YEAR-END REPORT, January–December 2016
Record results and delivering on external growth commitment
Fourth quarter of 2016
- Consolidated net sales increased by 6 percent to SEK 440 m (415), of which organic growth amounted to 3 percent
- Net sales for Product & Solutions amounted to SEK 298 m (293) and net sales for Installation Services amounted to SEK 158 m (139)
- Operating profit (EBIT) before items affecting comparability increased by 8 percent and amounted to SEK 42 m (39)
- Operating profit (EBIT) increased by 84 percent to SEK 39 m (21)
- Operating cash flow amounted to SEK 125 m (118) 
- Earnings per share before and after dilution were SEK 1.13 (0.31)
- Consolidated net sales increased by 5 percent to SEK 1,813 m (1,720), of which organic growth amounted to 5 percent
- Net sales in Products & Solutions amounted to SEK 1,341 m (1,304) and net sales for Installation Services amounted to SEK 560 m (493)
- Operating profit (EBIT) before items affecting comparability increased by 23 percent and amounted to SEK 224 m (182)
- Operating profit (EBIT) increased by 45 percent to SEK 206 m (143)
- Operating cash flow amounted to SEK 211 m (197)
- Earnings per share before and after dilution were SEK 6.49 (3.40)
- The Board proposes a dividend of SEK 3.75 per share
 Note: the definition of Operating cash flow has been revised to reflect changes as of Q3 2015 in net working capital excluding items affecting comparability.
Unless otherwise stated, figures within parentheses refer to the preceding year or the corresponding period in the preceding year in respect of income statement and/or cash flow items and the end of the preceding year or the corresponding period in the preceding year in respect of balance sheet items. For definitions of financial and alternative key performance indicators, please see page 21.
Message from the CEO
Record results and delivering on external growth commitment
I am proud to report our best year ever, in terms of both sales and financial results.
Consolidated net sales for the fourth quarter rose by 6 percent, from SEK 415 m to SEK 440 m. EBIT before items affecting comparability for the fourth quarter increased by 8 percent compared with the corresponding period in 2015. For the full-year 2016, net sales increased by 5 percent, from SEK 1,720 m in 2015 to SEK 1,813 m in 2016. EBIT before items affecting comparability for the full-year increased by 23 percent and reached SEK 224 m (182), while the operating margin was 12.3 percent (10.6). Compared to our previously communicated expectations, the satisfying profit during the fourth quarter was helped by favorable weather conditions in all the Nordic countries.
The good financial performance for the year was based on the combination of organic growth in most of our markets, and a favorable development of our cost position. In line with our strong operating result, our operating cash flow amounted to SEK 211 m (197). This has led to further significant strengthening of our financial position, and net debt decreased to SEK 25 m at the end of 2016. This will allow the Board to propose a dividend of SEK 3.75 per share, while leaving room for further acquisitions.
In the beginning of 2017 we made two acquisitions, thus delivering on our commitment to developing our business through both internal and external growth. EPDM Systems is a Dutch prefabricator of EPDM based waterproofing solutions, with a business model similar to that of our Belgian operation. SPT-Painting is a Finnish provider of liquid waterproofing solutions for buildings, outdoor surfaces and ships. This latter acquisition represents an addition to our existing product and services portfolio, in a growing market segment.
Nordic Waterproofing is one of Northern Europe’s leading producers and providers of products and related services for waterproofing, protecting and preserving buildings and infrastructure.
Consolidated net sales in the fourth quarter of 2016 showed growth of 6 percent compared with the corresponding period in 2015, from SEK 415 m to SEK 440 m, with both of our operating segments contributing. While our Products & Solutions operating segment reported a sales increase of 2 percent, our Installation Services operating segment achieved an increase of 13 percent, based on improved demand in Finland. Denmark continued to see a very favorable demand trend. Our Swedish operations continued to be soft following weaker demand in both ROT- related DIY sales and sales of infrastructure project-related products. Sales in Norway in the fourth quarter increased 22 percent compared with corresponding period in 2015, primarily as a result of increased market share in direct sales to flat roofing customers. The Finnish market developed stably, mainly due to seasonal effects. The order inflow in the fourth quarter was slightly lower than the exceptionally strong corresponding quarter last year.
Sales in the Product & Solutions operating segment increased despite weaker sales in Sweden. Earnings for the segment increased compared with the previous quarter, as well as compared with the corresponding quarter in 2015.
The Installation Services operating segment also reported improved result as both the Finnish subsidiaries and the Danish franchise companies continued to perform well during the fourth quarter. Our total order book for Installation Services remains at an acceptable level compared with the corresponding period in 2015. The demand situation is in line with the seasonal variations.
Earnings per share for the quarter were up, from SEK 0.31 to 1.13. Earnings per share for the full-year of 2016 were SEK 6.49 (3.40), an increase of 91 percent.
I am pleased to welcome two new companies, EPDM Systems of the Netherlands and SPT-Painting of Finland, to Nordic Waterproofing. The acquisition of EPDM Systems, a leading Dutch prefabricator, highlights our strategy of strengthening our prefabrication footprint in those European countries where EPDM has significant market share. Prefabrication of EPDM-based waterproofing offers two important advantages versus on-site work: better efficiency through faster installation and better quality production in a controlled factory environment. We intend to continue developing both geographically and in terms of complementary prefabrication solutions for roofs and façades.
Finnish company SPT-Painting, which operates in the growing floor coating market, has a strong market position. We expect to find synergies with it since SPT-Painting and our existing Installation Services serve overlapping customer groups. This acquisition is an important addition to our existing product categories.
Good integration of the acquired companies is critical to success, and it is our view that the most determining factors for achieving such an integration are highly experienced and motivated management teams. I am pleased to report that bot EPDM Systems and SPT-Painting have such teams.
Our growth strategy is based on organic growth and participating in trends towards systematic offerings and prefabrication. We continue to establish our brands in the Norwegian market using best practices developed in our other core markets. In addition to growing our EPDM platform in relevant European markets, we will continue to strengthen our market position by enhancing the product portfolio we offer our distribution channels.
I take this opportunity to welcome Esa Mäki to Nordic Waterproofing, effective 1 April 2017. Esa has extensive experience in the markets we serve, and will be heading our Finnish business with the objective to realize the Group’s ambitions for further profitable expansion in both our Product & Solutions and Installation Services segments. I also want to thank Jaakko Tuominen for his considerable and longstanding efforts to the development of our Finnish business, and for having been an anchor through changing and challenging environments. I am very pleased that Jaakko has agreed to stay on as senior adviser in the Group.
Vejen, 14 February 2017
President and CEO
A conference call for investors, analysts and media will be held today, 14 February 2017, at 10:00 a.m. CET and can be joined online at www.nordicwaterproofing.com . Presentation material for the call will be available on the website one hour before the call.
To participate, please dial:
From the United Kingdom: +44 20 3008 9801
From Denmark: +45 82 33 31 78
From Sweden: +46 8 566 426 92
Further information can be obtained from
Martin Ellis, President and CEO tel: +45 31 21 36 69
Jonas Olin, CFO tel: +46 708 29 14 54
Anders Antonsson, Investor Relations tel: +46 709 99 49 70
This information is information that Nordic Waterproofing Holding A/S is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 14 February 2017, 08:00 a.m. CET.