Q4 2024 Instalco AB Earnings Call Transcript
Key Points
- Instalco AB (LTS:0RP5) reported a strong cash flow from operations of SEK 471 million in Q4, showcasing effective working capital management.
- The company's service business grew over 10% in absolute numbers for the full year, with service sales reaching a record high of 41% in Q4.
- Instalco AB (LTS:0RP5) made a strategic move into the German market by signing a minority investment agreement with Fabri Group, aiming for majority ownership in the future.
- The company announced climate targets aiming for net zero emissions by 2045, with a medium-term goal to reduce greenhouse gas emissions by 50% by 2030.
- Instalco AB (LTS:0RP5) maintained a stable cash conversion rate of 89% despite challenging market conditions, reflecting strong operational efficiency.
- Net sales decreased by 6.8% to SEK 3.6 billion in Q4, with organic growth down by 7.4%, indicating a challenging market environment.
- The EBITA margin dropped to 5.4% in Q4 from 8% the previous year, impacted by one-off costs and market conditions.
- Instalco AB (LTS:0RP5) faced a challenging market in South Sweden, with overcapacity and a lack of large projects affecting performance.
- The company incurred one-off costs of SEK 94 million in Q4 due to restructuring efforts, including layoffs and subsidiary closures.
- Instalco AB (LTS:0RP5) reported a decrease in organic net sales for the full year by 6.5%, falling short of their 10% target.
Welcome to the Instalco Q4 presentation 2024.(Operator Instructions)
Now I will hand the conference over to CEO Robin Boheman. Please go ahead.
Net sales of around SEK 13.7 billion, and we ended the year with an order backlog of SEK 9 million, which represents a book to build of 66%. When adjusting for one of costs taken in Q4, our EBITA amounted to SEK 944 million corresponding to a margin of 6.9% compared to the 7.6% in 2023. This is a bit lower, but it also shows our strength and resilience in a very challenging market over the last year.
Part of that resilience can be explained by a quick adoption by our subsidiaries to service which has covered some of the shortfalls on the project side. So, for the full year, service represents 35% of our revenue compared to 30% in recent years, and I'm also pleased to see that our cash flow from operations has held up and is down by less than our earnings, showcasing the strong focus on improving working capital.
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