Year-end report January-December 2019

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 5 February 2020 at 7:45 a.m. CET.

Strengthened margin and sharply reduced net debt

Fourth quarter of 2019

• Net sales amounted to SEK 1,813 million (1,864), representing a decrease of 3%. Organic growth was a negative 4%.
• EBITA amounted to SEK 186 million and the EBITA margin was 10.3%. Excluding IFRS 16, EBITA amounted to SEK 183 million (215) and the EBITA margin was 10.1% (11.5).
• Operating EBITA amounted to SEK 211 million and the operating EBITA margin rose to 11.6% (11.5%). Excluding IFRS 16, operating EBITA amounted to SEK 208 million (215) and the operating EBITA margin was unchanged at 11.5%.
• Operating cash flow increased to SEK 393 million (291) and net debt decreased to 2.2x EBITDA (2.7x).
• Earnings per share amounted to SEK 2.28 (2.31).
• Kerstin Lindell and Christer Wahlquist were elected as new Board members in connection with the Extraordinary General Meeting in January.

January-December 2019

• Net sales amounted to SEK 6,631 million (6,667), representing a decrease of 1%. Organic growth was a negative 4%.
• EBITA amounted to SEK 621 million and the EBITA margin was 9.4%. Excluding IFRS 16, EBITA amounted to SEK 609 million (635) and the EBITA margin was 9.2 % (9.5%).
• Operating EBITA amounted to SEK 646 million and the operating EBITA margin was 9.7%. Excluding IFRS 16, operating EBITA amounted to SEK 634 million (657) and the operating EBITA margin was 9.6% (9.9%).
• Operating cash flow increased to SEK 925 million (434).
• Earnings per share rose slightly to SEK 7.48 (7.47).
• The Board of Directors proposes a dividend of SEK 3.50 (2.50).

The CEO comments

"As we now close the books for 2019, I can sum up a year that largely progressed in accordance with our plan given the market conditions. We delivered strong cash flows and a sharply reduced level of debt. This was all in line with our undertakings to continuously strengthen the balance sheet to be able to conduct new, value-generating acquisitions when the timing is right. My view is that our new governance model Simplify has contributed positively to the development of the Group and of our business units, and we meet the opportunities of the new decade with confidence.

In the fourth quarter of 2019, despite relatively weak market activity in Business Area North, we delivered an improved margin, while a continued strong cash flow brought net debt down to 2.2x EBITDA, excluding IFRS 16. Compared with the corresponding period in the preceding year, net sales decreased by 3 percent to SEK 1,813 million (1,864). Operating EBITA for the quarter was SEK 211 million (215) and the operating EBITA margin rose to 11.6 percent (11.5). Net sales for full-year 2019 landed at SEK 6,631 million (6,667), operating EBITA landed at SEK 646 million (657) and the operating EBITA margin was 9.7 percent (9.9).

Developments in our two segments
Business Area South continued its positive development in the fourth quarter, with most of the business units experiencing growth. In addition to the favourable development of the Danish units and stable deliveries by our UK units, the Irish operations achieved sharply improved earnings. Business Area South’s sales increased by 2 percent overall and its operating EBITA rose to SEK 147 million (139), lifting the operating EBITA margin to 19.7 percent (19.1). In e-Commerce, where development is compared with a strong fourth quarter in 2018, favourable growth was achieved in Sweden and Norway, while sales declined slightly in Denmark. On the whole, e-Commerce accounted for 8 percent of consolidated sales and the order backlog was strengthened. For full-year 2019, e-Commerce accounted for 9 percent of consolidated sales.

During the quarter, challenging conditions, primarily in the Swedish and Finnish markets, continued to impact Business Area North. Some recovery could be discerned in the industry markets in Sweden and Finland, although it is still too early to draw any conclusions regarding a more sustained recovery in the market. Sales fell by 6 percent in the fourth quarter, while operating EBITA decreased to SEK 75 million (90), resulting in the operating EBITA margin landing at 7.3 percent (8.2). During the quarter, we continued to invest in improved efficiency and growth. We are doing this alongside ongoing efforts with cost savings to mitigate fluctuations in volumes and changing market conditions.

Strong cash flow and sharply reduced debt
Acquiring and developing Europe’s leading window and door companies is Inwido’s clear guiding principle. In 2019, we refined our acquisition strategy and the strengthened balance sheet reassures us as we progress into 2020. Operating cash flow for the fourth quarter was SEK 393 million, compared with SEK 291 million for the corresponding period in 2018. For full-year 2019, operating cash flow rose to SEK 925 million, compared with SEK 434 million in 2018.

In summary, this development confirms that our strategy of broadening our market and also growing outside the Nordic region, while increasing our focus on e-commerce, is the right way to go.

Future prospects
The Nordic industry market remains challenging, although we are seeing possible indications that it is levelling out, while the consumer markets are difficult to assess. Our proven capacity to generate strong earnings and cash flows means we are well equipped to continue developing our companies and expanding the Group. First and foremost, however, we take on the start of 2020 and the quieter winter season, with equal portions of humility and energy."

MALMÖ, 5 FEBRUARY 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.