Bravida Holding AB

STO:BRAV

Earnings Call Transcript 2021-Q2

[Mattias Johansson, CEO & Group President]

Okay. Hi, everyone, and welcome to the presentation of Q2 report for 2021. And I'm here today with, as usual, Åsa Neving -- with Åsa Neving, who will support me in this presentation and guide you through the financials. So I think this has been a really good quarter. If you'll remember, last Q2, the Q2 last year was actually a really good, impressive strong quarter with 4% organic growth. So we have quite tough comps, but still we managed to beat Q2 last year on both sales as well as earnings. So I'm really pleased to see the development in this quarter. And this is something we will go deeper into on the coming slides and the coming 40 minutes. The agenda today is that we start with our position in the Nordics. Then we take you through the Q2 results. And also, I will tell you about the performance in each country. And then in the end, we have a summary and a Q&A session. Very much as a normal presentation. So starting with our position in the Nordic market. Many of you know this, but I think it's important to repeat and talk about Bravida on a high-level basis. As you know, we are the leading Nordic provider of sustainable technical solutions. We are doing both installation as well as service. And having both is, of course, very important because they feed each other. And also, in the new market, with a high focus on sustainable trends, et cetera, it's important to do the right installation and then get the bridge to service that continue to help our clients to increase or improve their sustainable work as well. We are one of the few who can act like a one-stop shop in the market regarding all installations we have in a building. Our largest part is, of course, electrical, but we are very big in plumbing, ventilation but also areas like security, cooling, sprinkler, power, et cetera, et cetera. So we have all disciplines that you might need in a building. And it's getting more and more important also to have all these from one supplier to be able to optimize the energy consumption, et cetera. 12,000 employees in around 300 branches. 65,000 customers. We have now, again, broken the trend and improved the LTM sales, which is SEK 21.2 billion. We have 94% recurring customers and 89 projects is below -- 89% of the projects has a contract size below SEK 50 million. So we have very low risk in our business model, low customer concentration, diversified end markets and small average contracts. And I think this is one of the reason why we have been able to be this resilient the last 12 to 15 months. I said a year ago that my ambition was to make Bravida even stronger through the pandemic. I didn't know that time that it will vary for this long. But I think we have been showing that our business model is resilient, and that is very much depending on many customers in many places with different needs. But on the same -- at the same time, we have the scale advantage of actually supporting or giving the clients the same type of services. And that's scale advantage, of course. So the market is changing and it's -- the focus is more and more on sustainable solution. And a new time needs a new vision. So our new vision is that Bravida helps customers develop the full potential of their buildings. Through service and installation, we bring buildings to life, leading the way to a sustainable and resilient society. And this becoming more and more important. Nowadays, we're not just providing our services. It's more important for the customers what we are doing but also in what way we are doing it, how we are doing it, what kind of vehicles we are using, what kind of material we are using, et cetera, et cetera. And this has just started, but it's increasing the speed with that -- the speed that this develops is high. So this is something we need to get used to. And we want to be the Nordic -- we are the Nordic leader regarding sustainable technical solution, and we want to be the one who is leading the development in this industry as well. So on top of different disciplines I mentioned before, we also have a high focus on car chargers, solar panels but also a high focus on helping our customers to take down the energy consumptions. So every customers have the access to all our offers, all our disciplines. We have life cycle perspective for every buildings, and we want to stay as the leading company in the sustainability development in this industry. Therefore, we are launching the Bravida GreenHub. This is a service for customers in the city centers, on the large cities in the Nordic countries. So we started this last year in Oslo. It was a test to see if the market was ready. It is a hub with sustainable services delivered in a sustainable way. In the city centers, we don't need to spend time on finding parking spaces for our cars. We don't even need cars. And this is an efficiency improvement to our customers, to ourselves. We are saving time, we are saving the environment and we actually increase the services -- the service to the customers as well. So a complete offering in the service -- city centers for our customers located in the city centers. And we are giving the opportunity for customers in the city centers to take down their carbon dioxide footprint to help them reach their sustainable targets. And now we have decided, from the first of September, to launch this in 9 cities. And that is -- on top of Oslo, we have Bergen, Trondheim and Kristiansand in Norway; Stockholm and Gothenburg in Sweden; Helsinki in Finland; and Copenhagen and Aarhus in Denmark. And this concept not only means service delivered in a very sustainable way. It also means that we have a high focus on delivery of material but also to try to recycle material even more than we have done before. So reuse of material is part of this initiative as well. So what about the Q2 numbers? The market outlook, it finally looks a bit better. We have seen an increased demand in all our markets, I would say. Even if we still had some increased lockdowns measures in Norway in the beginning of Q2, we can see that the market is improving. We have organic growth in Sweden, Finland and Denmark. Negative organic growth in Norway still, but we can see in the end of the quarter that the service demand from the customers in Norway is picking up as well. So we have a positive outlook for all our countries, I would say, the coming quarters. We see an increased demand, as I said a couple of time, for sustainable solutions. The obstacles we might see is rising raw material prices or shortage of material. We are handling that in 2 ways, of course. We have a very professional central team who is handling the agreement with the suppliers, and we very much know the prices for the coming 12 months. On the other side, we are, of course, increasing the prices to the market because there has been some increases on material. We know that the market has got increases on the material -- materials, and that's why we also increased our prices to our customers. The building confidence indicator is improved and is higher than it has been for the last previous quarters. So the market outlook, if nothing special happens during -- due to the pandemic, looks positive as we see it. And highlights in the quarter. We see a positive trend for service in all our countries: organic growth in Sweden, Denmark and Finland; good order intake, up 12% year-on-year, which is good; and we see a continued strong order backlog, improved SEK 510 million compared to the previous quarter. And we have an unchanged EBITA margin at 5.9%. Cash conversion, close to 90%. And net sales, up 3%. And we actually had an organic growth. We are rounding our numbers, and that means that we are presenting 0 to that, but it was actually close to 0.5%. Not enough to write #1, but we can see an organic growth again, and that is on group level. And that is, of course, very encouraging. Net sales is up from SEK 5.4 billion to 5 point -- close to SEK 5.6 billion. And the organic growth, as I said, slightly positive, but we are presenting 0. We have acquisition contributing 3%. And the FX effect is 0. Organic growth in all countries except for Norway, but I see the trend is positive in Norway -- in the Norwegian market as well. EBITA in the quarter, the margin is unchanged at 5.9%. Improved margin in Sweden and Finland. Very glad to see that Finland continued the strong journey they have had for -- I think this is the fifth -- fourth quarter in a row we are improving the margin. And I think that our position in the Finnish market is getting stronger and stronger for every quarter, every month, every week. So really happy to see that, that trend continues. The margin is unchanged in Denmark, in Norway. Very strong to have the same margin in Norway as we had last year when we see a society that has been closed to -- closed down to not 100%, but there have been a lot of measures that have been an obstacle for our Norwegian business. So really strong to be able to present that margin. The group-wide EBITA is negative due to the investments we are doing in the future initiatives. And we also see on this slide that we have spent SEK 7 million in the quarter due to the digitalization we are working within the group today. And actually, if we adjust -- we normally don't adjust our EBITA in the presentation, but if we should have been adjusted for that investment, we actually had improved the margin to 6%. So a strong quarter profit-wise. And I think the market outlook, combined with what we have done so far this year, it looks really positive for the second half of '21. The order intake and the order backlog, we have a growing order backlog in all countries except for Norway. I think the trend is similar in all our markets. And of course, when we had the measures in Norway, it's actually hard to -- in combination with our focus on margin before -- margin over volume, it's actually tough or actually impossible to grow the order backlog in Norway. But we see that the demand is strong, and we are positive for the future in Norway as well. The order backlog, slightly lower or on same level as last year. But as you know, I've said in many quarters we have really strong order backlog. We have been able, because of that, to be quite picky about what kind of projects we try -- or contracts we try to win. Still very happy with order backlog, and it has increased since the last quarter but are on the same level as last year. And happy to say that the order intake is up 12% year-on-year, which is, of course, a result of the positive trend in the service business. And service growth in all countries, which is, of course, important when we have close to 50% of our sales in that segment. Health and safety, one of our sustainable -- sustainability targets is improving. We are improving our numbers in all countries, except for Sweden. Actually, on group level, we are improving from 9.6% down to 8.7% on -- when we are measuring the LTIR. So that is a journey that is improved by changing behavior of 12,000 people. So this will take some time before we meet our target, which is a quite tough target if you think about what kind of starting point we had, but it is so important that our employees can work in a safe way. If they're going on a service job or an installation project, it doesn't matter. They should be able to work safe. So acquisitions. We still see a strong pipeline going ahead. Acquisition is possible to do still at attractive multiples. I read a lot, you probably read a lot on many who wants to do acquisition in our industry. We haven't seen -- we have seen a slight increase of the competitive landscape regarding that, but it's still not that tough, as you can imagine, when you read all the papers. And I think that is -- the reason behind that is that -- because we try to be proactive to buy a company that is good for us not only because they are for sale. We're not going to all types of competition depending on what kind -- or it depends on what kind of a company it is. It's important for us to buy the right company. And those company is a company we try to find ourself. So still quite positive about the pipeline and the prices we are paying as well. So we think -- I think that we can continue to do M&A in the coming quarters as well. And we are staying in the same market as we have been so far. 10 acquisitions so far this year, adding close to SEK 600 million in sales. So now I'm handing over to Åsa and the different countries, markets.

[Åsa Neving, Chief Financial Officer]

Thank you, Mattias. Let's look into our different markets and starting with a quick glance Of the market. If you look at -- starting with Sweden, we have a growth in both service and installation now in the quarter. And if you look at the confidence indicator that the building industry releases, then that is on -- above normal levels. So it's a positive signs there. We -- also, if you're looking at Norway, we have a growth in service this quarter. We're very happy to have that. We also see that the demand is picking up in the installation business. So that is a positive outlook going forward. In Denmark, there is a growth in service. There is also a good demand on renovation projects. You will also there see that the demand and the volumes were picking up on the installation side during the quarter. And the confidence indicator is above normal level. In Finland, we have a stable demand both for service and installation. The confidence indicator is below normal level, but it is picking up. So starting with Sweden then, our largest country. We have a net sales -- growing net sales. Grew by 5% during the quarter. And we had a growth in both service and installation. The year-to-date growth was 3%. And we're also happy to have organic growth in Sweden by 2%. We had a high production, especially in the northern part of Sweden and also in the Stockholm area during the quarter. And we're also glad to say that our largest division, the South, in the southern part of Sweden, has -- they've had -- struggling with lower volumes during a couple of quarters but are now picking up again, and we see that the volumes are coming back even there. So that's good signs. Looking at EBITA, it's improved to SEK 203 million from SEK 119 million. And we had a very stable performance in all our divisions. So the EBITA margin is improving to 6.5% from 6.4% in the quarter, and it's on the same level as last year on year-to-date. The order intake was plus 14%. It's mainly driven by service. We had one large order in the quarter. That was SEK 270 million, and that was a new bus terminal that we do in the Slussen area of Stockholm. And for those of you who doesn't know what Slussen is, it's a big public transportation hub in Stockholm, in the city center. The order backlog was almost on the same level year-on-year and increased in the quarter by SEK 521 million. So moving to Norway. In Norway, there was -- we had a negative growth of minus 6%. We still had a negative impact from the pandemic. Even though we see that it is -- Norway was still pretty closed down in the beginning of the quarter. But now we see that it's opening up and service is coming back strongly. We had a growth in service of 10%. Installation projects -- or the volume from installation was still low in the quarter, but we see that also the demand is picking up in the end of the quarter. So also there, positive signs. The organic growth was negative, minus 10%. We had an EBITA margin that was unchanged on 6.4%, and that is very strong due to the fact that we lost so much volume compared to last year. And the reason for that is that we have had a strong service volume picking up, especially end of the quarter, and we had very high margin on service. The order intake was negative, minus 14%. But if you look at the order intake from the installation, then the installation project -- the volume was higher than the turnover from installation in the quarter. So that's also a positive sign for the future. Order backlog was plus 2% year-on-year. Denmark. In Denmark, we had a growth in sales of 3%. We had a -- it was driven by growth in service. Installation was also lower in Denmark but picking up. So volume was picking up in the end of the quarter, so in June basically. The organic growth was 4% in Denmark for the quarter. We had an EBITA almost on the same level as last year, SEK 54 million versus SEK 53 million, and an unchanged EBITA margin of 5%. If you look at the year-to-date margin, the margin improved to 5.1% from 4.9%. Order intake, high, plus 24%, mainly driven by service and also by order backlog that increased by 3% year-on-year and also increased during the quarter. So Finland. Finland is continuing to growing. It's growing -- it grew by 22% in the quarter, and this comes from both service and installation. Highest growth in service but also a strong growth in installation. And this is mainly due to a large project that we have with Wärtsilä that is in a high-production phase. And that also led to an organic growth of 12%. We had a EBITA improving from 16 -- from SEK 10 million to SEK 16 million, and that means an EBITA margin of 4% compared to 3% last year. Order intake, strong, plus 47%. And in Finland, that was actually mainly driven by installation. And the order backlog was decreasing, minus 15%, year-on-year, but this is due to the fact that last year, we got in this large Wärtsilä order in Q1, and now we have actually been producing on this order. So it's not that much left in the order backlog. So that is the explanation for that. So all our countries show positive trends and positive deliveries. Moving on to our financials and the net debt and cash flow. Starting with the net debt, we still have a low net debt. The net debt-to-EBITDA ratio is 0.9. It was 0.7 last year for the same quarter. This year, we also paid out dividend in the quarter that we didn't do last year. So that's another SEK 500 million that we paid out this year. The only thing that is sticking out a little bit in this report as I see it is the cash flow. That is a lot lower than last year. So if you look at the quarter, it is SEK 317 million compared to SEK 728 million last year. Looking at the year-to-date figures, it's SEK 461 million compared to SEK 1 billion -- SEK 1.3 billion. And this is due to a working capital that is -- that has decreased or normalized, you can say. And these also have an effect then on a cash conversion that is a bit lower on 89%. I will guide you through why this cash flow is so much lower than last year and why I don't think this is a big problem. This is a bit of a busy slide, but I'll guide you through it. If you look at the blue bars, it's the cash flow for each quarter, starting with the last quarter in 2019. And the green bars is the working capital. And then the line is the working capital in percentage of the LTM sales. And what is affecting now the cash flow is the change in working capital in the first half year of 2020 compared with the change in working capital in the first half year in 2021. And as you can see, the cash flow -- or the working capital has done quite a journey during this time period. You can start in the last quarter 2019, then we started with a working capital of 3% of the turnover -- of the LTM sales, negative 3%. And then we took down -- in the last quarter 2019, we took down a lot of risks in the portfolio. We were resolving a lot of old projects in Stockholm that you may remember. That improved the working capital. And we also had some large projects coming in with good payment plans that also improved the working capital. Then the working capital continued to improve in the first half of 2020. So we had a good activity in the installation business with a lot of startups. And then also, when projects are starting up, we also -- we almost always have good payments in the beginning. We also had large projects with good prepayments. And then we also had an effect of COVID-19 actually, a positive effect. We got to postpone social costs and VATs in Norway and Denmark. So we didn't pay out any of those -- or we did -- we got these payments postponed during this half year. And this led to a very low working capital end of June last year. So we were down on minus 8 as a percentage of LTM sales. And then what has happened now in this half of the year, it has normalized a bit. So we now have seen a slower -- a bit slower activity in the installation business, meaning that we don't get so many prepayments. Also, these large projects that we took earlier, they have gotten further in their percentage of completion, so we have -- there's less prepayments left. And we have also paid out these postponed taxes. And then the last thing is that we have higher account receivables. This is due to high invoicing but also to a couple of outstanding invoices that we have with 2 customers in Denmark. And these are overdue invoices with 2 public customers in Denmark, but they are affecting the working capital negative. So -- but as you can see, the working capital level is still very good and it's on a very stable level. So we don't see a lot of fluctuations in the working capital these last quarters. But the fact that we had such a good improvement in the working capital last year now hits the cash flow in a negative direction. But the working capital as such is very good on almost minus 7%. So this will -- and we believe that it will stabilize in this level and not have this. And then it means that we will not have these big effects going forward. So I hope that was an explanation on the cash flow development. Then moving on to my last slide on the financial targets. We have an EBITA margin target of more than 7%. We are on LTM 6.4% now. And then due to what I just said, the cash conversion is a bit lower on 89%. Believe that will improve going forward. We have a low net debt-to-EBITDA ratio. Our target is to be below 2.5. We are on 0.9. Sales growth, the target is to be -- have a growth of more than 5%. We are flat year-to-date, but we had a negative growth last quarter, so positive growth this quarter. So we have a positive outlook for this. And the dividend payout should be more than 50%, and we paid out more than 50% this quarter, so SEK 507 million. By that, I will hand over back to you, Mattias, but it's a strong performance from all our countries this quarter.

[Mattias Johansson, CEO & Group President]

Thank you, Åsa. And a special thank you -- thanks to -- for you guiding us through the working capital slide.

[Åsa Neving, Chief Financial Officer]

Yes, that's a bit tricky, not always so easy to read.

[Mattias Johansson, CEO & Group President]

But negative working capital that's close to -- I think it was 6.8%, is really a strong number. So yes.

[Åsa Neving, Chief Financial Officer]

Yes. It's really strong. So we should remember that even though it changed negatively. But that's a very good level to be on.

[Mattias Johansson, CEO & Group President]

Yes. So maybe we can expect some questions on that slide even if you did your best to explain it.

[Åsa Neving, Chief Financial Officer]

Yes. Yes, absolutely. Okay.

[Mattias Johansson, CEO & Group President]

Okay. Try to summarize this presentation, the second quarter of 2021. Service sales increased in all countries, and the service increased actually with 13% with -- which is a very strong performance. And it's, of course, driven very much by the society opening up again. Still lagging a bit in Norway, but the trend is positive as well. Organic growth in all countries except for Norway, but the trend, as I said, positive. Increased order backlog compared to the first quarter with SEK 510 million. Quite flattish year-on-year, but an order backlog that we are really confident to have a strong level, high level. Norway was again heavily impacted by the COVID-19 measures. And actually, the measures increased in the beginning of the quarter, and it's quite easy to forget that when we see the rest of the society opening up. In the beginning of the second quarter, the government actually strengthened the measures in Norway. But now we see a positive shift in how the Norwegian society is actually opening up again. And that's, of course, very good. Improved production volumes in the end of the quarter. Sales -- stable EBITA margin at 5.9%. And the last bullet is about our investment on the digitalization. And again, if we should have been adjusted the margin, we actually had been able to present 6% margin if we adjusted for that investment. But it's needed to invest in the future, and I think that will, of course, pay back many times later on. This slide is, of course, very -- a slide I'm happy to present. You see the trend for many, many years. We had a little drop in the beginning of this year. Now again, we have an LTM sales that is higher than 2020, and I expect both the sales and the profitability to develop in a positive way in the end of the year. And cash conversion, slightly lower, normalized maybe. We have had a really strong cash conversion the last quarters, years. So sometimes, we need to be under 100% again, but I think Åsa explained that in a very good manner. So said that -- saying that, I think we can open up for some Q&A. Thank you.

[Operator]

[Operator Instructions] And our first question is from the line of Carl Ragnerstam from Nordea.

[Carl Ragnerstam, Analyst]

It's Carl here from Nordea. A couple of questions from my side. First, on the service side of your business. And I wonder if you could give some flavor on the end customer group that is driving the growth in the quarter. I mean is it the pent-up demand that you are working through, I mean, with schools? So Maybe not hospitals but public buildings? Or is it more broad-based recovery on the service side?

[Mattias Johansson, CEO & Group President]

I think it's all over, actually. We can't see any special customers, any special services to special customers. I think it's more the people coming back, opening up. They are actually willing to have a technician going into the buildings, et cetera, et cetera. So I think this is just a result of what we have seen and tried to explain earlier. When the society opening up again, the demand will be there. And of course, some is pent-up demand, but I think mostly, it's actually that they start to use our services again.

[Carl Ragnerstam, Analyst]

Okay. Perfect. And on the installation side, I mean, we saw similar characteristics to Q1, I think. And as we discussed before, maybe it was sort of a vacuum in the order backlog in the quarter temporarily impacting the installation volume. So I wonder if it's -- is it the case that you see improvements in the installation market already in Q3? Or should we still expect a somewhat slow development, of course, offset by the service side but still?

[Mattias Johansson, CEO & Group President]

No. But I think what we have seen is actually what we have said before. We see that we have had a strong order backlog. We have produced -- some of the projects are finalized. And then the confidence on some customers haven't been there to 100%. So they haven't signed the new deals they are planning for. So I think we have a gap, a period of time where we are affected -- will be affected by the fact that customers have taken late decisions or actually is contracts that we have signed, waiting to start up the project before they see the right timing. Because if a customer start a project in some countries, for example, and then the measures from the government actually says -- tells them that you need to send home the construction workers, the plumbers, et cetera, they need to pay the bill. So they have waited to start some projects, and I think that is the effect, what we are seeing. On the other hand, when the society is opening up, we see the demand for our services, both on service and as well as installation. So I think it can take some time before we have those contracts in production. And you can see it in the sales. But the demand is there. We have strong order backlog. And maybe we won't see a very huge growth on the installation in Q3. Maybe it will take until Q4 before we see that, but it's -- I'm just guessing now. The demand is good. We have a period of time where we have a slightly lower production because of different factors.

[Carl Ragnerstam, Analyst]

Okay, brilliant. And also a bit curious to know more about -- I mean, we have seen continuous price increases on the raw materials side. And have you seen an impact on margins in the quarter? And also, do you expect Q3 to be more impacted as I guess it takes some time for the prices to sort of run through the system?

[Mattias Johansson, CEO & Group President]

Yes. I think that could be a minor effect. But we don't know that. We haven't seen it yet. But I think it's important to understand how we are working with our suppliers. We have 1-year contracts with fixed price except for some products which have a lot of steel, copper, et cetera, which is excluded from the fixed price clause. But that also means that we know very much in detail what price increases we have got, where the uncertainties are. So we have a quite good idea about what type of material we face -- or see some risk in, get higher prices on. And that is something, of course, we take into consideration when we are doing the pricing. And that's why we are saying in the report that we are increasing the prices to the customer as well. Then we know that these increases that most of the market have already get, we will get in the beginning of next year. And we have plenty of time to actually adjust our prices due to that fact. So I think a minor impact on the margin shortly maybe. But in the longer-term perspective, we should have no impact on the margin because we are pricing very often at cost-plus to our customers. But we have increased the prices to our customers in the market just to be -- try to be sure that we will cover the increases we get from the supply side.

[Carl Ragnerstam, Analyst]

Okay. Perfect. And one more, if I may. Also, if you could please update us on the Minel acquisition. You announced it, I think, 6 months ago, but we haven't heard anything. And is it -- what's the likelihood of you closing it? Or yes, how should we look at it?

[Mattias Johansson, CEO & Group President]

Yes. As I know there's many companies reporting today, and I guess when you're asking the question, you haven't seen the report, but we are writing in the report that both ourself and Minel don't think it's possible to do that deal for different reasons. But we announced that we have had a letter of intent 6 months ago, and that -- the reason behind that was that we had to do a proper due diligence in a very decentralized group of companies on the Minel side. And what we have seen in the due diligence is not what we expected, so we don't think it's a good idea for us to continue. And I think the seller side thinks the same. And maybe it's a timing question. Let's see. But we have said in the report that, that deal won't happen.

[Operator]

[Operator Instructions] And next question is from the line of Karl-Johan Bonnevier from DNB Markets.

[Karl-Johan Bonnevier]

Yes. Just to come back to your little -- your answer to the, say, the momentum, getting back installation to growth again. Looking at the comment of improved production volumes in -- towards the end of the quarter, do you still think that it's -- even though seeing that, do you still think it's too early to expect installations to be back to showing growth again from Q3?

[Mattias Johansson, CEO & Group President]

Yes, I think when we do our own internal estimates, it's probably around late Q3, beginning of Q4 where we expect a pickup on the installation side. But it's not an exact science to do that. So we won't expect at least a huge pickup in Q3. I would be surprised if we get a pickup already in Q3. On the other hand, I will be probably a bit surprised if we don't get any positive pickup during late this year. So it's somewhere in Q4, we think, that installation will -- yes, the installation volumes will pick up again.

[Karl-Johan Bonnevier]

Excellent. Good for that. And then looking at -- you're still -- now once again building backlog since 2 quarters for -- partly related to installation, I guess, partly related to service coming back. Is that also a sign that you see the worrying trends you talked about a couple of quarters ago of negative pricing trends in contracts and these kind of things, that, that has normalized and we are back to a more normal market again?

[Mattias Johansson, CEO & Group President]

Yes, I think it's a combination of a more normal market as well as that some competitors in the market -- not a special competitor, I can say that right away, but I think some players in the market actually try to sell enough projects to have in the order backlog so they can actually keep their resources busy, and that is not our strategy. And I think the market going back to more normal market at the same time as those players have maybe filled up their order books enough is -- I think it's a combination of that. And I've seen it before. I've been in this industry for 20 years. So I think if you just are patient enough, have confidence with your existing order backlog, focus on the margin instead of order -- instead of the volume, you can find enough projects to the right price. And I think that is what we have done now. It's a timing question, and I think it's a better market as well.

[Karl-Johan Bonnevier]

Excellent. And also, obviously, I need to ask one question on the working capital side as well. When you look forward and getting back to some sort of more normality, looking at the installation business coming back and then services coming back, where would you see -- where would you expect to see the working capital-to-sales normalizing? Because I guess still being around 7% is, as you pointed out, quite a good level. Is it the old 3% level that we should be aiming for during, say, the next 12, 18 months or...

[Åsa Neving, Chief Financial Officer]

Well, that is difficult to say. But no, I don't think it's the 3% level. I think it is around the level that we are on now, actually. I think we are on a pretty stable level here. We will get -- when the installation business starts, we will get some good payment plan again from that, and that will balance off something else. But I think this is a level that we are -- yes, that we could stay on.

[Mattias Johansson, CEO & Group President]

Yes. And just to add some...

[Karl-Johan Bonnevier]

And is there any deferrals of tax or social costs we should be thinking about that you feel that are still going out?

[Åsa Neving, Chief Financial Officer]

Yes, there are still DKK 70 million, roughly, that is going out half -- second half year or maybe January next -- or even January 2022. But -- so there is a little bit left.

[Karl-Johan Bonnevier]

A little but nothing that will sort of tip the boat, so to say?

[Åsa Neving, Chief Financial Officer]

No. No, no.

[Mattias Johansson, CEO & Group President]

And I think also to -- as I say in the CEO statement, I think that the working capital is on a good level. And I think to have a negative working capital is good. And be around 3s, of course, also more than good, actually. So try to keep the working capital negative, and I also think this depends on what kind of phase we are in regarding large project service business, et cetera, et cetera. So a negative working capital is good. If it's 2%, 1%, 5%, minus 6, I don't think that is the most important. But a negative working capital is, of course, good.

[Operator]

And there are currently no further questions registered, so I'll hand the call back to the speakers. Please go ahead.

[Mattias Johansson, CEO & Group President]

Okay. Thank you very much. It's a very nice weather in Stockholm, so I wish you all a very pleasant and great summer. I think both me and Åsa is looking forward to have a couple of weeks off as well.

[Åsa Neving, Chief Financial Officer]

Yes. It'll be nice.

[Mattias Johansson, CEO & Group President]

So thank you very much and enjoy the summer and stay safe. Bye.

[Åsa Neving, Chief Financial Officer]

Thank you. Bye-bye.