INTERIM REPORT, January–March 2019

Report this content

First quarter in line with expectations considering Veg Tech seasonality

First quarter of 2019

  • Consolidated net sales increased by 20 percent to SEK 569 m (474), of which organic growth amounted to 5 percent. Acquisitions contributed by 11 percent and currency by 4 percent
  • Net sales in Product & Solutions amounted to SEK 445 m (368) and in Installation Services to SEK 138 m (119)
  • EBITDA increased to SEK 18 m (17)
  • Operating profit (EBIT) decreased to SEK -7 m (2)
  • ROCE was 12.0 percent (14.0)
  • Operating cash flow amounted to SEK -49 m (-65)
  • Earnings per share before and after dilution were SEK -0.44 (-0.13)
  • The Group applies IFRS 16 as of 1 January 2019 and all numbers for the first quarter 2019 include this change (numbers for previous periods have not been recalculated). The conversion has affected EBITDA by SEK 10 m, operating profit (EBIT) by SEK 0 m, and net income by SEK -1 m. The balance sheet total increased by SEK 137 m.

Message from the CEO

First quarter in line with expectations considering Veg Tech seasonality 

Consolidated net sales for the first quarter rose by 20 percent compared with previous year, from SEK 474 m to SEK 569 m. Acquisitions contributed by 11 percent. Organic growth was strong at 5 percent and the currency translation exchange rate effect was 4 percent.

At SEK -7 m, EBIT was below last year’s profit of SEK 2 m, and EBITDA was SEK 18 m compared with SEK 17 m in the corresponding period in the preceeding year. Earnings are in line with our expectations due to the normal seasonal effect in Veg Tech with very low sales in the winter quarter, as there are almost no deliveries and installation of green products during the winter period.

I am happy to report that our first acquisition this year was finalized in February, further delivering on our commitment to develop our business through both organic and acquisitive growth. The leading distributor of pond systems in the Belgium market, Distri Pond Group, has annual sales of SEK 110 m, and we expect to expand the business to geographies close to Belgium.

The consolidated net sales growth of 20 percent in the first quarter was driven by strong sales in roofing in Sweden, Norway and Denmark, but also the prefabricated elements business in Norway. While our Products & Solutions operating segment reported a sales increase of 21 percent, our Installation Services operating segment increased 16 percent.

Within our Products & Solutions segment, the weather was mixed in the first quarter and affected our geographies and businesses in various ways. The beginning was cold and snowy in Finland, while the latter part of the quarter was milder and more favourable, especially in Denmark and in the southern parts of Sweden. Sales in Norway develop positively in all segments, but the intensified sales and marketing efforts to increase the market share within Builders Merchants has affected gross margin and selling expenses negatively.

The prefabricated elements business in Norway continues to develop well and enjoys a strong order book. At the same time, the Danish prefabricated elements business continues to suffer from the recent trend of construction projects being delayed by our customers. The delays create difficulties in optimizing the production planning leading to lower efficiency and earnings. The order intake was positive in the quarter, but we expect delivery delays to continue in the short term.

For obvious natural reasons, Veg Tech is the most weather dependent and also the most seasonal business within Nordic Waterproofing. The main product is sedum, which just like grass does not grow below a certain temperature. Spring and early autumn are normally the best times to install sedum, while it is very sensitive to handle at frost and temperatures below zero degrees or the plants could be damaged. For this reason, deliveries and installation rarely take place during the winter months, which is also the case in 2019. This leads to a loss for Veg Tech in the first quarter, which normally is compensated by the profit especially in the second and third quarter.

Following some improvement in the project execution in our Finnish Installation Services segment, we are now focusing on receiving new orders and volumes without compromising profitability. The general outlook and the Finnish market expectations for the year are slightly negative, which makes for a continuously competitive marketplace. However, we have managed to improve the order intake during the first quarter compared with previous year, and the order book at the end of the first quarter is above previous year. Our Danish franchise companies experience a strong market and perform well in the first quarter, with strong order books and an EBIT contribution in line with the preceding year.

In February we acquired Distri Pond Group. The company, with annual sales of approximately SEK 110 million, is a leading distributor of pond systems with a one stop shop offer in the Belgium market, and offers EPDM waterproofing membranes, pumps, filtering, control systems, light and accessories, and maintenance & garden applications. Additionally, the company offers site preparation, installation of EPDM membranes, education, and technical support and maintenance. With the acquisition of Distri Pond, Nordic Waterproofing’s business unit SealEco enters the segment of high-quality pond systems. This is in line with Nordic Waterproofing’s strategy of expanding our product and services portfolio as well as downstream integration. Through the acquisition of Distri Pond, as in previous recent acquisitions, Nordic Waterproofing further demonstrates and enhances its commitment towards sustainable and environmentally efficient solutions and surroundings. We welcome our new colleagues in Belgium to Nordic Waterproofing!

We continue to focus on organic growth, profitability and selective acquisitions. Organic growth is expected to come particularly from the development of our recent acquisitions, building on our new platforms in prefabricated elements, Taasinge group, and green roofs and surfaces, Veg Tech. Regarding acquisitions, we maintain our focus on small to medium sized companies presenting good synergistic potential with our existing businesses

The year started in line with expectations, and our outlook for the year remain unchanged.

Vejen, 2 May 2019

Martin Ellis,

President and CEO

Conference call

A conference call for investors, analysts and media will be held today, 2 May 2019, at 10:00 a.m. CEST and can be joined online at Presentation materials for the call will be available on the website one hour before the call.

To participate, please dial:
From the United Kingdom: +44 33 3300 9263
From Denmark: +45 78 15 01 07
From Sweden: +46 8 505 583 52

Further information can be obtained from

Martin Ellis, President and CEO tel: +45 31 21 36 69
Jonas Olin, CFO & Investor Relations tel: +46 708 29 14 54

This information is information that Nordic Waterproofing Holding A/S is obliged to make public pursuant to the EU Market Abuse Regulation.
The information was submitted for publication, through the agency of the contact persons set out above, at 2 May 2019, 08:00 a.m. CEST.