Instalco AB (publ) (INSTAL) Earnings Call Transcript & Summary

Welcome to the Instalco Q4 Presentation 2024 [Operator Instructions]. Now I will hand the conference over to CEO, Robin Boheman. Please go ahead.

[Audio Gap] Net Sales of SEK 13.7 billion, and we ended the year with an order backlog of SEK 9 million, which represent a book-to-bill of 66%. When adjusting for one-off costs taken in Q4, our EBITDA amounted to SEK 944 million, corresponding to a margin of 6.9% compared to the 7.6% in '23. This is a bit lower, but it also shows our strength and resilience in a very challenging market over the last year. Part of that resilience can be explained by a quick adoption by our subsidiaries to service, which has covered some of the shortfalls on the project side. So for the full year, service represents 35% of our revenue compared to 30% in recent years. And I'm also pleased to see that our cash flow from operations has held up and is down by less than our earnings, showcasing the strong focus on improving working capital. Let's go in and move into a few of the highlights from the quarter. We've been facing, as I said before, a very challenging market all through '24. We have, during the year, taken measures in various subsidiaries and adapting operations with efficiency improvements and cost savings. We intensified those efforts in Q4 to strengthen our long-term competitiveness. This includes both further layoffs as well as starting to merge and closing down 8 loss-making subsidiaries. This initiative will gradually take effect during the coming year and result in a one-off cost in the fourth quarter. In parallel with this work, we have also taken several major offensive steps in Instalco's development during the year. And I must say the most significant one came in November in '24, when we took the first step into Germany by signing an agreement for a minority investment in Fabri Gruppe. Fabri is a decentralized acquisition-driven installation group, and we have a long-term plan of achieving majority ownership. Further, our technical consultants at Intec continue to deliver margins above the group. And last year, we also added automation and taking important steps there as well. We recently announced that Inmatiq, which is our automation business, is the first in Sweden to enter into the highest level of partnership with Siemens Smart Infrastructure business area at the national level. This is a strategic step for us as well as confirming that our buildup of Inmatiq is showcasing a good, strong long-term work. Energy efficiency and lower consumption of resources provided the foundation of our services that Instalco offers today. We have also noticed a growing interest from our investors, but also from customers regarding measurement and reporting of greenhouse gas emissions. This has been a priority during the year, and we were also now prepared for the CSRD reporting. We announced our climate targets in December, which Christina will go through in more detail shortly. So it sums up and will make our customer offer even more attractive, I would say. But now I would like to hand over to you, Christina, to take us through the financials development in more detail.

Thank you, Robin. Let's start off with looking at how our net sales and order backlog has developed during Q4. Net sales was down by 6.8% to SEK 3.6 billion with an organic development of minus 7.4%. The organic growth was down in both segments, but more in Sweden. For the group, this is a reflection of our prudent order taking over the last year given the price situation in the market. Our order backlog, however, grew by 6.7% in the quarter, all organically. The improvement is driven by segment Sweden, while rest of Nordics was down somewhat. We have maintained our cautious approach to order taking, prioritizing the right projects at the right price for the right customers. There are more projects available in the market, which may be an indication that the market is showing signs of turning. But the importance to be prudent on calculations remains. Our subsidiaries have continued to impress when it comes to shifting staff to service when there is not enough attractive project business to go for. And service remains an important stabilizing factor. For the full year, the service business grew over 10% in absolute numbers. In the quarter, service made up at record high 41% of sales. And as Robin mentioned earlier, it grew from 30% to 35% of sales for the full year 2024. Then on to looking at our earnings, EBITA in both millions and margin. To meet the challenges posed by the market, we have taken action continuously throughout the year. Our efforts were intensified in December when we announced an action program, including further layoffs, some project write-downs and initiation of mergers and closure of 8 loss-making subsidiaries. This resulted in one-off costs of SEK 65 million, which were charged to EBITA in the fourth quarter. EBIT was also affected by additional one-off costs, impairment of goodwill and other intangible assets of SEK 29 million due to closure of subsidiaries. So total one-offs impacting EBIT was SEK 94 million. The fourth quarter tends to be seasonally strong in the installation business. In the quarter, the EBITA margin amounted to 5.4% compared to 8% last year. The lower margins is a result of one-off costs and the current market situation. Adjusted for the one-off costs, the EBITA margin amounted to 7.2%. This is a step-up from Q3. The adjusted numbers this quarter represent a 0.8 percentage point margin drop year-over-year compared to a 1.4 percentage point margin drop in Q3. To break it down into more detail, over to a slide that summarizes segment Sweden in Q4. Overall, net sales were down to SEK 2.5 billion, while organic growth was down by 9%. The one-off costs relating to Sweden amounted to SEK 54 million. Adjusting for this, the EBITA margin amounted to 7.7% compared to 9.1% last year. Without adjustments, the margin came in at 5.5%. For the full year, Intec Technical Consultants was the only business area that reported a stronger margin. The development in other business area in Sweden varied quite a bit between regions. The order backlog grew organically by almost 10% to roughly SEK 7 billion. We have noticed the market is starting to move a bit. There are more projects to calculate on. Even so, we are still following our current strategy of choosing the right customer and the right assignment at the right price. We have not dropped that principle. And now for a summary of the Rest of Nordics segment. Overall, net sales were down to SEK 1.15 billion, while organic growth was down by 3%, in line with the year-over-year decline we saw in Q3. Acquisitions contributed with a growth of around 1%. The one-off costs relating to Rest of Nordics amounted to SEK 11 million. Adjusting for this, the EBITDA margin amounted to 6.0% compared to 5.3% last year. Without adjustments, the margin came in at 5%. Both Norway and Finland improved the full year margins compared to 2023. The order backlog decreased organically by 1.6% to SEK 2.18 billion. And here, we see the backlog growing for Finland, while Norway decreased slightly. Then on to the cash generation in the quarter. In Q4, cash flow from operations amounted to SEK 471 million, an increase compared to last year despite the lower earnings. The positive development is mainly due to improved working capital related to accounts receivables. Adjustments for noncash items was notably higher due to the depreciation and amortization, including parts of the one-off costs. This affected earnings but does not impact the cash flow. Cash flow from investment activities is mainly impacted by normal CapEx investments. No acquisitions have been finalized in the quarter as the minority investment in Fabri is yet to close and the majority of the purchase price will be paid in newly issued Instalco shares. The cash flow from the period looks low due to larger repayment of debt. The operational performance it is reassuring to see that despite the challenging market, we are reporting stable cash conversion at 89%. Finally, we'll look at our performance during the full year 2024 in relation to our financial targets. For those of you who have listened in on all calls during the year, you are familiar with the challenging installation market that has signified 2024. We have intentionally been very selective when taking on projects to protect our margins as much as possible, and we have remained cautious on acquisitions. This has led to an organic development of net sales of minus 6.5% for the full year, which is below the 10% target, the target which is set over a business cycle. So looking over the past 5 years, we report a compounded annual growth rate of close to 14%. Our adjusted EBITDA margin came in at 6.9%. We are not satisfied, and we have increased our mitigation efforts in Q4, as previously touched upon. The measures will gradually take effect during the coming year. Cash conversion remained stable at 89% due to the high focus on working capital. At year-end, our leverage came in somewhat above our target at 2.7x EBITDA. This is primarily attributable to the decrease in earnings. And as this is a year-end report, the Board proposes a dividend of SEK 0.68, maintaining the level of last year. This is above the 30% policy due to the strong cash flow and forward-looking optimism. Finally, we have a target on this new target on this Slide, in December, we announced our climate target, which we will follow up on annually. Long term, our goal is net zero in the entire value chain by 2045. And in the medium term, our goal is to decrease the emission intensity of greenhouse gas emissions in Scope 1 and Scope 2 by 50% by 2030, with 2020 as the base year for comparison. We will publish more information of this and our progress, of course, in the annual report for 2024. So by that, over to you, Robin.

Thank you very much, Christina. Going into the project highlight of the quarter. This one from Finland. Two Instalco subsidiaries, Kuopion LVI-Talo and Twinpukti were contracted on a joint assignment for installation at a major grocery store project in Kuopio, a city situated South Central in Finland. The project involves 2 companies. It's a new construction of approximately 12,000 square meters, and that is part of the end customer's expansion to open several new stores in rapid growth areas. Instalco subsidiaries have been contracted for the heating and plumbing, ventilation and sprinkler installations with the project value of approximately EUR 4 million. In 2024, we have spent a lot of time on preparing for what I call the next big step for Instalco. So this quarter's theme is a no-brainer. Given that we have explained and expanded outside of our 3 markets and gone into a new country, this is obviously the theme for the quarter. I will keep this deep dive relatively short as there is a full telco available on our website from the announcement in November 13, but I will comment and cover some small updates. First of all, Fabri is a fast-growing group founded in 2020 with a presence in several locations in the fragmented German market. The company is acquisition-driven with a decentralized model and has subsidiaries with specialist experience in areas such as electrical, heating and plumbing, ventilation and related disciplines. Germany is one of Europe's largest installation market with a size of around 5x the Nordic market where we are present at the moment. We have long said that we believe in the decentralized Instalco model and that it can work outside of the Nordics, and we think that remains true. We found out very early on in our research about Germany and the German market that it's important to local connections. So the key has been actually to find the right local partner and entrepreneur. With Fabri, I'm happy to say that we have done so. Short around deal structure. Deal structure is set in 4 stages. The first step includes a capital increase, whereby Instalco gets a minority stake of 24%. Due to administration time line and some German bureaucracy, it has not yet been finalized, but we expect to close during Q1 this year. Step 2 will be acquiring a further 27% of the shares in Fabri, which will result in a majority shareholder of Fabri, and we will also include Fabri in Instalco consolidated financial statements. Based on the current estimates that we have, this is expected to occur no earlier than the first quarter in '26 and no later in the, latest, so say, in the second quarter of '27. The fourth and final step during the period is an option, and it is running through 2030 to 2033. And this is also the first time that management can sell their shares, which means that they have remained, so to say, a very loyal investor for over 10 years in Fabri. This step-by-step approach ensures a successful establishment in Germany, where Instalco partners up with the founder and entrepreneurs to share the upside, but also the risk. Fabri is based in Nuremberg. I showed this slide in November, showcasing that the group employed 400 people and 12 subsidiaries across Germany with an annual turnover of approximately SEK 70 million. And as I said before, Fabri is a fast-growing and acquisition-driven. Since November, they have added 2 more companies to the group, which now consists of 14 subsidiaries, 500 people and SEK 80 million in turnover. And as I've said before, in November, Fabri is a natural fit for us and our strategic vision. We operate on the same model to acquire and strengthen best-in-class installation companies. The company's culture is very similar. I'd even say that they are modeled on the Instalco way, and we see great opportunities for collaboration. We can provide the best practice and knowledge based and knowledge sharing from our 10-year history of M&A strategy and business development within the installation industry. Through Fabri, we get a unique opportunity and a platform to continue the expansion and growth in Germany. With local knowledge of the market, it is a value creating expansion with great risk minimization. Finally, I'd like to return to Q4 and also take the opportunity to go through some key takeaways from the quarter, but also the full year. To sum up, we are now closing the books on what was a very challenging year. Price pressure, weak demand due to high interest rates and macro factors, delayed project starts in large projects, customer bankruptcies and reduced change orders are a few of the obstacles we have met along the way. I'm proud of the quick adaptation of subsidiaries shown by the growth of the service business, both as share of net sales, but also in absolute numbers. Our decentralized model has been key in this as well as the implementation and increased mitigation efforts that were taken during the year, but also increased in Q4. And the measures will gradually take effect during 2025. We now see that more projects are available in the market, as Christina said, also showcasing by our growing order backlog, which may be an indicator that the market is slowly showing some signs of turning. But it's important to state that we are still selective on taking projects. And you need to remember that the installation business is late cyclical. But I now say that we are cautiously optimistic for a better future. And we are also positioned to capture the profitable growth when the market improves. We have invested in our offers, both on the technical consultancy side that are reporting very strong numbers. Our automation business is showing proof of concept and our investment into Fabri ensures further M&A runway for at least 10 years to come. Also, our climate targets, they are part of our work and our more sustainable offer and will be another tool to strengthen the relationship with our customers. On the social side, our staff remains our most important asset. And during the quarter, we conducted an annual employee survey, and I'm very happy to say that the report, we also improved our employee Net Promoter Score to 31 from last year of already a very strong 30. This is quite a bit higher than the rest of the industry and that we're active in. So we're very proud of that. To round off, I would also like to take the opportunity to thank customers and shareholders for their trust and most importantly, our employees for their efforts and engagement during the year. And with that, I would like to thank you for joining this call, and I now open up for your questions.

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

It's Carl here from Nordea. A couple of questions. So firstly, just to clarify on the write-downs in the quarter. You took Serneke right, but not Northvolt. And is it possible to quantify the latter on the Swedish margin in the quarter? So let's start there.

Sorry, there was a break -- there was a bit of a hack in the -- could you please repeat the question, Carl?

Yes, Sure. So looking at the write-downs you're talking a little bit about in the quarter here, just to clarify it, you did not take Northvolt, but you took the Serneke bankruptcy right as a write-down. And also, what was the magnitude of the latter? And as of now, do you think that you'll take Northvolt in Q1 instead?

Okay. So first of all, to clarify, the SEK 65 million that we showcased in the report and that we also announced in December, that is due to closing down of these 8 subsidiaries. When it comes to Serneke the local companies have taken the reserves that they need and so to say, write-downs or what you want to call it or reserves within the local subsidiary. So that's already sort of included in the numbers we report. We don't see any further risks of, so to say, need for write-downs when it comes to Serneke. So that is, so to say, it's not adjusted for Serneke. These numbers are included Serneke. Was that all of your question, sorry?

I was a little bit about Northvolt as well.

So Northvolt is not taken. Norvolt is still under Chapter 11. And so we still have the risk of Northvolt. We still have a dialogue with them. Our goal is obviously to get the SEK 60 million back. So we don't have a plan to write that down as of yet. But there is still a risk in those. I think.

And looking at the percentage of completion in the quarter in relation to LTM sales, it came down 10 basis points, which is good to see. But still, it looks a little bit elevated considering that you've done write-downs in the quarter. So is Northvolt one factor behind the -- still a little bit elevated POC levels? Or are you comfortable with this level entering H1? Or should we expect a continued slight stream of minor project write-downs here to adjust to the current market situation? Or how should we look at the PC here?

Our goal is always we go through the POC monthly. So local subsidiaries are bound to go through the POC monthly and have to take up so to say, a risk scenario on their accounting and also on their projects and evaluate on a monthly basis of what they think the end is going to look like. So I don't see any other risk than, so to say, the normal risk with running projects that is always there when you're in the construction market and installation market. So I don't know if you have any comments, Christina, but we don't see any bigger risk than normal, so to say, when it comes to the POC.

Yes, I agree on that, absolutely.

And looking at installation sales in the quarter, if I look at it, it contracted by 17% year-over-year. I know it's not your strategy to take on lower-margin projects in order to keep key employees, but falling 17%, of course, compensated by services, but it's an acceleration versus 7% in Q3. So do you need to take more actions you think entering H1 to reflect the current installation demand? Or do you think that you could reallocate key employees to sort of endure lower utilization? And also on that note, could you also just remind us a little bit if you saw any impact from the cost savings you announced during Q4 already in Q4, and also what portion that will be materialized in Q1?

Okay. If we start with the sort of say, demand going forward and key employee question. We constantly, so to say, look over the staff in our local subsidiaries. We have a close relationship with our local subsidiaries. And on a local level, we will always evaluate, so to say, the step going forward. Obviously, as I said before, staff is our key resource. We want to be very cautious on staff. Just 3 years ago, there was a shortage of staff. That was the biggest question in the installation market. Now the table has turned. But we still think that we will get back to, sort of say, the same level as maybe 3 years ago when there was a shortage. So you need to take this decision on a local level to be able to protect your sort of say, key employees in the local subsidiaries. And that's a constant evaluation that we do with our subsidiaries. We'll have some subsidiaries growing. We will have some subsidiaries that will have to take additional measures also in 2025. It's hard to say on an overall level how this will look since business is local. If I get correct, the second part of the question was around our cost savings that was announced in December. So basically, we closed down or merged 8 of our subsidiaries, loss-making subsidiaries. So the effect will be gradually during the year. So let's say, if you are a loss-making company of, let's say, for example, SEK 6 million means that you basically lose SEK 500,000 every month. So it will be gradually affected during the year. The last company that we will be able, so to say, to merge will be all the way back in November, and that has to do with that ending of projects. So a few has already occurred. A few we will have to sort of say, live with all the way up until November, but we will gradually close that down, but we also have to finalize the projects that we have agreed upon with our end customer. I think it's also important to do it the right way.

And the final one, if I may, is on the cash flows. Quite nice to see them come through. I mean, considering the circumstances. Q1 and Q2 is typically less good, while organic EBITDA is seemingly organically contracting. How do you look at the deleveraging or leveraging profile during '25?

I think that, like you said, Q1 and Q2 are -- especially Q1 is typically not our strong quarter when it comes to cash flow. And Q2, the same since we have the dividend. We have some earn-out payments due to that some subsidiaries or sellers, so to say, in that sense, have an earnout that reflects the full year of '24. And those will be paid out roughly in the end Q1, beginning Q2, most likely. We also have the possibility to buy some of our minorities back typically in Q2. So cash flow-wise, in that sense, when it comes to leverage, I don't think you should expect us to delever much in Q1 or Q2. I think we'll stay at roughly the same level.

The next question comes from Marcus Develius from DNB.

If we could go to South Sweden, it's been a very tough and challenging market there. Both you described it as very tough and Bravida is the same. Can you maybe talk about what improvements we need to see there? What is happening? How do you improve your business there? If we start with that question.

I think South of Sweden is a bit, so to say, in a perfect storm, so to say. In the last couple of years, there have been a lot of new companies coming into the South of Sweden, what I like to call new kids on the block. And there is also no real big projects in the south of Sweden as we've seen in previous years. So there is overcapacity basically in South of Sweden. So what needs to happen is either there needs to come a lot of projects in the South of Sweden or so to say, the supply needs to go down. And we're seeing that us and some of our competitors are lowering the, so to say, supply of installers in South of Sweden. So that is what I think needs to happen.

And then we spoke about the free cash flow. If you go to the working capital profile, we saw some working capital release in the quarter. Is this something we should expect going forward? Can you maybe talk about your net working capital profile going forward in the coming year?

Yes. We have started a program to reduce working capital. We have a tendency of being very good when it comes to invoicing at the end of the year. It is a bit of an industry standard. But we tried to mitigate this and get that into the full year as well and constantly be as good as we are in Q4. That's the plan. Whether we manage it, we'll see in '25, but we are launching an initiative for our subsidiaries to focus more on working capital. So we hope that we will have some good effects during the years to come.

The next question comes from Johan Lönnqvist Sundén from Carnegie.

A few here. If we start on the kind of order backlog, and you've been clear throughout the presentation that you stick to your strategy to be careful not locking in projects at too low price points. But it's possible to give a little bit more color on kind of pricing in the order backlog, and margin levels that should be expected to be realized during, say, coming 9 months versus what the previous 9 months?

Like I've said many times before, it's very hard to comment on the profitability of an order backlog because my knowledge of the industry and from the last 10 years, what I've seen is that it's more important on how you perform at the construction site compared to what you've calculated on. So I think it's a bit too early to comment on when you take projects, whether how they're going to finalize. That's why we're cautious on revealing, so to say, the percentage of the order backlog's profitability. But we see no tendency of that we have lowered prices in that sense. The reason for the increase in order backlog, I would say as Christina mentioned earlier in the call, there are some more discussions with customers. There are some more possibilities. These are mainly small projects. We see a tendency in the market that the real largest projects are not there in the same sense. But our key focus has always been on midsized projects. So that suits us very well.

Very clear. Then back to the kind of write-down situation. And you made a little bit of a cleanup here in Q4. No indication that when you go through the books that new projects appears. Do you think you have your kind of arms around the situation as of now?

Yes. Like I mentioned before, we go through the and also the POC. So percentage of completion on our ongoing projects on a monthly basis. There's always some risks, but there is also some upsides. So there's always a discussion every month in this. Like I said, in Q3, what we are seeing is that compared to maybe 2, 3 years ago, there are not as much change orders in projects as before. So that can explain some of the lower margin for the whole industry at the moment. However, like I said, we go through this on a monthly basis. There's always a risk when running projects. However, there's also upside when you run projects.

But you feel at least happy with you being final with the kind of review of all the kind of subsidiaries that you have worked with throughout the year.

Yes, we have done...

No subsidiaries left that you...

We have 160 subsidiaries. I'm not going to say and guarantee that we have 6,000 projects in our order backlog. To guarantee that there is no risk in those 6,000, it's impossible. However, we did a good walk-through of our subsidiaries. We looked at 8 of our loss-making subsidiaries, decided to close them down. And during that process, we found SEK 65 million in costs related due to this closed down, also our project write-downs of those SEK 65 million. So we did a good analysis back in Q4. But like I said, running 6,000 projects, it's hard to guarantee that there are no more risks in those. But we did a good analysis back in beginning of Q4.

Yes. Completely understand. And then on the kind of restructuring initiatives that you announced, is it possible to give some color on how that has been received within the organization? You have a kind of legacy of working with a lot of these of responsibility and now you're coming in from the headquarter and point your figures towards a couple of companies and a few are closed down. How has the organization reacted on that?

We have a very mature organization, I would say. And I would say it's it maybe sounds harsh, but we have received positive reactions from the subsidiaries. We have even received that this is what's called mature leadership. And the theme has been go great during the year, our improvement programs. And we have a trial with these subsidiaries. So I think the remaining subsidiaries that are so to say, not affected out of these 8, they have been quite positive in a sense that they have seen the work we have put in to help these subsidiaries. But unfortunately, 8 of these subsidiaries, we were not able to help and not able to get back to where, so to say, our threshold is. And yes, how to say, after a while and after you've done all the work you can, you also somehow have to say enough is enough. And I think that, that's been a positive reaction in the group.

Perfect. Just a final question from my side, and it's on the building automation, the technical consultancy businesses that you built up. Just ballpark guidance of how many FTEs you are in the 2 segments and what kind of margin levels you're running at currently? I guess the Building Automation business still is diluting margins and maybe the technicals are boosting margins on a group level.

Yes. So I would say roughly, we are around 450 FTEs in the technical consultancy side. And I would add around 60 to 70, maybe 70 now on the automation business. Like you said, automation business is in a start-up phase where we are, so to say, incurring some costs due to not being fully utilized on staff, whereas on the technical consultancy side, as Christina mentioned, they have improved. That's the business area that has improved the most during 2024, and they are on group level or even above actually in '24. So very happy with that, so to say, closing the books for '24. This really showcase that our start-up business works. And as I've said many times before, the technical consultants will prove that it's a very good investment. And now we will also show that the automation business will have the same journey. Might not be as many FTEs, but it will also be a profitable company in the years to come.

And the recruitment plans in the automation business still to ramp that up? Or are you more focusing on getting that up to breakeven or group?

Yes, the automation quarter. We have handpicked these 70 FTEs, and we'll continue to handpick good employees in the coming quarters and years to come. However, the business is somewhat smaller than the technical consultancy business. So you cannot expect to say, as quick a ramp-up as you saw in the technical consultancy business. However, we're still looking for good employees. And if good employees come our way, we will absolutely try to recruit them as well.

And no guidance on profitability levels ahead on the building operations side?

No, not yet.

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

It was actually a follow-up to Johan's question here on Intec where you mentioned the margin improvement year-over-year. And did I interpret it correctly that for the full year of '24, we could also draw the assumption that Insta-EL's profitability was above Sweden?

That's correct, yes.

Okay. All right. I just have a question here on the rest of Nordics. I mean, even when we take into account the cost that you took this particular quarter, we still have a positive margin trend. You said many times that it's not like the market has magically improved, but how much more can you do internally before the market needs to take over, so to say?

How do you say, a few basis points are to be earned internally still? I mean we closed down some subsidiaries that were loss-making in the rest of Nordics out of these 8, 2 were in the rest of Nordics. So there are still so to say, actions that can be taken. We still have companies that are not at what we are in the Instalco course sufficient levels. So there are still improvements to be done locally. Of course, it would be a bit helpful if we could get a somewhat better market, obviously, but there are still improvements that could be made both in Sweden and in the rest of the Nordics.

Understood. We talked a little bit about seasonality and you talked about gearing. But in terms of working capital release, we tend to at least historically see another positive release in Q1. I was just curious to see if that was taken into consideration during the seasonality comments. My line was a bit poor.

I think that regarding the seasonality, it is somewhat harder to see the same effect. I must be honest and say that we have maybe not done the same analysis fully as you have done. However, when it comes to working capital is that in Q4, we're able to invoice quite sufficient, so to say, somewhat more invoicing, most likely that will turn in hopefully and most likely will turn into cash in Q1. So I think that is maybe what we can comment on. I don't know if you have anything else, Christina, to add.

I can maybe add that in Q4, of course, in the seasonality, a lot of the projects end and become summer up and then you can send your final invoice, and that gives a very positive effect in Q4 and will come into cash in Q1. And then on the other side, Q1 is when you should start up again with the projects and you have some vacation effect. So we have seasonality, as you understand and as Robin already has mentioned. But of course, it's also hard work working with the working cap, all the activities around, and being tough in a tough market.

The next question comes from Karl Norén from CB.

Just one question from my side on the restructuring cost here. I'm just wondering how much approximately is related to, let's say, project write-downs and how much is pure, let's say, restructuring cost or one-off so to say.

We haven't actually disclosed the exact split. So it's a combination here of some write-downs like we mentioned earlier in the call that we've gone through the projects for both, obviously, those 8 subsidiaries that are closing down, where we also see that we have had to take some write-downs on their existing order backlog. That has also to do with how, how say, if you announce a close down of a company, you can imagine the efficiency in that company might not go up, so to say. So that's also cautious where we say that we've taken down that order book for those 8 subsidiaries. Like I said' on these 8 subsidiaries try to continue and sort of say, finalize the work that we have in the order backlog for those 8. That's why one of the subsidiaries, as I mentioned earlier, will not be closed until somewhere maybe November this year. So it's a combination. It's hard to give an exact number or anything. It's a combination of cost that occurs and some write-downs in the 8 and also in some of the other subsidiaries where we have gone through, like I said, monthly on the POC accounting and in the order backlog as well.

Okay. Understood. And the less efficiency that you mentioned maybe in some of these companies, what happens naturally when you announce the wind-down of the business, I guess, do you think that will impact the coming quarters? Or do you think that most of that was?

That's into write-downs here in Q4. That's taken into account.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Okay. Since there were no written questions coming in this quarter, I would once again like to thank everyone for listening in, and thanks for the questions. And like I said before, we closed the book on a somewhat tougher year, but we are somewhat more optimistic going into the future and we'll continue the hard work in our subsidiaries to get back to where Instalco belongs. So thank you, everyone, for listening in, and I wish you a great day. Bye-bye.