Good morning, everyone, and welcome to Bravida's Q1 report. In this studio today, I have Bravida CFO, Åsa Neving, on my side, and I think we start immediately on slide three. I think it's even more important than ever to remind you about our business model and the low risk we have in our business. As you probably heard me telling you a couple of times, we have diversified end markets, which means that we have different types of customers in different segments in four different geographies. We also have a very low customer concentration, and we have small contracts and a lot of service, and this all together means that we are a very stable company and not dependent on any certain markets. We are a business that is dependent on very many different local markets, and I think that's something that we'll be seeing in the coming quarters.
We have more than 55,000 customers, and after Q1, we have an LTM sales at SEK 20.8 billion and LTM EBITDA of SEK 1,247,000,000 million. On the next slide, I will take you through the highlights for the first quarter. Net sales grew 8% to SEK 5,400,000,000 million, and we had organic growth at 2%, and acquisitions contributed with 7%. We had organic growth in Sweden, Norway, and Denmark. The servicing sales growth was 11%, and installation sales growth was 5%. And again, we have a really strong order backlog, record high level, close to SEK 15 billion. It's 11% up year on year. We also have a good continued momentum in the order intake at SEK 5.7 billion. And if you compare to last Q1, it seems like we have a slowdown in the order intake, but the reason behind that is one of the large contracts from Bypass Stockholm .
If we adjust for that, we are up 8% also regarding the ordering intake. We have a strong ordering intake in Sweden, Denmark, and Finland. Regarding the EBITDA, EBITDA increased by 8% to SEK 272 million , and margin is unchanged at 5%. EBITDA margin is improved in Norway and unchanged in Sweden. I think the cash flows may be, among many good things, may be the star in this report. We had a cash conversion to 127%, which of course is strong and a good thing that actually tells you about the stability we have in the business, a cash flow that we can use to develop the company further. It was improved to SEK 560 million . We had a working capital of minus SEK 1.3 billion or minus 6.5% of sales. Net debt is down at one times EBITDA on LTM basis, which is the lowest so far.
Also a good position to have in this type of. It's always good to have a low debt, of course. Acquisitions, we have finalized four acquisitions in the quarter, adding SEK 239 million, and we still see a good pipeline, and we think that we can continue to do acquisitions in the future as well, of course. On the next slide, we will try to guide you through the Corona impact so far and how we will handle the situation. On slide five, you can see that we so far have had limited impact from COVID-19 in the first quarter. Of course, we also have higher sickness absence, but it's manageable, and it's a bit different from country to country. Of course, it is the highest in Norway and Denmark and slightly lower in Sweden and Finland.
But already now we can see that it has gone back, not really to the normal, but very close to. So it's already improving. We will, of course, use temporary layoffs. And in most of our markets, we have financial support from the government to do this. Of course, we have uncertain market conditions ahead, but we have a good order backlog, and we have a visibility in the same, and that's regarding the installation business. And remember that in the order backlog, it's only the installation business that we take into that. The servicing business is coming on top of that. We have low fixed cost, which gives us the possibility to adjust our cost base. And our mantra, our culture, it's margin over volume, and we will defend the margin even if the volume decreases.
So we will manage a lower demand when or if it occurs with focusing on the margin. And that will, of course, could mean that the volume goes down, but we can defend the margin quite okay. On slide six, I will describe why Bravida is well positioned to manage a downturn in the economy. And I also think this is also the reason behind why I think Bravida is a good investment. We are late cyclical nature of the, yeah, we are late in the cycle. And our business model, Bravida's business model, enables predictability and timely adjustment of the cost base. We have a very flexible cost structure, which gives us the opportunity to adjust it quite quickly, and we can do it if the demand goes down. Around 8%-9% of our cost is fixed.
And if the volume goes down, we don't need material, we don't need the labor cost, and we don't need subcontractors. And that's the reason why we can adjust the cost that quick and also defend the margin. That's the reason behind that. But there are some advantages in this type of market as well. Customers prefer strong partners such as Bravida during uncertain times. They want to have a partner that they know can deliver the services in 18 months from now as well. And that's, of course, a big advantage for us. And the servicing business will recover quickly as access to facilities is granted given underlying demand. The last couple of weeks has actually been that the servicing business has gone down because it's not demand-driven, it's more health-driven, because our customers are home taking care of children.
They are home because they are sick, or they don't want us to go into their facilities to do the services. And that phase is, it's close to always past. So I think that the servicing part of our business will recover and come back to quite normal levels very soon. We also, of course, will have potential for opportunistic acquisitions in order to strengthen our market position even further. Just to give you a reminder of how we handled the crisis in 2009, it was that the margin in 2008 was at 5.9%. It went down to 5%, and then the year after, we were back on 6% again. And that's an example during the crisis 2009. And my ambition is definitely that we can do the same if we need to do that this time as well. The sales and EBITDA are shown on the next slide.
As I said before, the sales growth was 8%, and 7% came from M&A, and organic growth was 2%. We have been in a negative growth phase, but we also said in the last quarter report that we thought that we will enter a new growth phase during H1 in 2020. And I think this is the result behind that. A strong order backlog, and we have a good momentum in the order backlog. So let's see how the market will affect us in the future, but we at least have a really strong position going forward. Sales increased in Sweden, Denmark, and Finland. EBITDA plus 8% to SEK 272 million and margin at 5%, and EBITDA margin improvement in Norway. It was slightly lower in Denmark, and that's due to higher administration costs related to both acquisition, but also that we expected slightly higher volume.
That's already something we are handling, and actions are taken. On the next slide, you can see that once again, our order backlog is at record high level. Order backlog is up 11% year- on- year, and the order backlog increased with SEK 500 million in Q1. We have increasing order backlogs in Sweden, Denmark, and Finland. In Norway, we have told you before that we are in an early phase in some partnering projects, and these projects will most likely come into the order backlog in the coming quarters. If we adjust for that, we are quite happy with the order backlog in Norway as well. As I said, and it could be worth mentioning again, order intake is down year- on- year, but if we adjust for the large contract Q119, we have a growth in the order intake as well.
Acquisitions are a big driver of Bravida's value. And on slide 13, you can see that we already have done eight acquisitions so far, adding SEK 483 million in sales. We have done acquisitions in Denmark, Sweden, and Norway. One slightly larger in Denmark, two in Sweden, and then we have also signed two more acquisitions in Sweden in April, adding SEK 191 million, and two acquisitions in May, adding SEK 53 million. And I think that explains that we have a continued strong pipeline. We can continue to do acquisitions, and we will do that at attractive multiples. But I will say that the COVID-19 pandemic will delay acquisitions in the perspective that we are very thorough when we're doing the acquisitions. We want to do a proper due diligence. We want to make sure that we know what we are buying.
Of course, there are some practical reasons why it might be a period of time where we can't do acquisitions. On the other hand, there will be some opportunistic possibilities to do really good strategic acquisitions the coming quarters, of course. And we have the cash flows supporting that. Now over to Åsa.
Thank you, Mattias. Let's look into the different countries that we have, starting with Sweden on page 10. If we look at the sales, we grew sales by 8% year- on- year, and 2% of that was from organic growth. The EBITDA landed on or was SEK 156 million. That is, and with the same margin as last year, 5.6%. The order intake decreased to SEK 2.9 billion. And then if you look at the comparative figures from Q1 last year, it included one of the Stockholm Bypass contracts, and that was SEK 1.1 billion. So if you exclude that contract, it was an increase of over 24% in the quarter. The order backlog increased by 14% year- on- year, and we also had an increase in Q1 of SEK 91 million. Moving on to page 11 and looking at Norway, we can see that sales decreased by 3%.
But if you look at it from a local currency perspective, it was an increase with 1%. We had a negative FX effect of minus 4%, and Norway had an organic growth of 1%. The EBITDA improved from SEK 45 million to SEK 54 million , and the margin also improved from 3.5% to 4.5%. And in the figures from last year's quarter, we had write-downs in two projects from the Oras acquisitions, and these projects are now out of our books. So that explains the difference in margin. The order intake was down minus 40%. Here, the FX effect also had a big impact. In local currency, it was down minus 16%. The order backlog was also down in local currency, minus 21%, but it increased in local currency.
As Mattias said, there are a couple of projects coming into the pipeline in Norway, and we also have some contract that was almost on the rim to be booked in Q1, but will end up in Q2 then. We are pretty comfortable with the situation in Norway. Moving on to Denmark, we had a very strong sales growth, plus 27%, and organic growth was 3%. The EBITDA increased from SEK 44 million to SEK 51 million. There was, although, a margin decrease from 5.2% to 4.7%. This is also, as Mattias said, this is due to the acquisitions that we did last year, and it's mainly because the volume is a bit lower than we expected, and that means that the admin costs are a bit too high, and we are working on that.
There was a strong order intake, plus 20%, and a strong order backlog of plus 26%. Finland, then on page 13. We had a sales increase by 3%, and this was all due to a positive FX effect. There was a negative organic growth of 1%, and this is due to that we have low volume in some of the branches. Looking at the EBITDA, it decreased, and also the margin decreased from 0.9% to 0.4%. This is due to that we have too low volume in some branches, so the admin cost gets too high. We also took some costs from restructuring, and we had some project write-downs. But all in all, we are taking actions on this, and we see, as we had said before, we see that it is moving in the right direction, but a bit too slow.
Moving on to page 14 and looking at the net debt and cash flow, and this is, as Mattias said, maybe the star in our report. We look at the financial position for Q1. We have a cash balance of SEK 1.1 billion. If you look at the financing facilities, they end up at SEK 1.8 billion, and we have financial leases from IFRS 16 of SEK 1 billion. So we end up with a net debt of SEK 1.7 billion, and we have an LTM EBITDA of SEK 1.7 billion, and this gives us a net debt EBITDA relation of 1.0. So very strong, and if you look at our operating cash flow, it has also increased from last year's quarter, so if you look at our financing, we have also further strengthened our financial position.
In April, we have signed a one-year term loan of SEK 500 million , and this is mainly to replace certificates that we have that are expiring in the coming months and to strengthen our position now when we're going into uncertain market conditions going forward. So all in all, and we also had cash conversion on 127%, so that is a record high. So all in all, we have a very solid balance sheet. We have a very solid financial position, and this puts us in a very good position and shape when we are now facing some uncertain outlooks going forward. Next page, financial targets on slide 15. We have, as you may know, updated our financial targets, and we presented them at the Capital Markets Day in March.
So if you look at our sales target, we have a target of more than 5% sales growth, and this is a combination of organic growth and also contributions from our bolt-on acquisitions. And in Q1, we reached 8%. We also have an EBITDA target on more than 7%. We haven't reached that so far. We, of course, believe and thought that we were almost there, but now with these uncertain market conditions, it seems maybe unlikely to reach it this year, but we are determined that we will do that in a short time. Cash conversion targets more than 100. We reached 127. So very strong. And also we have a target payout or a dividend payout ratio of more than 50% on a dividend. And this has been we haven't paid out any dividend this year.
The board withdrew the proposal regarding the dividend payout, but we aim to have an extraordinary annual meeting in autumn to address this issue if the circumstances allow us to. Our net debt target leverage ratio is less than 2.5, and we are well below that with 1.0. So this, especially the cash conversion and the net debt, feels really good to have in the current situation. Thank you. That was all for me. I will hand over to you again, Mattias.
Thank you, Åsa. And look at slide 16 then, the slide we usually call our bragging slide, but I don't know. I think this is what you get when you have some relations with Bravida, a robust and resilient cash flow generator. And I think this is not very many that can show the same. We have had a very stable growth, a combination of organic growth and acquired growth, of course. And we also have increased the profitability in a very stable way and a really strong cash conversion. And no matter the type of market we are in, we will continue to create good cash flows that we can use to develop the company. The organic growth could be a little bit more tricky, but we will always have the possibility to continue to create value throughout our acquisition.
I don't think you should underestimate how we can handle slightly lower volume to adjust our cost base, our focus on margin over volume that we always are working with. And margin focus before volume is, of course, a way that we can handle the risk. And if we adjust, we don't need material, we don't need subcontracts, etc., if we don't are delivering the installation projects, for example, which means that we can defend the margins. So a summary on slide 17. So far, limited impact from COVID-19 in Q1, but of course, the market conditions are a bit uncertain ahead. Sales increased 8%, which is well above financial targets, a mix between acquisitions, and we also had come back into organic growth. Installation order backlog at record high level, close to SEK 15 billion, and we still see continued stable demand for servicing. The margin is unchanged, 5%.
Margin is improved in Norway. M&A execution on track with a healthy pipeline. Four acquisitions completed in Q1 and SEK 239 million added in sales. Net debt that I also told you about, 1.0 times EBITDA on LTM basis, and that's including the new rules or standards for IFRS, which is below our financial target as well. Strong operating cash flow, LTM SEK 560 million, cash conversion above financial target of 127%. Growth of EBITDA, 8%, is extremely good. And finally, my ambition is to strengthen Bravida even more during the next 18 months, no matter the market condition. And that's said in relative terms. And I think you will realize that Bravida is a very stable business with potential to handle different types of markets. We will do it by adjusting cost when needed and defend our margin. Margin over volume will be our focus the coming years. So by saying that, I think we can open up for some questions.
Thank you. Ladies and gentlemen, we will now start the question and answer session. If you wish to ask a question, please press star and one on your telephone keypad and wait for the automated message advising you your line is open. Please clearly state your first and last name before you ask your question. If you wish to cancel the request, please press star and two. So once again, that's star one to ask a question and star two to cancel. Thank you. Your first question comes from the line of Gustav Norström of Nordea. Please ask your question.
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Hi, it's Carl Aniston here from Nordea. Can you hear me now?
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Okay, okay, brilliant. First of all, you commented that you see improved sick leave rates at the end of the quarter, I guess. Should we expect them to be more or less normalized on all your geographies, or is it just mainly the Swedish market that you see this development?
I think, of course, we saw an increase in sick leave the last two weeks in first Norway and Denmark. And it's not only that people are sick. They have been needed to be home to take care of children that are not in school, etc., etc. Then in the beginning of Q2, the sick leave has gone up in Sweden as well and been quite stable in Finland. But what we can see now is that it's already now is not really back to normal levels, but close to in Denmark, Norway, and it's going down in Sweden as well. But I think that's very much depending on what will happen in the different countries, in the societies. But so far, the trend is close to normal. But let's see what happens. It's hard to forecast, of course.
Okay, perfect. And also regarding the order intake, I mean, adjusting for Bypass Stockholm last year, it seems fairly solid. I mean, can you give any comments on the monthly order intake development throughout Q1 if you see a weakening development in the end of March? And also on that note, if you could perhaps comment anything on the Norwegian order you expect to book, if you can give a range of the size of these projects, we can get a sense of the order intake development.
Yeah, I think the first question about the order intake timing in Q1, there is no difference actually in Q1 compared to Q1 last year. We still see a strong, good demand for our services, and that's actually in the start of Q2 as well. But again, you need to remember that we are late in the cycle, meaning that we are pricing or negotiating with projects that have been started since six months back. But that's also the beauty with our model. That means that the things that are not happening now are something that we can forecast quite quickly and will probably affect us in Q3, Q4. And that's the reason why we can have the advantage of adjusting our cost in time to defend the margin. So let's see what happens, but so far, no changes. And the second question was.
On Norway, you talked about. The problem becoming projects or orders.
We have a couple of projects that we are in the first phase, early phase, where we together with the customer and other partners are pricing the projects. It's hard to. I don't want to tell you how much it is, but it's normally quite large projects like hospitals, etc., so it's significant volumes in that perspective, so we think that the order situation in Norway is okay as well, even if we present some negative numbers in Q1, so I think that's how I want to answer that question.
Okay, perfect. And on the service side, have you seen or have you started to see service projects towards public buildings, schools, for instance, starting to pick up again? Some schools, for instance, are starting to reopen. Or are these customers still a bit reluctant to sort of have you in the building?
I think the challenges we're having regarding that segment are actually in Norway and Denmark, and they are open up now this week or next week. So we haven't seen that change yet, but there is no reason why the demand shouldn't be there when they come back to work, of course. In Sweden, we have a handful, fewer than 20 places where we haven't been able to come in to do our services. So that's a small impact. So yeah, my estimation is that in Denmark and Norway, it will quite soon go back to, yeah, close to normal, at least very, very soon, if they do what they have decided to do.
Okay, perfect. All for me.
Thank you.
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Hello, sorry. This is Lucas from DB. Can you hear me now?
Yes, we hear you. Yep.
I'll have a few questions. Just on the top line, organic growth, can you—I mean, if there's any difference between kind of January, February, and March, was it stronger earlier in the year and then you saw a dip? And was that dip any meaningful? And also, can you speak about what you see in terms of organic growth now in April, not necessarily in numbers, but if there's any issue or drop in activity?
No, I think, as we said after the Q4 report, we thought that we were going into a growth phase in the first six months of 2020, and actually, we thought that we should start to grow or would start to grow in Q2, but it actually already started in Q1, which is, of course, very good, and I think the trend has been positive during the quarter from an organic growth perspective, and we can't see that that has changed in the beginning of Q2, if you exclude, of course, that we have had a higher sick leave in Norway, Denmark, because of the things I already said, so the underlying growth has continued so far, but let's see what happens.
Okay. And on the services side, I think you mentioned that actually, because of lockdown measures, especially in Norway and to an extent in Denmark, you were not necessarily able to enter client premises, and that you might see some slowdown on the services side. But it doesn't seem to be the case when you look at the growth you delivered there. Is it something that's going to impact later, or it was actually a very small impact in the end?
I think in Norway, we have handled the situation quite very well because people have been home from work or been in quarantine because they have been out traveling, etc. So we have had lower activity in our production in Norway because people haven't been at work. In Denmark, we have had the possibility to actually move servicing resources to the installation business. I think that's another way we have handled it. And I think that's also one of the advantages of being big like Bravida, that we can move resources from service to installation, from one city to another, etc. So I think that's the reason why it's not that visible in the numbers. On the other hand, I think that we have had a slightly higher margin if we have had full production the last two weeks in Denmark and Norway as well.
Yeah. And also on the free cash flow, I think it's particularly strong. Can you detail a bit more what's driving that? I think you mentioned in the release the receivables. Can you just explain a bit what was done or what has driven that?
Excuse me, I couldn't hear your question. Was it about the working capital?
Yeah, exactly. What's behind it, exactly?
It is an improvement in customer receivables mainly, and also to some short-term loans that are increasing. So we have some prepayments that haven't been done, so to say. But it's mostly the accounts receivables.
Okay. And then the final one, when we look at what's happening in the market, and maybe there's a bit more risk in H2, and also when we look at the balance sheet, I think, I mean, it's not necessarily your decision, but the decision on the dividend seems quite conservative. Do you think it's still on the table to come, or was it just a bit cautious and there's still possibility to see a dividend?
I think there are probably many reasons why the board did what they did, and let's see what happens. That's, as you said, not our decisions. I think being smart, and I think it's been very common to, at least Sweden, to actually postpone the decision to see what happens in the market. I think low debt and a strong cash position for Bravida means that we have even more possibilities to develop the company, create value for the shareholders through acquisitions, M&A. Let's see what they decide to do. Of course, I think the board definitely, when they look at the position we have in the company, have the possibility to take the decision they want to take.
Okay. Thank you. That's all for me.
Thank you. Okay, it doesn't seem like we have any more questions, so if that's the case, thank you very much, and hopefully we can see you soon in person, but take care. Bye.