Interim Report January – March 2015


  • Sales increased with 6.2% compared with the same period last year. Growth adjusted for last year’s currency rates was 4.1%. Winter was again mild as last year, limiting freeze related damages. Order backlog is 20% higher than last year.
  • Operating profit before amortization and non-recurring items (EBITA before NRI) amounted to EUR 4.4 million, which was an improvement of 13%. The result in Europe improved with 60%. North America is below last year which was influenced by the 2013 Polar Vortec which caused a lot of freeze damages and the scope in the large US project (NYCHA) was reduced.
  • Operating profit (EBITA) amounted to EUR 4.4 million (3.1).
  • During the annual audit, which took place after the release of the interim report for 2014, the margin in the NYCHA project was revaluated. The result of the revaluation was a loss on the project and EUR 1.9 million was therefore booked in 2014. The work on the project was finalised late April and the remaining administrative work is anticipated to take 8 weeks.
  • In January Polygon UK acquired Harwell Document Restoration Services Ltd. Harwell is specialized in document restauration with annual sales of EUR 2.3 million.
  • On 12 January 2015, Lucas Hendriks was appointed as the new Chairman of the Board. Kai Andersen joined Polygon in January as the new country president Norway. After the closing of Q1 Andreas Weber has replaced Rene Just as country president Germany and Mark Murphy has replaced John Campanelli as country president US.

Amounts in brackets in this report refer to the corresponding period in the previous year.

Group Key Figures
For Group Key Figures table, please refer to attached file below.  

Comments from the CEO
With the basics in place, we are beginning to see results

2014 was a challenging year for Polygon as we faced a significant downturn in the second and third quarters, largely due to very unfavourable weather conditions for our core business. Apart from the problems in the large project in US resulting in a loss, the last quarter in 2014 showed a good trend in most countries. Q1 2015 confirms that development and we conclude that all countries with new management have improved performance.

The operating result (EBITA before NRI) improved in Q1 with 13% versus last year which is encouraging and a result of dedicated work on the basics. We have not been helped by the weather which as last year has been too mild for the season.

We are better prepared to meet the challenges in Q2 which historically is our weakest quarter. The backlog is better than last year and the improvement actions should give positive effects both on the project margin side as on the cost side. Germany improved its performance during 2013 but plateaued in 2014 and therefore was not as good as expected. In April we changed the country president and have put a restructuring program in place focusing on improving the efficiency which will show positive effects during 2015.

North America struggles from a lack of hurricanes and was positively impacted by the Polar Freeze in late December 2013. Some good projects are coming in but as in Germany we have put improvement actions in place. The large project (NYCHA) is of a disappointment both with the effects in 2014 and well managed it should have contributed a lot in the first half year 2015. In May we changed the country president in US and decided to focus the business on the profitable TCS activity.

Short term outlook
Improved backlog, new framework agreements and effects from productivity measurements should partly compensate for the low activity in the second quarter. We expect reduced indirect cost levels from the restructuring projects in US and Germany.

Market development
There are several market trends in the property damage restoration market that benefit larger players like Polygon such as: the centralization of procurement, the customer preference for end-to-end solutions and the more complex requirements for front-end IT systems. Global warming is gradually increasing rainfall levels and extreme weather which consequently will increase water damages.

Part of Polygon’s business is dependent on extraordinary weather elements. Markets such as the US normally witness several hurricanes with consequent property damages.  

Net sales and profit for the first quarter 2015
Consolidated sales amounted to EUR 111.0 million - an increase of 6.2% compared to the same quarter last year. Organic growth excluding exchange rate and acquisition effects amounted to 3.5%. Europe shows a growth of 6% while North America is in local currency 13% below last year’s sales mostly due to a decrease of 45% in Canada. Order backlog for the group improved with 20% versus last year.

Operating profit for the group before amortization and non-recurring items (EBITA before NRI) amounted to EUR 4.4 million (3.9) - an improvement of 13% versus the same period last year. Earnings have been positively impacted compared to last year in most markets as an effect of last year’s restructuring programs. Germany is on the same level as last year and has not showed the required improvement. North America is behind last year as the mix is unfavourable with less TCS sales than expected and low margin in the large NYCHA project. Restructuring cost in Q1 is on a low level, EUR 43 thousands versus 716 last year, but will increase with the planed actions in Germany and US starting in Q2.

Net financial income for the period amounted to EUR 0.8 million including exchange rates gains of EUR 2.6 million (loss 2.0). Profit before tax for the period amounted to EUR 3.8 million (loss 0.2), and net profit was EUR 3.7 million (loss 0.1).

Cash flow and financing
Cash flows from operating activities during the first quarter of 2015 amounted to EUR 0.7 million (1.5) and cash flows before financing activities amounted to EUR -1.8 million (-0.2). Due to the NYCHA-project and building up of work in progress, as part of the high business activity late in the quarter, working capital has increased since year-end.

Total interest-bearing net debt amounted to EUR 107.3 million (December 2014: 101.7).

Equity amounted to EUR 45.6 million (December 2014: 42.4).

The Group’s liquidity buffer amounted to EUR 26.5 million (December 2014: 31.9), comprising cash and cash equivalents of EUR 16.1 million (December 2014: 21.5) and unutilised contracted loan commitments of EUR 10.4 million. (December 2014: 10.4)

Capital expenditure
Capital expenditure during the first quarter of 2015 amounted to EUR 2.5 million (1.7).

Parent company
The consolidated figures in the report are presented at the consolidated level of Polygon AB. The parent company, Polygon AB (corporate registration number 556816-5855), directly and indirectly holds 100% of the shares in all subsidiaries in the Group, except for the company in Denmark of which the non-controlled interest is 24.2% Net income for Polygon AB for the first quarter amounted to a loss of EUR 63 thousands (profit 42).

Most significant risks and uncertainty factors
Around 75% of Polygons business is property damage control following a seasonal pattern of predictable demand. The remaining 25% is related to more extreme and less predictable events caused by weather and fire. The frequency of property damage can vary depending on circumstances beyond Polygon’s control, the outdoor temperature and weather. Since part of Polygon’s cost structure is fixed, the proceeds of the operations are to some extent unpredictable and vary from time to time.

Polygon is to a large extent dependent on its key customers, the insurance companies, and must maintain mutually beneficial relationships with them to compete effectively. Our top ten customers comprise about 30% of Polygon´s sales, with the newest customer on the top-ten list representing a seven-year relationship.

For further elaboration of the Group’s risk and uncertainty factors, please refer to the 2014 Annual Report.

Polygon’s view is that there have not been any significant changes during the reporting period with regards to risks and factors of uncertainty that were presented in the Annual Report.

Related-party transactions
The Group is under the controlling influence of Polygon Holding AB, the Parent Company of Polygon AB. Polygon Holding AB is under the controlling influence of MuHa No2 LuxCo S.á.r.l. There are no material transactions with companies in which MuHa No2 LuxCo S.á.r.l has significant or controlling influence.

Accounting policies
The interim report for the Group has been prepared in accordance with IAS 34 Interim Reporting. The interim report for the Parent Company has been prepared in accordance with the Swedish Annual Accounts Act.

The Group applies the International Financial Reporting Standards (IFRS) as adopted by the EU, and the Swedish Annual Accounts Act.

The accounting policies applied in this interim report is the same as those applied in the consolidated annual accounts for 2014. More specified accounting policies can be found on page 10-16 in the Annual Report for 2014.

A number of standards and changes of standards are in effect from January 1, 2015. Polygon does not intend to apply them beforehand and the overall assessment is that they will have no major impact on the Group’s result or position.

The term “IFRS” used in this document comprises the application of IAS and IFRS as well as the interpretation of these standards published by IASB’s Standards Interpretation Committee (SIC) and International Reporting Interpretations Committee (IFRIC).

The undersigned assures that this interim report gives a true and valid overview of the Parent Company and the Group’s business, position and results, describing essential risk and uncertainty factors that the Parent Company and its subsidiaries face.

Stockholm, 26 May 2015

Evert Jan Jansen
President and CEO

For more information please contact:
Mats Norberg, CFO, + 46 70 331 65 71
Email address:


About Us

Polygon is a Global Expert and the European market leader in Property Damage Control. On three continents and in 13 countries, our 3000 specialists prevent, control and mitigate the effects of water, fire and climate. Our innovative and tailor-made solutions combine people, knowledge and technology for a wide range of customer segments.