YEAR-END REPORT, January–December 2017
Continued strong sales growth
Fourth quarter of 2017
- Consolidated net sales increased by 27 percent to SEK 558 m (440), of which organic growth amounted to 6 percent. Acquisitions contributed by 21 percent and currency effects were neutral
- Net sales in Products & Solutions amounted to SEK 382 m (298) and Installation Services to SEK 192 m (158)
- EBITDA before items affecting comparability increased by 15 percent to SEK 57 m (50)
- Operating profit (EBIT) before items affecting comparability increased by 5 percent to SEK 45 m (42)
- Operating profit (EBIT) amounted to SEK 43 m (39)
- Operating cash flow amounted to SEK 89 m (125)
- Earnings per share before and after dilution were SEK 0.95 (1.13)
- Consolidated net sales increased by 21 percent to SEK 2,187 m (1,813), of which organic growth amounted to 5 percent. Acquisitions contributed by 15 percent and currency by 1 percent
- Net sales in Products & Solutions amounted to SEK 1,568 m (1,341) and Installation Services to SEK 714 m (560)
- EBITDA before items affecting comparability was unchanged and amounted to SEK 248 m (248)
- Operating profit (EBIT) before items affecting comparability decreased by 7 percent to SEK 208 m (224)
- Operating profit (EBIT) amounted to SEK 194 m (206)
- Operating cash flow amounted to SEK 164 m (211)
- Earnings per share before and after dilution were SEK 5.71 (6.49)
- The Board proposes a cash dividend of SEK 3.75 (3.75) per share
Message from the CEO
A year of successful acquisitions
In addition to our organic sales growth of 5 percent for the full year, we successfully pursued our selective acquisitions strategy. The four new members of our Group all match the focus we have set in our acquisition strategy: downstream integration for increased exposure to the end customers, enhanced product and services portfolios for our existing customers, and portfolio diversification with potential for geographic leverage.
EPDM Systems in the Netherlands: downstream integration in our EPDM business unit, SPT Painting: enhancement of the services portfolio in the Finnish liquid waterproofing segment, LA Kattohuolto: enhancement of the services portofolio in the Finnish building maintenance segment, and Taasinge Elementer: portfolio diversification in the specialist prefabrication market in Denmark, with the potential to extend the offering to all of the countries in which we are present. All of these companies have performed better than was expected at the time of acquisition.
Compared to previously communicated expectations, the satisfying profit achieved in the fourth quarter was influenced postively by favorable weather conditions in the quarter, particularly compared with the previous year when winter began in November. Raw materials prices, except for bitumen, have been stable also during the fourth quarter, although at a higher level than last year. Our own sales price increases also contributed positively to the quarter. However, as bitumen prices are increasing, we have announced additional price increases in most markets to be implemented during the second quarter.
Both of our operating segments contributed to our consolidated sales growth of 27 percent in the fourth quarter of 2017. While our Products & Solutions operating segment reported a sales increase of 28 percent, our Installation Services operating segment achieved an increase of 21 percent deriving from both continued demand improvement in the Finnish market and the contributions from acquired companies.
Within our Products & Solutions segment, Sweden, Denmark and Finland contributed positively. Sales in Norway decreased, due to continued strong competition and instability within the Builders Merchants segment. SealEco showed strong sales compared with the preceding year, explained by sales from the acquired EPDM Systems. Taasinge Elementer, which was acquired in July, continued to perform very well and showed an organic growth in sales of 30 percent (proforma) for the fourth quarter. The positive effect is only visible at the EBITDA-level since the earnings in the acquired order book are amortized in accordance with IFRS. Accordingly, the acquired order book does not affect EBIT positively for the first year following the acquisition.
Installation Services in Finland achieved a 7 percent sales increase in the fourth quarter of 2017, compared with the corresponding quarter in 2016 and comparable operations. Our flat roof installation services business in Finland is showing growth and maintaining its market share, although profitability in the legacy operations is not at a satisfactory level. As announced in the previous quarterly report, a profit improvement program has been put in place and is currently being implemented. The program includes reviewed and adjusted internal business processes, an increased focus on profitability by means of incentive systems, as well as organizational changes within the larger unit in Finland. Due to the relatively long order book, positive financial effects are expected to be visible as of mid-2018. Our Danish franchise companies continued to perform well in the fourth quarter.
Following the acquisition of Taasinge Elementer A/S in the third quarter, Taasinge signed an agreement in December to acquire a production plant for prefabricated roofing and facade elements, by means of an acquisition of assets, from Ugilt Savværk. The acquisition forms part of the strategy to make Taasinge a major player in the Nordic market for prefabricated roofing and façade elements, and I am pleased to welcome the 40 employees in northern Jutland to our Group. The factory is modern and of a high standard and its staff have the skills required to ensure efficient production of the type of construction components in which Taasinge is the market leader. In addition, the geographic location provides us with cost-efficient transport to both Norway and Sweden. The acquisition was completed as of 4 January 2018, thereby continuing to deliver on our commitment to expand our business through both internal and external growth.
Vejen, 8 February 2018
President and CEO
A conference call for investors, analysts and media will be held today, 8 February 2018, at 9:00 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 9810
From Denmark: +45 3544 5576
From Sweden: +46 8 5033 6562
Further information can be obtained from
Martin Ellis, President and CEO tel: +45 31 21 36 69
Jonas Olin, CFO & Investor Relations tel: +46 708 29 14 54
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 8 February 2018, 08:00 a.m. CET.