Instalco AB (publ)

Welcome everyone to this presentation of Instalco's report for the first quarter of 2025. My name is Robin Bormann and I'm the CEO at Instalco and with me today I have our CFO Kristina Kasperi. Let's kick off as usual with a short summary of the company today. Instalco is one of the leading installation companies in Sweden, Norway and Finland and since quite recently we also have a presence in Germany. Our decentralized model is a key strength, gives our local companies the freedom to act, but also backed with a strong governments and shared tools. Across the group, we have more than 6,000 employees contributing daily to enable the green transformation. Demand for our services continue to be underpinned by powerful long-term market trends. First, a quick glance at our last 12 months figures. Net sales amounted to 13.7 billion and we ended also the quarter with an order backlog of 9 billion which represents a steady book to bill of 66%. When adjusting for one-off costs taken in Q4 and Q1 our EBITDA amounted to 900 million which contributes to a margin of 6.6% compared to 7.6% at the same time last year. We are not satisfied with this obviously and we will continue to take action to improve but in this challenging market when many small and mid-sized companies are going out of business it is a testament to our resilience that we can continue to deliver this type of margin. Part of that resilience can be explained by our quick adaption by our subsidiaries to service, which has covered some of the shortfalls that we have on the project side during the past years. In Q1, service remained at the high level of 36% of our revenues. I'm very pleased to see that our cash flow from operations has held up, coming in at almost the same number as this time last year, even despite the decrease in earnings, showcasing our strong focus on improving working capital. If we look at a quick summary of the first quarter, Those of you who have listened in for the past years and even slightly beyond that know that the market has been very challenging for installers. It remains that also in Q1, but we have started to see some positive signs. Despite the headwinds, we deliver an organic growth in the quarter for the first time since Q2 23. And according to external forecasters, the construction sector has passed its weakest point. At the same time, our operational environment is currently characterized by global uncertainty. As a local player, we are not directly affected by the increase in world trade tariffs, but we noticed that the economy is somewhat hesitant and willingness to invest is made up due to some uncertainty, both when it comes to interest rate and geopolitical tendencies. Our margin this quarter was also impacted by several factors including one of costs as well as a continued tough pricing environment in some areas. But we're actively working to mitigate these effects as always. We also completed one acquisition during the quarter and finalized our first phase of our investment into Germany. An important strategy and milestone for Instalco going forward. And with that, I will hand over to you, Kristina, to go through the financials in somewhat more detail.

Thank you Robin. Okay, let's start off with looking at how our net sales and order backlog has developed during Q1. Net sales was up by 0.3% to 3.3 billion with an organic growth of 0.2%. This is the first time in over a year we report organic growth, although small. This was driven by Segment Sweden. The first quarter of the year tends to be seasonally weakest and as usual we saw a slow start of 2025 before activity picked up in March. Our order backlog shows growth of 1.1% in the quarter with an organic growth of 2.1% in constant currency, again driven by segment Sweden. In addition to the backlog, we have our service business, which remains an important stabilizing factor. In our service business, we saw growth of 14% in absolute numbers in the quarter. This resulted in service making up 36% of sales. Then on to looking at our earnings, EBITDA in both millions and margin. The seasonally weak Q1 also impacted on earnings. We are seeing the effects of the price pressure on the market throughout last year for the projects we are now delivering on. We have continued to stick to our strategy of favoring profitability over volume, but in a weaker market environment, the choice of projects becomes more limited. This is still reflected in our margin, which we are far from satisfied with. At the same time, a number of major projects were recently finalized that have not yet been fully replaced with new ones due to timing in the order book. This has led to a number of subsidiaries having temporarily lower capacity utilization during the quarter. This had a direct impact on the group's earnings, especially in other Nordic segments. In December, we communicated that Instalco's remaining exposure to Northvolt amounted to approximately 60 million. Following Northvolt's bankruptcy, we now take the exact cost of 64 million as a one-off expense, which impacted EBITDA in the first quarter. Adjusting for this, EBITDA amounted to 187 million, corresponding to a margin of 5.7%. The action program we also communicated in December is on track. The savings that have been realized so far corresponds to about 5 million in the quarter and we are taking further measures for subsidiaries that need them. To break it down into more detail, over to a slide that summarizes segment Sweden in Q1. Overall, net sales were up to 2.4 billion with an organic growth of 5.7%. The entire one-off cost of 64 million for Northvolt relates to segment Sweden. Adjusting for this, the EBITDA margin amounted to 6.8% compared to 7.9% last year. Without adjustments, the margin came in at 4.1%. The order backlog grew organically by 2.4% to 6.5 million. The Swedish installation market is still characterized by major regional differences. For example, in northern Sweden, the level of activity has fallen compared to last year, although volumes are still good. In Stockholm, as well as in the southern parts of the country, there is some recovery from low levels. In mid-eastern Sweden, demand remains weak. The development and demand in the industrial sector is generally positive. Okay, now for a summary of the rest of Nordic's segment. Overall, net sales were down to 900 million with an organic decrease 11.6%. Acquisitions contributed with a growth of around 1%. The EBITDA margin amounted to 2.7% compared to 5.3% last year. Last year, the market in Finland remained on a low but stable level. However, during Q1, the market showed sign of deterioration. Both sales and earnings were negatively affected by temporarily lower utilization of staff in several subsidiaries, primarily in Norway. This was due to the fact that larger recently completed projects have not yet been fully replaced by new ones. The Norwegian market had a tough start to the year. The timing of the backlog and project pipeline is expected to improve somewhat going forward, but uncertainty remains. The order backlog for the segment decreased organically by 1.3% to 2.4 billion. This still represents a sequential growth from the 2.18 billion at the end of Q4. Then on to the cash generation in the quarter. In Q1, cash flow from operations amounted to 223 million, an increase of 12% compared to last year despite the lower earnings. The positive development is mainly due to improved working capital, which has been a focus area for us for a long time and remains so. The work is never done. Looking at the cash flow from investment activities, here the main thing is that one acquisition has been finalized in the quarter and the minority investment in Fabri Germany was closed. with the majority of the purchase price paid in newly issued Instalco shares. In operational performance, it is reassuring to see that despite the challenging market, we are reporting a very strong cash conversion at 96%. Finally, we look at our performance on a rolling 12 months basis in relation to our financial targets. Our targets are set over a business cycle and given the market situation, there is no surprising that we are currently not meeting the growth target of 10%. This is a result of our prudent order taking over the past year. But I'm happy to say that we are reporting growth numbers that are back in black. Our adjusted EBITDA margin came in at 6.6%. We are not satisfied and continue to take actions for subsidiaries where this is needed. Cash conversion came in at a very high 96% due to strong focus on working capital. The leverage target we have set for ourselves is 2.5 times net debt to EBITDA. In the current environment, with earnings still impacted by market conditions, we remain above the target. This said, we still have significant headroom in relation to our loan covenants, and our dialogue with the banks remains strong. All this to say we have a stable financial position that allows for continued selective growth and we expect leverage to go down quickly when the market turns. This through our focus on profitability and working capital as well as prudence in capital allocation. In a week from now, we will hold our AGM where shareholders will vote on the board's proposed dividend of 0.68 sec, maintaining the level of last year. This is above the 30% policy due to the strong cash flow and forward-looking optimism. And we also remain committed to our climate targets announced in December. More information about this and our progress so far can be found in the recently published annual report. So, Robin, by that over to you again.

Thank you, Kristina. In March, we finalized our first acquisition of the year, which I would like to highlight very quickly here. Alf Näslunds eltjänst is a well-established electrical installation company based in Örnsköldsvik, founded in 1995 and led by Anders Näslund since 2010. The company brings a team of around 30 skilled employees and generates a net sale of around 55 million SEK. This is a strategic step aligned with our local cluster model and well-timed with the upcoming investments in the region. We already have an operation there through Inlandsluft, Kivent and Melins Plåtslageri. and adding Alf Näslunds eltjänst strengthens our multidisciplinary capabilities in the region. We have previously collaborated with Alf Näslunds eltjänst and found a shared commitment to quality and customer focus. We welcome them into the team and to the Instalko family and a natural progression and we are looking forward to a successful partnership together. The theme for the quarter, a typical Instalco project. I know that the typical Instalco company that we showcase in Q3 was quite well received. So we thought about digging a bit deeper and taking a step further and showcasing a typical Instalco project. Our bread and butter is small projects. The projects that are maybe not so prestigious or large that they deserve or weren't a press release, but they are the ones that make up the majority of our offerings in any given year. And it is definitely an area where we can excel. So here is basically one of the pages that I wrote as one of the first ones when we started in Stockholm and it's basically stayed the same. So we focus on the mid-size projects, we focus on the public buildings, residential, commercial building, industrial buildings, housing, corporations and we do that due to that key success factors is quality, lead time, local presence and relationship. And that's also to minimize risk, which is lower in the midsize segments. We can also do some partnering projects here. We have also stayed in the range, as you see here, of 1 to 75 million, where we only have a few larger fixed price projects above 30 million. So this is a size and a business environment where our local companies thrive. This is an illustration that gives you a glance of an order backlog of two of our companies. These companies have a turnover of roughly 60 to 70 million each year. This is a moment in time printout from our POC database and it includes all the projects that these two companies currently have in their order backlog. And of course this varies a lot between different Instalco companies based on discipline, customer base, local market and so forth. And again, this might not be the most prestigious, flashiest projects out there, but it is where we can do our best work. So it's a difference here in company A and company B. You see some difference here. There's some fire stations, some retail, some electrical upgrades, some municipality projects for company B. There are some few residentials, also some commercial, there's some fire, there's school... So there is a wide variety of smaller projects and some projects also somewhat larger here, especially for company B, but also a fire station there for company A, for instance. So actually over 80% of our projects are generated within the range of 1 to 75 million. And you can see the different contract types that we use. So fixed price projects 44%, partnering projects 30% and other types of commercial contracts 26%. And others typically some kind of a mix of the two above. In addition, after growing our service offers, we have a very well balanced sales mix when it comes to projects types where new builds now only make up a third of our revenue. We always get a lot of questions about new production, which of course is a relevant topic. But most of these questions centre around residential and commercial properties. And here it is more important to remember that this also includes a lot of industrial properties. If you look on the right side of your screen there. So renovation, new production and service. So in addition to focusing on an attractive niche when it comes to project size, we have also worked actively in the recent years to broaden our customer base and diversify our end market. Today, our sales are spread across the well-balanced mix of segments. Industrial properties lead at 24%, followed by schools and hospitals at 16%, and commercial properties at 14%. This diversity helps us to reduce exposure to individual sectors and give us a resilience throughout change in the market conditions compared to more focused competitors. Our customer base is as a wide variety of ranges across construction, property, industrial and public sector. Construction companies are our largest group. But no single client is, so to say, dominant in this field. We serve around 2000 customers and our top five customers combined makes up only 11% of our sales in 2024. And our largest contributes to less than 4% of our turnover. It is this diversification across both customers and market that gives us a long-term stability and strength. And here are two examples of typical Instalco projects. The first is a ventilation project during a renovation of a surgery room. Medical context requires special knowledge and advanced skills in a very sterile environment. The other one is a small but quite exciting one. It is a One of our subsidiaries did a heating and plumbing in a very specialized residential new build where the new house of 20 apartments were built on an existing inner yard in a very old style of building surrounding it. These examples showcase the range of our expertise from technical complex environment to innovative urban infill solutions. Now back to the summary and Q1. As we mentioned, Previously, the market remains challenging, but we are starting to see some positive signs. Notably, this quarter marks the first time since Q3 2023 that we are reporting organic growth, even if it's on very small levels. Our order backlog has also seen a slight little increase. Both are important early indicators of a momentum of maybe returns but we're not there yet further our technical consultants at intake continues to deliver margins above the group and they are much earlier in the cycle than our installation companies also our automation branch within matic is showcasing good progress as they get closer to celebrating their fifth year of existence With that said, the environment is still tough and on top of weak market conditions, our margins this quarter were impacted by temporary overcapacity in parts of our business, as well as one of write downs, as Kristina mentioned earlier. These are short term effects and we are taking actions and steps to addressing them. and we are not on a satisfactory level of where we aim to be as a company. Global market remains somewhat unstable and uncertain while our local operation is shielded from these kind of effects and increases of tariffs. But of course we are affected by the investment environment. and we're more influenced by interest rates and development in geopolitical instability. Looking beyond the quarter, our financial situation, as Kristin has gone through, remains stable, which gives us the flexibility to be selective and strategic when it comes to acquisitions. which is an important part of our long-term value creation. I'm also pleased to report that we have completed the first phase of our expansion into Germany. It is a significant step in broadening our platform and diversifying our growth opportunities even further. Internally, our team is working intensively, focusing on what we can influence, how we can improve our efficiency, how we can sharpen our offerings and build the foundation of what is to come out when the market turns. We remain confident that our strategy on our ability to create value, both in short term and long term. And with that, I would like to hand over to you for any further questions.

To ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Carl Ragnarstam from Nordia. Please go ahead.

Good morning. It's Carl here from Nordia. A couple of questions. You talked a little bit about the fact that you completed some bigger projects, especially during Q4, whilst it takes some time for new ones to sort of start up. That sort of vacuum, how long do you think it will last, given that the backlog has developed quite nicely over the past two quarters? So how should we look at that sort of development or that dynamic over the coming few quarters here, remainder of 2025?

I think when it comes to that comment, it mainly was also targeted against the rest of Nordics, where we had some larger and quite profitable projects that ended in Q4 and did not get so much effect in Q1. And we were not able to offset it with that type of profitable projects going forward. So it's always hard to give a prognosis of, so to say, next quarter in that sense. However, we do think that the level that the rest of Nordics delivered this quarter is definitely not satisfactory. And we don't think that this is a level of where they should be. So this was a bit of an extra effect in Q1. I think it's more important to look maybe at the 12 months rolling for rest of Nordics to kind of extrapolate this further out.

Okay very clear thank you and also leverage you obviously had a quite impressive working capital release development especially considering the typical seasonality but looking at leverage approaching three times here could you remind us a little bit apart from the proposed dividend of course but what will burden Q2 and perhaps Q3 such as minority dividends minority payments earn outs and where do you think as of now we might sort of peak in terms of leverage because I guess with the tough market we will see a negative organic at least LTM for one or two more quarters, I guess. So how do you view leverage at this point?

First of all, I want to restate my summary there. We have a stable financial situation. We still have cash in the bank. Obviously, leverage is somewhat high due to the somewhat slow start when it comes to EBITDA. However, we have good confidence in the bank relations at the moment. We still have headrooms when it comes to uh any situation uh regarding the banks so i'm not too concerned on that and more concerned i have to pay a lot of interest rates which i don't like um but uh we still have good discussion just showcasing that we are still able to do m a if we wanted to and so we don't have any restrictions anything like that and not in the near term either To comment on going forward obviously you have to have in your calculation like Kristina mentioned we have our AGM next week where they're proposing a dividend that dividend will be paid in During Q2, we will also buy back some minorities during Q2 and Q3 and typically pay out any long-term, so to say, earnouts that we have for companies we acquired. We have a tendency of having earnouts from between one to three years of typical acquisitions within Instalco. and just to guide a bit you could say that in q2 last year we paid out some 100 plus million and in q3 we paid out i think just shy of a hundred million in this type of payback so to say buybacks of minorities and earnouts so i i would guess you you'll have to look at roughly the same numbers going forward

very clear thank you so much and also finally here on Germany we've seen Fabry doing three acquisitions here today last one I think three a couple of days ago how does Fabry's balance sheet look right now do you think they'll need to inject cash or are they just running with their free cash flows and secondly if you could touch upon the demand situation and margins Fabry is generating in this environment currently, thanks.

So if we start with the balance sheet of Fabri they just received so to say the first and obviously the big injection from us so I think they're well I say well capitalized can you say it like that well capitalized in that sense when we acquired them we also made a deal with existing shareholders to take away all the shareholder debt so to say so they were debt free when we acquired them we had the capital issue issuing here and they also have an existing own bank agreement for fabri in germany so the acquisitions you have seen recently have been roughly done 50 50 so 50 with own cash flow and 50 by bank that they still have headroom so they are well capitalized in that sense i don't see any any need for so to say, any additional shareholder contributions in the near term, unless they do some real big acquisitions. But there is nothing in the pipeline so far. There are more of these typical companies, as you mentioned, they have acquired a few so that the business is growing they have a good stable pipeline and the plan is to execute a few more this year and to have a steady growth within so that we will also grow the business to the targets that we have set for the group so Instalco also gets the threshold of acquiring an additional so to say amount of shares so we can become majority shareholder which we hope to become during 26. okay very clear thank you thank you carl the next question comes from carl noren from seb please go ahead

Yes, good morning. I have a couple of questions from my side as well. And if we start on Sweden, I mean, quite impressive with the 6% organic growth there. It would be interesting to hear what you have seen in the market and if, I mean, overall you have seen an improvement compared to previous quarters, if you would say that. And also a question on, let's say, your strategy there, because before you said that, I think you still say that you have a strategy to prioritize price over volumes. Would you say that you are still doing that or have you taken on some lower margin volumes to get up utilization, you would say?

When we look at per business area I would say that only those that are able to maintain or strengthen the margins are growing at the moment when it comes to sales. So we try to continue with the strategy so we're not growing organically all across the board. So we try to grow where we are also seeing that we can continue with this strategy. So it's not the full grown for whole Sweden, but separate areas are, so to say, growing. And then your other point regarding... On demand overall. Yes, on demand overall. As mentioned before, I mean, we are seeing a bit of a pickup when it comes to activities. I don't know if you saw, for instance, NCC reported earlier today also showing that their building sites were taking on quite some good order backlog as well for building Sweden. So we're seeing some of our customers continue to take orders, which obviously will generate projects for the installers as well. So there are some parts where we can see some growth, but it's still from low levels. We still need more also to get prices up a bit, I would say.

Yeah, understood. And then on the Swedish side as well, Inmatik, is it possible to quantify how much that business contributed to growth here in the quarter?

Maybe not to growth, but we can give you that InTech, so the technical consultants are roughly 460. Inmatik has grown to 75 FTEs. So there are steady growth for Enumatic and we're seeing some positive trends also when it comes to their order backlog. But obviously utilization is not fully there for Enumatic. due to their growth and also due to their quite recent entry into the market. The first companies that we started was roughly a little bit less than one year ago.

Yeah, and I guess it's still impacting margins negatively. Yes.

That is correct.

That is correct.

But they're at least showcasing some positive trends. But they are in the situation, as you might recall, when we started Intech as well, the technical consultants. But Intech is now marginal wise better than the group.

Yeah, it's been a good development. For that one. One question also referring to Carl's question before there on cash flow. I mean, working capital quite strong here. What would you say is the main driver behind the working capital development? Is it broad based across the group or is there some certain larger subsidiaries improving it a lot or what can you say there?

Maybe Kristine you want to comment? I think my comment is only that we have been very focused and we have also basically not talking about working capital but we are talking about specific accounts in our accounting system to make it very easy for subsidiaries to follow this and we track it much more often and much more focus is put. I don't know if you want to add something.

I can state the same actually. We are of course very pleased with the adherence and the strong cash flow and the cash conversion demonstrated in this period and quarter. And we will aim to maintain the high level of operational management regarding this going forward. It's hard work every day. And it's routines and procedures, wrong invoicing, following up, et cetera. It's the DSO and DPO management and hard work. And we will continue to focus on operational efficiency in this area.

Okay, so it's broad-based, you would say. It's not that you've used some factoring or something like that. It's more underlying improvement, you would say. No factoring. Yeah. Yeah, good. And then just the final one on, I mean, you mentioned in the report as well, and you had this Norfolk one up here in the quarter, that there is still a lot of bankruptcies in the industry, et cetera. I mean, do you see any risk that more bankruptcies going forward will impact you in a similar way as Norfolk has made, so to say?

No, I'm not an expert but I'm guessing it is one of Sweden's largest bankruptcies for a very long time. So we don't anticipate anything nearly similar to this situation going forward. As you saw maybe for instance for Särnäcke, which is also quite a large, was a large construction company, the effect was not nearly close to that and that was basically swollen up in the daily business of our subsidiaries.

Okay, yeah that's good. And then if I may just on Fabri one more on their contribution and how it will be reported in the numbers here going forward, because I guess it will contribute with some positive earnings here in Q2, I guess. Just wondering how it will be reported, if you will create a new segment or if it will be reported under like the group items as a positive for the earnings.

Kristina, obviously, this is your expertise, but we have said that it will be on the group so far.

Yes, the profit from Fabri, our 24% going forward from Q2, will be allocated to, so to say, group wide or segment other, as you can read in that table. And if you should look in the P&L going forward, we could think about having an own row that sets share of profits of associated companies. So you can read it from these two places in the quarterly reports going forward.

And I mean, we still have about a year, a year until we at the earliest can can also become majority shareholder. So we have a year to plan also on how we will do this going forward. So but in the meanwhile, as Christina mentioned, this is our plan going forward for the coming year. Yeah, that's good. And that's all for me. Thank you. Thank you.

The next question comes from Marcus Develius from DNB. Please go ahead.

Hello, Robin and Christina. Just a couple of follow-up questions from my side. Most of the questions have been asked already. But going into the working capital again, would you say that you've noticed any payment terms becoming worse towards the end of the quarter due to the geopolitical situation, not the euro? impacted by it by maybe some customers becoming more hesitant?

No I would not say that we have seen any of those type of trends. The overall trend has been obviously when you go into this industrial segment as we have talked about for the last two years that we have really increased three years that we've really increased our focus on industrials they're obviously going from sort of buildings to industrials there are some worsening sort of terms when you are have your industrial end customer but that's sort of in the numbers that has nothing to do with the quarter or the geopolitical situation but that's a shift we have seen but we have been managed actually to offset it quite a lot with improving working capital overall you would otherwise anticipate a worse working capital when you go into this industrial focus that we've done for the last year but we have managed to offset that so happy with that as well

but we can also say in this market all all companies all players in the market as us as we as a company are having eye on the target on the cash flow from operations so it's a day-to-day important business to be close to your to your clients and your customers and and all around the working capital so so with no especially but the market climate gives us the

work hard on the databases on this okay and then a follow-up question on the order backlog volumes seems to be good especially in Sweden but would you say that if you spoke slightly about it but is it because prices to win the projects are down because of competitions remaining so tough and how should investors think about you know the balancing of filling capacity utilization for example in rest of nordics compared to mitigate the margin pressure in the short term versus being conservative and not taking the projects at low margins just if you could talk about the balance there yeah i think it's it's extremely important to um

uh to work with this on a daily basis and this is something that we evaluate company by company and so to say have a discussion with the local ceos on how to structure and what projects to take and not to take obviously at the end of the day we are running a decentralized business model but obviously there is a lot of discussions going on and there is especially a lot of discussions at the moment going on on so to say where is each individual company going to be afterwards maybe when we see a more normal market situation and there we have to plan and I think that plan is how we run the business meaning that do we think that this specific subsidiary will come back to the same situation then we might be willing to sort of have some over capacity in that specific subsidiary with others where we don't see them coming back to the same market as maybe in 2018 or so then we need to take on actions. So as I said before, the situation that we are in today, we have initiated already two cost cutting programs and we will continue to work hard on making sure that we have the right amount of staff and the right staff both for this environment but also the environment that we see after that will come back to a more normal situation so it's a it's like balancing on a knife edge you need to be very cautious not to get rid of people that you need going forward but you can also not so to say continue and be inefficient and have overstaffed as well so it's it's a balance okay

And then a final question from my side. I don't know if you can comment on this, but have you started to see contributions from NATO expansions in the Nordics in the figures now? And do you expect this to ramp up gradually in the coming quarters?

Maybe not from NATO specifically, because NATO, in my view, has maybe not started really, but the The effect of the increase when it comes to defense spend, we are starting to see so much we can comment. Like I said in previous quarters, there is a new customer in town that were not there before.

Okay, thank you. Those were my questions.

Thank you.

The next question comes from Johan Lankvist Sundhien from Carnegie. Please go ahead.

Good morning. Thank you for taking my questions. We touched upon a couple of subjects. I wanted to go back to start off with working capital swings. Big release in Q1. How much or how should we think about... the working capital swing profile for the rest of 25 per quarter? Will there be big kind of swing backs in Q2 and Q3? Or how should we think about that?

If I knew that exactly. But I think that, I mean, this is a focus area. And as I said before, we need to in the environment that we have today, You need to focus locally, as I just mentioned. You need to focus on what you can do as a company yourself. And working with working capital has nothing to do with the market environment or the pricing environment. So this is an area where we can improve and we'll have to continue to work very hard on. We have set quite hard targets for ourselves. to continue uh to work with this then whether the swings will be q2 q3 and so forth that's very hard to comment on um The best I can give is basically look at our historical level of this, that there are typical quarters that are, so to say, good quarters for releasing a working capital. And the best guidance I can give is to look at the historical numbers here. And then we were very happy that we were able to, so to say, offset Q1, which is typically a bad quarter in a sense. uh to to be able to stay at this level we're quite happy with that that's uh but the main focus is to continue to uh to the hard work as christina said and our focus will obviously be going forward to as i just mentioned continue to work with our subsidiaries look at our own costs look at our own processes, our own efficiencies and going through our portfolio. That's the key things to work with coming quarters.

Thanks for the caller and then going to go back to the utilization drop in Norway. Do you think that you must expand your restructuring work initiated during Q4 to cope with the current situation or do you have such a confidence in you or the backlog that you will hold on to your kind of resources during the spring? Or how should we view that?

I think we will continuously, the couple of quarters going forward now, have to take on measures across the board for all companies within Instalco to really go through and and be very thorough when it comes to what kind of actions can we take. As I say, we don't see, even if we see some small positive trends here and there, we don't see a big change in the market in the near term future. So we need to take on actions on our own. So we'll continue this. We might not launch a typical like a product, officials like we did in December, but we are definitely continuing that work and intensifying that work and making sure that we also deliver on the promises we gave in December of saving the 30 million. Because this is a level that we're not satisfied with that we delivered in Q1.

And the wider restructuring initiative that you implemented, how much of an effect did you see already in Q1?

So we have basically seen in December, we said that we were going to save 30 million on this. And I would say that we have, we can see in Q1 already 5 million. And then you can say, oh, but that's not so good. But I think you have to calculate it in a sense that five million is roughly two thirds since this is an ongoing. So meaning if we stay at this level, that would mean that we in the year will deliver 20 out of the 30. so with that said we still have things that needs to come into play as i said a small reminder for those that didn't read the press release in in december was that we were closing down two entities and uh six entities uh were uh we we are um going to um merge and and we have basically closed down two and merged three out of the six um so they're still but also the last one cannot be merged until november so this will be an ongoing project for 25. um maybe a long answer to a short question but roughly 5 million in in the quarter you could say so we're on a good path perfect i i was a little bit late to the call i think uh christina you said that there was a

was activity that was picked up in March. Can you please just repeat the message of the intra quarter activity levels and how Q2 has started?

I think what you referred to is that Q1 normally is a slow season. And we started this year in a low tempo as previous year. But in March, we saw the activity pick up a little bit. And that's where we landed the Q1 quarter you have seen.

Yes, January was very bad this year compared to what it's typically not a great month, but this was really a very slow month, to be honest.

A final question from my side. It's on leverage and the dividend. Given the high leverage situation, were there any discussion for postponing the dividend or scrapping it?

Yes, there were discussions. But I mean, at the end of the day, it is the board's decision. And I think that they had a good discussion, a solid discussion and agreed upon a level. And as Christina mentioned, we have a... consensus in the board of 100 on this and it is also i think maybe a bit of a statement looking forward on where we are heading and the strong cash flow that we can continuously deliver i think that's where the discussion ended up basically perfect i think thanks for the answer i get back in line thank you

Thank you. Good morning. Just wanted to follow up on Johan's question regarding utilization in the rest of Nordics here.

You specifically highlight Norway, but is it then fair to assume that if we call it the change in the margins either year over year or quarter over quarter in the rest of the Nordic, that is mainly due to Norway? Is Finland still progressing at a pretty good level?

I think for Q1 was a bit of a hiccup for both countries in that sense. And to make the answer quite easy, I think the main reason is that so to say a few quite profitable larger projects ended at the end of the year 2014 that we were not able to mitigate in these two countries and remember the rest of Nordics is quite small, so it will fluctuate over time and over quarters, as I mentioned many times before. That's also one of the reasons why we didn't state last year when actually the rest of Nordics beat, so to say, Sweden in margin, that you have to bear in mind that these are small segments, so fluctuation can be quite high when you look at percentage and numbers or absolute numbers as well. due to the lack of scale in those two segments.

Understood and then the development in Sweden we have a return more or less to organic growth and adjusted margins have held up so is there anything worth flagging here regarding any larger projects that were completed we should keep in mind or is it more about the balance between cost and then hopefully a bit of improving activity that should be the drivers going forward.

I mean like I said the activity we are seeing some pickup in the activities however I would not anticipate a big change going forward obviously we're not satisfied with the margins that we deliver in Q1. Q1 is typically a tough quarter however there are things that needs to be done internally and we also hope to see some pickup in the market overall but it is like a trend 25 will be sort of a transition year going forward and we will try to mitigate this kind of price pressure due to cost optimization internally

Understood. And my final one is on the financial situation and covenants. You mentioned a wide margin to your financial commitments, or if we put it that way. I understand you might not be willing to give us the full definition, but just kind of in broad terms, when your financial creditors look at the debt side and the earnings side, do they take into account impairments such as the one we saw now in Q1?

uh impairment thank you uh i mean or yeah yeah yeah we are allowed to to sort of say use adjusted if that's the question if i understand the question correct yes we are allowed to to sort of say deduct the unfortunate uh situation of north hold for instance up to a certain level we cannot obviously adjust for everything we want but we have possibilities to do some adjustments

Understood. And the net depth that you report to them, is that fairly in line with the figure that you report externally?

Yeah, I would say so. Yeah, absolutely. So it's fairly in line.

All right. That was all from my side. Thank you. Thank you.

No more questions at this time. So I hand the conference back to the speakers for any closing comments.

So I think thanks everyone for listening and thank you for the questions. I think we have gone through fairly thorough the report and also the presentation today and a lot of questions. So we thank you all for listening and we will get back to work and continue to improve this company and make sure that we are well inlined and well prepared for what's coming so thank you everyone for listening and have a nice day