Sdiptech AB (publ)

STO:SDIP PREF

Earnings Call Analysis

Sdiptech's Strong Q2 Performance with Strategic Moves

Sdiptech reported a robust second quarter, with 19% total sales growth, 9% from organic growth. Quarterly revenue reached SEK 1.4 billion, with a 13% profit increase totaling SEK 260 million in adjusted EBITDA. Despite a slight margin drop to 18.7%, the company achieved 83% cash conversion and generated SEK 200 million in operational cash flow. Significant moves included the acquisition of WaterTech and divestiture of Frigotech. While the elevator unit struggled, restructuring efforts continue. The company remains on track with acquisition plans, eyeing SEK 40-50 million in potential profit for the year's second half.

Strong Revenue Growth and Solid Margins

In the second quarter, Sdiptech reported a significant revenue increase of 19%, totaling approximately SEK 1.4 billion. Breaking this down, 9% of this growth was organic, reflecting strong market demand and successful operational execution. Year-to-date, the company has maintained a steady 9% organic growth. The operating margin has remained stable around 18.7%, which is indicative of the company's ability to manage costs effectively while expanding its revenue base.

Positive Contributions from Acquisitions

Acquisitions have played a crucial role in Sdiptech's growth strategy, with newly acquired companies such as Kemi-tech and WaterTech contributing positively to the overall results. The adjusted EBITA increased by 13% to SEK 260 million. Notably, in the resource efficiency segment, sales surged by 15% and EBITA improved by 24%, with margins rising to 22%. This demonstrates successful integration and performance of acquired companies.

Challenges in the Elevator Business

Despite overall positive trends, Sdiptech faced challenges in its elevator unit, which continued to undergo restructuring. This segment reported a loss of SEK 7 million, and the company aims to achieve profitability by year-end, indicating a need for careful management of its restructuring efforts to return this unit to a profitable status.

Cash Flow Management and Future Guidance

The company has seen impressive cash flow management, with cash conversion reaching 83% in the quarter, totaling SEK 197 million. This is well within the target range of 70% to 90%, highlighting the operational efficiency of Sdiptech's subsidiaries. Looking ahead, the management has indicated plans to increase acquisition activity, targeting SEK 100-120 million in acquired profit for the year, with expectations to secure an additional SEK 40-50 million profit from acquisitions in the second half.

Geographic Performance and Market Dynamics

The United Kingdom remains a critical market for Sdiptech, comprising a significant portion of sales, with prospects for increased funding in infrastructure from the newly elected government. This could further enhance demand for Sdiptech's services, particularly in electrification and charging infrastructure initiatives, aligning with the company's focus on sustainable solutions.

Debt Management and Financial Position

Sdiptech has successfully reduced its debt leverage, with ongoing efforts to lower overall debt levels. The interest rates on their debt have stabilized, which is expected to provide more favorable conditions for future acquisitions. The management's objective remains focused on maintaining a solid financial position while pursuing growth through acquisitions and organic expansions.

Seasonal Challenges and Market Resilience

Sdiptech's management noted the seasonal nature of their business, anticipating that Q3 may be weaker due to holiday impacts on operations. However, the firm is well-positioned with a diversified portfolio across 40 business units, minimizing the risk from any single segment. The expectation for the third quarter includes aiming to match the strong growth seen in prior years while addressing challenges presented by seasonal trends.

Earnings Call Transcript 2024-Q2

[Operator]

Welcome to Sdiptech Q2 2024 report presentation. [Operator Instructions]

Now I will hand the conference over to CEO, Bengt Lejdstrom and CFO, Susanna Zethelius.

[Bengt Lejdstrom, executive]

Thank you and welcome everyone to this presentation of Sdiptech's report for the second quarter. As already mentioned, it's myself, Bengt Lejdstrom here with our CFO, Susanna Zethelius, that will guide you through the quarter and also a brief look ahead, but let's start with just some words about Sdiptech in short. As most of you know, we are a technology group that are acquiring and developing companies that all work for a more sustainable, efficient and safe society, much of that being built into infrastructure. So that's also why we focus a lot on finding companies within the infrastructure sector that will support this future.

And we have divided our business into 2 business areas, resource efficiency and special infrastructure solutions where we have 3 sub-segments each, which you can see from this slide. And what's common for all these 6 industrial segments is that we believe that are sustainable drivers for growth much because of that, we all want a more sustainable, efficient and safe future. But also that the infrastructure of today is quite old, so it needs to be renovated or replaced. We also consume more of infrastructure and more of our resources and as well we're going into the direction of more sustainability. We also put some more regulations around all of this.

So all-in-all that means that the companies we look at to acquire and the ones we already have are well-positioned for a sustainable, good demand growth over time. And as you can see to the right hand in this slide, our companies currently, they are residing in the Nordics, U.K., the Netherlands, Italy and centrally Europe based in Croatia. All-in-all 40 business units, as we call them, since they are more legal entities. But we might call them business units, which we follow up and report on and we are currently almost 2,400 employees.

And we have had a very strong profit growth since 2017 when the B share was listed over 38% in average. And since we have a strong focus on sustainability how much of our turnover is actually contributing to one of the UN sustainability development goals. And for last year, 2023, that was 79%. So that was Sdiptech in a brief presentation. But let's go for the main topic of today, the second quarter as a summary, and we will get back to all of this in more detail.

We are very happy and proud to present that we had a strong sales growth, 9% organically, excluding currency effect. All-in-all then together with acquisitions acquired companies, we had a 19% growth, almost SEK 1.4 billion in a quarter. Our profit almost developed the same way, 13%, all-in-all which 1% was organic, excluding again the currency effect and that number was SEK 260 million in adjusted EBITDA. We were happy to see that our activities and measurements we have done to improve the cash flow had effect. So we had 83% cash conversion as we calculated but in absolute numbers, it meant that almost SEK 200 million of cash flow from the operations was brought into the group. But it of course, adds to our position to be able to continue with our acquisitions further on and we will come back to that as well of course.

The margin was somewhat lower than last year, but more or less in line with last quarter, 18.7%. And part of that was that we had a sales mix shift. Some of the companies that have been very, very profitable had a good quarter, but not as good as last year, but still good. But we are also taking some measures and costs for restructuring of one of our business units, the one that we still have within our elevator business in central Europe. But we'll comment on that as well.

During the quarter, we acquired one company, WaterTech in Sweden. It's a small company, but it's a company that's complementing our other companies within the water treatment area. So they cooperate already with the Kemi-tech in Denmark and WaterTech in the U.K. We did also actually divest the company, which we don't typically do. Frigotech, a company that services and installs different types of cooling equipment in warehouses and shops, et cetera. And the reason for that being that they are not really part of our main focus in the business. As you know, we're focusing on product-based companies, companies that control their own product and their product development. It could also be software of course, or more product-defined services you could call it, but pure service and installation of other companies products is not our focus.

And Frigotech being a very small company in the group and also perhaps would have a better future with another owner. We discussed and had a careful consideration about what to do. And together with the management, decided to divest the company. And they are now poor part of the Nordic Climate Group where they have much more in common with our sister companies than what they had with us. So nothing dramatic really. And it's nothing that we do typically because we are a forever owner to our companies, but in this case, we thought it was of value for all parties.

Then looking a little bit more on the distribution of our business in turnover by type of revenue, as mentioned that we focus on product-based business. And as you can see from this chart, we have 60% of sales is product sales and then we have an even split between installation and service and that is then mainly on our own products. We like installation and we like service because that brings added revenues and profit to a hardware offering. So typically our products, you cannot buy from the shelf as just as a piece of hardware, but instead we install it and we service it over the software also attached to that hardware. So we get a long-term relationship with our customers and also then recurring revenues.

Another way to split the sales is through the geography. And here is, you can see that U.K. is our main geography when it comes to where our customers are. So this is really who is receiving our invoices and Sweden is less than 20%. And then we have a split between many countries. So U.K. is of course very important and for us, U.K. has been a very stable economy when it comes to infrastructure operations. And we'll see what the new government in U.K. will do. They are promised to add more funding into infrastructure initiatives. So perhaps we can benefit some from that.

And yet another way to look at our turnover is to split or rather our profit to show the split between our different business units. And this chart is to show that we don't have any company about 10% of our total profit. And as you can see, we have a pretty big number of companies between 4% or 5% and 10% which is a good risk diversification. We believe for some years ago we had a few larger in comparison to others business units, but now as you see, it's a pretty decent and a good split, which means that we're not dependent 1 or 2 business units' performance. So all-in-all a good diversification.

Then looking into our acquisition activities, and as you can see from this chart, we have reduced the activity levels not the least last year because of the increasing interest rates which meant that when calculating how much we are willing to pay for a certain company, we reduced that price which of course meant that the dialogues with sellers take longer. But also that we wanted to bring down the debt leverage a bit, and we think we have done that. We are still on a path of reducing the overall debt level somewhat, and interest rates have stabilized and started to go down a bit as well.

So for this year, we have said that we increased the pace to perhaps 100, 120 or so in acquired profit, which means that we have acquired about half of that through the 2 acquisitions we have made already then in addition to WaterTech, then this quarter we acquired a pretty big JR Industries in Q1. But it means that we should acquire some SEK 40 million, SEK 50 million of round rate profit in the second half, and we have a very -- we have a strong pipeline in order to shield that. So that looks promising.

[Susanna Zethelius, executive]

Yes. So in order to look a bit closer at the financial numbers for the quarter and starting overall for the group. So what we see demand and sales continue in general for our companies and this resulted in a quarterly revenue of around SEK 1.4 billion. And on rolling 12, the revenue is now at SEK 5.3 billion. That was a sales increase in the quarter of 19% of which 9, like Bengt said was organic growth. Also year-to-date we've had 9% organic growth. Then for the margin, we can also see that it continues to be stable. It was 18.7% in the quarter, 18.8% year-to-date and 18.9% rolling 12.

And then moving to adjusted EBITA, we can see that several of our especially larger business units are showing stronger profits than last year. We also have some acquisitions contributing Kemi-tech, JR, WaterTech versus last year. Then we also do have some challenges Bengt mentioned. For example, our elevator unit where we've been working with restructuring efforts and had a negative result in the quarter. I will come to this when we talk about segments. And year-to-date, we had 3% organic growth. In the quarter, it was 1%.

And then if we look a bit more at the segments and start with resource efficiency. So our companies within water and sanitation, power and energy and bioeconomy and waste management. So resource efficiency had a good quarter. See that in some of the larger and also high margin units, we had a strong growth. One example being IDE, our company for temporary electricity solutions that had different projects in this quarter that contributed, and also other companies that we have within power and energy had a good performance in the quarter.

And then the new companies, Kemi-tech and WaterTech are also part of resource efficiency and they performed in line with expectations and contributed. And the overall numbers then for resource efficiency was a sales increase of 15% adjusted EBITA increase of 24% and the margin increased as well to 22%. And then if move to next segment, so special infrastructure solutions where we have our companies within air and climate, safety and security and transport and logistics.

And here we think it's important to mention that special infrastructure solutions had a very strong second quarter last year. Sales then grew by 50% adjusted EBITA grew by 63%. So it's been quite challenging comparables for a number of business units here. And if we look at the challenges here, I mean, that's been one of the challenges and that have resulted in a couple of our business units not being able to show better results than last year basically.

On the negative side here, we've also had the remaining elevator business that we have mentioned a few times here where restructuring efforts are still continuing. We had a negative performance in the quarter of minus 7. Our aim and ambition is to turn that company to profitability towards the end of the year. If we look at the positives instead we have of course, JR Industries that's contributing from acquisitions. And then a couple of our largest business also with high profitability have been going strongly here in special infrastructure solutions. So couple of examples of well-performing companies here is ELM, which is our customized forklift equipment business. GAH, our customized equipment for cooling last mile transportation and also Hilltip, and Hilltip is producing road maintenance equipment and it's based in Finland.

And so a bit pros and cons. And the total result is a sales increase of 21% in the quarter, EBITA increase of 8% and then a margin decreasing slightly to 19%. And cash flow and cash conversion. Now, we are pleased to see this development continue. It's been going on in the right direction for some time. We are still putting in quite a lot of effort in order to work with the companies to keep improving the cash flow and cash conversion. And cash flow amounted in the quarter to SEK 197 million or 83% cash conversion. And this, despite increasing sales the rolling 12 number is 84%. And this is well within our sort of internal aim of being somewhere between 70% and 90%.

If we look at profit after tax and earnings per share, those numbers have been going down compared to same quarter last year, despite an increasing EBITA. And the reason behind this is higher or the higher interest cost and tax. And just as a comparison, if we look at free cash flow per share that trend has been increasing and free cashflow per share is now higher than earnings per share. So it's at 12.12% for LTM, so above the 11.34%.

And finally our debt leverage numbers. They are showing a decreasing trend. We believe this trend is going to continue over time. But it's just good to bear in mind that the timing of acquisitions can of course affect these numbers. So it's going to go a bit up and down, but in the long-term trend, it's going to be downwards.

And with that, I'm leaving back over to Bengt.

[Bengt Lejdstrom, executive]

Thank you, Susanna, and a few words then about looking ahead and yes, we see, and as I mentioned in the beginning, we have selected our industrial segments based on that, that they should be pretty resilient. Of course, it can go up and down quarter-by-quarter. And for example now different seasonalities, the next quarter and this quarter we are already in. Then Q3 has all the vacation period, et cetera.

But all-in-all we have a solid platform and a solid growth underlying our businesses and we believe we have a good diversification then, as I mentioned with all the 40 business units of different sizes, but that no one is really too big. So it's a good split. When it comes to the quarter 3, we could also mention that it's a pretty tough comparison. During that quarter, we had some 20% organic profit growth and sales growth past years. Of course, we'll do our best to meet those numbers, but we'll see.

And also then looking on some of the acquisitions, as I mentioned, we had a strong financial position and we have a very strong pipeline, good pipeline and we control the processes ourselves so we can try to at least then even out when the acquisitions eventually are completed and executed instead of being, since we're doing it ourselves not relying on structured deals and the like. So we are very much in control of the speed of when the timing and when the acquisitions is actually happening. But we're optimistic about that. And we will also then, based on our leverage situation and on the interest rates, we're slowly but steadily had most probably increasing a little bit the speed of the acquisitions going in the next year. But that we will see, of course, but our aim is to acquire and still grow the company from acquisitions and a good solid organic growth.

Yes. So with that said, we open up for questions. Yes, we have already received a few questions on the chat, but perhaps we would let the conference call questions in first.

[Operator]

[Operator Instructions] The next question comes from Max Bacco from SEB.

[Max Bacco, analyst]

A couple of questions from my side. Perhaps starting with, as you mentioned, very tough comps here in Q3 but could you perhaps give us some comments on the seasonality Q3 versus Q2, perhaps both on sales and earnings? I mean, looking historically at your numbers, Q3 normally has a bit lower sales, but quite often the adjusted EBITA is very much on 4 or even slightly higher in Q3 compared to Q2. Is that a fair assessment to do?

[Bengt Lejdstrom, executive]

Well, it's of course when looking at our historical numbers, you always have the acquisitions that are kind of blurring the picture. But of course, Q3 is the weakest quarter in the sense that we have all the vacations going on. So typically we have lower sales and should also have a bit lower profit in Q3 compared to Q2, for example, which is a strong quarter. And we have some seasonality as well when comparing Q3 compared to Q1, for example, as well, since some of our companies are selling products that are aimed at the winter season and like Hilltip, HeatWork some other companies structurally have more sales in the Q4 and Q1 than compared to the summer. But yes, so it's more to see that we had a strong year last year.

[Max Bacco, analyst]

And then perhaps 2 questions relating to the cash flow. I mean, during the last 12 months, you have had a really nice support from changes in net working capital, helping the cash flow which is quite impressive given the high organic sales growth. Do you see any further potential to release more from working capital in the common quarter? Is that work done, would you say?

[Bengt Lejdstrom, executive]

Yes, well, the work is never done more or less as we continue not the least working with inventory management in our companies to try to be as efficient as possible. When it comes to accounts receivable, for example when we sell more, that number increases, but we still try to negotiate and bring down the number of credit pay for the customers. But yes, no, we're not done yet with the activities, so we'll continue that work. So hopefully that will be seen in the numbers as well.

[Max Bacco, analyst]

And then I noticed here in the quarter that looking at the CapEx a bit higher than usual, I guess it was some 4.6% of sales in the quarter. Did you have anything special in the quarter or was it just timing effect or whatever?

[Bengt Lejdstrom, executive]

No, if you look at the first 6 months, I think that number was 3.8%. I think we're very much in line with the amount of depreciation we're doing on the assets. So we are more or less replacing all assets.

[Max Bacco, analyst]

And then perhaps a question to Susanna as the new CFO, let's see if you agree. I mean, you are super clear on your intention to reduce the leverage and I guess also to some extent the absolute interest paying debt. But besides that, do you see any potential to improve the current debt structure and thereby also reduce your interest expenses? I mean, you have pref share and you have your bond that I think trades quite below what you paid in interest on it. So do you see any potential there going ahead?

[Susanna Zethelius, executive]

I would say that we are discussing a bit how we should roll out going forward. I mean, there's always potential for improvement, I think. But I wouldn't go into any details about plans. Bengt, what would you say ?

[Bengt Lejdstrom, executive]

No, but as Max is saying here that our bond is trading at a much lower rate than what we pay I think it's below 300 basis points now. But that's of course good because if we still have some SEK 400 million to tap on that issue. So if we would need, but we don't currently because we have good financial funding from our banks but if we would need, we could always get some more funding to a lower rates today than we did almost a year ago. So let's see how this works out. But hopefully all-in-all, all the interest rates will go down a bit our reference rates. So that's the biggest part of our rates is the reference rates.

[Max Bacco, analyst]

And one final very brief question the elevator business where the restructuring is perhaps taking a bit longer than initially expected, and you commented in the report that you or at least aims to show black numbers in the end of the year. Should we expect a gradual improvement in that during the second half year with a bit less negative impact in Q3 already, perhaps compared to Q2?

[Bengt Lejdstrom, executive]

Yes, perhaps. So obviously it's difficult now, but as I said, it's taking longer. We have been forced to lay off more staff, actually more than 20% of staff, and this is a big company with 300 employees, so it's a lot of people that have been forced to leave and that takes time and it costs money. And we've also done other restructurings of the business and moved production and such things, and it costs money in the beginning, but pays off in the long run. But that's still as well said, it's our clear ambition to be on the right side before year end.

[Operator]

The next question comes from Karl Bokvist from ABG Sundal Collier.

[Karl Bokvist, analyst]

My first question is on the order situation. I believe a quarter ago, you talked about the favorable environment, was just curious to hear if you could provide any comments on the backlog or order situation now?

[Bengt Lejdstrom, executive]

No. It's the same. I mean, we have our transparency differs from business units to business units. Some of them have pretty short order stock going forward, and some others are very long. All-in-all, it's the same situation as previous quarter.

[Karl Bokvist, analyst]

And then just a bit clarification, I understand the Q3 '23 figure, then you had good profit and sales growth excluding Rolec, but I would assume that the comparable comment that you make, that shouldn't be as much of a headwind in Q4, considering that it's easier if you exclude Rolec and the Rolec was the recovery year last year.

[Bengt Lejdstrom, executive]

Through Rolec, it was recovery, but also excluding them we had some, was it 17%, 18% or so? I don’t know exact numbers, but some around that. We look at the total and it is just yes, we just see that we have strong comparisons in in the next quarter. And as mentioned the previous speaker here that the seasonality, et cetera, is that the Q3 is typically a bit softer quarter than Q2.

[Karl Bokvist, analyst]

Then on the on the elevator side of the business, you highlighted that it's at least one of the 2 had a negative, had a loss in Q1. And this quarter you specify a number. So I was just curious, how this SEK 7 million compared to the Q1 performance?

[Bengt Lejdstrom, executive]

We mentioned it because it was more substantial in this quarter, so explains more of the difference. So if you can count in many different ways, but if that company had made a 0 result, a profit margin of 0.5% higher, for example, but it was just to give some flavor to the magnitude. And yes, as mentioned also just previously here, that we're aiming at having this in black numbers before year end.

[Karl Bokvist, analyst]

And just one more sticking on that subject. The kind of, let's call it overall business performance compared to the actual restructuring cost that you took. Is the change year-over-year mainly attributable to this upfront cost that you take or took?

[Bengt Lejdstrom, executive]

Yes, but it also that it takes some time to get these different measurements to pay off. So it's not only to cost cutting, it could also be to invest to be in a better position and take some cost for example, to move things. And then it takes some time before that's then giving contribution. So it's a mix of both.

[Karl Bokvist, analyst]

My final one is then on pricing strategy. Especially a couple of years ago, you did highlighted the inherent ability to raise prices, but that it could take a bit of time sometimes to contracts and so on. I was just curious about this current environment. Do you still feel that your units are racing prices or is it more about maintaining prices and that customers are in other areas perhaps pushing back a bit?

[Bengt Lejdstrom, executive]

I haven't, I think experienced the pushing back demand from customers really. And I think we even commented on the business areas resource efficiency in the report also that we have price adjustments to increase prices. So now as I said, we have a strong position, but it's lagging, but nowadays we don't have that strong inflation. So we have caught up since some time. So I think we have a good pricing position all-in-all. So yes, that's a long answer to your short question, but yes, we increase prices still .

[Operator]

The next question comes from Niklas Savas from Redeye.

[Niklas Sävås, analyst]

I want to focus a bit on the U.K. today. I mean, you mentioned that the newly elected government has I mean are offensive on like infrastructure build out and so on. And I just wanted to hear if you have any examples of how you think that could benefit a few of your business units in the country?

[Bengt Lejdstrom, executive]

Well, we haven't seen that in detail yet, but I know that the new government is more positive to the electrification of U.K. when it comes to, for example, than charging infrastructure and so, but I mean, it's too early to see what that will actually be in real politics apart from promises in the election process. But at least everything else equal it should be positive for us that they are putting more money into infrastructure development.

[Niklas Sävås, analyst]

Another question is with regards to acquisitions I mean, you have been a bit yes, put the brakes on that a bit but now I mean the depth level looks more solid and I continue to see, I mean, strong cash generation ahead. So at the same time you have been more, I mean, the prices you have paid for the recent acquisitions has been lower than before, and you mentioned that the processes takes a bit longer due to that you're a bit more strict on what you pay. Is that a risk that you, I mean, think about for the longer term when you're going to scale up M&A again that, I mean, do you think you would be able to do that with the prices that you're willing to pay now?

[Bengt Lejdstrom, executive]

Yes. I think we are more now on equal terms with sellers. So currently, it's not a difference compared to 2 or 3 years ago, even though the level has been reduced some 0.5x or 1x. So no, we don't see that as an obstacle going forward.

[Niklas Sävås, analyst]

And is there any follow up on that? Is it seems like a few of your competitors or peers in the Nordics are also ramping up their acquisition activities in the U.K. and even though you have your own sourcing and do more yourselves than others, maybe relying more on brokers, I mean, do you, do you still think that the competition is not an issue and do you foresee that to continue in the long-term as well?

[Bengt Lejdstrom, executive]

Yes, I mean, U.K. is a very big economy and it's a lot of companies and we have actually, we don't run into each other in the different situations if it's not the structured process where the sellers actually inviting others as well, but now we don't see that as a problem. There are opportunities for all but also we are having other geographies and if we feel that we get better deals within our scope in other geographies, we concentrate more on those. So for example, in Italy, even though we haven't done any acquisition there since some time ago, but it's still a very active M&A geography for us where we have a number of companies in the pipeline. So if we would feel that now competition is like we have seen in Sweden, for example, for many years, it's a bit too tough. We have other geographies to focus on.

[Operator]

The next question comes from Karl Oskar from Berenberg.

[Karl Vikstrom, analyst]

Just really one question my side here. Thinking about this divestment, Frigotech also thinking about the elevator business, could you walk us through if there are any other, out of your 40 companies now that you're kind of thinking of reconsidering, let's say or is this work that you do on an ongoing basis follow up? Is this part of our strategy still? I'm just trying to think about if the future we should expect more of these type of divestments and presumably maybe for this elevator businesses? Also clearly, does it may be fit in as well as some of the other names, your thoughts on that would be helpful?

[Bengt Lejdstrom, executive]

Yes, well, first of all, as I said, we focus on the type of companies we focus on, but we also have the companies we have and we take care of them. And we have a number of companies that was acquired before we set the strategy that we have today. We have had the strategy for about 5 years, but we have companies that are older than that in the group, and they're performing well and bringing good cash flow into to the group. So even if they wouldn't be a 100% according to our current focus, there are still good companies and we will continue to own them.

Then we have some companies like Frigotech and the former elevator businesses that we divested some 3 years ago that are a little bit further out of scope and where we believe strongly that these companies will have a better future in another constellation. And that's why we took the careful decision to divest Frigotech. That could be still one or 2 more companies perhaps in that. But when it comes to the elevator business that we've been talking about, our main focus now is to get that company in shape and in good numbers and so we don't have any other plans than that for that company. So no, it'll not be something that we do every year, but it may happen.

I think we are then switching to our questions from the chat. So I don't think we have any more questions in the conference call. And I've received a few. First question was what is your largest subsidiary at the moment since we showed the split between different units? And the biggest one having some 9.5%, I think, of the group EBITA, and then we have some others. But this may change from one quarter to the other, and that's the whole idea why showing this, that it's not really important, which one is which. We have a good diversification of the biggest. So we don't actually disclose that who's the biggest from one quarter to the other.

But of course, we can mention that previously, Rolec was our biggest one. I think it was 15% or even bigger when we acquired that company. And of course, that one has reduced in relative terms compared to the whole group since we have more or less doubled the group EBIT since then. The Rolec performs well, and they have an impressive EBIT margin for being a company focusing on charging business. They are above 20% EBIT margin, which is, I think, good in comparison to many other companies. And right now, they see a good demand coming in from different fleets and so in the U.K., which are investing in electrical vehicles. So they are a healthy company. And if you want to read a bit more about our biggest companies, you can look at the year-end report where we described the 5 biggest companies at that time. Another question was around the 2 construction units we mentioned in Q1 was that the elevator company we're talking about now, yes, that was one of them. And the other one was a Swedish company dealing in construction business.

And since the Swedish company, we have restructured and refocused a bit on their business. We think they are running in a better way now. But yes, as we have discussed a few times, we're taking measures still in the elevator business. And then yes, it was also a third question regarding the comparisons with last year and the year before. But as I mentioned, it was more a fact that the Q3 is all-in-all, from seasonality and from vacation times, et cetera, typically a bit softer quarter than Q2. And that we have a very good performance in a number of units last year, and we will try, of course, to meet that also this, but let's see how that will end up. So I think that was the -- yes, that was the question coming in from the chat.

So with no further questions, I'd like to hand over back to our hosts.

[Operator]

Thank you. There are no more questions from the telephone conference either. So I hand over to your speakers for any closing comments.

[Bengt Lejdstrom, executive]

Yes. And that I guess the only comment there is that we would like to wish you a very nice summer. And whenever you get the opportunity to take some time off a good well-deserved vacation. So thank you, and goodbye all. Thank you.