FULLTEXT DEL 1 AV 1
Kvartalsrapport Q3 2023
===== SIDA 1 =====
Interim Report Q3
JANUARY – SEPTEMBER 2023
" Weak order intake during the quarter but continued great interest in our products. The need to take action
on your balcony does not disappear. In the long run, an untreated balcony poses a danger to both the resi-
dent and those who move around the balcony. "
" Balco is entering a new market as we have taken our first order in Ireland with a value of approx. 3 MEUR.
We assess that there is great potential in this market going forward within the new build segment. "
- Camilla Ekdahl, President and CEO
Stable profitability despite lower sales
The third quarter: July – September
• Net sales amounted to 253 MSEK (311)
• Order intake amounted to 135 MSEK (265)
• Order backlog amounted to 1,067 MSEK (1,461)
• Adjusted operating profit (EBITA) amounted to 15 MSEK (17)
• Operating profit (EBITA) amounted to 14 MSEK (16)
• Operating profit (EBIT) amounted to 12 MSEK (16)
• Net profit after tax amounted to 6 MSEK (11)
• Earnings per share amounted to 0.26 SEK (0.48)
• Operating cash flow amounted to 20 MSEK (104)
The interim period: January– September
• Net sales amounted to 925 MSEK (950)
• Order intake amounted to 682 MSEK (921)
• Adjusted operating profit (EBITA) amounted to
74 MSEK (73)
• Operating profit (EBITA) amounted to 67 MSEK (71)
• Operating profit (EBIT) amounted to 62 MSEK (69)
• Net profit after tax amounted to 40 MSEK (50)
• Earnings per share amounted to 1.82 SEK (2.39)
• Operating cash flow amounted to 2 MSEK (122)
Events during the quarter and since the end of the quarter
• In October, Balco has received an order of more than 70 MSEK in Northern Sweden.
• Balco has received its first order in Ireland with a value of just over 3 MEUR.
• Balco Group has joined the Science Based Targes initiative.
• Balco Group has prolonged its RCF with Danske Bank with two years and it is now valid until October 12, 2026.
Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec
MSEK 2023 2022 2023 2022 2022/23 2022
Net sales 253,3 310,8 925,4 950,4 1 308,6 1 333,6
Order intake 135,1 264,8 681,7 920,7 869,6 1 108,6
Order backlog 1 066,9 1 460,8 1 066,9 1 460,8 1 066,9 1 274,7
Adjusted Operating profif (EBITA) 15,2 17,3 74,5 73,0 108,7 107,2
Adjusted Operating margin (EBITA), % 6,0 5,6 8,0 7,7 8,3 8,0
Operating profit (EBITA) 13,9 16,5 67,4 71,1 101,3 105,1
Operating profit margin (EBITA), % 5,5 5,3 7,3 7,5 7,7 7,9
Operating profit (EBIT) 12,3 16,0 62,3 69,4 95,4 102,5
Operating profit margin (EBIT), % 4,8 5,1 6,7 7,3 7,3 7,7
Net profit for the period 5,6 10,7 39,9 50,1 66,0 76,2
Operating cash flow 19,9 104,2 2,3 122,2 80,4 200,3
Earnings per share, SEK before dilution 0,26 0,48 1,82 2,39 3,21 3,78
Earnings per share, SEK, after dilution 0,26 0,48 1,82 2,36 3,21 3,75
===== SIDA 2 =====
2 | Balco Group Interim Report 1 January - 30 September 2023
New market - Ireland
As expected, the quarter had a declining turnover, but we
have managed to defend our profit margin in a good way.
Order intake was weak as customers are still waiting and the
decision-making process takes longer.
More persistent inflation and larger than expected in-
terest rate increases have affected order intake
When we look back, most macroeconomists' expectations
were that the Swedish key interest rate would peak in 2023 at
2.25 percent. The tenacious inflation has meant that the Riks-
bank has raised the key interest rate to 4 percent and will
perhaps raise it somewhat further. There has been similar de-
velopment in the euro area, Norway, Denmark and Great Brit-
ain. This has meant that the rec overy in order intake that we
had expected has been postponed.
Activity in inquiries and discussions about projects continued
to increase in the third quarter. Our customers have started
to get used to a higher interest rate, but the process leading
up to a decision takes longer than before, as discussions with
banks and potential advisors, among other things, often drag
on. Whe n it comes to housing associations in Scandinavia,
Balco has a unique sales model where we support and help
the associations also in these discussions with financial exper-
tise, but currently these processes take longer due to the un-
certainty that still prevails around when the central banks will
be ready with their interest rate increases.
New market - Ireland
Balco has had a very good development in the UK market in
the new build segment with our product Levitate. There is still
a great need for housing in the UK, but also in Ireland. In the
quarter, Balco took its first order in Ireland worth just over
3 MEUR. We see it as a first step in getting part of a market
that is currently planning for 350 construction projects in
Dublin containing balconies, where the balcony part of these
projects has a value of up to 2,700 MSEK.
Green transformation and sustainability
As an important step in our sustainability work and aim to
be a leader in climate change in its industry, Balco Group
has committed to developing short-term and long-term tar-
gets for emission reduction including net zero targets in line
with the Science Based Targets initiative (SBTi). Through the
undertaking, Balco Group will develop and report its targets,
including a long-term net zero target, to SBTi for approval.
We thus become part of the UNFCCC's Race to Zero cam-
paign. The new and more ambitious targets will, upon ap-
proval, replace Balco Group's existing reduction targets for
scope 1, 2 and parts of scope 3 until 2030.
We know that there is, and will be, a great need to renovate
not only balconies, but also the entire surface layer of apart-
ment buildings in the future, as approximately 40% of our
entire energy needs are used to heat the homes. As previ-
ously informed, Balco will be part of this necessary transfor-
mation by being able to run turnkey projects where the
glazed balcony is a trigger for the start-up of such a project.
To further strengthen this part, we in Norway have signed a
cooperation agreement with a company that works to in-
form and sell these types of projects to housing associa-
tions. The founder has solid experience from both the bal-
cony industry and larger transformation projects, and we see
great potential in this collaboration going forward.
Acquisition discussions
We have several ongoing acquisition discussions and receive
various prospects on an ongoing basis which we evaluate.
However, we are selective and focus on profitable companies
that strategically strengthen our market position in existing
markets as well as companies that strengthen our green
transformation offer. Acquisition of balcony companies can
also be interesting in new markets if we judge that the market
has potential and that the companies are well managed and
profitable.
The need for renovation of balconies remains
The need for renovation of balconies remains. Postponing the
measures will not improve the balconies. A balcony that is not
renovated in time can pose a danger to the resident as well
as to people moving around the balcony when chunks of con-
crete fall down. In the worst case, the balcony must be closed
off and also the area around the balcony. This of course
greatly affects the living environment, but also the property
owner as it leads to the need to lower rents until the balcony
is renovated . About 90 per cent of Balco Group's turnover
comes from the renovation segment, which means that we
are convinced that order intake will start again in the future.
In October, we received a large order in northern Sweden of
more than 70 MSEK, which shows that projects are coming
but the sales work is taking longer.
Challenging coming years with cost focus
The lower order intake in the past year will affect turnover
and earnings in the coming year. We continue to focus on
costs to defend our profit margin and adjust to the organi-
zation based on changes in occupancy and order intake but
retain important competence so that the company is not
damaged in the long term. We still have good capacity in
our factories and in our project organization, which will be
needed when the market situation around interest rates and
inflation has stabilized, and order intake picks up.
Camilla Ekdahl
President and CEO
===== SIDA 3 =====
3 | Balco Group Interim Report 1 January - 30 September 2023
The group’s development
The third quarter: July – September
Net sales amounted to 253 MSEK (311). Acquired growth was 6 percent, currency
effect was 2 percent and organic growth was -26 percent. Net sales for the renova-
tion segment increased to 225 MSEK (284) and net sales for the New Build segment
amounted to 28 MSEK (27).
Order intake amounted to 135 MSEK (265). The Renovation segment accounted for
82 MSEK (256) and the New Build segment accounted for 53 MSEK (9).
The order backlog amounted to 1,067 MSEK (1,461). The order backlog for the Reno-
vation segment amounted to 899 MSEK (1,325) and the order backlog for the New
Build segment amounted to 168 MSEK (136).
Gross profit amounted to 53 MSEK (61), entailing a gross margin of 21.1 percent
(19.6).
Sales costs amounted to 25 MSEK (29) and administrative costs amounted to
17 MSEK (16). Items affecting comparability of 1 MSEK (1) were taken in the quarter
linked to restructuring of the organization and acquisition costs.
Adjusted operating profit (EBITA) amounted to 15 MSEK (17), corresponding to an
adjusted operating margin of 6.0 percent (5.6). Operating profit (EBITA) amounted to
14 MSEK (16), corresponding to an operating margin of 5.5 percent (5.3). Operating
profit (EBIT) amounted to 12 MSEK (16), corresponding to an operating margin of 4.8
percent (5.1).
Net financial items amounted to -5 MSEK (-2), of which -0.4 MSEK (-0.5) refers to
interest costs linked to right-to-use assets (leasing). Profit after tax amounted to 6
MSEK (11). Earnings per share increased to 0.26 SEK (0.48).
Operating cash flow amounted to 20 MSEK (104). The timing of building permits and
the phases of the projects affect the cash flow between quarters.
Order intake per segment, MSEK
Order backlog, MSEK
100
200
300
400
500
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2021 2022 2023
New Build Renovation
250
500
750
1 000
1 250
1 500
1 750
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2021 2022 2023
Net sales
Q3 2023
253MSEK
===== SIDA 4 =====
4 | Balco Group Interim Report 1 January - 30 September 2023
The interim period: January – September
Net sales amounted to 925 MSEK (950). Acquired growth was 6 percent, currency
effect was 2 percent and organic growth was -11 percent. Net sales for the Renova-
tion segment increased to 846 MSEK (836) and the net sales for New Build segment
amounted to 79 MSEK (114).
The order intake amounted to 682 MSEK (921). The Renovation segment accounted
for 570 MSEK (846) and the New Build segment accounted for 112 MSEK (75).
Gross profit amounted to 195 MSEK (211), entailing a gross margin of 21.1 percent
(22.2). The gross result includes items affecting comparability of 4 MSEK (1) linked to
restructuring costs. The adjusted gross profit was 199 MSEK (212) and the adjusted
gross margin 21.5 percent (22.3). The gross margin has decreased due to an in-
creased share of sales in low-margin markets and in subsidiaries with a lower gross
margin. In addition, the gross margin is negatively affected by low occupancy within
mainly production.
Sales costs amounted to 82 MSEK (93) and administrative costs amounted to 54
MSEK (49). Items affecting comparability of 3 MSEK (1) are taken in connection with
restructuring of the organization and acquisition costs.
Adjusted operating profit (EBITA) amounted to 74 MSEK (73), corresponding to an
adjusted operating margin of 8.0 percent (7.7). Operating profit (EBITA) amounted to
67 MSEK (71), corresponding to an operating margin of 7.3 percent (7.5). Operating
profit (EBIT) amounted to 62 MSEK (69), corresponding to an operating margin of 6.7
percent (7.3).
Net financial items amounted to -10 MSEK (-5), of which -1.2 MSEK (-1.5) refers to
interest costs linked to right-to-use assets (leasing). Interest costs have increased
linked to higher market interest rates. Profit after tax amounted to 40 MSEK (50).
Earnings per share amounted to 1.82 SEK (2.39).
Operating cash flow amounted to 2 MSEK (122). The timing of building permits and
the phases of the projects affect the cash flow between quarters.
Net sales per customer category, MSEK
Net sales per geographic market, MSEK
Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec
2023 2022 2023 2022 2022/23 2022
Tenant-owner associations 130,5 225,3 599,7 680,1 872,5 952,9
Private landlords 30,1 9,8 79,2 47,6 95,0 63,5
Publicly owned companies 9,1 11,9 40,3 43,5 50,0 53,2
Construction companies 83,6 63,8 206,2 179,2 291,0 264,0
Total net sales 253,3 310,8 925,4 950,4 1 308,6 1 333,6
Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec
2023 2022 2023 2022 2022/23 2022
Sweden 148,3 189,0 585,8 588,8 832,6 835,6
Other Scandinavia 63,7 80,9 228,1 250,4 320,8 343,0
Other Europe 41,2 40,9 111,5 111,2 155,1 154,9
Total net sales 253,3 310,8 925,4 950,4 1 308,6 1 333,6
Net sales, MSEK
Adjusted operating profit, MSEK
0
300
600
900
1 200
1 500
100
200
300
400
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2021 2022 2023
0
50
100
150
10
20
30
40
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2021 2022 2023
Adj.EBITA-margin
YTD
8.0 %
Net sales
R12
Adjusted operating profit
R12
===== SIDA 5 =====
5 | Balco Group Interim Report 1 January - 30 September 2023
Development per segment
Renovation
The third quarter
Net sales amounted to 225 MSEK (284). The segment accounted for 89 percent of Balco’s total net sales.
Order intake amounted to 82 MSEK (256), which corresponds to 61 percent of the total order intake.
The adjusted operating profit (EBITA) improved to 16 MSEK (15) corresponding to an adjusted operating margin of 7.1 percent
(5.3). Operating profit (EBIT) improved to 14 MSEK (15), corresponding to an operating margin of 6.2 percent (5.1).
The interim period
Net sales amounted to 846 MSEK (836). The segment accounted for 91 percent of Balco’s total net sales.
Order intake amounted to 570 MSEK (846), which corresponds to 84 percent of the total order intake.
The adjusted operating profit imp roved to 72 MSEK (65) corresponding to an adjusted operating margin of 8.5 percent (7.7).
Items affecting comparability are included with 5 MSEK (1) linked restructuring costs. Operating profit amounted to 62 MSEK
(62), corresponding to an operating margin of 7.3 percent (7.5).
The order backlog amounted to 899 MSEK (1,325) which corresponds to 84 percent of the total order backlog.
New build
The third quarter
Net sales amounted to 28 MSEK (27). The segment accounted for 11 percent of Balco’s total net sales.
Order intake amounted to 53 MSEK (9) which corresponds to 39 percent of the total order intake.
The adjusted operating profit (EBITA) amounted to 1.5 MSEK (1.5) corresponding to an adjusted operating margin of 5.1 per-
cent (5.7).
The interim period
Net sales amounted to 79 MSEK (114). The segment accounted for 9 percent of Balco’s total net sales.
Order intake amounted to 112 MSEK (75) which corresponds to 16 percent of the total order intake.
The adjusted operating profit (EBITA) amounted to 3 MSEK (7) corresponding to an adjusted operating margin of 4.0 percent
(6.5). The decrease is since the Maritime business, which in recent years has been the most profitable part of the New Build
segment, no longer has any turnover.
The order backlog amounted to 168 MSEK (136), which corresponds to 16 percent of the total order backlog.
Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec
Renovation, MSEK 2023 2022 2023 2022 2022/23 2022
Net sales 225,0 284,2 846,3 836,5 1 173,3 1 163,5
Adjusted Operating profit (EBITA) 15,9 15,0 71,9 64,7 107,4 100,1
Adhusted Operating margin (EBITA) 7,1 5,3 8,5 7,7 9,1 8,6
Order intake 82,0 256,2 569,6 845,9 707,5 983,9
Order backlog 898,7 1 325,1 898,7 1 325,1 898,7 1 145,6
Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec
New Build, MSEK 2023 2022 2023 2022 2022/23 2022
Net sales 28,3 26,6 79,1 113,9 135,3 170,1
Adjusted Operating profit (EBITA) 1,5 1,5 3,1 7,4 6,5 10,8
Adhusted Operating margin (EBITA) 5,1 5,7 4,0 6,5 4,8 6,3
Order intake 53,0 8,6 112,1 74,8 162,1 124,7
Order backlog 168,2 135,6 168,2 135,6 168,2 129,1
===== SIDA 6 =====
6 | Balco Group Interim Report 1 January - 30 September 2023
Financial position and cash flow
Liquidity and financial position
Interest-bearing net debt including leasing debt at the end of half-year period
amounted to 223 MSEK (113). Interest-bearing net debt including leasing debt in
relation to adjusted EBITDA amounted to 1.5 times (0.7).
Interest-bearing net debt excluding leasing debt amounted to 153 MSEK (32). Inter-
est-bearing net debt excluding leasing debt in relation to adjusted EBITDA
amounted to 1.1 times (0.2).
At the end of the half-year period, the Group’s equity amounted to 758 MSEK (724).
The Group’s equity ratio was 57 percent (51).
Cash flow, investments and amortization/depreciation
For the interim period, cash flow from operating activities amounted to -44 MSEK
(56).
Cash flow from investing activities amounted to -50 MSEK (-13), of which -2 MSEK
(-8) was replacement investments and -9 MSEK (-5) expansion investments and
-39 MSEK (0) acquisition of shares in subsidiaries.
Cash flow from financing activities amounted to 62 MSEK (-22) where the largest
items refer to dividends paid of -16 MSEK (-22) and increased utilization of the re-
volving credit facility of 100 MSEK (0).
Cash flow for the interim period amounted to -31 MSEK (22).
Depreciation for the interim period amounted to 33 MSEK (26), of which 15 MSEK
(15) refers to depreciation linked to right-to-use assets (leasing) and 5 MSEK (2) re-
fers to amortization of acquired intangible assets.
The Parent Company
The Parent Company has its registered office in Växjö and conducts operations di-
rectly as well as through Swedish and foreign subsidiaries. The Parent Company’s
operations are focused primarily on strategic development, financial control, corpo-
rate governance issues, board work and relations with banks.
The operating result for the interim period amounted to 4 MSEK (4).
30-sep 30-sep 31-dec
MSEK 2023 2022 2022
Non-current liabilities to credit institutions 174,7 172,2 72,6
Leasing liabilities non-current 54,3 64,5 63,3
Current liabilities to credit institutions 0,4 0,4 0,8
Leasing liabilities current 14,8 16,4 20,0
Cash and cash equivalents -21,6 -140,7 -51,9
Interest-bearing net debt incl leasing debt 222,6 112,8 104,8
Interest-bearing net debt excl leasing debt 153,5 31,9 21,6
Interest-bearing net debt incl. leasing/EBITDA (12 months),
times 1,5 x 0,7 x 0,7 x
Interest-bearing net debt excl. leasing/EBITDA (12 months),
times 1,1 x 0,2 x 0,2 x
Equity/assets ratio, % 57,5 51,3 56,3
External interest-bearing net debt
relative to EBITDA
Operating cash flow R12, MSEK
0,0
0,5
1,0
1,5
2,0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2021 2022 2023
50
100
150
200
250
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2021 2022 2023
Equity ratio
57 %
===== SIDA 7 =====
7 | Balco Group Interim Report 1 January - 30 September 2023
Operations and segment description
Balco Group is a market-leading player in the balcony industry and offers a range of different services, from development and
manufacturing to sales and installation of self-made open and glazed balcony systems. Balco has a unique method, known as
the Balco Method, for delivering glazed balconies and balcony solutions. The method means that existing balconies are re-
moved and replaced with new, larger glazed balconies with a lifespan of over 90 years, which provides the market's most eco-
nomical and sustainable solution.
In order to offer complete and customized solutions in the balcony industry, Balco Group has several subsidiaries that work
together to offer a comprehensive solution in areas such as manufacturing and delivery of balconies, masonry and tiling ser-
vices, technical solutions and facade services such as renovation, window replacement and facade cleaning. Balco Group
strives to meet customer needs and requirements by offering a combination of specialized services and expertise. Balco
Group's offer contributes to increased quality of life, safety and value for residents in apartment buildings and provides energy
savings up to 30 percent. The group takes full responsibility for the project and guides the customer through the entire pro-
cess from project planning to final inspection and service.
Segment - Renovation Segment – New Build
Sjøsiden Boligpark New Road Rainham
The segment includes the replacement and extension of exist-
ing balconies as well as the installation of new balconies on
multi-residential properties, mainly glazed balconies. The main
driving force is the pent -up need for renovation and the age
profile of the properties. The offer also includes facade reno-
vation in connection with balcony projects.
The segment includes balconies in the construction of
multi-residential properties as well as balcony projects in
the maritime market. Largest product areas are balcony
glazing and open balconies. Balco expands selectively with
a focus on profitability and low risk. Demand is driven by
the pace of new housing production.
Sales development per quarter, MSEK Operating margin per quarter, %
Sustainability
Sustainability is a prerequisite for long-term profitability for the Balco Group. By focusing on sustainability, we can create a
strong brand, increase customer trust and improve our competitiveness in the long term. We will continue to work hard to
incorporate sustainability into all aspects of our business.
Sustainability is a focus area in the construction industry and affects all links in the value chain. This particularly applies to the
market for balconies where Balco Group operates. Property developers and property owners demand economically advanta-
geous and climate-smart solutions with a long lifespan.
As an important step in our sustainability work and aim to be a leader in climate change in its industry, Balco Group has com-
mitted to developing short-term and long-term targets for emission reduction including net zero targets in line with the Sci-
ence Based Targets initiative (SBTi).
100
200
300
400
2022
2023
2022
2023
2022
2023
2022
2023
Q1 Q2 Q3 Q4
New Build Renovation
5,0
10,0
15,0
2022
2023
2022
2023
2022
2023
2022
2023
Q1 Q2 Q3 Q4
New Build Renovation
===== SIDA 8 =====
8 | Balco Group Interim Report 1 January - 30 September 2023
Other information
Employees
At the end of September 2023 Balco had 501 (518) full-time employees.
Seasonal variations
Balco’s sales and earnings are partially affected by the date when orders are placed, seasonal variations and the fact that the annual
general meetings of tenant-owner associations normally take place in the second and fourth quarter. In addition, the Group is posi-
tively affected by months with a large number of workdays and lack of absences, and somewhat negatively affected by weather fac-
tors, when winters with significant volumes of snow entail increased costs.
Shares, share capital and shareholders
At the end of September 2023, there were 21,909,348 shares in Balco, corresponding to a share capital of 131,461,248 SEK. There were
5,636 shareholders. The five largest shareholders were The Family Hamrin, Skandrenting AB, Swedbank Robur fonder, Lannebo Fonder
and Tredje AP-fonden.
Related-party transactions
Related parties comprise the Board of Directors, Group management and the CEO. This is due to ownership stakes in Balco and posi-
tions as senior executives. Related parties also include the Company’s largest shareholder, The Family Hamrin that is represented on
the Board of Directors by Carl-Mikael Lindholm and Skandrenting that is represented on the Board of Directors by Johannes Nyberg.
Related-party transactions take place on commercial terms. For further information, see pages 112 and 133 in the 2022 Annual Report.
Incentive program
Balco Group AB has three long-term incentive programs aimed at the company's senior executives and additional key employees, a
total of 50 employees. The incentive programs comprise a total of no more than 820,000 warrants, which entitles to a maximum of
new subscriptions of the corresponding number of shares. Balco's total cost for the incentive programs during the term of the pro-
grams is expected to amount to approximately 6 MSEK. The programs involve a dilution corresponding to approximately 4 percent of
the company's total number of shares. The senior executives in Balco have acquired 233,332 warrants amounting to a total value of
2,180,784 SEK. The purpose of the incentive programs is to encourage broad shareholding among Balco's employees, facilitate recruit-
ment, retain competent employees and increase motivation to achieve or exceed the company's financial goals. For more information,
see the Annual Report 2022 on pages 58-59, 90 and 110-111.
Risks and uncertainty factors
Through its operations, the Group and the Parent Company is exposed to various types of risks. The risks can be divided into industry
and market-related risks, business-related risks and financial risks. Industry and market-related risks include changes in demand be-
cause of a weaker economy or other macroeconomic changes, a changed price picture for raw materials that are central to Balco's
production, and a change in competition or price pressure. Business-related risks include Balco's ability to develop and sell new inno-
vative products and solutions, that the Group can attract and retain qualified employees and that Balco's profitability depends on the
results of the individual projects, i.e., the Group's ability to anticipate, calculate and deliver projects. The financial risks are summarized
under financing risk, liquidity risk, credit risk and interest rate risk. Balco's risks and uncertainties are described on pages 70-77, 85,
120-121, 124 and 127 in the Annual Report for 2022.
Outlook
Balco Group is one of the few complete balcony suppliers on the market that provides customized and innovative balcony solutions
on a turnkey basis. Balco Group is the market leader in Scandinavia and has a strong challenger position in other markets in which the
Group operates. The market is fragmented and growing throughout northern Europe. The value of the balcony market in the coun-
tries where Balco Group is represented is estimated at just over 40 billion SEK.
Our financial position means that the company is equipped for growth through selective acquisitions that strengthen our market posi-
tion in existing markets. The timing of building permits affects cash flow between quarters. The lower order intake in the past year will
affect sales and earnings in the coming year. We continue to focus on costs to defend our profit margin and make adjustments to the
organization based on changes in occupancy and order intake but retain important competence so that the company is not damaged
in the long term.
Events during the quarter and since the end of the quarter
In October, Balco has received an order of more than 70 MSEK in Northern Sweden.
Balco has received its first order in Ireland with a value of just over 3 MEUR.
Balco Group has joined the Science Based Targets initiative.
Balco Group has prolonged its RCF with Danske Bank with two years and it is now valid until October 12, 2026.
===== SIDA 9 =====
9 | Balco Group Interim Report 1 January - 30 September 2023
Financial targets
Revenue growth
Balco shall achieve growth of 10 percent per year during a business cycle.
Profitability
Earnings per share shall grow by 20 percent per year during a business cycle.
Capital structure
Interest-bearing net debt shall not exceed 2.5 times operating profit before depreciation and amortization (EBITDA), other than
temporarily.
Dividend policy
Balco shall distribute 30 -50 percent of profit after tax, taking into consideration the needs for Balco’s long -term growth and
prevailing market conditions.
The interim report has been subject to a review of ISRE 2410 by the company's auditors.
This information comprises such information as Balco Group AB is obliged to publish in accordance with the EU Market Abuse Regulation. The
information was provided by the contact person below for publication on 30 October 2023 at 13:00 CET.
Camilla Ekdahl
President and CEO
Web conference
A webcast conference call will be held at 14:00 CET October 30, 2023, where CEO and President
Camilla Ekdahl and CFO Michael Grindborn will present the report and answer questions.
To follow the webcast presentation and send written questions, please use this link:
https://www.finwire.tv/webcast/balcogroup/balco-group-q3-presentation-2023/
To participate via teleconference and be able to ask questions, call in:
SE: +46 8 5050 0829
PIN: 859 7363 6769#
For more information, please contact:
Camilla Ekdahl, President and CEO, Tel: +46 70 606 30 32, camilla.ekdahl@balco.se
Michael Grindborn, CFO and Head of IR, Tel: +46 70 670 18 48, michael.grindborn@balco.se
Calendar 2023
Year-end report Jan-Dec 2023 February 5, 2024
Interim report Jan-Mar 2024 April 29, 2024
Annual General Meeting 2024 May 14, 2024
Interim report Jan-Jun 2024 July 12, 2024
Interim report Jan-Sep 2024 October 28, 2024
===== SIDA 10 =====
10 | Balco Group Interim Report 1 January - 30 September 2023
Consolidated statement of comprehensive income
Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec
MSEK 2023 2022 2023 2022 2022/23 2022
Net sales 253,3 310,8 925,4 950,4 1 308,6 1 333,6
Production and project costs -199,9 -249,9 -730,5 -739,6 -1 036,8 -1 046,0
Gross profit 53,4 60,9 194,9 210,7 271,8 287,6
Sales costs -25,3 -28,8 -81,5 -92,6 -115,4 -126,4
Administration costs -17,2 -16,2 -54,3 -49,1 -76,2 -71,0
Other operating income 1,4 -0,0 3,5 0,4 15,4 12,3
Other operating expenses -0,1 - -0,2 - -0,2 -0,0
Operating costs -41,1 -45,0 -132,6 -141,3 -176,4 -185,1
Operating profit 12,3 16,0 62,3 69,4 95,4 102,5
Finance income 0,9 0,2 2,7 0,3 3,4 1,0
Finance costs -5,8 -2,2 -12,7 -5,8 -15,7 -8,8
Profit before tax 7,3 14,0 52,4 63,9 83,0 94,6
Income tax -1,7 -3,3 -12,4 -13,8 -17,1 -18,5
Net profit for the period 5,6 10,7 39,9 50,1 66,0 76,2
Other comprehensive income
Translation difference when translating foreign operations -4,5 -0,1 3,4 2,3 8,0 6,9
Comprehensive income for the period 1,1 10,5 43,4 52,4 74,0 83,1
Of which attributable to:
Parent company's shareholders 0,8 10,5 43,2 52,4 73,5 82,8
Non-controlling interest 0,3 - 0,2 - 0,5 0,3
Comprehensive income for the period 1,1 10,5 43,4 52,4 74,0 83,1
Earnings per share, SEK, before dilution 0,26 0,48 1,82 2,39 3,21 3,78
Earnings per share, SEK, after dilution 0,26 0,48 1,82 2,36 3,21 3,75
Average number of shares before dilution, thousands 21 909 21 909 21 909 21 909 21 909 21 909
Average number of shares after dilution, thousands 21 909 21 909 21 909 21 909 21 909 22 106
Items that may later be reclassified to the income statement
===== SIDA 11 =====
11 | Balco Group Interim Report 1 January - 30 September 2023
Consolidated balance sheet in summary
30-sep 30-sep 31-dec
MSEK 2023 2022 2022
ASSETS
Non-current assets
Intangible assets
Goodwill 485,4 448,4 457,8
Other intangible assets 142,2 109,0 135,3
Total intangible assets 627,6 557,4 593,1
Tangible assets
Right-to-use assets 67,8 80,0 82,3
Property, plant and equipment 162,9 153,6 158,8
Total tangible assets 230,6 233,6 241,1
Deferred tax assets 0,7 0,1 1,0
Total non-current assets 858,9 791,2 835,2
Current assets
Inventory 58,6 60,6 58,4
Accounts receivables 158,6 229,8 174,8
Contract assets 156,2 114,9 111,9
Current tax receivables 42,2 33,7 22,0
Other current receivables 20,5 39,6 42,4
Cash and cash equivalents 21,6 140,7 51,9
Total current assets 457,8 619,3 461,4
TOTAL ASSETS 1 316,7 1 410,5 1 296,6
EQUITY AND LIABILITIES
Equity
Share capital 131,5 131,5 131,5
Other capital contributions 406,3 406,3 406,3
Reserves 11,7 3,7 8,3
Retained earnings, incl. profit for year 207,0 182,3 183,7
Equity attributable to Parent Company’s shareholders 756,5 723,7 729,8
Non-controlling interest 1,4 - 1,2
TOTAL EQUITY 757,9 723,7 731,0
LIABILITIES
Non-current liabilities
Liabilities to credit institutions 174,7 172,2 72,6
Leasing liabilities 54,3 64,5 63,3
Other non-current liabilities 13,8 29,0 18,4
Deferred tax liabilities 42,1 32,6 40,0
Total non-current liabilities 284,9 298,3 194,3
Current liabilities
Liabilities to credit institutions 0,4 0,4 0,8
Leasing liabilities 14,8 16,4 20,0
Contract liabilities 70,3 135,5 124,9
Accounts payables 101,7 139,1 122,8
Current tax liabilities 4,2 4,5 3,6
Other current liabilities 31,0 36,8 38,2
Accrued expenses and prepaid income 51,4 55,8 61,1
Total current liabilities 273,9 388,5 371,3
TOTAL EQUITY AND LIABILITIES 1 316,7 1 410,5 1 296,6
===== SIDA 12 =====
12 | Balco Group Interim Report 1 January - 30 September 2023
Consolidated changes in Shareholders’ Equity
MSEK
Share
Capital
Additional
paid-in
capital Reserves
earnings
including
comprehensive
income for the
year
Non-
controlling
interest
Total
equity
Opening balance 1 Jan 2022 131,5 405,1 1,3 154,1 - 692,0
Comprehensive income for the period
Profit for the period - - - 50,1 - 50,1
Other comprehensive income for the period - - 2,3 - - 2,3
Total comprehensive income for the period - - 2,3 50,1 - 52,4
Acquisitiom of non-controlling interest - - - - - -
Transactions with shareholders:
Distributed dividend - - - -21,9 - -21,9
New warrants issue - 1,2 - - - 1,2
Total transactions with Company owners - 1,2 - -21,9 - -20,7
Closing balance 30 Sep 2022 131,5 406,3 3,7 182,3 - 723,7
Opening balance 1 Jan 2023 131,5 406,3 8,3 183,7 1,2 731,0
Comprehensive income for the period
Profit for the period - - - 39,7 0,2 39,9
Other comprehensive income for the period - - 3,4 - - 3,4
Total comprehensive income for the period - - 3,4 39,7 0,2 43,4
Acquisitiom of non-controlling interest - - - - - -
Transactions with shareholders:
Distributed dividend - - - -16,4 - -16,4
New warrants issue - - - - -
Total transactions with Company owners - - - -16,4 - -16,4
Closing balance 30 Sep 2023 131,5 406,3 11,7 207,0 1,4 757,9
===== SIDA 13 =====
13 | Balco Group Interim Report 1 January - 30 September 2023
Consolidated Cash Flow Statements in summary
Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec
MSEK 2023 2022 2023 2022 2022/23 2022
Operating activities
Operating profit (EBIT) 12,3 16,0 62,3 69,4 95,4 102,5
Adjustment for non-cash items 8,9 4,5 34,0 13,4 52,8 32,2
Interest received 0,9 0,2 2,7 0,6 3,1 1,0
Interest paid -5,5 -2,2 -11,5 -5,6 -12,9 -7,0
Income tax paid -7,4 -13,9 -32,4 -49,4 -24,0 -41,0
Cash flow from operating activities before changes in
working capital 9,2 4,5 55,1 28,4 114,4 87,7
Changes in working capital
Increase (-)/Decrease (+) in inventories 0,8 2,4 0,2 -7,2 2,8 -4,6
Increase (-)/Decrease (+) in current assets 10,0 28,7 7,5 -54,3 64,7 2,9
Increase (+)/Decrease (-) in current liabilities -14,0 47,7 -106,4 89,7 -129,0 67,1
Cash flow from operating activities 5,9 83,4 -43,6 56,5 53,0 153,0
Cash flow from investing activities
Investments in intangible fixed assets -0,5 -0,0 -3,5 -0,2 -10,6 -7,2
Investments in tangible fixed assets -1,4 -3,4 -6,8 -12,9 -10,8 -16,9
Acquisitions of operations - - -39,5 - -68,0 -28,5
Changes in other non-current assets/liabilities - -2,1 - -1,8 1,8 -
Cash flow from investing activities -1,9 -3,3 -49,8 -12,6 -89,8 -52,6
Cash flow from financing activities
Changes in bank loans -5,0 49,9 94,4 -0,3 -4,9 -99,7
Changes in leasing -4,0 0,3 -15,7 -1,2 -39,9 -25,4
New warrants issue - 1,2 0,0 1,2 0,0 1,2
Distributed dividend - - -16,4 -21,9 -38,3 -43,8
Cash flow from financing activities -9,0 51,4 62,3 -22,2 -83,1 -167,7
Cash flow for the period -5,0 131,5 -31,1 21,6 -120,0 -67,3
Cash and cash equivalents at beginning of the period 27,5 8,4 51,9 117,5 140,7 117,5
Exchange rate differential cash and cash equivalents -0,9 0,8 0,8 1,6 0,9 1,6
Cash and cash equivalents at end of the period 21,6 140,7 21,6 140,7 21,6 51,9
===== SIDA 14 =====
14 | Balco Group Interim Report 1 January - 30 September 2023
Key ratios
Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec
MSEK 2023 2022 2023 2022 2022/23 2022
Net sales 253,3 310,8 925,4 950,4 1 308,6 1 333,6
Order intake 135,1 264,8 681,7 920,7 869,6 1 108,6
Order backlog 1 066,9 1 460,8 1 066,9 1 460,8 1 066,9 1 274,7
Gross profit 53,4 60,9 194,9 210,7 271,8 287,6
Adjusted Gross Profit 53,4 60,9 198,7 211,8 279,5 292,6
EBITDA 22,3 26,3 95,7 99,8 140,4 144,5
Adjusted EBITDA 23,5 27,2 102,8 101,7 147,7 146,6
Operating profit (EBITA) 13,9 16,5 67,4 71,1 101,3 105,1
Adjusted operating profit (EBITA) 15,2 17,3 74,5 73,0 108,7 107,2
Operating profit (EBIT) 12,3 16,0 62,3 69,4 95,4 102,5
Adjusted operating profit (EBIT) 13,5 16,8 69,4 71,3 102,7 104,6
Gross profit margin, % 21,1 19,6 21,1 22,2 20,8 21,6
Adjusted gross margin, % 21,1 19,6 21,5 22,3 21,4 21,9
EBITDA margin, % 8,8 8,5 10,3 10,5 10,7 10,8
Adjusted EBITDA margin, % 9,3 8,7 11,1 10,7 11,3 11,0
Operating profit margin (EBITA), % 5,5 5,3 7,3 7,5 11,7 9,5
Adjusted operating profit margin (EBITA), % 6,0 5,6 8,0 7,7 10,2 8,4
Operating profit margin (EBIT), % 4,8 5,1 6,7 7,3 7,3 7,7
Adjusted operating profit margin (EBIT), % 5,3 5,4 7,5 7,5 7,9 7,8
Operating cash flow 19,9 104,2 2,3 122,2 80,4 200,3
Operating cash conversion, % 84,6 383,7 2,2 120,2 54,4 136,6
Capital employed, average 978,9 874,5 906,9 812,8 907,8 811,8
Capital employed, excl. goodwill, average 493,4 426,2 435,2 364,6 440,9 358,9
Equity, average 756,1 717,9 743,2 707,9 740,1 710,9
Interest-bearing net debt incl leasing debt 222,6 112,8 222,6 112,8 222,6 104,8
Interest-bearing net debt excl leasing debt 153,5 31,9 153,5 31,9 153,5 21,6
Interest-bearing net debt incl. leasing/Adjusted EBITDA 12
months, times 1,5 0,7 1,5 0,7 1,5 0,7
Interest-bearing net debt excl. leasing/EBITDA (12 months),
times 1,1 0,2 1,1 0,2 1,1 0,2
Return on capital employed, %, (12 months) 11,1 12,8 11,3 13,5 11,3 12,9
Return on capital employed, excl. goodwill, %, (12 months) 22,0 26,2 23,6 30,0 23,3 29,2
Return on invested capital, %, (12 months) 8,7 11,1 8,9 11,3 8,9 10,7
Equity/assets ratio, % 57,5 51,3 56,9 53,3 54,3 55,9
Number of full-time employees on the closing date 501 518 501 518 501 536
Average number of shares before dilution, thousands 21 909 21 909 21 909 21 909 21 909 21 909
Average number of shares after dilution, thousands 21 909 21 909 21 909 22 116 21 909 22 106
Equity per share, SEK 34,51 32,77 33,92 32,01 33,78 32,16
===== SIDA 15 =====
15 | Balco Group Interim Report 1 January - 30 September 2023
Parent Company, income statement in summary
Parent company, balance sheet in summary
Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec
MSEK 2023 2022 2023 2022 2022/23 2022
Net sales 6,2 6,5 18,4 19,4 24,9 26,0
Administrative expenses -3,9 -5,7 -13,3 -15,2 -22,3 -24,2
Operating profit 2,3 0,7 5,1 4,3 2,6 1,8
Interest income and similar profit/loss items 0,8 0,9 4,0 1,9 5,4 3,3
Interest expenses and similar profit/loss items -5,0 -2,1 -14,4 -4,2 -18,2 -8,1
Dividend / result from group companies - - 12,7 - 12,7 -
Profit/loss after financial items -2,0 -0,4 7,3 1,9 2,5 -2,9
Appropriations - - - - 62,0 62,0
Tax 0,4 0,1 1,1 -0,4 -10,8 -12,3
Net profit/loss for the period -1,6 -0,3 8,4 1,5 53,7 46,8
In the Parent Company there are no items that are reported as other comprehensive income, so total comprehensive income is consistent with the profit for the period.
30-sep 30-sep 31-dec
MSEK 2023 2022 2022
ASSETS
Non-current assets
Financial assets
Shares in group companies 745,7 683,2 702,5
Other non-current assets 2,9 3,2 3,1
Total non-current assets 748,5 686,4 705,5
Current assets
Receivables from group companies 154,7 122,3 126,3
Other current receivables 39,1 27,4 25,7
Cash and cash equivalents 14,0 139,3 46,3
Total current assets 207,8 289,0 198,3
TOTAL ASSETS 956,4 975,4 903,8
EQUITY AND LIABILITIES
Equity
Restricted equity 131,5 131,5 131,5
Non-restricted equity 333,2 317,8 341,2
Total equity 464,7 449,3 472,7
LIABILITIES
Non-current liabilities
Liabilities to credit institutions 150,0 150,0 50,0
Other non-current liabilities 15,8 31,6 20,3
Total non-current liabilities 165,8 181,6 70,3
Current liabilities
Liabilities to group companies 316,1 338,8 352,0
Other current liabilities 9,8 5,7 8,8
Total current liabilities 325,9 344,5 360,8
TOTAL EQUITY AND LIABILITIES 956,4 975,4 903,8
===== SIDA 16 =====
16 | Balco Group Interim Report 1 January - 30 September 2023
Notes
Note 1 Accounting principles
This summary consolidated interim report for the Group has been prepared in accordance with IAS 34 Interim Financial Reporting and
relevant provisions of the Swedish Annual Accounts Act. The interim report for the Parent Company has been prepared in accordance
with RFR 2 and Chapter 9, Interim Reports, of the Swedish Annual Accounts Act. For both the Parent Company and the Group, the
same accounting policies and computation methods have been applied as in the 2022 Annual Report, which was prepared in accord-
ance with International Financial Reporting Standards and Interpretations as adopted by the EU. The information on pages 1-9 relating
to the part of the year covered by this interim report constitutes an integral part of this financial report.
Note 2 Financial instruments
The financial instruments measured at fair value are forward exchange contracts. Financial assets at fair value amounted to 0.7 MSEK
(0.9) at the end of the period while financial liabilities at fair value amounted to 1.0 MSEK (0.8). The fair values of financial instruments
are determined using valuation techniques. Market information is used as far as possible when available, while company-specific infor-
mation is used as little as possible. If all key inputs required for the fair value measurement of an instrument are observable, the in-
strument is categorized in level 2. Reported value of trade receivables, other receivables, cash and cash equivalents, trade payables
and other liabilities constitutes a reasonable approximation of fair value.
Note 3 Business segments
Balco reports the following segments:
• Renovation: includes replacement and expansion of existing balconies and installation of new balconies on apartment buildings
without balconies. The segment’s main market driver is the age profile of the residential property portfolio.
• New Build: includes installation of balconies in conjunction with the construction of apartment buildings and balcony solutio ns in
the maritime area. The segment is driven mainly by the rate of new residential construction.
Jul-Sep
MSEK 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
Net sales – External revenue 225,0 284,2 28,3 26,6 - - - - 253,3 310,8
Net sales – Internal revenue - - - - 6,2 19,8 -6,2 -19,8 - -
Total sales 225,0 284,2 28,3 26,6 6,2 19,8 -6,2 -19,8 253,3 310,8
Operating profit (EBIT) 14,1 14,6 1,5 1,4 -3,3 -0,0 - - 12,3 16,0
Depreciation included with 9,8 9,0 0,2 1,3 - - - - 10,0 10,4
of which amortization 1,7 0,4 - 0,1 - - - - 1,7 0,5
Items affecting comparison 0,2 - - - 1,0 0,8 - - 1,2 0,8
Adjusted operating profit (EBITA) 15,9 15,0 1,5 1,5 -2,2 0,8 - - 15,2 17,3
Adjusted operating margin 7,1% 5,3% 5,1% 5,7% 6,0% 5,6%
Operating profit (EBIT) 14,1 14,6 1,5 1,4 -3,3 -0,0 - - 12,3 16,0
Finance income - - - - 0,9 0,2 - - 0,9 0,2
Finance cost - - - - -5,8 -2,2 - - -5,8 -2,2
Profit before tax 14,1 14,6 1,5 1,4 -8,2 -2,0 - - 7,3 14,0
Jan-Sep
MSEK 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
Net sales – External revenue 846,3 836,5 79,1 113,9 - - - - 925,4 950,4
Net sales – Internal revenue - - - - 18,4 33,1 -18,4 -33,1 - -
Total sales 846,3 836,5 79,1 113,9 18,4 33,1 -18,4 -33,1 925,4 950,4
Operating profit (EBIT) 61,9 62,5 3,0 7,1 -2,5 -0,2 - - 62,3 69,4
Depreciation included with 31,2 26,1 2,2 4,3 - - - - 33,4 30,4
of which amortization 4,9 1,5 0,2 0,2 - - - - 5,1 1,7
Items affecting comparison 5,1 0,8 - - 1,9 1,0 - - 7,0 1,8
Adjusted operating profit (EBITA) 71,9 64,7 3,1 7,4 -0,6 0,9 - - 74,5 73,0
Adjusted operating margin (EBITA) 8,5% 7,7% 4,0% 6,5% 8,0% 7,7%
Operating profit (EBIT) 61,9 62,5 3,0 7,1 -2,5 -0,2 - - 62,3 69,4
Finance income - - - - 2,7 0,3 - - 2,7 0,3
Finance cost - - - - -12,7 -5,8 - - -12,7 -5,8
Profit before tax 61,9 62,5 3,0 7,1 -12,5 -5,7 - - 52,4 63,9
Renovation New Build Group-wide Eliminations Total
TotalRenovation New Build Group-wide Eliminations
===== SIDA 17 =====
17 | Balco Group Interim Report 1 January - 30 September 2023
Note 4 Reconciliation with IFRS financial statements
Balco’s financial statements include alternative performance measures, which complement the measures that are defined or specified
in applicable rules for financial reporting. Alternative performance measures are presented since, as in their context, they provide
clearer or more in-depth information than the measures defined in applicable rules for financial reporting. The alternative perfor-
mance measures are derived from the Company’s consolidated financial reporting and are not measured in accordance with IFRS.
30-sep 30-sep 31-dec
MSEK 2023 2022 2022
Interest-bearing net debt incl leasing debt
Non-current interest-bearing liabilities 229,0 236,7 135,9
Current interest-bearing liabilities 15,1 16,8 20,7
Cash and cash equivalents -21,6 -140,7 -51,9
Interest-bearing net debt incl leasing debt 222,6 112,8 104,8
Adjusted EBITDA (R12) 147,7 150,8 146,6
Interest-bearing net debt/EBITDA (R12), times 1,5 0,7 0,7
Interest-bearing net debt excl leasing debt
Interest-bearing net debt incl leasing debt 222,6 112,8 104,8
Leasing liabilities non-current -54,3 -64,5 -63,3
Leasing liabilities current -14,8 -16,4 -20,0
Interest-bearing net debt excl leasing debt 153,5 31,9 21,6
Interest-bearing net debt/EBITDA excl leasing (R12), times
Adjusted EBITDA (R12) 147,7 150,8 146,6
Leasing depreciations (R12) -3,9 -20,0 -23,4
Adjusted EBITDA (R12) excl leasing depreciations 143,8 130,8 123,2
Interest-bearing net debt/EBITDA excl leasing (R12), times 1,1 0,2 0,2
Return on capital employed
Equity 756,5 723,7 729,8
Interest-bearing net debt 222,6 112,8 104,8
Average capital employed 907,8 835,0 811,8
Adjusted operating profit (EBIT), (R12) 102,7 109,3 104,6
Return on capital employed, % 11,3 13,1 12,9
Equity/assets ratio
Equity attributable to owners of the parent company 756,5 723,7 729,8
Total assets 1 316,7 1 410,5 1 296,6
Equity/assets ratio, % 57,5 51,3 56,3
===== SIDA 18 =====
18 | Balco Group Interim Report 1 January - 30 September 2023
Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec
MSEK 2023 2022 2023 2022 2022/23 2022
Adjusted operating profit (EBIT)
Operating profit (EBIT 12,3 16,0 62,3 69,4 95,4 102,5
Items affecting comparison
Adjustment of earn-out - - - - -10,7 -10,7
Re-structuring costs 0,2 0,8 5,1 1,6 15,9 12,3
Acquisition costs 1,0 0,0 1,9 0,3 2,1 0,5
Adjusted operating profit (EBIT) 13,5 16,8 69,4 71,3 102,7 104,6
Operating profit (EBITA) - - - - - -
Operating profit (EBIT) 12,3 16,0 62,3 69,4 95,4 102,5
Amortization 1,7 0,5 5,1 1,7 5,9 2,6
Operating profit (EBITA) 13,9 16,5 67,4 71,1 101,3 105,1
Adjusted operating profit (EBITA) - - - - - -
Adjusted operating profit (EBIT) 13,5 16,8 69,4 71,3 102,7 104,6
Amortization 1,7 0,5 5,1 1,7 5,9 2,6
Adjusted operating profit (EBITA) 15,2 17,3 74,5 73,0 108,7 107,2
EBITDA
Operating profit (EBIT) 12,3 16,0 62,3 69,4 95,4 102,5
Depreciation and amortization 10,0 10,4 33,4 30,4 45,0 42,0
EBITDA 22,3 26,3 95,7 99,8 140,4 144,5
Adjusted EBITDA
Adjusted operating profit (EBIT) 13,5 16,8 69,4 71,3 102,7 104,6
Depreciation and amortization 10,0 10,4 33,4 30,4 45,0 42,0
Adjusted EBITDA 23,5 27,2 102,8 101,7 147,7 146,6
Investments, excluding expansion investments
Investments in intangible fixed assets -0,5 -0,0 -3,5 -0,2 -10,6 -7,2
Investments in tangible fixed assets -1,4 -3,4 -6,8 -12,9 -10,8 -16,9
of which expansion investments 1,9 1,0 8,7 4,9 15,9 12,1
Investments, excluding expansion investments - -2,4 -1,6 -8,1 -5,5 -12,0
Operating cash flow
Adjusted EBITDA 23,5 27,2 102,8 101,7 147,7 146,6
Changes in working capital -3,6 79,4 -98,9 28,7 -61,9 65,7
Investments, excluding expansion investments - -2,4 -1,6 -8,1 -5,5 -12,0
Operating cash flow 19,9 104,2 2,3 122,2 80,4 200,3
Net Sales excluding acquisitions
Net Sales 253,3 310,8 925,4 950,4 1 308,6 1 333,6
Acquired net sales -18,1 - -58,2 -33,4 -71,4 -46,6
Net Sales excluding acquisitions 235,1 310,8 867,2 917,0 1 237,1 1 287,0
===== SIDA 19 =====
19 | Balco Group Interim Report 1 January - 30 September 2023
Note 5 Acquisition
On March 2, 2023, Balco entered into an agreement for the acquisition of all shares in NMT Montageteknik i Norden AB, a company
in Sundsvall that offers total contracting in balcony renovation in northern Sweden. The acquisition is expected to contribute positively
to earnings per share already in 2023.
NMT Montageteknik i Norden AB had a turnover of 49 MSEK during the last operating year. The acquisition has been financed with
existing cash and cash equivalents.
More information can be found in press releases from March 2, 2023.
NMT Montageteknik i Norden AB is consolidated as of March 1, 2023.
The acquisition calculation is preliminary.
The purchase price comprises the following components (MSEK)
Cash payment 42,8
Aquired net assets -15,3
Goodwill 27,5
The following assets and liabilities were included in the acquisition (M
Cash and cash equivalents 6,1
Tangible fixed assets 1,6
Intangible assets 8,3
Receivables 12,1
Liabilities -10,2
Deferred tax liabilities -2,6
Acquired net assets 15,3
===== SIDA 20 =====
20 | Balco Group Interim Report 1 January - 30 September 2023
Alternative performance measures
This interim report contains references to a number of performance measures. Some of these measures are defined in IFRS, while oth-
ers are alternative measures and are not reported in accordance with applicable financial reporting frameworks or other legislation.
The measures are used by Balco to help both investors and management to analyse its operations. The measures used in this interim
report are described below, together with definitions and the reason for their use.
Alternative performance measures Definition Reason for use
Return on equity Income for the period divided by the average
shareholder equity for the period. Average cal-
culated as the average of the opening balance
and the closing balance for the period.
Return on equity shows the return that is generated
on the shareholders’ capital that is invested in the
company.
Return on capital employed Adjusted EBITA as a percentage of average cap-
ital employed for the period. Average calculated
as the average of the opening balance and the
closing balance for the period.
Return on capital employed shows the return that is
generated on capital employed by the company
and is used by Balco to monitor profitability as it re-
lates to the capital efficiency of the company.
Return on capital employed exclud-
ing goodwill
Adjusted EBITA as a percentage of average cap-
ital employed for the period excluding goodwill.
Average calculated as the average of the open-
ing balance and the closing balance for the pe-
riod.
Balco believes that return on capital employed ex-
cluding goodwill together with return on capital
employed shows a complete picture of Balco's capi-
tal efficiency.
Gross income Revenue less production and project costs. Shows the effectiveness of Balco's operations and
together with EBIT provides a complete picture of
the operating profit generation and expenses.
Gross margin Gross income as a percentage of net sales. Ratio is used for analysis of the company’s effective-
ness and profitability.
EBITDA Earnings before interest, tax, depreciation and
amortization.
Balco believes that EBITDA shows the profit gener-
ated by the operating activities and is a good meas-
ure of cash flow from operations.
Interest-bearing net debt relative to
adjusted EBITDA
Interest-bearing external net debt divided by
adjusted EBITDA.
Balco believes this ratio helps to show financial risk
and is a useful measure for Balco to monitor the
level of the company’s indebtedness.
Adjusted EBITDA EBITDA as adjusted for items affecting compa-
rability. For a reconciliation of adjusted EBITDA
to income for the period.
Balco believes that adjusted EBITDA is a useful
measure for showing the company’s profit gener-
ated by the operating activities after adjusting for
items affecting comparability, and primarily uses
adjusted EBITDA for purposes of calculating the
company’s operating cash flow and cash conver-
sion.
Adjusted EBITDA margin Adjusted EBITDA as a percentage of net sales. Balco believes that adjusted EBITDA margin is a
useful measure for showing the company’s profit
generated by the operating activities after non-re-
curring items.
Adjusted EBIT margin Adjusted EBIT as a percentage of net sales. Balco believes that adjusted EBIT margin is a useful
measure for showing the company’s profit gener-
ated by the operating activities.
Adjusted EBIT EBIT adjusted for items affecting comparability.
For a reconciliation of adjusted EBIT to income
for the period.
Balco believes that adjusted EBITA is a useful meas-
ure for showing the company’s profit generated by
the operating activities, and primarily uses adjusted
EBIT for calculating the company’s return on capital
employed.
Adjusted EBITA margin Adjusted EBITA as a percentage of net sales. Balco believes that adjusted EBITA margin is a use-
ful measure for showing the company’s profit gen-
erated by the operating activities.
===== SIDA 21 =====
21 | Balco Group Interim Report 1 January - 30 September 2023
Alternative performance measures Definition Reason for use
Adjusted EBITA EBITA adjusted for items affecting comparabil-
ity. For a reconciliation of adjusted EBIT to in-
come for the period.
Balco believes that adjusted EBIT is a useful meas-
ure for showing the company’s profit generated by
the operating activities, and primarily uses adjusted
EBIT for calculating the company’s return on capital
employed.
Items affecting comparability Items affecting comparability are significant
items reported separately due to their size or
frequency, e.g., restructuring costs, write-
downs, divestments and acquisition costs.
Balco believes that adjustment for items affecting
comparability improves the possibility of compari-
son over time by excluding items with irregularity in
frequency or size. This is to give a more accurate
picture of the underlying operating profit.
Operating cash conversion Operating cash flow divided by adjusted
EBITDA.
Balco believes this is a good measure for comparing
cash flow with operating profit.
Operating cash flow Adjusted EBITDA increased/decreased with
changes in net working capital less investments,
excluding expansion investments.
Operating cash flow is used by Balco to monitor
business performance.
Organic growth Net sales excluding acquired growth current
period divided by net sales during the corre-
sponding period last year.
Organic growth excludes the effects of changes in
the Group's structure, which enables a comparison
of net sales over time.
Interest-bearing net deb
The sum of non-current interest-bearing liabili-
ties and current interest-bearing liabilities.
Balco believes interest-bearing net debt is a useful
measure to show the company’s total debt financ-
ing.
Net working capital Current assets excluding cash and cash equiva-
lents and current tax assets less non-interest-
bearing liabilities excluding current tax liabili-
ties.
This measure shows how much net working capital
that is tied up in the operations and can be put in
relation to sales to understand how effectively net
working capital tied up in the operations is used.
EBIT margin EBIT as a percentage of net sales. Balco believes EBIT margin is a useful measure to-
gether with net sales growth and net working capi-
tal to monitor value creation.
EBIT Earnings before interest and tax. Balco believes that EBIT shows the profit generated
by the operating activities.
EBITA margin EBITA as a percentage of net sales. Balco believes EBITA margin is a useful measure to-
gether with net sales growth and net working capi-
tal to monitor value creation.
EBITA EBIT excluding amortization on acquired intan-
gible assets.
Balco's growth strategy includes acquiring compa-
nies. In order to better illustrate the development of
the underlying business, the management has cho-
sen to follow EBITA, which is an expression of the
operating profit before depreciation and write-
downs of acquired intangible assets.
Equity/asset ratio Equity divided on total assets. Balco believes that equity to asset ratio is a useful
measure for the company's survival.
Capital employed Equity plus interest-bearing net debt. Capital employed is used by Balco to indicate the
general capital efficiency of the company.
Capital employed excluding good-
will
Capital employed minus goodwill. Capital employed excluding goodwill is used to-
gether with capital employed by Balco as a measure
of the company's capital efficiency.
===== SIDA 22 =====
Balco Group in brief
Balco Group is a market leader in the balcony industry, where we develop, manufacture, sell,
and take responsibility for the installation of our own bespoke open and glazed balcony sys-
tems. The Group's customised products contribute to enhanced quality of life, security, and in-
creased value for residents in multi-occupancy buildings. Furthermore, Balco Group's stand-
ardised glazing systems result in reduced energy consumption.
501 employees
Balco Group was established in 1987 and is a group
consisting of producing and selling companies. The
Group's seven brands belong to the companies Balco
AB, Balco Altaner AS, TBO-Haglinds AB, Stora Fasad
AB, RK Teknik i Gusum AB, Söderåsen Mur & Kakel AB
and NMT Montageteknik AB. The group is the market
leader in Scandinavia and operates in several markets
in northern Europe. The head office is located in Växjö,
and the group has more than 500 employees. A gen-
eral and distinctive feature of the companies in the
Group is that they control the entire value chain - from
sales work to installed balcony - through a decentral-
ised and efficient sales process.
7 markets
1 309 MSEK net sales R12
27 000 sqm total production area