Inwido

First quarter

• Net sales amounted to SEK 1,811 million (2,095), down 14 percent. Organic growth amounted to negative 21 percent.
• Total order intake increased by 1 percent, while the order backlog had increased to SEK 2,236 million (1,581) as of March 31.
• Operating EBITA amounted to SEK 91 million (168) and the operating EBITA margin amounted to 5.0 percent (8.0).
• Earnings per share amounted to SEK 0.37 (1.90).
• Net debt amounted to a multiple of 1.4 in relation to operating EBITDA (1.1 excluding IFRS 16).

After the end of the quarter

• On April 10, Fredrik Meuller took over as the new President and CEO.
• Inwido’s climate goals were approved by the Science Based Targets initiative.

CEO Comments:

The year has begun in line with the information communicated by Inwido in connection with our year-end accounts in February. The sharp declines in volume in the new build markets in Finland and Sweden that we witnessed during the second half of last year have affected both sales and order intake at the start of 2024. Net sales during the first quarter were down by 14 percent (negative 21 percent organically) compared to the corresponding period last year, to SEK 1,811 million (2,095). Under these conditions, Inwido’s ability to deliver an operating EBITA of SEK 91 million (168) and an operating EBITA margin of 5.0 percent (8.0) in the seasonally weak first quarter demonstrates good resilience in the business model.

The lower volumes have been partially compensated by reduced production costs and the implementation of savings in relation to fixed costs in the business units. While it is necessary to reduce costs when volumes go down, it is important to retain the skills and strength in our operations in order to be able to be prepared, now that the window season is just around the corner. This is a balancing act that Inwido has proven to master time and time again. Total order intake increased by 1 percent compared with the corresponding quarter last year (down 9 percent adjusted for acquisitions). It is worth noting that we are seeing an increasing level of activity on the consumer and renovation side. This is particularly evident in Denmark, where inflation and interest rates have been falling for some time, and house prices are rising.

In the key performance indicators for the sustainability work, unit-related figures in the area of the environment are being challenged by the substantial decline in volume. On the other hand, the key performance indicators for sick leave , health and safety are reporting a steady improvement. Another positive aspect is the fact that the amount of waste is decreasing. Our climate targets have now been approved by the Science Based Targets initiative. This represents an important milestone for our sustainability work and shows our high ambitions as regards increasing the pace of the transition. 

Business Area Scandinavia was affected by the decline in volume in the new build market during the quarter. Sales fell by 24 percent, although the gradual improvement in the gross margin continued. The operating EBITA margin fell to 7.4 percent (10.8), compared with the corresponding quarter last year.

Within Business Area Eastern Europe, which has reported historically high profitability levels in recent quarters, the dramatic reduction in volumes witnessed over the past six months has now taken full effect. With a drop in sales of 43 percent during the quarter, the operating EBITA margin fell to negative 4.8 percent (positive 6.8). The rate of new construction in Finland has now fallen to levels not seen since the 1940s, which is the principal explanation for the decline in volumes.  

Business Area e-Commerce, which is the most consumer-oriented business within Inwido, reported a positive trend during the first quarter. Sales increased by 8 percent compared to the corresponding period in 2023. The increase in volume also contributed to an increased gross margin, which in turn resulted in the operating EBITA margin increasing to 4.2 percent (1.5).

Business Area Western Europe performed well during the first quarter, primarily driven by last year’s acquisition of Sidey Group. The business area’s sales increased by 90 percent, operating EBITA increased by 122 percent and the EBITA margin increased to 10.2 percent (8.7). However, other operations within the business area, with the exception of the business unit in Ireland, continue to be affected by the pressured consumer market in the UK.

Outlook
It is with confidence, humility and a high level of commitment that I am now taking up the position of President and CEO of Inwido. We have an exciting journey ahead of us, as we build to reach our long-term target of sales totaling SEK 20 billion by 2030, with profitability in line with the target of more than 15 percent return on operating capital. Achieving this requires not only a well-thought-out M&A strategy, but also an innovative product portfolio and dedicated customer focus. It tfeels inspiring, now as I join the Group, that Elitfönster is launching products adapted to the energy requirements of the future, at the same time as the company is celebrating its 100th anniversary; Diplomatdörrar is offering a digitalized lock (Diplosmart) alongside Assa Abloy; and the “Rolls Royce of sliding doors”, Hajom, is launching products with a new, market-leading level of performance. These are just a few examples that bode well for the future.

Even though we are currently experiencing a sharp drop in volumes in the new build market in the Nordic region, the outlook in the slightly longer term is positive, with growth being driven by the green transition. The EU’s clear ambition to enhance energy performance in properties over the upcoming years means that there are favorable growth opportunities for energy-efficient windows and doors. With the arrival of spring, we are hopeful that the positive signs we have observed in the Danish consumer market can also spread to more European markets. 

In my opinion, we are well positioned for favorable long-term trends, such as energy efficiency and sustainability. It is worth noting that, through our offering of greatly appreciated windows and doors, we represent an important part of the solution for a good indoor climate and the energy-efficient homes of the future.

MALMÖ, APRIL 23, 2024

Fredrik Meuller,  
President and CEO