Interim report January-June 2016

This information is information that Inwido AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out below, at 07:45 on Monday July 18th, 2016.

Best quarter to date

Second quarter 2016

• Net sales rose to SEK 1,470 million (1,376), an increase of 2 percent for comparable units adjusted for currency effects
• Operating EBITA rose to SEK 208 million (180) and operating EBITA margin rose to 14.2 percent (13.1)
• EBITA increased to SEK 202 million (180) after items affecting comparability of a negative SEK 6 million (0), and the EBITA margin grew to 13.8 percent (13.1)
• Earnings per share, before and after dilution, increased to SEK 2.46 (2.38)
• Acquisition of Värmelux in Finland
• The acquisition of Outrup in Denmark was approved by the competition authority after the end of the period
• An agreement was signed on the acquisition of CWG Choices in the UK after the end of the period

January – June 2016

• Net sales rose to SEK 2,518 million (2,423), an increase of 1 percent for comparable units adjusted for currency effects
• Operating EBITA rose to SEK 245 million (209) and the operating EBITA margin rose to 9.7 percent (8.6)
• EBITA increased to SEK 229 million (209) after items affecting comparability of a negative SEK 16 million (0), and the EBITA margin grew to 9.1 percent (8.6)
• Earnings per share, before and after dilution, amounted to SEK 2.51 (2.72) as a consequence of negative currency effects and items affecting comparability

The CEO comments:
"The positive development we had in the first quarter of 2016 gained momentum and I have the pleasure of presenting both a strong and stable second quarter, the best quarter in Inwido’s history in terms of earnings. Operating profit was SEK 208 million, with a margin of 14.2 percent. We generally see a gradually improved profitability, primarily thanks to our extensive work to improve efficiency in our market efforts and in our factories – particularly the gross margin improved. Sales increased by 7 percent and by 2 percent adjusted for currency effects and structure. Order bookings also developed positively – the underlying organic order bookings during the quarter increased by 5 percent.  

Operating segments – significant improvement in Finland 
Sweden continues to be strong in virtually every chosen channel and segment even if we are still selective in certain subsegments, mainly with regard to some new construction projects. Finland is showing a significant improvement. It is hoped that Finland has bottomed out and that the trend in the Finnish market is headed in a more positive direction.  

We also see a continuous improvement in Norway where the second quarter provided positive earnings compared with a material loss during the corresponding period in 2015. In Denmark, development was somewhat irregular in the first half of the year. Focus was on the internal structure projects initiated at the end of 2015. These forces are now gradually being moved to new customers and product launches, and order bookings in the consumer segment were strong during the quarter. 

EBE (Emerging Business Europe) has largely developed according to plan. In the UK, establishments of new stores, channels and acquisitions were in focus and we expect a better development in the future. After a weak first quarter in e-Commerce, order bookings gradually improved and increased during the quarter by around 20 percent compared with the same quarter in 2015.  

To-date in 2016, acquisitions have added around SEK 800 million in annual sales 
Acquisitions are of great importance to our growth strategy. It is pleasing that we completed two acquisitions during the quarter, both in Finland: Värmelux and the smaller Klas1. After the end of the quarter, we entered an acquisition agreement with the British company CWG Choices and received approval for the acquisition of the Danish company Outrup from the competition authorities with an expected completion in mid-August. So far in 2016, including these companies, we have acquired companies that add annual sales of around SEK 800 million. 

Future prospects 
As is known, external developments, both political and financial, remain uncertain with many risks that could affect our business. The UK’s choice to leave the EU, Brexit, has caused financial unrest. However, it is uncertain what effects it will have in the long term, an uncertainty that will probably last for some time. Inwido has not yet seen any major effects of Brexit, but is prepared that they may come. There is a strong need for both renovations and new housing in Europe, which means that there is an underlying demand for our products and services. Uncertainty regarding the housing policy in many countries in terms of the right to make deductions, subsidies and taxation can, however, affect future investment and renovation decisions. 

We are continuing to work according to our plan with a predominance of sales in consumer-driven channels, to continuously review our structure to find potential additional efficiency enhancements and to work with both organic and acquisition-based growth.

Overall, we remain cautiously optimistic about the future."

MALMÖ, 18 JULY 2016

Håkan Jeppsson
President and CEO

Read the full report in the pdf attached

For more information, please contact:
Inwido AB
Håkan Jeppsson, President and CEO Tel.: 46 (0)10-451 45 51 or 46 (0)70-550 15 17
Peter Welin, CFO Tel.: 46 (0)10-451 45 52 or 46 (0)703 24 31 90 
E-mail: peter.welin@inwido.com

About Inwido
Inwido is Europe’s largest supplier of windows and doors. The company has operations in Denmark, Finland, Norway, Sweden, Austria, Estionia, Ireland, Lithuania, Poland and the UK, as well as exports to a large number of other countries. The Group markets some 20 strong local brands including Elitfönster, SnickarPer, Hajom, Hemmafönster, Outline, Tiivi, Pihla, Diplomat and Sokolka. Inwido has approximately 3,400 employees and generated sales of slightly more than SEK 5.2 billion in 2015. The Group's headquarters are located in Malmö, Sweden. For further information, please visit www.inwido.com

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