Lindab’s 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
- 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 update the financial targets.
- 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).
- 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).
January – September 2021
- 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).
- 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).
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 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.
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.
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 materials. 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.”
Press and analyst meeting:
A live audiocast will be held at 1:00 pm (CEST) on October 29, 2021. The Interim Report will be presented by Ola Ringdahl, President and CEO, and Jonas Arkestad CFO.
To access the audiocast, please call:
Phone +46 (0) 8 566 426 93
Alternatively phone +44 333 300 9262
The audiocast can be followed live at: https://tv.streamfabriken.com/lindab-q3-2021
This disclosure contains information that Lindab is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 29-10-2021 07:40 CET.
President and CEO
Phone: +46 (0) 431 850 00
Phone: +46 (0) 431 850 00
Head of Corporate Communications
Mobile: +46 (0) 701 48 99 65
Lindab in brief
Lindab is a leading ventilation company in Europe. Lindab develops, manufactures, markets and distributes products and systems for energy-efficient ventilation and a healthy indoor climate. The products are characterised by high quality, ease of installation and environmental thinking.
The Group had sales of SEK 9,166 m in 2020 and is established in 24 countries with approximately 5,000 employees. The Nordic region accounted for 48 percent of sales in 2020, Western Europe for 32 percent, Central- and Eastern Europe for 18 percent and Other markets 2 percent.
The share is listed on the Nasdaq Stockholm, Mid Cap, under the ticker symbol LIAB.