Interim report January-September 2016
This information is such that Inwido AB (publ) is obliged to publish in accordance with the EU market abuse regulation and the Swedish Securities Market Act. The information was submitted by the below contact persons for publication on 24 October 2016 at 7:45 a.m. CET.
Strong earnings trend continues
Third quarter of 2016
- Net sales increased to SEK 1,446 million (1,326), corresponding to an increase of 9 percent. For comparable units and adjusted for currency effects, that corresponded to a decrease of 4 percent
- EBITA increased to SEK 212 million (195) after items affecting comparability of SEK 10 million (0), and the EBITA margin was unchanged at 14.7 percent
- Operating EBITA rose to SEK 202 million (195) and the operating EBITA margin amounted to 14.0 percent (14.7)
- Earnings per share after dilution amounted to SEK 2.50 (2.38)
- The acquisitions of Outrup in Denmark and CWG Choices in the UK were concluded
- Net sales increased to SEK 3,964 million (3,750), corresponding to an increase of 6 percent. For comparable units and adjusted for currency effects, that corresponded to a decrease of 1 percent
- EBITA increased to SEK 441 million (404) after items affecting comparability of a negative SEK 6 million (0), and the EBITA margin grew to 11.1 percent (10.8)
- Operating EBITA rose to SEK 446 million (404) and the operating EBITA margin rose to 11.3 percent (10.8)
- Earnings per share after dilution amounted to SEK 5.01 (5.10)
The CEO comments:
"In terms of earnings, the third quarter of 2016 was the second best quarter in Inwido’s history even if it did not entirely reach up to our expectations. Operating profit for the quarter was SEK 202 million, with an operating margin of 14 percent. In general, we see profitability continue to gradually improve. The extensive work we have done to improve efficiency in production yields results. Not least, the gross margin continues to improve.
Sales increased by 9 percent at the same time that organic sales and order bookings were weaker than expected, mainly due to the development in Sweden during the summer. Adjusted for currency effects and structure, sales decreased by 4 percent. The underlying organic order bookings decreased by 1 percent. The order backlog was 18 percent higher than at the same time in 2015 and for comparable units, the order backlog was 1 percent higher.
Sweden is undergoing a transition and during the quarter, the consumer segment developed weaker than expected. Compared with 2015, the Swedish consumers were less inclined to buy with lower ROT tax deductions and higher amortization requirements. In addition, the comparative figures were probably pulled up during the summer and autumn of 2015 as a result of the announced reduction of the ROT tax deductions for 2016. At the same time, competition has increased. The market also sees some bottleneck effects in the contractor and tradesman segment at the same time. Sweden is now initiating aggressive market efforts and we view the Swedish business, which is very profitable, in a positive light.
In Norway, we see a better development for the second consecutive quarter. We are on the right path despite tough market conditions. Norway is showing good growth even if the comparative figures are relatively weak. We can also note that Finland has now bottomed out and is showing stable order bookings for the second consecutive quarter. After a weak winter, Denmark gradually improved during the year and positive development provides hope for the future. EBE (Emerging Business Europe) has developed well even if the overall business in the UK underperformed during the quarter. In e-Commerce, there is good momentum and order bookings are gradually increasing.
Positive development in all acquisitions
Acquisitions are a fundamental part of Inwido’s growth strategy. During the beginning of the quarter, the acquisition of Danish Outrup was approved and we carried out the acquisition of British CWG Choices. So far in 2016, we have acquired companies that provide Inwido annual sales of SEK 850-900 million. All acquisitions developed positively during the quarter even if they put pressure on our operating margin in the short term.
External developments, both political and financial, continue to be uncertain with many remaining risks that could affect our business. At the same time, there is a strong need for both renovations and new housing in Europe, which means that there is a good underlying demand for our products and services.
Regardless of what happens politically and financially, we are continuing to work according to our plan with a predominance of sales in consumer-driven channels, to continuously review our structure to find potential additional efficiency enhancements and to work with both organic and acquisition-based growth.
In total, we are cautiously optimistic about the future.
MALMÖ, 24 OCTOBER 2016
President and CEO
Read the entire report in the pdf attached
For more information, please contact:
Håkan Jeppsson, President and CEO Tel.: 46 (0)10-451 45 51 or 46 (0)70-550 15 17
Peter Welin, CFO Tel.: 46 (0)10-451 45 52 or 46 (0)703 24 31 90
Inwido is Europe’s largest supplier of windows and doors. The company has operations in Denmark, Finland, Norway, Sweden, Austria, Estionia, Ireland, Lithuania, Poland and the UK, as well as exports to a large number of other countries. The Group markets some 20 strong local brands including Elitfönster, SnickarPer, Hajom, Hemmafönster, Outline, Tiivi, Pihla, Diplomat and Sokolka. Inwido has approximately 4,000 employees and generated sales of slightly more than SEK 5.2 billion in 2015. The Group's headquarters are located in Malmö, Sweden. For further information, please visit www.inwido.com