Interim report January-March 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 26 April 2018 at 7:45 a.m. CET.

Good start to the year despite a long and hard winter

January – March 2018

• Net sales amounted to SEK 1,391 million (1,365), representing an increase of 2 percent. Organic growth was a negative 2 percent
• EBITA amounted to SEK 37 million (82) after items affecting comparability of a negative SEK 19 million (negative 1), and the EBITA margin was 2.6 percent (6.0)
• Operating EBITA amounted to SEK 56 million (83) and the operating EBITA margin was 4.0 percent (6.1)
• Earnings per share before dilution amounted to SEK 0.54 (0.69)
• Adjusted earnings per share before dilution increased to SEK 0.86 (0.76)
• Inwido acquired the remaining 75 percent of shares in Outrup Vinduer & Døre A/S
• The acquisition of e-commerce group Bedst & Billigst was completed as per 1 April 2018 and e-commerce now accounts for more than 7 percent of Inwido’s annual sales
• Henriette Schütze proposed as new Board member after Sisse Fjelsted Rasmussen who declined re-election

The CEO comments:
"The first quarter of 2018 was challenging in many ways, with a long and tough winter that led to reduced consumer sales. Despite this, we achieved the second-best first quarter earnings to date, attributable to recent years’ expansion of operations, including the expansion in Europe and growing e-commerce. In terms of earnings, we achieved our strongest first quarter to date in 2017, with the mild winter that year, affecting the comparison figures this year.  

In the first quarter of 2018, we held up sales well and decreased by just 2 percent organically. Operating profit for the quarter was SEK 56 million, compared with SEK 83 million in the first quarter of 2017. Order bookings during the quarter were 6 percent lower than in the corresponding period in 2017 and the order backlog at the end of the quarter was 8 percent lower. 

The winter and Easter holiday had a negative impact 
As mentioned previously, sales and order bookings were affected negatively by external circumstances, mainly the late, long and cold winter. In Northern Europe, the market remains favourable for craftsmen and many of them prioritized indoor work during the cold winter period. In addition, there were fewer working days in the first quarter of 2018 than in 2017 because the Easter holiday fell in the first quarter this year. As a result of these external factors, the proportion of our sales that were made to consumers, affected profitability negatively.  

In the Sweden-Norway business area, sales fell by 3 percent. At the same time, operating earnings fell, mainly due to a lower proportion of consumer sales. The order backlog decreased by 18 percent compared with last year’s record-breaking first quarter.  

In Finland, reported sales rose by 7 percent while earnings fell. Here too, the proportion of sales to consumers fell, due to the winter, which was also unusually cold in Finland. Outdoor construction even came to a complete standstill for a number of days, which only happens when temperatures are extremely low. 

Continued strong development in Denmark and EBE delivered improved profit  
Development in Denmark remained strong, although both sales and operating profit decreased somewhat compared with the very strong first quarter of 2017. The Danish market remains favourable and we have good gross margins. There is a high level of activity in Denmark, with Inwido launching many new products. 

Within EBE, reported sales rose by 4 percent and operating profit improved, driven primarily by e-commerce and the UK. Ireland and Poland also developed favourably.  

Online shopping is increasing – a trend that favours us as a market leader. We are generally seeing a favourable increase in our e-commerce. With the acquisition of Bedst & Billigst, e-commerce direct to end-customers now accounts for more than 7 percent of our sales, that is almost SEK 0.5 billion on an annual basis. Today, Inwido is the largest e-commerce player in our sector. 

Future prospects 
We are seeing continued high underlying demand in most of our markets, although concerns regarding the economy, the housing market and property prices are affecting consumers, particularly in Sweden.  

During the cold winter, the seasonally weakest period, with lower overall demand, competition has been somewhat fiercer than usual. However, Inwido’s primary exposure to the renovation and consumer market normally entails a favourable mix with better margins. We expect the markets to normalize with the arrival of spring, although the second quarter will also be affected by the late winter.  

In 2017, we generally captured market share, giving us a good starting position. With our strong position in the Nordic region, our expanding business in the rest of Europe and in e-commerce, we perceive good potential to continue growing in 2018, while also making Inwido even more efficient."  

MALMÖ, 26 APRIL 2018

Håkan Jeppsson
President and CEO 

The 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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