Another strong year in spite of cost headwinds
Fourth quarter of 2021
- Consolidated net sales increased by 16 percent to SEK 890 m (769), of which organic growth amounted to 5 percent, acquisitions with 11 percent and currency effects were neutral.
- Net sales in Product & Solutions amounted to SEK 658 m (584) and in Installation Services to SEK 249 m (205)
- Gross profit increased to SEK 232 m (207), Gross margin decreased to 26.1% (26.9%)
- EBITDA increased to SEK 97 m (93), EBITDA margin decreased to 10.9% (12.1%)
- Operating profit (EBIT) decreased to SEK 59 m (65), EBIT margin decreased to 6.6% (8.4%)
- ROCE increased to 16.6 percent (15.6)
- Cash flow from operating activities amounted to SEK 92 m (183)
- Earnings per share before and after dilution were SEK 1.82 (2.32) and SEK 1.81 (2.30), respectively
January-December 2021
- Consolidated net sales increased by 11 percent to SEK 3,664 m (3,303), of which organic growth amounted to 4 percent, acquisitions with 8 percent and currency had a negative impact of -2 percent
- Net sales in Product & Solutions amounted to SEK 2,818 m (2,570) and in Installation Services to SEK 928 m (833)
- Gross profit increased to SEK 1,041 m (929), Gross margin increased to 28.4% (28.1%)
- EBITDA increased to SEK 515 m (455), EBITDA margin increased to 14.1% (13.8%)
- Operating profit (EBIT) increased to SEK 382 m (337), EBIT margin increased to 10.4% (10.2%)
- Cash flow from operating activities amounted to SEK 220 m (462)
- Earnings per share before and after dilution were SEK 10.71 (10.60) and SEK 10.64 (10.52), respectively
- The board proposes a cash dividend of SEK 6.00 (5.50) per share
Message from the CEO
Another strong year in spite of cost headwinds
Consolidated net sales in the fourth quarter increased by 16 percent compared to the previous year, from SEK 769 million to SEK 890 million. Organic growth was 5 percent, the impact from acquisitions was 11 percent and currency translation effects were neutral. Organic growth of 5 percent is the result of 8 percent in Products & Solutions, all due to sales price increases, and -7 percent in Installation Services in Finland. The latter is to some extent caused by delays on job sites due to component shortages from other suppliers, and a disciplined approach towards not accepting lower margin business.
EBIT for the fourth quarter amounted to SEK 59 million, compared to SEK 65 million for the corresponding period last year. The slightly negative development of the operating result is explained by a drop in profitability in Installation Services while Products & Solutions increased profitability significantly. In Installation Services we have not yet been able to pass on the significant input cost inflation to our customers.
Our Return on Capital Employed at 16.6 percent (15.6) remains significantly above the threshold of 13.0 percent. Operational cash flow has been negatively affected by increased inventory due to securing raw material availability, higher input costs and higher finished product levels to secure our delivery capabilities.
Dramatic increases in input prices have had a negative effect on both business segments. In Products & Solutions we have successfully absorbed these through a series of sales price increases. In Installation Services, we still expect a degree of margin compression to remain in the foreseeable future.
The net sales organic growth of 5 percent (1) in the fourth quarter are explained by good sales in the Products & Solutions operating segment, which organically grew 8 percent (6), all due to sales price increases, while the Installation Services operating segment decreased organically by -7 percent (-11).
In the Products & Solutions operating segment, the Bitumen-based waterproofing business showed double-digit growth in Sweden and Denmark, growth in Finland was on a lower level while Norway had a minor negative development.
SealEco, our synthetic rubber proofing business, had double-digit growth in net sales. Most major markets show a continued strong demand.
The Taasinge group, our prefabricated wooden elements business, had slightly lower sales than last year due to the Norwegian entity. In both Denmark and Norway, we have strong order books. Seikat, our recently acquired Finnish entity within this business, are fully booked into the second quarter 2022.
The sales development for our green urban environment businesses, sold under the brands Veg Tech and Urban Green, showed positive organic development compared with the same period previous year.
In the Installation Services operating segment, where sales are mainly generated in Finland, net sales decreased organically by -7 percent, to some extent due to job sites delays and due to avoiding low margin business.
Our Danish franchisees continue to experience a stable and strong market. In the fourth quarter the EBIT contribution was somewhat below last year and the order book was well exceeding the level of last year.
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, 8 February 2022
Martin Ellis,
President and CEO
Conference call
A conference call for investors, analysts and media will be held today, 8 February 2022, 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.
To participate, please dial:
From the United Kingdom: +44 33 33 00 90 35
From Denmark: +45 78 72 32 50
From Sweden: +46 8 50 55 83 55
