Hello everyone, and thank you for joining us on this Q3 presentation 2021 for Instalco. With me today I have my newly appointed CFO, Christina Kassberg, and also Fredrik Trahn, head of IR. Just a short introduction of Instalco. I think many of you already know us. Next slide, please. We're a leading Nordic installation group. We do heating and plumbing, electrical installation, ventilation, cooling, industry, and also our technical consultants that I will come back to a little bit later in the presentation today.
Roughly 100 subsidiaries with highly specialized local companies. As you can see, we're spread out in Norway, Sweden, and Finland, with Sweden being our largest market. We have roughly 4,600 employees, highly decentralized structure with the support of a small central organization. We have a strong profitability with high margins over time. That is Instalco in short. Next slide, please.
I also, before we start going into the numbers and everything, just wanna say that we ticked off a milestone in the history of Instalco just recently with our 100 subsidiaries coming into play here with our 100th acquisition. For me, it feels a little bit extra special since I was there when we founded the company in 2014. It has been an intense journey since, and we are creating synergies and continuing our acquisition agenda, and we are the best harbor for installation companies. Here you see a little bit of the team. You have to the left there, Gustav, Head of M&A.
You have Jonas, who is part of our area business management team. We have the three sellers from Kompressorteknik, which was our 100th company. To your right there, you have Johan, head of our business area, Nordics and Industry as well. I'm also surrounded by a great team. If you go to the next slide, please. We talk about great team. We also have a newly appointed CFO. For those of you who don't know, I stepped over from the CFO role to the CEO role as of the first of September.
I'm very pleased to now announce that Christina Kassberg will take over the role or has taken over the role as of the first of November as CFO. Christina, maybe you can just say a few words about yourself to the audience.
Thanks, Robin. Dear audience today, my name is Christina Kassberg, and I joined Instalco, as Robin said, November 1 as the new Group CFO. I'm both happy and proud to be on board and to get the opportunity to work closely with you, Robin. Who am I for you that are curious? I have more than 10 years experience as CFO in stock listed company, also in company with a similar business model as Instalco. With my experience, I can contribute with solid financial professionalism, industrial experience, as well as leadership skills.
Actually, I have followed Instalco from the side a couple of years now and find the company truly successful, well run and sustainable. Instalco has good profitability and quarter after quarter deliver on the targets. We create value through our local subsidiaries, and they work closely with the customer relation and drive all the sales activities and have full profit responsibility. Furthermore, the local subsidiaries gets inspired in collaboration with sharing best practice and cross-selling.
As Robin said, on central level, we have a small, efficient, skilled team that operates and serve the units with business development, acquisition support, leadership, and group finance. To summarize, I joined Instalco because I personally truly believe in the business model and the value ground. Key for Instalco success is the decentralized structure, doing business close to the customer in combination with an M&A agenda. I really looking forward being a part of this journey with further growth and value creation.
We are very happy to have you on board and really looking forward to working together, with you and the rest of the team as well. If we go into a little bit more of the quarter report, next slide, please. Here you have the key financials for the last twelve months. You see that we have surpassed the SEK 8 billion mark when it comes to net sales. We have a adjusted EBITDA of a little bit above SEK 700 million, coming at 8.5% EBITDA margin. We have a strong order backlog of almost SEK 6.5 billion, roughly around a little bit above 75% of our net sales. As I said, 4,600 employees.
We have in the last 12 months done acquisitions for SEK 1.4 billion in turnover. That's roughly Instalco in numbers. If you go to the next slide, please. You will see here the highlights of Q3. Stable quarter overall, results and margin. We are still affected by the pandemic. I think it is. I want to stress this once again. I've said it many times before, 2020 was not the year for us when it comes to how you say that. We were not affected in 2020 by the pandemic. It comes now a year later, and that's what we have been telling the market.
We have been telling you guys over and over that 2021 will be somewhat tougher due to the fact that we are in the later cycle when it comes to production on the building side. With that said, I'm tremendously proud to say that we have 21% net sales growth. We are able to get an organic growth of 2.2%, which I'm very proud of. We have an extremely strong Segment Sweden, and I stress here, I mean, Segment Sweden has been in restriction mode, so to say, all in Q3 except the last week in Q3. So very proud of Sweden. Rest of Nordics are below desired levels. I will come into that a little later in the presentation.
We have been able to do six acquisitions during the quarter of highly skilled companies. I also wanted to add an extra here of a sustainability project that we have done, and it's a collaboration with a company called Wayout International, where we will contribute knowledge and also funding and management team. This company is a company that cleans water. If you don't know about the company, please check it out. I think it's a great company with an interesting future ahead of themselves.
Looking at the numbers, we almost reached SEK 2 billion in sales. We have an EBITA of SEK 171 million and 8.6% margin. The quarter is a strong quarter overall, and we are within our targets. Next slide, please. Net sales. As you see, net sales is coming mainly from acquisitions. As I mentioned, we have an organic growth here of 2.2%, which in a market like this is a strong proof of our concept that synergies can be made from this. I'm very happy with that.
If we move into next slide, please. We have the EBITA. I mean, we are well above our target of the 8%, so nothing to complain there. I would, of course, hoped for a little bit more, but I still think in a market like this, being above 8%, we are outperforming all our competitors in this. I think it is still a good result in a quarter like this. Next slide, please. Looking into the order book, we have a growth in the order book compared to last year.
We see a slight decline when it comes to total numbers, but still we have a backlog ratio of above 75% related to the 12 months rolling net sales, which is a strong order backlog. The reason for the slight decline in numbers is due to the fact that we took some large projects in 2019, beginning 2020. They came in beginning 2020 in the order book, and I'm referring to these larger hospital projects of almost SEK 1 billion in turnover. Of course, we're working our way through those projects. Still very strong order backlog on very healthy levels. Next slide, please.
Going in to Segment Sweden, a very solid result from Segment Sweden. Still able to get an 8.27% EBITA margin. Very strong order backlog in Sweden. Sweden is standing for the organic growth of 2.9%. Net sales growth of 24%. I'm very pleased with the result in Sweden, and we're doing a great job here. If we go into next slide, please. You'll see Segment Rest of Nordics. We were able to get a net sales growth in the Nordics. It has been a bit more lockdown here. The pandemic has taken its toll on us, and this time it's actually mainly Finland that's been taking a toll.
Those of you who follow the news knows that Finland is actually in a new, so to say, wave when it comes to the pandemic, which is affecting investments in Finland. If you look in the long term for Finland, you will see a lot of positive trends with large investments. We are also seeing, those of you who follow us, some results of the action plan that we launched in Norway a few quarters back. I'm also positive both when it comes to Finland and Norway. We are now able to travel to those countries.
We are able to meet people, look them in the eye, and I'm a true believer that we will get this back on its feet and come back to more desirable levels than that we are at today. However, with that said, we are at least giving a positive results in these a lot tougher markets in these countries. Next slide, please. Acquisitions, one of my favorite topics, as you all know. What's even nicer is to see that we cannot even fit all the acquisitions that we've done in 2021 in one page. I will actually ask you to skip to next page 13, where you have acquisitions continuing in 2021. As I said, we have done three acquisitions in the quarter.
Those of you who follow us know that we have done some more also now in Q4. It will be a very good acquisition year for us. We have a strong pipeline. Looking at the companies acquired in Q3, we have some specialization within the group here. We have very interesting companies joining the group. I'm very exciting to see how they can collaborate with the existing companies that we have. Overall you see from the quarter SEK 975 million in turnover so far, and adding to the ones we've done already in Q4, it looks like a really good year for us.
Next slide, please. The financial targets here, I must say we usually tick all the boxes. As you see here, I've decided to not tick the box, cash conversion. We'll come back to that. When we're talking about growth, we are well above our target margin. We are also within our target for the year -to -date, so I'm very pleased with that. As we have said, our goal is to reach 8%, and we are year -to -date at 8.2%. I think that is very solid margin in this environment that we are today. You see the capital structure, it is a little bit higher ratio than you might be used to, but it has to do with we've done a lot of acquisitions lately.
Also of course, it affects a little bit due to the cash conversion here as well. I think it's also good to stress that the cash conversion is down. We see the same with our peers at the moment, so there is a little bit shift in the market. We are working on this. We have a new CFO here at the moment also sitting beside me. I think we will get this back on its feet and where it's supposed to be now we have some more arms and legs working on this as well. Yeah, dividend policy is not much to comment about.
Next slide, please. The CEO's theme, this is something new for the quarter, where I will talk a little bit about what is happening in Instalco and give you guys a little bit of flavor. I'll shortly this time talk about technical consultants. Next slide, please. Slide 16. Instalco subsidiary Intec plays a key role in this area of technical consultants. Intec's core business is project planning and designing. They work and offer a range of services as you can see on the slide.
Intec works with all types of customers in all phases of the project or even in the whole life cycle of a building. Intec's technical consultants are typically engineers specialized in areas like electricity, heating and plumbing, ventilation, energy industry, fire protection, that type of specialization. Mainly specialized in the same areas as we do installations. If I can go to next slide, please. This is to give you guys a short summary of where we are today with this project.
This was a project that we started, actually basically in the beginning of the year. We have so far, during the third quarter, we have started 11 companies in 20 cities in Sweden. We have 230 coworkers working in these companies. We have gathered 400 clients. We have done 1200 assignments year -to -date. We are also seeing that the first startup companies that started a few months ago, they are already starting to show profit.
It's a tremendous strength that we can show here with the Instalco model and the collaboration between our companies. I think we can move on to next slide. Why do we do this? Why technical consulting? I think the main reasons is these four reasons. We get early involvement in the project. We get closer collaboration with the customers. We have a sustainable and energy-efficient solutions.
The third part, which I like the most actually, is that we combine the theory with the practice, so we can offer a very good solution for our customers, combining these two, and we are already seeing that in a lot of the projects. I would be lying if I said I hadn't looked at the margins of this business area as well, and they are somewhat higher than we have in the installation market. This combines, gives us a very unique offer to the client, and I'm very happy to have the technical consultants on board, and they're doing a tremendous job. If you go to next slide, please.
I wanted to comment on a few things that have come up recently, and I think you need to look at some of these issues in a short and a long-term perspective. I mean, we are a long-term company. We are looking at long-term drivers. Short-term, absolutely, it's about fixing and turning out fires, but long-term drivers is the most important. If we look at the short term, we have the pandemic. It is not over yet. We are seeing, we are getting back to a normal society, but we're not there yet.
We see an increase in raw material prices. I'm not too concerned long term, but short term, it is affecting us, of course. Once price levels are stabilized for everybody, we will come back to a normal level. We see some discussions about shortage of material and delivery delays. We haven't been affected by it in a large extent, but we do see some warning signs. There is a possible shortage of cement. Those of you that live in Sweden have not missed this discussion.
There are people who know more about this than me, but we are of course looking into this. We have a strong board member with a lot of knowledge in this area, so we are confident that we have all the information we need here. Going back to, I think, the most important part of this slide is the long-term drivers. They are still there. It is the same that I've been talking about before. It is the technical development, the sustainability, environmental awareness.
We are finally talking about the environmental impact of just living, the urbanization, housing shortage. We have the investments in infrastructure, and I'm very pleased also to see that Finland is jumping aboard this train. Sweden has committed SEK billions, Norway has committed NOK billions, and now finally Finland is also committing EUR 1 billion. I'm very pleased with that. We have an aging building stock in all markets.
Long-term drivers are looking very good at the moment. Next slide, please. To summarize the quarter very briefly for you guys, stable quarter. We are affected by the pandemic, particularly in Sweden, a little bit in Norway as well. We are returning to normal circumstances eventually and sooner. There are good conditions for projects and design, installation, and service is picking up. Long-term drivers are all good. That was my final slide. Next slide, and I open up for questions.
Thank you. If you do wish to ask a question, please press zero one on your telephone keypad now. Our first question comes from the line of Carl Ragnerstam from Nordea. Please go ahead.
Hi. It's Carl Ragnerstam here from Nordea. Couple of questions from my side. Firstly, on the margin in Sweden, it's obviously quite good, but it dropped a bit year-over-year. I wonder if you could help us bridge the margin and what the impact, for instance, the consultancy business push had on the margins as well as raw material prices. You also mentioned increased sick leave rates, et cetera. If you could help us with that.
Of course. Hi, Carl. I mean, you have kind of pointed out the three main areas, which is pushing, so to say, the somewhat lower margins. However, I want to stress that we have always communicated that our long-term goal is to stay above 8%, and that is our long-term target. We see a tougher market at the moment. There is somewhat price pressure. There is, due to the raw material, and it hasn't really stabilized.
The market is, so to say, we are seeing a fluctuation here in price. Once it stabilizes, we will get back to normal levels, but it hasn't stabilized yet. When it comes to sick leave, we don't, so to say, disclose the exact number. What I can tell you is that we are used to having maybe 4%, and we are seeing 6% to 7%, and even higher in some companies. Of course, that has affected us. The consultancy business, as I said, it is the companies that we start in the beginning of the year, they are starting to show so to say, black figures. I don't want to disclose how much it has cost us to start these companies.
However, I can say that it is from a business point of view very efficient to start companies compared to buying them. However, that will be costs on the result compared to if you buy a company. At least a little bit, maybe not the exact numbers that you wanted, Carl, but like I said, we don't disclose.
Okay. Perfect. I mean, how to put this? I mean, we've seen an organic slowdown the past quarters, right? It sounds at least in other Nordics that you're becoming more optimistic. You mentioned that the Nordic market has returned to a more normal situation following lifted restrictions. Should we interpret that, to start off with, that you might reach organic growth soon in other Nordics? Have you seen a better organic pace at the end of the quarter on the group level or even early in Q4?
Yeah, first of all, you know that this organic growth is something that is very hard to predict on, and I won't step in the trap of giving you a exact answer when it comes to kind of when we can expect growth in rest of Nordics. What I can give you is that, of course, the comparison numbers are maybe not the toughest in the world. However, there are still, like I said, in Finland, we are seeing. I don't know if it is the fourth, fifth, or sixth wave or wherever we are in Finland, but we are seeing a new wave of the pandemic in Finland, for instance.
They have very high number compared to when they thought they had high numbers. What I am looking for is the long-term drivers, and those I see in these countries. As I've said before, and I stick to that, is that I think that we will become a more stable company once we get a certain volume in these countries, and I stick with that. I'm a firm believer that that is the case.
We need to become a little bit larger in these countries, so that we are not affected by the single companies within these countries. If you look at Finland, for an extra example, there we see slowdowns in construction, and of course that hits us very hard, very fast.
On the Finland topic there, for instance, you mentioned that you want to do more M&A to get the critical mass, so to speak. Did you see a risk that you're not making sufficient or high enough margins that the companies that have low margins are starting to do M&A? Is that a problem when they cannot deliver, I mean, group level results themselves starting to do more M&A?
I mean, we still have our, as I think I've shown many times, and I think as we talked, and you can see in our yearly report. I mean, we have our criteria for joining Instalco, and they are the same. That doesn't matter. We haven't been, or we will not change those. So it's not about doing any different M&A than we have done before. It is just getting back to doing M&A. If you look at kind of the acquisitions we have done this year and also last year, it was mainly in Sweden.
We haven't done much in Norway or Finland. So it's getting back to a more, so to say, stable combination of not only doing in Sweden. Also if you look at the companies that we are buying, they are good companies. We won't change that. There is also somewhat less competition in other in the Nordics compared to Sweden.
Okay, perfect. Thank you.
The next question comes from the line of Robin Nyberg from Carnegie Investment Bank. Please go ahead.
Hello, Robin and Christina. It's Robin here from Carnegie. A couple of questions. First related to profitability. Margins were a bit lower than expected in Norway and Finland. Could you walk us through the issues you have in Norway and the action plan there to bring up margins higher?
Absolutely. What we have done in Norway is that two of our subsidiaries have gotten restrictions of what type of projects they are allowed to take. We have kind of taken away a little bit of their how should I say, headroom of deciding themselves to get back to a somewhat midsize market and midsize project. They have reorganized their organization and are now building it back. We are seeing some good effects here and we are seeing a good work in Norway, and the trend is positive. I think Norway is in good hands and are getting back eventually, but it takes time.
This quarter it's a little bit actually more of a Finland issue, like where you are from Robin, where we are seeing that we have some stopping productions due to corona. We have some issues with the not perfect overlapping in the order backlog. It is a little bit of stop-and-go at the moment in Finland. That is very hard to be able to be that flexible as it is demanded of us at the moment. But overall markets in both countries looks good.
Excellent. Thank you. I think you mentioned higher raw material prices as one headwind in Q3. Could you specify how meaningful was that headwind? Also you have this large hospital project still ongoing. How are those proceeding?
If we start with the raw material prices, I think the key thing here is to understand that long term it is not how should I say? It is of course always a problem if prices goes up, but long term it is not affecting us too much as long as everybody else gets the same increase. Since we are one of the largest companies, we are able to withhold and withstand a lot of price we can negotiate with our bargaining power. Of course, the raw material price increases that we have seen nobody can hold them back, so to say. In the short term, we are affected. The number is very hard to disclose, and we don't want to disclose it.
Over a long-term period of time, we have this cost plus perspective, meaning that we can push a lot of the price increase over to the customer. For old projects in the order book that are taken at fixed price, this is of course a little bit problematic. This will stick with us a few quarters, but long term, as long as everyone gets the same increases, it is not a problem for us. When we talk about these larger projects, for instance, like the hospital project as you mentioned, this is not a big issue because we can push all these price increases over to the customer.
It is they who will pay for the raw material increases here. That project is going along well. It is divided into a lot of smaller projects or smaller but different, so to say, it is grouped in different ways. It's three hospitals in the sort of, say, mid part of Sweden. It is going along very well. It's a good collaboration we have on also been able to upsell some of our other subsidiaries recently joining Instalco, for instance, companies working with more power. We are very pleased with having that in the order book, and it is progressing very good.
Excellent. Thank you. Last question related to acquisitions. You mentioned in the report that you want to widen your base of companies in Finland and Norway. Any chance you could comment if there are specific areas that you would prefer to strengthen?
No, absolutely. I'm definitely looking into building up some industrial knowledge in Finland, for instance. I think you have a very good industry in Finland, solid one. Also, we are looking at increasing all segments in both these companies. Like I said, we have a somewhat too small base here to be called the player in the market. I think that we can strengthen a lot of the areas.
Of course, if we look at Finland, for instance, Helsinki, we have a good team in Helsinki, but there are more cities in Finland than Helsinki. Also the industry, I think it's very interesting. Eventually, I would also like to strengthen our technical consultants within these countries. Maybe that will be in a startup phase or we'll purchase something. We'll see eventually.
All right. That's all from me. Thank you, Robin.
Just as a final reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. Our next question comes from the line of Stefan Andersson from SEB. Please go ahead.
Thank you. A few questions from me. If I start with the organic growth, I know you don't want to talk too much about that, but just trying to understand, and we talked about this before. I mean, in Q1 you had around zero to negative organic growth, and then it was 12% last quarter, now it's down to 2% or so. It's a volatility. I know we've spoken about this before. It's relating to the fact that you buy so much and you have a small base and all that, but you're rather big now.
So just to understand that, should I, because in my world, if you have such a volatile business, it'd be very hard to handle your people. So I don't think it has to do with production. I don't think that represents your actual production rate. I could be wrong. This is a leading question then, but if I assume this instead, is it that you could have some, you know, ups and downs in invoicing from the subsidiaries that you're running or is it something else, or am I totally just wrong here?
I think
Maybe-
I will stop you there, Stefan, because I think one of the key things here is to understand our business. I will give you an example of a subsidiary. I looked into them this quarter again, just to kind of be prepared. I think you need to understand it. We have a small company in Finland. They have 16 or 17 employees, and they last year took a project of building one of the largest shopping malls in Finland, when it comes to sprinkler and fire alarm system. They then rent in 30 employees. So they go from 17 to 45. Then that project ends, and they go back to the 17, or they have now 18.
The problem here with organic growth is that their comparison numbers this year is impossible for them because they are compared to that if they had that specific once in a lifetime large project in Finland where they build the biggest shopping mall. Basically, the organic growth, I would say, is the 15 or 16 employees going to the 17 because they get a little bit service on that large project. That one or two persons.
The problem is that we have to deliver what they have in turnover, and last year they had a double or almost 2.5 times of what they're usually at. They will be negative for the whole year this year for us. That's just to give you a little bit of the, so to say, the problem with delivering this. I would rather look at maybe how many employees we have or some different type of comparison than this organic growth. Maybe with a new CFO, we can dig deeper into this, but this is an area which is very hard for us to give any comments about, and this is very high fluctuation, and it is very hard to give any guidance on.
I can just guide on that we are still getting organic growth. I mean, we are so far this year at 4%, I think, right? I think even 4.2% and that is higher than the market overall. I mean, long term I'm very confident and I feel very good about that. I mean, we are in a tough environment, so.
Thank you.
We didn't answer the question there, Stefan, but at least you get some flavor.
Yeah. Can you hear me by the way?
Yeah, we hear you loud and clear.
Oh, good. I was disconnected, so that's why I have to call in again. That's fine. The next question is on the cash flow here. You know, my experience says that, you know, being an auditor, I'm not concerned about one quarter being, you know, weak on cash flow, you know, it's just cut-off effects and so on. When I see a couple of quarters and receivables growing in a project business, I always get a little bit concerned.
I guess you said what you can say there. Or, is that a concern from you as well? I mean, you said that you changed management, and of course, focus has been on other things, and now you have a CFO in place. I'm sure that's the priority number one here, but you're not concerned in any way that there might be some error in there as well?
I'm fully with you, Stefan. I'm not satisfied at all with the development that we have seen. I'm not satisfied that we let it go this far. Like I said, it has been a tough environment for us, and focus hasn't maybe been fully on this. We do see also our competitors, the large ones, listed ones, Caverion and Bravida, having a little bit of the same problem at the moment. What I have been looking for is also seeing that we don't see any increase in, so to say, overdues. As long as we get the invoice out, people are paying the invoice, which is, in this way, at least some comfort. Let me assure you guys that this is a focus area for us.
It has been for the last month. I'm confident that we will be able to get this back to somewhat normal levels in the near future. Of course, it's always a little bit concerning when you see these type of numbers. We know where we have to work, and we know where we have to find them, and we are working on it. That I can give you at least.
As long as they're not overdue, at least that's a good start.
Yeah.
Another question, which is, I mean, I kind of hear the tone. Maybe I'm wrong, but I'm kind of hearing that you expect a little bit of a challenge in Q4. At least you're not willing to be overly excited, but you're cautious. I can hear that. That this is not my question, but just remember Per, just before the summer, Per
was talking about some kind of explosion towards the end of the year, volume-wise, and I'm not talking about your revenue accounting here now, because I hear what you're saying. But if we look at tendering instead, are you seeing that, or should we blame the old CEO for that comment, so to speak? I mean, do you have any better flavor to give on that?
He's probably listening in, so, no. I will comment like this. I think that, as I said, 2020 was a good year for us, and we were not that affected. The business, the market overall wasn't that affected. 2021 has been somewhat tougher. I am confident about our financial targets and our goals. I think that we will be reaching those. I am a little bit cautious about the market at the moment, and I don't want to promise too much. I will stick to my financial targets. I think that that is still, like I said, those are hard to beat just compared to our competitors. You'll see that, we are outperforming them, and we will continue to do so.
Good. Then some boring number questions here, but I'm just trying to get the adjusted EBITA, EBITDA and EBIT together. I could be wrong here. Let's see if I do it right here. I mean, you have adjusted EBITA, EBITDA at SEK 165. There's a +6 to get to the EBITDA of SEK 171. I'm just curious about the +6. You have a -8, which I guess is transaction-oriented, maybe. I don't know. Maybe it's a little bit high, on the high end, but you've done quite a lot of acquisitions. If there's something else in there, please, you could comment that as well. I guess +6 there is-
I think the main difference here is some changes. As you know, we have roughly 30 or so earn-outs that we have to evaluate, and we have to evaluate them as close to our best of our knowledge expectation of them. We try to do that with as much precision as we can. As you know, it is not the easiest thing in the world. So that is mainly driving the difference here.
What you're saying is the SEK 6 million is positive revision of earn-outs?
Yes.
That's on the amortization line that comes in. You don't have that as a one-off.
That is the difference between what you said between adjusted and EBITA.
Okay, good. Perfect. The SEK 8 million is transaction costs. Those were high in the quarter. Is that correct as well, or is there something else?
Those SEK 8 million, which SEK 8 million are you talking about? Sorry, please repeat that.
Oh, no, sorry. No, I'm totally. Sorry, I'm maybe. I was. Okay. I think let's have this on the side because I think there's probably a combination of things in here. I won't start.
Yeah.
Let's have this separately. If you look at the group, the two divisions, and look at the earnings there, I think there's like a SEK 15 million positive in order to get to the adjusted EBITDA. In Q1, you had a positive one-off of SEK 10 million or something. I remember. What is the positive 15 there?
Uh-
If I'm not incorrect here with my calculation. Sorry.
Yeah. Let's see. You have in Sweden the 135, and then in Nordics you have the 15. Yeah.
That's SEK 150, and then your SEK 135, which the adjusted EBITDA.
Yeah.
Am I?
A little bit of this is due to the fact that, as I said before, we try to push out a lot of the costs to our subsidiaries.
Okay
We are an SEK 8 billion company, so it's hard to match this perfectly. That is one of the reasons. We also have a contract signed with Instalco that gives us in some projects some cash backs to the group as well. Actually the group is doing quite well, but that should be on the, so to say, line of the companies actually, but because we are not doing any projects, but at the moment we are doing quite good due to some of these contracts being signed by Instalco.
Okay, good. There's no. It's just with what we've seen before as well, the discharging, charging.
Yes
... a bit more than-
Yes
than the cost really.
Yeah.
Okay, good. That's perfect. You said something there on raw material.
Yes
... or the market. Maybe, just to understand you correctly here, you said something about price pressure-
Mm
... in the markets, but at the same time we have the raw material going up. I'm just trying, I guess. You're not actually seeing price pressure, but what you mean is price pressure in relation to the material going up, and that you can't get that out, or are you seeing pressure from both sides?
No, I'm to be clear, however, what I'm saying is that we still have maybe a price pressure in the sense that we have some competitors not fully calculating on the raw material increases. So I think there is at the moment, when the market is very stable, everybody knows the prices of raw material that we put in. At the moment, it is not 100% fixed of what the prices are going to be for all the materials that we put in, and then it's very hard to see the normal, so to say, price level where a project is supposed to be. Do you understand what I mean, Stefan?
Yeah. That was perfect. One last thing on the material there. You talked about that you are seeing some initial signs of delays on some materials and so on. Do you have any larger contract where you could be seeing fines coming through, or they are so rare that you can direct the material that you need to those projects and therefore there's no risk of that?
Yeah, I haven't seen any of those.
Late fines.
Yeah. I understand what you mean. I haven't seen any indications on that so far, and I'm also quite certain that that goes out of our scope. If the material is not able to be delivered, that's not on us.
Perfect. I think the last question then, on M&A.
Mm.
Price-wise there, if you look at the total price, including earn-outs that you're paying, I would guess it's going up slightly because there's so many other players out there trying to copy you. They all want to have your success, so to speak. There's some players who are maybe not as specialized as you, but still in your area, and some of them are exactly like you and competitive. Are you seeing any changes on the price side there, or would you like to indicate where you are currently on what you pay? I think you used to say four to six or something, but any indication on what's happening there?
We are at the same interval as you just mentioned. However, we do see some competitors, and there can only be one original, but there are a few copycats out there. What I can mention there is that they have to pay a higher multiple. We see that from time to time. However, the real companies that we really want, they tend to join Instalco anyways because they like our model, and then price is not the most critical factor for them. However, of course, you have to be somewhat in line. I think, as you see our acquisitions so far this year, it is very impressive and I think we can continue doing M&A. Maybe not to the
I can't promise to the extent that we've done 2021, but I see a positive outlook here as well. I think we can cope with the price increase here. However, some competitors are very aggressive, but let's see what happens with them in the future.
Great. That's all from me. Thank you.
Thank you, Stefan.
We have one more question from the line of Marcus Almerud from Erik Penser Bank. Please go ahead.
Yes. Hi. Hi, can you hear me?
Yes. Hello.
Yes. Hi. Marcus Almerud from Erik Penser Bank. I'd like to start off where you ended, actually, talking about acquisitions.
Mm-hmm.
Quite an impressive number of acquisitions this year. Is this temporary? How should I put it? Is there any lull situation here when the pandemic is also affecting the pace that you have right now, that there are more targets out there, that market's a bit slowish, and there are more companies in trouble, et cetera? Is there any effect like that, or is it just coincidence that you have been able to close as many as you have?
I think it's a combination of a tremendous lot of work being done in this area. We have, as you saw on the picture here, increased the number of area managers a little bit. That helps out. We have also been able to do a lot of acquisitions just as you mentioned, due to the fact that people understand the strength of joining Instalco, and especially in these type of circumstances we are today, where it might not be as confident of being a lone small company.
It is nice to be part of a group, have colleagues. The things that we can deliver are very highly valued at the moment of delivering this network, helping the companies during these somewhat difficult times. To say our proposal to these companies are very attractive at the moment. That plays into our hands, absolutely.
Okay. There's no effect like there's a lot of companies coming, like you haven't been able to meet, and then all of a sudden you can, and there's just a big flood coming at one time. There's nothing like that?
I think you will see a change here if you look at the number of acquisitions, and you see how many are done in Sweden. I think you will see, like I mentioned before, a little bit shift here in the rest of Nordics. We'll see a little bit more action when it comes to M&A due to the fact that I usually say this, we are a modern company, but when it comes to M&A, we are old school.
We want to look them in the eye, we want to shake hands, and that has not been possible in Norway and Finland. Once that comes back into play a little bit more, you will see the number of acquisitions done outside of Sweden increase. Of course, that would be a little bit on the cost and the numbers of acquisitions done in Sweden.
Okay. Just a detailed question. The Blomquist Group acquisitions-
Yes
Is that, has that been closed?
Yes.
Okay. Okay, good. Finally, if I can just ask about the infrastructure. You listed a number of long-term factors which are positive and where you're seeing, you mentioned for instance, there's a lot of money going into infrastructure, and we
Yes
We know that a lot of the stimulus is coming into that direction, but then there's this is slow as well. Which I know, but do you see any signs of these kind of factors picking up? I mean, we all know that the money is going in there, but is something tangible happening?
Yeah, I mean, I recommend you going down to Gothenburg, for instance, and seeing all the infrastructure being put into Gothenburg, for instance, just to give an example. There are a lot of these long-term infrastructure projects that we have been talking about for many, many years in Sweden that are being in effect now. We have in Stockholm a few of them kicking in.
Even if we are not part of it, just if you're in Stockholm past Slussen, you'll see a lot there being done. We are not on those main infrastructure projects, but that these type of projects also kind of puts different type of projects out on the market in their near surroundings that are very interesting to us. I mean, just looking at the Slussen project, that also affects that you have to rebuild a lot of the offices there. You have all that type of project, which suits us perfectly. We might not be interested in building the bridge over Slussen, but all the projects around is very interesting to us.
It's the same thing as the rest of your business, I assume, that, I mean, you're late cycle here as well, so you get in quite late.
Yes
I mean, in the whole building scheme.
Especially when it comes to infrastructure, I would say, I would argue we are even later in the cycle than in the normal, like, housing project.
Okay. All right. Well, that's all for me. Thank you very much.
Thank you, Marcus.
As there are no further audio questions, I'll hand it back to the speakers.
Yeah. That's no further questions from the webcast, so just hand over to you, Robin, to summarize and.
Okay. Thank you for listening in, everybody. As I said, long-term drivers are looking good. We have some short-term things, but I think we are in a good position to handling them, and the long-term drivers are there, so I'm very pleased with that. I think once again, thank you for listening in, and have a nice day. Bye-bye, everyone.
Bye.