Interim report January-March 2020

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 23 April 2020 at 7:45 a.m. CET.

Increased order intake and sales and strengthened margins, but uncertain market prospects

January – March 2020

• Net sales amounted to SEK 1,448 million (1,443). Organic growth was -1 percent.
• The order intake increased by 9 percent and the order backlog increased by 12 percent to SEK 1,031 million.
• EBITA increased to SEK 48 million (45) and the EBITA margin increased to 3.3 percent (3.1).
• Operating EBITA rose to SEK 48 million (45) and the operating EBITA margin rose to 3.3 percent (3.1).
• Earnings per share amounted to SEK 0.10 (0.58).
• Net debt decreased to 2.3x operating EBITDA (2.8x).
• Kerstin Lindell and Christer Wahlquist were elected as new Board members in connection with the Extraordinary General Meeting in January.
• Due to the Covid-19 pandemic, the Board of Directors decided to withdraw the proposed dividend.

The CEO comments:
"Despite the disconcerting and serious development of the Covid-19 pandemic, the first quarter of 2020 was largely in line with Inwido’s expectations. Sales were on a par with the preceding year, the margin strengthened, cash flow was positive for the season, the order intake was favourable, and we have, at the same time, worked consciously to have a high level of preparedness for future challenges. Net sales for the first quarter amounted to SEK 1,448 million (1,443). Operating EBITA rose to SEK 48 million (45) and the operating EBITA margin was 3.3 percent (3.1). Viewed over an annual cycle, the first quarter is, under normal circumstances, Inwido’s weakest, both in terms of sales and earnings.

Increased order bookings in our business areas
In the first quarter, Business Area South continued its positive development, with good growth. Sales increased by 9 percent and operating EBITA rose to SEK 67 million (60), lifting the operating EBITA margin to 11.0 percent (10.9). Inwido’s Danish business units performed well overall, showing good growth and a strong order intake. Our three business units in the UK were, however, forced to close almost completely at the end of March due to the general directives issued by the UK Government. They are ready to restart quickly when restrictions are lifted though. e-Commerce continued to develop positively, growing by 19 percent and therefore accounting for 10 percent of consolidated sales for the quarter.

In Business Area North, we saw a break in the trend with an order intake rising 7 percent compared with the corresponding period last year and the order backlog being 9 percent higher at the end of the quarter. Sales for Business Area North decreased by 5 percent in the first quarter, however, as a result of the weaker order backlog at the start of the year. Operating EBITA amounted to a negative SEK 2 million (positive 2), meaning that the operating EBITA margin landed at negative 0.2 percent (positive 0.3). Some recovery could be noted in the Swedish and Finnish industry markets, as reflected in the order backlog, which mainly grew on the industry side and was up 9 percent at the end of the period. The emerging Covid-19 pandemic had a negative impact on consumer sales, which includes home visits and installation at end-customers’ homes, particularly in Finland. In Norway, both sales and order intake were impacted by Covid-19.

Debt and earnings per share influenced by currency effects
Operating cash flow for the quarter was positive in the amount of SEK 33 million, compared with SEK 50 million for the corresponding period last year. Net debt was adversely affected by currency effects and by our having increased materials inventories in many business units to secure delivery capacity during the Covid-19 pandemic. Excluding IFRS 16, net debt decreased to a multiple of 2.3 in relation to operating EBITDA, compared with a multiple of 2.8 at the corresponding time last year. Currency effects also affected earnings per share negatively by 0.59 SEK.

Covid-19 pandemic
Together with the management teams in our 28 business units, we are monitory developments surrounding Covid-19 carefully. Measures are taken on a daily basis to safeguard the health of the employees and to take responsibility for communities, customers and our business units. It is encouraging to see that all production facilities are operating, apart from the three in the UK, and that the inbound supply chain has, to date, functioned without any significant disruption. I am impressed by and proud of how our managers and employees have dealt with this challenge, which, in itself, bears testament to the strength of Inwido’s decentralized business model.

Future prospects
Given the difficulty in assessing the effects of Covid-19, the outlook for 2020 is very difficult to predict and we have substantial preparedness for a rapidly changing situation in our operations. In these uncertain times, we are focusing on securing our capacity to deliver on demand and in accordance with our customers’ requirements, while preparing to immediately reduce our cost base should demand fall."

MALMÖ, 23 APRIL 2020

Henrik Hjalmarsson
President and CEO

For more information, please contact:
Henrik Hjalmarsson, President and CEO Tel.: 46 (0)76 846 20 46 
Peter Welin, CFO and deputy CEO Tel.: 46 (0)703 24 31 90 
E-mail: peter.welin@inwido.com

About Inwido 
Inwido owns and develops companies that improve people’s everyday lives indoors with various products and services. Today, Inwido is Europe’s largest windows group and a natural home for the region’s strongest companies in the areas of comfort, indoor climate and safety. In 2019, Inwido achieved sales of SEK 6.6 billion and an operating EBITA margin of 9.7 percent. The Group has some 4,400 employees in total, with operations in Denmark, Estonia, Finland, Ireland, Lithuania, Norway, Poland, Romania, the UK, Sweden and Germany.