Instalco (INSTAL) Q4 2024 earnings summary

Executive summary

• Net sales for 2024 reached SEK 13,690 million, with an organic decline of 6.5%–6.6% and Q4 net sales down 6.8% to SEK 3,610 million.

• Service business grew to 35% of revenue for the year and reached a record 41% of Q4 sales, offsetting declines in Project business.

• Strategic entry into Germany via minority investment in Fabri Group, aiming for majority ownership by 2026–2027.

• The company responded to a challenging market with efficiency improvements, cost savings, layoffs, and closure of eight loss-making subsidiaries, incurring one-off costs in Q4.

• New climate targets announced: net zero by 2045 and 50% reduction in Scope 1 and 2 emissions by 2030.

Financial highlights

• Q4 net sales declined by 6.8% year-over-year to SEK 3,610 million; organic growth was -7.4%.

• Q4 EBITA margin was 5.4% (8% last year); adjusted for one-offs, margin was 7.2%.

• One-off costs in Q4 totaled SEK 94 million, including SEK 65 million for subsidiary closures and SEK 29 million for goodwill impairment.

• Order backlog increased 6.7% organically to SEK 9,002 million, mainly driven by Sweden.

• Cash flow from operations in Q4 was SEK 471 million, with a stable cash conversion rate of 89%.

Outlook and guidance

• Measures taken in Q4 to improve competitiveness will gradually take effect in 2025.

• Cautiously optimistic outlook as more projects become available and order backlog grows.

• Focus remains on prudent order selection, margin over volume, and working capital improvements.

• No significant deleveraging expected in Q1 or Q2 2025; leverage to remain stable.

• Long-term climate targets set: net zero by 2045, 50% reduction in Scope 1 and 2 emissions by 2030.