Secure one call. Here in the room, we have our CEO, Martin Jacobson, our CFO, Casper Tamm, and me, Magnus Blomberg, Head of IR. With that being said, I hand over the word to Martin. Please go ahead.
Thank you, Magnus. Good morning also from me to everyone. I am glad to present the Q1 results for Fasadgruppen Group today. Let's dive into the presentation. First of all, we implemented a new organization here in Q1, a more flat organization, and a partly new group management team as well. I am pleased with the development so far with the organization in place and the new group management team. It has been well received throughout the organization. In the quarter, we saw a continued organic sales decline, roughly 10% down. That was mainly due to the low new build activity we have seen in the market. We are pretty hesitant markets around new build activity still. It is pretty early to tell here where the new build market is going. In the quarter, at least, we saw still muted activity.
In Q1, we also achieved an adjusted EBITDA of roughly SEK 77 million compared to SEK 20 million the same period last year, meaning a margin of roughly 6.5% compared to 1.9% a year ago. It was a strong contribution from Clearline in the results. We will get back to that. In the important order backlog, we saw an organic growth by roughly 4%, mainly driven by the Swedish entities. That was the first organic improvement in the order backlog in the Swedish entities since 2022. That is quite positive as we see it. For the first time, we also present our new segments for transparency reasons, mainly. We have divided into three divisions, our segments called Total Solutions. The Total Solutions segment, that is where we could say mainly have the full ownership of the project. We coordinate various services on the building envelope.
That's the main focus for the Total Solutions segment. Whereas in the Specialist Solutions segment, we provide a niche service and mainly work as a subcontractor. In Clearline, it's quite obvious it's only Clearline. We have it as our own segment due to its large importance for the Fasadgruppen Group. Looking at our net debt to adjusted EBITDA pro forma, that came in at 3.25 times here in the end of March. It's down slightly from Q4, which is noteworthy. There is still focus here on taking leverage back below 2.5 with our financial goals. Moving on to net sales, we saw a total increase of 12.2%. As I mentioned, it was down roughly 10% organically. Some more flavor to that, if we divide it into various geographies. In Sweden, we saw double digits down. In Denmark, it was slightly up.
Norway and Finland slightly down. In Sweden, as I mentioned, especially then we saw continued low activity in new build. Remember here that back in, go back to 2023, whereas it was an okay new build activity, there were some spillovers into Q1 2024. That affects these numbers. If we move on to our segments, our new segments, Total Solutions segment was down roughly 10%, of which 14% was organically. The Specialist Solutions was actually up 3.4% in total, but down 6% organically. Both of these segments were mainly affected by the lower activity in Bruton. Clearline had sales of SEK 174 million. We do not have a comparison number here since they were acquired in the last of October last year. Yeah, we can move on.
Looking on the results on an adjusted EBITDA level, as I mentioned, the result of roughly SEK 77 million, margin of 6.5%. All in all, we could say, of course, Clearline is performing according to plan, which is important for us, obviously. Of these SEK 77 million, it stood for roughly SEK 61 million of the adjusted EBITDA. Looking at the Total Solutions, they came in at an adjusted EBITDA level of SEK 23 million, roughly a margin of roughly 4% compared to 5% a year ago. On Specialist Solutions, we saw an adjusted EBITDA level of SEK 13.5 million, a margin of 3.2% compared to 1.3% a year ago. Looking at the total adjustments of the group, it was roughly SEK 2.5 million. Nothing special there, really.
I'm pretty glad to see that the EBITDA, if we take a look at it on the last 12 months, has improved here. If you compare, if you take a look at the graph on the right-hand side, the trend is going in the right way. Moving on, take a look at the order backlog. As I mentioned initially, we saw an organic increase in the order backlog of roughly 4%. That was mainly driven then by renovation demand. If we take a look once more at the various geographies, it was quite flat development in Denmark. Norway was actually down significantly compared to last year. Finland was significantly up. In Sweden, it was also a strong set of numbers compared to last year here, if you take a look at the organic order backlog.
Obviously, the strong increase in the total order backlog was heavily affected by the Clearline acquisition, which was not part of the group a year ago. Now we reached an order backlog of roughly SEK 4 billion here. When we take a look at the order backlog margin, that was pretty stable compared to the Q4 numbers here. Nothing really dramatic in the order backlog margin since Q4. If we take a look at our various segments, in Total Solutions, we saw an organic decrease of roughly 2.2% in the order backlog, but up somewhat on the normal total level. Specialist Solutions, we saw an organic increase actually by roughly 9%. Also up on a total setup level. Clearline's order backlog came in at roughly SEK 800 million, somewhat affected by FX.
What you could say in general is that Clearline was seeing very strong demand throughout the quarter. Their kind of niche services is still very much in need going forward as well. Some general comments as well around the market, I would say, is we've seen obviously lower interest rates. All in all, that's net positive for us and our customers. We've seen, especially in public tenders and housing associations, positive development around the demand situation. Moving on to cash flow. Since we've seen now that the business is ramping up, that has had an effect on our cash flow. You could say the working capital is roughly SEK -127 million. That's an unusually, you could say, strong number in one way because it's a net positive for us that the business is ramping up.
Of course, it negatively affects our cash flow in that instance. Then we also have a one-off that is in conjunction with the Clearline acquisition of roughly GBP 3 million that was paid out here in the quarter. You could say a delayed payment in conjunction with the Clearline acquisition. Yes, moving on. Okay, we took a look at the financial capacity and our net debt. We saw the interest rate was pretty stable. We continued with the interest period of one to three months. As I mentioned initially, the net debt to adjusted EBITDA pro forma came in at 3.25, somewhat down compared to Q4. This is obviously a focus area for us. We continue to monitor this going forward as well. Yes. Okay, then we wanted to give also a deep dive in historical cash flow for Clearline.
Since it is so big a part of the group, and we wanted to give some granularity and transparency for Clearline. All in all, Clearline delivers strong cash flow with low CapEx needs. As you can see in the table on the right-hand side, if we take a look on the three-year period, that is closely similar to Fasadgruppen's fiscal year. Remember, Clearline had a fiscal year ending in the end of March. The three-year average of the cash conversion is roughly similar, as you can see. Clearline had roughly 87% cash conversion, similar to what Fasadgruppen had in roughly the same period. We can expect similar pattern as Fasadgruppen in cash conversion-wise going forward. Hopefully, we can improve it somewhat. Just to clarify, there is a line here called EUT contributions in the Clearline statement.
That is then connected to when Clearline acquired, we could say the employees and the management acquired the company from the entrepreneur and repaid throughout these EUT contributions to the entrepreneur. It's just important to note that was a big, you could say, distortion in the cash flow. If there were any questions about that, then we've shown this now what happened, so to speak. Nothing unusual there. With that said, I want to reaffirm our priorities now and forward. Still focus on profitability and leverage, obviously. This is the same as we mentioned in our capital markets day here last year. Of course, we want to ensure the continuous improvements in our subsidiaries. We want to still focus on efficiency within the group and the cooperation within the group.
As I mentioned initially, with the new organization in place, I see this as going according to plan. I am pleased with the development so far. On the leverage side, we have talked about that. Of course, it is a focus area to decrease leverage. Okay. Some concluding remarks before we open up for questions. We have seen a stronger order backlog and some positive signs in the market with that, especially in the Swedish market. There is still low activity within new build. It is too early to tell how the year will pan out, if you put it like that. If we look at what we have seen business-wise, it is really ramping up, and that is having a negative effect on our cash flow here in Q1. I am also pleased to say that Clearline is performing according to plan.
Focus then forward is still on profitability and our deleveraging, as we talked about. I think that sums it up pretty well. With that, we open up for questions.
To ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Elvin Rolder from Carnegie Investment Bank AB. Please go ahead.
Good morning, Martin and team. I hope you can hear me well.
Absolutely. Good morning.
Everything's going well.
Absolutely.
Good morning. I just have a couple of questions here. If I begin maybe on the cash flow side, I can see that, I mean, the working capital is quite negative here in Q1. I can also see we have higher adjustments for non-cash items. You mentioned that there was a GBP 3 million there from Clearline affecting the working capital. Is that portion offset by the non-cash adjustment items as that is not seemingly fully explained by D&A items and such? Can you give a little bit of comment so we understand the dynamics of the working capital here in Q1 and how we should think about that in Q2 and the coming quarters?
Yeah, mainly you could say that working capital, that's such a big negative, is of course in one way a positive, as I mentioned. Since when you start a lot of new projects, there can be some initial purchasing around materials, as an example. I would more put it like with this kind of working capital situation, you could more expect an increase in the business. The business is ramping up in that instance. I think it's too early to tell whether how this will pan out for the rest of the year, if that's the question. I think in Q1, there has been a lot of project starts. It's more like you could see that this is as a startup cost, you could initially say.
I don't know if that answers your questions, Elvin, or if you had any more thoughts about that.
Yeah, partly, but just one question maybe so I understand. Because the adjustment for non-cash items is, let's say, SEK 135 million here, whereas depreciations and amortizations and such were SEK 75 million, if I'm not remembering wrong here. Is the difference there explained by this GBP 3 million related to Clearline? Or what explains that difference? Because it seems that it's offset, the negative.
Okay. Sorry. Yes, it's Casper here. No, no. I think when you look on the adjustments for non-cash items, the big difference there is the exchange rate differences which we have had on the income statements. That is the main reasoning because they are not cash flow driven, so to say. It's just recalculations, as you say, of our loans and things like that. That is the main reason why it's increasing here.
Okay. Perfect. Thank you. I mean, you talked about a little bit, I would say, more positive renovation side of the market, whereas new build continues to be quite low. Is it possible to give any comments on the margin for the projects that you're taking in now on the renovation side? Is it a similar kind of pattern as we've seen the last couple of quarters here where it's still, I mean, lower prices than normal? Or have you seen any changes there, Q over Q or year over year that you can comment on?
Yeah. We mentioned regarding the order backlog margin was quite stable in Q1 compared to Q4. It is, I could say, a mix of new kind of new orders, I would say. Of course, in some geographies, if you put it like that, like Sweden, we've seen an increased demand and henceforth we've also managed to raise prices, but somewhat then offset in other markets. As I usually say, remember that the order backlog margin is not the true answer to what will be at the end. You could say this when you write the contract is one thing with a customer, but that's when the project starts. You have a lot of work ahead of you, of course. With that said, the project will move forward in either a better situation than you thought initially or worse.
There are various things that affect projects along the way. It is not like the initial price is everything, but in total then, as I mentioned, it is on a stable set of levels since Q4. In various geographies, there are some positives, but also some negatives in other geographies. At the end of the day, it does not give the full picture because, as you remember, Elvin, we talked about this before, but usually a project grows by roughly 20-30% along the way in various extra works, you could say.
Yes. Good. I just have one final comment here regarding, I mean, calendar basically in Q1. Has there been any help here in Q1 that we should take into account going into Q2 with the effects of Easter? Or how should one think about that coming into Q2?
Yeah. Good question, Elvin. Yes, of course. Since Easter is in April this year and last year it was in March, March this year, of course, obviously was somewhat helped by that. It would be somewhat negative then for this year, absolutely. I would say it's hard to tell exactly how much it will affect. Since it was in another quarter last year, that distorts the comparison figures, yes.
Okay. Perfect. Thank you. That was all for me. Thank you for taking my questions and have a good day.
You too. Thanks.
No more questions at this time. I hand the conference back to the speakers for any written questions and closing comments.
All right. We have a few written questions here. The first one from Max here. If you could elaborate a little bit on the Clearline order book decline and also what Clearline the comparable numbers to Q1 2024.
Yeah. Yes, absolutely. Yes, there was a decrease in Clearline's order book. That was somewhat, you could say, distorted by FX since the British pound was weakened here compared to the Swedish krona. We also see that it is more of a seasonal pattern in that instance. It is nothing unusual that I am worried about in the order book backlog for Clearline. Regarding the comparison figures for Clearline, we write that in the report as well. We say that for Q1 here in 2025, the margin for Clearline was somewhat better than the average margin in the same period in the last couple of years here. That is net positive on that side.
Right. Moving on, if you could elaborate on the, so to speak, old FG, the Nordic Fasadgruppen, which has margin in line with the comparison period. Do you see any improvement of profitability going forward?
Yeah. The usual, let's say, outlook question. I mean, obviously, there are positive signs in the market, but also, I mean, some negatives. It's actually too early to tell here, Max. It's a mixed kind of set of numbers in that instance. Obviously, we said it before that on the net side, 2025 has the opportunities, if you put it like that, to be better than 2024. I think I can stand by that comment still.
Thank you for that. Moving on, we have several questions, of course, related to our leverage. Could you elaborate a little bit on that part going forward to Q2 and Q3?
Yes. Of course, leverage, we spoke about that in the last quarter report as well regarding our covenant situation as well. If you remember here, towards our banks, we have an agreement in place that the cap on covenants should decrease during 2025, you could say. Obviously, a key focus area to be within agreed levels. There are various, let's say, solutions to that. We want to optimize Fasadgruppen in that way that we still run as efficiently and profitably as possible, but still have that, let's say, covenant level in regards to the situation. I'll put it like this. The net debt situation is, yeah, I've stressed it enough, but a focus area. Throughout the year, we usually put it like this.
Usually, we have a large dividend or a dividend list that is due to be paid here in Q2. We do not have that this year, so that helps. We have taken a lot of various actions around cash flow and leverage, which we see as good measures in order to be within our agreement.
Thank you for that. Speaking of cash flow, big increase in the working capital. Do we see any credit loss risks here?
Not really. Of course, there were some bankruptcies, especially in Sweden, on large construction companies. We have talked about those before. We were affected back then. We do not see any real credit risks here at this moment. Of course, we continue to monitor that closely. You can also be quite proactive in various projects, which we are, I see. It is also a focus area for us to not end up in a situation like that. You can also insure some credit, you could say, some invoices in that instance. That can also affect positively in such regard if something like that would happen.
Thank you. You mentioned that our orders typically grow at 20%. Do we see how was the sentiment among the extra work developing the quarter?
Yeah. No, but this is also affected, you could say, by the competition landscape, competitive landscape. If we take Sweden once more, which was affected, especially in 2024, where we had, you could say, various competitors that were into this kind of extra works. Some actually went bust. There have been a lot of bankruptcies within the construction sector in Sweden, which is ultimately positive for us. We have also seen, I do not know if people have read that, but there is a new, let's say, government subsidy as well, meaning that it could be positive for these kind of smaller players to be more affected to, let's say, the smaller works side towards private individuals because they get a new kind of subsidy from the government. That is also an indirect positive effect for us as we move towards those kind of projects instead.
We are, as you remember, mainly a business-to-business company then, of course. I mean, with that said, the buildings that we work on are still in the same bad shape, if you put it like that. Usually, still the same amount of extra work that is needed on each of these kind of older buildings that we renovate. With that said, since Q1 is, remember here, the smallest kind of quarter for us as well. Now that the business is ramping up, this is something that we will monitor, of course, closely and be as proactive as you can in that instance to take full kind of advantage of the situation. Hopefully, we can see some dynamics going back to, let's say, the more normal pattern.
Thank you. Another question. Are you planning to buy any more companies in Denmark since it is going quite well?
Denmark is going quite well, absolutely. Of course, we are looking into acquisitions in our various, let's say, geographies. Of course, as we mentioned, focus is now on profitability and leverage.
Thank you for that. If you could elaborate on the margin going forward, do you have any comments on that, Martin?
The margin going forward.
Mm-hmm.
Not really.
All right. We have another question here on the line. Operator, if you could please connect us with Elvin.
Question comes from Elvin Rolder from Carnegie Investment Bank AB. Please go ahead.
Hello again. Sorry, I just have one more question regarding the timing of earn-out payments. I see you have, is it SEK 88 million here that is expected to be paid out within 12 months? Can you give some comments on the timing of those cash flow outflows, so to say?
Yeah. It's not been finalized yet, Elvin, so it's too early to tell, actually. Within 12 months, but not really any more comment on that.
Okay. Thank you. I'll get back again.
Yeah.
All right. So no more questions for now. I'll hand over the word back to you, Martin, if you have any concluding remarks.
Yes. Okay. Thank you, Magnus. I am pleased with the development for the organizational structure so far. We are poised to take full advantage of the market situation here for 2025 going forward. I am excited for 2025 and hope that you are too. Next week, we will have an annual general meeting here. If you have the possibility to attend, you are more than welcome. The last day to notify your attendance is today. I want to say you are more than welcome to attend as a shareholder. With that, I would like to wish you all a pleasant day and hope to see you again in the next quarter, which we will present in August. Okay. Thank you.