Bravida Holding AB
STO:BRAV
Bravida Holding AB
STO:BRAV
Price:
93.8
SEK
-2.8%
Market Cap:
kr19.2B
Add Note
Add Target
Capture your thoughts and set a target
Decide at what price you'd be comfortable buying and we'll help you stay ready.
Based on
Margin of Safety
0%
10%
20%
30%
40%
50%
Your Price Target
Linked to
current price
· In Buy Zone
Loading
Note attached
Choose the stock you wish to monitor with a price target
Popular Picks
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
Bank of America Corp
NYSE:BAC
|
US |
|
Mastercard Inc
NYSE:MA
|
US |
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
Pfizer Inc
NYSE:PFE
|
US |
|
Nike Inc
NYSE:NKE
|
US |
|
Visa Inc
NYSE:V
|
US |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
Coca-Cola Co
NYSE:KO
|
US |
|
Verizon Communications Inc
NYSE:VZ
|
US |
|
Chevron Corp
NYSE:CVX
|
US |
|
Walt Disney Co
NYSE:DIS
|
US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
Good morning, everyone, and welcome to the presentation of the third quarter report of Bravida. And as usual, it's myself, Mattias Johansson, who will take you through this presentation together with my...
Åsa Neving, CFO, Bravida.
Welcome. And I think we start immediately. The agenda, our position in the Nordic market and then, of course, the Q3 numbers, et cetera. Also, we'll take you through the different countries. And then in the end, we will have a short summary and possibility for you to ask some questions.
We start with our position in the Nordic market, and we are still a growing company, close to 14,000 employees all over the Nordic and delivering service to a lot of different types of customers. 85% of our net sales comes from projects, orders, services, below SEK 50 million. We are the leading Nordic provider of sustainable technical solutions for buildings in many different segments.
Electrical, Heating & Plumbing, Ventilation are the biggest segments within our business, but we also have Cooling, Critical Power, Security, Sprinkler, Technical FM, Energy Management, Building Automation, Solar Panel, et cetera, et cetera. So all the systems you need in the building is something we can provide to our customers.
On rolling 12-month basis, we have sales above SEK 29 million today and a lot of and many very, very loyal customers that we are working with every day. So this is the history of Bravida, and we have seen a great development the last 8 years, 9 years, 9% CAGR on sales side, 10% CAGR on the earnings. And then the cash conversion, too weak for the moment. But on average, the last year, we are very close to the 100%, which is our target as well. Very stable development both on sales as well as earnings or profitability, and for the moment, a cash flow that is weaker than we wanted to be.
So we are the leading Nordic provider of sustainable technical solutions, as we say, all customers, every customers have the access to the entire offering within Bravida, and that is a big potential for us as well to sell more to already happy and existing customers. We are moving to a more focused way of looking at the life cycle perspective of every building, and we are the industry leader in sustainability. I'll come back to that later as well. And this is something we try to improve, of course, but also a trend in the market and customers due to the CSRD, taxonomy, et cetera. Looking at the life cycle, energy consumption, the green deal, et cetera, is something that will be supportive for our business and the whole market going forward.
In the bottom to the left, you see also that we're working with EV chargers for cars. We are working with solar panels when we think it's a good idea, and the competition allows us to do that. And then, of course, a segment that we thought -- I thought should be a bigger demand in, and that is the energy-saving industry. And that is a bit -- the demand in that sector is surprisingly low for the moment, and maybe that is because the uncertainty of higher interest, et cetera, et cetera. But I guess when the energy prices goes up again during the winter, the demand for this service will increase again.
So the third quarter in numbers. First, the market outlook. And of course, there are some uncertainties in the market. We see some increased price pressure due to lower demand in some segments. We see increasing interest rates and inflation leads to the delays in decisions regarding investments going forward, and that leads to margin pressure in the whole industry as well as for Bravida as we have been telling you all the last quarters that we are expecting somewhat lower margin. Said that, I think still we have a very stable earnings in the company, in the industry. We are presenting an EBITDA that are in line with last year.
On the other side, when I say that there is uncertainty in the demand, we still see a relatively good demand for service and in some segments, special, the industry segments, I would say, and infrastructure projects. So we have a mixed demand. Residential is definitely down. And today, it's actually only 7% of our sales. But on the other hand, we see a very, I would say, very big demand for our services on the industry side as well as the infrastructure side.
The highlights in number, we are growing 8%. We have a stable order backlog. The order intake is growing 11%, and we are presenting stable earnings. Margin is down to 5.4%. We are growing in both service and installation. We have slightly increased the accident number, and the cash flow is weak. Even if we have a seasonality in this, this quarter is weaker than the last quarter.
Growing organically 3%. We have said when we presented the second quarter that we expect the organic growth to be lower going forward, and we will probably see that flatten out in the coming quarter as well. But all in all, 8% growth, stable and high. Order backlog, order intake increasing both in service and installation, and we have a stable earning.
On group, this means that net sales increased to SEK 6.5 billion from roughly SEK 6 billion. We have an order intake that are increasing from 5.9% to almost the same as the sales in the quarter, SEK 6.5 billion. And order backlog are at SEK 16.5 billion compared to SEK 17.9 billion.
In the third quarter, we also won 2 contracts in the 2 Stockholm city, the underground, the new line -- underground line. And that means it was signed after Q3, and that means that we can add another SEK 1.3 billion on top of that. So if we take that into account, we have the same order backlog this year compared to last year.
The EBITDA in the quarter is SEK 352 million compared to SEK 357 million. And year-to-date, we are at SEK 1.1 billion roughly compared to SEK 1 billion. So we have increased our earnings the first 9 months, and we have, again, a stable order backlog and an increasing order intake.
Net sales in numbers. Organic growth is contributing with SEK 200 million, approximately. M&A, SEK 111 million. And then we have currency effect at SEK 170 million, taking us from SEK 6.097 billion to SEK 6.581 billion.
Growth in both service and installation. We have organic growth in Sweden, Norway and Finland. And I guess that also will comment on Denmark later. We are happy to see that organic growth is coming down in Denmark, so we can -- to be able to consolidate the Danish business.
FX effect is 3%. The EBITDA, SEK 352 million compared to SEK 357 million. And we have a lower margin, 5.4% instead of 5.9%. It is unchanged in Norway, but lower in the other countries. And the margin is mainly affected by, of course, high inflation and a too high growth rate that we have been communicated earlier, and that is still the case. And we have really not been able to pass on all cost increases to customers in the quarter.
But on top of that, we also have some investments that we're doing to become an even better company. And nonrecurring costs for implementing new digital systems and IT systems is SEK 25 million in the quarter compared to SEK 14 million last year. And year-to-date, it's SEK 81 million.
Forecast for the full year '23 is, as earlier communicated, SEK 125 million. Then we have some EBITDA impact on -- coming from new development in new business areas like sustainability and a modern IT platform according to our plan.
And driving the business plan forward increases administrative expenses, but will be -- will enable improved margin and growth going forward. The increased recurring cost to the left is the IT platform, as I just mentioned, digital development capabilities, but also increased sustainability focus and improved HR support.
Then we have the initial cost of investments in new business. We have the technical facility management that is going to -- according to plan. Automation, we can see today that we have a profitable growth. And then Energy Management, as I said a couple of minutes ago, that still a low demand for larger investments in energy efficiency, a surprisingly low demand if you ask me. But I also think that is something that will develop and come going forward because energy is one of the drivers in our industry to make sure that we, in our industry as well in the society, reach and can handle the transformation and meet the things we need to do to make sure that temperature is not increasing more than 1.5 degrees.
Nonrecurring cost in new digital system is system like procurement system, which will give us benefits to suppliers, increase our competitiveness, but also give us a competitive edge regarding sustainability report, et cetera, due to our competitors in a year or -- from now. Project management system, CRM system and then we have systems to handle the technical facility management business as well.
Order intake and the backlog, as you can see, it's very stable. It has been for a while. We have some seasonality in different quarters. We think overall that we have very solid and strong order backlog on a good level. Happy to see that the order intake is increasing with 11% year-on-year, and we have growth in all countries. Some is coming from service and some is coming from installation. And again, the new project to -- in Stockholm is not in these numbers.
Sustainability. LTIFR on group level is up 3%. We have a very good improvement in Finland and Norway, but slightly higher in Denmark. Norway is well below our group target at 5.5%. Then I said earlier that we are the industry leader in sustainability. One way of showing that is that we, today, have 23% of all our cars in our car fleet is 100% electrical. And that is close to twice as many as we had in the beginning of this year. So the transformation is going quite quick internally, and that is something I think we can benefit from the coming years going forward, and that is something that will continue as well.
We can see that the changes in CO2 emissions from vehicles in relation to net sales LTM, has, therefore, improved and gone from 0.9 free ton to 0.79 ton per million SEK in sales, and that is an improvement with 15%, which is good and something we want to see and is well in line with our ambition going forward.
Acquisitions, we have used our balance sheet in the quarter as well. 12 acquisitions so far this year. In the quarter, we have signed 3 deals adding for SEK 740 million in annual sales. We see a continued strong pipeline, and we still see acquisition at strong -- at attractive multiples.
So -- and as you know, we have been signed another deal in Norway in the fourth quarter, Thunestvedt group in Norway. It's adding SEK 600 million in sales. It is the market leader within electrical installation and service in the Western Norway, Vestland as it's called. It had losses in '21 to '23 due to write-downs in some completed projects. So turnaround will be made through reorganization, synergies implementing Bravida Way and increased focus on service. And we expect to reach 0 EBITDA margin in year 1, 2% margin in year 2 and 5% margin year 3.
And just to do the comparison with Oras case in 2017, this is pretty much the same type of deal. That time, we had SEK 1.1 billion in sales. And the business today is -- has been growing 25% to approximately SEK 1.4 billion. We took it down in the first couple of years. And today, we have EBITDA margin at approximately 5% in that business. That is an excellent way to create value for you as shareholders. And that is, of course, something we are planning to do with Thunestvedt as well.
So by that, I hand over to Åsa, who will take you through the performance in the different countries.
Thank you Mattias. And as usual, then let's start with Sweden, where we are happy to say that we are growing sales with the 7%. So top line is at SEK 3.1 million. And the growth is both organic, 5%. And from acquisitions, 2%. And we're growing in installation here. We have an EBITDA of SEK 208 million compared to SEK 199 million, and that is -- gives us a stable EBITDA margin of 6.8%.
Order intake is plus 2% coming from installation. Order backlog, minus 9%. We also got 3 larger orders in this quarter amounting to around SEK 300 million, and that is 1 hospital. It's a multi-disciplined contract in the Stockholm area. There is one -- we're installing a security system for prison and probation services, and then there is a wastewater treatment plant, which is also a multi-disciplined order. And as Mattias said, in Q4, we also got an order regarding installations in the extended subway system in -- or it's actually 2 contracts in Stockholm. So Sweden continued to look stable and also growing in the quarter.
Then moving to Norway, which has a more or less flat sales if you look in Swedish kroner, but there is a growth in local currency. So a 2% organic growth and 1% from acquisitions. And the growth in Norway is from services, which we are very happy with. Also stable margin, 5.2%. Order intake, plus 22%, and this is coming both from services and installation. And order backlog is negative minus 22%.
Denmark then has a growth in sales, but this growth is coming from FX translation. So there is a negative growth if you look in local currency, and we are happy with that. We are -- we plan to take down the volume in Denmark focusing on margin and cash flow improvement. So EBITA margin declined. EBITA was SEK 58 million to -- compared to SEK 70 million, and the EBITDA margin declined to 3.5%. We have some challenges in some projects.
We have had some write-downs in the quarter, and there are also -- there is also write-downs in one of the acquisitions that we did earlier that we are now restructuring and taking actions on. We have a high focus on margin and on cash flow, and Denmark is the main reason why the cash flow also is lower than we would like it to be. Order intake is plus 23%. But in local currency, it is 2%. Order backlog is plus 1% year-on-year.
Finland has a growth in sales of 32%. It's coming both from organic growth, 12%. And from acquisitions, 8%. FX margin also has a 12% impact. And here, we're growing in both service and installation. EBITA margin declined to 2.5%. This is also the trend that we see in a couple of quarters we have. It's isolated to a few right now, and there is mainly one school project that we're having some problems with that is ending now in, yes, next couple of months. So that will be improving. Order intake here is plus 4% negative in local currency, and we have an order backlog of plus 23% year-on-year.
If we then look at the net debt and cash flow, if you look at the left-hand side, you can see the cash -- the financial position that we have now and that we have a cash balance SEK 672 million. We have loans financing of SEK 2.4 billion, and then we had the leasing according to IFRS 16. So of course, basically at SEK 1.3 million. That adds up to a net debt of SEK 3 billion. And with the LTM EBITDA of 2.3, that gives us a net debt-to-EBITDA ratio of 1.3.
And as you can see on the right-hand side, you can see the financing that we have right now. And we are right in the middle of refinancing the RCF that is expiring next year in October. So we are planning to sign a new RCF in the coming months.
Also, you can say CNS, Mattias said, the cash conversion is at 57%. And that is, of course, due to the weak and negative cash flow that we have now in the quarter, and that we are not happy with. So this is now our highest priority to turn this. And the reason for this lower cash flow is -- well, there are different reasons. But one is that we've had the prepayments that we have had before in some of the larger projects. They have been ending the projects. If you take the Stockholm Bypass, for example, we've got a large prepayment a couple of years ago. Now we're starting working on it, and now we are in this quarter and the next. We were working on a negative cash in that project. So that's one reason.
And also this tougher market that we are in now with the margin pressure that we have and some of the brightens that we had, that is, of course, impacting the cash flow as well. And that also leads to -- that it is -- the willingness for customers to pay is a bit less now or you can say it takes longer to -- for the money to get into our pockets. There are more discussions back and forth before we send the invoices and then there are some discussions, and then it takes longer time before we get the money in.
In Denmark, we have a couple of disputes with some public customers. And there is a hospital also in Norway where we are disputing. That is also tying up capital right now. In Norway, though, we have partly sold that. So money is coming in the next quarter. And we believe that the rest will be sold in a pretty short time period.
Saying that, we don't think this will have a negative impact on our on our EBITDA or on our EBITDA margin since we have a pretty conservative revenue recognitions and provisions for this possible losses, but we believe that they will take some time. We will get the money in, in our -- into our bank accounts. But this has highest priority, and we are working with action plans in all countries and targeting especially Denmark on this.
So the financial targets. We have a financial target, as you know, an EBITDA margin of more than 7%. We are right now at 6.1%. Cash conversion, as we talked about, is 57% on average. As Mattias said, looking a couple of years average, we are almost on 100%. Net EBITDA ratio is 1.3, and we have a sales growth of 16%. And we did pay out more than 50% dividend last time.
Well, Mattias, with that, you want to close.
Yes. Thank you, Åsa. Just a short summary. And again, increase of top line net sales, 8%. We have 3% organic growth. We are growing organically in all countries except Denmark, Sweden, Norway and Finland. We have 2% growth from acquisitions. And the margin -- EBITA margin is affected by inflation and too high growth, leading to a lower productivity. And we have not really been able to pass all the cost increases due to the high inflation to customers in this quarter. EBITA margin is also affected by increased costs for some development within the business, but those are according to plan.
Negative cash flow explained by, as also said just a minute ago, increasing account receivables due to strong growth and slower payments from customers and fewer new large projects with payment in advance. But overall, close to 100% cash conversion on average the last years.
So by that, I think we can open up for some interesting questions.
[Operator Instructions] The next question comes from Carl Ragnerstam from Nordea.
It's Carl here from Nordea. A few questions. Firstly, starting at working capital, you said that it's -- the weak development is partly due to disputes. Could you give any flavor of how many disputes there are currently, which impacted this? And also sort of if you could specify the amount from these projects as well as the effects from the prepayment from the Stockholm Bypass project. And also on that, if you could also shed some light on what counterparties you have in this project and if you -- I guess if you have any bankruptcy risk, et cetera, why they're not paying.
Shall I start and then you can fill in with a fact. No, I think the bankruptcy risks are low, close to nothing in those projects where Åsa refers to. I think it's -- of course, we have some risk regarding bankruptcy in the business, but that is more normal conditions that -- and that hasn't increased the last quarter. It's mainly public customers. So they can pay, but they are not willing to pay.
And I just say -- I can say in Denmark, for example, it's very frustrating to have a system that is not working. We have 1 dispute in Norway, for example, where it's a quicker system that works. Part of that dispute is solved. And we actually had -- in that part, we have 100% right, I would say. So we got those money, and they are coming in, in the fourth quarter.
In Denmark, we really have a system that is not working. In the contract, it is decided how to handle disputes. And it's just prolonged, late handling of these disputes. For example, in one of the projects, it's coming up in 2025 or something. So it's very frustrating from our side as well. But yes, I...
Yes. No, but that's -- and these are public customers, I should say, in Denmark. And we're not doing large -- we're not taking large contracts for public customers in Denmark any longer if it's not very -- if we don't have very good terms in the contract. But -- so main part is the accounts receivables, and it is this -- except for these 2 larger disputes that we talked about earlier, there are smaller ones in Denmark, and it takes -- It's a lot more discussions back and forth before we get the money.
And in the other countries, it's -- we don't have any big issues, except for this, we talked about in Norway. But that, we will solve. But in the other countries, it is just, in general, a longer time before we get the money into our accounts. So we are now working really hard. We have people centrally and on division level calling the branch managers, calling customers, making sure that we are doing everything we can to get the money in, in our accounts.
Okay. But it sounds good there is public counteparties at least. How do you handle it POC wise in these contracts? I mean should we expect the write-downs coming here in the coming quarters? If I heard it correctly, you didn't expect that. Of course, on a group level, the POC seems pretty okay. But maybe on a contract level or a division level, it might be a different picture.
It depends -- I mean we have -- I think -- so there are different ways of handling this. In some of the countries, we have a very low revenue recognition already. So you will not see -- and we don't believe that you will see any losses. In some other contracts, there might be write-downs, but then we have provisions for that, that we will resolve. So...
On an aggregated level, what will that end up with?
Pardon?
On an aggregated level, what will that -- what will result in if you talk to division or maybe on the group level?
No. So it will not impact the -- we don't see that it will have a big impact on the margin that will -- yes.
Yes, I think if you asked about the margin, Carl, I think it's more about we see continued pressure on the margin, as we have said before. But we will -- I'm very confident and we are very confident that we will be able to continue to present stable earnings. But of course, we are in a very tricky market condition. We have some segments going down. And then in some other segments, it is a really strong demand. So it's -- but all in all, we stay with a quotation from the last quarter that we will have a pressure on the margin going forward. And I think that is another way to answer your question. It's not only related or correlated to the projects you're talking about now, it's more cities in the industry.
Yes. I think these projects recover pretty well. But then as you say, the general pressure on the margin will take down the margin a bit.
Okay. And in Finland and Denmark, we saw margin pressure in the quarter. Finland obviously stood out here, one big project. What portion of the margin drop in Finland is related to the school project?
And also coming back to -- I mean, if you're finalizing it in Q4, as you said, how -- I mean how is also here the POC look? Will it get worse once it's closed to be finalized after -- I mean, following it will get better in Q1, Q2 when it's out of the books. But -- and also in Denmark, is it across the board, a tough margin in many contracts? Or is it related to just a few that's also about to be finalized?
Yes. But I think in Finland, first of all, I think Finland has the trickiest market of all countries. I think it's not -- the school has impacted now short term. But I think the most important question is about the Finnish overall market going forward, which might -- I expect that to be a bit tricky because the demand is probably the toughest in Finland compared to the other countries.
In Denmark, we have a lot of very profitable business in Denmark. So also said, we are consolidating, taking down the volumes in Denmark and focusing on cash-generative projects and services going forward. And that's what we're trying to do. We have a fantastic business in Denmark as well.
Okay. That sounds fair. Looking at this service versus installation mix, installation continues to obviously gain share here. To what extent is that impacting the margin mix in the quarter?
And also looking at the order intake, you said -- I mean, it's growing by double digit here in the quarter. What portion of that growth comes from service, meaning that the mix at some point might change to the positive?
If you look at service during the year, the margin has improved. So that should have a positive impact. It has improved actually in all countries, except for Denmark. So there, it has a negative impact. So -- but in general, service margin is improving, which is positive for the business. And what was your last question, sorry?
I mean in terms of order intake, historically, services has been more profitable than installation. In the market where you gain shares of sales in installation, you should have a negative margin mix on the group level. But if you look at the order intake, which is up double digit, you said that service is performing very well. So if you look at the order intake, are services gaining shares over installation, meaning that you have a higher growth in services than installation if you look at order intake?
Not really. Actually, service has decreased a bit compared to last quarter.
Year-over-year versus what the decline in Q2? Or how should we...
Compared to last year, was that down or up? I don't really -- I don't remember.
I don't remember those numbers. But I think it's a pretty overweight in the 11% order intake to installation, but not a very big difference. I think that is how I remember it.
But you said that you had a good demand in service, and it's declining. It doesn't sound like you have good demand then or...
Yes, it's still and I think -- but if you look at the service, I think Q3 is the weakest quarter during the year compared -- together with Q1. The strongest service quarters are Q4 and Q3. So you have a seasonality as well in that, and yes.
But I mean, if you look at the order intake in service, that is the turnover during the quarter. So the turnover was a bit slower than the quarter before.
The next question comes from Karl Norén from SEB.
I'll start off with another question on the cash flow. I was wondering if you can give any kind of guidance when we should expect the working capital trends or the trend. Working capital Is increasing as a percentage of sales when that trend is expected to reverse. And also if you could give any guidance on what your working capital to sales should be in, let's say, 1 year from here would be helpful.
First, Karl, I don't think we usually give guidance on that, but maybe we can give some more flavor also.
But we want it to be negative to begin with. And we believe that it will be a top quarter next year and -- not next year, next quarter as well. So next 2 quarters, I think will be still tough. And we hope to...
Okay. And then improving in the second half of next year.
That, we're working that for.
Yes. And then just one question regarding the Norwegian acquisition there. Just to be clear, did you say that you expected to make a 0% EBITDA margin? Is that for 2024?
We are saying the first year. So it depends when we are able to close it. Now very recently, we got the okay from the competition authority. So the first 12 months, yes.
Yes. So closing is beginning of December.
But that's pretty much the same.
Yes. So it will be '24.
Okay. Yes, that's good. And then I just had a question on the margin as well because I think it's quite interesting. You said that you have pressure from inflation, et cetera, impacting your margins, but you still have a very good margin or a flattish margin in Sweden and Norway. And it looks more to be that there are some projects we have some issues in Denmark and Finland. Can you maybe comment a bit on how we should read that? I guess it seems like in Sweden, et cetera, you're handling inflation quite well still. Or do you expect inflation to maybe even more going forward?
I think you answered the question yourself. I think we have handled it better in Sweden and Norway due to different reasons, I think. In Norway, we have a history -- the whole industry have a history of having more index clauses in the contract. So I think we have been supported and helped by that. But in Sweden, I think we have been more successful in actually doing exactly what you said, transport and be more proactive in working with the pricing in a better way than we have been for now in Denmark and Finland. So yes, I think that's the answer.
Okay. Yes. And then a question on pricing for next year. I think it's quite a pretty big topic, I mean...
I think also there can be some differences in timing in each country as well. But all in all, Sweden is our best segment, and that is reasons for that, followed by Norway and that are reasons for that as well. So good business-ships handles trickier environment in a better way.
I think also that in Sweden, we have some areas where we have been able to keep a high margin so that can actually compensate for some areas that we have more problems with.
Yes. That's right, yes.
So margin will be more stable.
Okay. And then just on the pricing and price impact. Can you give any kind of comment on how much pricing helped you in Q3? And maybe some forward-looking comments on the price increase. We're hearing from a lot of companies that pricing competition gets quite tough here. And just your view on that would be helpful in there.
No, no. But I think, first, you started your question with saying that you think our margin is very stable even if we're losing some margin. And I think that is what you can expect from Bravida, we are delivering stable earnings. Said that, I think we still see a decreased margin and it would probably be some tough quarters coming as well, probably a bit lower margin in those quarters. But we have some demand in some segments in the market where we are seeing quite good margins as well as we see some segments where the price pressure is bigger or tougher, what to say. And that is segments that we are not focusing a lot on and we try to avoid.
We have some sweet spots that Bravida is, for example, the sub in Stockholm, the competition is slightly different project where we can price our competencies and risk in a different way compared to, example, residential, which is not very high on our agenda. But a clear trend shift in those segments as well is that we actually have won some residential project because Bravida is a very stable financial partner. Customers, there are a few projects that start, choose to buy from stable financial suppliers, and we are one of those. So we have, for the first time in many years, actually, seen that we got a higher price compared to some others in the market just because we are Bravida. And that is, of course, a good sign as well. But the margin will have some pressure going forward as well. And in some segments, they are better than else.
The next question comes from Johan Skoglund from DNB Markets.
So we were talking about the disputes in Denmark and Norway. But I'm curious about the willingness for customers to pay being lower in general. In general, what is being discussed? Would this be payment terms, price renegotiations, work that has been carried out, milestone timing, et cetera? So I would appreciate some additional color on this and how it has changed.
I think and qualified guess from my side is that for many years, the interest rates have been very low. The cost of capital has been low or nothing. And I think our local organization in some cases have been a bit surprised when they have seen that the other side of the contract have been better in negotiating the payment terms when we have been so successful earlier. Now it is actually a negotiation. Three years ago, no one really -- to express it maybe too strong, but no one really wanted to have the cash. We wanted to have them, and we were successfully in those payment plans negotiations. Today, it is a bigger struggle to get front-loaded payment plans. And then later on in the project as well, it's a bit tougher to get extra work approved, et cetera, and get those payments as well.
So I think it has shapen up all over the line regarding the payments. If we see customers that are not able to pay, a bit increased in Q3 compared to earlier, but not a very big difference, I would say.
No. That's not...
That happens every year. But -- so I think it's just -- everyone is focusing more about on the cash today and also the price levels, et cetera. So I think that is a big change, and that is something we need to handle, of course. Do you want to add something else, Åsa?
No, I just want to maybe add on that. We see that because we call customers and we call the branch -- branches and ask why this wasn't paying us. And then the invoice has to be crystal clear. It has to be exactly verifying what they are paying for. And if it's not -- and maybe that wasn't so as necessary a couple of years ago. But now it's really customers sending back invoices. There's -- we need to credit it. We need to send another invoice. There has to be a documentation in another way. So it's tougher. So we learn as well.
We need to adjust to that.
We need to adjust, yes.
Okay. And are there any specific end markets or customer groups that are more prone to be negotiating? Or do you see this all across the board?
Yes, they're public customers in Denmark.
Yes. But apart from that, I think it's more general.
Yes. And again, the Danish situation is, as I said, very -- you get frustrated because you have a public customer who is loaning money from Danish companies to build the society, and that is not how it works in Finland, Sweden and Norway. And they are not taking responsibility for, as we see their mistakes, projects that are many, many years late and they are not paying because of -- we don't understand. And probably it is because they are a public customer. So they need some kind of court decision to dare to pay out those money.
It's easier sometimes for a public customer to pay out money when someone else have decided and force them to do it. So I think that is the reason behind it. But I think it's -- we are not a bank. We should not be the one who is lending money to the public customers in Denmark. That's my view, and that is something we struggled a lot to handle, of course.
There are no more questions at this time. So I hand the conference back to the studio for any closing comments.
Okay. Thank you all for interesting questions. And I think we say thank you for you who have listened in. And then also myself going back to work some on the cash flow, aren't we?
Exactly. We're going to roll up our sleeves even more and do that.
But overall, stable earnings, and I think we stopped the presentation with that. Thank you so much for listening. Bye-bye.
Thank you. Have a good day.