Year-end report January-December 2017

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 1 February 2018 at 7:45 a.m. CET.

Continued good growth – stabilised operating profit

Fourth quarter of 2017

• Net sales rose to SEK 1,774 million (1,709), representing an increase of 4 percent. Organic growth was 3 percent
• EBITA amounted to SEK 89 million (223) after items affecting comparability of a negative SEK 112 million (negative 4), and the EBITA margin was 5.0 percent (13.0)
• The revaluation of the remaining 75 percent of shares in Outrup Vinduer & Døre due to better‑than‑expected earnings towards the end of 2017 burdened EBITA for the quarter by SEK 39 million.
• Operating EBITA amounted to SEK 201 million (227) and the operating EBITA margin was 11.3 percent (13.3)
• Earnings per share before dilution amounted to SEK 0.38 (2.37)
• An agreement was reached to acquire the e‑commerce group Bedst & Billigst, with control of the operations being expected to take place during the first quarter

January – December 2017

• Net sales rose to SEK 6,371 million (5,672), representing an increase of 12 percent. Organic growth was 4 percent
• EBITA amounted to SEK 535 million (664) after items affecting comparability of a negative SEK 114 million (negative 10), and the EBITA margin was 8.4 percent (11.7)
• Operating EBITA amounted to SEK 649 million (673) and the operating EBITA margin was 10.2 percent (11.9)
• Cash flow from operating activities increased to SEK 591 million (489)
• Earnings per share before dilution amounted to SEK 5.02 (7.38)
• Georg Brunstam was elected as the new Chairman of the Board
• The Board proposes a dividend of SEK 3.50 per share (3.50)

The CEO comments:
"Overall, 2017 was challenging, mainly due to production disruptions in the Sweden-Norway business area. Despite these disruptions lagging into the fourth quarter of 2017, we showed good growth and an operating profit of more than SEK 200 million – one of the best quarters in the Group’s history in terms of earnings. 

During the fourth quarter of 2017, sales increased by 4 percent to SEK 1,774, million and for the full-year by 12 percent to SEK 6,371 million. Operating profit for the quarter was SEK 201 million, compared with SEK 227 million in the fourth quarter of 2016. Nonetheless, this was Inwido’s best quarter to date. For the full-year, earning amounted to SEK 649 million, against SEK 673 million for 2016. Order bookings for the quarter were 2 percent higher than for the same period in 2016. Order bookings for the full-year rose by 11 percent, meaning that the order backlog at the end of the year was 5 percent higher than a year previously. 

Production disruptions phase out – Denmark still strong 
Net sales in Sweden-Norway increased by 3 percent, while operating earnings fell, negatively impacted by production disruptions and a lower proportion of sales to consumers. The underlying causes of the production disturbances we had for a large part of 2017 are now handled. However, we estimate that we have a bit left to achieve full efficiency. Order bookings fell by 10 percent over the quarter, although the order backlog was on a par with the preceding year.

Finland’s economy is developing positively and consumer confidence is rising. Our sales in Finland increased slightly in the quarter and operating earnings were on a par with the preceding year. Although the product mix has had a negative impact on the margin, we do not believe this will continue in the future. Order bookings in the quarter increased by 4 percent and the order backlog was 21 percent higher than in the preceding year. 

Denmark had a very good year in 2017 and ended the year with strong growth in the quarter and increased order bookings. The order backlog at the end of the year was 23 percent lower than in the preceding year, although the comparative figures are tough with an unusually high order backlog at the end of 2016. Additionally, increased productivity led to shorter delivery times during the year.  

In the EBE business area, both sales and earnings for the quarter were in line with 2016. Due to strong order bookings, the order backlog grew and ended the year in line with the preceding year.  

Digitization has broken through on a broad front within the Group, and we have launched connectable products in several markets. In 2017, e-commerce sales to consumers grew by about 20 percent.  

To strengthen competitiveness, the Group commenced an efficiency improvement programme in the fourth quarter of 2017. Overall, expenses are expected to decrease by at least SEK 100 million on an annual basis, with full impact being achieved in 2019. The programme generated structural expenses of SEK 63 million in the fourth quarter and the expenses for the first quarter of 2018 are estimated at SEK 19 million. 

Future prospects 
The year 2018 has good prospects of becoming an interesting year full of opportunities. This aside, the year starts with a quarter that will be compared with 2017, when we delivered Inwido’s undisputed best first quarter to date. Last year, we also had the advantage of Easter falling in the second quarter. In 2018, Easter begins in the first quarter. 

Looking at our markets, demand is generally good and is primarily being driven by the need for new housing. There is increasing demand for building projects to be cheaper and faster, resulting in both increased expenses and a certain degree of price pressure in the industry segment. However, Inwido’s primary exposure to the renovation and consumer market usually means a good mix in our overall business. On the plus side, we have a programme to reduce expenses in progress and the effects of the production disruptions will be ceasing. At the same time, there is widespread uncertainty regarding the development of the housing market and real estate prices in Scandinavia. 

With our strong market position in the Nordic region and ongoing internal measures, we see good potential to continue developing Inwido in terms of growth and efficiency in 2018." 

MALMÖ, 1 FEBRUARY 2018
 
Håkan Jeppsson
President and CEO 

Read the entire 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, 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 4,000 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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