Bravida Holding AB
STO:BRAV
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Estee Lauder Companies Inc
NYSE:EL
|
Consumer products
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Church & Dwight Co Inc
NYSE:CHD
|
Consumer products
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
American Express Co
NYSE:AXP
|
Financial Services
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Target Corp
NYSE:TGT
|
Retail
|
| US |
|
Walt Disney Co
NYSE:DIS
|
Media
|
| US |
|
Mueller Industries Inc
NYSE:MLI
|
Machinery
|
| US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
Technology
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
62.8444
91.9487
|
| Price Target |
|
We'll email you a reminder when the closing price reaches SEK.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Estee Lauder Companies Inc
NYSE:EL
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Church & Dwight Co Inc
NYSE:CHD
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
American Express Co
NYSE:AXP
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Target Corp
NYSE:TGT
|
US |
|
|
Walt Disney Co
NYSE:DIS
|
US |
|
|
Mueller Industries Inc
NYSE:MLI
|
US |
|
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
This alert will be permanently deleted.
Bravida Holding AB
You don't have any saved screeners yet
Okay. Thank you. Good morning, everyone, and welcome to Bravida's Q3 report. Today, and as usual, it is myself, Mattias Johansson; and CFO, Nils-Johan Andersson, who will take you through this presentation.On the next slide, on Slide 3, I want to start explaining our explanation to the market and our risk profile. As you all know, we have a low-risk in our business model. First, we are acting in diversified end-markets in 4 different countries in more than 155 location and in different customer segments. Second, we have a low customer concentration, meaning that we have more than 50,000 customers and our top 5 customers represent around 15% of our sales. And third, we have a small average contract size and close to 50% of our sales is service. And down to the right, you can see that 72% of our sales -- of our contracts and sales or services is less than SEK 10 million and more than half of this is contract or services below SEK 1 million.On the next slide, I will take you through the highlights of the quarter. And I think those are quite many. So I will look close to read the [highlights] from the slide. The net sales grew 13%, and we had organic growth at 6% and M&A contributed with 4%. We had growth in all countries. And service sales grew at 11% and installation growth were at 15%. And the order momentum, the order backlog, is at good level, and at SEK 10.7 billion. And we have had good continued momentum with order intake above SEK 4 billion. Especially good order intake in Denmark and Finland, where we had 65% up in Denmark and 85% up in Finland. As you know, we also have been awarded an installation contract in Stockholm Bypass Project or as we say in Swedish, Förbifart Stockholm, at an order value at SEK 2.7 billion. And this is not included in the order backlog yet. We normally not put orders in the backlog until we have signed the contract, and these contracts are planned to be signed in the beginning of the first quarter in '19.The EBITA is up 20% to SEK 267 million, and margin is improved to 6% from 5.7%. EBITA margin is improved in Denmark and Finland, it is unchanged in Sweden and slightly lower in Norway. Norway, it has a lower margin due to high production in low-margin projects in Oras. Regarding the cash flow. We can see a seasonal weak cash flow depending on the holiday period, but it is improved compared to the last year. The cash flow from operating activities is minus SEK 132 million and is better than last year, where we had at SEK 144 million minus. We had reached cash conversion of 93%. The working capital is minus SEK 583 million. And we have a net debt at around SEK 2 billion or 1.7x adjusted EBITDA on a LTM basis.The acquisitions continue in a good way. We have completed 2 more in Q3, adding SEK 86 million in sales, 4 more acquisitions in Q4 adding more than SEK 400 million. And year to date, we have made 12 acquisitions or completed 12 acquisitions so far, adding, in total, SEK 800 million. And the integration of Oras is going according to plan.On Slide 5, you can see the market trends. And the market, as we see it, is good in Sweden, Norway and Denmark and stable in Finland. In Sweden, where you can see the main growth drivers from public investments, in buildings and infrastructure, and we have industry confidence indicator still at good levels. In Norway, overall service and installation activity is good. And the market drivers are public investments and energy efficiency projects. And common for both Sweden and Norway is that you can a declining production of residentials. But as we have said earlier, and we can see that in the order books as well, that we see a high demand for renovation of residentials and that demand has increased. In Denmark, the market is supported by public investments and residential constructions, and also, health care and education buildings are driving the volumes. Construction confidence indicator are at normal level. In Finland, we can see stable market, the construction market is improving and the sales increase is for the construction companies, but -- that are, in many cases, our customers. And we see stable service and installation market. And the confidence indicator is at a stable level.On the next slide, you can see that sales in the quarter is up 13% and 11% year-to-date. The growth trend is positive, and the sales is SEK 4.4 billion in the quarter, 6% organic and 4% from M&A. And the EBITA is up 20% in Q3 to SEK 267 million and margin is improved 6%. And as I said earlier, the margin is improving in Denmark and Finland, unchanged in Sweden and at good level, but somewhat lower, in Norway.Earnings per share is up 23%, 2-3 percent, in the quarter. And as I say it, and as we normally say in Bravida, we are proud, but not satisfied. We think that we can continue this way of delivering result in the future as well.Regarding order intake on Slide 7. It's flat in the quarter and it's up 5% year-to-date. We have a declining order backlog in the quarter, and this is explained by a declining order backlog in Oras, which is the acquisition we did last year in Norway. We are producing on products with quite low profitability, and this is part of and in-line with our plan. We have also completed 2 large projects with high production in Sweden within sprinkler and power. And last year, in Q3, we had a couple of large orders we just registered in Sweden. So all in all, we think that we have order backlog at high and good level. And we think this will support healthy growth in the future as well.On the next slide, we're going to talk a bit about the Stockholm Bypass Project. And again, this is not included in the order backlog yet. We have been awarded 2 contracts from the Swedish Transport Administration or Trafikverket in Swedish. The total order value is at SEK 2.7 billion. This is electrical and lighting order value, 1 project at SEK 1.6 million (sic) [ SEK 1.6 billion ] and water and wastewater and fire extinguishing systems at a order value at SEK 1.1 billion. The last one of the 2 has been appealed on technical grounds and Bravida’s offer is not disputed. And we think that we'll -- this will go our way. You can never be sure, but it's unlikely, as I see it, that we not are going to win this project in the end. The signing of the contracts will probably happen in the beginning of Q1 in '19. Regarding the project, there is a couple of years of planning, designing and documentation, and the production will start at 2021 until 2023 in -- yes, mainly in this period. And then after that, there will be a maintenance and testing period until 2025, and the project, as such, will be finalized in 2026. We also have service and maintenance for 2 years, including the risk project. And we're really looking forward to deliver this project as we see as core business, we have done these type of projects before, and we are very confident that we can deliver the quality to healthy margin in this type of project.On the next slide, and that's Slide 9, you can see the graph showing the order backlog compared to the sales for service and installation. The red line shows that we continue to have a strong development in our service sales. As I mentioned earlier, service sales grew -- growth was 11% in the quarter. And the blue line shows that the order backlog is on high level. And I'm confident on this level, and even on lower level as well, for the coming quarters, why the order backlog is well above the LTM sales for installation, which is the green line. And also remember that we did not register outcoming service jobs in this order backlog. It's just including installation projects.On Slide 10, you can follow the acquisitions we have done so far in '18. We have done the acquisitions in all countries, in all markets. A couple of quarters ago, I said that I thought that we can be more active in this perspective in Sweden, and we have certainly seen that in the last quarters. We have done 1 in Finland in the quarter, 4 in Sweden, 2 in Denmark and 1 in Norway. Those adds SEK 386 million in the quarter. In October and November, we have done 4 more acquisitions, adding SEK 420 million to top line. We see a continued strong pipeline to attractive multiples. So we think that we can continue to do M&A that will strengthen our top-line, of course, as well as the competence and our offer to the customers. We have also established -- reinforced acquisition group. We have strengthened that with a couple of persons to enable to increase our activity in M&A because we think that's a good way to develop Bravida as a company. And we also think that not depending on the market, even in a market with good demand or a slightly weak demand, we can continue to do M&As and create a lot of shareholder value. All in all, we have done 12 acquisitions so far, adding around SEK 800 million in sales.Now over to Nils-Johan and the financials.
Thank you, Mattias. And let's look a little deeper into the figures, starting with the sales. As Mattias said, we had a top line growth of 13%. The organic growth was 6%, and this is actually slightly above our financial target of 5%. Acquisition contribute with 4%, and the currency impact this quarter was 3%. This is coming from a weaker Swedish krona, adding up to top -- to sales for SEK 4.437 billion. I would just like to give some comments about the earnings per share. And again, we increased it with a higher rate than the EBITA. In this quarter, we were up with 23%. This is explained by improved financial net, but also -- now also lower tax expenses. So all in all, overall, a good performance.Let's look into next slide and start to -- start with Sweden. In Sweden, we saw a stable development in the quarter. Sales were up at 5%. This is mainly coming from organic growth. EBITA was stable on a high level, 6.7%. And if we look at the order intake, it was down with 11%. And you will see that the order intake per country varies from one quarter to another. And in Sweden, it went down by 11%. And if we then -- if we look back to the Q3 report last year, you saw that we reported 4 large orders: there was a wind farm, there was a large school, there was a culture center in Kiruna and also multifunctional building. So we still believe that the order backlog is in good level and that will support the growth the coming quarters.Let's continue with Norway. We continue to see good development in Norway. Sales were up with 13% this quarter. It's a combination of good organic growth and also currency impact. Margin, you see, it was more or less flat. It was down with 10 bps. The -- it's dilution coming from high production in Oras. This is from production of the old backlog that we acquired in May '17. And we -- as we said earlier, we -- there is lower margin in this order backlog. If we adjust for the Oras, the, so to say, old Bravida Norway, delivered a EBITA margin of 7.1% in the quarter. So still, we see a good development in the old Bravida. Just a bit more comment on the order backlog. In Norway, it was up with 7% year-on-year. If you look at the Oras order backlog, it's -- when we acquired the company in May, order backlog was something around SEK 850 million to SEK 900 million. In the end of September, we have -- we were down to SEK 350 million. And we assess -- we expect that this unprofitable projects from the acquisition will be completed in Q1, so next year, in '19. So then, we -- you will see -- from that point, you will see limited dilution coming from this order backlog.Next slide. In Denmark, you continue to see a strong development in Denmark, as sales were up with 30%, 3-0, and this is a strong organic growth but also positive currency impact and small impact from M&A. We took a big step in the right direction if you look at the EBITA margin, up from 3.5% of 5.6%. Please remember that we had some challenges in the last year in Q3 with 1 or 2 projects. So -- but anyhow, it's good to see that Denmark are increasing the margin with up to 5.6%. If you look at the order intake and order backlog, the order intake this quarter is up with 65%. And we have a large hospital order in this quarter and that explains this high figure. Order backlog year-on-year is up with 12%. And if you look at the overall situation in Denmark, and I think I said, both after Q1 and Q2, we have a good position in Denmark. And most likely, Denmark will be the best market, from a macro perspective, the coming quarters because we have -- we see many drivers now which is improving the demand.We get to Finland. In Finland, we reported good growth and stable EBITA margin. Sales is up with 50%, and this is mainly driven by the acquisition of Adison, but also from currency. EBITA improving from low levels. We are going from -- EBITA from SEK 3 million up to SEK 5 million, and the EBITA margin is more or less flat. If you look into the order intake and order backlog, we -- order intake was up with 85% and the order backlog is up with 40%. So there is a good growth in both the order intake and order backlog.We get to next slide and give an update on the cash flow and the net debt. You know that the cash flow is seasonality weak in the third quarter affected by low production in the holiday period. Normally, we have the weakest cash position in mid-September. And from mid-September until more or less, February, we have a strong cash generation. And we expect that we will see the similar trend this year. We have had a good cash generation in October, so they're supporting this trend. Net debt/EBITDA came down to 1.7 compared to 2.3 a year ago. And if you look at the operating cash flow towards the bottom of the page, we see that we have SEK 802 million compared with SEK 895 million. If we -- this is including the tax payment. If we add back the tax payment, that's not really operational. We have a cash generation close to SEK 1.1 billion the last 12 months compared with SEK 900 million the 12 months before. So we continue to generate strong cash flow. And actually, as we used to say, that cash is the true result.So I -- just give, next slide, an update on the financial target. There is no changes. Sales, we are committed to improve the sales with 10%, it's a combination of organic growth and M&A. We will take the EBITA margin over 7%. We took one small step this quarter. Cash conversion is, we're saying, we should be in the top, this needs to be around 100%. We have now 93%. And the target also is to pay out at least 50% of the net profit. And if you're looking to the balance sheet, we should be around 2.5x net debt-to-EBITDA.I'll hand over to Mattias to summarize.
Thank you, Nils-Johan. And the summary for the Q3 is that we have a sale increase at 13%, organic growth at 6% and acquisition contributed with 4%., and we have a sales service growth at 11%. The installation order backlog is at good level, above SEK 10 billion or SEK 10,746,000,000 -- SEK 10,746,000,000, to be exactly. And this is order backlog that we are very happy with, and it gives us comfort for the future as well. EBITA margin is improved to 6%. The M&A execution is on track with healthy pipelines. 12 acquisition is completed in 2018 and add SEK 800 million to the top line. And net debt is 1.7x EBITDA. And we have an LTA -- LTM operating cash flow improved compared to last year. The cash conversion is improved to 93% in the quarter. And we can see stable, good market conditions to continue. And we have seen improvements in Finland and Denmark. So there are many bullets that prove the strong performance in the quarter.So by that, thank you very much. And now we can open up for some questions, if you have any. Thank you.
[Operator Instructions] The first question comes from Stefan Andersson from SEB.
First a question on the organic growth. It's picking up rather dramatically from the first half, from roundabout 3%, 4% to 6%. Could you maybe explain where that comes from? Is it comps? Or is there certain region that is picking up? Or is it a certain project?
Yes. Good morning, Stefan. We see -- I think it's not a specific project. It's not really a specific country. We see -- we normally do not give comments about the organic growth by country, but in this case, we see organic growth in more or less all countries. So it's not -- of course, we had -- in Denmark, we have the strongest organic growth, but also good organic growth in Norway and Sweden. So it's in -- it's over in all countries.
Yes. And I also think that, that we have mentioned before as well as the order backlog, it can vary between one quarter to another. But we know that we have a order backlog on high levels that will support the organic growth. And I -- yes, I think this is just a proof of that we have a good demand in the market and a order backlog that supports the growth as well in more countries as Matt said.
The reason I'm asking, as you can understand, if this is a positive trend that is ongoing. I'm trying to understand if this is a level you can stay on. Is that what you're saying? Or this is a level that you could stay on for a little while?
That's always hard to estimate in the future. But of course, again, we had a order backlog that is high. And I think many branches when we discuss tenders that we are submitting, some branches -- or very often it's branches that are searching for new products after [ the summer ]. And of course, we try to price those in a very positive way for Bravida. And I think 6% organic growth is quite high level. But I think, we're saying that we are going to grow this business with 5% organic. And I think we will be around that figure for at least a while longer.
Yes. And then on that topic as well. When it comes to Oras and Norway, if I don't misrecall it, you've said that we should expect a little bit of a drop at some of the underperforming contracts in Oras. Oras are being completed and you are not really replacing them with similar volumes now. We're not really seeing any of that in this quarter rather the reverse. So could you -- I mean, has that -- has something changed that makes you more positive on Norway offsetting that comment? Or is that coming with the delay?
No. I think it's -- as we said earlier, that we are -- when we bought Oras in May last year, the sales was around SEK 1.2 billion. Now we have said that the sales, most likely, will come down to below SEK 1 billion, something between SEK 900 million and SEK 1 billion. And we -- of course, we are building up a new order backlog in Oras. But when we're looking for the older one that have a lower margin and slightly higher risk that we normally -- compared to what we normally are accepting, there will be -- we have had high production in the Q3 in the Oras old backlog. But it's -- yes, we have some dilution, but of course, the -- we hope we can we build a new stock -- order backlog, but we are really -- it's important for us to produce on the old one, so we are -- we get rid of the old projects.
Yes. And I think what we are doing is that we have put up a tender team that will support in the Oras organization. And all tenders we are submitting for -- from Oras today is on different -- yes, much higher price levels that we have had before. That will mean that we will lower the sales and are more cautious about the order backlog, but we are winning new projects on those new levels. So we still think that Oras is a very good acquisition. And we are in line with the plan. So I'm -- I think, we are in 12 different places with Oras. And in some places, we are much better than expected, and of course, we have the opposite in some place as well. But overall, it's still very good acquisition we have done regarding Oras.
And then my final question. The contract that is appealed in bypass Stockholm, if -- I mean, you're expecting it to be thrown out that is not going to be approved after the appeal. But if it is approved, what kind of -- what's your experience? What kind of time line would we have then?
Yes. This is of course very much speculation, but it's -- I think, the time line for the customer, in this case, is very critical. And the terms they have appealed on is, as I see, they're not likely that they will be very successful with because that will have, we -- yes, that will have very big effects on the way how customers can buy turnkey projects in the future in the whole industry. So I would be very surprised if they will be successful with this. So yes, I really don't know yet on that, yes, I don't think it's likely that, that will happen. And again, not in the order backlog, so let's see what happens.
The next question comes from Predrag Savinovic from Nordea.
I have a few follow-up questions here on the Stockholm Bypass Project. You said part of it is subjected to appeal. If there will be a longer time process here, could you, for example, include the first SEK 1.6 billion at the first stage, and then the later stage, the remaining SEK 1.1 billion?
Yes. It's 2 different contracts. So they are not connected to each other in that perspective. So the large one, the first one, SEK 1.6 billion, that is something that we are discussing -- the forms in the contract, and it's quite straightforward depending on the type of customers and type of contracts.
All right. And then can you talk a bit on how this can change your risk profile? From what I know, this is the biggest project you have ever taken on. Should we be worried about anything here?
No. I think you should have -- always have respect for all different types of projects, but this is something we have done before. I think, we have, in some way or another, been active in all the tunnels that had been made in modern time in Stockholm, and we are very positive -- what to say, yes, we have been very successful in these type of projects. So we have a very good team that has done -- performed the tender, and we're also building up a new team that will produce these projects for us, and they are very experienced in this. We are hiring some consultants that have been in the industry for very many years as well. And we also had the opportunity to hire new personnel that can contribute to strengthen Bravida for many, many years in the future as well depending that we have these type of projects. So of course, you should handle all these types of projects with respect, but we think we have priced this in a way that are covering all the risks that we know can show up. And we are confident that we can deliver on this one.
And on the margin that we should be expected here, should we expect like an average Swedish margin for this project also?
It's very early in the project. Let's see when we have signed the contract, when and how we decide to communicate this. But I think we have priced it in a good way. We have covered the risks in the project. And let us come back to that and I think production will start in a couple of years from now, and I think I pause on that.
Moving on to Norway. You'll see that the order intake has come down a bit. Can you elaborate more on this? Why and how can you turn around since it doesn't appear there is any bigger projects in the comparing periods, but rather small and mid-sized as you're right in the presentation here?
Yes. We -- I think, we had an order for wastewater treatment plant in Q3 last year for -- if I remember, it was something between SEK 85 million and SEK 90 million. So that was the big one also in Q3 in Norway. And as I said earlier, we continue to see a good demand in Norway. And the order backlog is up year-on-year even if we have high production out there with Oras backlog. So we are quite fine with the level. And if we look and compare the order backlog to the -- in Norway compared to the sales, it's still on high level. So we are -- it's nothing new really in Norway. It's -- and things have -- nothing have changed, just slightly more positive on the residential side, but it's, overall, a good situation in Norway.
And you mentioned that the backlog from Oras will be fully chewed off ending Q1 '19. Does that mean that there will be no more dilution from this in the profitability area?
Yes.
All right. And then finally for me. Momentum in Denmark seems really strong, and we are seeing a decent figures as well. And do you still think that the relative growth here will be the strongest in Denmark in spite of the figures you're seeing?
No. I think the 30% is an extremely high figure. We are -- I think, we talked about the large hospital in the beginning of this year while we were in an early stage. We were a little bit more cautious on the margin. Now we are halfway through the project, and we could be a little bit safe from the margins but also -- of course, they come to an end. But as we said earlier, we see that the order backlog is up. And we have a good activity, good demand both from public and private sector. We have talked about the data centers earlier and also now the residential demand is coming back. So overall, there is a good demand in Denmark. 30% is a high figure.
And just one more. You say that it's coming back on the residential side in Denmark, you just mentioned slightly more positive on the resi side for Norway as well. What about Sweden here? Have you seen any changes here now in the past say -- past quarter or so since you have alluded to slower growth here previously?
Yes. I think the trend is the same. We are in the same page that you are reading, and we try to look up the same signs that you see there. Of course, the Stockholm area and the new area, of course, have a lower demand for residential and that's not a surprise [indiscernible] due to those market. It's still 1% of the sales that is connected in -- to the resi market [indiscernible] Oslo. And what we have said earlier that we expect the renovation on the residential to go up, and that's something we can see in the order books now. And let's see what trend will show us in the future. But no change regarding the resi market, and that's not a very interesting or big market from Bravida's perspective.
[indiscernible]
The next question comes from Robin Nyberg from Carnegie.
It's Robin Nyberg. Couple of questions from me. How do you see the overall backlog quality at the moment? And how confident are you that you can deliver this recently announced large project with good margins. And as a follow-up on that related to this Stockholm Bypass project, is that installation project? Is it a fixed-price contract? Or can you increase prices if salary inflation is, for example, faster?
Yes, this is long -- first of all, the quality of the order backlog is the same as earlier. You see, we try to be cautious in the way how we count on the profit as well as how we choose our customers and the projects we are competing around or about. And so the quality is unchanged. Regarding the Förbifart Stockholm, the big -- large project in Stockholm, we -- again, we are confident that we can deliver in this project. And it's a long contract that we think where we have good contract terms and we have some index clause as well. And the -- it's important for us to have these clause, of course, depending on that, this production will be -- takes part in 3 to 4 to 5 years from now. So yes, we think, overall, it's a very good project, of course.
And just to add to Mattias. If we look to the duration in the order backlog is more or less on the same as we have seen earlier, that we expect that 70% 75% of the order backlog should be produced the coming 12 months. So nothing have really changed on the duration. So it's the same figures as we have seen now for a certain period.
Okay. And then one final question. Could you comment how you expect the sales mix to develop in the next 12 months? I mean, sales between service versus project sales?
Thank you for that question. That's quite hard to give you a certain figure on that one. But we have to date 47% of sales service. And we are focusing a lot on the service side. We have put a lot of effort in the organization to develop this side of the business. And if the mix will change or not, I think that's also depending on how the installation will develop. We want to have a good mix between service and installation, and we want to be close to 50% when it comes to the service. On the other hand, we don't want to lower the growth in installation if we can take that part of the market as well. So the most important thing for me is that we continue to grow the service as well as the installation as long as we can do that in a profitable way. And so far, we -- as you've seen in this quarter, we grew the service at 11%. And I think, if we can continue to do that, of course, very happy. Regarding your question, I think, the mix we're having today is something we want to continue to have. If that's some higher or some lower figure in percentage that we will achieve to show, but we try to grow the service business more every day, of course. And I think this is a side of the market where we can actually gain market shares as well.
[Operator Instructions] The next question comes from Lucas Ferhani from Deutsche Bank.
As a follow-up to the question just asked, how do you see the sales mix evolving between new build and especially in each countries? Can you talk about the exposure of new build? Is there any country where you have a larger exposure?
Do you mean -- regarding residentials or...
Yes, residential new build.
No, we don't have those figures for each country. But what we know is the renovation of residential is growing, and that goes up. And then new build is quite stable, all low levels because I think, we have said earlier that we have around 70% in total connected to residentials, all in all. And 10% units of those 70% as been new build, and this is very stable. But what we can see is that renovation side goes up. And in our case, in Bravida, it's very often on the countryside, we are building residentials. Only 1% is connected to Stockholm and Olso. I think those type of residentials, they are not building on speculation because we are building those because there is demand in small city in Norway or Sweden or Denmark. So this is not connected to the same issue as you're probably asking for.
Okay. And then, also flip on the margins in Norway, so given you still expect to have some of the projects inherited from Oras, does that mean the margin should also -- we should also see some dilution Q4 and Q1 next year before getting to more of a run rate?
Yes, yes, as we said earlier, the -- as we said earlier, that if you look for the underlying margin in Bravida, old Bravida, excluding Oras, we were around 7% -- 7.1%, and we reported 5.6%. There is a dilution coming from Oras. And that what we also expect in Q4, and to some extent, also in Q1.
And so Q2, we should no longer see that in [indiscernible] except if another acquisition comes in, I mean?
Normally, this was a typical -- this was a turnaround case. So if you look for more or less all the other one, it's not really turnaround. It's -- many of the acquisition is -- have a really good healthy margin. So -- but it's -- if looking for Oras, we expect that will be a dilution in Q4 and Q1. But the plan -- if we look into the product today, it looks like we have -- we are -- we will be in the final production phase in Q1.
Yes, I said that I think we have a positive margin development in the Oras today, so it's definitely going in the right way. And if you compare to the old Norway, of course, we will have dilution. It takes a couple of years or more than a couple of years before we are at the same level as the old Bravida Norway were. You need to remember that this was the best division in the whole group. And if you compare last year, including Oras, of course, we have another margin to compare to, of course.
Okay. And my last question will be on the currencies. So the Swedish krona has been down this year. Can you talk a bit more about being tight on your overall business, and especially on the cost base, and in particular, the gross margin has been slightly down versus historically being stable around 15%. Can you tell us a bit more about why we see that margin going slightly down?
So if you start with the question about the currency, as we said, that there is -- if you look on the currency impact on the top line, we talked about 3%. And of course, there is a small positive impact on the EBITA as well. You see that the gross margin have came down. And I think we are -- we see that we're now growing in -- there is a mix change because Oras have a different model how to reporting cost, and you also see a different situation in Finland. But overall, if you look for the large market like Sweden and Norway, excluding Oras, there is more or less on the same level as earlier.
There appear to be no further questions. I will turn the conference back to you.
Okay. Thank you very much. Thank you all for listening and yes, see you soon. And we probably will meet some of you in the coming days as well. So have a nice day. Thank you very much from us. Thanks.
Thank you.
Thank you, ladies and gentlemen. This does conclude today's conference call. Thank you very much for attending. You may now disconnect your lines.