Welcome to this presentation of Instalco's report for the first quarter 2026. My name is Per Sjöstrand. I'm CEO at the Instalco, and with me today is our CFO, Christina Kassberg, and for the Q&A part, our Head of IR, Mathilda Eriksson. The start of 2026 is further proof that we are moving in the right direction. As always, I will start with a short snapshot of Instalco today. We are a leading installation group across the Nordics with an established platform also in Germany. Our strength is our decentralization, I will say. Local companies close to customers, combined with common standards, tools, and governance. With over 6,000 employees, we're exposed to market segments driven by long-term needs, such as energy efficiency and electrification. First, for a quick glance at our LTM numbers.
Net sales amount to SEK 13.7 billion, and we ended the quarter with a backlog of almost SEK 10.4 billion, which represents a steady book-to-bill of around 75%. This is a sign of more activity in the market, as well as proactive selling from our companies. At the same time, we will still have the available capacity to take on more projects when the market improves further. Our EBITDA for rolling 12 months amounts to SEK 877 million, corresponding to a margin of 6.4%, a significant step up compared to Q4. The strong cash flow in Q1 is as well as throughout the last year, kept our LTM cash flow from operations above SEK 1 billion, showcasing our strong focus on improving working capital. This means that we report a cash conversion of 100%. That is exact or exactly on target, in fact.
Let me briefly summarize the quarter. We are starting to see clearer signs that the market is improving. Activity is picking up, although it's still uneven, and we see that in our order backlog, which is growing in all three countries. At the same time, this is not just about the market. The work we are doing is making a difference, and Instalco 2.0 is gaining traction. There is, of course, still a lot of work to be done, but we are confident that we are doing the right things. That means that we are seeing improvements in both organic growth and on EBITDA level. We also continue to strengthen cash flow. Importantly, we have fewer major negative project deviation. That's very important.
That gives us a more stable business and a better foundation going forward. For now, I will hand over to Christina, who will take you through our financial development in more detail.
Thank you, Per. I'll start with the net sales and order backlog and how they developed during the quarter. Net sales grew by 4.4% to slightly above SEK 3.4 billion. Currency had a negative impact on the outcome with -1%. Organic growth, on the other hand, remained positive at 4.9%, and we saw growth in all three countries. Our order backlog also reported even more growth of 15% or 14.2% organically. On order backlog, we saw good growth in all three countries, and the most in Norway. What I said in Q4 also holds true for Q1. Especially for the Norwegian order growth, it is important to keep in mind that many of the projects taken have long durations. I would therefore caution against expecting it to quickly go to execution. In addition to the backlog, we have our service business, which remains an important stabilizing factor.
For the first quarter, service amounted to 33% of sales. Moving on to the earnings. As expected, the quarter was impacted by normal seasonal patterns with lower activity during the first two months of the year, followed by a strong finish in March. EBITDA amounted to SEK 201 million, corresponding to a margin of 5.8%. The year-on-year development reflects both improved operational performance and to some extent, items affecting comparability in the prior year. Overall, we are seeing gradual improvements in underlying profitability, although the development remains somewhat uneven. Improved margins continues to be a key priority across the group. Before we move on to the next slide, from this quarter, we have moved to country-based segment reporting, Sweden, Norway, and Finland, to better reflect how the business is managed. I will now walk you through each country.
First up, over to a slide that summarizes Sweden in Q1. Overall net sales grew to SEK 2.45 billion, with an organic growth of 1.5%. The order backlog increased by 7.6% compared to a year ago to SEK 7.1 billion. The EBITDA amounted to SEK 124 million, corresponding to a margin of 5%, compared to 4.1% last year. The stronger margin is the result of the segment no longer being burdened by last year's one-off costs, combined with operational improvements. Improved margins and earnings are evident across the majority of geographical areas. Performance continues to be weighed down by a persistently challenging market and some delayed industrial projects. Sweden experienced even clearer seasonality effects than the other countries, is still working through projects taken in a tougher market environment. The market is showing clearer signs of recovery, with higher activity and more projects moving forward.
At the same time, the development remains uneven. Decision-making is still relatively slow, but we are seeing more inquiries and better opportunities to be selective. Demand in technical consulting, automation, and digitalization continues to strengthen, indicating a gradual improvement. The industrial market remains mixed, with stable development in areas such as electrification, defense, and parts of the green transition. As always, it is important to keep in mind that installations is late cyclical. Now for a summary of Finland. Net sales grew organically by 30% to SEK 431 million, FX impacted negatively by -6.2%. The order backlog increased by 9.9% compared to a year ago, or 8.9% organically. EBITDA amounted to SEK 52 million, compared to SEK 7 million last year. This corresponds to a margin improvement from 2% to 12%.
The improvement is explained by higher utilization and better project execution in several companies, as well as a very strong performance in companies with the projects towards industrial clients. These companies are based and reported in Finland, but the largest share of their customers and projects are located in Sweden, and internally these companies belong to our business area industry. As for the Finnish market, activity remains low, with residential construction and larger private investments still largely on hold. A broader market recovery is not expected in the near term, and overall sentiment remains cautious. At the same time, investments linked to the energy transition, defense, and digital infrastructure continues to support underlying demand over time. Finally, a summary of Norway. Overall net sales were up slightly to SEK 552 million, and organic growth amounted to 3.6%. FX effects impacted negatively by -2.6%.
EBITDA amounted to SEK 26 million, compared to SEK 18 million last year. This corresponds to margin improvement from 3.3% to 4.6%. The improved margin is mainly explained by better utilization and a more favorable project mix compared to last year. Several companies have achieved good profitability in ongoing projects. More proactive sales efforts and somewhat less aggressive pricing pressure have also contributed positively. Norway showed very strong development of the order backlog, which increased by over 40% compared to a year ago. Norway was shown good order intake over the past few quarters, which drives this number up, but it also represent a sequential uptick of 18% compared to Q4. It is, however, important to remember that some of these are for us larger orders with long durations.
I would therefore caution against expecting it to quickly go to execution, especially since the macro environment continues to create some uncertainty around investment decisions and project timing in Norway, with several projects in phase one showing delays regarding the start of phase two. In Norway, the market continues to stabilize with clearer signs of recovery, although at a gradual pace. Activity remains strongest in Oslo and the southern regions, supported by public investments, while we also see some improvements in commercial segments such as logistics and technology. Competition remains high, although pricing discipline has improved somewhat. Onto the cash generation in the quarter. In Q1, cash flow from operations amounted to SEK 234 million, compared to SEK 223 million a year ago.
The increase is mostly related to the stronger earnings and somewhat higher adjustments for non-cash items related to unrealized FX losses. We still managed to showcase a working capital release of SEK 75 million, although this is slightly lower than last year's, mainly due to tougher comparables with a larger reduction in accounts receivables and contract assets in the prior year period. Taken together with a strong development throughout this and previous quarters, means we ended up with a cash conversion at 100%. In total, the cash flow performance gives us confidence in the direction and the quality of our execution. This cash flow profile strengthens our financial foundation and increases our flexibility going forward. By that, over to you, Per.
Thank you, Christina. I have to say, a fantastic work done with cash flow, you and your team have done. It gives us a lot of opportunities going forward. I'm very satisfied with that. Then, let's have a look at our performance on a rolling 12-month basis in relation to our financial targets. Our targets are defined over a business cycle. You have to have that in mind. In the current market, we continue to prioritize profitability and disciplined project selection over pure volume growth. Despite this, we are happy to have reported two quarters now in a row of organic growth, and we have complemented this with a strategic acquisition, TSM, Taksäkerhetsmontörerna, announced in mid-April.
The EBITDA margin came in at 6.4%, a clear improvement from just one quarter ago, but we are still far from satisfied. The implementation of Instalco 2.0 is progressing according to plan, and we see room to improve further in our operations. Over to cash operational cash flow, it was again strong with the conversion rate, as Christina mentioned, at 100%. At our target, supported by ongoing improvements in working capital efficiency. Our leverage remains somewhat over our own long-term target, 2.5x net debt to EBITDA, though it has continued to come down and as of the end of Q1 sits at 2.6x. The board proposes a dividend of SEK 0.5 per share for approval at the AGM next week.
Of course, we remain firmly focused on delivering on our climate commitments as part of our long-term targets. Let's go to the CEO theme for this quarter, and let me take a few minutes to explain how our business is composed and what actually drives our performance. Instalco is built as a group of specialized companies. Over time that has resulted in a well-balanced portfolio across projects, disciplines, customers, and end markets. This is because, I mean, it means our performance is not dependent. It's important to say also that our performance is not dependent on any single segments or type of projects. I think that's very important to mention. If we start with the type of work we do, these charts show our net sales for 2025 broken down in different ways.
I think you can find them in our annual report. Around 70% of our business comes from service and renovation, and these are typical smaller, ongoing or repeat assignments, often closer to the customer and somewhat less correlated to the business cycle. In addition, the majority of our projects are not fixed price. This gives us more flexibility in execution and reduce the risk in more complex projects. Taken together, this means that a significant part of our business is either recurring or has a low-risk profile. Looking at how the business is distributed, we have a broad mix across disciplines. No single discipline dominates, and we combine several technical areas within the group, and the same applies to our customer base.
We work with a wide range of customer groups, from construction and industrial companies to a public sector and property owners. This variety reduce our dependency on individual segments and gives us a more stable foundation over time. At the same time, this is not static. As part of Instalco 2.0, we are working more actively with our customer mix, including more proactive sales, it's very important, and clearer prioritization though, for example, ABC categories. This allows us to gradually shift towards the right type of customers and projects over time. If we look at our exposure across end markets, we see a similar pattern. These charts also show net sales for 2025.
Compared to previous years, we have now broken the end market down into more categories, including logistic and warehousing, energy production, and data centers. Despite shifts in the market over time, our overall exposure remains well-balanced. Going forward, we will continue to actively shape this mix as part of Instalco 2.0. No single end market dominates, and we maintain a presence across several segments with different underlying drivers. This reduces cyclicality and makes the group less sensitive to changes in any or one part of the market. Overall, this composition also of the group gives us multiple drivers of performance and supports a more stable and resilient business over time. I will underline that. Before wrapping up, I want to briefly return to Instalco 2.0.
As you understand, this is my favorite topic. While the previous section focused on our business mix and multiple drivers of performance, this is the framework that underpins how we execute across all of that. This is a slide we showed last quarter, but it's worth repeating. Instalco 2.0 is not a one-off initiative. It's a long-term shift in how we run the business. In Q3, we defined the framework and aligned the operational model. In Q4 2025, we moved into execution, embedding it into daily operations. During Q1, that work has continued according to plan. The rollout is progressing, the structure is being applied more consistently across the group, and it remains our top priority.
We are still early, but this is about building a more disciplined and consistent way of working over time, with continuous improvement at the core. Let us return to the quarter and summarize the key takeaways. We continue to improve EBITDA, and this quarter, the progress is broader, with more parts of the business contributing. It's a step in the right direction, even if there is still more to do. I will also underline that. At the same time, we are seeing clearly clearer signs of recovery in the market. Activity is picking up, but it remains uneven. Given the continued uncertainty in the global market environment, we maintain a disciplined and selective approach. Operationally, we deliver strong cash flow, as I have said earlier, and an even stronger financial position, which gives us increased flexibility going forward.
Instalco 2.0 is continuing to gain traction. The changes we are implementing are becoming more visible in daily operations, and we are seeing the benefits of a more structured way of working. This is very much thanks to the engagement across the organization and the work being done at all levels to continuously improve. Importantly, we are operating with greater discipline in execution, with fewer major negative project deviations, contributing to a more stable and predictable performance. All in all, we are moving in the right direction, step by step, from a stronger position. With that, I would like to thank you for listening and open up for questions. First, from the telephone conference, but those of you following via webcast can submit written questions as well. Thank you very much.
The next question comes from Oscar Rönnkvist from SEB. Please go ahead.
Thank you and good morning. My first question would be on the margin. In Finland, obviously looks very strong as it's as some of the last few quarters. Also wanted to sort of hear on the opposite side in Sweden, if we adjust for the one-offs last year, I think the margin is down around 170 basis points. I think you talked about project margins being quite soft in the delivery that you have in Q4. Just wanted to hear if you have any comments on when the lower project margins are sort of out of the delivery. Thanks.
Shall we start maybe with the question around Sweden? In Sweden, we have improved margins. We are, have a more stable, you know, underlining activity. Also, I also want to say that our project portfolio and our back order backlogs, they are more stable. The projects are more stable. We are not riding ups and downs all the time. The foundation is very solid, I will say. You don't see that so much in the margins. But, I have I think I'm rather satisfied with that as well. We have worked in another way with order backlogs and order intake. I think that will improve. That's Sweden.
We don't see it rather yet, but I think that will come. Finland, I mean, you talk a lot about Finland, Christina as well. I mean, of course, we have a low margin last year, so the uplift is very encouraging. It's driven by higher utilization, improved project execution, and strong performance in companies. I also want to add that while these industrial companies in Finland are reported in Finland, much of the business is in Sweden. So it integrated with our industrial operation there. Maybe you should look, put that together. Also, given the small size of the Finland segment, we can of course expect quarterly volatility since individual projects have a larger effect on the whole.
We therefore recommend analyzing performance over a rolling 12 months, rather than individual quarters. Do we have something to add to that, Christina? No?
No.
No? Okay.
Great. Thank you. My next question would just be on the turmoil recently we have seen in geopolitics, and specifically, on potential cost inflation. I mean, if you can recall, what you did a few years ago when we had high cost inflation, you know, we see fuel prices coming up, et cetera, et cetera. Can you talk a little bit about how you are dealing with the potential cost inflation now in some of the contracts that you have, and also, you know, higher fuel prices, et cetera?
A very good question, it's always actual. I mean, the situation is clearly more uncertain, that's for sure. This is not a new territory for us as an installation group. We have a lot of lesson learned from 2021, 2022. From an operational perspective, this is something we try to actively manage. We have closer lesson learned, we have closer supplier relationships, we are used to handling price fluctuations. We are also working more consistently with contract structures. Price clauses, for example, project selection, that reduce risk over time. Of course, we are aware about the situation, but we are taking actions to meet that, I will say.
Lesson learned from 2021, 2022, definitely.
Oh, that's great. Just to follow up, have you seen any, you know, significant pressure on any sort of cost inflation near term?
Not yet. Not yet. I mean, for the first quarter, the impact on our businesses has been very limited or if any, I will say. No, we haven't seen it yet. Of course, we understand that it will come.
Great. Thank you. I think the final question just on more technical maybe to Christina Kassberg on the CapEx levels. I think they're a little bit higher than usual in the quarter. Just wanted to see if there's anything structural. I think it was CapEx to sales of around 1.3%. Normally, it's around, you know, 0.5% approximately. Anything structural, or is it temporary in Q1?
I would say from the start, we are a CapEx light business. Some investments are necessary, of course, and these can fluctuate a bit from quarter to quarter. Significant for Q1, we had some more CapEx investment in our industrial companies in Q1. That is what you can be seeing in this quarter.
All right. Got it. That was all for me. Thanks.
The next question comes from Karl Bokvist from ABG Sundal Collier. Please go ahead.
Yes, thank you. Good morning. I had a follow-up there on the Finnish business. I hear what you're saying here, just to be a bit mindful of the fact that I believe about a year ago or so, you had some very profitable projects in Norway that you actually flagged that you had had good project execution and also said that, you know, in the upcoming quarters, things would not, perhaps not be as good. Just to kind of verify or double-check here, also given the high organic growth in the quarter, is there anything similar happening here now where the Finnish companies are approaching the end of a few very profitable completed projects?
Yeah. Hi, Karl. I think as for Finland, they have also had good order intake that's continuing also going forward. Of course, 12% is a exceptionally strong margin. As Per mentioned, it's important to remember that it's quite a small segment, so I think quarterly variations here would not be unexpected.
On that same time, they are doing very well. I mean, it's not just the Queen cells.
Yeah. Good. Okay. It's not like we will see a few very, very abnormal quarters. I understand the variations, but just to get that kind of answered.
Mm-hmm.
The second question is. Yeah, sorry.
I think 12% is a very, very strong performance. We're probably expecting continued good performance, but we're not gonna make any promises on margin levels.
Understood. On, we can both look regionally, but also just on a group level. It's encouraging to see that the contract sales business is still growing, or growing for a second quarter in a row. At the same time, we see service as being down a little. I'm just curious here if it has to do with some of the underlying units shifting from service work to contract work, or if there's anything worth flagging here on the service business side of Instalco.
I mean, we are showing growth for the group as more project related business has picked up, and this grows quicker than service, and it's therefore natural that service as a percentage of sales comes down somewhat. As for individual quarter services in absolute numbers can of course fluctuate somewhat. You know, it's a balance between projects and the service and so that can fluctuate.
All right.
We are very comfortable with what we now see here, and we are comfortable with that level that we have.
All right. Yes, thank you for that. That's all from my side.
The next question comes from Johan Dahl from Danske Bank. Please go ahead.
Yes. Good morning, everyone. Per, trying to drill a little bit deeper on the Swedish performance. You know, I was wondering if you can divide it slightly on, I'm talking about this margin decline year-over-year in Sweden. Can you divide it in slightly in contracting service? Do I interpret you correctly that you're referring to a more stable order book that will materialize and sort of rectify the situation during 2026? How should we read your comments there on the stable and the quality of the order book?
That's a good question, of course. I will say that we have a more stable order book. We took on contracts in 2024, 2025 that we see, you know, still have sort of dragging us. I mean that it's a more healthy business today. Seeing result of it will take some time, not, you know, years, but still quarters. My gut feeling is that, as I mentioned, is that we will see improvements in margin here. I will be very surprised if that's not coming in quarters ahead.
I'm rather comfortable even though we have a lower or a flat margin in Sweden. I think they are doing the right things. We are taking all the actions that we have decide on. I'm not worried. I'm rather comfortable about the Swedish, what, how they perform and will perform in the future.
Yeah. It's more a pricing issue than utilization issue in Sweden.
Yeah.
I expect output is to churn. Is that the right-
Exactly.
Got you. Can you provide some or any update on the German venture, such as timing, latest LTM earnings and possibly cash outflow?
I mean, first of all, a long-term agreement underpins the collaboration between Instalco and Fabri. Now we are, as you might know, we are approaching the next phase of ownership in line with our multi-phase model. At the same time, execution is dependent on the right timing and preparations. I think we can talk about the second half of 2026 now. They perform well, and I'm sitting in the chair there, of course, as a chairman, but also I think that they perform well, and we have no, you know, signs of ups and downs or that the market will go down.
I think so far so good, and we will follow our ambitions to sign off, sign here.
Yeah. All in all, I can add that as said in Q4, the timing for step two is still expected to become relevant during the second half of 2026.
Okay, thanks.
The next question comes from Johan Lönnqvist Sundén from DNB Carnegie. Please go ahead.
Good morning. Thank you for taking my questions. First one is also a little bit, sorry for sticking on the Swedish margin, but just I think it's quite important to get a sense of what's happening, because you're talking about margin improvement, but what we can see on adjusted basis margin is going down. You refer-- You're highlighting the report that building automation showing black numbers for the first time. Is there any other part of the Swedish business where we see adjusted EBITDA margins going up year-over-year here in Q1 that's worth mentioning?
We have a strong, you know, industrial sector. I think that also we have not so many write-downs, but of course, we have to take in consideration companies or sorry, projects that we took in in 2024, 2025. They are, as I mentioned, of course, we haven't finished them all. I can just repeat what I said. I think the industrial part doing well, and I think other parts of geographic areas also, they have been an uneven, you know, situation, but I think they are catching up now, the southern part of Sweden, and maybe Stockholm as well. I don't have any other answer on that.
I can also add to that if we look at the different geographical areas, we are seeing even on the adjusted level improvements in a lot of the business areas.
Yeah. I could also maybe add that Sweden had a clearer, more tough effect.
Mm
than the other countries this quarter.
Yeah.
As said, still working through projects taken in a tougher market environment. Also Sweden had a good tick up of the margins in the third month, in the quarter in March.
Have we had?
Sorry, Christina Kassberg.
Sorry.
I think someone caught in your comment there.
Yeah.
What did you say? Did Sweden had weather pro-?
I would say-
... weather related problems or?
The seasonality effects in Q1 was tougher in Sweden than in the other, our other countries in this quarter. Sweden showed a very good tick up in March.
You know, when it's very cold outside, even if we are often inside the buildings, but when it's cold outside, the whole pace of, you know, in our industry is going down. We had a very tough situation in January, February due to the weather. I think you have to have that in mind as well.
Yeah. Tougher than normal, so to say, in that sense.
Tougher than normal. Absolutely. With both cold and snow.
Yeah. Understand. Any, possible to give any kind of comment on progress beginning of Q2? We're now end of April.
Sorry. You know the answer. Sorry. We will not give you any comments. We had a strong March.
Yeah. My final question, it's on the cash flow, and it puzzles me a little bit the kind of level of how much tax you pay and the kind of difference you book in the P&L and what we see in the cash flow. Can you give some kind of reason why you're having such a low tax cost booked in the P&L versus how much you pay in the cash flow statement? It's been a theme now for quite a while.
Yeah. I could say we have lot of entities, as you know, 150 entities, and from one quarter to another. We don't make year-end tax, calculations, in each quarter as we do in the full year and in Q4. That's the main reason I would say that you can't draw the final conclusion on the tax level from a single quarter.
How should we think going forward? Are you in a situation where you paid a little bit too much and the taxes paid should come down?
Would say you can do.
the best guess?
You can take the conclusions when you look at the numbers for the full year, calculate that from 2026 also. We don't have a new pattern here.
Okay, great. Thanks a lot. I think those were my question. I get back in line.
There are no more questions at this time, so I hand the conference back to the speakers for any written questions.
Yeah, thank you. We do have a written question coming in here. Has the number of electricians, plumbers, and similar tradespeople in the Nordic market declined in recent years, or would you say that the overall capacity in your segment remains broadly unchanged?
No, I don't think it has declined. I don't think so. On the other hand, I haven't that, those figures or numbers right here, and not decline, maybe it's rather even. I don't, I'm not sure about that.
That was it for the written questions.
Thank you very much, everyone. Thank you.
We do have one more in the speaker queue, I think.
Uh-huh. Okay. Okay. Thank you very much.