Interim Report Q1 January-March 2014

"Inwido has begun 2014 with good growth and improved earnings, as well as improved margins compared with last year. This favourable start derives primarily from the consumer market. The tone from the industrial side is also more positive, even though the difference between the individual markets is greater here.”
Håkan Jeppsson, President and CEO

January – March 2014

• Net sales rose to SEK 907 million (857), which, adjusted for currency effects, represents an increase of 5 percent
• Order bookings rose by 22 percent
• Operating profit (EBITA), adjusted for items affecting comparability, rose to SEK 4 million (loss 17), and the adjusted profit margin rose to 0.5 percent (neg. 1.9)
• The operating loss (EBITA) amounted to SEK 75 million (19), including items affecting comparability amounting to a negative SEK 80 million (3), attributable primarily to restructuring costs in Norway and Finland, and the operating margin (EBITA), including items affecting comparability, amounted to a negative 8.3 percent (2.3)
• The loss after tax was SEK 64 million (30)
• Cash flow from operating activities was negative in the amount of SEK 198 million (123)
• In Denmark, JNA and SPAR were acquired (after the close of the reporting period)

CEO Håkan Jeppsson comments

A well-managed company with a strong market position, prepared for the opportunities and challenges that current market conditions entail
Inwido has begun 2014 with good growth and improved earnings, as well as improved margins compared with last year. This favourable start derives primarily from the consumer market. A rising consumer confidence index and our own aggressive investments in the market have had a positive impact on our figures for the quarter. The tone from the industrial side is also more positive, even though the difference between the individual markets is greater here. Particularly encouraging is the increase in order bookings: up 22 percent on the corresponding period last year. In addition to an improved situation in the market, order bookings were also affected positively by the fact that Easter was in April this year.

During the first quarter, we also completed the acquisitions of JNA and SPAR in Denmark, which we have wanted to implement for some time. Since certain consumer groups do not only want to access product information via the Internet, but increasingly also want to be able to buy windows and doors directly on-line, the acquisition of these companies, most of whose sales are made on-line, means that we now have a favourable alternative for this target group.

In terms of our segments, important decisions have been taken regarding our operations in Norway. For nearly two years, we have seen reduced volumes and profitability for both windows and doors in Norway. This is mainly due to increasing imports from countries with lower production costs. Consequently, our Norwegian operations are moving their handling of doors, as well as certain window production activities, to Vetlanda and Lenhovda in Sweden. We have also sold our operations in Russia and instead established a sales partnership with exports to Russia from other Inwido units. In all other segments and markets, we improved our key ratios during the quarter. In particular, development in Denmark and Finland was very positive and we are continuing to capture market shares there. In Finland, order bookings were affected positively by one of Inwido’s foremost competitors being declared bankrupt.

We are now experiencing increasing optimism among households, albeit at a cautious pace. At the same time, the market is pervaded by continued uncertainty with fierce competition and price-conscious customers. Backed by a strong balance sheet, for the rest of 2014, we will continue to develop our ventures in new, smart products while focusing on customer and consumer satisfaction. In my assessment, Inwido is a well-managed company with a strong market position and is prepared for the opportunities and challenges that prevailing market conditions entail.

MALMÖ, SWEDEN, 8 MAY 2014

Håkan Jeppsson
President and CEO

Contact regarding financial questions

Håkan Jeppsson,
President and CEO
Tel: +46 (0)70 5501517
or  +46 (0)10 4514551
E-mail: hakan.jeppsson@inwido.com

Peter Welin,
CFO
Tel: +46 (0)70 3243190
or   +46 (0)10 4514552
E-mail: peter.welin@inwido.com

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