Solid finish to 2022
Fourth quarter of 2022
Message from the CEO
Solid finish to 2022
Consolidated net sales in the fourth quarter increased by 17 percent compared to the previous year, from SEK 890 million to SEK 1,045 million. Organic growth was 6 percent of which 13 percent were sales price increases and volume development was -7 percent, the impact from acquisitions was 6 percent and currency translation effects were 6 percent. Organic growth was 6 percent in Products & Solutions and 13 percent in Installation Services.
EBIT for the fourth quarter amounted to SEK 66 million, compared to SEK 59 million last year. The positive development in operating profit is explained by a strong improvement in all areas of Installation Services. At the same time, some areas within Products & Solutions had lower margins compared to the high levels of the fourth quarter 2021. Prefabricated wood elements still has not reached a satisfactory profit level while we have seen significant improvements in the green infrastructure business.
Our ROCE at 16.1 percent (16.6) remains significantly above the threshold of 13 percent. Cash flow from operating activities amounted to SEK 93 M (92), driven by reductions in both inventory and operating receivables.
We maintain a strong focus on sustainability throughout the Group and remain on track to reach our emission reduction targets. The Group has driven improved data collection and CO2 footprint reduction initiatives. Our units have completed and published seven EPDs (Environmental Product Declarations). Our acquisition strategy has been squarely focused on sustainable construction solutions with Anneberg Limtrae, Playgreen and EG Trading joining our Group.
We have seen slightly deflated costs for our input materials while energy and transportation remain on a high level. Our expectation for residential new build development on our main markets is slightly negative in the short-term, while demand for renovation seems to remain stable. In this macro economic situation there are more uncertainties for the future than normally. Contingency plans are in place to mitigate the consequences of any negative development.
During the quarter we made two acquisitions in Finland and one in Sweden.
The Products & Solutions operating segment grew by 15 percent (13). Organic growth was 6 percent (8) of which 15 percent were related to sales price increases and volume development was -10 percent, the impact from acquisitions was 4 percent and currency translation effects were 5 percent.
The Bitumen-based waterproofing business showed growth on all the four Nordic markets. SealEco, our synthetic rubber waterproofing business, had a somewhat declining sales with maintained market share.
In our prefabricated wooden elements business, Taasinge group had a decline in sales in Denmark while Norway and Seikat in Finland had a strong positive sales development. We maintain strong order books in all three markets.
Sales development of our green infrastructure businesses, sold under the brands Veg Tech and Urban Green, had a very strong growth compared to the fourth quarter 2021.
The Installation Services operating segment grew by 30 percent (21) to a quarterly all-time high of SEK 325 M. Organic growth was 13 percent (-7), of which 6 percent was sales price increases and volume development was 7 percent, the impact from acquisitions was 9 percent and currency translation effects were 8 percent.
The majority of this business within Installation Services is conducted in Finland where we saw growth and improved margins for our roofing business.
Our roofing business in Norway had a strong double-digit growth and good improvement in Operating result.
Our Danish franchisees continue to experience a strong market and the fourth quarter EBIT contribution was above last year.
We have maintained an active acquisition strategy.
On 3 October we acquired 70 percent of the shares in EG Trading, a company headquartered in Tammisaari in southern Finland growing sedum and offering a wide variety of different landscaping products. The acquisition extends our geographic presence in the green infrastructure solutions.
On December 1, we acquired 100 percent of the shares in Hagmans Tak Öst AB, a company that provides roofing and waterproofing services. The acquisition expands our offering to customers in Sweden and is part of our ambition to integrate downstream in the Swedish market.
On December 7, we acquired an additional 31 percent of the shares in Playgreen Oy, a Finnish company mainly active in the design, sales and installation of solar energy solutions, and now hold a total of 64 percent of the shares in the company with an option to acquire the remaining 36 percent.
We continue to focus on growth (organic and selective acquisitions), profitability and sustainability. Our balance sheet is strong, and we continue to have the capacity to carry out acquisitions. We have a strategic focus to promote sustainable building solutions and enhance our service and product portfolio.
Helsingborg, 7 February 2023
President and CEO
A conference call for investors, analysts and media will be held today, 7 February 2023, at 10:00 a.m. 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. To participate via phone, please use conference id 594 299 331# 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
This information was distributed by MFN https://www.mfn.se/