Lindab International

Second quarter 2024

• Net sales increased by 5 percent to SEK 3,520 m (3,365). Organic sales growth was negative by 3 percent while acquisitions contributed positively by 8 percent.
• Adjusted1) operating profit increased to SEK 338 m (302).
• Operating profit increased to SEK 338 m (302).
• Adjusted1) operating margin increased to 9.6 percent (9.0).
• Operating margin increased to 9.6 percent (9.0).
• Profit for the period amounted to SEK 213 m (240).
• Earnings per share before and after dilution amounted to SEK 2.77 (3.14).
• Cash flow from operating activities increased to SEK 342 m (323).
• During the quarter Lindab signed an agreement to acquire the Danish ventilation company Venti A/S. The acquisition was completed in July.
• In April, Lindab finalised the acquisition of the German ventilation business of TGA KlimaPartner.

January - June 2024

• Net sales increased by 1 percent to SEK 6,667 m (6,589). Organic sales growth was negative by 7 percent while acquisitions contributed positively by 7 percent.
• Adjusted1) operating profit amounted to SEK 563 m (566).
• Operating profit amounted to SEK 563 m (566).
• Adjusted1) operating margin amounted to 8.4 percent (8.6).
• Operating margin amounted to 8.4 percent (8.6).
• Profit for the period amounted to SEK 330 m (420).
• Earnings per share before and after dilution amounted to SEK 4.29 (5.49).
• Cash flow from operating activities amounted to SEK 550 m (678).

1) Adjusted operating profit/operating margin does not include significant one-off items and restructuring costs.

 Lindab's President and CEO, Ola Ringdahl, comments:

"Lindab increased both sales and operating margin during the second quarter. Ventilation Systems delivered its highest ever sales and operating profit, while Profile Systems recovered and improved its profit for the first time in two years.

As in previous quarters, the second quarter was characterised by weak demand due to lower construction activity in Europe. However, there are signs that the Nordic market has stabilized and is likely on the way to recover.

Ventilation Systems continues to grow with good profitability

Ventilation Systems increased both sales and operating margin compared with the same period last year. The gross margin has been strengthened as an effect of implemented efficiency and cost measures. Completed acquisitions have also made a positive contribution. The operating margin for the quarter was 10.4 percent and during the first half of the year Ventilation Systems met the long-term target of an operating margin of at least 10 percent. We see it as a sign of strength and stability that Ventilation Systems can deliver on the profitability target despite a weak economy. When the market starts to improve again, Ventilation Systems will increase sales and show rising margins.

Improved market situation and results for Profile Systems

Over the past two years, Profile Systems has been negatively affected by reduced construction activity in the Nordic region. Since April, the market has gradually improved, although to a lesser extent.

Profile Systems turned the first quarter's loss into an operating margin of 8.7 percent in the second quarter. This is the first time since the recession began two years ago that Profile Systems has improved its results compared with the same period last year. The break in the trend shows that the measures to strengthen profitability have started to have an effect. Structural changes are continuously evaluated for units that do not achieve the profitability targets.

Acquisitions create conditions for further growth

During the second quarter, an agreement was signed to acquire the Danish ventilation company Venti, which manufactures circular and rectangular ventilation ducts and distributes ventilation products. Venti does not currently sell Lindab's products. With the acquisition, Lindab will have better geographical coverage and increased production of ventilation ducts. The acquisition was signed in May and finalised in July.

With a continued strong cash flow and a good financial position, more acquisitions will be added to Lindab during 2024. Acquisitions are expected to account for about two-thirds of Lindab's growth until 2027.

Prepared for higher demand

The long-term demand for Lindab's products looks very positive. Ventilation is one of the areas that offers the greatest energy savings in a building. New legislation requires newly built properties to have zero emissions and existing buildings to reduce their energy consumption. This means that ventilation will be a priority area for both new construction and renovation. In addition, demand for products with a strong sustainability profile is increasing, which favours Lindab.

When the market improves, Lindab is well positioned to quickly capitalize on higher demand. With investments already made in increased capacity and automation, production can be increased without major cost increases as a result, which will lead to a noticeable strengthening of the operating margin.

The target for 2027 is to achieve sales of SEK 20 billion. The operating margin will be at least 10 percent, but the ambitions are higher. Growth will take place in Ventilation Systems, in a combination of organic growth and acquisitions. The core of Profile Systems will be refined, especially in Scandinavia where there are significant synergies between our operations.

Market shows signs of recovery

The market situation remains subdued, with many projects on hold, but signs of recovery have been noted in the second quarter. The accumulated needs are high and continued interest rate reductions will benefit the construction industry. Lindab believes in gradually increasing volumes during the second half of 2024, from low levels. From 2025, our assessment is that the ventilation market will enter a multi-year growth phase."

Press and analyst meeting:

A live webcast will be held at 11:00 am (CEST) on July 19. The Interim Report will be presented by Ola Ringdahl, President and CEO, and Lars Ynner CFO.

If you wish to participate via webcast please use the link below.

Lindab Q2 Report 2024 (financialhearings.com)

If you wish to participate via teleconference please register on the link below. After registration you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference.

Call Access (financialhearings.com)