April – June 2020

• Net sales rose to SEK 1,719 million (1,710). Organic growth amounted to 1 percent.
• Order intake increased by 2 percent and the order backlog increased by 12 percent to SEK 1,262 million.
• EBITA increased to SEK 193 million (187) and the EBITA margin increased to 11.2 percent (10.9).
• Operating EBITA rose to SEK 202 million (187) and the operating EBITA margin rose to 11.8 percent (10.9).
• Earnings per share rose by 20 percent to SEK 2.46 (2.05).
• Net debt, excluding IFRS 16, in relation to operating EBITDA decreased to a multiple of 1.7 (2.8).

January – June 2020

• Net sales rose to SEK 3,167 million (3,153). Organic growth amounted to 0 percent.
• EBITA increased to SEK 242 million (232) and the EBITA margin increased to 7.6 percent (7.3).
• Operating EBITA rose to SEK 251 million (232) and the operating EBITA margin rose to 7.9 percent (7.3).
• Earnings per share amounted to SEK 2.56 (2.63).

 
The CEO comments:
In the second quarter, our efforts to generate profitable growth with strong cash flows continued. Despite the uncertainty surrounding the Covid-19 pandemic, Inwido delivered growth and better earnings than in the corresponding quarter in 2019. It is also pleasing to note that we are entering the third quarter with a 12 percent higher order backlog than at the corresponding time last year.

Backed by a positive consumer market and a high growth rate in e-commerce, net sales increased to SEK 1,719 million (1,710). Operating EBITA rose to SEK 202 million (187) and the operating EBITA margin rose to 11.8 percent (10.9).

Strong consumer market, primarily in e-commerce
During the quarter, Business Area South continued to develop favourably, with good growth and strong results. Sales increased by 3 percent and operating EBITA increased to SEK 137 million (115), lifting the operating EBITA margin to 19.3 percent (16.7). Order intake rose by 11 percent compared with the corresponding period last year and the order backlog was 29 percent higher at the end of the quarter. Most of the business units in Denmark showed good growth, solid order intake and favourable earnings. The business units in Ireland and the UK were affected negatively by the closures forced by the Covid-19 pandemic, although operations were gradually restarted during the latter part of the second quarter. The initiatives taken in recent years by the Group’s industry-leading e-commerce business units paid off during the quarter. Reaching an all-time high, e-Commerce grew by 44 percent, accounting for 13 percent of the Group’s sales in the quarter.

Most of Business Area North’s business units in Sweden and Norway experienced a positive consumer market, while the Finnish consumer market, as well as the industrial market, was more cautious. Sales were in line with the corresponding quarter last year and the operating EBITA amounted to SEK 74 million (76), meaning that the operating EBITA margin amounted to 7.6 percent (7.8). Order intake fell by 4 percent compared with the corresponding period last year, while the order backlog was 2 percent higher at the end of the quarter. In Business Area North too, the Covid-19 pandemic to some extent had a negative impact on the business units, with, for example, the direct sales model in Finland being halted for a period and operational disruptions occurring in both Sweden and Finland due to deliveries being delayed and increased absence due to illness.

Improved cash flow and reduced debt
Operating cash flow for the first six months of the year rose to SEK 515 million, compared with SEK 213 million for the corresponding period last year, reinforced by reduced working capital. The strong cash flow, combined with positive currency effects, affected net debt favourably. Accordingly, excluding IFRS 16, net debt decreased to 1.7x operating EBITDA, compared with 2.8x at the corresponding time in 2019.

Covid-19 pandemic
Thanks to responsive and resolute management of the Covid-19 pandemic situation, and with the support of a strong consumer market, we managed to achieve a good first half of the year during the Corona crisis. The Covid-19 pandemic has challenged all operations but also strengthened both our business units and their customer relationships. In the current situation, it is difficult to foresee the long-term effects of the pandemic on housing investments, consumer behaviour and government incentives as well as its impact on Inwido. We are continuing to monitor developments carefully.

Future prospects
I am pleased to present the fifth consecutive quarter with improved margins and a strong cash flow. Our efforts now continue to strengthen Inwido for expansion, with investments in our business units, industry-leading e-commerce and value-generating acquisitions. We enter the third quarter with a good order backlog, strong liquidity but also a large portion of humility since the Covid-19 pandemic makes the development of demand unusually uncertain. Independent of the external circumstances, we are focusing on quickly being able to adjust our costs and always keeping the customers’ best interests in mind.

MALMÖ – 15 JULY 2020

Henrik Hjalmarsson
President and CEO

Read the full report in the pdf attached