Very much. I also want to say welcome to this presentation of Instalco's quarter one report. My name, as you heard, Per Sjöstrand. I'm CEO of Instalco, and with me I have Lotta Sjögren, our CFO, as usual. We start with slide two, here you can see it shows a brief overview over Instalco. Of course, I'm pleased to report that we now have reached sales in excess of SEK 4.5 billion on a 12-month rolling basis. We are around 60 companies today, in total, more than 2,000 employees. We can also see that we have an LTM adjusted EBITDA margin of 8.5%, order backlog is high. I think with that, we can go to slide three. There has been a very rapid growth in the Nordic installation market for some time. You can see that up to the left on the slide.
However, I think it's starting to level off, and in some regions, the rate of growth will likely slow down. As I said, it's important to remember that the drop will be from an all-time high level. The value of the total Nordic market is more than SEK 200 billion, and as you can see, Sweden represents the largest component. Throughout the Nordic region, urbanization is a strong trend and one of the main driving forces in the installation sector. Other factors fueling the markets are shortage of housing, technological development, investments in infrastructure, aging property holdings, higher demands on sustainability, and energy efficiency improvements. With that, I think we can go to slide four.
Highlights, I'm proud to report that in the first quarter, we not only had robust growth in profitability, but also were able to make 3 acquisitions of top-quality companies in Sweden, while we're continuing to grow in accordance with our acquisition strategy. Net sales, as you can see, increased by 25% to SEK 1.2 billion. Organic growth was 5.8%, EBITDA for quarter one was SEK 90 million, with a margin of 11.6%. Our observation is that the installation sector is still stable, even though there has been an overall slowdown of investments. Our order backlog remains high at more than SEK 4.6 billion, which is an increase of 18%. We go to slide five, Lotta, I'll let you take over there.
This diagram shows the trend in net sales and adjusted EBITDA compared to last year. As you can see, we have record high sales compared to earlier first quarters. Sales in first quarter are typically lowest compared to the rest of the year. Next slide, please. Already in 2014, when Instalco was established, we formulated our run-rate EBITDA target for SEK 450 million by 2019. Once again, I'm happy to report that we are well on our way to achieving that. Next slide, please.
Okay. As I already mentioned, our backlog of orders remains high and our situation is stable. Thanks to the level of diversification we have in types of projects and markets, a focus on what we call the middle segment, by which we mean small and medium-sized projects. That's because of the reduction of risk. Our large order backlog also provide us with excellent opportunities for adapting our business if changes occurs in the market. We can go there to slide eight. Here are two of our projects from the quarter that I'd like to highlight as great examples of how Instalco works. Collaboration between Instalco companies enables us to deliver attractive solutions to customers that meet all their needs.
For example, three of our companies working with heating and plumbing, ventilation, and sprinklers, have been contracted by Skanska, which is building a new major shopping center at Bålsta for their client ICA Fastigheter. Another example is Rörläggaren D-Vent have also won new contract from Skanska for work at the site where ESS in Lund is being constructed. We have been there for a long time, and this time it is ventilation and pipe installation work for the KTH campus area. If we go to slide nine and closely look at operation in Sweden, we can see that the market for installation services remains stable, particularly in the public sector, where the rate of construction and renovation for schools and hospitals is high. Net sales for Sweden increased by 21%, with organic growth of 4.6%, and we also have a very strong margin here of 9.1%.
I think we can go to Rest of Nordics, next slide 10. For the Rest of Nordics, net sales increased by slightly more than 35%, with organic growth of 9.7%. As you can understand, we are still not quite satisfied with the margin for the Rest of Nordics. We have taken several actions to aim at raising the profitability of this segment. For example, we discontinued two significant loss projects. We are in the process of shutting down operations in one loss-making company, but we also replaced the management totally. We are confident that those measures ensure that we achieve the same high level of profitability as in segment Sweden. The Norwegian market is stable with growth in all areas where Instalco is represented. Market, I think, is also stable in Finland, fueled by activity in the Helsinki region.
By that, we can go to the next slide 11. We acquired three companies during the first month of 2019, all which are in Sweden. In total, their annual sales are around SEK 230 million, which puts us well on the way towards meeting our target of SEK 600 million, SEK 600 million-SEK 800 million in acquired sales per year. I'd like to highlight two of the acquisitions that were made during the quarter. One is Ekotek i Sala, which specializes in electrical power solutions for the process industry. It's an acquisition that strengthens our position and offering to industrial companies. We also acquired Aquadus, which is a heating and plumbing company in Eskilstuna. It is situated in Mälardalen, which is a strategically important area to Instalco. I think both are good examples of acquisitions we made to strengthen our position in a particular area.
I think you know that, all our companies have strong brands and reputation in their local markets. It is very important for us. We have also made three additional acquisitions after the end of the reporting period. Shall we go to slide 12 now?
Since the beginning of the year, we have new financial targets for the group. Instalco now has a target of average growth that should be at least 10% a year over one business cycle. Growth should occur through a combination of organic growth and successful acquisitions. Another new target is to achieve cash conversion rate of 100% on a rolling 12-month basis over one business cycle. We are off to a great start and are well on our way to meeting the targets. Next slide, please.
Thank you, Lotta. Looking ahead and looking forward, our assessment is that the market remains stable with a higher demand for energy-efficient, sustainable solutions. The rate of constructions for new apartment buildings in metropolitan regions is slowing down, as you know. Nevertheless, the overall demand for installation service remains high. There is a high level of installation service demand. As I said before, I will say it again, one of the biggest challenges is finding enough skilled labor to meet the demand. I will say that our future acquisition opportunities remain good, and we have an ongoing close dialogue with several potential candidates. With that, I think we can go to slide 14, which is summary. I can proudly conclude that Instalco has had another strong quarter with high growth, high profitability, and a very strong order backlog.
I am very enthusiastic about the year ahead for Instalco, during which we will celebrate our fifth anniversary. As you know, I used to have some music text from last slide, this time I have chosen Niklas Strömstedt's hit "Oslagbara," which can be translated to unbeatable. That song is from the album Halfway to the Future, because that is, I think, how it is. We are unbeatable, and we are halfway to the future. With that, I would like to thank you all for joining in on this call, and now I would like to take your questions.
Thank you. Ladies and gentlemen, we're now ready to take your questions. If you wish to ask a question, please press 01 on your telephone keypad. Our first question comes from the line of Stefan Andersson from SEB. Please go ahead.
Thank you. Three questions only. First, Easter is falling into the second quarter. Has that had any impact on your organic growth positive in this quarter? It's just good to know if it has a negative impact on the second quarter.
The impact for Easter has very little impact on organic growth. It's more like where the projects are ends or starts and so on. If it's one or two more days in one quarter, it doesn't matter so much.
Okay. It seems like that one of the companies you acquired are not performing. I'm talking about the Rest of Nordics, where you refer to some projects that you want to close down. Could you maybe elaborate on, is that a mistake in acquiring a company? What kind of volumes are we talking about that you will close down? Is it going to impact the top line in some way?
Yeah, it really impacted top line. It was a mistake made to acquire that company. I talked about it a lot before. The company brings with them three projects that was loss-making. We have now shut down the company. We have taken the costs. There is some costs we have taken now this quarter for the shutdown, but we are not having any loss-making projects in the company anymore. There has also been a little bit slowdown in Finland this quarter, so it's not just Norway that had affected the Rest of Nordics figures this quarter. I'm still very confident that on a full year basis, we will reach our goals in both Finland and Norway. There's been a little bit slowdown in the first quarter. On our top line, I think about SEK 40 million-SEK 45 million will affect us for the loss-making company that we have shut down.
Okay. Just so I understand correctly, because when you talked about Rest of Nordics, you said that as those projects are fading off or gone, your profitability should close in on the Swedish profitability. Are you saying that adjusted for the one-offs in the quarter and those projects, your other business is actually generating closer to the Swedish level of margin?
Yeah, almost at least.
Things works out fine. That's what we should expect for Q2 as well.
Yeah, right.
Thank you. The second last question, you talked about your five-year celebration. Is there a lot of costs associated with that that will impact the Q2 or is it just smaller impact?
It's smaller, but we take all the chance we can to have a party.
That's good.
It's smaller cost.
Okay. Thank you.
The next question comes from the line of Robin Nyberg from Carnegie. Please go ahead.
Hello, it's Robin from Carnegie. I have a couple of questions. First, related to cost inflation. Is the situation right now quite similar to what you have seen during the past few quarters, or have you seen any changes there?
No, I think there it is the same. We have a couple of % in salary increase and a couple of % on the material side. I think we are very used to it. You know what? We have this type of calculation, we call it cost-plus. We are taking care of cost increases.
All right. One question related to the margin in division Other Nordics. You mentioned some actions that you have taken in order to improve margins. When do you think it's more realistic to see segment Other Nordics to reach a kind of similar level you are seeing in Sweden?
Yeah. Of course, you always underestimate the cost for shutting down, and we have done that too. I think that's over now. If the Finnish market is going as we want it to go, I think we will see the same margin for Rest of Nordics in quarter three this year as we have in Sweden, same margin as in Sweden.
Okay. Thanks. One question related to the backlog. It was up 18%, if I remember correctly, year-over-year. How much was it in sort of like for like? Was it up?
It was up, I don't have the exact figure here. Do you have it, Lotta? Just a second. We'll see what we can find here. Like for like, year like for like.
I'm sorry, I don't have the quarter report here, but it's under our financial information, you can find it.
Okay.
Order backlog, organic growth of order backlog.
Okay. Finally, to Lotta, one question. Cash flow was quite strong, but I guess the IFRS 16 had some positive impact. Do you have any sort of calculation of how much the operating cash flow would have been with the previous accounting definitions?
Yes. We have made very detailed information of that in our annual report that you can read. I don't remember the pages, but if I remember right, it's about page 56 or 57 or something like that in the annual report. You can see all the calculation and how it impacted on the figures in the balance sheet.
Okay.
Results. Yeah.
All right. Thank you very much.
Thank you.
Just as a reminder, if you do wish to ask a question, please press 01 on your telephone keypad now.
We received one question from the webcast. It's about the decrease of the order backlog in Rest of Nordics. We can comment on that.
The negative development of the order backlog for the Rest of Nordics is due to the phasing out of the operation in Norway that we talked about. Last year, we had quite a big order backlog in that company that we are shutting down now. Today that order backlog is zero. That impacts on the organic growth.
Okay. Thank you very much. If there is no more questions, thank you very much for joining in on this call. We see you in the next quarter.