LINDAB INTERNATIONAL AB Lindab International AB (publ)
Interim Report January - September 2021
High organic growth and continued improved profitability
Demand for Lindab's products remained high during the third quarter and sales increased significantly compared to the same quarter previous year. Business areas Ventilation Systems and Profile Systems reported high organic sales growth and improved profitability. During the quarter, Lindab signed an agreement to divest business area Building Systems, in line with Lindab's strategy to increase focus on the core business.
Third quarter 2021 | January - September 2021 |
- Lindab has signed an agreement to divest business area Astron Building Systems. The divestment is mainly subject to anti-trust approval in Russia. In this interim report Building Systems is recognised as "asset held for sale/discontinued operations".
- In September, Lindab's Board of Directors decided to up- date the financial targets.
Continuing operations
- Net sales increased by 21 percent to SEK 2,488 m (2,059). Organic growth was 19 percent.
- Adjusted1) operating profit increased to SEK 403 m (246).
- Operating profit increased to SEK 403 m (250).
- Adjusted1) operating margin increased to 16.2 percent (11.9).
- Operating margin increased to 16.2 percent (12.1).
Total operations
- Profit/Loss for the period amounted to SEK -102 m (198) and was affected by one-off items and restructuring costs of SEK -432 m (4) related to Building Systems.
- Earnings per share before dilution amounted to SEK -1.33 (2.59) and after dilution to SEK -1.34 (2.59).
- Cash flow from operating activities amounted to SEK 202 m (452).
2021 | |
Key Figures | Jul-Sep |
Continuing operations
- Net sales increased by 15 percent to SEK 7,088 m (6,138). Organic growth was 16 percent.
- Adjusted1) operating profit increased to SEK 955 m (635).
- Operating profit increased to SEK 955 m (565).
- Adjusted1) operating margin increased to 13.5 percent (10.3).
- Operating margin increased to 13.5 percent (9.2).
Total operations
- Profit for the period amounted to SEK 316 m (410) and was affected by one-off items and restructuring costs of SEK -432 m (-66) related to Building Systems.
- Earnings per share before dilution amounted to SEK 4.14 (5.37) and after dilution to SEK 4.13 (5.37).
- Cash flow from operating activities amounted to SEK 489 m (773).
2020 | Change, | 2021 | 2020 | Change, |
Jul-Sep | % | Jan-Sep | Jan-Sep | % |
Continuing operations2) | ||||||
Net sales, SEK m | 2,488 | 2,059 | 21 | 7,088 | 6,138 | 15 |
Adjusted1) operating profit, SEK m | 403 | 246 | 64 | 955 | 635 | 50 |
Operating profit, SEK m | 403 | 250 | 61 | 955 | 565 | 69 |
Adjusted1) operating margin, % | 16.2 | 11.9 | - | 13.5 | 10.3 | - |
Operating margin, % | 16.2 | 12.1 | - | 13.5 | 9.2 | - |
Discontinued operations3) | ||||||
Profit for the period, SEK m | -102 | 198 | -152 | 316 | 410 | -23 |
Earnings per share before dilution, SEK | -1.33 | 2.59 | -152 | 4.14 | 5.37 | -23 |
Earnings per share after dilution, SEK | -1.34 | 2.59 | -152 | 4.13 | 5.37 | -23 |
Cash flow from operating activities, SEK m | 202 | 452 | -55 | 489 | 773 | -37 |
- Adjusted operating profit/operating margin does not include significant one-off items and restructuring costs. See 'Reconciliations' page 27.
- Continuing operations, Lindab Group excluding asset held for sale/discontinued operations, i.e. excluding Building Systems.
- Total operations, continuing operations and discontinued operations.
Lindab Interim Report January-September 2021
A word from the CEO
Foto: Mette Ottosson
Lindab continued its strong development during the third quarter. Sales reached a new highest level, both for the Group and for the two business areas Ventilation Systems and Profile Systems. With an adjusted operating margin of
16.2 percent, Lindab has also continued to strengthen the profitability.
During the third quarter, Lindab experienced a very high demand for its products for both Ventilation Systems and Profile Systems. We were also early in adjusting prices to compensate for higher steel prices, which had a positive effect on sales. Lindab has a robust supply chain and reliable access to raw materials. Customers have appreciated the high delivery performance, which is a great competitive advantage, especially in times when there is a shortage of steel and other materials.
"With the divestment of Astron, we can focus on the core business and continue to develop Lindab with full force."
Increased focus after the divestment of business area Building Systems
In September, an agreement was signed to divest Astron Building Systems to Groupe Briand. The divestment is part of our efforts to refine the business and increase focus. Lindab's strength is to provide high-quality products with high availability. Astron has a distinct project business with a high degree of customer-unique solutions. With the divestment, we can focus on the core business and continue to develop Lindab with full force.
New financial targets
Increased focus on the remaining business and a stability in our earnings capacity have improved the conditions for profitable
growth. The financial targets have been raised to reflect Lindab's ambition to grow sales through acquisitions. The annual growth should now amount to at least 10 percent as a combination of organic and acquired growth, compared with the previous target of 5-8 percent. One third of the growth is expected to be organic and two thirds through acquisitions.
During the quarter, Kami, a Swedish roof specialist, was acquired. Shortly after the end of the quarter, the Swiss ventilation company Tecnovent was acquired. We are now gradually increasing the pace and aim for more acquisitions in the future.
Our long-term profitability target was changed so that the adjusted operating margin should exceed 10 percent per year. During the third quarter, the operating margin target was exceeded by far, mainly due to strong sales. The effects of the investment program are becoming increasingly noticeable and contributed to increased earnings during the quarter, even though most of the efficiency gains are still ahead of us.
"During the third quarter, the operating margin target was exceeded by far."
Well positioned for the future
In recent quarters, Lindab has proven that we have an organisation that can manage high steel prices and shortage of raw ma- terials. Through our close cooperation with the largest players in the steel industry, we have good visibility of the expected market development. Our assessment is that the shortage of steel, and thus high steel prices, will persist at least for some time into next year. We plan the business and our pricing accordingly.
The long-term demand for Lindab's ventilation products benefits from an increased interest in solutions that create healthy indoor environments and reduce energy consumption. With an estimated 65-70 percent of our sales in line with EU's taxonomy, we have
a product portfolio that is well positioned. We have a strong and motivated organization and good cost control. With our presence throughout Europe and a robust supply chain, we are well positioned to continue to develop the business in a positive direction in both the short and long term.
Grevie, October 2021
Ola Ringdahl
President and CEO
2 | Lindab International AB (publ), Corporate identification number 556606-5446, www.lindabgroup.com |
Lindab Interim Report January-September 2021
Long-term financial targets
Lindab has long-term financial targets for growth, profitability and net debt. On September 23, 2021 Lindab raised its targets for growth and profitabi- lity, see page 9. For 2021 the outcome regarding annual growth and adjusted operating margin is reported for continuing operations, while net debt/ EBITDA is reported for total operations.
Annual growth, >10%1) | 18.52) | |||
8.9 | ||||
3.7 | 3.3 | |||
-5.2 | ||||
2017 | 2018 | 2019 | 2020 | 2021 |
Q1-Q3 |
Adjusted operating margin, >10%
13.52,3) | ||||
9.33) | 10.03) | |||
6.2 | 6.8 | |||
2017 | 2018 | 2019 | 2020 | 2021 |
Q1-Q3 |
Net debt/EBITDA, <3,06)
2.2 | ||||
1.6 | 1.64) | 1.44) | 1.14,5) | |
2017 | 2018 | 2019 | 2020 | 2021 |
- Growth excluding currency effects.
- The outcome for total operations was 16.9 percent for annual growth and 12.5 percent for adjusted operating margin.
- Excluding the effect of implemented new accounting standard IFRS 16 Leases, operating margin amounted to 13.2 percent in 2021, 9.7 percent in 2020 and 9.0 percent in 2019.
- Excluding the effect of implemented new accounting standard IFRS 16 Lea- ses, net debt to EBITDA amounted to 0.6 in 2021, 0.8 in 2020 and 1.0 in 2019.
- Rolling 12 months (R 12M).
- Adjusted for one-off items and restructuring costs.
Lindab's sustainability work - For a better climate
Lindab's sustainability plan includes activities and targets in three areas: To create healthy buildings is about contributing to a better society. Together with our customers, Lindab can reduce the environmental impact by offering leading energy-efficient products and systems. Finally, the business should be managed in a sustainable way.
In 2021, the sustainability plan is further detailed. Local strategies are developed for each unit in Lindab. It will result in a refined overall plan with an additional level of details.
EU Taxonomy
Lindab estimates that 65-70 percent of sales is aligned with the first objective "Climate change miti- gation" in the EU Taxonomy.
Create healthy buildings
Indoor environments are very important for our lives as we spend about 90 percent of our time indoors. We contribute to healthy buildings to improve well-being and productivity.
Reduce the environmental impact from customers
Buildings account for 40 percent of all energy consumption. Together with our customers, we can reduce the environmental impact by offering leading energy-efficient products and systems with a high degree of recycling.
Drive a sustainable business
In order to achieve a circular economy and be able to offer customers sustainable solutions, all parts of our value chain - purchasing, manufacturing and transports - must reduce the resources used and thus lower the carbon dioxide emissions. Lindab should be a work- place that employees are proud of.
Lindab International AB (publ), Corporate identification number 556606-5446, www.lindabgroup.com | 3 |
Lindab Interim Report January-September 2021
Sales, profit and cash flow
Sales and market - continuing operations
Net sales during the quarter amounted to SEK 2,488 m (2,059), an increase of 21 percent. Organic growth was positive by
19 percent while currency effects had a negative impact on growth of 1 percent. Structural changes, related to Lindab's acquisitions and divestments, contributed positively by 3 percent.
The demand, during the quarter, remained positive for the Group where both Ventilation Systems and Profile Systems reported strong organic growth. Lindab has been able to manufacture and supply customers with demanded products, despite a general imbalance of raw materials. During the first nine months of the year, a number of price increases have been announced and implemented to customers to compensate for the historically high raw material prices, which also contributed to the growth. The comparison period previous year started with lower demand due to the uncertainty related to covid-19, which also contributed to the strong growth.
Ventilation Systems reported strong organic growth in most markets in which Lindab operates on. Sales growth in Eastern Europe was particularly strong, where several markets had limitations on the construction markets due to covid-19 during the same period previous year. Profile Systems positive growth was mainly a result of increased sales of industrial projects in the Nordics but also increased sales of building products in both Eastern Europe and the Nordics.
Net sales during the period January-September amounted to SEK 7,088 m (6,138), an increase of 15 percent compared to the same period previous year. Organic growth was positive by
16 percent while currency effects had a negative impact on growth of 3 percent. Structural changes, related to Lindab's acquisitions and divestments, contributed positively by 2 percent.
Profit - continuing operations
Adjusted operating profit for the quarter increased to SEK 403 m (246). No one-off items or restructuring costs were reported during the quarter compared to a capital gain of SEK 4 m in the same period previous year, see reconciliation page 27. Adjusted operating margin increased to 16.2 percent (11.9).
Ventilation Systems' adjusted operating profit increased to SEK 236 m (158) and Profile Systems increased to SEK 180 m (98).
The improved adjusted operating profit is mainly explained by significant sales growth, structural changes and strengthened gross margin, as a result of implemented price increases and cost efficiency measures from the previously announced investment program.
Adjusted operating profit for the period January-September increased to SEK 955 m (635). No one-off items or restructuring costs were reported during the quarter compared to SEK -70 m in the same period previous year. See reconciliation page 27. Adjusted operating margin increased to 13.5 percent (10.3).
Sales and market, profit/loss - total operations
Net sales during the quarter amounted to SEK 2,778 m (2,302), an increase of 21 percent. Net sales during the period January- September amounted to SEK 7,773 m (6,852), an increase of 13 percent compared to the same period previous year.
The quarter included one-off items and restructuring costs of SEK -432 m (4), of which SEK -418 m (4) was reported in operating profit. The costs were attributable to Lindab's decision to divest the business area Building Systems, as part of the Group's strategy to streamline the operations. The reported one-off items and restructuring costs were mainly related to impairment of goodwill.
Adjusted operating profit for the quarter increased to SEK 424 m (262). Adjusted operating margin increased to 15.3 percent (11.4).
Profit/Loss for the quarter amounted to SEK -102 m (198) and earnings per share after dilution amounted to SEK -1.34 (2.59).
Adjusted operating profit for the period January-September increased to SEK 973 m (668). Adjusted operating margin increased to 12.5 percent (9.7).
Profit for the period January-September amounted to SEK 316 m (410) and earnings per share after dilution amounted to
SEK 4.13 (5.37). Profit for the period included one-off items and restructuring cost of SEK -432 m (-66) of which SEK -418 m (-70) was reported in operating profit.
Net sales, SEK m
Continuing operations
3,000 | 10,000 | |||||||||
2,400 | 8,000 | |||||||||
1,800 | 6,000 | |||||||||
1,200 | 4,000 | |||||||||
600 | 2,000 | |||||||||
0 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | 0 |
Quarter | 2019 | 2020 | 2021 | R 12M | ||||||
Quarter | R 12M |
Adjusted operating profit, SEK m
Continuing operations
500 | 1,250 | |||||||||
400 | 1,000 | |||||||||
300 | 750 | |||||||||
200 | 500 | |||||||||
100 | 250 | |||||||||
0 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | 0 |
Quarter | 2019 | 2020 | 2021 | R 12M | ||||||
Quarter | R 12M |
4 | Lindab International AB (publ), Corporate identification number 556606-5446, www.lindabgroup.com |
Lindab Interim Report January-September 2021
Sales, profit and cash flow (cont.)
Seasonal variations - total operations
Lindab's business is affected by seasonal variations in the construction industry, and the highest proportion of net sales is normally seen during the second half of the year. The largest seasonal variations can be found in the segments Profile Systems and Building Systems. Ventilation products are mainly installed indoors which is why the Ventilation Systems segment is less dependent on season or weather conditions.
Depreciation/amortisation and impairment losses- continuing operations
Depreciation and amortisation for the quarter amounted to
SEK 97 m (87), of which SEK 7 m (7) was related to intangible assets and SEK 52 m (50) was related to the right of use assets attributable to rental and leasing agreements. No impairment losses were reported in the period or in the same period previous year.
For the period January-September depreciation and amortisation amounted to SEK 285 m (263), of which SEK 21 m (19) was related to intangible assets and SEK 155 m (149) was related to the right of use assets attributable to rental and leasing agreements. Impairment losses in the period amounted to SEK 2 m (42). Of the impairment losses previous year, SEK 42 m were reported as other operating expenses in the statement of profit or loss, of which SEK 40 m were classified as one-off items and restructuring costs.
Depreciation/amortisation and impairment losses- total operations
Depreciation and amortisation for the quarter amounted to SEK 107 m (97). Impairment losses amounted to SEK 380 m (-). The impairment losses of SEK 380 m referred to goodwill and were classified as one-off items and restructuring costs, related to Building Systems.
For the period January-September depreciation and amortisation amounted to SEK 315 m (294). Impairment losses in the period amounted to SEK 382 m (42), of which SEK 380 m (40) were classified as one-off items and restructuring costs. The impairment of SEK 380 m referred to goodwill.
Tax - continuing operations
Tax on profit for the quarter amounted to SEK 95 m (56). Earnings before tax was SEK 394 m (242). The effective tax rate amounted to 24 percent (23). The average tax rate was 19 percent (20). The higher effective tax rate during the quarter, compared to previous year, was mainly explained by that Lindab signed an agreement to divest Building System, which will lead to the termination of the German tax union. The Group has therefore, revaluated deferred tax assets related to previously recognized tax losses carry forward in Germany. The effective tax rate was in previous year negatively impacted by that Lindab was not able to fully recognise carry-forward tax losses to reduce the total tax on profit. In the quarter, the deviation between the effective tax rate and the average tax rate is mainly explained by the same reason.
Tax on profit for the period January-September amounted to SEK 201 m (151). Earnings before tax was SEK 925 m (536). The effective tax rate amounted to 22 percent (28). The average tax rate was 20 percent (20). The lower effective tax rate, compared to previous year, was mainly explained by that Lindab in previous year was not able to fully recognise carry-forward tax losses to reduce the total tax on profit. Furthermore, the effective tax rate during previous year was negatively impacted by withholding tax. The higher effective tax rate compared to the average tax rate in the period, was mainly explained by that Lindab signed an agreement to divest Building Systems, which will lead to the termination of the German tax union. The Group has therefore, revaluated deferred tax assets related to previously recognized tax losses carry forward in Germany.
Tax - total operations
Tax on profit for the quarter amounted to SEK 100 m (59). Earnings before tax, excluding impairment of goodwill, was SEK 378 m (257). The effective tax rate amounted to 26 percent (23). The average tax rate was 19 percent (20).
Tax on profit for the period January-September amounted to SEK 211 m (162). Earnings before tax, excluding impairment of goodwill, was SEK 907 m (572). The effective tax rate amounted to 23 percent (28). The average tax rate was 19 percent (20).
Net sales by region,
last 12 months
Continuing operations
14% 1%
54%
31%
Nordic region | Western Europe | |
CEE/CIS | Other markets | |
Cash flow from operating activities, SEK m
Total operations
500 | 1,200 | |||||||||
400 | 900 | |||||||||
300 | ||||||||||
600 | ||||||||||
200 | ||||||||||
100 | 300 | |||||||||
0 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | 0 |
Quarter | 2019 | 2020 | 2021 | R 12M | ||||||
Quarter | R 12M |
Lindab International AB (publ), Corporate identification number 556606-5446, www.lindabgroup.com | 5 |
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Lindab International AB published this content on 29 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 October 2021 05:47:03 UTC.
