Ladies and gentlemen, welcome to the Instalco Q3 Report 2019. Today, I am pleased to present CEO Per Sjöstrand. For the first part of this call, all participants will be in a listen-only mode, and afterwards there will be a question and answer session. Please begin your meeting.
Thank you very much. Of course, I will welcome you to this presentation of Instalco as a quarter three report for 2019. My name is, as you heard, Per Sjöstrand, and I'm CEO of Instalco. I will say that today our CFO, Lotta Sjögren, is not here. If you have a very detailed or tricky questions relating to figures, I would like you to just email the questions to our IR function. We will come back to you, of course. If you hear some strange sounds, it's because they are changing the roof above our studio here at the moment. I think we can handle that. First slide number one. We used to show this slide. Instalco, a short overview. We are a leading Nordic installation group in heating and plumbing, electrical and ventilation and cooling, with strong local brands, a high decentralized structure.
We have and still do deliver high margins over time. As you can see here, we have now reached sales of more than SEK 5 billion. That is on a 12-month rolling basis. We have 65 companies, and in total, more than 2,500 employees. Let's go to the next slide, just shortly about the Nordic installation market. The value of the total Nordic market, the installation market, is more than SEK 200 billion. Sweden represents the largest component. Still, urbanization is a strong trend throughout the Nordic region and still also the main driving force in the installation sector. Also other factors fueling the market are a shortage of housing, technological development, investment in infrastructure, and aging property holdings. More recently, there has also been greater emphasis on environmental awareness, generating benefits to society and sustainable entrepreneurship in the market.
I think also that over time, the Nordic installation market has had a stable rate of growth, although it's now starting to level off, and important to emphasize that it is doing so at a relatively high level, as you can see from the slide. With that, I think we can go to slide number three. Of course, I'm very proud to report that for this quarter, we have had a stable growth in sales and continued good profitability. During the period, we made five company acquisitions, all of which have contributed to our strong performance. Net sales increased by almost 42% to SEK 1.4 billion, with an organic growth rate of 14.6%. Adjusted EBITDA for the second quarter was SEK 137 million and with a margin of 9%.
A comment on this organic growth. I will say that the high level of this quarter's organic growth stems in part from the high growth rate of several of our subsidiaries, which we previously reported as a component of acquired growth. However, because they have been part of Instalco for 12 months, they are now and of course henceforth, included in organic growth. That's one reason. Another reason for the current high rate of organic growth is that some of our subsidiaries had substantially lower sales during the same period last year. They have made an excellent recovery this year. I must however, also again point out that it is important to look at the full-year figures rather than making conclusions based on quarterly comparisons where fluctuations are normal. Our order backlog is stable, more than SEK 4.4 billion, which is an increase of 19%.
If we go to slide number four, and this diagram shows the trend for Instalco's net sales and adjusted EBITDA compared to prior years. Our robust growth stems from our active acquisition strategy. For several quarters, we have had an order backlog the size of the last 12-month sales. These strong figures are now reflecting the result, as I think, of our strategy of working with many small companies and medium-sized projects, which keeps risk at a low level with a high profit margin. Our business also has low exposure to the housing market, in fact, just 10% of our construction. Our largest area of operations is installation work at public buildings such as schools, preschools, hospitals, and other public facilities. Office and commercial facilities is our next largest area.
If you look to slide five, as I already mentioned, our backlog of orders and overall situation remains stable thanks to the level of diversification we have as regards types of projects and markets. Our large order backlog also provides us with excellent opportunities for adapting our business if changes occurs in the market. I said that before, and I will say that again. Seasonal fluctuations like summer vacation always affect us each year in the third quarter, and you can see it was the same situation last year in 2018. Slide number six, and here are two of our projects from the quarter that I'd like to highlight as great examples of how we work. We signed two very important large projects contracts during the quarter. JN El has been contracted by Skanska for electrical installation in conjunction with the construction of Scania's new foundry in Södertälje.
Work will be done as part of a collaboration contract where JN El will be responsible for the electrical installations, and the sum is approximately SEK 100 million. The other major project involves Rörläggaren in Malmö, which has been contracted to work associated with a new hospital area down there. Rörläggaren has been engaged by Skanska for extensive heating and plumbing installations with an order value of SEK 270 million. Two new buildings are being built as part of the major investment to expand Malmö's hospital care facilities. There are more than 2,200 rooms and 108,000 sq m that will be added. If you go to the segments Sweden and also Rest of Nordics, which was Sweden, and that's slide number seven. Looking more closely at segment Sweden, we see that the market remains stable with electrical installation as the largest component. About 50% of the total market is electrical installations.
In the public sector, construction and renovation of hospitals, schools, and preschools remains at a high rate. The rate of construction for commercial property, and that means offices and business facilities, is also relatively high. Let's say for Sweden increased by 44%, 44.5% in fact, with an organic growth of 15.2%. We also have a very strong margin area, as you can see, 11%. If you go to Rest of Nordics, the next slide number eight, we will say that net sales increased by slightly more than 35% with organic growth of 12.9%. For the second quarter in a row now, profitability for Rest of Nordics is good, and we have recovered from the prior loss project we had in Norway. I mentioned that many times before. The market in Norway is stable with high growth in all areas where Instalco is represented.
The market in Finland is strong, and we have a large order backlog in major metropolitan areas, and industry clusters are still the main engines in that market. We go to slide nine. As you have understood already, we have continued to actively pursue our acquisition agenda, and during the quarter, we have acquired five new interesting companies and operations. Those companies have broadened our geographic coverage and offering. Two acquisitions that we have made during the quarter I would like to highlight. The first is the heating and plumbing company Pohjanmaan Talotekniikka in Oulu, which is a city in the region of North Ostrobothnia in Finland. Our expansion into Northern Finland is particularly interesting since it's an area we have not been previously represented, and the acquisition of Pohjanmaan marks the third step in our geographic expansion in Finland beyond Helsinki and Tammerfors.
The second acquisition I want to highlight is in Sweden. We have widened our geographic scope with the acquisition of OVAB, which primarily serves the markets of Östersund and Åre. I think both are good examples of strategic acquisitions we made to strengthen our position in a particular area, both in Finland and in Sweden. They are all companies, and all of our companies, I would say, have strong brands and reputation in their local markets. Other companies that we acquired during the third quarter are Rörtema in Nyköping, Miller Ventilation in Skövde, and IP-Tek i Helsingfors . You can see on slide number 10 that we have made 13 acquisitions during the first three quarters, and we continue pursuing our agenda of making high-quality acquisitions.
Already during the first three quarters of the year, we have acquired annual sales in excess of SEK 1 billion, which far exceeds our target of SEK 600 million-SEK 800 million. Subsequent to the end of the reporting period, we made an additional three acquisitions, which contributes another SEK 260 million in sales. Okay. I will talk a little bit on slide 11. You can see I'm talking about how we create value. First off, we only, as I mentioned, purchase high-margin companies, and we pay reasonable multiples for them. Furthermore, we have a high cash conversion rate and low level of investments, which enables us to acquire companies with our own generated profits. Then when a new company joins the Instalco Group, it gets to collaborate with other Instalco companies, which creates synergies on many levels. New customer contacts are created, with that comes what we call cross-selling.
New companies in the group also gain access to projects they wouldn't have been able to manage on their own, and they may also use the central purchasing agreements we have created. Another key success factor is that the entrepreneurial spirit in our companies is very high, along with the desire to continually develop and improve throughout the entire organization. Through it all, we keep our central costs at a very low level. Okay. Next slide number 12, looking ahead and looking forward, our assessment is that the market remains stable with a constantly rising demand for energy efficient, sustainable solutions. There has been a slight slowdown in the overall economy, as you're all aware of, but we have a wide portfolio and a large bank of orders. Because of that, we have many ways of adapting to any changes that might occur in the market.
According to Hantverksföretagen, that is the employers association representing the plumbing and electrical industry, the outlook for next year is about a decline of 2%-3% in the installation sector, and that is for 2020. Okay. Slide number 13. Looking ahead at Instalco, sustainability and providing benefits to society are key concepts. You have heard it before. I will say it in the future as well. We have also noticed that both our customers and subsidiaries are showing a higher level of awareness and interest in such matters. There is increased awareness of the importance of sustainable entrepreneurship and societal development among both companies and consumers. Providing safe, sustainable installations that help generate benefits to society is a high priority for us. We also put much emphasis on having a safe, stimulating work environment at all companies in the Instalco Group.
With this in mind, I'm very proud to report that we are about to take the next step with our sustainability efforts. We are working intensively to design our new sustainability program. We will launch that early next year. Service is another item that is high on the agenda. We are currently designing a plan for soon providing a wider scope of service with our subsidiaries. Going forward, and in an effort to increase comparability, we also will clarify what we package in the service area. Slide number 14, one of my favorite slides, I will say. We have now reached, or we have achieved our run rate EBITDA target of SEK 450 million by 2019. It's a goal we formulated when Instalco was first established.
Since it was founded, Instalco has had a stable profitability, and the graph here shows that we accomplished what we set out back in 2014. We will continue pursuing our plan of acquiring profitable companies, creating synergies, and developing companies together with others in Instalco Group. If we go to slide number 15, financial targets and dividend policy. As you are well aware maybe of our target growth rate is at least 10% per year over a business cycle. Growth shall occur through a combination of organic growth and successful acquisitions. We have another goal for us to achieve an adjusted EBITDA margin of 8.0%. Also furthermore, Instalco's ratio on net debt adjusted EBITDA should not exceed 2.5. As you can see, there are green dots there. Instalco's cash conversion rate should be 100% on a rolling 12-month basis over one business cycle. Also green dot.
We can conclude that our performance is in line with or exceeding, I would say, all our financial targets. It is also worth mentioning that we have set targets that we can maintain over time and which enables us to cope with any fluctuations in the market. Okay, shall we go to slide 16 then to start summarize. In summary, I can proudly conclude that Instalco has another strong quarter with strong growth, high profitability, and a healthy cash flow. The acquisition climate remains favorable, and interest in becoming part of the Instalco Group is still high. This time I'll wrap up by mentioning the hit song "The Heat Is On" by Glenn Frey. We have the same energy here at Instalco, but we have cranked up the temperature even further. We are continuing to deliver high margins and strong growth in sales via our high-quality subsidiaries.
With that, I would like to thank you for all joining in on this call, and I'd like to take your questions. Please go ahead.
If you would like to ask a question, please press 01 on your telephone keypad now. If you wish to withdraw a question, you may do so by pressing 02 to cancel. That is 01 if you would like to ask a question. As there are no questions, I will hand the word back to the speakers for any final comments.
I think it's all for us. Thank you very much for joining in, and see you next time or hear you next time in January, no, February, I think, for the next call. Thank you very much, everyone.