• Net sales decreased by 14 percent to SEK 2,218 m (2,569). Organically, sales declined with 12 percent.
• Adjusted1) operating profit decreased by 7 percent to SEK 222 m (238).
• Operating profit amounted to SEK 148 m (238).
• Adjusted1) operating margin increased to 10.0 percent (9.3).
• Operating margin amounted to 6.7 percent (9.3).
• Profit for the period amounted to SEK 76 m (181).
• Earnings per share, before and after dilution, amounted to SEK 1.00 (2.38).
• Cash flow from operating activities increased to SEK 295 m (177).
• In June Lindab acquired 95 percent of the Irish ventilation company Smofir Trading Ltd., licensor of the technology under the trademark Thor Duct.
• The quarter includes one-off items and restructuring costs of SEK -74 m (-) due to Lindab´s strategic decision to close the IMP Klima Group.
January - June 2020
• Net sales decreased by 7 percent to SEK 4,550 m (4,884). Organically, sales declined with 7 percent.
• Adjusted1) operating profit decreased by 6 percent to SEK 406 m (430).
• Operating profit amounted to SEK 332 m (430).
• Adjusted1) operating margin increased to 8.9 percent (8.8).
• Operating margin amounted to 7.3 percent (8.8).
• Profit for the period amounted to SEK 212 m (323).
• Earnings per share, before and after dilution, amounted to SEK 2.78 (4.23).
• Cash flow from operating activities increased to SEK 321 m (256).
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 shows strength during the quarter, in very challenging times. Thanks to rapid cost saving measures, Lindab delivers a good result and strengthened operating margin. Our customer-oriented organisation has shown strong delivery performance and we have continued to maintain a high pace in the investment program.
Sales have been negatively affected by lockdowns of several of Europe’s major economies, as a consequence of the corona pandemic.
Recovery in June
During the month of June, we have seen a recovery when countries have re-opened and construction activity in Europe has gradually increased. Lindab’s employees have made every effort to help the thousands of customers around Europe who depend on our deliveries to do their everyday job. We can proudly say that we have stayed open throughout the crisis and kept our promises to customers. Delivery performance has been exceptionally high thanks to our customer-oriented production and distribution systems.
Improved profitability and a strong balance sheet enable Lindab to continue the strategic investments. We continue to develop new products and digital solutions for the future. The pace is high in the investment program, which increases our productivity and capacity within prioritised product segments. The returns on these investments are good.
Acquisitions strengthen Lindab
Bolt-on acquisitions are an important part of the strategy. In June, Thor Duct was acquired to strengthen Lindab’s position in fire and smoke protection ventilation systems in Ireland and the United Kingdom.
In early July, Lindab acquired Crenna, a leader in rectangular ventilation ducts in Sweden. With the acquisition, Lindab and Crenna can together offer customers throughout Sweden a complete range of ventilation ducts and accessories.
In our effort to increase the profitability of the Lindab Group, we decided at the end of June to close IMP Klima in Slovenia. The company that manufactures air handling units was acquired in 2015 and has shown weak profitability for many years. The corona crisis further worsened the situation. We do not see a reasonable path to profitability and growth for IMP Klima. Operations will be discontinued during this year.
We create a sharper Lindab by investing in areas with growth potential where we have high competence, at the same time as we remove unprofitable operations outside our core competencies. In our decentralised structure, high demands are put on all business units to deliver the highest customer satisfaction and results in line with the Group’s goals.
Maintained dividend to shareholders
At Lindab’s Annual General Meeting on 29 April, it was decided that Lindab would pay as large dividend this year as last year (SEK 1.75 per share). Although lower than what was originally proposed, the Board’s aim was to find a balance between short-term caution with cash flow, and the long-term shareholder interest. Lindab demonstrates that we care about customers, employees and shareholders, even in tough times.
Well positioned for the future
When we now look ahead, we assess that the general market situation over the next year will be subdued compared to the situation before the crisis. However, the long-term demand for Lindab’s ventilation products benefits from an increased interest in solutions that reduce energy consumption and create healthy indoor environments. EU’s directives for renovation and new construction of buildings, as well as miscellaneous new support packages, have increased the demand for high quality ventilation products.
Lindab’s employees have shown that they can grow in a crisis. A decentralised organisation has enabled quick decisions. Our local managers have taken great responsibility for employees, customers and results. Together we shape a Lindab that is ready for a new global environment. Thank you to all employees for your efforts during this difficult time.”