Nordic Waterproofing

Fourth quarter of 2023

• Consolidated net sales increased to SEK 1,048 m (1,045), of which acquisitions 3 percent, currency effects 2 percent and organic development -5 percent
• Net sales in Product & Solutions amounted to SEK 718 m (756) and in Installation Services to SEK 364 m (325)
• Gross profit increased to SEK 257 m (252) Gross margin increased to 24.6% (24.1%)
• EBITDA decreased to SEK 89 m (114), EBITDA margin decreased to 8.5% (10.9%)
• Operating profit (EBIT) decreased to SEK 47 m (66), EBIT margin decreased to 4.5% (6.3%)
• ROCE amounted to 10.2 percent (16.1)
• Cash flow from operating activities amounted to SEK 255 m (93)
• Earnings per share before and after dilution were SEK 1.86 (2.00) and SEK 1.85 (2.00), respectively

January-December 2023

• Consolidated net sales increased by 3 percent to SEK 4,463 m (4,343), of which acquisitions 5 percent, currency 4 percent and organic development -7 percent
• Net sales in Product & Solutions amounted to SEK 3,279 m (3,381) and in Installation Services to SEK 1,352 m (1,124)
• Gross profit decreased to SEK 1,114 m (1,184), Gross margin decreased to 25.0% (27.3%)
• EBITDA decreased to SEK 464 m (583), EBITDA margin decreased to 10.4% (13.4%)
• Operating profit (EBIT) decreased to SEK 293 m (430), EBIT margin decreased to 6.6% (9.9%)
• Cash flow from operating activities amounted to SEK 503 m (360)
• Earnings per share before and after dilution were SEK 8.85 (13.84) and SEK 8.80 (13.76), respectively

Message from the CEO
Strong cash flow in quarter despite early winter
Consolidated net sales in the fourth quarter increased to SEK 1,048 million compared to SEK 1,045 million last year. Impact from acquisitions of 3 percent, currency translation of 2 percent and organic development of -5 percent whereof sales price decreased -1 percent and volume development was -4 percent. Organic development was -7 percent in Products & Solutions while Installation Services were stable at -1 percent.

EBIT for the fourth quarter amounted to SEK 47 million, compared to SEK 66 million last year. The negative development in operating profit is explained by costs related to the mandatory on Nordic Waterproofing amounting to SEK -9.5 m, and a negative year on year impact of SEK -17.4 m from the Finland solar panel installation entity (capital gain of SEK 7.0 m in 2022 vs operational loss of SEK -10.4 m in 2023). Excluding the impact of these two exceptional items, EBIT increased from SEK 59 m to 67 in spite of harsh weather conditions in 2023.

ROCE now stands at 10.2 percent (16.1). Cash flow from operating activities amounted to SEK 255 M (93), the increase was mainly due to a significant reduction in working capital.

We have seen continued stabilisation on, in some cases slightly deflated, costs for our input materials. Our expectation for commercial new build is slightly negative to neutral while demand for renovation remains stable. Residential new build will remain depressed in the short-term. We have effected cost reductions throughout our Group to adapt to the current business climate.

The Products & Solutions operating segment decreased Net Sales by -5 percent (15). The impact from acquisitions was 0 percent (4) and currency translation effects were 2 percent (5), organic development was -7 percent (6) of which impact from sales price was -1 percent (15) and volume decreased by -6 percent (-10).

The Bitumen-based waterproofing business in Sweden showed a neutral development in Net Sales while the other three Nordic markets had slightly negative development. The price development for most of the markets was neutral compared to last year.
This was achieved in spite of harsh weather conditions and an early winter.

SealEco, our synthetic rubber waterproofing business, had a decline in sales in most of its markets, however at a lower rate than previously this year.

In our prefabricated wooden elements business, the Taasinge group had an increase in sales in Denmark while Norway had a negative sales development. Kerabit Kattoelementit in Finland had a slightly positive development in sales. The Taasinge group has had slightly positive sales trend with increased margins, although still at an unsatisfactory level. Order books are on good levels in Denmark and Finland.

Sales development of our green infrastructure businesses, sold under the brands Veg Tech and Urban Green, had a slightly negative development due to lower activity within the area of roof park installations.

The Installation Services operating segment grew by 12 percent (30) to SEK 364 M. The impact from acquisitions was 9 percent (8) and currency translation effects were 4 percent (8), organic development was -1 percent (13), of which sales price development was neutral (6 percent) and volume development was -1 percent (7). In Finland, which represents the largest part of our Installation Services, we saw lower margins as a consequence of inefficiencies due to the early winter for our roofing activities. We also faced operational challenges within the area of solar panel installations where improvement plans have been implemented. The entity performing flooring on cruise ships showed excellent performance. In Norway, where we face some operational challenges, we had a negative development in volume and weaker margins. In Denmark, our franchise companies reported operating profit on a par with the strong previous year. The recently acquired entities in Sweden contributed with a positive operating result in the quarter.

The fourth quarter concludes a year in a challenging environment. I am pleased to report that during the year we continued to strengthen our Group’s positions, taking market shares in most of our businesses. We are confident that the remaining operational challenges in a few limited areas offer the opportunity of improved profitability in 2024. We are presently well positioned with strong cash flow and a solid balance sheet to further expand the Group in accordance with our strategic plan. Our decentralized model continues to prove effective as we have been able to simultaneously implement necessary cost savings as well as innovative marketing initiatives. Overall, we are well positioned after a period of challenging market climates.

Helsingborg, 6 February 2024

Martin Ellis,
President and CEO

Annual General Meeting 2024 and dividend proposal
The AGM of Nordic Waterproofing Holding AB will be held on 25 April 2024.
The Board of Directors will propose the Annual General Meeting to resolve to pay a cash dividend of SEK 5.00 per share, totaling SEK 120 m. This represents ca 58 percent of the net profit in 2023.

Nomination Committee for the 2024 Annual General Meeting
Information about the nomination committee is published on the Group's website: www.nordicwaterproofing.com/en/nomination-committee.

Annual report 2023
The 2023 Annual Report will be available on Nordic Waterproofing’s website and at the company’s headquarters from 25 March 2024.

Conference call
A conference call for investors, analysts and media will be held today, 6 February 2024, at 10:00 am CET and can be joined online at https://events.teams.microsoft.com/. Presentation materials will be available on https://www.nordicwaterproofing.com one hour before the call.
To participate from computer, use link above or via MS Teams with meeting id 366 053 287 953 and passcode: i443Lv.
To participate via phone, please use conference id 300 609 265# on any of below numbers:

• From Sweden: +46 8 502 428 90
• From Denmark: +45 32 72 66 61
• From United Kingdom: +44 20 7660 8326
• From Finland: +358 9 85 626 548