Stable sales in a challenging market, EBITDA matches last year’s
Third quarter of 2023
- Consolidated net sales increased by 7 percent to SEK 1,212 m (1,132), of which acquisitions 4 percent, currency effects 7 percent and organic development -4 percent
- Net sales in Product & Solutions amounted to SEK 860 m (831) and in Installation Services to SEK 398 m (337)
- Gross profit decreased to SEK 306 m (317) Gross margin decreased to 25.3% (28.0%)
- EBITDA decreased to SEK 159 m (162), EBITDA margin decreased to 13.1% (14.3%)
- Operating profit (EBIT) decreased to SEK 115 m (128), EBIT margin decreased to 9.5% (11.3%)
- ROCE amounted to 10.8 percent (16.1)
- Cash flow from operating activities amounted to SEK 149 m (244)
- Earnings per share before and after dilution were SEK 3.49 (4.34) and SEK 3.47 (4.32), respectively
January-September 2023
- Consolidated net sales increased by 4 percent to SEK 3,415 m (3,298), of which acquisitions 6 percent, currency 5 percent and organic development -7 percent
- Net sales in Product & Solutions amounted to SEK 2,562 m (2,626) and in Installation Services to SEK 988 m (799)
- Gross profit decreased to SEK 857 m (933), Gross margin decreased to 25.1% (28.3%)
- EBITDA decreased to SEK 375 m (470), EBITDA margin decreased to 11.0% (14.2%)
- Operating profit (EBIT) decreased to SEK 246 m (364), EBIT margin decreased to 7.2% (11.0%)
- Cash flow from operating activities amounted to SEK 248 m (266)
- Earnings per share before and after dilution were SEK 6.98 (11.83) and SEK 6.95 (11.76), respectively
Message from the CEO
Stable sales in a challenging market, EBITDA matches last year’s
Consolidated net sales in the third quarter increased by 7 percent to SEK 1,212 million compared to SEK 1,132 million last year. Impact from acquisitions of 4 percent, currency translation of 7 percent and organic development of -4 percent whereof sales price had no impact and volume development was -4 percent. Organic development was -4 percent in Products & Solutions while Installation Services were unchanged.
EBIT for the third quarter amounted to SEK 115 million, compared to SEK 128 million last year. The negative development in operating profit is mainly explained by increased competition in the market for synthetic rubber waterproofing membranes that has led to lower volumes and margins. Overall, our Group has achieved an operating result on par with last year.
ROCE now stands at 10.8 percent (16.1). Cash flow from operating activities amounted to SEK 149 M (244), the decrease was mainly due to changes in working capital, where inventories decreased while operating receivables and liabilities developed negatively.
We have seen continued slightly deflated costs for our input materials. Our expectation for commercial new build remains slightly negative while demand for renovation seems stable. Residential new build is expected to remain depressed in the short-term. We have effected cost reductions throughout our Group to adapt to the current business climate.
The Products & Solutions operating segment increased Net Sales by 3 percent (11). The impact from acquisitions was 3 percent and currency translation effects were 5 percent, organic development was -4 percent (5) of which impact from sales price was neutral and volume decreased by -4 percent.
The Bitumen-based waterproofing business in Sweden showed an increase in Net Sales while the other three Nordic markets had slightly negative development. The trend was neutral for both volumes and prices compared with the same period last year. SealEco, our synthetic rubber waterproofing business, had a decline in sales in most of its markets.
In our prefabricated wooden elements business, Taasinge group had a decline in sales in Denmark while Norway had a positive sales development. Seikat in Finland had a slightly negative development in sales. The Taasinge group has had negative sales trend while margin development has been positive, although still at an unsatisfactory level. Order books are on good levels in all three markets.
Sales development of our green infrastructure businesses, sold under the brands Veg Tech and Urban Green, had a slightly positive growth compared to the third quarter 2022.
The Installation Services operating segment grew by 18 percent (20) to SEK 398 M. The impact from acquisitions was 7 percent and currency translation effects were 11 percent, organic development was 0 percent (3), of which 2 percent was sales price increases and volume development was -2 percent. In Finland, which represents the largest part of our Installation Services, we saw unchanged margins. In Norway, where we face some operational challenges, we had a negative development in volume and weaker margins. In Denmark, our franchise companies reported operating profit on a par with the previous year.
We continue to focus on growth via organic market share gains and selective acquisitions which our balance sheet continues to allow for. We have a strategic focus to promote sustainable building solutions and enhance our service and product portfolio.
Helsingborg, 26 October 2023
Martin Ellis,
President and CEO
Conference call
A conference call for investors, analysts and media will be held today, 26 October 2023, at 10:00 am CEST and can be joined online at https://events.teams.microsoft.com/. Presentation materials will be available on https://www.nordicwaterproofing.com one hour before the call.
To participate from computer, use link above. To participate via phone, please use conference id 274 150 289# on any of below numbers:
From Sweden: +46 8 502 428 90
From Denmark: +45 32 72 66 61
From United Kingdom: +44 20 7660 8326
From Finland: +358 9 85 626 548
