INTERIM REPORT, January–June 2019

Continued sales growth and improved earnings

Second quarter of 2019

  • Consolidated net sales increased by 21 percent to SEK 889 m (736), of which organic growth amounted to 6 percent. Acquisitions contributed by 13 percent and currency by 2 percent
  • Net sales in Products & Solutions amounted to SEK 688 m (565) and Installation Services to SEK 234 m (201)
  • EBITDA increased by 32 percent to SEK 124 m (94)
  • Operating profit (EBIT) increased by 25 percent to SEK 95 m (76)
  • ROCE on rolling 12 months basis was 12.5 percent (14.5)
  • Operating cash flow amounted to SEK 73 m (39)
  • Earnings per share before dilution were SEK 2.79 (2.43) and after dilution SEK 2.77 (2.43)
  • As resolved at the AGM, a dividend of SEK 4.00 (3.75) per share was paid in May

January–June 2019

  • Consolidated net sales increased by 20 percent to SEK 1,458 m (1,210), of which organic growth amounted to 5 percent. Acquisitions contributed by 12 percent and currency by 3 percent
  • Net sales in Products & Solutions amounted to SEK 1,134 m (932) and Installation Services to SEK 373 m (320)
  • EBITDA increased by 27 percent to SEK 142 m (111)
  • Operating profit (EBIT) increased by 13 percent to SEK 89 m (79)
  • Operating cash flow amounted to SEK 24 m (-27)
  • Earnings per share before dilution were SEK 2.35 (2.30) and after dilution SEK 2.34 (2.30)

Message from the CEO

Continued sales growth and improved earnings

Nordic Waterproofing continued to grow strongly also in the second quarter. Consolidated net sales for the second quarter rose by 21 percent compared with previous year, from SEK 736 m to SEK 889 m. Acquisitions contributed with 13 percent. Organic growth was strong at 6 percent and the currency translation exchange rate effect was 2 percent. At SEK 95 m, EBIT was 25 percent above last year’s profit of SEK 76 m, and EBITDA was SEK 124 m compared with SEK 94 m in the corresponding period the preceding year. The quarterly operating profit was the best ever, in spite of the prefab elements business and Norway performing below target.
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 infrastructure, Veg Tech.
Regarding acquisitions, we maintain our focus on small to medium sized companies presenting good synergistic potential with our existing businesses. Promoting sustainability remains a key focus.
While our Products & Solutions operating segment reported a sales increase of 22 percent, our Installation Services operating segment increased 16 percent.
Within our Products & Solutions segment, sales were mainly driven by the acquired businesses in Veg Tech and Distri Pond as well as flat roofing products and geomembranes in Finland. The Finnish builders’ merchants market is somewhat weaker with lower volumes than in the corresponding period the preceeding year. SealEco continues to grow, both due to the acquired company Distri Pond developing according to expectations but also organically with fairly strong sales in Western Europe. In Norway we continue to experience increased competition and price pressure, and a consolidation within builders’ merchants. Our intensified sales and marketing efforts to increase market share continues but has yet to produce increased sales volumes and profitability within the builder’s merchants segment. At the same time, we continue to make good progress in the flat roofing and ground businesses in Norway. In Denmark, the flat roofing market is strong although our sales in the second quarter were slightly lower than previous year. In Sweden both the flat roofing and builders’ merchants markets remain stable and we still only see a minor impact from the weaker housing market.
The prefabricated elements business both in Norway and Denmark enjoys strong order books, however the Danish prefabricated elements business continues to suffer from customer delays. This creates difficulties in optimizing the production planning leading to lower efficiency and earnings, and although the situation has stabilized recently, the inefficiency is expected to continue through 2019.
The seasonally low sales in Veg Tech in the first quarter have been followed by strong sales volumes in the second quarter. As a result, Veg Tech shows a positive profit contribution for the first half of the year.
Within the Installation Services segment, activity was strong with higher sales volumes in flat roofing, pitched roofing and also flooring. As commented previously, the general outlook and the Finnish market expectations for the year are slightly negative, which makes for a continuously competitive marketplace. The order intake during the second quarter was slightly lower compared with previous year, but our focus on margin improvement continues to bear fruit. Our Danish franchise companies experience a strong market and perform well in the second quarter, with strong order books and an EBIT contribution above the corresponding period last year.
We see current trends continuing for the rest of the year, and our result outlook remains unchanged.
Vejen, 25 July 2019
Martin Ellis,
President and CEO

Conference call

A conference call for investors, analysts and media will be held today, 25 July 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 9034
From Denmark:
+45 78 15 01 07
From Sweden:
+46 8 566 426 92

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 25 July 2019, 08:00 a.m. CEST.