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Okay. Welcome to the Q2 reporting of Balco. It's me here Kenneth Lundahl, CEO; and Michael Grindborn, CFO. On Page 2. In Q3, we had more than doubled the order intake. The order intake increase was 116% to SEK 306 million compared to SEK 142 million last year. And it was also 54% higher than in the third quarter, and order intake was 26% higher than the revenue in the quarter. We see that the order intake in Q4, Q1 and Q2 will be really good. And the reason for that is that we see all the cooperation agreement signed [indiscernible] stock and offering stock. The reason for the high order intake in Q2, Q3 and the coming, as we see now, 3 quarters. That's not only, I would say, pent-up demand after the Corona period. We see also that one of the main effect is the improvement we did in the financing before the corona period. The improved financing, especially in the Nordic countries has lowered the monthly cost with about 25% for our customers. And this -- we see this gives a really good effect and it will support the Balco business many, many quarters, years going forward. If we look at -- we have a strong financial position, equity-to-asset ratio is 51%. Net debt to EBITDA 1.2. We have an extended bank agreement, has been signed with Danske Bank with a sustainability-linked revolving credit facility of SEK 510 million and an overdraft facility of SEK 75 million. We have done a lot of sustainability activities, and we will come back to that. Of course, a lot of improvements, a lot of rating improvements, but we will also change -- support our business model in how we can help our customers to transform our project building to Green buildings. We have an improved ESG rating at Sustainalytics from 28.6 to 20.8 and we are really confident in improving this really further next year. Balco has -- is also the current member of the Swedish Green Building Council and the UN Global Compact. Transformation into Green estates. We have seen that old buildings, there are in some cases where you really have to do big change of the buildings, and that can be that the balconies is falling down, you have to do something. In these cases, you see that you should really go in an analysis and see what kind of improvements in any saving you can do. This has all been done in Balco in Holland, in Germany, where we are working with energy consultants and making big, big transformations of the buildings where the energy savings in many, many cases, are more than 30%. Now we will do this offering also in the Nordic countries. I will come back to this later in this presentation. But if we make a quick analysis now of the order intake in the third quarter, 62% of that will give more than 50% energy savings for our customers and 10% of the projects will give more than 30% in energy savings. Our goal and that's not a 5-year goal. I would say it's a 2-, 3-year goal, is that at least 50% of our project -- liaison projects for our customer, we will provide at least 30% energy saving. And this will, of course, help them to run the project really efficient and also give them good long-term financing and also Green loans bonds. I will come back to this Green building transformation, Michael?
Yes, and start to have a look at the quarter 3 financial highlights. And as Kenneth mentioned, we more than doubled our order intake in the quarter. Net sales amounted to SEK 243 million, down SEK 258 million last year of which we had acquired growth of 11% and the organic growth was negative by 17%. The sales was affected by the low order intake during the Corona period from March 2020 to April 20 this year. So that had a strong impact of negative growth of the sales. Order intake was 26% higher than our net sales. That increased by 116% compared to last year, up to SEK 306 million. And of this 103% was organic growth of the order intake. The order intake was also 54% higher than before the Corona year. So compared in 2019, it was 54% higher this year. Of the order intake, 96% would come from the renovation segment. Our order backlog has increased by 13% compared to the same period last year and is now close to SEK 1.5 billion again. Operating profit in the period was SEK 25 million, down SEK 4 million compared to last year with an operating margin of 10.4%, adjusted operating margin. And the reason for the lower EBIT was [indiscernible] sales and also that we had too little to do still in operations and production. But now with a good order intake in the last 2 quarters and our increasing backlog will have a positive effect and need to employ roughly 70 people, both white-collar and blue-collar people in the coming half year. So we really see that we're starting to have more to do in operations and production already in quarter 4 and from beginning of next year, we will be up and running in full speed again. Our cash flow in the quarter was SEK 24 million operating cash flow compared to SEK 35 million last year. Turning to Page 4 and to have a look at the 2 business segments that we have and start with the Renovation segment. We had a really strong order intake for the Renovation segment. It increased by 138% up to SEK 295 million. And it was 96% of the total order intake in the quarter. The order backlog for the Renovation segment increased by 15%, up to SEK 1.25 billion. And is 86% of our total order backlog. Revenue in the quarter was down 12% to SEK 230 million. And the operating profit was SEK 24 million with an operating margin of 11.1%. Turning to Page 5, and our New build segment, it had a little bit lower order intake compared to last year. It was just SEK 12 million in the quarter. And it was 4% of the total order intake. Order backlog is stable at SEK 207 million, and it is 14% of our total order backlog. Revenue though increased by 90%, up to SEK 30 million, and it's mainly because of increased sales in the Maritime segment and also from Stora Fasad, our acquired company. Operating profit was SEK 2 million with an operating margin of 6.7%, and that's an improvement from 4.1% the year before. Now turning to Page 6 and have a look at the 9-month period. During this period, our order intake has grown by 53%, and it has been 35% higher than our revenue. Net sales has been affected by the low order intake during the Corona period and have been SEK 797 million during this period, of which 10% is acquired sales and organic growth has been negative by 24%. Order intake has increased by 53%, up to close to SEK 1.1 billion of which 29% has been organic order intake growth. Operating profit amounted to SEK 81 million with an operating margin of 10.2%. And our operating cash flow during this 9-month period has been slightly negative by SEK 30 million. And now turning to Page 7 and the 2 business segments during this 9-month period, and starting with Renovation segment. Here sales has been negative, affected by the low ordering in the Corona period. So it's been down 20% to SEK 679 million. It's been 85% of our total sales. Order intake though has been very strong, increased by 68% to more than SEK 1 billion. And it's been 95% of our total order intake in this 9 months period. Operating profit, SEK 72 million with an operating margin of 10.7%. New Build segment has been increased in sales by 44%, up to SEK 118 million. It's been 15% of our total sales. Order intake has been SEK 58 million, and our order backlog is stable at the same level as last year. Operating profit, up 37 -- 34% to SEK 10 million. And also the operating margin has been increased to 8.1% compared to 7.6% last year. Going forward to Page 8 and look at our financial position. We have a strong equity to asset ratio of more than 51%, 51.4% to be exact, 2 percentages better than the same period last year where we had 49.4%. Net debt to EBITDA still lower than our set financial goal. So it's [ 81.2 ]. So we have still quite good possibilities to further acquisitions. And if you exclude leasing debt, the net debt to EBITDA is just 0.9. Our profit after tax has been SEK 60 million with -- corresponding to an earnings per share of SEK 2.76 during this 9-month period. And we are prepared [ to ] have acquisitions. We have an acquisition headroom. We extended our bank agreement with Danske Bank, and it was signed and now valid until October 12, 2024, and its sustainability-linked revolving credit facility of SEK 510 million. And we also have an overdraft facility of SEK 75 million. We also have authorization to issue shares to finance acquisitions. So we are really prepared to further on continue with our acquisition growth. And turning to next page, you have a look at our financial targets, and we have a growth target of 10% per year. Now during the last 12 months, we have had negative growth, but we expect to be back on track next year and start to be growing at least 10% per year again. Our profitability goal is 13%, and we have been, during the last 12 months, down at 9.7%, but we also here see that we will start to increase the EBIT margin again. Our capital structure, we have said that our interest debt to EBITDA should not exceed 2.5 more than temporarily. And here, we have -- are down at 1.2 right now. So here, we have good possibilities to grow with acquisitions. Our dividend policy is that we should distribute at least half of our profit after tax to our shareholders. Now we had furlough during the first half year of this year. So we are not able to give any dividend this year, but we will be back and give the dividend again now in 2022? And turning to the next page with sustainability initiatives. We have a product that we have documented, but our material and construction lasts for at least 90 years and it's also fully recyclable after these 90 years. And the only thing that is needed during this 90-year period is 2 minor services. We also have documented that our city balconies, open balconies last for more than 70 years. And when you have a glazed balcony, the average temperature inside the glazed balcony is on average 7 centigrade higher than the temperature outside. And this -- due to this you get energy savings of 15% to 30%, depending on which product you have and under which condition, if it's in south, west or east, the balcony. And this all together, if they are climate positive after 25 to 40 years with our glazed balconies. And Kenneth will talk to this a little bit more, but we have set a new goal that our -- 50% of our glazed balcony products should give at least 30% energy saving. This will be done through complementary product offerings to help our customers to transform their building to Green buildings or Green estates through energy savings. We have also worked a lot with improvement in our sustainability work. And during this year, we had gone down with our sustainability ESG rating from 28.6 to 20.8 to now on the low range of the medium risk ESG rating. We have set a goal that we should be down below 20 next year and be rated as a low-risk ESG company. And now back to you, Kenneth.
Thank you, Michael. We turn -- change to Page 11, Green transformation of the estates. We have learned during many years, and we have seen that when you really have a big [ product with ] a building, then that's a triggering to make an analysis of what you can do energy saving wise for a building. We already do this in a professional way in Holland, where we have energy consultants, so to say, more [indiscernible], for example, you have a cleaner wall build. You have an insulation of the whole roof. We cut gas supply and make, let say, heat hole in the [ mounting ] for the energy. So that is already happening. In Germany, we have the same future [ ratio ]. There we will take a whole grid to make an analysis of the building, but it always starts with the glazing. Now we have taken a decision to do the same in the Nordic countries. So we have hired and own energy consultants, and we will really help the customer to make an analysis of what we can do and help with them with the buildings. This, we are only doing as a general contractor working very, very close to the customer. Our goal is that in the long run, at least 50% of our glazing projects will provide at least 30% energy saving. And then we can, I would say, changed, improved energy declaration of the building, and we can finance the whole building with a Green loan and all the loans in the building with green loans. The renovation of balconies with the Balco-method to new glazed balconies gives energy saving of 15% and 30%. And we have very good knowledge of own products. This is not due to that it's just in glazed balconies, it's also due to the patents, the solutions, the ventilation system that we have. So I would say that if we would buy another glazing company, we could pretty quick improve their way, their possibilities to save energy. But anyway, glazed balconies project gives a trigger that enables energy saving. We will help them to transform them where we see it's possible. The idea is that when we sign a cooperation agreement, we offer also to make an energy declaration of the house or make an analysis of existing energy declaration. And with the resources we have, we can very, very quick evaluate which kind of things we can do to improve it. If they have a problem with the facade, we solve the facade. If they haven't done that roof insulation, correctly, we do that. If they have mechanical error -- change, we can change that. If they don't have solar panels, we will offer that. The solar panel investment with our solution would actually decrease the monthly cost if they don't have enough currency for their buildings and they want to have, let's say charging poles, we will also offer them solar panels, battery charging and electrical post. So this is -- this starts with the key triggering is that the balcony had to do the -- that we make an analysis of the building. And we already know directly that we make a big energy saving of the balconies. So it's not -- we don't need to transform the whole building. And we will, of course, never ever do something if the building is fresh. Then you can't do the change. But if you see that you have to do some renovations anyway, then we will take the grip. And this we'll do as a total contractor. And the reason we do this is, of course, a total contractor get a good grip. Of course, support the business, but we also feel a responsibility because the only time you can do this transformation with the energy declaration, that is when you do 1 or 2 big investments. If you have a good bulk on a good facade, it's really difficult to change the energy saving really, really big. We also know in other countries like in Holland and Germany, there are subsidies to do this big transformation. In Holland, Balco doesn't need subsidized to, how to say, to sell and support our business. With our financing, with our projects and with our lifetime, and we will sell anyway a lot. But we see that there is a big, big push to really transform the buildings. There is an EU Green Deal, SEK 715 billion were probably 1/3 of the money will be pushed in to transform all buildings with a key focus of energy saving. Already before the EU Green Deal, there are subsidies in Holland and in Germany. And what happened now, 1st of October in Sweden, it's possible to get subsidies if you do energy saving of 20% or more of a building. So this is coming step by step in every country. In Sweden, bang. In Finland, it's starting also. Most probably there will come some kind of system in Norway, I would say, in 6 months. Anyway, we will come back to this in many times. And this offering is already happening now in our organization. We have the resources. We have the system. We now have to calculate, we have the financing in place. Now as you see down in Page 11, we can already now follow how much energy saving the projects are giving in the orders we have sold. And our objective is that this will move so that more or less 50% of our projects has energy savings of 30% or more. Okay. I think that was it. Please, questions?
[Operator Instructions] We have the first question from Nicklas Fhärm, SEB.
So first, a couple of housekeeping questions on Q3 results. I meant to ask you if you could walk us through the gross margin bridge, which is expanding by about 2 full percentage points compared to Q3 last year, please?
Yes. Main improvements are coming from where we have, I would say, of course, we have had some increased material costs, but we have been able to transfer them to customers. We have no real effect on the project margins. They are very stable, but we have sold or have had most of our net sales in our high-margin countries. So main part of the sales has been coming from Sweden and Norway. So that's really the main reason that we have improved our gross margin because still people in both production and operations had a little bit -- too little to do. So full positive effect, we have not seen. But main reason is that main sales are coming from Sweden and Norway where we have our best margins.
We can say that the margin going forward, as Michael said that regarding price increases, we are really -- we are always selling on the existing prices, not what they bought material and so on. And we also have a material index of, I would say, 80% of all the orders we have in the order stock. And the orders we are putting into the order stock, they are also always evaluated when they put in them and also monthly. So we feel really comfortable of the margin in our order stock. So we are really don't -- we don't feel that we will get hit in our net due to the material cost in our order stock.
Thanks for taking that as well. That was actually my second question. So my third question would be, if you could give us some idea of the EBIT contribution from Stora Fasad and RK Teknik in Q3, please.
We don't comment on EBIT on separate companies. So we will not give that.
But I can say that their run -- if you look at the plans we had when we made acquisitions, they are running without -- or, I would say, performing better. And in order intake going forward, we are very happy that we bought these 2 companies. And also, if we look in our product offering, the combination, balconies and facade, where we, in some cases, do everything ourselves. And in some cases, we take in someone else, that is really a good thing. When we run it as a total contractor, the efficiency that we get from that is really, really high. And I would say that when we bought Stora Fasad turnover is SEK 30 million. They will expand many, many times going forward, not in percentage, it's more at times. Yes, so that area, we are increasing heavily with the people, both in sales and also we are building up a lot bigger operation organization in that area.
Thank you, Kenneth. And this is also, of course, answering some of my follow-up questions here, but for the record, could you give us just a broad description of the main drivers to taking primarily RK Teknik's, say, 8-ish percent margin to closer to your group margin target sometime in the future? What will be the main components necessary for you to deliver on here, please?
When we bought TBO, we improved the profit with 100%, EBIT-wise, in 3 years, and we will do the same for RK Teknik due to the synergies, due to the sales pros and the offering we can do. And they will also get new products from us. They haven't had their own glazes before, now they will get it. And they are also niche player that are really competent in concrete balconies, which they can sell to all other companies and all other countries in our group, we don't have that solution. We didn't have that solution before. So they will have both a margin improvement, and they will have also sales improvement. So they are -- they will have also really good, say, run in Balco as TBO has. And also they were only selling in Sweden before. And we can offer their products also in the other Nordic countries.
Okay. I will come back into the call perhaps later. But one final question from me at this stage would be to ask you, so your new Green estates goal, does that actually include increased OpEx or CapEx for that matter in order to be met?
No. But the only thing that will happen with it, if we look at actions we have done step by step, before Corona period, we improved our financing a lot, that will improve our order intake many, many years going forward. This offering in Green states, this broaden our offering increases or turnover, and it will also increase our sales of balconies. So the only thing that will happen is that we will need to build more capacity earlier because we believe that order intake going forward here will be really, really good organically and this will also support organic growth. I would say that this Green estate transformation, I will say that, that is one of the biggest things that Balco has done the last 8 years. And after that, I would say it's the transformation of the financing and of course, some new product. But this is really a big thing helping the customer, I would say. And we are really -- this is not just something we found out last week, we have learned a lot of what has happened in Holland and Germany. And we know very well about the energy savings effect in a building.
Next question is by Kenneth Toll, Carnegie.
They were good questions asked by the former questioner. But still, I want to go back to the Green estates and that project. Do you -- have you started working like this in some countries, but not in all countries? Or where are you in your offering on this side, country-wise?
In Holland, we have done that, I would say, 1 year. In Germany, half year, up a little bit more perhaps. So there, we have already this, I would say, energy consultants that understand our products very well, they understand the financing, they understand the subsidy system because there they have subsidy system. So we are actually the consultant helping the customers through the whole process, the evaluation, the calculation, the financing and also all the application of how you are applying for this. In Sweden, we have hired internally this kind of resource. This resource worked before in the Nordics, Sweden. He himself found buildings, where they had to do some with the basing. He found out what they could do with insulation, the facade, windows, roof insulation, heat exchanging. So he came to the customer and said that with this action, with the financing I have for the bank, we can do this without you having to increase the monthly cost at all. That person, we have hired. And we have worked with this, I would say, for a while. So these we are all offering. We already now, as you see in our order intake had a good feeling about what energy saving is happening. Last -- this week, we signed 1 cooperation agreement. For one project it is EUR 10 million. And we already know now that, that will be energy saving over 30%. So there we can do all the work with the project, give them a good project, we can help them with the financing. We can help them with Green bond. And also here with a Green bond, we can actually change all the loans they have in the building. So if you don't take this chance to really move building your from past [ EF, to say, CD ], if you don't take that chance then, you cannot have the opportunity in the next 15 to 20 years. So Ken, this is happening now today. We are doing the offering. But of course, this is a lot of education internally, but also say, external for the customer. We will -- we see this that we don't need to buy more companies. We have older agreements with solar panel solutions, we know the effect of that. Facade, we know very well of. Some of facade we do ourselves. Some of facade we will do as total contractor, we take in supplier. The only thing I see now that I would like to buy tomorrow, that's a roof insulation company that is flexible in the Nordic countries. That one, we would buy 100% or 51% directly because that's a quick fix helping energy savings with a low cost and a quick return.
Next question is by [indiscernible], Carnegie.
So my first question is in this order backlog in Q3, could you tell us how much was it from the new acquired company.
It's slightly less than SEK 100 million who is coming from the acquired companies.
Okay. And can you also say something or what we can expect in future acquisitions? Are you focused on your verticals and foreign countries and then...
Acquisitions going forward is in Nordic country as #1 and after the Nordic countries, it will be Germany. But #1 is where we -- in the Nordic countries. And it is in the balcony segment. It can be like a roof insulation company. But otherwise, we are growing organically with competence inside house, doing the most of the work ourself as total contractor.
Okay. And this financial target in total sales growth, how is that [ risk ] by organic and acquired would you say?
The organic sales -- just a second here, which page, Michael. This one here?
Yes.
The 10% that we will achieve a lot more than next year and going forward. So I mean that -- the next coming 2 years organically in the box, probably some more acquisitions. Don't forget that we had a really boring period during the Corona. Now Q2, order intake good. Q3 and the next coming 3 quarters will be really good. So turnover increase next year will be more than 10% for sure and probably next year also with all the activities we are doing. But we will not change this target anyway. So the next coming years, organically, yes. Later on, perhaps organic with acquisitions.
Okay. And with the subsidies, would you say that tenant association, organizations that they know about this? Or [indiscernible] ?
No, this is a good question. This is so good. Listen, here, we were working with this since 1 year ago. And we knew about the EU Green Deal. And then suddenly, 1 person internally in Balco organization said, Kenneth, I have seen some small notice in [ DE ] that it was a subsidy to come here. We didn't know. I mean hello, [indiscernible] didn't know it, [indiscernible] didn't know it, [indiscernible] didn't know it. I mean hello, what kind of advertising was this in Sweden of the EU Green Deal. This is something that [indiscernible] both are working on. Actually, their own people internally [Foreign Language]. In english...
The people handling this.
The people handling this. They will be educated next week.
Next week.
They have got in already 150 applications. So you could say like this, we didn't know this was coming. But from what I believe, it happened in Sweden now. I think that in the Finland, they will improve there. And I would guess that in 6 months, they will do something in Norway. This will just be popping up in many countries.
There are no further questions and so I hand back to you.
Okay. Excellent. Thank you all, and we wish you all a really good day.
Yes. Thank you.