News
October 23, 2020

Lindab´s Interim Report January - September 2020: Stable quarter with improved operating margin


Lindab’s operating margin increased during the quarter. Net sales decreased, compared with the corresponding period previous year, due to the effects of covid-19. Ventilation Systems recovered during the quarter and Profile Systems continued to increase sales and earnings. Building System’s sales have declined as a result of prevailing market uncertainty, but profitability has continued to be good. Lindab has a strong cash flow and balance sheet, which has enabled further acquisitions.

Third quarter 2020

• Net sales decreased by 6 percent to SEK 2,302 m (2,462). Organically, sales declined with 4 percent.
• Adjusted1) operating profit decreased by 4 percent to SEK 262 m (273).
• Operating profit amounted to SEK 266 m (273).
• Adjusted1) operating margin increased to 11.4 percent (11.1).
• Operating margin increased to 11.6 percent (11.1).
• Profit for the period amounted to SEK 198 m (212).
• Earnings per share, before and after dilution, amounted to SEK 2.59 (2.78).
• Cash flow from operating activities increased to SEK 452 m (395).
• In July, Lindab acquired the Swedish company Crenna Plåt AB, a leading manufacturer of high-quality rectangular ventilation ducts in the Swedish market.
• In September, Lindab divested IMP Klima Group, manufacturer of air handling units in Slovenia.
• After the end of the quarter, Ekovent, a leading Swedish manufacturer of ventilation and fire protection products, was acquired.

January - September 2020

• Net sales decreased by 7 percent to SEK 6,852 m (7,346). Organically, sales declined with 6 percent.
• Adjusted1) operating profit decreased by 5 percent to SEK 668 m (703).
• Operating profit amounted to SEK 598 m (703).
• Adjusted1) operating margin increased to 9.7 percent (9.6).
• Operating margin amounted to 8.7 percent (9.6).
• Profit for the period amounted to SEK 410 m (535).
• Earnings per share, before and after dilution, amounted to SEK 5.37 (7.01).
• Cash flow from operating activities increased to SEK 773 m (651).

  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 showed continued recovery during the third quarter and stands strong in a challenging time. Sales increased compared to the previous quarter, thanks to a customer oriented organisation with high delivery capability. Rapid adjustment of costs contributed to improved profitability and the operating margin is the highest in Lindab for more than ten years.

Sales have developed positively compared to the second quarter but are slightly lower than in the third quarter previous year. We see that construction activity has gradually increased since the spring, but several of Europe’s large economies continue to be negatively affected by covid-19.

Strong operating margin

The adjusted operating margin reached 11.4 percent in the third quarter and to reach that level, despite reduced sales, demonstrates quality and stability. Our decentralised organisation has adjusted costs quickly. Good profitability and a strong cash flow have given us the opportunity to continue the implementation of the strategic investment program. With increased automation, our production becomes safer and more efficient, which strengthens Lindab both short and long-term.

Acquisitions and divestments

We continued to make acquisitions during the third quarter, enabled by high profitability and strong cash flow. The ongoing pandemic has made it somewhat more difficult to work with acquisitions, but Lindab is equipped to grow through acquisitions, even under the current circumstances. During the past six months, Lindab has acquired three companies, Thor Duct, Crenna and Ekovent. All three are quality companies that complement Lindab’s product range within ventilation systems.

Thor Duct provides ventilation systems for fire and smoke protection and is the market leader in the United Kingdom and Ireland. Lindab sees good growth opportunities in this niche.

Crenna is the leading manufacturer of high-quality rectangular ventilation ducts on the Swedish market. Lindab is the market leader in circular ducts. With the acquisition of Crenna, Lindab will have a complete range of ventilation ducts in Sweden.

Ekovent, acquired on 1 October, is a leading Swedish manufacturer of ventilation and fire protection products. The acquisition expands Lindab’s offering in ventilation solutions and Lindab strengthens its position for fire protection in Sweden.

During the third quarter, IMP Klima and its subsidiaries were divested. At the end of June, we decided to close the business due to weak sales development and low profitability. We are pleased that we were able to find a new owner, the Dutch company Orange Climate, which will continue to manage IMP Klima and thus save many jobs.

Well positioned for the future

The challenges related to covid-19 are far from over, but Lindab has a robust supply chain and an organisation that is well equipped to handle the situation. The spread of infection is increasing again in Europe and we are prepared for renewed local restrictions and lockdowns.

The long-term demand for Lindab’s ventilation products will benefit from an increased interest in solutions that create healthy indoor environments and reduce energy consumption. EU’s directives for renovation and new construction of buildings, as well as several new support packages, should increase the demand for high quality ventilation systems. This gives Lindab possibilities to continue to develop its business in a positive direction.

Thank you to all customers who continue to choose Lindab and thank you to all employees for your efforts during this challenging time.”

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