Interim report, January-March 2023

Delivering well in a challenging market

First quarter 2023

• Net sales rose to SEK 2,095 million (2,073), up 1 percent. Organic growth amounted to a negative 7 percent.
• Reported order intake decreased by 17 percent while the order backlog decreased by 32 percent to
  SEK 1,581 million.
• EBITA amounted to SEK 167 million (177) and the EBITA margin amounted to 8.0 percent (8.5).
• Operating EBITA amounted to SEK 168 million (180) and the operating EBITA margin amounted to
  8.0 percent (8.7).
• Return on operating capital amounted to 17.6 percent (17.8)
• Earnings per share amounted to SEK 1.90 (2.08).
• Net debt amounted to a multiple of 0.7 in relation to operating EBITDA (0.4 excluding IFRS 16).

CEO Comments:

We began 2023 facing a tougher market than last year. The fact that Inwido has nonetheless increased its sales, achieving our second-highest first quarter profit to date, shows that our focus on the Consumer market, combined with a pan-European expansion, is building a resilient and stable Group.

With the economy being weaker, it is not surprising that order intake fell during the quarter. Although a decline by 17 percent may sound substantial, it must be borne in mind that 2022 began very strongly. Compared with 2021, order intake remains largely at the same level and is significantly higher than in 2020, even when adjusted for acquisitions. We have also seen our market-leading e-commerce grow by 29 percent over the quarter despite a tougher market in which our competitors are more active than previously. In our sustainability work, we are pleased to see that systematic preventive efforts are largely responsible for the number of accidents decreasing. Energy use is also falling both per unit and overall. Waste unfortunately increases during the quarter and we continue our ongoing efforts to reduce our total footprint. 

Over the quarter, the operating EBITA margin decreased to 8.0 percent (8.7). This is due to several factors: increased energy costs that we have yet to offset, a changed sales mix, lower volumes (despite increased sales), resulting in poorer cost coverage in production, as well as increased marketing spend to capture market shares. 
Over the quarter, net sales increased by 1 percent to SEK 2,095 million (2,073) and organic growth was a negative 7 percent. Operating EBITA totaled SEK 168 million (180). The order backlog amounted and SEK 1,581 million (2,311) while order intake ended up at SEK 2,094 million (2,527).

Higher margins in three out of four business areas
For Business Area Scandinavia, the sales trend over the quarter was negative and the margin lower, due mainly to a more cautious Consumer market. Sales decreased by 9 percent, operating EBITA decreased by 23 percent to SEK 116 million (149) and the operating EBITA margin amounted to 10.8 percent (12.7).

Business Area Eastern Europe showed growth, with increasing sales in both the Consumer and Industry markets. Sales rose by 11 percent, operating EBITA increased to SEK 38 million (27) while the operating EBITA margin increased to 6.8 percent (5.4). The strengthened margin derives from the previously implemented price increases now having an impact, as seen most clearly in the largest Finnish business unit and in the Polish operations, which started the year strongly.

Business Area e-Commerce shows that the positive trend from the previous quarter has continued. Sales, profit trend and order intake continue to develop favorably. At the same time, the competition is tougher than previously, requiring increased investment in marketing to consolidate our leading position. Sales increased by 29 percent to SEK 236 million, operating EBITA increased to SEK 4 million (-8) and the operating EBITA margin was 1.5 percent (-4.2). 

Business Area Western Europe showed increased growth and profit over the quarter. Although the Consumer market remains stronger than the Industry market, we perceive consumers as more cautious than previously. Sales increased by 17 percent to SEK 223 million. Operating EBITA rose to SEK 19 million (15) and the operating EBITA margin rose to 8.7 percent (8.1). 

Low debt provides opportunities for further acquisitions
Last year, three companies were acquired and we see continued opportunities for growth through acquisitions in 2023. The objective of establishing the Group in a new market also remains. With a strong balance sheet and low debt ratio the financial conditions are in place to continue the acquisition journey even when market conditions are tougher.

Future prospects
The first quarter of 2023 showed stable sales and earnings. Although order intake is decreasing, it remains at a relatively high level from a longer-term perspective. The weak trend in the Industry segment, affected by low new construction activity, continues and consumers are also affected by many people’s disposable income falling due to inflation and rising interest rates. We are also seeing considerable interest in, and extensive needs for, energy efficiency, both among homeowners and property companies. To accelerate society’s green transition, we would welcome additional financial incentives for energy efficiency improvements, which would also be beneficial for a construction market that now seems to have a number of more challenging quarters ahead.  

MALMÖ, APRIL 25, 2023

Henrik Hjalmarsson, 
President and CEO

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 April 25, 2023 at 7:45 a.m. CET.  

For more information, please contact:
Henrik Hjalmarsson, President and CEO Tel.: 46 (0)76 846 20 46, henrik.hjalmarsson@inwido.com
Peter Welin, CFO and deputy CEO Tel.: 46 (0)703 24 31 90, peter.welin@inwido.com

About Inwido:
Inwido improves people's lives indoors with windows and doors. As Europe's leading window group, Inwido's business concept is to develop and sell the market's best customized window and door solutions through a decentralized structure and with a focus on the consumer-driven market in order to create long-term sustainable growth, organically and through acquisitions. Inwido consists of 32 business units with approximately 4,900 employees in eleven countries. In 2022 group sales amounted to SEK 9.5 billion with an operating EBITA margin of 11.4 percent. Inwido has been listed on Nasdaq Stockholm since 2014. Follow Inwido on LinkedIn.