Instalco AB

STO:INSTAL

Earnings Call Transcript 2022-Q1

[Operator]

Welcome to the Instalco Q1 Report 2022. [Operator Instructions] Today, I'm pleased to present CEO, Robin Boheman. Speakers, please begin.

[Robin Boheman, executive]

Hello, everyone. This is Robin Boheman, CEO of Instalco. And with me today, I have CFO, Christina Kassberg; and Fredrik Trahn, Head of IR. Very pleased to today be presenting the Q1 for 2022 for Instalco.

Just a quick follow-up on what Instalco is. We're a leading installation group within heating, plumbing, electrical installation, ventilation, cooling and also industry and technical consultants. We have roughly around 115 subsidiaries, highly specialized local companies. And as you can see on the map, very spread out around the Nordics. About 5,000 employees with a highly decentralized structure, as you can see on the map, and they are supported by a small central organization. And our key thing here is strong profitability with high margins over time. That is what sets us from the rest.

Going to Slide 3, key financials, rolling 12. We are almost -- we are a little bit above SEK 9.5 billion turnover and order backlog of SEK 7.6 billion. We have EBITDA of SEK 769 million, turning over to an EBIT margin of 8.1%. Positive cash flow of SEK 210 million and also annual acquired sales of a little bit above SEK 1.6 billion. So that's Instalco in the numbers for you.

And looking at the highlights from Q1, I would want to start off with saying we had a really high cash flow in Q1. We are also able to have an impressive net sales growth of 33% and also an impressive organic growth of 7.8%.

During the quarter, we also did share split of 5:1, meaning that every shareholder received 5 shares instead of 1. We had a good recovery in other Nordics. We will come back to that later in the presentation. We also increased our credit facility with SEK 500 million. So we are also well-equipped to continue our M&A journey. On the one problematic side, we still had a high sick leave in the beginning of the quarter, especially January and February. As all of you know that lives in the Nordics, that was troublesome for everybody. We're also seeing price increase in the material and also -- and basically based on raw material price increases. But there is still a strong demand for project design and sustainable installations.

And numbers when looking at Q1, Christina will come back to that. But we had a sales of SEK 2.5 billion. We had EBITDA of SEK 173 million and that comes out to an EBITDA margin of 6.7%. So overall a very good quarter under the circumstances. So I'm very proud of the team and what we achieved in the quarter.

And now I'm going to hand over to you, Christina to explain a little bit on the reporting system that I started when I was CFO, but you have now finally finalized it a little bit. So please give a little bit of background of what we have done.

[Christina Kassberg, executive]

Yes. Thanks, Robin, for that. To describe Instalco's growth and operations in a good way and transparently from a financial perspective, we have changed somewhat in the way we report. Instalco has previous quarters been presenting EBITDA and EBITA, both with and without adjustment for acquisition-related items. Those of you that have been following us for a while are most probably aware of that.

News for Q1 2022 is that we will only be presenting EBITDA and EBITA without these general adjustments. Nevertheless, information on the period's effect of acquisition-related items can be found in the quarterly sections, both under section Acquisitions and also under section Quarterly Data and Key Figures.

So please stay calm, those of you that will continue to make your own adjustments will have the possibility. On this slide, you can follow the quarterly trend on our earning levels, EBITDA, EBITA and EBIT. The increased trend in depreciation within property, plant and equipment is in the light of our growth within the industry discipline. Look at the numbers. Q1 2022, SEK 50 million, compared with, for example, SEK 37 million the same quarter previous year. Over to the increased trend in depreciations within acquisition-related intangible assets, is attributable to a high rate of acquisition with a larger portion of the foreseeable assets related to acquisitions. I would say the best way to follow the earnings on operational performance level is EBITA.

On this slide, we can see the net sales development in Q1 and how the growth is distributed. We have had a high activity in the quarter, and the net sales increased in total with 33% to SEK 2.6 billion. Acquired growth increased with impressive 25.4%, definitely a strong proof of the intensive M&A agenda.

Organic growth increased with 7.8%, a performance that we are proud of. This is a proof of our business model, where our companies collaborate, find synergies and use the cross-selling concept toward customers.

Okay. On this slide, we can see the EBITA development quarterly, both in million and the margin. EBITA increased by 14.3% and amounted to SEK 173 million, which corresponds to an EBITA margin of 6.7%. Historically, as you can see here in the figure, Q1 has been weaker for Instalco, and that holds true for 2022 as well. With our growth within the industry discipline, this trend with a low season in Q1 will most probably be more visible over time. The lower margin is, all in all, primarily attributable to higher sick leave and a situation where we have cost inflation, an impact from rising prices for raw materials and equipment.

Okay. On this slide, we can see the order backlog quarterly development. Order backlog remained strong with a growth year-over-year of 13.3%, an increase to SEK 7.6 billion. We have continuously a stable ratio of 80% relative to 12 months roaming net sales. This is a level that we are comfortable with, and it offers us flexibility when entering into new agreements. Our companies continue to sign new exciting and, of course, profitable agreements. Acquired growth year-over-year, 13.9%, again, a proof of the intensive M&A agenda. Organic development almost flat, a comparison from a high level. As our companies delivered in the big Swedish hospital projects, the order backlog comes to a more normalized level.

On this slide, we can see segment Sweden and development in Q1. The growth continues and our companies in this segment have dealt with the current price situation for materials relatively well. There are many excellent examples of collaborations between our Swedish subsidiaries. The companies they meet, they discuss, learn from each other and get inspired. But not forget our companies keep their independency and local responsibility. The net sales increased in Sweden with 29.8% to SEK 2.0 billion compared with the same quarter previous year.

Organic growth was 8.3%, a strong and solid performance. Acquired growth was 21.5%, and this is, again, an effort of the successful M&A agenda. In total, the EBITA increased by 3.4% to SEK 141 million. And finally, EBITA margin was 7.1%. This is a drop, but still a good level taking into account the sick leaves and the challenging price situation.

Okay. On this slide, we can see segment other Nordic development in Q1. This segment has recovered, and we have had a positive effect on our action plan to improve the profitability of our Norwegian subsidiaries. Although the segment is still performing below the desired margin. The market in Norway has stabilized regarding both new construction and renovation. The market in Finland has been somewhat stagnant. Some of our companies are still having problems in some of the projects. In total, the net sales increased by 44.7% to SEK 598 million compared with the same quarter previous year.

Organic growth, 6.1%, a strong performance, acquired growth of 39.5% also proof here of the strong acquisitions we have made. EBITA Increased and was 313% higher to SEK 34 million. EBITA margin landed at 5.7%, a very strong improvement. The higher margin, all in all, is attributed to a better performance in Norway and positive effect from acquisitions that have been made.

Okay. On this slide, we summarize the performance of the financial targets. Regarding growth and capital structure, we have performed well above. The margin for Q1 is below the target, but for the last 12 months, we are still slightly above. Cash conversion for Q1 is strong, but for the last 12 months were below due to the lower performance in Q3. And finally, the Board proposes a dividend at the AGM today at 30%.

Robin, over to you again.

[Robin Boheman, executive]

Thank you, Christina. So now looking at Slide 13 and a little bit on the projects that we do. So first of all, I would like to touch upon a recent acquisition that we did, MRM Mining, in Gällivare, which is on our industrial side, and they have received the project from LKAB, a technical installation in the iron mine in [ Mälbyön ]. The work involves renovating and upgrading of the transport system. Much of it is a 700-meter vertical elevator shaft, which require quite a great amount of knowledge and specialty as a typical project that we would be looking for, for Instalco companies. So it's great proof of that our industrial business is going forward and moving.

Same here goes for Slide 14. If you look at the electrical installation, from Kempes El in Kramfors, a major project with SCA in expanding their sawmill. For example, in this case, they're adding a new lumber sorting function. Once completed, it will be one of the world's largest and most productive sawmills. Kempes El have been contracted for the electrical installation and power distribution at the new building, which is a 200-meter building for lumber sorting, and Kempes El has been involved in this project and design from the start, and we'll see the projects to its end and the start was in 2019 with design. So also showing that we have a long relationship and that we could take all the way from design work to finalized project as well, which is also a proof of the concept of Instalco. So 2 very interesting projects on the industrial side that we received during the quarter.

Going into acquisitions. And those of you know, we are a company that do a lot of acquisitions. Q1 was maybe not the strongest acquisition quarter for us. But as you know, acquisitions come when they come, and it is hard to plan. But we're very happy with the acquisitions that we have done during Q1. And we have also started Q2 very strongly with acquisitions. So we are on a good track record so far this year.

Looking into the companies that we look at, we look for strong companies with high profitability, enthusiastic and committed leadership teams in primarily growing regions, and we have a very strong pipeline for the coming months. And looking specifically out of these acquisitions that we have done, we acquired TC-Kraft and [indiscernible]. We also acquired Manglerud Rørleggerbedrift in Norway and also Kyrön Sähkö in Finland, which was our second acquisition in the industrial side in Finland. So we're excited about that as well. So they are all very welcome to the team. So now a little bit about the theme of this quarter and the theme for the quarter is sustainability and sustainable installations.

So I would like to start off a little bit to talk about the Instalco sustainable program that we have. And each and every day, Instalco contributes to better environment. Since every single installation that we do results in a more energy savings and energy-efficient installation. And our climate smart solutions and installation reduces the energy and the resource consumption to help to future proof in the society as well. And we help our customers to -- from, like I said, with SCA from design all the way to finalized project, helping our clients to construct and apply a holistic approach to sustainability in all stages.

We provide them with more knowledge of what is possible and what is also best for the environmental perspective, when undertaking a new construction or renovation, for instance. We're also in our second year when it comes to our sustainability program and our sustainability -- sustainable installation. And as a result, that you can look in our annual report and see our 7 sustainable goals, and we are very happy of where we ended up last year with them.

Going into a little bit more detail. We also launched 2 years ago, we launched a sustainable installation in Instalco projects. And the purpose of this certificate is to show and offer our customers a guarantee that we have considered all the possible improvements to a sustainable project to all parts of the specific projects. The criteria for a project obtain a certificate includes questions about safe work, transportation and delivery, climate benefits, waste sorting and recycling, service via sustainable agreements and also that all our suppliers will sign a code, our code of conduct as well.

And I'm very pleased to announce that we reported 47 sustainable Instalco projects during the second year of this launch. And so far this year, it looks promising to you beating that number this year. And these are set with high sustainable goals and to be classified is something that you have to perform, and it's also a stamp of quality for the project, the customer and also the people working in it. So very happy with that. Just to show you an example, which is maybe easy to grasp.

During the last year, the demand, for instance, for installation of charging stations, especially, of course, solar panels and so forth as well, but taking charging stations as something easy to grasp since I'm also driving an electric car myself. I know all about charging poles and how to get them. So I think this is a very interesting subject and also where we have grown quite rapidly over the last years. Several Instalco companies have embraced this trend and have specialized within these type of installations for electrical vehicles and plug-in hybrids. And we're also seeing the trend continuing here.

We have, for instance, specialists like Vallacom, [ Milen ], [indiscernible] in Gothenburg, Voltmann in Helsinki, which are all very active in these fields and are also helping other companies within our organizations. And like I said, driving an electric car myself, there is a huge demand for more superchargers.

Then I want to touch upon a subject that was very hot when it launched, but then we haven't talked so much about it. I don't know where the discussion ended up. But we are at least very excited about the taxonomy. This is another way to talk about all the sustainability work that we are doing, and it's also a unanimous way that the EU has decided on how to calculate it. We can just show here that we have 33% within taxonomy which is a very high number, something we're very proud about, and we will continue to work with this to increase it even further. But this also shows all of you how, sort of say, green we are as a company and that we are really doing installations that definitely helps the environment and the next generation. So that's also very pleasing to know that you are working for such a company.

And then just to sum up this quarter and this presentation. We have a strong growth and a stable acquisition platform. We are recovering in other Nordics. We do see some challenging material prices in the raw material situation that you all already know about, and I've talked to you regarding in Q3, Q4 and now also Q1. We still have, unfortunately, a high sick leave, especially in the beginning of the year. We see the trend going down, which is good. And I wanted to end the presentation with saying that demand for sustainable installations are very high, and we see a good trend going forward as well.

So with that, I would like to close out this Q1 presentation and open up for some questions.

[Operator]

[Operator Instructions] Our first question does come from the line of Carl Ragnerstam from Nordea.

[Carl Ragnerstam, analyst]

It's Carl from Nordea. A few questions. Firstly, on the market development, margin down 110 basis points year-over-year. Could you help us split how much is -- how much that comes from sick leave and also how much that comes from raw material headwinds, if we start there?

[Robin Boheman, executive]

Yes, Carl, you have asked us this or one of your colleagues had asked this question before. Unfortunately, we cannot disclose exactly what comes from what. We don't have that specific numbers. So unfortunately, I'm not able to help you there with that specific one. But what we can say is that we are seeing that sick leave is on the right path.

We're seeing a positive trend in the sense that people are not as sick as in the beginning of the year. We had some really horrible sick leave numbers in January, which affected the January results very much. We don't see that trend in March.

On the other hand, we do see that material prices are continuing to go up. And as I discussed with you all in Q3 and Q4 presentation, it is hard in the short term to be able to push these prices over to end customer. But in the long run, we are able to push them through. But I can't give you any more information than that, unfortunately, Carl.

[Carl Ragnerstam, analyst]

Would you say that the material inflation, given that a lot of the materials came up quite quickly at the end of the quarter, early Q2, that's your sort of the raw material situation will be more challenging during Q2 compared to Q1? Or is it do you think you manage in a similar way?

[Robin Boheman, executive]

It's always hard when you talk about this, how much it will affect because it's a little bit on project to project. But I will give you an example like -- as we have discussed before, we had a price increase in August that hit us in Q3 a bit. But we saw the bigger result that we saw maybe in Q4 regarding material prices because projects that we take don't start immediately, they start a little bit later on, but you take them in a sense that you offer them a couple of months before. And as I said before, also a typical Instalco project is around 6 to 9 months.

So I do believe that we are better prepared this time because now we know that prices will increase more than we're used to. The industry overall is used to be having 1.5%, 2% increases per year that we kind of have in our, how should I say, calculations overall, but we are not -- it's a very uncommon situation that we are in today where we see price increases of 10%, 15%, 20% for some materials. So it will be tough going forward, but we are a little bit better prepared that, so to say, the normal situation is not normal anymore. Do you understand what I mean, Carl?

[Carl Ragnerstam, analyst]

Yes, definitely. And on that note as well, I mean, I mean you are highly decentralized, which is, of course, a good thing. But how do you secure that all of your companies and subsidiaries are working in a similar manner with price increases. Have you changed your control functions in any way to secure the projects are taken with the right profitability level?

[Robin Boheman, executive]

I think that at the end of the day, the decentralized model is also that they are in charge of their, so to say, P&L, and they're very easy to follow up in their P&L. So we do have the same control system as before and we can very, very fast and very accurate say who is doing the right -- who is taking the right moves. So I don't think that the decentralized model is any different in this case. But what we have done now is that we have much more sort of say, teams updates where our CEOs and also project managers can log in and get the latest information regarding, for instance, purchasing.

So we have, so to say, closer collaborations and also open collaborations when it comes to kind of best practice and ideas that come. And so we have short meetings that everybody can participate in if they want. So...

[Carl Ragnerstam, analyst]

Perfect. And on the technical installation side, I mean, as your technical consultants, they, I guess, should be earlier in the value chain compared to the installers. Do you have a feeling of the market sentiment currently because we have a lot of inflation we see a risk of postponed project or an overall muted market. Have you heard anything around that from your technical consultants or for any of your installers for that matter?

[Robin Boheman, executive]

Yes, if we start with the technical consultants, I mean, we are, as you say, they are a little bit earlier in the value chain in that sense. So that's a good sort of indication. With that said, they did the best month ever in March. So they were doing very well in March. It was a long month, many working days, so they did a tremendously good result from where they are at the moment.

But with that said, they are, of course, a good indicator. We listen a lot them on where they are and their feel. And so far, they have a good utilization rate on their consultants. But it's also a very growing business for us. So it's a little bit hard to look at the numbers too much for us yet. We need to have a little longer track record in this field to be able to utilize it fully, I would say. But we are getting some indications on how projects are going and so forth. And so far, we haven't seen any big hiccups in that sense.

[Operator]

Our next question comes from the line of Karl Bokvist from ABG Sundal Collier.

[Karl Bokvist, analyst]

The first question is just on Sweden and the profitability here. I understand it's difficult to give exact numbers and percentage points. But just to understand the kind of dynamics, for example, you -- you touched upon the ramp-up of a technical consulting business. How should we think about if there is still a negative impact on profitability because you're ramping up the organization and perhaps billing will catch up later and normalization of profitability on projects, whether or not you see the backlog offering perhaps a bit better profitability in the future. And then the remaining portion due to headwinds such as raw material inflation and so on.

[Robin Boheman, executive]

So just to kind of dig down to the question then. So first of all, the technical consultants. They are still growing, maybe not at the same speed as they were in the end of last year due to a little bit that we're also consolidating them a little bit, but they're still growing, but they are starting to become profit generating, as I said in March, did a really good month. They're not on the real profit side for rolling 12, so to say. So it's still costing us a little bit of cash flow and also on margin as well, but I'm very positive about the turnout so far. So it's -- they have a lot of -- they have a headwind in that sense, but maybe still costing us a little bit of money.

Then I didn't fully understand your questions. So please repeat it maybe one at a time.

[Karl Bokvist, analyst]

Yes, sorry. No, it was just whether or not you see any projects in particular where you feel that this might have recently had a bit lower profitability and now you see backlog offering perhaps a bit better profitability.

[Robin Boheman, executive]

I see. Sorry, yes, then I understand. No, and that comes back to Norway. We have, of course, a lot of fixed price projects in the portfolio that is ongoing and those are fixed price. So that is hard to push out price increases when it is fixed price. So in the short term, we do have some headwinds. It's a similar question that Carl asked before you from [indiscernible] is that I mean, we cannot kind of give you an exact figure on how much that has cost us. It is too much work to go into such a detail and look at all our roughly 6,000 projects that we are running at the moment and say how much that cost us. But I mean, they are definitely costing us a lot of money that prices of raw material is up 10%, 20% and even more in some materials. And that is, of course, costing us.

What we can say is that typical project for us is at least 30% material. So it's definitely impacting us. But when you come to -- sorry, and the second one there, when it comes to order backlog, of course, projects that we take now we take at the new price level, and we try to price in also future price increases, but it is tough to get to that type of writing in all projects. And we do have competitors that are very aggressive out there on taking projects as well. So we have to try to cope with that and work with the market at this and try to protect the margin at all costs in that sense.

[Karl Bokvist, analyst]

Understood. Just to follow up on that one regarding the competition. Do you feel that it's mainly smaller players that are more aggressive on price that the larger ones are perhaps a bit more disciplined?

[Robin Boheman, executive]

Every CEO for the last 30 years has probably said the same thing that I'm going to say now, but there's always that one competitor that is a little bit aggressive on price and that you don't understand how that competitor can be that aggressive. But -- so in this case, we do see some of the larger competitors being quite aggressive on price. But yes, that's, I guess, always the case. And they have to do their calculation. We have to stick to ours and believe in our method of calculating and stay true to our beliefs.

[Karl Bokvist, analyst]

Understood. And my final one is just on the impressive improvement in rest of Nordic. You highlighted Norway being the kind of main stabilization factor here. But just looking forward, I mean, the profitability level you've achieved in Q1, is that kind of a good starting point for the rest of the year? Or is there anything felt that's really positively support the results this quarter that might not have the same support for the rest of the year?

[Robin Boheman, executive]

I mean, we don't give too much prognosis and too much information going ahead. But I am very positive when it comes to the work that has been done and that I've been discussing with all of you in my different Q reports here that we are seeing some higher margins and primarily due to that we have some of the daughter companies not making losses, basically, which is improving the margin and also some good and strategic acquisitions.

As I've talked to all of you before, one of our primary strategic target is to increase our business in the rest of Nordics to get up synergies, to get a better platform, and we are seeing that this is paying off as well. So...

[Operator]

Our next question comes from the line of Markus Almerud from Penser Bank.

[Markus Almerud, analyst]

This is Markus Almerud from Penser Bank. A couple of questions from my side. Starting with pricing. Could you talk a little bit about the acceptance on the April price increases? Has it been accepted in the same way as before?

[Robin Boheman, executive]

I mean, nobody wants price increases. So -- the thing here is that as long as the whole industry sticks to this, the end customer has no choice. So I mean, we do see acceptance because at the moment, the market is that way that if you don't accept price increases, you will not get any material because at the moment, there's a shortage of material for the whole world, meaning that if you're not willing to pay, you will not get the project done. And so basically, you have no choice.

So if you want the material and the projects to be delivered, you will have to pay the price. So in that sense, yes, acceptance is there, but it's, of course, not a happy discussion to have.

[Markus Almerud, analyst]

Yes. But I expect you get to a point where it's not worthwhile building and hence, demand will take -- I mean, will be impacted. But we're not there yet. I mean there's still no impact on demand. You still carry on the project that you have in planned.

[Robin Boheman, executive]

Yes. Absolutely. I mean, we are still in a sort of say, controlled environment that in the Nordics, if we have started a project, we finalized the project. That is, of course, the Nordic way of building compared to maybe some other countries. But -- of course, there is always some kind of, how to say, roof, or there is, of course, a line in the ground somewhere where someone might say, then I won't start my project.

But I do think that you have to find the customer that is willing to pay the correct price. So there are, of course, segments in the market where there is possibility to continue to increase prices. For instance, I mean, energy-efficient installations is still a very profitable investment for someone that owns a house whether we increase prices 20%, 30%, 40%, it will still be a very profitable installation.

Then whether going into new build apartments that might not be as profitable as it has been in the past if you see price increases of 20%, 30%. So you have to find your niche within the market. I think that is very important going forward.

[Markus Almerud, analyst]

Okay. My second question is about the fixed price contracts because we talked about this in Q4 where you had fixed price contracts, which were being phased out, but that's why you took them back in August before prices went up for the first time. And then that had an impact. If we go into this kind of like, call it, Ukraine war increases of raw materials together with China being closed has the share of price fixed contracts gone down compared to before? Or are there an increased amount of clauses in them, et cetera, et cetera?

[Robin Boheman, executive]

I think the -- our order backlog is quite similar as before. However, the market is pushing, of course, if you're a construction company today, you would like to have a fixed price project, of course, to secure your kind of cost base. However, it is -- so, how should I say, market in that sense, I think fixed prices are up, but our order backlog is very similar. But a lot of contracts now are changing over to fixed price. But then they also have to be willing to pay that extra amount for getting fixed price because a smart installer today doesn't take fixed price without specific clause in their agreement.

[Markus Almerud, analyst]

Okay. Okay. Then my next question is -- let me ask us about the Norway just in a different way. So if you look at Q1 and the improvement, I would just to confirm that, that improvement that we are seeing is underlying. There are no specific factors drive -- specific temporary factors driving the results for earnings in any of the subsidiaries in Norway, but it is truly underlying improvement that we're seeing.

[Robin Boheman, executive]

Yes. It's not a one-off in Norway in any sense. And to add on this, like Christina said before, Finland is still struggling quite a lot and yet we're able to deliver these type of results. So I'm very pleased with other Nordics overall. So it is underlying business is much better now. I would not say we're out of the woods yet, but we are seeing improvements in a few of those companies that were maybe loss-making before. And we have also done some positive effects on acquisitions and collaborations within the group as well. So it's a combination of those 2.

[Markus Almerud, analyst]

Okay. And my final question is on acquisitions. And I was just curious about the -- I think we discussed before, but if you could remind me on the industry side, are those companies that you're targeting usually the same size as the installation companies or are they larger.

[Robin Boheman, executive]

I would say they are slightly larger because you are in larger markets. But we also see some smaller -- we did a smaller one yesterday, for instance, was roughly SEK 38 million turnover, but maybe industry companies are usually around maybe SEK 100 million plus, but there are all sizes here as well.

[Operator]

Our next question comes from the line of Robin Nyberg from Carnegie.

[Robin Nyberg, analyst]

Robin here from Carnegie. A couple of questions. First, organic growth was quite strong, 8% in Q1. Was there a meaningful effect from price increases or was that mostly volume related?

[Robin Boheman, executive]

I think it's a little bit of a combination, but also I think comparison numbers was on the lower side, and we were also able to -- yes, to continue production in a good way, even through the high sick leave. So I think it's a little bit -- of course, we're boosting it a little bit by price increases as well. But think main part is that we have done more projects than Q1 last year.

[Robin Nyberg, analyst]

Okay. And then you talked about the industrial area you are looking at acquisitions there. Could you be a little bit open up how many interesting targets are there in the Nordics? And are the multiples similar in that segment?

[Robin Boheman, executive]

Yes, what to say. I don't want to disclose too much since I think it's a very interesting area, and we are so far quite alone in this area. So I would not like to disclose too much on how many targets we're looking at. But we are seeing, like I said to you before, this is a strategic area where we look into, and we want to continue to do acquisitions within this industrial installation. And I would say that -- it's a little bit different type of industry. You cannot kind of compare multiples really since they also have a lot more on their balance sheet than maybe a typical installation company like Christina said. This is also why you see a shift in maybe EBITDA and EBITA from our point of view. So they have a little bit more on the balance sheet. So you can't really compare the multiples that we are paying exactly.

And I'd rather not kind of go into detail on how we pay exactly. But we are seeing -- we are doing some good acquisitions there, and we see that we're able to attract some really interesting companies to attractive prices. So -- if we combine overall industry installation and everything, we are still at the same multiples on average as before, around 5x.

[Robin Nyberg, analyst]

Okay. So basically, you are able to generate about the same amount of return on capital employed in that business as well?

[Robin Boheman, executive]

Yes, you can say that.

[Operator]

Our next question is a follow-up question from Karl Bokvist from ABG.

[Karl Bokvist, analyst]

I just had a follow-up on more of -- one more just of a technical nature. The cash paid this quarter, do they refer to the 3 acquisitions you highlighted here in Q1? Or do you also referred to a prepayment of Highcon or any other acquisition?

[Christina Kassberg, executive]

When it comes to the acquisition of Highcon, if you ask for that one, that is, yes, that was closed as we press released just after the quarter in the beginning of April. So if you look at the table of acquisitions, we don't have the acquisition of Highcon in the numbers yet. That will come for the Q2 report later on.

[Karl Bokvist, analyst]

Understood. So the cash SEK 200 million, they referred to the 3 acquisitions highlighted this quarter?

[Christina Kassberg, executive]

Yes. That's correct.

[Karl Bokvist, analyst]

Okay. And then just a follow-up on something you -- I believe you touched upon, Robin. But the development -- you said that the end of the quarter in the report, I believe, was developing very positively. And is there anything you can say about how April has progressed?

[Robin Boheman, executive]

No, we don't disclose for the future. Sorry.

[Operator]

And as we have no more questions, I'll now hand back to our speakers for any closing comments.

[Fredrik Trahn, executive]

Okay. Fredrik here, we have a few questions from listeners on the webcast. First one about the inflation coming up. And how will that affect the margins throughout the rest of the year, do you think?

[Robin Boheman, executive]

Yes, it's always hard to guess about the future. But like I said, it will, of course, impact us, as I said, in the short term, when you have fixed price projects, it is very hard when price increases comes along. With that said, that's not the main part of our business. However, it will affect us. We do have some other projects where we are able to kind of push price over and we have this cost-plus perspective, meaning that we have a fixed percentage that we're allowed to add on the material that we purchase.

So in that sense, it will be a positive effect. However, I don't think that will compensate all the way for the material in fixed prices where we lose a bit of money. But we're working with this every day. This is part of the business. Like I said, we will do all we can to protect the margin. But I do think that there will be some challenges going ahead.

On the other hand, I do think that if we could get back to a more normal society and get the value chain up and back and running, I think these price increases will stop quite dramatically and go back quite fast and that will be very positive for us in the future.

[Fredrik Trahn, executive]

And maybe you can comment on how the fixed-price projects are set up compared to previous year. Is there any change like that you can add an extra sort of bonus up on the fixed price projects or are they just fixed or are they fixed and open?

[Robin Boheman, executive]

I mean there are -- when I talk about fixed price, I talk about fixed price, then there are, of course, all variants of different contracts out there. Like I said, we have 6,000 projects running overall or variants. But when I talk about fixed price, it is fixed price. What you do see now that was maybe scrapped 15 years ago was this index regulations that we now see come back in maybe all fixed price projects where we do have some possibilities to increase prices over time due to index regulations. And that's, I think, what I can comment.

[Fredrik Trahn, executive]

Yes. Yes. And then one final specific question. In your risk section, you mentioned about the possible cement shortage in Sweden. Can you just comment on that? And how could that affect the installation business?

[Robin Boheman, executive]

Yes, I think that will -- I mean it's hard today not to talk about it, but of course, it's also a scenario where we cannot do much about it. It is up to the politicians in that sense. And I mean I can only say that if we see a cement shortage that will stop all of construction in Sweden, and we'll be very devastating for Sweden overall not just for the installation business, it will be for all businesses all over. So I do think that you have to be very sensible here and look at the big picture here, and it is up to the politicians in that sense. And it is an election year. So yes.

[Fredrik Trahn, executive]

Okay. I guess that it's a good sum up of this presentation. So...

[Robin Boheman, executive]

Thank you for listening in, everyone. And I do hope to see a few of you at our Annual General Meeting later today. And I will also have a little bit of a presentation there as well that you can look at our website after -- will also be uploaded to our website after as well. So thank you a lot for listening in and have a nice day and take care.

[Operator]

This now concludes our conference. Thank you for attending. You may now disconnect your lines.