CEO Comments

Read Managing Director and CEO Joachim Welin’s comments from Wall to Wall’s latest quarterly report.






The contracting market within pipe relining remained cautious through the fourth quarter of 2023, with squeezed margins for Wall to Wall Group, which was communicated in conjunction with the publication of preliminary figures January 31, 2024. A number of actions have been initiated that are expected to lead to gradual improvements in the first half of this year.


Performance in the fourth quarter of 2023


Market caution dominated the year, mainly due to uncertainty with regard to interest rate levels during the year and their consequent impact on investments in planned maintenance, particularly among housing companies and housing cooperatives. This has mainly impacted contractors in pipe relining operations, which have been subject to price pressure that has gradually affected project margins, and were not offset in time through more cost-efficient production. This trend became increasingly clear in the fourth quarter, when utilisation rates were generally stable but with reduced average price levels.


Given that we have completed a number of pipe relining acquisitions over the past year, which have yet to be fully coordinated, costs in this part of the operations have been excessively high. Together, these factors have impacted heavily on pipe relining’s net revenue and earnings contribution in the fourth quarter, which, together with initiated new establishments in the same segment, performed below expectations.


To some extent, market caution has also impacted the Group’s geothermal energy project activities, while the development of contracting services for duct sealing and service operations in flushing progressed in line with plans.


Robust actions initiated


During the year, Wall to Wall Group established itself as a Nordic market leader in its main service segments. Major investments have been made to improve the offering, process- es, reporting and sustainability as well as in an organisation that can manage larger volumes. This means that in the current market climate, shared costs are too high in relation to the operations’ current net revenue and earnings contribution.


Therefore, a number of actions have been initiated to strengthen the operating margin and more quickly reach the long-term financial target. In addition to actions to reduce indirect costs, actions are being taken to strengthen cost control and project management, and to adjust direct costs of production to thereby raise competitiveness and improve project margins. This applies especially to areas where, by virtue of its size and market-leading position, Wall to Wall Group has particularly favourable preconditions, including optimal resource utilisation and the purchase of materials and external services.


Moreover, consolidation of the Finnish operations into one company is being accelerated, which will result in discontinuation of the operations of RPL, which can be expected, in the short term, to lead to slight shrinkage in the revenue base concurrent with reduced costs. Similarly, earlier new establishments are being evaluated based on targets set for these.


Performance in full-year 2023


In 2023, the Group markets were dominated by caution among the primary customer groups, housing companies and housing cooperatives, primarily as a result of the uncertainty with regard to interest rate levels. This has impacted the Group’s operations in pipe relining and to some extent in the Group’s project activities in geothermal energy while contracting services for duct sealing and service operations in flushing progressed well.


During the full-year 2023, a number of additional acquisitions were completed primarily in the Finnish market. The acquisitions of the pipe relining operations of Sukittajat and Consti created an important platform for continued expansion and consolidation of the fragmented market in Finland. In addition, investments took place in new business systems that will be fully operational across the Group in 2024.

Financial performance for the fourth quarter of 2023 and the year as a whole


Pro forma fourth-quarter net revenue for Wall to Walls Group’s operations (formerly Spolargruppen) amounted to SEK 274.7 million (281.6), corresponding to a decrease of -2.4%. The quarter’s currency impact amounted to 0.8%. Adjusted EBITA amounted to SEK 14.0 million (42.5), corresponding to an adjusted EBITA margin of 5.1% (15.1).


For the full-year 2023, sales increased 10.1% (currency adjusted 8.4) to SEK 1,016.8 million (923.7) with an adjusted EBITA of SEK 73.3 million (98.6), corresponding to an adjusted EBITA margin of 7.2% (10.7).


Pro forma fourth-quarter adjusted EBITA for the parent company Wall to Wall Group AB amounted to SEK 11.7 million (39.7). For 2023 as a whole, adjusted EBITA totalled SEK 60.6 million (84.2). The Group-wide costs pertaining to corporate acquisitions, being a publicly listed company, company management, etc., represent just over 1.0% of the Group’s sales.


Adjustment items affecting comparability amounting to SEK -0.4 million (3.1) were reported for the fourth quarter. These pertained mainly to earnout revaluations (primarily related to RPL Talotekniikka Oy), restructuring of the Finnish operations and costs arising from name and listing changes.


Comments from Joachim Welin, Managing Director and CEO since the start of the year


“During 2023, we achieved an important milestone when we reached pro forma sales exceeding SEK 1 billion, we developed our sustainable development efforts and became the first company in the industry to be verified in accordance with ISO 26 000. Our progress in terms of size and quality is some- thing I am very proud of.


However, I am not satisfied with profitability as we failed to achieve our targets for the year. By virtue of our size, we should have the industry’s lowest production and joint costs as a share of net revenue. It is possible to achieve this but requires us to realise more synergies, improve our project management and control costs in everything we do. This is something we are actively engaged in and operations may be merged where appropriate. I expect the measures we initiated will lead to gradual improvements already in the first half of this year.


It is with the utmost humility and pride that I look forward, together with my more than 500 employees, to continuing work developing and growing Wall to Wall in the years ahead.”


Outlook for the current year


Market trends in the Group’s operating areas are fragmented. Contracting services in pipe relining are still experiencing a cautious market with elements of price pressure, while the market for service in primarily flushing operations is favourable. Stabilising interest rates during the year are expected to contribute to a recovery for investments by property owners in planned maintenance, where there could currently be a pent-up need. At the same time, measures are being implemented to realise synergies and reduce costs, which are expected to have a positive impact on profitability. The company’s long-term financial targets of 10% organic growth and 15% adjusted EBITA margin remain but are not expected to be achieved during the current year as the company anticipates cautious growth and a gradual improvement in year-on-year profitability, driven by initiated measures and market improvements.

For full year-end report, see appendix.



Linus Marmstedt, Acting CFO
+46 768 08 03 01