDA and a really strong cash flow. And I'm very confident that we can continue this journey. The last year has I see it strengthened BRAVIDA a lot. I mentioned it before. Orsar just did it. So we are a much better company today than we were a year ago. But there is still more to do. So on the next slide, I will briefly say something about our new business plan. And our business plan for the coming 3 years starts with our vision on where we as a company want to be in 2026. We have a long term plan. And to be able to meet that ambition, we by 2023 will have a higher customer focus. We have will have a continued profitable growth. But we want to see that our service business is a bigger part of the sales than the installation business yesterday. With that, I'm not saying that we will take down our installation business, spot we want to grow the service business more in the coming years than we are growing the installation business. But we will still definitely see a growth on the installation side. We will focus more on sustainable solutions to our customers and sustainable operations as well. And I won't go into detail about the measures we have planned to do to meet this, but this is just way of telling you that we think that we have much more that we can do. And our vision new vision is that BRAVITA helps customers develop the full potential of their properties. We bring properties to life, food service and installation and are leading the way to sustainable resilient society. We want to be a partner to the customers from early design phase throughout the installation phase and the service and maintaining phase. And we will do it in a sustainable way, and we will help our customers with sustainable to reach their sustainable targets. We will improve our ability to create service from installation contract and vice versa. And this will, of course, need some investments. So on the next slide, the investments for the business plan for this year, 2021, we have an estimate of nonrecurring costs in systems and digital solutions somewhere between $25,000,000 $40,000,000 Sustainability is, of course, an important part of this plan as well it is for all our customers. On the next slide, you can see some things that we what we are focusing on regarding sustainability. It's not all, but there are some examples. We will focus on sustainability because it is an important part of the new business plan where Aveda aims to take a leading position in our 3. Sustainable customer solutions, of course, we are talking about energy efficiency, remote services, smart buildings. In practice, it means solar panels, EV chargers, etcetera. And all the time, when we have done a job to our clients, we actually are leaving the site with a more efficient system to the customer than actually before we help them. It could be changing lighting in office, changing fans, pumps for water, etcetera, etcetera. But we're also focusing on our own carbon footprint. And we have set of target on reducing our CO2 emissions with 10% per year and mainly by reducing our fossil powered vehicles. And already 2019, we said that at least 30% of all our vehicles should be non fossil driven or fossil free. And we have more than 6,000 cars. I think it's close to 7,000 cars. So you understand that these, of course, have a major impact of our own footprint, but it also takes some time to do this in a sustainable way. Safety is, of course, prioritized extremely high. We have the medium term goal on LTIR below 7.5, and we are still too high. We improved it with 17% this year, but we have so much more to do on this topic so we can make sure that all our employees can fulfill the service and the work to all our customers in a very safe way. So said that, I just want to summarize the quarter on the last slide before we go into the Q and A session. Of course, we had an impact on COVID-nineteen. And in Q4, it has affected the order intake. I told you about the lower service sales. That's one example. We can see an uncertain market conditions ahead. Even if the demand is good, the service sales will could be below H1 in 2021. But some installations are not served the last 12 months. And the longer the customers wait, the more risk they are taking. So I my estimate is that the service will pick up as soon asset is practical possible due to the pandemic. And not everything is lost sales. Some of them there will be some buildup demand as well. Sales increase, minus 1% and actually plus 2% if we adjust for the FX or currency. Service sales down 7% and yet we actually improved the margin. Backlog down 5% year on year. EBITA margin improved to 8.5% in the quarter. It's improved in Sweden and Finland. M and A execution is definitely on track. Even if we only did 2 acquisitions in the Q4, we have started off well in 2021. Net debt, really strong balance sheet, 0.6 times EBITDA. Cash conversion, extremely strong, I would say. And the Board proposed a dividend at 2 50%, which is 51% of net income. And I'm really proud of being one of the companies who actually were able to fulfill an increased dividend in 2020. And now we actually start 2021 with proposing another increased dividend. So I really that's another proof of the really strong business model we have in Bermuda. So really proud of presenting this quarter for you, the best quarter ever. And now I think we can start the Q and A. Thank you very much. And the first question comes from the line of Peter Testa, 1 Investments. Please ask your question. Your line is now open. Hi, thank you. I have 3 questions. I'll go one at a time. On the first one, just on the service sales points you made at the end, Can you give us some sort of sense how service sales performed during months when the economy was more reopened, so September, October and maybe versus December, just to give some understanding of in a reopening phase, how quickly you have seen service come back? Here, I think there are first some difference between different school countries, I would say. We didn't see a very high pickup in Norway, for example, and they have probably been the country that is having the toughest lockdown. But otherwise, when people come back to work, they notice things that need to be that need to be handled. And it picks up very quickly, I would say. If you use the word instant, I'm not sure if that's correct, but very, very quick. Okay. And then just on the installation side, there's a bit of lower book to bill the last couple of quarters and you've highlighted in the release that you expect it maybe to be at the part of the year. Can you give some sort of sense as to how you expect the backbone to kind of phase through 2021 and maybe the extent to which you need More book and burn business in the earlier part of the year? I'm not sure I fully understand the question. But if we there are some differences in different geographies, different. Our market is local. So we have places where we can't sell anything more this year and are really confident that they will have a good development in 2021. Sum has the book filled until the summer and needs some new orders after the summer. But very many has at least 60 percent of the orders they need for the full 2021 in the books, and that's quite normal. So there are some areas and we also and that is something we do every year. We are taking down sales in some areas, and we hire new employees in some other areas. So It's not like the whole market is really going down at the same time, for example. Yes. I guess my question is more your book to bill was 0.9%. Last quarter is 0.8%. The backlog is down 5%. So I was wondering whether how that earns through or whether you expect a faster flow of projects arriving at some point Is that that or whether we should take that as an indication for the start of the year? No, I think you should take an indication of that. We are quite confident about the existing order backlog, and we are not pricing low to just fill up with orders we don't need for the moment. Okay. And then the last question was just on Swedish margins. Last year, you had a €58,000,000 one off in Stockholm, which if you adjust for that, the margins are actually slightly down in the quarter year over year. And I was wondering whether That was you felt that was business mix? Or how you would take us through that underlying margin picture? Call, I haven't done that analyzed, but I guess that what we see is that the Stockholm business is much better today. And we see improvement in all different ways, the type of executing existing business, how we're working with future business, the relation with customers, etcetera. I am very confident that Stockholm will continue the positive development in 2021. Right. Okay. All right. Fine. Thank you. Thank you. Thank you. And the next question comes from the line of Karl It's Karl here from Nordea. A few questions from my side as well. To start off with a follow-up on the service side, just so I understood you correctly. Should we, I mean, sort of expect a more severe service impact in Q1 compared to Q4 or given the second or if it's a 3rd wave, I don't know, or if we should expect fairly similar development as in Q4. So my question is what you see in terms of current trading in the service side? Firstly, there is a seasonality in all our business. Q4 is the best quarter, of course, and Q1 is always the slowest. And if you compare Q1 'twenty one with Q1 'twenty 20, of course, there is a difference. But I would say that the demand, if you try to compare apple to apple is not worsening in Q1. I think it's the same as it was in Q4, then of course, you have to do some adjustment for the seasonality. Okay. Perfect. Very helpful. Also, You just talked a bit of the pent up demand. Could you perhaps try to explain how the pent up demand could look like? I mean, in what sectors do you see the best potential for pent up demand? And what service types do you see also or where you could see PEMTAP demand, so to speak. No. But I think it's in all different segments. But there are some service you need as a if you're a customer to Pravida, there are some service you need to do to make sure that the guarantee, for example, on things you have bought or invested in earlier shall be valid. So that's one part of the service demand that will be some kind of pent up, if you call it like that. Then of course, we have, as I see it, quite nice investment in front of us regarding changing the type of offices, etcetera, meaning that small renovations rebuilding sites, that's part of the service as well. The sustainability topic for everyone actually means that you need to do something about the energy consumption in the buildings, offices you are renting, etcetera, because 40%, I think it is, of all energy consumed in the society is actually coming from heating up and cooling down buildings. And that's one type of demand that is could build up. So I think we have the demand in all segments. I'm not sure how I should answer the question. So but and also when you come back to offices and start using conference rooms, kitchen, restaurants, you will notice that things are not working the way they used to do and then some one needs to do something about that as well. So it is everywhere, I would say. Okay. Perfect. Very clear. Also, One question on your business plan here. I mean, could you give probably more granularity on what the increase in OpEx will be, I guess, it will imply, I mean, something around in 2%, 3%, maybe 4% OpEx increase year over year. Also, should we expect CapEx increase as well? Also, the second part of that question is, of course, Where will the business plan take you margin wise? Also, you talked about the service share. Maybe some flavor on where you want to be in a few years' time there. And if M and A is probably The most relevant or the best driver of the service side? I think we have a financial targets, Karl. And that is definitely that plan will definitely support the financial targets we're having. And but we I'm confident that we can continue to do a lot more to improve bravita as a company. If we can manage to handle a year like this in the way we have done, I think that there is so many things that we can do to continue this development. And yes, and regarding the investments, we have decided to show you this number now and for 2021. And of course, if something are changing in one way or another. We will communicate that. What's that you can do? Well, you asked about CapEx and OpEx. We don't expect to increase CapEx. So this will be mostly costs. And we don't expect to increase OpEx at the level that you talked about a couple of percentage. But as Matthias said, it will we will have a target of 7% of that we are aiming for. Yes. And I would say that, of course, we started to do some investments already in 2020. But I think you can't see bet in the numbers, and that actually means that the margin we had in 2020 is even stronger than you actually can see. We are not a very big fan of adjusted EBITA, etcetera. We are taking the cost in the running profit and loss, and that's how we choose to do. Okay. Perfect. And also, I mean, wage inflation together with the OpEx increase maybe a fairly muted organic growth in full year, who knows. Would you be able to offset this in order To reach your financial target in the short term or at least have a margin increase given these sort of headwinds? I think we can increase the margin. Then we haven't set a timetable for when we should reach the last financial target we haven't yet met yet. But I also think that the day we meet that target, we will quite rapidly change it. So it is a moving target. But we aim we want to deliver 7% before we change that target. We think we can do it, but we it depends also on what kind of acquisitions we are doing. That's another way to increase the shareholder value, for example. It's not only to meet 7%. But the existing business shall be improving. And then let's see what kind of acquisitions we're doing. Okay, perfect. Thank you very much. Thank you. And the next question comes from the line of KJ Bon Weier from DNB Markets. Please question. Your line is now open. Thank you very much. I hope you hear me. Looking at acquisition, as you pointed out, you have had Quite a strong start to this year. And looking at the acquisitions you have announced, you're basically up already to the same kind of turnover as you did and managed to do in the whole of 2020. Is there some sort of catch up going on out there, both looking at, I guess, your willingness to take on new things, but also maybe from the sellers' perspective due to the pandemic. Is there anything like that playing out? No, I think a catch up effect. Some of these deals, if we had a different timing on some discussions, we will, of course has closed some of them before Christmas, etcetera. But that's not always something you can beside yourself, we are very sort of working with negotiations, etcetera, due diligence, etcetera. In some quarters, we are having more than others. It was quite low in Q4, slightly much higher Q1 this year already. We have done in one larger in Norway and one in Finland, it's still open in Sweden, for example, which is our largest market. We can yes, I think we can have the M and A machine to continue during the year as well. So we don't see this as a finished topic even if we are close to the financial target. We will continue to do acquisitions if we think that we can find the right targets with synergies. We're not only buying for the buying just to buy. We want to add value. We think that's the best way to do M and As in long term. And when I look at Norwegian acquisition, it looks to be, say, it's It's obviously a bit much larger than your normal kind of more bolt on type. Is that new segments you are entering with that acquisition? Or is Your strength in current segments. It's the same segments but in new geographies. So we are covering white spots, which, of course, gives us a platform to develop. This is an electric company in new areas, which gives us the opportunity to continue to develop plumbing, ventilation, security, sprinkler, cooling, etcetera, in the same area where we now have a new footprint. And this is a decent profitability kind of operation that's already at this stage? Yes, it is. Excellent. Then just looking at the free cash flow generation, which obviously was amazing during this year, Is there any temporary effect helping you in the working capital when you now end the year with timing effects or something like that, that we should be thinking about? Yes. We had postponed tax payments, and it's about we still have put on takes over roughly EUR 120,000,000. There's still nothing to say if you are looking at it from a total perspective, it's still quite a small sum, I guess, still fantastic number. It is. So now it is mainly improved working capital mainly from the from the net of the contract assets and contract liabilities. Excellent. And I just noticed there was also, say, a little increase in provisioning coming up to year end. Is there anything particular there? It's Slightly higher compared to sales than it has historically been. So No, we actually we have put on some provisions for some well, we have a couple of disputes that we've had for a long time. And so we have actually puts up provisions for them. So we have taken down the risk in the project portfolio, you can say. But I think it's fair to say that we have a very solid balance sheet. Yes, absolutely. So that is sign that it is positive. I think it is positive. Not really negative. No, it is positive because the risk in the petroleum has gone down. No. And I guess it even strengthens even the reported results even more in that perspective. Yes, exactly. Fantastic. Thank you very much. Thank you. Thank you. And our next question comes from the line of Stefan Anderson from SEB. Please ask your question. Your line is now open. Thank you. Just a question on margins, if you can help out a little bit. I know you don't give prognosis, but let's talk about the history try to get it through the history. If I look at Norway and Denmark, I mean looking at Norway first half, I think margins were performing rather well year on year. You had a little bit of easy comps. So on the second half, it was a little bit more challenging. And I guess it's the same pattern in Denmark, and we can see margins are down slightly in Denmark. If you could unfortunately, I got in a little bit late, so maybe you touched we haven't mentioned that in particular, but I think OSA and I and also the management in Norway and Denmark are slightly disappointed about the second half of twenty twenty. And I think maybe that tells you nothing about what we think and what we expect. It's the same there. I think that the portfolio now is better and more stable. We had some disappointment in the quarter. So some projects were not performing the way we wanted to. And also service, the decrease in service had an impact, of course, especially Norway, I would say. Especially Norway, yes. Okay. Then on the order intake, see if I might have touched this well. But I guess Is it primarily Sweden, where you've been, if anything, a little bit disappointed? Am I wrong there? But And if so, how do you view the market in Sweden? Is it still pricing pressure and you're standing on the sideline? Or do you see a change in behavior in the market? I think it varies from yes, in different geographies. But first, yes, we increased order intake in Denmark and Finland. We think that we have a really strong order position in Sweden already. I don't know if you saw the bridge regarding order intake, Stefan, if you or if you joined late after that. But if we adjust for a large order in Sweden that we received Q4 2019. And then we actually the order intake is also affected by the lower service days in the quarter. If we adjust for those two things, extraordinary things, we actually had to grow with 5.5% on the order intake quarter to quarter. We have a strong order position in Sweden in most of the places, part we will never and in some areas, there are pressure on the price. But in some areas, we are actually standing on the side and looking and waiting before because we can do that. And in some other areas, of course, we we actually take down our business before we price lower because we will always defend the margin. Margin is more important than volumes. I think a strong order backlog and price pressure in some areas, the demand is still good. Gives us the opportunity to, yes, do smart things. And I've been in this business for very long. The worst thing you can do is actually sell low margin projects because when prices picks up again, then you are busy to do to work on nonprofitable products. So we rather yes, we prefer the margins before volume. Okay, great. Final question then on acquisitions. Just the wording you're using there, the intention, your letter of intent with the Nynaele in Norway, I guess that's the only risk you see then for not landing that one. Is that Or is there something else that's happening you feel that's worrying? Ron, one second, I didn't understand. Sorry. No, yes, you're right in the press release that you have the intention to buy, the retrofit intent to buy. No, but it's the reason is that we are very close to yes, it's not signed but really, really closed. But we have had when we do the due diligence, we have discussions, meetings with management, and we thought that this will this is not impacting the share price, for example. But when we have talked to so many people, and it is so close to sign. So we said that we need to inform the market about this. So it is there. Extremely high likelihood that you will land this one. Good. Yes. It's not 100, but I don't know the margins way that we've been to under. Okay. Good. And then finally, on the pipeline, do you see more of these larger ones being available? Or how does the pipeline look? Yes, I think that the size of this one, there are not very many. But of course, there will be the target yes, the list of targets is long, and there are some large companies, and there are many small, of course. So there yes, I'd say there are more, yes. Thank you. That was all for me. And great work, especially with Finland there. It seems to be on track now, Pangly. That's great to see. Thank you. Thank you very much. Thank you. This was our final question. Please continue with your closing remarks. Okay. Thank you very much, everyone. Good discussions, good questions. And I think that Hopefully, we have continued the good discussion during the day with some of you who is listening in and others who are interested. And I'm really happy. We are not satisfied, as Ulfonso said. We are never in Bavidad, but we are really proud to be able to present the best quarter ever in a year like 2020. I think that is something extra. Thank you very much for listening. Bye bye.