Instalco: Instalco : Annual and Sustainability Report 2024

Annual and Sustainability Report 2024 Full power installations from a powerful team Introduction A decade with Instalco Instalco Annual and Sustainability Report 2024 2 2014 Instalco started its operations in 2014 by acquiring five different installation companies, all of which had extensive experience in the industry and good profitability. 2016 Instalco established itself as a Nordic installation group after acquiring its first companies in Norway and Finland. 2018 The largest assignment in Instalco's ten-year history has been for NCC and region Sörmland when three hospitals in Sörmland needed to be renovated and expanded, and about 15 Instalco companies helped with the electrical and plumbing installations. 2020 The beginning of the business area Technical Consulting through the new Intec subsidiary. Instalco's founder, Per Sjöstrand, left his role as CEO to become Chairman. Robin Boheman becomes the new CEO. 2022 The Technical Consulting company Intec established itself in Norway, and the first acquisition of a scaffolding company within the business area Industry was made. 2024 Increased diversification in automation. Instalco also signed an agreement for a strategic minority acquisition of Fabri AG which means the entry 2015 The business grew in Sweden, primarily within electrical, plumbing and ventilation, and the first multidisciplinary assignment was given where several Instalco companies were involved with the same project. 2017 Instalco's shares were listed on Nasdaq Stockholm in May 2017. 2019 Several acquisitions took place during 2019, and the expansion of the business area Industry was initiated. 2021 Instalco passed the 100 subsidiaries milestone in October 2021. 2023 Three major acquisitions were made at the beginning of 2023, and the expansion of Industry and Technical Consulting continued. into the German market. Introduction Table of Contents Instalco Annual and Sustainability Report 2024 3 Contents Introduction Introduction Operations Our history 2 Business description This is Instalco 4 Segments The year in brief 5 Sweden CEO comments 6 Rest of Nordics Investment case 8 Corporate Governance Strategy 9 Comment from the Chairman Market 10 Corporate Governance Report Expansion into Germany 11 Board of Directors Market trends 12 Management Value creation 14 Guidelines for remuneration Strategic focus areas 15 Other information Acquisitions 16 Risks Start-ups 18 Strategic targets 20 21 Sustainability reporting 47 22 Contribution to sustainability 48 27 The CSRD process 50 28 Collaboration initiatives 51 29 The UN's global goals 52 Instalco's environmental responsibility 53 30 Taxonomy 56 31 Instalco's social responsibility 62 32 Instalco's responsibility for financial and 38 governance matters 67 39 40 Financial information 71 42 The Group's financial statements 72 43 The Parent Company's financial statements 76 Notes 80 Approval of the financial statements 99 Auditor's report 100 Other information 104 Five-year overview 105 Definitions 108 Share information 110 Shareholder information 112 Subsidiaries 113 Cases Growth outside the Nordics 11 Appreciation for the familial setting 17 New business area 19 Collaborative projects 25 Small and mid-sized projects 26 Our history This is Instalco The year in brief CEO comments Investment case Strategy Operations Corporate Governance Sustainability Report Financial information Other information SUSTAINABILITY REPORT DIRECTOR'S REPORT The statutory sustainability report in accordance with the Swedish Annual Accounts Act is included on the following pages: social relations and staff questions, see pages 47-70. Environment, see pages 47-70. Human rights and anti-corruption, see pages 46 and 47-70. For the business model and goals, see pages 14 and 20. The management of material sustainability risks is described on page 43. For taxonomy tables, see pages 59-61. The Board of Directors and the chief executive officer of Instalco AB (publ), organisation number 559015- 8944, hereby present the Annual Report for fiscal year 2024 for the Parent Company and Group, which consists of the Director's Report pages 5, 16, 18, 20, 22-24, 32-46, 110-111 and the financial statements, notes and comments on pages 71-99. The Corporate Governance Report, which has been reviewed by the auditors, can be found on pages 32-39. Instalco's annual and sustainability report is published in both Swedish and English. The Swedish version is the original version. This annual report is also available in English as a downloadable pdf on the company's website, www.instalco.se­ Introduction This is Instalco Instalco Annual and Sustainability Report 2024 4 Contents Instalco is a leading installation group in Northern Europe that helps customers with more sustainable and efficient installations in the areas of elec- trical, plumbing, ventilation, industry and technical consulting. Today, the Group consists of over 150 subsidiaries that continuously develop sustainable solutions and energy-efficient installations. Instal- co's decentralised model combines local entrepreneurship with the resources of a large company to create development and coordination advantages for entrepreneurs in the Group's subsidiaries. Through a number of its subsidiaries, the Group is able to offer design, technical installation services via contracting, maintenance and service, which enables buildings and facilities to consume fewer resources. Instalco's subsidiaries are active in various installation areas, which creates clear synergies and enables the Group to offer comprehensive solutions. Instalco has a highly diversified customer base, which mainly consists of construction companies, real estate owners, industries, mining companies, electricity and power companies, as well as actors in the public sector such as municipalities, regions and state-owned enterprises. End users include schools, nurseries, retirement homes, care facilities and hospitals, as well as shippers, miners, actors within electricity and power, and the marine and fishing industry. By focusing on lowering the consumption of energy and other resources, Instalco creates the necessary conditions for a more sustainable and cost-effective society. Vision We enable our companies, employees and customers to grow by collaborating on installations for the transition to a green society for the next generation. We are the most competent and efficient partner for our customers. The Instalco Spirit Through courage, entrepreneurship, best practices and mature leadership, we harness the power of each other. We are down-to- earth, highly committed, promote creativity, and create a sense of well-being. We are the best in the business when everyone truly wants to develop and cooperate. Then we will succeed, together! Business Model Acquire and strengthen - for sustainable development. Our growth strategy is largely based on acquiring profitable, high-quality- companies with strong local ties. By bringing new companies into the Instalco Group, we create both synergies and cooperation opportunities. We want to enable our subsidiaries to grow stronger and maintain the same entrepreneurial spirit that made them successful.­ 13,690 m SEK net sales 6,200 Employees 150+ Companies 4 Countries Introduction Our history This is Instalco The year in brief CEO comments Investment case Strategy Operations Corporate Governance Sustainability Report Financial information Other information ELECTRICAL HEATING & VENTILATION INDUSTRIAL TECHNICAL PLUMBING CONSULTING Director's report - Introduction The year in brief Instalco has navigated a challenging market in 2024. The focus has been on defending profitability and adapting operations to meet local market conditions. Our decentralised business model has continued to allow us to be close to our customers and to react quickly to market changes, which has been crucial for us in 2024. Highlights during the year: The start of automation as a new business area using Inmatiq as a key player Germany as a new market by agreeing to acquire a minority stake in the installation group Fabri AG Acquiring three new companies to the Group and founded 11 new companies Extension of a credit facility agreement totaling SEK 3.4 billion Strong employee satisfaction with an eNPS of 31 Long-term climate targets and decisions to measure and report on greenhouse gas emissions and climate impact Internal health program in the form of The Instalco Workout Ten Year Anniversary Eight Instalco companies in a joint contract for the new Central Station in Gothenburg Installation assignment for Region Västmanlands new emergency hospital in Västerås Strong growth in the service business 9,002 6.9% 89% Order backlog, SEK m Adjusted EBITA-margin Cash conversions rate Instalco Annual and Sustainability Report 2024 5 KPI SEK m 2024 2023 Change, % Net sales 13,690 14,279 -4 EBITA 879 1,085 -19 EBITA margin, % 6.4 7.6 Operating profit (EBIT) 690 899 -23 Operating margin (EBIT), % 5.0 6.3 Earnings before taxes 486 792 -38 Cash flow from operations 946 999 -5 Order backlog 9,002 8,437 7 Basic earnings per share (SEK) 1.31 2.29 -43 Diluted earnings per share (SEK) 1.31 2.26 -42 Dividend per share (SEK) 0.68 0.68 1) For additional KPIs and fiscal years, see the Five-year summery on pages 105-107. 3 11 35% Number of Number of new Service, share of acquisitions start-ups revenues Contents Introduction Our history This is Instalco The year in brief CEO comments Investment case Strategy Operations Corporate Governance Sustainability Report Financial information Other information Introduction Instalco Annual and Sustainability Report 2024 6 Contents A year of adaptation and streamlining in preparation for the next growth cycle Introduction Instalco's decentralised model has once again proven successful in enabling the company to adapt to market conditions. Thanks to our flexible organisation and dedicated employees, we managed to maintain a good operating margin and strong cash f