YEAR-END REPORT, January-December 2019

Solid growth and financial performance

Fourth quarter of 2019                                         

• Consolidated net sales increased by 10 percent to SEK 763 m (692), of which organic growth amounted to 5 percent. Acquisitions contributed by 3 percent and currency by 2 percent
• Net sales in Products & Solutions amounted to SEK 554 m (516) and Installation Services to SEK 232 m (198)
• EBITDA increased by 49 percent to SEK 91 m (61), whereof SEK 12 m refers to effects from IFRS 16
• Operating profit (EBIT) increased by 31 percent to SEK 62 m (47), whereof SEK 0 m refers to effects from IFRS 16
• ROCE on rolling 12 months basis was 14.2 percent (14.0)
• Operating cash flow amounted to SEK 137 m (84), whereof SEK 12 m refers to effects from IFRS 16
• Earnings per share before dilution were SEK 2.56 (1.03) and after dilution SEK 2.54 (1.03)

January–December 2019

• Consolidated net sales increased by 16 percent to SEK 3,122 m (2,680), of which organic growth amounted to 7 percent. Acquisitions contributed by 7 percent and currency by 2 percent
• Net sales in Products & Solutions amounted to SEK 2,358 m (2,023) and Installation Services to SEK 866 m (752)
• EBITDA increased by 35 percent to SEK 371 m (274), whereof SEK 48 m refers to effects from IFRS 16
• Operating profit (EBIT) increased by 23 percent to SEK 260 m (212), whereof SEK 2 m refers to effects from IFRS 16
• Operating cash flow amounted to SEK 306 m (180), whereof SEK 48 m refers to effects from IFRS 16
• Earnings per share before dilution were SEK 8.19 (6.30) and after dilution SEK 8.13 (6.30)
• The Board proposes a cash dividend of SEK 4.50 (4.00) per share

Message from the CEO

Solid growth and financial performance

I am again proud to report our best year ever, both in terms of sales and financial results. Consolidated net sales for the year was SEK 3,122 m, an increase by 16 percent, and EBIT increasing by 23 percent to SEK 261 m. Consolidated net sales for the fourth quarter rose by 10 percent compared with last year, from SEK 692 m to SEK 763 m. Organic growth was 5 percent, acquisitions contributed by 3 percent and currency exchange rate effects was 2 percent.

At SEK 62 m, EBIT was above last year’s profit of SEK 47 m, an increase of 31 percent. At the same time, EBITDA increased 49 percent to SEK 91 m compared with SEK 61 m in the corresponding period in the preceeding year.

Our larger acquisition in 2019, Distri Pond, has performed in line with our expectations and contributed to the growth of Nordic Waterproofing’s full year sales and results.

The consolidated net sales growth of 10 percent in the fourth quarter was driven by strong sales in SealEco and Taasinge Group, but also roofing in Finland and Denmark. While our Products & Solutions operating segment reported a sales increase of 7 percent, our Installation Services operating segment increased 17 percent.

As communicated earlier, the profitability challenges in Taasinge Group, our prefabricated elements business, continued during the fourth quarter. A comprehensive profit improvement program is being implemented and organizational adjustments have been made. I am happy to report that both RVT in Norway and Taasinge Elementer in Denmark show strong order books at the end of the year.

Veg Tech, acquired in July 2018, continued to show strong sales with a positive contribution to organic growth as well as increased profit in the quarter. Distri Pond, acquired in February 2019, entered its low season during the fourth quarter but full year performance was in line with our expectations at the time of the acquisition.

The legacy business within bitumen roofing was in line with previous year for the Nordic countries. In Norway we continue to experience strong competition and price pressure as the consolidation within builders’ merchants is on-going. The consolidation is also visible in Sweden and we continue seeing customer movements between different builders’ merchants. On the other hand, the Swedish flat roofing market remains stable and we still only see a minor impact from the weaker housing market. In Denmark, the flat roofing market remains strong although organic growth has flattened out this year. The Finnish builders’ merchants market is somewhat weaker with lower volumes than in the corresponding period the preceeding year. Sales in SealEco and the rubber membrane business increased in the fourth quarter, driven in part by DistriPond which was acquired earlier this year.

Within the Installation Services segment, activity was higher particularly in the flat roofing business but also SPT showed strong sales as a cruise ship project was finalized in the fourth quarter.  We are happy to see now a significant effect from last year’s profit improvement program within our flat roof installation services business in Finland, including a more selective approach towards roofing projects and the efficient execution of the projects. The outlook on demand in Finland remains slightly negative. The order intake during the fourth quarter was lower compared with previous year, however with a healthy margin. Our Danish franchise companies continue experiencing a strong market and performed very well in the fourth quarter, with strong order books and an EBIT contribution above the corresponding period last year.

In 2020  we will 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 infrastructure, Veg Tech. Regarding acquisitions, we maintain our focus on small to medium sized companies presenting good synergistic potential with our existing businesses.

Last but not least, I want to thank each and every colleague within the Group for the efforts made throughout the year to make our Group successful once again, proving our strong beliefs in our decentralized business model. Our colleagues are all key to the satisfaction level of our customers, a critical element of our success, continuing at a high level, confirmed by Best supplier nominations. The dedication, enthusiasm and creativity of our colleagues therefore remain the keys to making Nordic Waterproofing a great place to work at.

Vejen, 6 February 2020

Martin Ellis,
President and CEO

Conference call

A conference call for investors, analysts and media will be held today, 6 February 2020, at 10:00 a.m. CET and can be joined online at www.nordicwaterproofing.com. Presentation materials for the call will be available on the website one hour before the call.
   

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 6 February 2020, 08:00 a.m. CET.

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