Interim report January-June 2017

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 17 July 2017 at 7:45 a.m. CET. 

A good first half of 2017

April – June 2017

• Net sales rose to SEK 1,673 million (1,470), representing an increase of 14 percent. Organic growth was 1 percent
• EBITA amounted to SEK 192 million (202) after items affecting comparability of a negative SEK 1 million (negative 6), and the EBITA margin was 11.5 percent (13.8)
• Operating EBITA amounted to SEK 193 million (208) and the operating EBITA margin was 11.5 percent (14.2)
• Earnings per share before dilution, amounted to SEK 2.10 (2.46)
• Acquisition of Bøjsø Døre & Vinduer in Denmark
• Effective from 1 July, the Sweden and Norway operating segments will be merged under a new Senior Vice President (from 1 September)
• A dividend of SEK 3.50 per share was paid

January – June 2017

• Net sales rose to SEK 3,038 million (2,518), representing an increase of 21 percent. Organic growth was 5 percent
• EBITA increased to SEK 274 million (229) after items affecting comparability of a negative SEK 2 million (negative 16), and the EBITA margin amounted to 9.0 percent (9.1)
• Operating EBITA rose to SEK 276 million (245) and the operating EBITA margin amounted to 9.1 percent (9.7)
• Earnings per share before dilution, increased to SEK 2.79 (2.51)

The CEO comments:
Inwido’s strong sales trend continues. Sales for the second quarter of 2017 rose by 14 percent to SEK 1,673 million and, for the first half of the year, they rose by a total 21 percent to SEK 3,038 million. However, following 11 consecutive record quarters, operating earnings for the second quarter were lower than we expected due to temporary operational problems, primarily in Sweden and Finland. Operating earnings were SEK 193 million, compared with SEK 208 million in the corresponding period in 2016. Earnings were also adversely affected by the fact that Easter fell in the second quarter of the year. In the first half of the year, Inwido’s best to date, earnings rose to SEK 276 million, compared with SEK 245 million in the preceding year. Order bookings increased by 10 percent in the second quarter and the order backlog at the end of the quarter was 20 percent higher than at the same point in 2016.  

Continued favourable trend in Denmark 
Denmark continues to develop favourably. Consumer confidence is high and the Danish construction market is very strong. At the same time, we have good efficiency in our organization and production. In the second quarter, Inwido acquired the premium brand Bøjsø Døre & Vinduer in Denmark, with annual sales of approximately SEK 65 million. 

EBE (Emerging Business Europe) also continued to develop well. In particular, CWG Choices in the UK contributed to increased sales. E-commerce also developed strongly in the second quarter, growing by 27 percent with continued good profitability.  

Challenges in Sweden and Finland
Earnings performance in the second quarter was adversely affected, mainly by production disturbances in Sweden, as well as by various temporary problems in parts of the Finnish sales organization. In general, we are also seeing that increased new building is giving a less favourable mix in both Sweden and Finland. Production disruptions in Sweden were caused by both internal and external factors, primarily due to delays in deliveries of raw materials. This led to lower productivity and, as a consequence, delayed deliveries. Since the Swedish operations deliver to Norway, this also affected our Norwegian operations. An action program was implemented in March to correct the problems. At that time, the assessment was that this would be sufficient. In April and May, however, the problems increased, causing us to apply further rigorous measures, which have been effective. The change in the mix towards increased industry sales in Finland was mainly caused by higher personnel turnover among the sales force in our latest acquisition. This has affected total sales and consumer sales negatively, as reflected in earnings. The sales force is now back at the “correct” level. 

Future prospects 
Overall, underlying development in our markets is favourable. We see no change in stable demand, driven primarily by very strong new building, while consumers are in general more cautious in several markets. In most Western European countries, the opportunities and threats look largely similar. Urbanization is increasing, bringing increased housing shortages. Demands are increasing to build cheaper and faster, leading to increased competition and somewhat increased price pressure. 

We continue to work towards our vision – to improve life at home – while continuously reviewing our structure to identify further efficiencies. In the short term, the highest priority is to overcome the temporary operational challenges we face in Sweden and Finland. In the longer term, earnings growth, based on increased sales and continuous efficiency improvements are highly prioritized. Based on the position we have captured in recent years and with a good first half of the year behind us, we take a positive view of development over the remainder of 2017.  

MALMÖ – 17 July 2017

Håkan Jeppsson
President and CEO

Please read the entire 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 a leading door supplier. 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 4,000 employees and generated sales of slightly more than SEK 5.7 billion in 2016. The Group's headquarters are located in Malmö, Sweden. For further information, please visit www.inwido.com

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