Year-end report January-December 2018

The full report in pdf

This information is such that Inwido AB (publ) is obliged to publish in accordance with the EU market abuse regulation and the Swedish Securities Market Act. The information was submitted by the below contact persons for publication on 6 February 2019 at 7:45 a.m. CET.

A good quarter despite difficult circumstances 

Fourth quarter of 2018

  • Net sales rose to SEK 1,864 million (1,774), representing an increase of 5 percent. Organic growth was a negative 2 percent
  • EBITA rose to SEK 215 million (89) after items affecting comparability of SEK 0 million (negative 112) and the EBITA margin rose to 11.5 percent (5.0)
  • Operating EBITA rose to SEK 215 million (201) and the operating EBITA margin rose to 11.5 percent (11.3)
  • Earnings per share before dilution increased to SEK 2.31 (0.38)
  • Implementing Simplify – a more customer-focused, decentralized governance model for the Group
  • As previously communicated, CEO Håkan Jeppsson passed away suddenly in December. He was succeeded by Henrik Hjalmarsson in January.

January-December 2018

  • Net sales rose to SEK 6,667 million (6,371), representing an increase of 5 percent. Organic growth was a negative 2 percent
  • EBITA amounted to SEK 635 million (535) after items affecting comparability of a negative net SEK 22 million (negative 114), and the EBITA margin was 9.5 percent (8.4)
  • Operating EBITA amounted to SEK 657 million (649) and the operating EBITA margin was 9.9 percent (10.2)
  • Earnings per share before dilution increased to SEK 7.47 (5.02)
  • The Board of Directors proposes a dividend of SEK 2.50 (3.50) 

The CEO comments:
"For the Inwido Group, the fourth quarter was special in many ways. In part, the period was characterized by intensive efforts to prepare for the implementation of the Simplify strategy, and, in part, conditions remained challenging in some of our principal markets. Also, in early December, our CEO Håkan Jeppsson unexpectedly and tragically passed away. Despite these circumstances, we can state that the Group delivered satisfactory results. Net sales for the quarter increased by 5 percent compared with the corresponding period in the preceding year, meaning that sales for the full year were SEK 6,667 million (6,371). Operating EBITA improved by 7 percent during the quarter, from SEK 201 million to SEK 215 million. Earnings for the full year increased to SEK 657 million (649).  

Strong growth in e-commerce increased share of consumer market
One important reason for the improvement in earnings in the fourth quarter is that the proportion of consumer sales grew in relation to the proportion of industry sales. One crucial factor behind this was organic growth of more than 30 percent in e-commerce. This had a positive impact on earnings, as the consumer segment has higher margins. At the same time, we also know that consumers are guided strongly by season – few want to replace windows in the winter, and thus we cannot expect to see the same effect in the first quarter of 2019. Overall, order bookings increased by 4 percent during the quarter compared with the corresponding period in the preceding year and, cleared for acquisitions, ended up on par with the preceding year. However, the order backlog was 7 percent lower at the end of the quarter compared with corresponding date in 2017. We also continued our efforts to integrate the acquisitions made earlier in the year and the consolidated net debt in relation to operating EBITDA decreased during the quarter, from 3.0 to 2.7.

Continued challenges in the Swedish market
Effective from the fourth quarter of 2018, Inwido’s operations are reported divided into two operating segments, Inwido North and Inwido South. With regard to development in Inwido North, the Norwegian companies continued in the right direction and the companies in Finland achieved a decent quarter despite a headwind on the industry side. The challenges in the Swedish market remain, with a continued weak new build market and fierce competition. We continue to address the trend as planned, with clearer decentralization, increased customer focus and new consumer-oriented initiatives, such as Elitfönster På Plats, and, of course, continuous efficiency enhancements. With regard to Inwido South, the companies in Denmark have had a number of successful years, and the trend continues. E-Commerce also continues to grow strongly, by more than 30 percent in the fourth quarter, excluding acquisitions. The UK operations have undergone major restructuring and turned to profit in 2018. The operations in Ireland are also delivering at a stable level. Combined, the trend confirms that our strategy of broadening our market and also growing outside the Nordic region, while increasing our focus on e-commerce, is the right way to go.

Future prospects
As a market leader, with strong brands and leading industrial expertise, we are confident in terms of our prospects. At the same time we are also seeing signs of a weaker market trend in some geographic areas. The industry market in Sweden and Finland shows few signs of improvement, while prices for raw materials are rising, competition is increasing, and consumer confidence index is declining. We do, nonetheless, see bright spots in the longer term. There is an underlying need for, and increased interest in, investment in housing in large parts of Europe. With our decentralized Simplify model, we are freeing up energy for the companies to respond quickly to opportunities in their local markets with increased customer and consumer-oriented decision-making. In the long term, we are also well-positioned to meet customers’ and consumers’ shifting behaviours with, for example, faster delivery times, convenient solutions, additional connected products and an increasing proportion of e-commerce. Our long-term acquisition strategy also stands firm and our efforts to further strengthen our balance sheet for this purpose are continuing.

Finally, a few additional words on Håkan Jeppsson’s passing. Håkan was a strong and appreciated leader and friend. We who worked closely with him on a daily basis are still deeply affected by our loss. At the same time, as the new CEO, it is encouraging for me to see how everyone has unflinchingly chosen to continue working in Håkan’s spirit – fully focused on achieving our targets for 2019."


Henrik Hjalmarsson 
President and CEO

Read the full report in the pdf attached

For more information, please contact:
Henrik Hjalmarsson, President and CEO Tel.: 46 (0)76 846 20 46 
Peter Welin, CFO and deputy CEO Tel.: 46 (0)703 24 31 90