Gradual progress in a cautiously improving market

Comments from CEO Robin Boheman on Q2 2025:
The development in the second quarter indicates that we are gradually moving in the right direction. The market remains challenging, but we are seeing cautious signs of a turnaround, with metropolitan areas in particular beginning to regain momentum. However, the recovery is taking place from low levels and varies significantly between regions.

Despite continued price pressure, we are seeing more projects in the market, allowing for increased selectivity in the tendering process in line with our clear focus on margin over volume. Against this backdrop, it is particularly encouraging that our order backlog continues to grow. This reflects both our competitiveness and the strong demand for installation expertise.

At the same time, the challenging market conditions we have faced for some time are still visible in our results for the second quarter. We are not satisfied with the margin level, even though it is improving sequentially. We continue to focus on increasing efficiency through continuous improvements and cost control, strengthening profitability, and developing our service offering, particularly in a market where new construction remains subdued.

Strong cash flow and new credit agreement
Operating cash flow was strong this quarter, with cash conversion well above our long-term objective. It stems from our clear focus on working capital, project governance and payment terms. A slight sequential increase in the leverage ratio has also occurred, consistent with our expectations Furthermore, we entered into a new credit agreement with our existing banking consortium during the quarter. It ensures continued financial capacity to operate and grow the business long-term, providing a stable and secure foundation for our efforts.

Growth in Germany
Our German platform, Fabri, is making solid progress. The company made another three acquisitions during the quarter and strengthened its market position. It currently consists of 17 companies. We continue to advance the collaboration focused on knowledge exchange and structural capital – and we see significant long-term potential – both for Fabri’s development and for our goal of building a strong platform beyond the Nordic region.

Certified environmental efforts in Norway
Environmental efforts are a natural and important component of Instalco's business. We have set ambitious targets to reduce both our own climate footprint and that of our customers – operating in accordance with the majority of our industry’s certification systems. I am proud to report that we obtained Eco-Lighthouse (ELH) certification in Norway during the quarter. It is Norway's most widely used environmental management system and serves as confirmation that we meet the required high environmental standards. The Eco-Lighthouse scheme also serves as a tool for helping businesses systematically improve their sustainability performance and achieve continuous improvement.

Passing the baton
We announced during the quarter that I will be leaving my role as CEO as of 31 July. It marks the end of an eleven-year journey during which I’ve had the privilege of helping to found, lead, and shape Instalco into the company it is today. It has been a great honour to contribute from the company’s inception to its evolution into a Nordic group with SEK 14 billion in annual sales.

Although the past few years have been challenging for the entire industry, we have made significant progress in building a stronger, more resilient Instalco.

We’ve expanded our offering, grown our service, industrial and technical consulting operations, launched automation, and laid the foundation for growth beyond the Nordic region. I am proud of how we, as a cohesive Group, have taken responsibility, stood together, and continued to grow as a team.

As of August, Per Sjöstrand will take over as the interim CEO. He knows the company well, having been instrumental in shaping it since its inception. This will help ensure a smooth transition at a time when continuity is essential.

Signs of recovery boost confidence for the future
Although times remain challenging, we have noticed signs of recovery in the market, albeit from low levels and with conditions varying widely by location. That said, we see a number of strengths that position us well for long-term resilience: growing demand for technical installations, increased defence industry investment across the Nordics, rising requirements for energy efficiency improvements, and a decentralised model that drives commitment and profitability.

Instalco will keep doing what Instalco does best – building strong companies and teams in close collaboration with our customers.

The full quarterly report: https://instalco.se/en/investors/reports-and-presentations/