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Instalco AB
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Welcome to the Instalco Audiocast Teleconference Q2 2021. [Operator Instructions] Today, I am pleased to present CEO, Per Sjostrand; and CFO, Robin Boheman. Please begin your meeting.
Thank you very much, and welcome to this presentation of Instalco's quarter 2 report for this year 2021. My name is, as you heard, Per Sjostrand, I'm the CEO at Instalco. And with me today are Robin Boheman, today, CFO, but from next week, CEO of Instalco. I will come back to that later. Also with us today is Fredrik Trahn, Head of IR.Starting with Slide #2 and a short update on who are and what we do. Instalco is one of the leading installation groups in the markets of Sweden, Norway and Finland. Our main business area is installation and service for electrical, heating and plumbing, ventilation and cooling systems, along with solutions for industry and technical consulting. And the group now consists more -- of more than 100 subsidiaries and around 4,300 employees. Still very and highly decentralized structure. We are supported by a small central organization and strong profitability with higher margins over time. Of course, we will be back to that.So if we move to Slide #3. For the last 12 months rolling, our sales increased to nearly SEK 8 billion with an adjusted EBITDA of SEK 693 million, as you can see, and an adjusted EBITDA margin of 8.7%. We also have a solid order backlog at just over SEK 6.6 billion. We will come back to that also.So that's -- with that, then we take Slide 4. I think I can say that Instalco has continued delivering high profitability and robust growth. This, I would say, despite the fact that Instalco and the construction and installation sector as a whole is no more intensely experiencing the effects of the pandemic and as you understand, at the later stage than many other industries. Prices, for example, for the raw material has risen in our industry, primarily copper and steel. So we are working intensively to be able to compensate for that effect. We can start with a strategy of applying a cost-plus system and the purchasing efforts that we carry out.Our assessment though is that over a long run, there is no risk or at least limited risk that will be affecting our margins. And for yet another quarter, we have had higher sick leave than normal, primarily in Norway and Finland, where periodic shutdowns at construction sites due to COVID infection has led to some relaxation in certain projects. But despite these relatively difficult consequences of the pandemic, we once again delivered very strong quarterly results. We are extreme -- which we are extremely proud of. And I think all of it demonstrates the strength of our business model.During the quarter, there was much activity in the area of acquisitions. We did those strategic, opportunistic and add-ons. We grew our operations in the area of roads and street lighting, for example, which is a very interesting and closely related area to our regular electrical installation work. We can also see the effects of our prior start-ups that we have as a supplement to the ordinary acquisitions.Segment Sweden continues to deliver strong results, and other Nordic segments have recovered somewhat since last quarter, although it's still performing below the desired level. We have somewhat a lower cash flow than normal this quarter, which is due to some of our accomplishment being a little behind with the invoicing, primarily caused by the fact that we are starting up a lot of new projects and that we compare, of course, with a very strong quarter that we have before. Adjusted EBITA for the quarter was approximately SEK 195 million, and adjusted EBITA margin of 8.4%.So if we go to Slide #5, you can see there, we have acquisitions, I can't believe, that's a figure 22%; organic growth, 12%; and total abut SEK 2.3 billion totally in terms of sales. I think, as we used to say about the organic growth, this is very good this quarter, but we see it in the long run, we have in the first half year, I think, 5.3% in organic growth, but always in long run.Okay. Going to Slide 6. Here you see the adjusted EBITA for each quarter, and it looks like before, I would say. The quarter differs a little bit, but it looks like before. Slide #7, our order backlog is very solid. It's just over SEK 6.6 billion and that corresponds to 83% (sic) [ 0.83x ] of our annual sales. We are also very satisfied with that.So if we turn to Slide #8, I will hand over to Robin. Robin, do you have?
Yes. Thank you. And as you mentioned, Per, we are very satisfied with the result in the development of segment Sweden. We had a strong and solid result here with a good EBITA margin of 9.2%. We also see a stable demand for technical installations in Sweden. We are growing in all regions. As you can see, we have a very strong organic growth. As you mentioned, Per, we are seeing some of our start-ups kicking in here and growing very well, which is also part of the organic growth here, which is very exciting.We can also see that the consultant business in Sweden is growing, and we now have approximately around 200 contracted technical consultants, who will all start during fall, and are established in 15 different locations in Sweden. So we're even more confident than we were in the beginning regarding this, I would say, start-up that we together can combine consultants and the installation business in one group. And we will see effects here of collaborations and synergies here. So we are very pleased with the start-up here as well.Moving over to next slide then, please, Rest of Nordics, #9 then. So looking at the Rest of Nordics, as Per mentioned, we have somewhat recovered from last quarter, although we are still a little bit below our Instalco desired levels. As we've said before, the pandemic has been -- was tougher in the second quarter. And due to that, both Norway and Finland have had stricter policies regarding the pandemic. However, we see that our action plan has delivered results in Norway. Norway had a very good result here last month. So we are very pleased with that.We are seeing some effects in Finland. We have had a very solid result in Finland so far, but we are seeing a little bit of a downturn there due to -- mainly due to the sick leave and closing down of some projects due to the pandemic in Finland. However, we are confident about Rest of Nordics, and we are still very positive about the long-term market here. So we are hoping to get them back on track. We are delivering. I mean, 5.2% is not a bad result, even though it is maybe not in line what we are hoping for and aiming for in the Instalco measures. But a positive view on Rest of Nordics as well.So next slide here, 10, please. So looking at acquisitions. As you have seen, if you follow our press releases, the pandemic has not affected our acquisition rates. We had done 15 acquisitions up until Q2 and approximately acquired around SEK 570 million in turnover in the year. All very profitable and high-quality companies. And as you've seen also, we have continued this into Q3 as well, and we did one acquisition as recently as yesterday. And the pipeline is still very good. It's a good solid mix of healthy companies, both, so to say, stand-alone Instalco companies, but also add-ons. And as you can see in listed a few of add-ons, all add-on acquisitions that we have done. So we're very pleased with acquisitions. We're very pleased with the pipeline and what's coming ahead as well here. So very good acquisition possibilities.If we take the next slide, please, Slide 11 and look at some examples. You mentioned Per before, this specialization in roads about Nihlén in Gothenburg, which is specialized in road lighting and charging stations, which we think is both due to the fact that there are a lot of infrastructure projects in Gothenburg, but also the charging installation business is growing. Approximately sales of around SEK 80 million and very profitable, which is also -- this is also expanding a little bit of the range of possible projects that we can take on. So we're happy that they wanted to join the Instalco group.And then we used to give a number example here of acquisition is the add-on acquisition that we did in Norway that Andersen og Aksnes did, Inva Engineering, which is strengthening Andersen og Aksnes in the area of energy optimization. Somewhat smaller sales, as you can see, SEK 6 million, but it's adding value to our existing portfolio companies. So as you can see, we can do all ranges here in acquisitions.Okay. Let's move on to the next slide, Slide 12. And as you can see here, we are ticking all the boxes yet once again. We have a strong year-to-date growth. We have a target of 10%, and we are at 25% year-to-date. We have a margin year-to-date of 8.2%. Our target is 8% over a business cycle.Looking at the capital structure, we have a net -- sorry, adjusted EBITA at 2.5x, and we are at 1.4x last 12 months. Looking at cash conversion, as you mentioned Per, it is a little bit below last 12 months. It's a little bit below 100%, but -- and that's due to this quarter somewhat lower cash conversion. But I think it's also a little bit of backlash as you mentioned where we've had tremendous high cash conversion, and we are seeing a little backlash here in this quarter. And dividend policy is unchanged.Per, maybe we move over to some of the projects that were done so far.
Thank you, Robin. Let's do that. Slide 13, yes. Three examples of new projects from the quarter. I'd like to highlight them as great examples of how we work. The first is Ohmegi's assignment at a major logistics center in Rosersberg, north of Stockholm. And for this, Ohmegi, we'll apply the successful electricity contract model for it's used by one of our subsidiaries in Borås, which is specialized in the design and installation of electrical solutions at those logistics centers. And I think this is a typical best practice project. We learn from each other.And the other project is in Norway, where our subsidiary, JB Elektro, was recently engaged for assignment by Skjervøy municipality to replace the street lighting at a large and very difficult to access and sensitive area around Tromsö and exchanging the lighting of a major energy-saving projects for their own municipality.And the third example is Rörgruppen and Ohmegi's assignment with NCC and Region Stockholm to expand the subway system in Stockholm. It's a partnering project for installation of the electrical and heating and plumbing solutions in conjunction with expansion of the Högdalen depot. And with the scope of these projects, our technical consulting company, INTEC, has been engaged for the technical design work, and I'm very glad that we could do that.So if we -- Slide #14 -- go to Slide #14. So to summarize the second quarter, strong quarter despite the pandemic; 10 acquisitions and a strong pipeline; margin we are very satisfied with; and we can also now say that Norway are delivering stronger margins. I'm very proud of that. So that is the summary of the quarter, I think.So let's go to Slide #15. Changes in the management team. And as you might know, I will be leaving the position of CEO from Instalco in order to take over as a Chairman of the Board. I think by doing so, I will be able to focus even more on strategic matters and in Instalco's future investments and pursuits. I'm also looking forward to work with Instalco's highly competent Board of Directors, of course. But I'm also very pleased that Robin Boheman, as I said before today, will be taking over as CEO.Robin and I have worked closely together since Instalco was established in 2014. And his experience of the group's acquisition pursuits and the accounting finance function makes him highly suitable and I think an excellent successor to this role. And with Robin as a new CEO, we ensure continuity and that we have a person with the right Instalco spirit. Isn't that right, Robin?
Yes. I am tremendously happy for the opportunity and really looking forward to taking on this challenge. And I also feel very confident with the management team that we have in place. And as you said, I've been working here in Instalco since the founding. And I think we have a tremendous journey ahead and also the mix now with you stepping up in the Board as well, I think that's also helping us a lot and showing about continuity in our plan that we set ahead in 2014. So very happy with the situation.
Good. Sounds good. Okay. Let's change to Slide #16, I think. And I think we can take a few words here about our model because we are talking a lot about our model and how we run this company. And the Instalco model, our model is built on team spirit, close coordination between units, best practice and cooperation, but also what we call mature leadership. And then that means that you have to -- in this team, you have to understand that 1 plus 1 can get more than 2 if you cooperate. And we have a decentralized organization.And we also work, what we say -- what we call is in the middle of the road. It could have come back in a decent way and doing business in the right way. We talk a lot about sustainability. We are in the middle of that circle. We talk about safety, and we've taken that very seriously. We have a flat and lean organization. And of course, the team spirit, as I mentioned, is very important. It characterizes our organization and leadership style, I think.And let me hand over to you to Robin because I think it's important that listeners here can rely on this model. It's worked very well, and I think you have...
I think it's worked tremendously well for us. And I mean, from the start in 2014, when we kind of set this journey when we started this journey together. And I fully agree with what you mentioned. I mean I think this is the -- how should I say, this is the modern leadership. And I think this is the way forward. You're talking about a decentralized organization where we give a lot of trust out there to our local subsidies. I think that's the way ahead as well. And building on the team spirit instead of maybe a typical hierarchy. I mean, we have, of course, boundaries and rules to follow in the group. I think a lot has to be trust in this organization and the team spirit and leadership here. And I mean, even if we have done tremendously, I still think there is a lot of journey ahead of us as well. I mean we are still in the beginning.
You certainly heard that the other day that the journey has just begun.
Yes. Yes. And I like that. And I truly believe that there are a lot of things that we have done, but there is still a lot of improvement and growth here to be taken. And...
Can I ask you? I think how you see also, I think -- we have a business. We do business as usual. You have said that it many times. But how do you see to begin -- into the digitalization, sustainability, ESG things coming on?
I mean if we start by the digitalization that we talked about, I think the pandemic, it's, of course, not something fun that has happened to us, but it has helped the construction industry, I think, to maybe do a jump of 5 to 10 years. I mean, just looking at before pandemic, if you ask anyone in the construction, should we have a team meeting? People would look at you with a strange face and say, what are you talking about. Now we are seeing that we are having the construction meetings on Teams, which is much, much more efficient.We are also saving -- sustainability. We are seeing a lot of good effect also on our work here, efficiency. So I think the digitalization will improve a lot. We're also looking at kind of how we will be purchasing. We don't go to the store as much as we did. We order online instead. So we have moved into the digitalization age much faster than I was expecting and hoping for.And I think we have mentioned before, I mean, ESG and sustainability, that plays right into our arms and something that I'm really looking forward to working even more with. We are in the middle of it. I mean we are the ones doing all the installations. It doesn't matter what you're talking about. At the end of the day, it's always something that's going to need to be installed. And who does that? Yes, we do it. And there's always electricity involved. There's always a lot of water and those type of something involved in all these improvements, and we are the ones doing the installation.And now with also us moving into the industry as well, we see a lot of this happening as well in the industry. I mean, just open the newspaper today. Everything is talking about carbon or CO2 neutral installations and looking at that and who's going to do that? We are going to do it. So I'm really looking forward to this.
We talk a lot about our decentralized model. Do you have any comments on that? It's not in the schoolbooks.
Yes. I mean, like I said -- no, it's not in the schoolbook. But I think that's the modern way of leadership. And I mean I think the future is with the decentralized model. I think even looking at the really large corporations, they are trying to do this, but it's very hard, and it's a little bit slow moving. It's like trying to move -- trying to turn a big ship instead of having a lot of small ships that you can turn very quick and fast, so you can be agile and fast moving. So I do think that this is the way forward. And we are also seeing on the market out there. There are -- even if we have all been here for 7 years, there are a lot of people trying to copy us already. So I think more and more are looking at this type of model for the future as well.
Okay. Good. Okay. Let's go to Slide #17. And as you might know, I always wrap up these presentations with a thanks title. Of course, I could have chosen time to say goodbye with our bright man. This is going to be the last time we're rolling stones, but I don't feel that. So I chose my way with Frank Sinatra. I think the title should be Our Way. Let me just say that we started Instalco in 2014. We had a vision of becoming the leading installation company in the Nordic region. And I think we are certainly there. Seven years have gone by quickly, and we have had an amazing journey, as we talked about earlier here. And we had an amazing journey so far. We now have more than 100 subsidiaries working daily throughout the Nordic region. And throughout the Board, we have delivered strong results and well-executed projects.We have also been influential, I think, in developing the industry. We launched innovative ideas and actively contributed to -- our environmental way of thinking and working. And as we have also mentioned, we have a modern leadership with incredible many talented employees. Nevertheless, it still feels like we said, it's just the start of what we can accomplish.So I now want to hand over the reins of CEO to Robin Boheman. I wish him, of course, much success in developing the company further as we continue our journey. And for me, as the company's founder and departing CEO, it has been an honor to have held this role and together with all our fantastic employees that have built this wonderful company. I think we've done it all the way. Thank you. Thank you so much.
And before we kind of hop into questions, I actually put in an extra bonus slide here in the presentation. And since you're always looking at music titles, I had to find my own music titles to kind of sum up. And it is a classic Abba, Thank You For The Music, and for giving it to us. Even if I know it's not really thank you because you're stepping into the Board, but it's thank you for the CEO. And for me, especially, I really want to thank you on behalf of the company for those 7 years that you have held the role as CEO and led the ship and on this journey that we've taken.I think there's a lot of people out there that has a lot to thank you for this. And we are all tremendously proud of being part of Instalco, me especially still remember that first meeting 7 -- a little bit more than 7.5 years ago in the conference room when something said click and the journey started. And truly honored to have been working with you for the last 7 years, and I'm really looking forward to continue this. And I think a lot of people within Instalco would agree with me that we hadn't -- we couldn't have chosen a better CEO for this part of the journey. So we say thank you for the music and for giving it to us, Per.
Thank you very much, Robin. The pleasure is mine.
And now we open for questions. But do remember that this Per's last quarter. So be kind, only nice questions and then you can spare the tough questions for Q3 when I attend to them. So now we open the line for questions.
[Operator Instructions] And the first person is Markus Almerud of Erik Penser Bank.
Markus Almerud from Erik Penser. I've got a couple of questions. First of all, just you mentioned raw materials, and you're working hard to compensate all that in passing on prices. But just in the meantime, are we seeing some pressure? And does that explain some of the pressure, for instance, on the margin in Sweden? So are we seeing a lag here just to understand.
Yes. I can start with answering your question here regarding -- you fell away a little bit there, but I'm guessing you were asking about the purchasing and the increased raw material prices. And we are -- we don't see the full effect. I think you have to understand also the way the business works is that, on a lot of our contracts, we just kind of push the increase of the price further because we have a cost plus system working for us. We do, of course, have some fixed prices, but you also have to understand that we have taken -- this discussion started in the beginning of the year, so we have known that prices were going to increase. Then, we haven't had the exact percentage. So this affects us in the fixed price projects. And we see that some adjustments have been done, but it is actually all because that the prices are increasing. So we have known for a little bit a while that they were going to increase. So there might be a little bit of a lag here absolutely in some of our contracts.
And I think we have headroom as well.
We have a little bit of headroom, and it's very hard to estimate anything in advance because we don't know how much headroom we have gotten in the contracts and -- but that's to give a little bit of flavor at least to you.
I think region wise, it's marginal in any case. It's nothing material.
No.
No.
Then the consultants business, just to understand, you're talking about you have 200 consultants coming on board in the fall. And how does this work? And what does this mean in terms of revenues? Because it's not -- it's a little bit difficult to understand and put it in context of 200 consultants coming on board.
I mean, I think some kind of figures -- for consulting, I think turnover when you say for each consultant it's about SEK 100 to 11 -- maybe SEK 1 million, SEK 1.2 million. So there you have the figures. And what we expect is a little bit higher margins from the consulting part of our industry and our business. But slightly, I think...
Now in the beginning, I mean, as you can understand, there are some costs involved there in -- and just to be clear, we're not taking on 200 in the fall. We have already some working for us. But in the fall, we have contracted about 200, and most of them are already on board. But you don't become profitable day 1, so to say. You have some starting costs, and you also have maybe not 100% billability as well. So -- but once billability goes up and we have all the structures in place, as Per mentioned, I think margins are slightly higher than there are on installation business. That's also why we are so interested in the consultant business.But it's also hard for us to give you any estimate of how much this will affect or not because in a start-up like this, we need the company and we start up, like I said, there are 15 of them at the moment. They need to run the year before we can kind of give you any precise estimate here. But the main reason for why we're doing this is because we think, and we believe hardly in the fact that we can combine in a more theoretical and practical knowledge and that we come close to our customers and that we can solve more of the customer's problem, so to say. And that's the big effect.
Perfect. I'm looking forward and talking about the consultants. I mean, should we expect you hire consultants on an organic basis as well? Or are they mostly coming through acquisitions?
I mean these 200 that we have at the moment, they are organically founded, I would say, 90% of them. Then as I mentioned earlier, we did an acquisition yesterday with about 60 technical consultants. So main part will be through organic, but of course, we are looking at acquisitions as well.
In the future, but they don't -- they are not in organic this year. No, no, because we started that journey 9 months or...
Yes. I mean if you look at the organic numbers, then the consultants are not calculating since we have not owned them for 1 year full. So those are not in the organic numbers yet. That's correct.
And how big is the consultant business today?
Sorry, it's very hard to hear you. Sorry, You're falling out.
The consulting business as of today on a running rate, how big is it?
Running roughly 200 as we said, but that's on an annual basis, maybe today, SEK 50 million.
Yes. SEK 50 million roundabout.
Okay. And then finally, as most are talking about the green movement from EU, Sweden, et cetera. And one of these parts is renovations. So there is a big push to get renovations to double over the next 5 years is a big part of the green deal. Is it anything -- have you seen anything from this yet? Because I would assume that -- I mean you will benefit from it during the time -- have you seen anything of this as...
You fell out there. But I understand what you mean. I think that we have had pandemic during this period. And it has been a little bit difficult to start new projects in the renovation sector, as you can call it, because people -- it's not possible to move people out as we did before. But what we can say here, and you are absolutely right that this will increase. And we can see a tendency now, I would say, but this is -- the project is starting. But I think we will see in a couple of months or maybe in half a year more activities there.
We're definitely not seeing the full effect of this directive of trying to push for renovation. I don't believe we have even seen that yet fully. And I think also you'll see a lot of renovation being taking place once people are a little bit more back in the office. You'll see also a lot of shifts in how our offices look in the way of open compared to kind of small boxes when it comes to office space and stuff like that. So I think it will grow even further. I don't think we've seen the full potential of this area.
[Operator Instructions] And we have one further person joining the queue so far. That's Stefan Andersson of SEB.
Fantastic quarter, I must say, impressed with the organic growth there, so I'll start with a question there. I think I've been touching on this before. And I know at that point, you're also worried that you were a small company, doing lots of acquisitions. So therefore, there were volatility. But my question is, if you could maybe explain a little bit about the volatility in organic growth. You had plus 8% two quarters ago, minus 1% last quarter and now plus 12%.The swings are very dramatic, and I don't see it in some of your competitors that I also cover. So do you have a sense or a feeling for why that is? And the reason I'm asking is, of course, to understand looking at Q3, Q4 and Q1 next year, is 12% a new level, the 16% in Sweden? Is that a new level we should expect because of the consultancy coming in? Or -- so that's why I'm asking. And of course, you're not giving guidance. So but then you know why I'm asking.
Yes. But you see, as I mentioned, this first half year, I think, we, on average, had 5.3%. I think -- and I mentioned that, you have to see it in the long run. It can be like this fluctuated from almost 0 to 12%. We have seen that before. And it depends a lot on which company and where the company's growth is and in which part of our -- which is pace there. So that can be. But if you see it in the long run and if you have to put it into in your models, then you should see it on annual or yearly. And we had 5.3%, I think, and Robin mentioned here. And that's what I think is the level...
Which is very strong given the market, and we are growing there.
It is very strong given the market and -- exactly, with the pandemic. So if you want to squeeze something out of this and get some flavor, I think you should more look to our annual increase or organic growth.
This is the problem, Stefan, that we are too much quarterly focused in the financial sector, and I think that's problematic for us. And to give you one mathematical explanation is that if historical has been very fluctuating, then the future is going to be fluctuating because it's a percentage measure. So if you compare Q2 and Q3, and they have been very fluctuating between each other, then we're going to have that problem next year as well because you compare with the numbers. So it is also a little bit of a mathematically problematic.And as we have said from the beginning, it will always be very hard for a company in our industry with the acquisition rate that we're having, and we're growing 25% annually in the last couple of years, it will be fluctuating. And we also have companies that are growing and, so to say, sizing down very rapidly due to the fact that we can ramp in a lot of people to finish one project, a larger one, and then you don't have that next year, so you downsize and downsize being that you don't rent in as many installers as you did last year. So fortunately, we cannot guide more than we have done.
One example is also what we have done in Norway. Yes, we have said that we're not chasing volume anymore. We have to improve our margin. And then we have that focus, then organic growth will be negative. And that's part of our strategy, I would say.
But we see a very positive development with our start-ups, as you mentioned or as we mentioned before. With the technical consultants now coming in, 200-plus consultants before year-end, that has not been calculated yet, including organic growth last year. So they will, of course, push again growth next year as well. And we have some other...
We have to live with Stefan now unfortunately.
Yes, absolutely. I just decided to ask why. So I fully understand we have to live with it. But I mean, I just try to understand, if you tell me 5% is an average, sure, that's fine. But why was it 12% this quarter? Was it -- could you -- is that explained by you starting an unusually large number of new contracts? Or -- I mean, I guess you have not given anything on that.
I think that's part of the answer. And also that we had 12% is also that you compare with maybe lower numbers from last quarter or you compare it with the quarter last year, and also that some of our start-ups now have kicked in and are included in the organic growth that were not included last year because we also did new start-ups in the beginning of last year. And they are now included and are growing. So that's also one of the explanations that we ended up with very high organic growth this quarter.
I guess there was some COVID, maybe COVID in Norway and such in last year as well I guess that had some...
Yes. So we have easier comparison numbers.
Yes. Then on -- what was I was thinking about, yes, I was looking at the order backlog, and it seems like you're using quite a lot of the order backlog with the revenue. So book-to-bill, it's a little bit poor in the quarter. I think it's down 2%, maybe the order backlog quarter-on-quarter, while you've been buying some companies. I know -- I mean, again, it's only 1 quarter, of course. And we've seen this drop Q3, I think, in '18, '19 or something. And there's been some quarters with those drops. So no big issue, but just trying to hear what you have to say about that.
One reason, Stefan, is also that you have what we call in Sweden, you have to have ice in your stomach, you have to be cool. When the pandemic started and throughout the pandemic, there's been a more, I would say, a market -- a little bit lower market activity, and the price is a little bit lower. And we don't want to be part of that push, I would say, the level downwards. So we have tried, and that's deliberate -- tried to avoid being in that type of circle that choose -- give you offers lower, lower and lower margin. And that, of course, affects our order backlog sooner than later. But still, we are very satisfied with 85%, almost 85% the order backlog of sales. So I think we can say now that we have handled this very well. And I'm not concerned at all if the order backlog is 2% lower than before or something.
No, I fully agree with you, Per, and I would also like to add to that is that at 83%, we're very satisfied. If you have looked at our -- in the future and if you look at some of our competitors and also like how the landscape looks like, if you're about 70%, you're very satisfied. And then we have been at very high levels at almost 90%, which is maybe too high. And I think like you mentioned, Per, I think one effect that you're seeing in the quarter is also there is a lot of discussion on the price level has not kind of stabilized due to the raw material price shift that has been a big discussion in our industry. So that's also why we have been a little bit more cautious on taking on projects because the price level has not been set yet. So I think those are the 2 main reasons there.
Should I interpret that with the last comment you made then that will not really pass the point where you see that the market has, how should I put it, normalized? Or would you say that this pricing pressure, which you had avoided, is that something that was behind us?
We can see a recovery in the market, as I mentioned now. And also the building permits is increasing, another sign of an increasing market. Of course, we are in a later stage. I mean we don't -- we want the first one in the projects. But I think, and I've said it before, I think we have a couple of rather good years ahead of us here. And we can see they're recovering now, the market.The other thing is the price level because it's one thing that if the market increase, and there are more tenders to give and so on. But also, we have to be aware of where do -- as Robin mentioned here, where do we have the price level now? What is a proper, or what you say, call it, level? We also have what we call index in our projects. We don't know if that reflects all the material prices that we can have index -- regular index in -- index adjusted -- adjustment. So it's still a little bit uncertainty here, but I think that, that will sort out here in a few months or a...
I would be scared, like I said, if you see also in Q3 somewhat lower order backlog due to the fact that we might not be as aggressive as before. Like I said, we want to make sure that the price is on a good level. We want to make sure that we're not taking on any projects that we, at the end of the day, are not fully satisfied with kind of our purchase price as well. So -- and on this level, we can absolutely afford to have somewhat lower order backlog without having to sleep bad at night. As long as we are about 70%, we are very satisfied.
Perfect. Then I just remember the last question I had. Talking to some of you ahead of the summer towards the mid of the quarter, I got the feeling I might be wrong, but that you had a little bit of a soft start to the quarter. Is that the trend you've seen as well that you had a rather strong recovery towards the end of the quarter and then moving rather strongly into Q3 now. I'm talking about the top line here again.
If we have a slow -- we had a slow start. But at the end of the day, we had a strong report, then you have -- you understand that we had a strong...
We finalized a lot of projects before the summer.
I could have misunderstood the situation. So that's to doublecheck.
No, that's absolutely correct. We had a slower start in the beginning of the quarter, but it was picking up very rapidly end of last -- or last month before the summer, we had a real pickup. A lot of things needed to be done before the summer. So I think it also has a little bit to do with the people that are looking into -- returning to more regular lifestyle, so to say. So I think that was comparing before the summer.
Okay. Congratulations on a great report. And it's been great to have to do with you Per Sjostrand as well. So thank you for these years, and we hope that it will be as pleasant to work with Robin going forward. Thank you.
Thank you, Stefan.
Thank you, Stefan. Take care.
[Operator Instructions]
There are a few questions from the webcast. The first one is have you really decided not to have any operations in Denmark?
No. We are looking into Denmark right now. We have not taken any decisions. We had a Board meeting, of course, earlier today. We talked about Denmark. It is interesting for us to look into that market. We think we have good opportunities, but we want to be certain that our platform investment will be the right one and that we found -- in that case that we will enter into Denmark, we will find the right companies, of course, but also the right management team. So we are looking into Denmark. And that is absolutely a possibility for us. But if we will be there or not, it depends.
And I mean, it has not been a real big topic for us going outside the Nordic. You have been able to travel. And as you -- those of you that have been following us for a long time know that we don't do any hasty decisions. We want to make sure that we meet face -- look each other in the eyes and meet face-to-face. In that sense, we are a little bit old school, and it has not even been able to travel anywhere. So -- but now once we open up again and society is back to normal, eventually, we will start looking ahead as well.
And then 1 M&A question. Has the multiples increased or decreased somewhat during the pandemic?
I think that it has been a little bit of an increase. And I don't think it has to be with the pandemic. I think it more or less has to do with the fact that we have some more competitors out there. We have few larger competitors that are more on an investment type of companies that are not -- that are looking into all types of segments and kind of more shooting from the hip, so to say. And they are buying up companies in our segments. So we are seeing some higher competition here, and that, of course, drives up the price. But then you can also discuss, okay, is it reasonable to buy a company for -- as we have done or almost lower than 4 or 4x? Maybe that's not realistic. Maybe we have just been lucky to buy them at a very reasonable price. And there is a slight price adjustment. And I think it's...
We also believe in our business model that attracts entrepreneurs all over from every corner.
We also see that for some cases, the multiples are much higher than we are willing to pay. But we also see that, like you said Per, our model attracts a lot of good. And as you can see the pipeline, I mean the number of acquisitions we have done, there are no big problems here.
Thank you. Then one Rest of Nordic question about downsizing a bit in Norway. Now you're saying that Norway has recovered, is that the effect of your strategies there?
Well, we think so. We think we have succeeded with what we said that we should do, lower the pace a little but also go for margins. They have done a tremendous job, Roger, with the whole team there. And I think we will see the result of that now. And we have said, maybe we said it, last quarter, I think or 2, that we will see that effect of that during here. And I think we see the -- as Robin also mentioned, have been more struggling in Finland. But we have a good team in Finland in place, and we know what they can deliver and they will deliver in the future. But they have been affected by the pandemic in the Northern Norway I would say at the moment.
But I think also when we talk about Norway, I mean we're very positive in the long-term view and also for Finland as well and just coming back to Norway, I mean, we'll now -- we won't take our hands off it, so to say, because they are delivering now. We will, of course, keep a close -- together with Roger, who is running the Norwegian business, keep a close eye and continue this journey. It's not a onetime fix. So that's, I mean, continuous improvement. This is something that we always work on.
It's not been a quick fix, and we knew it was going to take a while, but we're definitely seeing the effect of our action plan.
And then we'll be talking about organic -- fluctuating organic growth. And one last question on that is now when it has been so strong this quarter, should we expect lower organic growth for the second half of the year comparable that -- this order backlog is down a bit?
I haven't so much to do with the order backlog. But I would say that, again, that on average, and we have -- I think we have an average during this year is about 5% organic growth. Take that as the best explanation we can give. I mean, of course, it's up and down during these quarters, 1 or 2 and maybe 3 and 4. But on average, 5%, 5.5% maybe. And that's a good figure. And I think that what we will hold on to and also what we can achieve.
And I mean our financial target is not focused on organic growth. It's just saying that we are focusing on growth, and we are focused on profitability. Those are 2 main financial goals. And so I think everyone has to bear that in mind.
And we also are very proud of and we also -- we have said that what we promise we will have And I think it's important that we have said 10% growth or 8% in margin, that's what we get. I think that's also important. And that's why we don't stress this organic growth because as we have said so many times, we can always increase organic growth, just lower your price. And that's not our way. So -- but 5% is an answer, I would say, on average 5%, 5.5% maybe.
I think that's a very good sentence to sum up this call. The last call for Per. And from my side, also I would like to thank you, Per for excellent job.
Thank you, Fredrik. Okay. Thank you for joining in, and have a good time. And next time, Robin will see you. He's all yours. Thank you very much.
Talk to you in November. Take care.