Lindab International AB (publ): Lindab's Interim Report for the third quarter 2018
Third quarter 2018
- Net sales increased by 15 percent to SEK 2,397 m (2,081), of which organic growth was 8 percent.
- Adjusted1) operating profit increased by 29 percent to SEK 209 m (162). Operating profit amounted to SEK 200 m (154).
- Adjusted1) operating margin increased to 8.7 percent (7.8).
- Profit for the period increased by 32 percent to SEK 152 m (115).
- Earnings per share, before and after dilution, increased to SEK 1.99 (1.51).
- Cash flow from operating activities improved to SEK 262 m (-58).
- Products & Solutions will be divided into two business areas (Ventilation Systems and Profile Systems respectively) and recognised as separate segments from Q1 2019.
January - September 2018
- Net sales increased by 15 percent to SEK 6,942 m (6,057), of which organic growth was 10 percent.
- Adjusted1) operating profit increased by 18 percent to SEK 461 m (392). Operating profit amounted to SEK 400 m (383).
- Adjusted1) operating margin increased to 6.6 percent (6.5).
- Profit for the period increased by 10 percent to SEK 288 m (263).
- Earnings per share, before and after dilution, increased to SEK 3.78 (3.45).
- Cash flow from operating activities improved to SEK 355 m (64).
1) Adjusted operating profit/operating margin does not include significant one-off items and restructuring costs.
Lindab's President and CEO, Ola Ringdahl, comments:
Sales growth was strong in the third quarter, particularly in Eastern Europe and the Nordics. Net sales increased by 15 percent to SEK 2,397 m and adjusted operating profit increased by 29 percent to SEK 209 m.
Products & Solutions had continued good sales development with 8 percent organic growth. Net sales was SEK 2,125 m, which is the highest sales amount ever achieved in a single quarter. Steel prices have stabilised to some extent and we are beginning to see benefits from our necessary price adjustments in the market. Adjusted operating profit increased by SEK 33 m to SEK 202 m.
Building Systems had its best quarter since 2015. Organic growth was 12 percent and net sales amounted to SEK 272 m. The ongoing turnaround programme is having positive effects on both gross margin and cost levels. Adjusted operating profit increased to SEK 14 m compared to SEK -1 m during the same period last year. The market continues to develop strongly and during the quarter we signed twelve major agreements each worth in excess of SEK 10 m. The backlog is significantly higher than a year ago. We see good potential to show continued improvement going forward.
The strategic assessment of the non-ventilation related business that was initiated in 2017 has now been completed. Our strategy to build an even stronger position within our largest business - ventilation - remains highly relevant. We have a strong brand and a good market position in many geographies within Products & Solutions. The strategic review has shown that there are valuable cost synergies between the ventilation business and the remaining business within Products & Solutions. Lindab will continue to develop these businesses, but with even more focus and accountability. Therefore, we will split Products & Solutions into two business areas (Ventilation Systems and Profile Systems) from Q1 2019.
Business area Building Systems has been thoroughly reviewed and a solid turnaround programme is ongoing. The programme has now begun to contribute positively, as demonstrated by the Q3 result, and we are ahead of schedule. Simultaneously, we have investigated a potential divestment of Building Systems. However, the indicative bids were not reflective of our view of the value of Building Systems, especially considering the current trend of improvement. We have concluded that Lindab can create more shareholder value by completing the turnaround of Building Systems, and further improve profitability. The financial improvement during Q3, combined with a strong order intake and a significantly higher backlog, indicate that we are on the right track.
By organising Lindab Group in three distinct business areas, with consequential changes in the segment reporting from Q1 2019, we will achieve more focus and transparency for the respective areas. Throughout the Group, we are taking actions to improve operating efficiency and strengthen the profitability. Lindab's financial targets remain, including the target of a long term operating margin of 10 percent.
End
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This is information that Lindab International AB (publ) 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 below, at 07:40 am (CEST) on 25 October 2018.
Contact:
Ola Ringdahl, President and CEO
E-mail: ola.ringdahl@lindab.com
Phone: +46 (0) 431 850 00
Malin Samuelsson, CFO
E-mail: malin.samuelsson@lindab.com
Mobile: +46 (0) 701 45 46 85
Lindab in brief:
Lindab develops, manufactures, markets and distributes products and system solutions for simplified construction and improved indoor climate. The products are characterised by their high quality, ease of assembly, energy efficiency, consideration towards the environment, and are delivered with high levels of service. Altogether, this increases customer value.
The Group had sales of SEK 8,242 m in 2017 and is established in 32 countries with approximately 5,100 employees. The main market is non-residential construction, which accounts for 80 percent of sales, while residential accounts for 20 percent of sales. During 2017, the Nordic market accounted for 46 percent, Western Europe for 33 percent, CEE/CIS (Central and Eastern Europe plus other former Soviet states) for 18 percent and Other markets for 3 percent of total sales.
The share is listed on the Nasdaq Stockholm List, Mid Cap, under the ticker symbol LIAB.