Interim report January-June 2018

This information is such that Inwido AB (publ) is obliged to publish in accordance with the EU market abuse regulation. The information was submitted by the below contact persons for publication on 16 July 2018 at 7:45 a.m. CET.

In line with expectations after a late start to the season

April – June 2018

• Net sales rose to SEK 1,729 million (1,673), representing an increase of 3 percent. Organic growth was negative 2 percent
• EBITA amounted to SEK 184 million (192) after items affecting comparability of SEK 0 million (negative 1), and the EBITA margin was 10.6 percent (11.5)
• Operating EBITA amounted to SEK 184 million (193) and the operating EBITA margin was 10.6 percent (11.5)
• Earnings per share before dilution rose to SEK 2.31 (2.10)
• The acquisition of e-commerce group Bedst & Billigst was completed as per 1 April, and the acquisition of Profin in Finland was completed as per 1 July
• A dividend of SEK 3.50 per share was paid
• Most of the Group’s existing loans were refinanced on 9 July

January – June 2018

• Net sales rose to SEK 3,120 million (3,038), representing an increase of 3 percent. Organic growth was negative 2 percent
• EBITA amounted to SEK 220 million (274) after items affecting comparability of a negative SEK 20 million (negative 2), and the EBITA margin was 7.1 percent (9.0)
• Operating EBITA amounted to SEK 240 million (276) and the operating EBITA margin was 7.7 percent (9.1)
• Earnings per share before dilution rose to SEK 2.85 (2.79)

The CEO comments:
"The outcome was largely as anticipated following a late start to the season and confirming that the strategy of broadening the operations and increasing e-commerce is working – that is how I would like to summarize the second quarter of the year.  

The Group’s reported sales increased by 3 percent to SEK 1,729 million, organically down 2 percent, and the operating EBITA margin was 10.6 percent compared with 11.5 percent in the corresponding period last year. The lower profitability can primarily be attributed to effects of both the year’s cold and late winter and weaker development in our Swedish operations. Order bookings increased 5 percent adjusted for acquisitions compared with the corresponding period last year and adjusted also for currency, order bookings were slightly higher than last year. Payments for acquisitions in the first half of the year have temporarily increased consolidated debt, although our assessment is that our strong cash flows in the second half of the year will reduce this.  

Sweden-Norway in process of realignment 
We are continuing our efforts to realign the Norwegian and Swedish operations. The merger into a single business area in July 2017 gave favourable synergies, and Norway returned to profitability for the quarter. At the same time, the important Swedish market remains challenging with slightly lower demand, fierce competition and ongoing structural changes. As a market leader, we are long-term and continuously reviewing brands and offerings, as well as sales channels. We are working intensively to develop more products for connected homes, to create additional solutions that help end-customers achieve both safer and more energy-efficient housing, and to continue developing our fast-growing e-commerce.

Although we are not satisfied with the outcome in Sweden, we do also see flashes of light. For example, in line with our strategy, the proportion of consumers in our sales mix increased slightly towards the end of the quarter. This is positive for us and increased our margins. The initiated expense and efficiency programmes should also have a greater impact later in the year.

Positive in other markets 
In other markets, development was largely as planned. In Finland, both sales and earnings increased during the quarter, while we can see that efficiency can be improved further. During the quarter, we also entered an important agreement to acquire Profin, the Finnish market leader in the fast-growing segment for exclusive panoramic windows and sliding doors.  

Denmark continues to make good progress despite comparison figures at historically high levels. Although sales were slightly lower than last year in local currency, the margin improved, order bookings were positive, and the order backlog was in line with the preceding year.  

Development in EBE (Emerging Business Europe) is also pointing in the right direction, driven mainly by the UK having turned from loss to profit and e-commerce continuing to grow strongly with good profitability. Today, e-commerce directly to consumers accounts for slightly more than 8 percent of consolidated sales and is growing steadily from quarter to quarter. This means we are continuously consolidating our position as the industry’s largest e-commerce player.  

Future prospects 
We are continuing our strategy by broadening our operations through, for example, new product offerings and growing e-commerce while, in parallel, increasing efficiency and profitability, particularly outside the Nordic region. Although we remain concerned about the economy and property prices in the Swedish market, as well as some upward pressure on raw material prices, we see continued underlying demand in our other markets. In addition, we are defending our strong Nordic position, maintaining a high level of efficiency in our factories, and have implemented two strategically important acquisitions in the past year, and, on the whole, we are well-equipped for the second half of 2018."  

MALMÖ – 16 JULY 2018
 
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 a leading door supplier. The company has operations in Denmark, Finland, Norway, Sweden, Austria, Estonia, Ireland, Lithuania, Romania, 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 4,400 employees and generated sales of slightly more than SEK 6.4 billion in 2017. The Group's headquarters are located in Malmö, Sweden. For further information, please visit www.inwido.com

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