Bravida Holding AB

STO:BRAV

Earnings Call Transcript 2021-Q3

[Mattias Johansson, CEO & Group President]

Hi, and good morning, everyone, and welcome to the Q3 presentation for Bravida's financial report. Today, it's myself, Mattias Johansson, and together with Asa, we are going to take you through this quarter and the presentation. So once again, welcome. And we start as normal with our position in the market and a beautiful picture of Malmo is, of course, a good start of the day, while I'm coming from Scania. But Bravida, overall, as you -- all of you should know now, we are in the 4 Nordics, Nordic companies -- countries, sorry, 4 Nordic countries, and we are the market leader in 3 out of these 4.We have earned LTM sales at SEK 21.3 billion. You know the business model, we have the quite low-risk in our business model. We have a small average contract size, a lot of different type of customers and high content of service in combination with installation. But said that, close to 90% of all our contracts are below SEK 50 million.But said that, we also have the ability to provide larger contract, which is very important to us. Bypass Stockholm is one example. Another example is that we are 1 out of 4 prequalified bidders on the Fehmarn belt tunnel between, the tunnel between Denmark and Germany. And I think that is a way for us to attract new talents, improve our own knowledge, skills, et cetera. And that is a kind of talent factory for Bravida. And that is important for us to be able to both show the market, but also improve our ability to be in the front regarding BIM, et cetera, et cetera.So in combination with the small local service orders with the large contracts, data centers, infrastructure projects, hospitals, et cetera, that is what I think is the beauty of Bravida. And then, of course, that we are delivering, able to delivering all different type of services for the customers and act like a one-stop shop for the customers. That is, of course, important.We have a new vision in the new business plan, a new vision for a new time. It is focusing slightly more on sustainability than the old one, very similar, but a higher focus on sustainability. In Bravida, we help customers to develop the full potential of their buildings through service and installation; we bring buildings to life, leading the way to sustainable and resilient society. That is what we are doing in Bravida.So Nordic leader in sustainable technical solution, what does that mean? I talked about the large project in combination with the small local services. And being a leader in sustainable technical solutions for building means that we need to focus on new type of services. We want to help our customers to be more successful regarding their sustainability work. We want to help our customers to reach their sustainability targets. We are working with EV chargers. We are working with solar panels, and we are helping our customers to take down their energy consumption. And we always try to have the life cycle perspective for all our buildings. We are helping the customers with service and installation, with sustainable services throughout the building's whole life cycle.The industry leader in sustainability also means that we need to develop ourselves. And we have a high focus now to offer slightly wider scope to the customer, and we are focusing a lot to become the market leader regarding building automation. We have started a new business area within Bravida, which is focusing more on building automation, try to be more successful than we are today in all 4 countries, and we are doing the same for technical facility service.This is a couple of examples on how we try to develop Bravida, the coming years ahead. So what about the quarter? The market outlook, we see an increasing demand for both service and installation. The service businesses have been growing for a couple of quarters now. At the same time, as installation business has gone down a bit because of delayed projects and that the customers have been a bit uncertain regarding if they should push the start button regarding new projects, et cetera. But we have had a really strong order backlog, which has given us the position. So we haven't been stressed about the fact that the installation business has gone down. And overall, we are presenting today positive growth, very much depending on the acquisitions we are doing.The demand for sustainable solution is going up a bit, I would say. It is still the fact that some customers are talking a lot about sustainable solutions, services et cetera, but actually, they -- some of them are a bit away from actual taking action upon it. So we see a growing demand for after sustainable services, but I think this will be improved a lot the coming years. It has started positive, but this is just the beginning of that journey.We see some rising prices, of course, in the market in the industry. We have 2 ways of handle that. First, on the supply side, we have a lot of partners that we, together with them, try to do smarter procurement together, which means that we actually are trying to keep the prices is down, and we have been quite successful so far. And on the other side, we're working with the customers to make sure that we have index clauses in the contracts and make sure that we can pass-through the cost increases we are having to the customers.Said that, you all should know -- also know that we have quite short periods regarding the project. The normal project in Bravida lasts for around 9 months, which means that we have a quite good forecast regarding the prices, regarding the materials in the project when we are doing the bid. So we think we can handle it in a very good way. Risk for shortages is, of course, something we all know. We have in our industry as well in all other industries; but so far, very limited impact. In some cases, we have been forced or had the opportunity to change one product to another. There are some short delays, but it haven't had an impact on our delivery, our delivers to the customers so far. So -- but we are, of course, following this closely. We think this was a slightly bigger risk before the summer than it is today, but you never know what happens in the coming months, but it has improved a bit at least. The building confidence indicator are above normal level again, and that is, of course, very good for us.So the Q3 highlights, we have a net sales growth at 2%. Service is growing 6%. We have an increased order backlog, all-time high order backlog, about SEK 50 million. We have an order intake that is 30% up, and we had an improved margin in the group, and we can see a very strong trend in the Swedish market, which is our biggest business units where we have good order intake, strong order backlog and improved margin. Cash conversion is something below -- somewhat below where we want to be. And also, I will come back to that. There are some reasons for that but overall, a really strong quarter.And if we look at the net sales, you can see if we split it up, that we have a slightly negative organic growth, minus 1%, a 3% growth from acquisitions, and we have a zero effect from the currency. Regarding the negative organic growth, we have a positive growth on service, as I said. We had minus 1% growth on the installation business. Compared to the last quarter, the installation business had a negative growth of minus 4%. And we see a positive trend in the last month of the quarter, which is, of course, give us some confidence for the coming quarter as well. So we have a positive trend regarding the organic growth as well, not positive yet. My guidance, last quarter, was that we expected to see an organic growth somewhere in Q4, and we have no reasons for change that. Let's see if that happens. But we have a really strong position. If we look at both order intake and order backlog.So EBITDA, improved EBITDA, higher margin. And I think this is the beauty of our business model. Even if we have struggled a bit with the organic growth depending on the pandemic, we are still able to present a higher margin. And we do that despite investments in digitalization and investment in new hires people on group level to improve our offer for the future. We are investing quite a lot to make sure that we are still a valid provider for our customers the coming years ahead as well.The margin is improved in Sweden, Norway and Denmark and flat in Finland. And Finland, as you know, have had a quite very good development there the last quarters. So I think that's just a way to say that Finland getting more and more stable, even if that's quite a small part of our business. Flat margin in Finland, improved margin in the rest of the countries is very good.Yes. And year-to-date, we have an improved margin as well, 5.7% compared to 5.6% a year with the pandemic, lower sales in Norway. And I think that is really a good way of showing the stable business model we're having. So order intake and order backlog is something we have discussed already, or I've presented already, but the order intake increased by 30%. I think that is a quite powerful sign of that the market is getting back to somewhat what we can call normal. We have growth in all countries regarding the order intake and the backlog in Q3 are growing in all countries, except for Finland. And it's up SEK 361 million, and the order backlog increased 7% year-on-year and record high level, above SEK 50 billion, which is, of course, supporting the growth journey ahead.Health and safety is, of course, important. That's part of our sustainability work, our sustainability strategy. We want to present and to have a safe working place for all our employees, of course. We have improved the numbers from 9.5% roughly down to 8.7% LTIR. And we have seen -- we can see improvement in all countries except for Sweden. And maybe the Swedish development in this KPI is something I'm not happy with for the quarter. But we need to improve our work with this. And let's make sure that we have the right strategy to improve this in the longer term.Fossil-free vehicles is also part of our sustainability strategy in the quarter. We have continued to do the new cars, we have continued to acquire electrical driven cars. And now we can see a big change in the service cars' fleet as well. And so far this year, we have been able to buy 231 electrical cars so far, and that is 28% of the total ordered vehicles. So we are focusing a lot to taking down the CO2 emissions coming from our car fleet. 2 years ago, we launched the ambition that we should reduce the CO2 emissions from the car fleet with 30%. We are going against that target still. And 2 years ago, that was a quite stretched target because we didn't have the ability to buy any cars at all, hardly. Today, we see that more and more brands are coming up with new cars. And I think we can accelerate this. And maybe we need to think about a new target regarding this as well. But we need to see first that all the suppliers actually are able to deliver the cars we want to buy.Acquisition is, of course, one important value creator for Bravida. So far, in '21, we have done 15 acquisitions, adding SEK 750 million in sales. In the beginning of Q4, we have done 2 more. So that must be 17 in total. The last 2 one, one in Norway, and one in Finland, adding another SEK 150 million roughly. And we still see attractive pipeline, a little bit higher prices, but not very much. And I also think that is because it could be the reason can actually be that we are buying slightly better companies today than we did before. But still, this is something that I'm confident that we can continue with. And very much depending on that the society had opened up again, and we can meet people, do the due diligence and meet people to discuss the future strategy. So they understand that we are here to improve the companies we are buying as well is, of course, important in our acquisition strategy.So said that, I'm handing over to Asa, who will take you through the different countries.

[Åsa Neving, Chief Financial Officer]

Thank you. Let's start with Sweden. That is our largest country. In Sweden, as in actually all our countries, we had a pretty slow start in the quarter, but then activity in production we're picking up. And towards the end, we had a pretty good activity in all our countries. So Sweden had a growth in the quarter of 4%. This was driven by installation. The organic growth was zero. We had, in the quarter, a very strong production in the northern part of Sweden. It was a bit slower in the southern part, but we are happy to see that also in the south part, which is our largest market, the production was accelerating and increasing towards the end of the quarter. Strong EBITDA margin, it improved to 6.9%, and it was actually a good performance in all our divisions in Sweden. Strong order intake, plus 37%, driven by installation. We got one large order in this quarter. That's Karlatornet in Gothenburg. Karlatornet is a tall building, at least for Sweden, where we are doing the installation in apartments on 74 floors. The order backlog grew by 7% year-on-year, and it also grew in the quarter.Moving on to Norway. And as you know, Norway has been most hit by the pandemic, but we see that it is coming back now into a more normal situation. We had a safe decrease by 1% in the quarter. There was a growth in service. We had a growth in service also last quarter. Installation is still a bit slow, but it's improving. The organic growth was minus 3%. Also an improved EBITDA margin here to 5.9%, which is strong considering the volume that we have lost. This is due to a good mix. We have a high-margin on service here. The order intake is plus 13%. This is driven both by installation and service. The order backlog was plus 7% and also increasing in the quarter. After we closed the quarter, we had a couple of contracts coming in, actually, hospital contracts, and one of those was a large one on NOK 340 million, roughly. And this is a contract where we're doing electrical installations for a new hospital in Drammen.Moving on to Denmark, where we had a sales growth of 2%; growth in service, it was driven by service. The organic growth was 1%. So we have had good production in the Danish organization. The EBITDA margin improved also here to 5%. We had a strong order intake, 31% up. And this is driven by both service and installation. We have an order backlog of plus 12% year-on-year, also here, growing in the quarter. We got one large order in this quarter, and this is installation of the infrastructure of electrical power to a new hospital in Odense. And we don't only do the installations here. We also have the operation and maintenance contract afterwards.So moving to Finland. In Finland, we had a sales decrease of minus 2%. There was a growth in service. The organic growth was minus 6%. But in Finland, we had a large project last year in the Wartsila project, which had a high production last year, and it's still in production, but not to the same extent. So the comparative figures are pretty high in Finland. Strong, stable unchanged margin on 3.8%. A strong order intake of plus 22%. This is driven by both service and installation. The order backlog decreased by 8%, and this is also due to the high comparative figures that I just mentioned. That was our countries.So if you look into our financial positions. And starting by the graph on the left-hand side, you can see the operating cash flow. And it decreased in the quarter to SEK 139 million, minus SEK 139 million compared to last quarter -- last year's quarter of 10. And also, if you look at the year-to-date figures, you can see that we have SEK 322 million year-to-date this year compared to SEK 1.3 billion last year. And that is, of course, a substantial difference. And one reason for that is that we are coming from a very favorable, you can say, working capital situation, where we had a good project mix with a lot of projects starting up with high cash flow in the beginning. And now it has been a bit slower on that side. So we haven't generated as much cash. It's also so that we have repaid -- we got to postpone tax payments last year due to the pandemic in Norway and in Denmark, and that has been repaid this year.But the largest effect here is the fact that we have 2 large projects in Denmark that we are debating. And these 2 have been -- these are together, roughly SEK 0.5 billion. We -- they are the 2 public customers. We talked about these contracts last quarter as well. These are the 2 public customers. We don't see that there is any risk on our P&L. We have a pretty conservative revenue recognition here, but it will take some time until we get this money. It will most certainly go to arbitration. And before we have the money on the bank account, it will take probably a couple of years. So that is the main reason for this difference. And this also then is affecting the cash conversion. That is a bit lower than that we would like to 75%. Also, if you look at last year's cash conversion, it was very high due to this favorable working capital situation that we had.Moving on to the right-hand side, you can see the net debt EBITDA ratio. We have a net debt this year on SEK 1.9 billion compared to last year's SEK 1.2 billion at the same time. But last year, we paid out dividend in the fourth quarter. So that explains the difference. Still a low net debt ratio on 1.91 compared to 0.7 last year.And then our financial targets. We have an EBITDA margin target on more than 7%. We are on the LTM figure are right now 6.4%. Cash conversion, as I said, 75%. We want it to be larger than 100%. We have our net debt to EBITDA, well below our target on 1.1%. Target is less than 2.1. Sales growth, 2% -- now 1% year-to-date now, and we would -- our target is to be about 5%. And the target payout for dividend has been more than 50% this year. So by that, I will hand over to you, Mattias.

[Mattias Johansson, CEO & Group President]

Thank you, Asa. And I will try to summarize this quarter for Bravida. And as I hope you agree that this is a quite stable quarter. We have order intake up 30%, increased order backlog to all-time high level, above SEK 15 billion. And the order backlog is only containing the works we are doing on the installation side. Service sales increased with 6%, improved EBITDA margin, 6.1%, improved margin in the quarter, but also year-to-date, we have improved margin in 3 out of 4 countries and the 3 largest ones, largest markets where we in Sweden, Norway and Denmark improved the margin, which is, of course, extremely good for us. Costs for initiatives taken in the P&L. We are not adjusting for that or because we think, so far, at least, this is how we should have been treating it. So in the improved margin, we also have cost for improvement work that is in the quarter, SEK 8 million. And I think we have said something around SEK 40 million as an estimation for the full year. On top of that, we're also hiring new type of resources to be able to develop Bravida even further the coming years. And that is also taking as a cost in the P&L without an adjustment.So without taking into consideration, the improved margin is even better, I would say. Cash flow affected by the things Asa told you about and public customers in Denmark, and we will probably go to arbitration. And some type of customers they probably don't want or can take some decisions in the projects, and this is probably the only way to solve it. So it will take some time before we get that money into the account. But our estimate is that, that will have no or very limited effect on the P&L.So -- and this next slide, I think, is again, showing what I started this presentation with, showing the beauty of our business model. A combination of organic growth, together with acquisitions, and at the same time, high focus and details that can improve the business have given us the opportunity to develop the companies since many years back, and we have a CAGR at plus 10% since 2014, both on sales as well as on earnings, which is, of course, something we are very proud of presenting for you today. And when the pandemic is easening or the market is going back to more normal level again, I think we can continue this journey many more years ahead.So thank you, and I think we can open up for some questions.

[Operator]

[Operator Instructions] The first question comes from Carl Ragnerstam from Nordea.

[Carl Ragnerstam, Analyst]

A couple of questions from my side. Firstly, if you could give some flavor on the month-by-month development for your installation side, in terms of organic growth during Q3 and if you've seen any significant changes in the organic growth or in the demand throughout the quarter.

[Mattias Johansson, CEO & Group President]

Yes. As I said, the installation business was minus 4% in Q2, I think, minus 1% in Q3. Service positive growth, just by reading those numbers, you can understand that we have a positive development regarding installation. And if you look in the quarter as well, you can see a positive trend. September was -- were much better than July and August. And as Asa said as well, our biggest division, the division in south of Sweden had a positive trend in the end of the quarter as well. And that is, of course, good. So the trend is positive.

[Carl Ragnerstam, Analyst]

And also, I was a bit surprised on Finland and the organic growth contraction there. And maybe you said, or I think Asa said that you had lower production in the Wartsila project, but it's still running. So my question is, when will the Wartsila product be fully delivered? And should we also expect lower production rates in general in Q4 as well?

[Mattias Johansson, CEO & Group President]

I think it's fair to say that the production rate has been high the last 12 months in Finland. And again, when you have 1 large project in a small unit, which Finland actually is, of course, that has higher impact than in a normal -- in the other countries, for example. And I think you can expect slightly lower growth in Finland going ahead. We are focusing on margin, and that goes for all countries as well as Finland. So we are building this step by step. But we still think we can have a decent margin. So yes.

[Carl Ragnerstam, Analyst]

So we should expect organic growth in Finland in the coming period that is?

[Mattias Johansson, CEO & Group President]

No, we're not normally give any guidance on organic growth for different countries. But we have had high production in the last 12 months on that Wartsila project. And let's see if we can have something that meet up to that. But again, we have had high production, and that is, of course, having a high-impact in Finland comparative that has been the same case in Sweden, for example.

[Carl Ragnerstam, Analyst]

And on the order backlog, as you mentioned, it's obviously really strong. So could you give some flavor on the margin profile in the backlog? And do you see any risk that you're taking on too much project in a sort of, let's say, in inflationary environment, meaning that you could have some troublesome projects in the backlog or?

[Mattias Johansson, CEO & Group President]

No, we have been quite cautious throughout the whole pandemic because we have had a -- we had really strong order backlog when we entered into this phase. So we haven't been stressed. We have been focusing on the right type of projects to the right type of customers. Projects that we know we can handle with the type of competencies we have within Bravida today. And we also know, we have been knowing for many, many months that there will be some pressure on material prices, other type of inflation, et cetera, as you're mentioning. And that is something we have put into the calculation. So I see no reason why the margin should be lower. I think we have a healthy order backlog that will support the earnings going ahead. Maybe the risk can be that there might be some changes regarding the shortage of material, for example. But regarding the prices, I think we have that in control. Shortage, I think it's okay for the moment, and let's see if that's changing. Then we have the resources. Let's see what happens with all international resources, the whole industry have had in the Nordics coming to Norway coming to Sweden and Denmark. Let's see if they come back into the Nordics when they have been home in their home countries for a while and maybe found some other job. I think that might be the risk instead.

[Carl Ragnerstam, Analyst]

And the final one from my side is on building automation. You've done some acquisitions within that area recently and you also done, I guess, an organic push as well in that niche. So my question is how big do you expect it to be a few years out in terms of group sales? And also on that note, how important is it, do you think to have your own hardware in the building automation niche?

[Mattias Johansson, CEO & Group President]

I think some of the -- regarding the last one, that's something we're working on. How are we the most efficient, profitable player in the market. And I think what kind of hardware we are working with is, of course, very important regarding that topic, of course. How big we can be. I don't want to give any guidance. But of course, when we enter, when Bravida is entering a market, for example, building automation or technical facility management, we want to be one of the biggest, one of the most competent players in the market. And I think we are focusing a lot on hiring the best people. We have a really strong leader in that in building automation as well as in technical facility management, which I think is the start of attracting new acquisitions to hire new people to grow organic, and I think that is how we're doing it.

[Operator]

The next question comes from Karl-Johan Bonnevier from DNB Markets.

[Karl-Johan Bonnevier]

And again, very good numbers in Q3, obviously, looking at the development. Just to continue on Carl's question on building automation and facility services, to be able to target these areas as new business areas, are there any particular targets you are setting up for them? And maybe you can give us some idea how much of revenue they represent today.

[Mattias Johansson, CEO & Group President]

Yes, we have targets. I'm not sure we want to give you those targets today, but we have ambitious target, of course. And as I said, on Carl's question, we want to be one of the market leaders in all segments we are acting in. And that goes for building automation as well as technical facility management as well. And that is -- I think again [indiscernible]

[Karl-Johan Bonnevier]

[indiscernible] business areas is that's then a way to put pressure on the management team to maybe double or triple the operation for it? Or why is the reason to putting to the business area.

[Mattias Johansson, CEO & Group President]

No. We are actually building a new business areas to be able to do this slightly faster, to accelerate that growth. I think that doing -- if we should ask the same organization to do this as well. I think we have been slightly -- it has taken somewhat longer time to do it, and maybe we haven't succeeded at all. I think we need to focus with a certain management to make this happen. And then how big we can be, I think it's not only a target on sales. It's also a target about the time. So I think it's -- as well as all other segments. It's important to build this very thoroughly, make sure we build it with quality accounts on the customer side, et cetera, do it in the right way to be able to create as much value as possible ahead.

[Karl-Johan Bonnevier]

And looking at the working capital challenge in the quarter and then these Danish projects, I understand that you are now in the startup of a lot of, of say, installation projects in other areas, which normally then has a positive kind of working capital impact. If you go into Q4 and onwards, is there still a headwind coming from these Danish projects that will not then be fully balanced with maybe the positive upstarts in installations? Or could you give us some idea how this will play out?

[Åsa Neving, Chief Financial Officer]

Yes. Let's see on the timing on when we get the installation products in, but there is still some -- one of the projects is done production wise. And on the other one, there is still some production in it. So it will have some impact also probably in Q4. And then depending on it if it will be offset by good cash flow from installation. Let's see.

[Mattias Johansson, CEO & Group President]

But then I think you're right in the estimation that the new project should support a strong cash flow going ahead and good working capital. That's...

[Åsa Neving, Chief Financial Officer]

Yes.

[Mattias Johansson, CEO & Group President]

We see no reason why that shouldn't happen this time because that is normally how it is.

[Karl-Johan Bonnevier]

And just one final for me. Looking at Finland, you have found a couple of bigger acquisitions there of late [indiscernible] in building automation obviously. Do you feel that you are now have the base in Finland for having a more stable operation there and getting say a foundation for taking that up to, say, become the -- a similar size as maybe Norway and Denmark for you?

[Mattias Johansson, CEO & Group President]

Yes. I think it's always more things to do in all countries we are in. But I think in Finland, we have done a good job the last 2 years. Clear. It's obvious that we have improved the business a lot, much more stable. Again, small business. So a small, medium mistake will have impact on the P&L, of course, in Finland, but we are much stronger, better positioned today. And we also see that we have a much stronger brand when we are sitting and discussing acquisitions, hiring of new people, et cetera. And that is something we have struggled with before. But today, we -- all things we look at is actually better than it was 2 years ago. And we still, we can improve it, of course. But the platform is there, and we will, of course, try to improve this even more. So critical mass? Yes. Better position? Yes. Can we continue to develop Finland? Yes.

[Operator]

[Operator Instructions] The next question comes from Stefan Andersson from SEB.

[Stefan E. Andersson, Analyst]

A couple of questions from me. If I start with the -- just a [indiscernible] thing. This -- the program that you have running, which you now says, I think I saw the slide, you said SEK 40 million for the full year. Is it correct that it's SEK 20 million up into Q3? And would -- do you really mean that you will have a SEK 20 million impact in Q4 in [indiscernible] or how should we read that?

[Mattias Johansson, CEO & Group President]

I think that's correct. But let's see, I think you should read it that it probably won't be more than SEK 20 million. But yes.

[Åsa Neving, Chief Financial Officer]

I think it will be lesser -- a bit less than SEK 40 million but between SEK 30 million, SEK 35 million. That would be a good estimation.

[Stefan E. Andersson, Analyst]

And then on the organic growth, I mean, we're talking about extremely small divisions. So I fully understand that. But we have negative 1%. You're talking about it being stronger towards the end of the quarter in September, and you talked about the good momentum into Q4. And at the same time, Mattias, when you speak, I hear some cautious comments about whether it's -- Q4 is going to be a quarter with organic growth or not. So I'm just trying to -- maybe if you could elaborate on that because to me, if you probably had organic growth in September and the good momentum into the fourth quarter, I guess, it should be back into growth.

[Mattias Johansson, CEO & Group President]

Yes. But I think I understand your question, Stefan, and I think what I said after Q2, again, we expected -- I expected that we can see some support for organic growth in Q4. I think that is still valid. Then when we see a positive trend in Q3, yes, definitely. But on the other hand, we have a quite low activity in July and August. So if that's depending on that we still had a strange July and August because of the pandemic later start of projects I think the landscape we are looking at is a bit different to what we are used to. So that's why I'm a bit cautious. I don't want to be -- we are soon presenting in Q4. We have a strong order backlog. We have positive signs in the business. And a couple of months ago, I said we'll probably have support for organic growth in Q4, and I still think that is valid, of course.

[Stefan E. Andersson, Analyst]

Yes. I mean, it will come to -- or Q1 anyhow. So no worries. So just trying to understand.

[Mattias Johansson, CEO & Group President]

Yes. I think, at least I'm not less positive today than I was when we presented the Q2 report. That's another way to put it.

[Stefan E. Andersson, Analyst]

And then on M&A, you have a very strong balance sheet. Of course, it's been a struggle to do transactions with Covid and so on. I mean what was your thinking there? Are you willing to take a little bit more risk and be more active and use the balance sheet? Or are you happy with the balance sheet, where it is today? What -- yes. Your thinking in relation to the balance sheet.

[Mattias Johansson, CEO & Group President]

No, the balance -- we know the situation about the balance sheet. I, together with Asa and the rest of the management group and the Board is supporting that we will continue to do M&A. That's our main focus when we are discussing how to use the balance sheet. And I think our way of doing acquisitions means that we need to meet people to discuss, to present what we -- how we want to help them develop, what they can do for us, et cetera. And we have had a period of slower pace regarding acquisitions. But now I think we are back at the same level as before the pandemic. So -- and that is how we will use the balance sheet as well.

[Stefan E. Andersson, Analyst]

And I guess my question was not being back at the level before. I mean, my question was, is this the revenue do you think you will be on? Or is there a...

[Mattias Johansson, CEO & Group President]

I thought you said that if we were willing to take higher risk, actually. We think that we can do more acquisitions with the same risk, yes.

[Stefan E. Andersson, Analyst]

Because this is some other -- this is very popular this model that you -- there's a lot of copycats out there and other guys are looking for the same targets. I am just curious if it's possible to scale up and do more than you've done before?

[Mattias Johansson, CEO & Group President]

Yes, I think we can. And of course, the competition has gone up a bit. But I also think it's important to understand what type of acquisitions we want to do. We want to find the logic where we can create value together with the acquired company. And some other or the copy cats you call them, they are just buying to make sure they add sales. And I'm speaking about risk. I think that is much higher risk in the long-term perspective than our model. But that's our philosophy. And we stay tied to our philosophy. And we think that we can continue to do this more than we have done so far. And we have a balance sheet supporting that.

[Stefan E. Andersson, Analyst]

My final question then, boring, but just a little bit curious, one of the really big, big projects you have in the backlog is for Bypass Stockholm. Do you have any idea about timing when you might be starting up that one?

[Mattias Johansson, CEO & Group President]

No, no changes. I think that there are some discussions with the clients, the rumors we hear is that the production of the tunnel is going quite okay meaning that it should be possible for us to start a little bit earlier. But I think that this maybe that's up to the customer to think back, to decide. So, so far no changes, we are following our plan, regarding the documentations and the design we are sending in. And so far we are doing very well.

[Operator]

[Operator Instructions] There are no further questions at this time, dear speakers, back to you.

[Mattias Johansson, CEO & Group President]

Okay. Thank you very much. And for all of you who is interesting in our sustainable strategy, we have a presentation of Bravida's strategy regarding sustainability work, we are doing in 50 minutes from now. So welcome to listen in, and you will see and hear an even better side of Bravida than you've heard in this presentation. So thank you very much. And welcome.