Still benefitting from strong demand
Message from the CEO
Still benefitting from strong demand
Nordic Waterproofing again delivered a record quarter both in sales and operating profit terms, backed by continued strong demandConsolidated net sales for the third quarter rose by 16 percent compared with previous year, from SEK 778 m to SEK 901 m. Organic growth was strong at 10 percent, acquisitions contributed with 4 percent and the currency translation exchange rate effect was 2 percent. At SEK 109 m, EBIT was 27 percent above last year's profit of SEK 86 m, and EBITDA was SEK 137 m compared with SEK 102 m in the corresponding period the preceding year.
Our Products & Solutions segment reported a sales increase of 17 percent while Installation Services increased 11 percent. Sales were driven by strong demand in almost all parts of the business.
Veg Tech, which was acquired in the beginning of July 2018, showed strong sales and contributed positively to the organic growth as well as increased profit of the Group in the quarter. As weather conditions were fairly favorable during the third quarter, especially compared with the warm and unusually dry summer previous year, sales within green infrastructure were strong both in Norway and Sweden. In order to secure volumes for coming years, Veg Tech has started local production of sedum in Norway and the first deliveries of Norwegian sedum will take place next year.
As communicated earlier, the customer delays in the Taasinge prefabricated elements business in Denmark have created difficulties in optimizing the production planning leading to lower efficiency and earnings. The situation in Denmark has continued to stabilize during the third quarter, while the Norwegian business in RVT experiences challenges in the installation department due to significantly increased volumes and building site inefficiency.
In July, Taasinge strengthened its position in eco-friendly construction by acquiring a small installation business in Denmark. Taasinge now offers our customers a complete solution, from drawing to assembly at the building site, in order to ensure that both the logistics and the execution are as high in quality as possible. Nordic Waterproofing has the ambition to contribute significantly towards making buildings and infrastructure, as well as the construction process itself, sustainable and climate efficient. We see a strong opportunity for increasing the use of wood in prefabricated building parts. Wood binds significant amounts of carbon dioxode, and its use in building and construction contributes to reducing climate change. Using prefabricated building parts reduces construction time considerably compared to on-site building, generating financial benefits and reducing energy consumption.
The legacy business within bitumen roofing was strong during the quarter, driven by flat roofing products in all Nordic countries but also sales of geomembranes in Finland. In Norway we continue to experience strong competition and price pressure as the consolidation within builders' merchants is on-going. Our intensified sales and marketing efforts to increase market share continues but has yet to produce increased sales volumes and profitability within the builder's merchants segment. The consolidation within builders' merchants is visible also in Sweden and we see customer movements between different builders' merchants. On the other hand, the flat roofing market remains stable and we still only see a minor impact from the weaker housing market. In Denmark, the flat roofing market is strong although organic growth has been somewhat slower this year. The Finnish builders' merchants market is somewhat weaker with lower volumes than in the corresponding period the preceeding year. SealEco and the rubber membrane business developed well also in the third quarter, primarily driven by DistriPond which was acquired earlier this year.
Within the Installation Services segment, activity was higher particularly in the flat roofing business. In general, the outlook and the Finnish market expectations are slightly negative, which makes for a continuously competitive marketplace. However, the order intake during the third quarter was higher compared with previous year with a healthy margin. Our Danish franchise companies continue experiencing a strong market and perform well in the third quarter, with strong order books and an EBIT contribution above the corresponding period last year.
We see current trends continuing for the rest of the year, and our result outlook remains unchanged.
Vejen, 31 October 2019
President and CEO
A conference call for investors, analysts and media will be held today, 31 October 2019, at 10:00 a.m. CET and can be joined online at www.nordicwaterproofing.com (https://tv.streamfabriken.com/nordic-waterproofing-q3-2019). Presentation materials for the call will be available on the website one hour before the call.
To participate, please dial:
From the United Kingdom: +44 33 3300 9264
From Denmark: +45 78 15 01 07
From Sweden: +46 8 566 426 92
Further information can be obtained from
Martin Ellis, President and CEO tel: +45 31 21 36 69
Jonas Olin, CFO & Investor Relations tel: +46 708 29 14 54
This information is information that Nordic Waterproofing Holding A/S is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 31 October 2019, 08:00 a.m. CET.
This information was distributed by Cision http://www.cisionwire.se/