Interim report January-September 2020

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 21 October 2020 at 7:45 a.m. CET.

A strong quarter

Third quarter of 2020

• Net sales rose to SEK 1,716 million (1,665). Organic growth amounted to 4 percent.
• Order intake increased by 7 percent and the order backlog increased by 18 percent to SEK 1,308 million.
• EBITA increased to SEK 240 million (203) and the EBITA margin increased to 14.0 percent (12.2).
• Operating EBITA rose to SEK 247 million (203) and the operating EBITA margin rose to 14.4 percent (12.2).
• Earnings per share rose by 19 percent to SEK 3.05 (2.56).
• Net debt, excluding IFRS 16, in relation to operating EBITDA decreased to a multiple of 1.2 (2.5).

January-September 2020

• Net sales rose to SEK 4,882 million (4,818). Organic growth amounted to 2 percent.
• EBITA increased to SEK 482 million (435) and the EBITA margin increased to 9.9 percent (9.0).
• Operating EBITA rose to SEK 498 million (435) and the operating EBITA margin rose to 10.2 percent (9.0).
• Earnings per share rose to SEK 5.61 (5.20).

The CEO comments:

"As Europe’s largest windows group, Inwido’s business concept is to grow sustainably and profitably, organically and through acquisitions, focusing on the consumer-driven market. In the third quarter, we continued to build on this platform with strong profits, good organic growth and strong cash flows, achieving our sixth consecutive quarter with strengthened margins

The third quarter was Inwido’s strongest quarter to date, in terms of profit. Backed by a positive consumer market and a high growth rate in e-Commerce, net sales increased by 4 percent to SEK 1,716 million (1,665). Operating EBITA rose to SEK 247 million (203) and the operating EBITA margin rose to 14.4 percent (12.2). Bolstered by solid profits, we enter the fourth quarter with a record high order backlog of SEK 1,308 million, up 18 percent.

Positive consumer market in both South and North
During the quarter, Business Area South continued to develop favourably, with both strong growth and profits. Sales increased organically by 10 percent and operating EBITA increased by 44 percent to SEK 195 million (135), lifting the operating EBITA margin to 24.7 percent (18.7). Order intake rose by 13 percent and the order backlog was 36 percent higher at the end of the quarter. In Denmark, our business units continued to capitalize well on a stable consumer market. e-Commerce grew organically by 42 percent, accounting for 13 percent of the Group’s sales in the quarter. In Ireland and the UK, operations have reopened and are gradually working their way back as the market recovers, although uncertainty remains regarding the impacts both of Covid-19 and Brexit.

In Business Area North, the Swedish business units addressing the consumer market have advanced their positions and shown positive development. At the same time, the Finnish consumer market and the industrial market were generally more cautious. The business area showed modest organic sales growth during the quarter. Combined with good cost control, operating EBITA rose somewhat to SEK 73 million (72). This meant that the operating EBITA margin rose to 8.2 percent (8.0). Order intake rose by 3 percent compared with the corresponding period last year and the order backlog was 7 percent higher at the end of the quarter.

Improved cash flow and reduced net debt
Operating cash flow for the first nine months of the year rose to SEK 872 million, compared with SEK 532 million for the corresponding period last year, reinforced by reduced working capital. Affected positively by this strong cash flow, net debt decreased to a multiple of 1.2 in relation to operating EBITDA, excluding IFRS 16, compared with a multiple of 2.5 at the corresponding time in 2019.

Covid-19 pandemic
Covid-19 had a relatively limited negative impact on our 28 business units during the quarter. Production efficiency, particularly in Business Area North, was negatively impacted by an increased sick leave. Following previous closures in the UK and Ireland, although operations have now reopened, they are not fully back to pre-pandemic levels yet. At the same time, our e‑trade operations, in particular, have probably been impacted positively by the current “DIY trend” and changed buying behaviours. In the short to medium term, demand in the consumer and industrial markets may be affected by outbreaks of contagion. We are monitoring developments closely to be able to respond quickly if the situation so demands.

Future prospects
Bolstered by a very good third quarter, we enter the winter season with lower consumer activity but a strong order backlog. With a stable consumer market but with industrial demand still hesitant, we will, over the remainder of the period, continue persistently to gear up Inwido for expansion. We are investing in our business units, refining our channel and segment positions, driving development in e-commerce and intensifying our efforts to achieve value-generating acquisitions. With our strengthened balance sheet, we have stepped up our acquisition efforts, continuing our discussions with potential target companies.

We are driven by our ambition to lead the development of the window industry in Europe and to strengthen our leadership position while improving people’s everyday lives indoors, developing our employees and generating value for shareholders."

MALMÖ, 21 OCTOBER 2020

Henrik Hjalmarsson
President and CEO

Read the full report in the pdf attached

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

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