Strong start to 2022, disturbances later in the year cannot be ruled out

First quarter of 2022

  • Consolidated net sales increased by 30 percent to SEK 912 m (704), of which organic growth amounted to 19 percent, acquisitions 6 percent and currency effects 4 percent.
  • Net sales in Product & Solutions amounted to SEK 773 m (563) and in Installation Services to SEK 171 m (152)
  • Gross profit increased to SEK 237 m (183), Gross margin decreased slightly to 26.0% (26.1%)
  • EBITDA increased to SEK 91 m (50), EBITDA margin increased to 10.0% (7.1%)
  • Operating profit (EBIT) increased to SEK 56 m (22), EBIT margin increased to 6.1% (3.1%)
  • ROCE increased to 17.9 percent (16.6)
  • Cash flow from operating activities amounted to SEK -15 m (-88)
  • Earnings per share before and after dilution were SEK 1.61 (0.47) and SEK 1.60 (0.47), respectively

Message from the CEO

Strong start to 2022, disturbances later in the year cannot be ruled out
Consolidated net sales in the first quarter increased by 30 percent compared to the previous year, from SEK 704 million to SEK 912 million. Organic growth was 19 percent of which 13 percent were sales price increases, the impact from acquisitions was 6 percent and currency translation effects were 4 percent. Organic growth was 30 percent in Products & Solutions and -6 percent in Installation Services.

EBIT for the first quarter amounted to SEK 56 million, compared to SEK 22 million for the corresponding period last year. The positive development of the operating result is explained by Products & Solutions increasing profitability due to a good volume development and a pro-active approach to price management while Installation Services maintained profit on same level as first quarter last year.

Our Return on Capital Employed at 17.9 percent (16.6) remains significantly above the threshold of 13 percent. The improvement is driven by the improved operating result. Operational cash flow has been negatively affected by increased accounts receivable because of increased sales and increased inventory due to securing raw material availability, higher input costs and higher finished product levels to secure our delivery capabilities.

The direct impact on our Group from the Russian war on Ukraine has been limited. We have neither any subsidiaries nor any employees in these countries and sales in 2021 were insignificant. It is likely that there is an indirect impact through additional input cost inflation. The availability of input material has not yet been affected. It cannot be ruled out that we will see a negative impact from additional input cost inflation, as well as potential shortage of input materials creating direct or indirect disturbances of our supply chain.

The net sales organic growth of 19 percent (2) in the first quarter are explained by good sales in the Products & Solutions operating segment, which organically grew 30 percent (8) of which 13 percent were related to sales price increases, while the Installation Services operating segment decreased organically by -6 percent (-23) whereof 11 percent were related to sales price increases.

In the Products & Solutions operating segment, the Bitumen-based waterproofing business showed strong double-digit growth on all the four Nordic markets. SealEco, our synthetic rubber waterproofing business, also had strong double-digit sales growth. Our major markets show continued strong demand. Taasinge group, our prefabricated wooden elements business, had a single digit increase in sales compared to last year with a stronger development on the Danish market. In both Denmark and Norway, we have strong order books. Seikat, our Finnish entity within this business, has started the year well and is fully booked into the third quarter 2022.
Sales development of our green infrastructure businesses, sold under the brands Veg Tech and Urban Green, showed strong positive organic development compared with the same period previous year however the first quarter is seasonally weak.

In the Installation Services operating segment net sales increased with 12 percent. Organic growth was -6 percent, of which 11 percent were sales price increases, the impact from acquisitions was 14 percent and currency translation effects were 4 percent.
Our Danish franchisees continue to experience a stable and strong market. In the first quarter the EBIT contribution was on the same level as last year and the order books were well exceeding the level of last year.

During the quarter we have closed the acquisition of Gordon Low Ltd, a UK leading specialist fabricator and distributor of pond liners and other waterproof membranes for the aquatic, landscaping, commercial water containment and agriculture sector.

We continue to focus on organic growth, profitability, sustainability, and selective acquisitions. Our balance sheet is strong, and we continue to have the capacity to carry out acquisitions. We have a strategic focus to promote sustainable building solutions and enhance our service and product portfolio.

Helsingborg, 26 April 2022

Martin Ellis,
President and CEO

Conference call

A conference call for investors, analysts and media will be held today, 26 April 2022, at 10:00 a.m. CET 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 33 00 90 32
From Denmark: +45 78 15 01 10
From Sweden: +46 8 50 55 83 54