Interim report, January-September 2023

Strengthened profit and stabilized order intake

Third quarter 2023

• Net sales amounted to SEK 2,339 million (2,386), down 2 percent. Organic growth amounted to a negative 13 percent.

• Total order intake increased by 3 percent, while the order backlog had increased to SEK 2,428 million (2,420) as of September 30.

• Operating EBITA rose to SEK 308 million (297) and the operating EBITA margin rose to 13.2 percent (12.5).

• Earnings per share amounted to SEK 3.25 (3.88).

• Net debt amounted to a multiple of 1.1 in relation to operating EBITDA (0.8 excluding IFRS 16).

• In July, Sidey Group in Scotland was acquired.

• Fredrik Meuller appointed new President and CEO.

January-September 2023

• Net sales amounted to SEK 6,697 million (6,934), down 3 percent. Organic growth amounted to a negative 12 percent.
• Operating EBITA amounted to SEK 737 million (775) and the operating EBITA margin amounted to 11.0 percent (11.2).
• Earnings per share amounted to SEK 8.52 (9.62).
• Return on operating capital amounted to 16.2 percent (17.9).

CEO comments:

It is with satisfaction we summarize the third quarter of 2023. We have managed to deliver the best third quarter profit to date, improving margins, stabilizing order intake and continuied to generate good cash flow under the prevailing market conditions, which I am satisfied with. Having implemented our largest acquisition to date, I am also pleased with our continued stable balance sheet. On the whole, I believe that these observations show Inwido to be standing firm in a time pervaded by an uncertain external environment. Inwido’s good profitability and cash flows, as well as its strong balance sheet, attest to the strength of our business model and enable continued initiatives despite a challenging market.

Investments in new construction have remained restrained, which we have noted mainly in Finland and Sweden. On the consumer side too, we have experienced a more cautious trend over the year. We nonetheless managed to improve order intake in the quarter by 3 percent, including the acquisition of Sidey Group. We have also strengthened the EBITA margin to 13.2 percent (12.5) and delivered a return on operating capital of 16.2 percent, significantly above our 15 percent target. Net sales decreased by 2 percent over the quarter to SEK 2,339 million (2,386) and organic growth was -13 percent. Operating EBITA increased to a record-strong SEK 308 million (297).

As far as our internal sustainability work is concerned, the unit-related KPIs are affected negatively by lower production volumes, while the continued improvement work results in the absolute figures showing a positive trend. A lot of work is also being put into preparing the organization and the business units for the Corporate Sustainability Reporting Directive, CSRD, which we will report for the 2024 financial year.

Clear improvements in three out of four business areas
Business Area Scandinavia operated in a continued weak market over the quarter, resulting in sales declining by 16 percent. The profitability trend is stable with a gradual improvement in the gross margin. We believe that the energy efficiency improvement subsidy which took effect in Sweden in early July and that includes window replacements for houses heated with electricity or gas will, in the long term, have an impact on the willingness to invest, thereby increasing the pace of the green transition.

Business Area Eastern Europe shows greatly increased profitability, resulting in an operating EBITA margin of 12.7 percent (9.0), driven by the full impact of price increases and the continued favorable adjustment of factory costs. The volumes are under pressure, however, which is illustrated by a 15 percent decline in sales over the quarter. It is primarily the new construction market in Finland that is continuing to lose volumes.

Business Area e-Commerce operates in a weak market with consumers currently being cautious and it is therefore particularly pleasing that sales rose by 15 percent and that operating EBITA increased by 38 percent over the quarter. To maintain growth and recover margins, ongoing market investments are being made in both new and existing markets. The newly started operations in the Netherlands, which have come off to a good start, represent one stage of this.

Business Area Western Europe has been positively affected by the acquisition of Sidey Group, which got off to a very good start as part of Inwido. Over the quarter, the business area’s sales increased by 89 percent and operating EBITA increased by 118 percent. Despite these great figures, we can affirm that the UK consumer market remains challenged, which is affecting Inwido’s business units.

Future prospects
The third quarter was characterized by continued limited investment in new construction and a cautious consumer market. We know from experience, however, that tougher times provide scope for new opportunities. Our stable profitability, good cash flow and low debt allow us to remain focused on finding new opportunities to advance our positions, particularly through value generating acquisitions.

Higher interest rates and inflation in Europe affect new construction as well as consumers’ willingness to invest. We welcome the tightening of the objectives linked to energy efficiency within the framework of the Green Deal, implemented by the EU in July. As one approach to stimulating the market, the EU countries are now introducing supportive measures to achieve the challenging targets set for 2030. Given the EU’s clear ambitions to enhance energy performance in properties over the upcoming years to mitigate negative environmental impacts, I see good growth opportunities for our energy-efficient windows and doors that also improve our indoor environment.

MALMÖ, OCTOBER 24, 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 October 24, 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 34 business units with approximately 4,800 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.