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Lindab International
Interim / Quarterly Report • Jul 21, 2023
2938_ir_2023-07-21_20113660-42aa-4648-98c3-56bb1fe36d2a.pdf
Interim / Quarterly Report
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Lindab International AB (publ) Interim Report January - June 2023
Ventilation shows strength and expands in Europe
During the second quarter, Lindab reported its highest sales ever. Sales increased by 6 percent, mainly due to completed acquisitions and organic growth in region Western Europe. The operating margin was strengthened compared to the first quarter and amounted to 9.0 percent in the second quarter. Business area Ventilation Systems, which represents approximately 75 percent of sales, delivered its highest operating profit ever for a single quarter. Profile Systems was affected by weaker demand and did not reach the expected level of profitability. Cash flow from operating activities remained strong in the quarter.
Second quarter 2023
- Net sales increased by 6 percent to SEK 3,365 m (3,171). Organic sales growth was negative by 13 percent. Structural changes contributed positively by 14 percent.
- Adjusted1) operating profit amounted to SEK 302 m (402).
- Operating profit amounted to SEK 302 m (402).
- Adjusted1) operating margin amounted to 9.0 percent (12.7).
- Operating margin amounted to 9.0 percent (12.7).
- Profit for the period amounted to SEK 240 m (300).
- Earnings per share before dilution amounted to SEK 3.14 (3.92) and after dilution to SEK 3.13 (3.91).
- Cash flow from operating activities increased to SEK 323 m (161).
- During the quarter Lindab acquired the British company Firmac Ltd. and the Czech business Ventilace EU, with total annual sales of approximately SEK 80 m.
January - June 2023
- Net sales increased by 12 percent to SEK 6,589 m (5,904). Organic sales growth was negative by 9 percent. Structural changes contributed positively by 17 percent.
- Adjusted1) operating profit amounted to SEK 566 m (742).
- Operating profit amounted to SEK 566 m (723).
- Adjusted1) operating margin amounted to 8.6 percent (12.6).
- Operating margin amounted to 8.6 percent (12.2).
- Profit for the period amounted to SEK 420 m (536).
- Earnings per share before dilution amounted to SEK 5.49 (7.01) and after dilution to SEK 5.48 (6.99).
- Cash flow from operating activities increased to SEK 678 m (-52).
| Key Figures | 2023 Apr-Jun |
2022 Apr-Jun |
Change, % |
2023 Jan-Jun |
2022 Jan-Jun |
Change, % |
|---|---|---|---|---|---|---|
| Net sales, SEK m | 3,365 | 3,171 | 6 | 6,589 | 5,904 | 12 |
| Adjusted1) operating profit, SEK m | 302 | 402 | -25 | 566 | 742 | -24 |
| Operating profit, SEK m | 302 | 402 | -25 | 566 | 723 | -22 |
| Adjusted1) operating margin, % | 9.0 | 12.7 | - | 8.6 | 12.6 | - |
| Operating margin, % | 9.0 | 12.7 | - | 8.6 | 12.2 | - |
| Profit for the period, SEK m | 240 | 300 | -20 | 420 | 536 | -22 |
| Earnings per share before dilution, SEK | 3.14 | 3.92 | -20 | 5.49 | 7.01 | -22 |
| Earnings per share after dilution, SEK | 3.13 | 3.91 | -20 | 5.48 | 6.99 | -22 |
| Cash flow from operating activities, SEK m | 323 | 161 | 101 | 678 | -52 | - |
1) Adjusted operating profit/operating margin does not include significant one-off items and restructuring costs. See 'Reconciliations' page 24.
A word from the CEO
Lindab's sales and earnings developed well during the second quarter even though the economic climate was challenging. The assessment is that demand in the ventilation market has stabilised. Sales within Ventilation Systems continued to grow and the operating margin for the segment exceeded the Group target of 10 percent. Profile Systems was affected by lower demand, which led to lower profitability than desired.
Stable demand for ventilation systems
The market in Western Europe has had a strong development, while demand in the Nordic region has been weaker. Increased demand for energy-efficient solutions has partly offset the negative effects of high inflation and higher interest rates, and we plan for a continued stable ventilation market at current levels for the rest of the year.
New construction has fallen significantly, especially in the Nordic region. This has a direct impact on the demand for Profile Systems' products. We expect new construction to remain low over the next 12-18 months.
Ventilation Systems expands in Europe
Ventilation Systems continues to grow its share of total sales and accounted for approximately 75 percent of sales during the quarter. Western Europe has developed particularly well and accounted for more than half of the of the business area's sales during the quarter. Operating profit also increased during the second quarter and Ventilation Systems achieved an operating margin of 10.2 percent thanks to cost control and increased geographical diversification. The raw material effects that had previously had a negative impact on operating profit diminished at the end of the quarter.
"Ventilation Systems achieved an operating margin of 10.2 percent thanks to cost control and increased geographical diversification."
Challenging market for Business area Profile Systems
Business area Profile Systems has high exposure to the Swedish market and to residential construction, which are areas where construction activity is slowing down. Significantly reduced demand led to a lower operating result than desired. Activities to strengthen profitability in Profile Systems began in the second quarter and the operating margin of 6.9 percent has developed in a positive direction compared to the first quarter. With current raw material prices, the raw material factors that have put pressure on the gross margin for several quarters will diminish in the third quarter.
Continued acquisition of ventilation companies
Lindab continues to acquire well-managed quality companies. During the second quarter we welcomed Firmac Ltd. in the UK and Ventilace EU in the Czech Republic to the Lindab Group. Firmac is the European leader in machines for manufacturing of rectangular ventilation ducts. Lindab has for many years been a leader in machines for manufacturing of circular ventilation ducts. Ventilace specialises in the production and sale of rectangular ventilation ducts, mainly on the Czech market.
Acquisitions are an important part of our strategy and we see good opportunities to complete attractive acquisitions also in the future. The companies we acquired in recent years have developed well as part of Lindab.
Focus on cost savings and profitability
Lindab operates in a market with positive prospects, although there are challenges in the short-term. During the second quarter, Lindab has initiated cost savings in all parts of the Group to strengthen earnings. In total, approximately 200 positions are affected, with a particular focus on Profile Systems. During the second quarter the cost for these measures amounted to SEK 4 m and is estimated to be slightly lower in the third quarter. These costs are taken on an ongoing basis and are not recognised as one-off items. The measures are expected to have full effect from October.
In recent years, Lindab has implemented actions to increase profitability and reduce sensitivity to market fluctuations. In challenging times, it becomes clear which parts of the Group that are able to fulfil our profitability requirements and where we need to make targeted measures. In addition to the cost-saving programmes being implemented in the near term, we will review the need for structural measures to become an even more stable company in the long-term.
"Lindab has initiated cost savings in all parts of the Group to strengthen earnings."
Demand for energy efficiency benefits Lindab
We notice an increased demand for sustainable and energy-efficient products. This is beneficial to Lindab, which has a competitive offering in this area.
Ventilation Systems already has an operating margin of over 10 percent. For Profile Systems, the situation is more challenging and the construction market needs to improve during the second half of the year for the business area to reach over 10 percent. However, the financial targets remain unchanged. Lindab's ambition is to deliver an operating margin of at least 10 percent and we will work actively with both revenues and costs to achieve this target even in a weaker economy.
Lindab has an experienced and motivated organisation, strong customer relationships throughout Europe and a stable supply chain. We have good preconditions to continue developing the business in a positive direction going forward.
Grevie, July 2023
Ola Ringdahl President and CEO
Financial targets
Lindab has the following financial targets for growth, profitability and net debt:
1) Growth excluding currency effects.
2) Including the previous segment Building Systems, which was divested in 2021. 3) The outcome for annual growth including divested business was 9.2 percent
for Q2 2023 R 12M, 13.0 percent in 2022 and 18.5 percent in 2021. Adjusted operating margin including divested business was 12.2 percent in 2021.
4) Adjusted for one-off items and restructuring costs.
Lindab first in the world with ventilation ducts in fossil-free steel
As one of few companies in the world, Lindab will this year receive a test delivery of fossil-free steel from SSAB. Lindab will offer its customers a limited number of ventilation and building construction products made from fossil-free steel.
Hybrit is a collaboration between SSAB, LKAB and Vattenfall. Hybrit has developed a technology for hydrogen-based iron and steel production with the aim of establishing a fossil-free value chain from mine to finished steel products. The delivery that Lindab will receive comes from a test facility and is the only delivery Lindab will receive before regular production starts in 2026.
Lindab, in collaboration with selected customers, will offer circular ventilation ducts, with fittings, to the customers' projects. These will be the first ventilation ducts in the world made from fossil-free steel. Lindab will also offer selected roof and façade products in fossil-free steel, including SolarRoof with solar cells integrated in the roof.
"For us, close co-operation with steel suppliers is of great importance for several reasons. It has helped us to secure deliveries to customers during times of steel shortage. Now it gives us the opportunity to get access to fossil-free steel. It is very pleasing
that Lindab's customers will be the first with ventilation products in fossil-free steel", says Ola Ringdahl, President and CEO of Lindab.
Lindab will already this year continuously offer products in decarbonised steel. The decarbonised steel consists mostly of recycled steel, is produced with 100 percent renewable energy and has approximately 70 percent lower climate impact than traditionally manufactured steel.
Sales, profit and cash flow
Sales and market
Net sales during the quarter amounted to SEK 3,365 m (3,171), an increase of 6 percent. Organic sales growth was negative by 13 percent while the currency effects was positive by 5 percent. Structural changes contributed positively by 14 percent.
Lindab reported its highest quarter ever in terms of sales. The high turnover was primarily driven by structural growth, which has mainly been positively affected by the acquisitions of Felderer, R-Vent, Muncholm, Liftasud, Raab and Irish Ventilation & Filtration. During the quarter, two additional acquisitions were completed, the company Firmac Ltd. in the United Kingdom and the business Ventilace EU in the Czech Republic.
The first six months of the year have been characterised by continued high inflation and increased interest rates, although the construction market has adapted somewhat to the new conditions. This has resulted in that the organic sales growth during the quarter was negative, mainly in Profile Systems. Organic growth has also been affected by that a number of markets reported historically high sales in the same period previous year.
For Ventilation Systems, the demand has been relatively stable, with positive organic sales growth in Western Europe. The Nordics and Central Europe reported negative organic growth as a result of generally lower construction activity. Profile Systems' lower sales are explained by that the business has a high exposure to the Swedish market and to new construction, where activity has slowed down. The organic growth in Profile Systems has also been affected by exceptionally high comparative figures, where several major industrial construction projects were delivered in the same period previous year.
Profit
Adjusted operating profit for the quarter amounted to SEK 302 m (402). No one-off items or restructuring costs were reported during the quarter or in the corresponding period previous year. Adjusted operating margin amounted to 9.0 percent (12.7).
The quarter's change in adjusted operating profit was explained by lower sales volume adjusted for structural changes, but also by lower gross margin and slightly higher costs. The reduced sales volume adjusted for structural changes was primarily related to
Profile Systems. The lower gross margin has been affected by the fluctuating raw material prices, which pressured the margins compared to the previous year, mainly within Profile Systems. Acquired companies have also entered Lindab with a slightly lower average gross margin than Lindab as a whole.
Ventilation Systems' adjusted operating profit increased to SEK 254 m (240) and Profile Systems amounted to SEK 61 m (178).
The quarter's net profit amounted to SEK 240 m (300). Earnings per share before dilution amounted to SEK 3.14 (3.92) and after dilution to SEK 3.13 (3.91).
Adjusted operating profit for the period January-June amounted to SEK 566 m (742). No one-off items or restructuring costs were reported during the period compared to SEK -19 m in the corresponding period previous year, see Reconciliations page 24. Adjusted operating margin amounted to 8.6 percent (12.6).
Net profit for the period January-June amounted to SEK 420 m (536). Earnings per share before dilution amounted to SEK 5.49 (7.01) and after dilution to SEK 5.48 (6.99).
Seasonal variations
Lindab's business is affected by seasonal variations in the construction industry, and the highest proportion of net sales is normally seen during the second half of the year. The largest seasonal variations can be found in the segment Profile Systems. Ventilation products are mainly installed indoors which is why the Ventilation Systems segment is less dependent on season or weather conditions.
Depreciation/amortisation and impairment losses
Depreciation and amortisation for the quarter amounted to SEK 148 m (112), of which SEK 14 m (8) was related to intangible assets and SEK 81 m (61) to right-of-use assets attributable to rental and lease agreement. Impairment losses during the quarter amounted to SEK 0 m (-).
Depreciation and amortisation for the period January-June amounted to SEK 290 m (218), of which SEK 28 m (15) was related to intangible assets and SEK 156 m (118) was related to right-ofuse assets attributable to rental and lease agreements. Impairment losses during the period amounted to SEK 0 m (2).
Net sales, SEK m Adjusted operating profit, SEK m
Sales, profit and cash flow (cont.)
Impairment losses for the previous year have been reported as other operating expenses in the consolidated statement of profit or loss and were classified as one-off items and restructuring costs.
Tax
Earnings before tax for the quarter amounted to SEK 263 m (381) and tax on profit was SEK 23 m (81). The effective tax rate amounted to 9 percent (21) and the average tax rate was 21 percent (20). The lower effective tax rate, compared to the average tax rate, was mainly explained by establishment of internal tax union in Germany, leading to Lindab being able to recognise previously unrecognised carry-forward tax losses. The deviation between the effective tax rate for the quarter and the effective tax rate during the corresponding quarter previous year was mainly explained by the same reason.
Earnings before tax for the period January-June amounted to SEK 493 m (688) and tax on profit was SEK 73 m (152). The effective tax rate amounted to 15 percent (22), while the average tax rate was 21 percent (20). The lower effective tax rate, compared to the average tax rate, was mainly explained by establishment of internal tax union in Germany, leading to Lindab being able to recognise previously unrecognised carry-forward tax losses. The deviation between the effective tax rate for the period and the effective tax rate during the corresponding period previous year was mainly explained by the same reason.
Cash flow
Cash flow from operating activities for the quarter increased to SEK 323 m (161). The strengthened cash flow during the period was primarily related to changes in working capital, which amounted to SEK -20 m (-264). Compared to the corresponding period previous year, the development of working capital was mainly explained by lower amount of capital tied up in stock, but also a less negative cash flow impact from changes in operating receivables/liabilities. The positive cash flow effect from changes in working capital was partly offset by the Group's increased payments of interest, a net change of SEK -23 m compared to the same period previous year. During the quarter, operating profit
amounted to SEK 302 m (402) and cash flow before change in working capital equalled SEK 343 m (425).
Cash flow from financing activities for the quarter amounted to SEK -182 m (581). This included amortisation of SEK -81 m (-61) related to leasing liabilities. Dividend to shareholders increased by SEK 46 m and equalled SEK -199 m (-153). Other changes within financing activities were related to changes in borrowing and utilisation of credit limits.
Cash flow from operating activities for the period January-June increased to SEK 678 m (-52). The improved cash flow during the period was primarily related to changes in working capital, which amounted to SEK 103 m (-792). Compared to the corresponding period previous year, the development of working capital was mainly explained by lower amount of capital tied up in stock, a change which improved cash flow by SEK 660 m. The lower value of capital tied up in operating receivables, corresponding to SEK 218 m, also contributed to the strengthened cash flow from working capital. The positive cash flow effect from changes in working capital was partly offset by the Group's increased payments of tax and interest, a net change of SEK -90 m compared to the same period previous year. Operating profit for the period January-June amounted to SEK 566 m (723) and cash flow before change in working capital equalled SEK 575 m (740).
Cash flow from financing activities for the period January-June amounted to SEK -83 m (820). This included amortisation of SEK -156 m (-118) related to leasing liabilities. Dividend to shareholders increased by SEK 46 m and equalled SEK -199 m (-153). Other changes within financing activities were related to changes in borrowing and utilisation of credit limits.
Cash flow from investing activities is explained under the headings 'Investments' respectively 'Business combinations'.
Cash flow from operating activities, SEK m Comparable numbers 2021 includes divested operations
Investments and financial position
Investments
Investments in intangible assets and tangible fixed assets during the quarter amounted to SEK 108 m (99), of which SEK 19 m (13) were related to investments in intangible assets.
Cash flow from investing activities, excluding business combinations, amounted net to SEK -107 m (-98) during the quarter. The cash flow included an effect from the sale of intangible assets and tangible fixed assets of SEK 1 m (1).
Investments in intangible assets and tangible fixed assets for the period January-June amounted to SEK 205 m (205), of which SEK 31 m (19) were related to investments in intangible assets.
Cash flow from investing activities, excluding business combinations, amounted net to SEK -201 m (-204) during the period January-June. The cash flow included an effect from the sale of intangible assets and tangible fixed assets of SEK 4 m (1).
Business combinations
On April 24, Lindab signed an agreement to acquire the Czech ventilation business Ventilace EU, an acquisition that was finalised on June 5. Ventilace EU is a well-established manufacturer of rectangular ventilation ducts in the Czech Republic. With the acquisition, Lindab strengthens both sales and production of rectangular ventilation ducts in the Czech Republic. Ventilace EU is registered in Prague, Czech Republic. The business has annual sales of approximately SEK 42 m and has 30 employees.
On May 2, Lindab acquired all shares and voting rights of the British ventilation company Firmac Ltd. The company is the market leader in Europe of machines for manufacturing of rectangular ventilation ducts. Lindab is the market leader in machines for manufacturing of circular ventilation ducts through its Spiro business. With the acquisition of Firmac Ltd. Lindab gets the corresponding business for rectangular ducts. Firmac Ltd. is registered in Scarborough, United Kingdom. The company has annual sales of approximately SEK 40 m and has 32 employees.
For further information about above and for information about previous acquisitions during 2023, see Note 3.
Financial position
Net debt amounted to SEK 3,747 m (3,169) as of June 30, 2023, of which SEK 1,393 m (1,111) was related to leasing liabilities. The change in net debt was mainly related to acquisitions. Currency effects increased net debt by SEK 64 m (35) during the second quarter.
The equity/assets ratio was 49 percent (48) and the net debt/ equity ratio was 0.5 (0.5). Financial items for the second quarter amounted to SEK -39 m (-21). The change is related to increased interest expenses due to a higher net debt and a higher interest rate.
During the second quarter, Lindab extended all three central credit agreements by one year through an option. The current credit limits of SEK 1,300 m with Nordea and Raiffeisen Bank International and EUR 70 m from Raiffeisen Bank International are valid until second quarter 2026. Lindab also have a credit limit of SEK 1 000 m with Nordea which is valid until second quarter 2025. All agreements contain a covenant, which is monitored quarterly. Lindab fulfilled the conditions as of June 30, 2023.
Pledged assets and contingent liabilities
No significant changes have been made in pledged collateral and contingent liabilities during the second quarter 2023.
Investment program
- Lindab continues the investment program with the objective of achieving increased capacity, higher efficiency, a safer work environment and investment in renewable solar energy.
- During the quarter, continued investments were made in Ventilation Systems and Profile Systems. The largest projects concern automation of production lines in Grevie (SE), Förslöv (SE) and Haderslev (DK).
Other
Parent company
Lindab International AB (publ), corporate identification number 556606-5446, is a registered limited liability company with its domicile in Båstad, Sweden. The Lindab share is listed on Nasdaq Stockholm, Large Cap.
Net sales for the quarter amounted to SEK 2 m (2). Profit for the quarter amounted to SEK 1,240 m (4). The profit included a dividend from shares in subsidiaries of SEK 1,250 m (7).
Net sales for the period January-June amounted to SEK 3 m (3). Profit for the period amounted to SEK 1,233 m (2). The profit included a dividend from shares in subsidiaries of SEK 1,250 m (7).
Significant risks and uncertainties
There have been no significant changes in relation to what was stated by Lindab in its Annual Report for 2022 under Risks and Risk Management (pages 64-69).
Employees
The number of employees, calculated as full-time equivalent employees, was 4,912 (4,920) at the end of the quarter. Adjusted for acquisitions and divestments, the net decrease was 262 employees compared to the same quarter previous year.
Incentive program
Guidelines for remuneration of senior executives were most recently adopted at the Annual General Meeting in 2021. These guidelines shall as per resolution be submitted for adoption at the Annual General Meeting at least each fourth year. According to adopted guidelines, the remuneration program for senior executives shall among other things include variable cash pay elements. These variable elements shall be based on measurable criteria, which reflects predetermined financial and qualitative targets for Lindab. Based on previous resolution at the Annual General Meeting, a long-term incentive program has been implemented in 2023. The program has a three-year measuring period and any outcome in terms of long-term variable cash pay is presumed to be invested in shares or share related instruments in Lindab on market terms. The total cost in the event of maximum outcome for the three-year measuring period of 2023 to 2025 is estimated to SEK 14 m. Long-term incentive programs from 2021 respectively 2022 have essentially the same principles as the program for 2023 and these programs measuring period are 2021 to 2023 respectively 2022 to 2024.
Share option program
At the Annual General Meeting in May 2023, it was resolved to establish a share option program for senior executives in Lindab through a directed issue of maximum 275,000 share options. As a result of this program, 225,500 share options have been subscribed during the second quarter by senior executives in Lindab, according to a market valuation determined on the basis of the agreement. Liquidity regulation and thereby distribution of the share options to the participants has taken place during the beginning of the third quarter. Each share option entitles the holder to acquire one share in Lindab at a exercise price of SEK 209.70. Acquisitions of shares supported by share options may take place after Lindab has published the Q2 interim report
for the year 2026 and up until 31 August of the same year. At the Annual General Meeting in 2020, 2021 and 2022, respectively, there were also resolutions to implement share option programs for senior executives. From the 2020 share option program there are 210,000 outstanding share options with a subscription price of SEK 101.90 exercisable during July/August 2023. From the 2021 share option program there are 183,950 outstanding share options with a subscription price of SEK 222.00 exercisable during summer 2024. From the 2022 share option program there are 238,050 outstanding share options with a subscription price of SEK 219.90 exercisable during summer 2025.
Annual General Meeting
At Lindab International AB´s Annual General Meeting on May 11, 2023, the following resolutions were made, among other things:
- Approval of the Parent company's and the Group's consolidated statement of profit or loss and balance sheet for 2022.
- Granting of discharge of liability for the members of the Board of Directors and the CEO for the financial year 2022.
- Dividend of SEK 5.20 per share distributed half-yearly with SEK 2.60 per share with record date May 15, 2023, and SEK 2.60 per share with record date November 6, 2023.
- Re-election of the Board members Peter Nilsson, Per Bertland, Sonat Burman-Olsson, Viveka Ekberg, Anette Frumerie, Marcus Hedblom and Staffan Pehrson. Peter Nilsson was re-elected as Chairman of the Board.
- Re-election of Deloitte AB as the company's auditors, with Harald Jagner as principal auditor.
- Establishment of a share option program for senior executives with a maximum of 275,000 share options issued.
- Authorisation for the Board of Directors to decide on the transfer of treasury shares on one or more occasions.
For further information, see documents from Lindab International AB's Annual General Meeting which are available at lindabgroup.com.
Changes in the Management Team
In April, Lars Ynner started the position as Chief Financial Officer (CFO).
Significant events during the reporting period
In May, Lindab acquired the British ventilation company Firmac Ltd., see page 6 and Note 3.
In June, Lindab finalised the acquisition of the Czech ventilation business Ventilace EU, see page 6 and Note 3.
There are no other significant events during the reporting period to report.
Significant events after the reporting period
There are no significant events after the reporting period to report.
General information
In December 2021, Lindab divested the segment Building Systems. Key figures for periods earlier than 2022 include divested operations, which result in that key figures for rolling 12 months 2022 are calculated both including and excluding divested operations. For further information see Note 6.
Unless other indicated in this interim report, all statements refer to the Group. Figures in parentheses indicate the result of the same period previous year. Unless other stated, amounts are in SEK m.
The interim report has not been audited.
This is a translation of the Swedish original report. In case of differences between the English translation and the Swedish original, the Swedish text shall prevail.
Segment – Ventilation Systems
| Key performance indicators | 2023 Apr-Jun |
2022 Apr-Jun |
2023 Jan-Jun |
2022 Jan-Jun |
|---|---|---|---|---|
| Net sales, SEK m | 2,480 | 2,057 | 4,898 | 3,954 |
| Net sales growth, % | 21 | 26 | 24 | 28 |
| Adjusted1) operating profit, SEK m | 254 | 240 | 501 | 475 |
| Adjusted1) operating margin, % | 10.2 | 11.7 | 10.2 | 12.0 |
| Number of employees by end of period | 3,925 | 3,909 | 3,925 | 3,909 |
1) No one-off items and restructuring costs were reported in the second quarter 2023 respectively 2022. In the period January-June 2022 one-off items and restructuring costs of SEK -19 m were reported. See Reconciliations page 24.
Sales and market
Net sales during the quarter amounted to SEK 2,480 m (2,057), an increase of 21 percent. Organic sales growth was negative by 5 percent, while currency effects were positive by 7 percent. Structural changes contributed positively by 19 percent.
Ventilation Systems reported its highest quarter ever in terms of sales, primarily driven by structural growth. The structural growth was mainly related to the acquisitions of Felderer, R-Vent, Liftasud, Raab and Irish Ventilation & Filtration. Currency changes also contributed positively to sales the growth, while organic sales growth was negative.
The European construction activity has slowed down as a result of cost inflation, increased interest rates and continued turbulent global conditions. Lindab's largest region in terms of sales, Western Europe, reported despite this positive organic growth while it decreased slightly in Central Europe. The Nordics, which is Lindab's second largest region in terms of sales, reported negative organic growth as a result of generally lower construction activity.
Of the larger markets in Western Europe, the majority reported positive organic growth. Germany, which is Lindab's largest ventilation market in Western Europe as a result of the acquisitions of Felderer and Raab, reported continued positive growth. Other important core markets such as France, Ireland and Switzerland had all positive organic growth, while sales decreased slightly in the United Kingdom and Italy. Organic sales growth in Central Europe decreased marginally during the quarter. Positive organic growth was reported in the Czech Republic, Romania and Hungary, while sales in Poland and Estonia declined.
In the Nordics, sales decreased in all markets. The Nordics is the region in Europe where construction activity has been most affected by increased interest rates and high cost inflation.
Profit
Adjusted operating profit during the quarter increased to SEK 254 m (240). No one-off items or restructuring costs were reported during the quarter compared or in the corresponding period previous year. Adjusted operating margin amounted to 10.2 percent (11.7).
The improved adjusted operating profit, which is the highest ever for an individual quarter, is mainly explained by positive effects from structural changes, but also by positive currency effects and strengthened gross margin adjusted for structural changes.
Adjusted operating profit for the period January-June increased to SEK 501 m (475). No one-off items or restructuring costs were reported during the quarter compared to SEK -19 m in the corresponding period previous year, see Reconciliations page 24. Adjusted operating margin amounted to 10.2 percent (12.0).
Activities
In May, Lindab acquired the British company Firmac Ltd., which is the leader in Europe of machines for manufacturing of rectangular ventilation ducts.
In June, Lindab completed the acquisition of the Czech ventilation business Ventilace EU. With the acquisition, Lindab strengthens both sales and production of rectangular ventilation ducts.
As one of the few companies in the world, Lindab will this year receive a test delivery of fossil-free steel from SSAB. Lindab will offer its customers a limited number of ventilation products and construction products made from the fossil-free steel.
Lindab International AB (publ), Corporate identification number 556606-5446, lindabgroup.com 9
Segment – Profile Systems
| Key performance indicators | 2023 Apr-Jun |
2022 Apr-Jun |
2023 Jan-Jun |
2022 Jan-Jun |
|---|---|---|---|---|
| Net sales, SEK m | 885 | 1,114 | 1,691 | 1,950 |
| Net sales growth, % | -21 | 28 | -13 | 30 |
| Adjusted1) operating profit, SEK m | 61 | 178 | 94 | 300 |
| Adjusted1) operating margin, % | 6.9 | 16.0 | 5.6 | 15.4 |
| Number of employees by end of period | 929 | 959 | 929 | 959 |
1) No one-off items or restructuring costs have been reported in 2023 or 2022.
Sales and market
Net sales during the quarter amounted to SEK 885 m (1,114), a decrease of 21 percent. Organic sales growth was negative by 29 percent, while currency effects were positive by 2 percent. Structural changes contributed positively with 6 percent.
Profile Systems' negative organic sales growth is explained by the combination of high comparative figures for the segment, but also by lower demand on the construction market in Europe. This is as a result of general cost inflation and increased interest rates, which resulted in lower investments, mainly in new construction.
Organic sales growth was negative in the Nordics, which is mainly explained by Sweden. The Swedish market, which represents approximately half of Profile Systems' total sales, has slowed down significantly compared to the same period previous year. The organic growth has also been affected by that sales were particularly high in the comparison period.
The majority of markets in Central Europe had particularly strong sales in the comparison period and at the same time construction activity in the region has been affected by higher interest rates and cost inflation. The region has also continued to be affected by the uncertainty that Russia's invasion of Ukraine has brought. This has resulted in that sales during the quarter decreased in all markets.
Operations in Western Europe decreased, but the impact was marginal as the region only represents a minor part of Profile Systems' total sales.
Profit
Adjusted operating profit during the quarter amounted to SEK 61 m (178). No one-off items or restructuring costs were reported during the quarter or in the same period previous year. Adjusted operating margin amounted to 6.9 percent (16.0).
The lower adjusted operating profit and operating margin was mainly explained by lower sales, increased costs and lower gross margin. The increased costs and the lower gross margin have been affected, among other things, by increased logistic and material prices as well as general cost inflation compared to the previous year. The gross margin during the quarter has also been affected by strategic measures to reduce inventory levels further. In addition, the adjusted operating profit in the comparison period was exceptionally high. A cost review is ongoing to adapt to the lower demand.
Adjusted operating profit for the period January-June amounted to SEK 94 m (300). No one-off items or restructuring costs were reported during the period or in the corresponding period previous year, see Reconciliations page 24. Adjusted operating margin amounted to 5.6 percent (15.4).
Activities
During the quarter, Lindab has updated its design roof Lindab SolarRoof with integrated solar cells, with a new and improved solar panel. Lindab SolarRoof is aimed at those who want to optimise their investment in a new roof by producing their own electricity, but do not want to compromise on the design of the roof.
Net sales and segments
Net sales and growth
| SEK m | 2023 Apr-Jun |
2022 Apr-Jun |
2023 Jan-Jun |
2022 Jan-Jun |
2022 Jan-Dec |
|
|---|---|---|---|---|---|---|
| Net sales | 3,365 | 3,171 | 6,589 | 5,904 | 12,366 | |
| Change | 194 | 670 | 685 | 1,304 | 2,718 | |
| Change, % | 6 | 27 | 12 | 28 | 28 | |
| Of which | ||||||
| Organic, % | -13 | 14 | -9 | 18 | 11 | |
| Acquisitions/divestments, % | 14 | 10 | 17 | 7 | 13 | |
| Currency effects, % | 5 | 3 | 4 | 3 | 4 |
Net sales per segment and region
| 2023 | 2022 | 2023 | 2022 | 2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| SEK m | Apr-Jun | % | Apr-Jun | % | Jan-Jun | % | Jan-Jun | % | Jan-Dec | % |
| Ventilation Systems | 2,480 | 74 | 2,057 | 65 | 4,898 | 74 | 3,954 | 67 | 8,444 | 68 |
| - Nordic Region | 787 | 32 | 874 | 43 | 1,640 | 33 | 1,710 | 44 | 3,362 | 40 |
| - Western Europe | 1,396 | 56 | 904 | 44 | 2,684 | 55 | 1,698 | 43 | 4,032 | 48 |
| - Central Europe | 245 | 10 | 233 | 11 | 471 | 10 | 469 | 11 | 886 | 10 |
| - Other markets | 52 | 2 | 46 | 2 | 103 | 2 | 77 | 2 | 164 | 2 |
| Profile Systems | 885 | 26 | 1,114 | 35 | 1,691 | 26 | 1,950 | 33 | 3,922 | 32 |
| - Nordic Region | 693 | 78 | 874 | 78 | 1,354 | 80 | 1,558 | 80 | 3,148 | 80 |
| - Western Europe | 44 | 5 | 51 | 5 | 79 | 5 | 90 | 5 | 176 | 5 |
| - Central Europe | 144 | 17 | 186 | 17 | 252 | 15 | 296 | 15 | 585 | 15 |
| - Other markets | 4 | 0 | 3 | 0 | 6 | 0 | 6 | 0 | 13 | 0 |
| Total | 3,365 | 100 | 3,171 | 100 | 6,589 | 100 | 5,904 | 100 | 12,366 | 100 |
| - Nordic Region | 1,480 | 44 | 1,748 | 55 | 2,994 | 45 | 3,268 | 55 | 6,510 | 53 |
| - Western Europe | 1,440 | 43 | 955 | 30 | 2,763 | 42 | 1,788 | 30 | 4,208 | 34 |
| - Central Europe | 389 | 11 | 419 | 13 | 723 | 11 | 765 | 13 | 1,471 | 12 |
| - Other markets | 56 | 2 | 49 | 2 | 109 | 2 | 83 | 2 | 177 | 1 |
| Gross internal sales all segments | 11 | 12 | 21 | 23 | 46 |
Operating profit, operating margin and earnings before tax
| SEK m | 2023 Apr-Jun |
% | 2022 Apr-Jun |
% | 2023 Jan-Jun |
% | 2022 Jan-Jun |
% | 2022 Jan-Dec |
% |
|---|---|---|---|---|---|---|---|---|---|---|
| Ventilation Systems | 254 | 10.2 | 240 | 11.7 | 501 | 10.2 | 475 | 12.0 | 881 | 10.4 |
| Profile Systems | 61 | 6.9 | 178 | 16.0 | 94 | 5.6 | 300 | 15.4 | 526 | 13.4 |
| Other operations | -13 | - | -16 | - | -29 | - | -33 | - | -60 | - |
| Adjusted operating profit | 302 | 9.0 | 402 | 12.7 | 566 | 8.6 | 742 | 12.6 | 1,347 | 10.9 |
| One-off items and restructuring costs1) | - | - | - | - | - | - | -19 | - | -22 | - |
| Operating profit | 302 | 9.0 | 402 | 12.7 | 566 | 8.6 | 723 | 12.2 | 1,325 | 10.7 |
| Net financial items | -39 | - | -21 | - | -73 | - | -35 | - | -87 | - |
| Earnings before tax | 263 | 7.8 | 381 | 12.0 | 493 | 7.5 | 688 | 11.6 | 1,238 | 10.0 |
1) One-off items and restructuring costs included in adjusted operating profit are described in 'Reconciliations' page 24.
Number of employees by end of period
| 2023 | 2022 | 2023 | 2022 | 2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Apr-Jun | % | Apr-Jun | % | Jan-Jun | % | Jan-Jun | % | Jan-Dec | % | |
| Ventilation Systems | 3,925 | 80 | 3,909 | 79 | 3,925 | 80 | 3,909 | 79 | 3,862 | 80 |
| Profile Systems | 929 | 19 | 959 | 20 | 929 | 19 | 959 | 20 | 936 | 19 |
| Other operations | 58 | 1 | 52 | 1 | 58 | 1 | 52 | 1 | 55 | 1 |
| Total | 4,912 | 100 | 4,920 | 100 | 4,912 | 100 | 4,920 | 100 | 4,853 | 100 |
Consolidated statement of profit or loss
| SEK m | 2023 Apr-Jun |
2022 Apr-Jun |
2023 Jan-Jun |
2022 Jan-Jun |
R 12M 2022 Jul 2023 Jun |
R 12M 2021 Jul 2022 Jun |
2022 Jan-Dec |
|---|---|---|---|---|---|---|---|
| Net sales | 3,365 | 3,171 | 6,589 | 5,904 | 13,051 | 10,952 | 12,366 |
| Cost of goods sold | -2,460 | -2,252 | -4,825 | -4,165 | -9,568 | -7,634 | -8,908 |
| Gross profit | 905 | 919 | 1,764 | 1,739 | 3,483 | 3,318 | 3,458 |
| Other operating income | 21 | 18 | 36 | 57 | 94 | 110 | 115 |
| Selling expenses | -394 | -322 | -779 | -624 | -1,493 | -1,194 | -1,338 |
| Administrative expenses | -181 | -160 | -356 | -309 | -706 | -575 | -659 |
| R&D expenses | -17 | -15 | -33 | -30 | -64 | -57 | -61 |
| Other operating expenses | -32 | -38 | -66 | -110 | -146 | -165 | -190 |
| Total operating expenses | -603 | -517 | -1,198 | -1,016 | -2,315 | -1,881 | -2,133 |
| Operating profit1) | 302 | 402 | 566 | 723 | 1,168 | 1,437 | 1,325 |
| Interest income | 1 | 1 | 3 | 2 | 6 | 4 | 5 |
| Interest expenses | -43 | -15 | -78 | -28 | -132 | -48 | -82 |
| Other financial income and expenses | 3 | -7 | 2 | -9 | 1 | -13 | -10 |
| Financial items | -39 | -21 | -73 | -35 | -125 | -57 | -87 |
| Earnings before tax | 263 | 381 | 493 | 688 | 1,043 | 1,380 | 1,238 |
| Tax on profit for the period | -23 | -81 | -73 | -152 | -185 | -311 | -264 |
| Profit for the period, continuing operations | 240 | 300 | 420 | 536 | 858 | 1,069 | 974 |
| Discontinued operations | |||||||
| Profit/loss for the period from discontinued operations, net after tax |
- | - | - | - | - | -414 | - |
| Profit/loss for the period, discontinued operations | - | - | - | - | - | -414 | - |
| Total operations | |||||||
| Profit/loss for the period, total operations | 240 | 300 | 420 | 536 | 858 | 655 | 974 |
| –attributable to the Parent company's shareholders | 240 | 300 | 420 | 536 | 858 | 655 | 974 |
| –attributable to non-controlling interests | - | - | - | - | - | 0 | - |
| Earnings per share, before dilution, SEK2) | 3.14 | 3.92 | 5.49 | 7.01 | 11.21 | 8.56 | 12.73 |
| –of which relates to continuing operations | 3.14 | 3.92 | 5.49 | 7.01 | 11.21 | 13.98 | 12.73 |
| Earnings per share, after dilution, SEK2) | 3.13 | 3.91 | 5.48 | 6.99 | 11.19 | 8.52 | 12.70 |
| –of which relates to continuing operations | 3.13 | 3.91 | 5.48 | 6.99 | 11.19 | 13.93 | 12.70 |
1) One-off items and restructuring costs, which are included in operating profit, are described in 'Reconciliations' on page 24.
2) Based on the number of outstanding shares, i.e. excluding treasury shares.
Consolidated statement of comprehensive income
| R 12M | R 12M | ||||||
|---|---|---|---|---|---|---|---|
| SEK m | 2023 Apr-Jun |
2022 Apr-Jun |
2023 Jan-Jun |
2022 Jan-Jun |
2022 Jul 2023 Jun |
2021 Jul 2022 Jun |
2022 Jan-Dec |
| Profit for the period, total operations | 240 | 300 | 420 | 536 | 858 | 655 | 974 |
| Items that will not be reclassified to the statement of profit or loss |
|||||||
| Actuarial gains/losses, defined benefit plans | 17 | 60 | 23 | 57 | 46 | 48 | 80 |
| Deferred tax attributable to defined benefit plans | -3 | -13 | -5 | -12 | -9 | -9 | -16 |
| Total | 14 | 47 | 18 | 45 | 37 | 39 | 64 |
| Items that will later be reclassified to the statement of profit or loss |
|||||||
| Translation differences, foreign operations | 317 | 134 | 399 | 189 | 612 | 240 | 402 |
| Hedges of net investments | -38 | -31 | -46 | -40 | -80 | 6 | -74 |
| Tax attributable to hedges of net investments | 8 | 6 | 10 | 8 | 17 | -2 | 15 |
| Total | 287 | 109 | 363 | 157 | 549 | 244 | 343 |
| Other comprehensive income, net of tax | 301 | 156 | 381 | 202 | 586 | 283 | 407 |
| Total comprehensive income | 541 | 456 | 801 | 738 | 1,444 | 938 | 1,381 |
| –attributable to the Parent company's shareholders | 541 | 456 | 801 | 738 | 1,444 | 938 | 1,381 |
| –attributable to non-controlling interests | - | - | - | - | - | 0 | - |
Consolidated statement of cash flow
| SEK m | 2023 Apr-Jun |
2022 Apr-Jun |
2023 Jan-Jun |
2022 Jan-Jun |
R 12M 2022 Jul 2023 Jun |
R 12M 2021 Jul 2022 Jun |
2022 Jan-Dec |
|---|---|---|---|---|---|---|---|
| OPERATING ACTIVITIES | |||||||
| Operating profit | 302 | 402 | 566 | 723 | 1,168 | 1,437 | 1,325 |
| Operating profit, discontinued operations1) | - | - | - | - | - | -422 | - |
| Reversal of depreciation/amortisation and impairment losses |
148 | 112 | 290 | 220 | 553 | 814 | 483 |
| Reversal of capital gains (-)/losses (+) reported in operating profit |
-1 | 0 | -2 | 0 | -7 | -1 | -5 |
| Provisions, not affecting cash flow | 5 | 11 | 9 | 7 | 20 | 15 | 18 |
| Adjustment for other items not affecting cash flow | 1 | -6 | 2 | -10 | 3 | -12 | -9 |
| Total | 455 | 519 | 865 | 940 | 1,737 | 1,831 | 1,812 |
| Interest received | 3 | 1 | 4 | 2 | 6 | 7 | 4 |
| Interest paid | -42 | -17 | -76 | -29 | -131 | -60 | -84 |
| Tax paid | -73 | -78 | -218 | -173 | -353 | -263 | -308 |
| Cash flow from operating activities before change in working capital |
343 | 425 | 575 | 740 | 1,259 | 1,515 | 1,424 |
| Change in working capital | |||||||
| Stock (increase -/decrease +) | 18 | -111 | 225 | -435 | 308 | -971 | -352 |
| Operating receivables (increase -/decrease +) | -160 | -207 | -336 | -554 | 205 | -428 | -13 |
| Operating liabilities (increase +/decrease -) | 122 | 54 | 214 | 197 | -351 | 249 | -368 |
| Total change in working capital | -20 | -264 | 103 | -792 | 162 | -1,150 | -733 |
| Cash flow from operating activities | 323 | 161 | 678 | -52 | 1,421 | 365 | 691 |
| INVESTING ACTIVITIES | |||||||
| Acquisition of Group-/associated companies | -57 | -627 | -293 | -700 | -576 | -866 | -983 |
| Divestment of Group companies | - | - | - | - | -12 | 159 | -12 |
| Investments in intangible assets | -19 | -13 | -31 | -19 | -52 | -34 | -40 |
| Investments in tangible fixed assets | -89 | -86 | -174 | -186 | -307 | -373 | -319 |
| Change in financial fixed assets | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Disposal of intangible assets | 0 | - | 1 | - | 1 | 0 | - |
| Disposal of tangible fixed assets | 1 | 1 | 3 | 1 | 16 | 3 | 14 |
| Cash flow from investing activities | -164 | -725 | -494 | -904 | -930 | -1,111 | -1,340 |
| FINANCING ACTIVITIES | |||||||
| Proceeds from borrowings | 98 | 795 | 272 | 1,091 | 513 | 1,188 | 1,332 |
| Repayment of borrowings | - | - | - | - | -237 | -63 | -237 |
| Repayment of leasing-related liabilities | -81 | -61 | -156 | -118 | -297 | -236 | -259 |
| Issue of shares/share options and redemption of warrants/ share options |
- | - | - | - | 26 | 10 | 26 |
| Dividend to shareholders | -199 | -153 | -199 | -153 | -352 | -283 | -306 |
| Cash flow from financing activities | -182 | 581 | -83 | 820 | -347 | 616 | 556 |
| Cash flow for the period | -23 | 17 | 101 | -136 | 144 | -130 | -93 |
| Cash and cash equivalents at start of the period | 611 | 391 | 481 | 542 | 429 | 531 | 542 |
| Effect of exchange rate changes on cash and cash equi valents |
25 | 21 | 31 | 23 | 40 | 28 | 32 |
| Cash and cash equivalents at end of the period | 613 | 429 | 613 | 429 | 613 | 429 | 481 |
1) For information of cash flow per category in terms of discontinued operations, i.e. Building Systems, see Note 6.
Consolidated statement of financial position
| SEK m | 30 Jun 2023 | 30 Jun 2022 | 31 Dec 2022 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Goodwill | 4,421 | 3,588 | 3,967 |
| Other intangible assets | 335 | 244 | 282 |
| Tangible fixed assets | 2,233 | 1,907 | 2,014 |
| Right-of-use assets | 1,335 | 1,044 | 1,156 |
| Financial interest-bearing fixed assets | 25 | 30 | 25 |
| Other financial fixed assets | 27 | 25 | 27 |
| Deferred tax assets | 70 | 64 | 36 |
| Total non-current assets | 8,446 | 6,902 | 7,507 |
| Current assets | |||
| Stock | 2,678 | 2,677 | 2,752 |
| Accounts receivable | 2,373 | 2,311 | 1,951 |
| Other current assets | 403 | 333 | 262 |
| Other interest-bearing receivables | 3 | 8 | 4 |
| Cash and cash equivalents | 613 | 429 | 481 |
| Total current assets | 6,070 | 5,758 | 5,450 |
| TOTAL ASSETS | 14,516 | 12,660 | 12,957 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity attributable to Parent company shareholders | 7,158 | 6,087 | 6,751 |
| Total shareholders' equity | 7,158 | 6,087 | 6,751 |
| Non-current liabilities | |||
| Interest-bearing provisions for pensions and similar obligations | 206 | 234 | 217 |
| Liabilities to credit institutions | 2,619 | 2,252 | 2,349 |
| Lease liabilities | 1,067 | 840 | 930 |
| Deferred tax liabilities | 166 | 149 | 150 |
| Provisions | 7 | 5 | 7 |
| Other non-current liabilities | 84 | 5 | 41 |
| Total non-current liabilities | 4,149 | 3,485 | 3,694 |
| Current liabilities | |||
| Other interest-bearing liabilities | 170 | 50 | 42 |
| Lease liabilities | 326 | 260 | 282 |
| Provisions | 12 | 9 | 11 |
| Accounts payable | 1,223 | 1,326 | 974 |
| Other current liabilities | 1,478 | 1,443 | 1,203 |
| Total current liabilities | 3,209 | 3,088 | 2,512 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 14,516 | 12,660 | 12,957 |
Consolidated statement of changes in equity
| Shareholders' equity attributable to Parent | |||||
|---|---|---|---|---|---|
| SEK m | Share capital |
Other contributed capital |
Foreign currency translation reserve |
Profit brought forward incl. profit for the year |
Total sharehol ders' equity |
| Closing balance, 31 December 2021 | 79 | 2,272 | 180 | 3,119 | 5,650 |
| Profit for the period | 536 | 536 | |||
| Other comprehensive income, net of tax | |||||
| Actuarial gains/losses, defined benefit plans | 45 | 45 | |||
| Translation differences, foreign operations | 189 | 189 | |||
| Hedges of net investments (after tax) | -32 | -32 | |||
| Total comprehensive income | - | - | 157 | 581 | 738 |
| Issuance/redemption of share options | 5 | 5 | |||
| Dividends to shareholders | -306 | -306 | |||
| Transactions with shareholders | - | - | - | -301 | -301 |
| Closing balance, 30 June 2022 | 79 | 2,272 | 337 | 3,399 | 6,087 |
| Profit for the period | 438 | 438 | |||
| Other comprehensive income, net of tax | |||||
| Actuarial gains/losses, defined benefit plans | 19 | 19 | |||
| Translation differences, foreign operations | 213 | 213 | |||
| Hedges of net investments (after tax) | -27 | -27 | |||
| Total comprehensive income | - | - | 186 | 457 | 643 |
| Issuance/redemption of share options | 21 | 21 | |||
| Transactions with shareholders | - | - | - | 21 | 21 |
| Closing balance, 31 December 2022 | 79 | 2,272 | 523 | 3,877 | 6,751 |
| Profit for the period | 420 | 420 | |||
| Other comprehensive income, net of tax | |||||
| Actuarial gains/losses, defined benefit plans | 18 | 18 | |||
| Translation differences, foreign operations | 399 | 399 | |||
| Hedges of net investments (after tax) | -36 | -36 | |||
| Total comprehensive income | - | - | 363 | 438 | 801 |
| Issuance of share options | 5 | 5 | |||
| Dividends to shareholders | -399 | -399 | |||
| Transactions with shareholders | - | - | - | -394 | -394 |
| Closing balance, 30 June 2023 | 79 | 2,272 | 886 | 3,921 | 7,158 |
Share capital
At June 30, 2023, the share capital equalled SEK 78,842,820 (78,842,820) divided among 78,842,820 (78,842,820) shares with a quota value of SEK 1.00. Lindab International AB (publ) holds 2,200,838 (2,375,838) treasury shares, corresponding to 2.8 percent (3.0) of the total number of Lindab shares. The number of outstanding shares totals 76,641,982 (76,466,982).
Proposed dividend to shareholders
In accordance with the proposal of the Board of Directors, the Annual General Meeting on May 11, 2023, decided that dividends of SEK 5.20 per share, corresponding to SEK 399 m, would be paid for the financial year. The remaining retained earnings of SEK 1,443 m will be carried forward. The dividend of SEK 5.20 per share will be distributed half-yearly, with the first dividend of SEK 2.60 per share, corresponding to SEK 199 m, with record date May 15, 2023 and the second dividend of SEK 2.60 per share, corresponding to SEK 199 m, with record date November 6, 2023.
Parent company
Statement of profit or loss
| SEK m | 2023 Apr-Jun |
2022 Apr-Jun |
2023 Jan-Jun |
2022 Jan-Jun |
2022 Jan-Dec |
|---|---|---|---|---|---|
| Net sales | 2 | 2 | 3 | 3 | 6 |
| Administrative expenses | -3 | -3 | -5 | -5 | -9 |
| Operating profit | -1 | -1 | -2 | -2 | -3 |
| Profit from subsidiaries | 1,250 | 7 | 1,250 | 7 | 62 |
| Interest expenses, internal | -11 | -2 | -19 | -4 | -15 |
| Earnings before tax | 1,238 | 4 | 1,229 | 1 | 44 |
| Tax on profit for the period | 2 | 0 | 4 | 1 | -8 |
| Profit or loss for the period1) | 1,240 | 4 | 1,233 | 2 | 36 |
1) Comprehensive income corresponds to profit for all periods.
Statement of financial position
| SEK m | 30 Jun 2023 | 30 Jun 2022 | 31 Dec 2022 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Financial fixed assets | |||
| Shares in Group companies | 3,467 | 3,467 | 3,467 |
| Financial interest-bearing fixed assets | 5 | 5 | 5 |
| Deferred tax assets | 1 | 1 | 1 |
| Total non-current assets | 3,473 | 3,473 | 3,473 |
| Current assets | |||
| Receivables from Group companies | 1,251 | 1 | 55 |
| Current tax receivable | 2 | 1 | - |
| Other current receivables | 5 | 5 | - |
| Cash and cash equivalents | 0 | 0 | 0 |
| Total current assets | 1,258 | 7 | 55 |
| TOTAL ASSETS | 4,731 | 3,480 | 3,528 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Restricted shareholders' equity | |||
| Share capital | 79 | 79 | 79 |
| Statutory reserve | 708 | 708 | 708 |
| Unrestricted shareholders' equity | |||
| Share premium reserve | 90 | 90 | 90 |
| Profit brought forward | 1,358 | 1,695 | 1,716 |
| Profit/loss for the period | 1,233 | 2 | 36 |
| Total shareholders' equity | 3,468 | 2,574 | 2,629 |
| Provisions | |||
| Interest-bearing provisions | 5 | 5 | 5 |
| Total provisions | 5 | 5 | 5 |
| Current liabilities | |||
| Liabilities to Group companies | 1,056 | 746 | 886 |
| Current tax liability | - | - | 6 |
| Accrued expenses and deferred income | 2 | 2 | 2 |
| Other liabilities | 200 | 153 | - |
| Total current liabilities | 1,258 | 901 | 894 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 4,731 | 3,480 | 3,528 |
Key performance indicators
| 2023 | 2022 | 2021 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK m | Apr-Jun Jan-Mar | Oct-Dec Jul-Sep Apr-Jun Jan-Mar | Oct-Dec Jul-Sep Apr-Jun | ||||||
| Net sales | 3,365 | 3,224 | 3,223 | 3,239 | 3,171 | 2,733 | 2,560 | 2,488 | 2,501 |
| Growth, % | 6 | 18 | 26 | 30 | 27 | 30 | 23 | 21 | 26 |
| of which organic | -13 | -5 | 1 | 7 | 14 | 23 | 20 | 19 | 28 |
| of which acquisitions/divestments | 14 | 20 | 20 | 20 | 10 | 3 | 3 | 3 | 2 |
| of which currency effects | 5 | 3 | 5 | 3 | 3 | 4 | 0 | -1 | -4 |
| Operating profit before depreciation/amortisation and impairment losses | 450 | 406 | 379 | 486 | 514 | 429 | 418 | 500 | 440 |
| Operating profit | 302 | 264 | 244 | 358 | 402 | 321 | 311 | 403 | 344 |
| Adjusted operating profit | 302 | 264 | 244 | 361 | 402 | 340 | 311 | 403 | 344 |
| Earnings before tax | 263 | 230 | 215 | 335 | 381 | 307 | 298 | 394 | 333 |
| Profit for the period | 240 | 180 | 171 | 267 | 300 | 236 | 234 | 299 | 268 |
| Operating margin, % | 9.0 | 8.2 | 7.6 | 11.1 | 12.7 | 11.7 | 12.1 | 16.2 | 13.8 |
| Adjusted operating margin, % | 9.0 | 8.2 | 7.6 | 11.1 | 12.7 | 12.4 | 12.1 | 16.2 | 13.8 |
| Profit margin before tax, % | 7.8 | 7.1 | 6.7 | 10.3 | 12.0 | 11.2 | 11.6 | 15.8 | 13.3 |
| Key performance indicators including divested business1) | |||||||||
| Net sales | 3,365 | 3,224 | 3,223 | 3,239 | 3,171 | 2,733 | 2,846 | 2,778 | 2,747 |
| Growth, % | 6 | 18 | 13 | 17 | 15 | 22 | 23 | 21 | 24 |
| of which organic | -13 | -5 | 1 | 7 | 13 | 21 | 20 | 20 | 26 |
| of which acquisitions/divestments | 14 | 20 | 8 | 7 | 0 | -3 | 3 | 2 | 2 |
| of which currency effects | 5 | 3 | 4 | 3 | 2 | 4 | 0 | -1 | -4 |
| Operating profit before depreciation/amortisation and impairment losses | 450 | 406 | 379 | 486 | 514 | 429 | 393 | 494 | 462 |
| Operating profit | 302 | 264 | 244 | 358 | 402 | 321 | 286 | 6 | 356 |
| Adjusted operating profit | 302 | 264 | 244 | 361 | 402 | 340 | 324 | 424 | 356 |
| Earnings before tax | 263 | 230 | 215 | 335 | 381 | 307 | 275 | -2 | 346 |
| Profit for the period | 240 | 180 | 171 | 267 | 300 | 236 | 221 | -102 | 278 |
| Operating margin, % | 9.0 | 8.2 | 7.6 | 11.1 | 12.7 | 11.7 | 10.0 | 0.2 | 13.0 |
| Adjusted operating margin, % | 9.0 | 8.2 | 7.6 | 11.1 | 12.7 | 12.4 | 11.4 | 15.3 | 13.0 |
| Profit margin before tax, % | 7.8 | 7.1 | 6.7 | 10.3 | 12.0 | 11.2 | 9.7 | -0.1 | 12.6 |
| Key performance indicators including divested business1) | |||||||||
| Cash flow from operating activities | 323 | 355 | 527 | 216 | 161 | -213 | 215 | 202 | 227 |
| Cash flow from operating activities per share, SEK | 4.21 | 4.64 | 6.88 | 2.82 | 2.11 | -2.79 | 2.82 | 2.64 | 2.97 |
| Free cash flow | 159 | 25 | 446 | -139 | -564 | -392 | 202 | 8 | 135 |
| Adjusted free cash flow | 216 | 261 | 446 | 156 | 63 | -319 | 110 | 107 | 147 |
| Cash flow, investments in intangible assets/tangible fixed assets | -108 | -97 | -82 | -72 | -99 | -106 | -105 | -97 | -86 |
| Key performance indicators including divested business1) | |||||||||
| Number of shares outstanding, thousands | 76,642 | 76,642 | 76,642 | 76,642 | 76,467 | 76,467 | 76,467 | 76,467 | 76,357 |
| Average number of shares outstanding, thousands | 76,636 | 76,595 | 76,552 | 76,508 | 76,451 | 76,423 | 76,396 | 76,368 | 76,353 |
| Earnings per share, before dilution, SEK | 3.14 | 2.35 | 2.24 | 3.48 | 3.92 | 3.09 | 2.88 | -1.33 | 3.64 |
| Earnings per share, after dilution, SEK | 3.13 | 2.35 | 2.24 | 3.47 | 3.91 | 3.08 | 2.87 | -1.34 | 3.64 |
| Shareholders' equity attributable to Parent company shareholders | 7,158 | 7,011 | 6,751 | 6,480 | 6,087 | 5,932 | 5,650 | 5,358 | 5,440 |
| Shareholders' equity attributable to non-controlling interests | - | - | - | - | - | - | - | - | 0 |
| Shareholders' equity per share, SEK | 93.39 | 91.69 | 88.08 | 84.54 | 79.61 | 77.58 | 73.89 | 70.07 | 71.24 |
| Net debt | 3,747 | 3,456 | 3,310 | 3,390 | 3,169 | 2,155 | 1,696 | 1,836 | 1,777 |
| Adjusted net debt | 2,354 | 2,173 | 2,098 | 2,274 | 2,069 | 1,305 | 820 | 864 | 806 |
| Net debt/equity ratio, times | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.4 | 0.3 | 0.3 | 0.3 |
| Equity/asset ratio, % | 49.3 | 51.4 | 52.1 | 48.2 | 48.1 | 53.8 | 54.8 | 49.8 | 51.8 |
| Return on equity, % | 12.8 | 14.2 | 15.8 | 17.3 | 11.5 | 11.4 | 9.9 | 9.5 | 15.3 |
| Return on capital employed, % | 11.0 | 12.7 | 14.1 | 15.5 | 12.3 | 12.3 | 11.0 | 10.6 | 14.1 |
| Interest coverage ratio, times | 7.1 | 7.6 | 7.7 | 16.6 | 27.0 | 24.9 | 26.7 | 0.8 | 34.8 |
| Net debt/EBITDA, excl. one-off items and restructuring costs | 2.0 | 1.8 | 1.6 | 1.3 | 1.1 | 1.0 | 1.0 | 1.1 | 1.2 |
| Number of employees by end of period | 4,912 | 4,926 | 4,853 | 5,012 | 4,920 | 4,579 | 4,549 | 5,182 | 5,187 |
| of which employees in discontinued operations | - | - | - | - | - | - | - | 683 | 680 |
1) Key performance indicators for periods earlier than 2022 include divested business (Building Systems), which results that rolling 12 months in 2022 are calculated on both outcomes including and excluding divested business.
Key performance indicators (cont.)
| 2023 | 2022 | 2022 | 2021 | 2020 | |
|---|---|---|---|---|---|
| SEK m | Jan-Jun | Jan-Jun | Jan-Dec | Jan-Dec | Jan-Dec |
| Net sales | 6,589 | 5,904 | 12,366 | 9,648 | 8,220 |
| Growth, % | 12 | 28 | 28 | 17 | -3 |
| of which organic | -9 | 18 | 11 | 17 | -2 |
| of which acquisitions/divestments | 17 | 7 | 13 | 2 | 0 |
| of which currency effects | 4 | 3 | 4 | -2 | -1 |
| Operating profit before depreciation/amortisation and impairment losses | 856 | 943 | 1,808 | 1,660 | 1,185 |
| Operating profit | 566 | 723 | 1,325 | 1,266 | 790 |
| Adjusted operating profit | 566 | 742 | 1,347 | 1,266 | 860 |
| Earnings before tax | 493 | 688 | 1,238 | 1,223 | 752 |
| Profit for the period | 420 | 536 | 974 | 958 | 554 |
| Operating margin, % | 8.6 | 12.2 | 10.7 | 13.1 | 9.6 |
| Adjusted operating margin, % | 8.6 | 12.6 | 10.9 | 13.1 | 10.5 |
| Profit margin before tax, % | 7.5 | 11.6 | 10.0 | 12.7 | 9.1 |
| Key performance indicators including divested business1) | |||||
| Net sales | 6,589 | 5,904 | 12,366 | 10,619 | 9,166 |
| Growth, % | 12 | 28 | 16 | 16 | -7 |
| of which organic | -9 | 18 | 10 | 17 | -6 |
| of which acquisitions/divestments | 17 | 7 | 3 | 2 | 1 |
| of which currency effects | 4 | 3 | 3 | -3 | -2 |
| Operating profit before depreciation/amortisation and impairment losses | 856 | 943 | 1,808 | 1,645 | 1,284 |
| Operating profit | 566 | 723 | 1,325 | 841 | 846 |
| Adjusted operating profit | 566 | 742 | 1,347 | 1,297 | 916 |
| Earnings before tax | 493 | 688 | 1,238 | 802 | 811 |
| Profit for the period | 420 | 536 | 974 | 537 | 596 |
| Operating margin, % | 8.6 | 12.2 | 10.7 | 7.9 | 9.2 |
| Adjusted operating margin, % Profit margin before tax, % |
8.6 7.5 |
12.6 11.6 |
10.9 10.0 |
12.2 7.6 |
10.0 8.8 |
| Key performance indicators including divested business1) | |||||
| Cash flow from operating activities | 678 | -52 | 691 | 704 | 1,129 |
| Cash flow from operating activities per share, SEK | 8.85 | -0.68 | 9.03 | 9.22 | 14.79 |
| Free cash flow | 184 | -956 | -649 | 300 | 466 |
| Adjusted free cash flow | 477 | -256 | 346 | 319 | 709 |
| Cash flow, investments in intangible assets/tangible fixed assets | -205 | -205 | -359 | -395 | -425 |
| Key performance indicators including divested business1) | |||||
| Number of shares outstanding, thousands Average number of shares outstanding, thousands |
76,642 76,636 |
76,467 76,451 |
76,642 76,552 |
76,467 76,396 |
76,357 76,340 |
| Earnings per share, before dilution, SEK | 5.49 | 7.01 | 12.73 | 7.02 | 7.80 |
| Earnings per share, after dilution, SEK | 5.48 | 6.99 | 12.70 | 7.00 | 7.80 |
| Dividend per share, SEK | - | - | 5.202) | 4.00 | 3.40 |
| Shareholders' equity attributable to Parent company shareholders | 7,158 | 6,087 | 6,751 | 5,650 | 5,178 |
| Shareholders' equity attributable to non-controlling interests | - | - | - | - | 0 |
| Shareholders' equity per share, SEK | 93.39 | 79.61 | 88.08 | 73.89 | 67.82 |
| Net debt | 3,747 | 3,169 | 3,310 | 1,696 | 1,640 |
| Adjusted net debt | 2,354 | 2,069 | 2,098 | 820 | 663 |
| Net debt/equity ratio, times | 0.5 | 0.5 | 0.5 | 0.3 | 0.3 |
| Equity/asset ratio, % | 49.3 | 48.1 | 52.1 | 54.8 | 55.1 |
| Return on equity, % | 12.8 | 11.5 | 15.8 | 9.9 | 11.6 |
| Return on capital employed, % | 11.0 | 12.3 | 14.1 | 11.0 | 11.5 |
| Interest coverage ratio, times | 7.3 | 26.0 | 16.2 | 20.0 | 19.0 |
| Net debt/EBITDA, excl. one-off items and restructuring costs | 2.0 | 1.1 | 1.6 | 1.0 | 1.4 |
| Number of employees by end of period | 4,912 | 4,920 | 4,853 | 4,549 | 5,078 |
| of which employees in discontinued operations | - | - | - | - | 692 |
1) Key performance indicator for periods earlier than 2022 include divested business (Building Systems), which results that rolling 12 months in 2022 are calculated
on both outcomes, including and excluding divested business.
2) The dividend for 2022 is distributed half-yearly with the first dividend of SEK 2.60 per share with record date in May 2023, and the second dividend of SEK 2.60 per share with record date in November 2023.
Notes
NOTE 1 – ACCOUNTING POLICIES
The consolidated accounts for the interim report have, similar to the annual consolidated accounts for 2022, been prepared in in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, the Swedish Annual Accounts Act and the Swedish Financial Reporting Board RFR 1, Supplementary Accounting Rules for Groups.
This interim report has been prepared in accordance with IAS 34 Interim financial reporting. The Group has applied the same accounting policies as described in the Annual Report for 2022.
None of the new or amended standards, interpretations or improvements adopted by the EU have had any significant impact on the Group.
Information in terms of IAS 34 p. 16A Interim financial reporting has been disclosed in notes to the financial statements as well as in other pages of the interim report.
The Parent company
The financial statements for the Parent company are prepared according to the Swedish Annual Accounts Act and RFR 2, Accounting for legal entities and according to the same accounting policies as were applied in the Annual Report for 2022.
NOTE 2 – EFFECTS OF CHANGES IN ACCOUNTING ESTIMATES AND JUDGEMENTS
Significant estimates and judgements are described in Note 4 in the Annual report for 2022. No essential changes, which could have a material impact on this interim report, have been made to what is described in the Annual Report for 2022.
NOTE 3 – BUSINESS COMBINATIONS
Ventilace EU
On April 24, 2023 Lindab signed an agreement to acquire the Czech ventilation business Ventilace EU, a acquisition that was finalised on June 5, 2023. Ventilace EU is a well-established manufacturer of rectangular ventilation ducts in the Czech Republic. With the acquisition, Lindab strengthens both sales and production of rectangular ventilation ducts mainly in the Czech Republic. Ventilace EU is registered in Prague, Czech Republic. The business has annual sales of approximately SEK 42 m and a operating margin that is slightly lower than the Lindab Group's. Ventilace EU has 30 employees.
The purchase consideration of the business Ventilace EU was mainly settled at time of acquisition. Transaction related costs amounted to SEK 4 m, of which SEK 3 m is recognised as other operating expenses in 2023 and the remaining in previous year.
According to preliminary purchase price allocation analysis, the acquisition resulted in a goodwill. This goodwill is, among other things, related to that Lindab strengthens its position in the Czech Republic, obtain local expertise on rectangular production and is expected to achieve buyer specific synergies. Identified intangible assets are mainly related to customer relations and the trademark Ventilace.
Ventilace EU is consolidated in Lindab as of June 5, 2023. The acquisition has an immaterial impact on the consolidated statement of profit or loss in the second quarter. The business is part of the Ventilation Systems segment.
Firmac Ltd.
On May 2, 2023, Lindab acquired all shares and voting rights of the British ventilation company Firmac Ltd., which is the leader in Europe of machines for manufacturing of rectangular ventilation ducts. Lindab is the market leader of machines for manufacturing of circular ventilation ducts through its Spiro business. With the acquisition of Firmac Ltd. Lindab gets the corresponding business for rectangular ducts. Firmac Ltd. is registered in Scarborough, United Kingdom. The company has annual sales of approximately SEK 40 m and a operating margin in line with the Lindab Group's. Firmac Ltd. has 32 employees.
The purchase consideration of Firmac Ltd. was settled at time of acquisition. Transaction related costs amounted to SEK 3 m, of which SEK 1 m is recognised as other operating expenses in 2023 and the remaining in previous year.
According to preliminary purchase price allocation analysis, the acquisition resulted in a goodwill. This goodwill is, among other things, related to that Lindab access expertise in machines for manufacturing rectangular ventilation ducts and a complement to Spiro for other machine technic within the segment Ventilation System. Identified intangible assets are mainly related to customer relations and the trademark Firmac.
Firmac Ltd. is consolidated in Lindab as of May 2, 2023. The acquisition has an immaterial impact on the consolidated statement of profit or loss in the second quarter. The company is part of the Ventilation Systems segment.
Irish Ventilation & Filtration Ltd.
On March 3, 2023, Lindab acquired all shares and voting rights of the Irish ventilation company Irish Ventilation & Filtration Ltd. The company is a leading distributor of ventilation products and targets mainly maintenance and repair departments of large international companies as well as mechanical contractors. The company primarily offers filters and fans, but also dampers, grilles and ventilation ducts. The company also has its own design and manufacturing of air handling units. With the acquisition Lindab access new customer categories, a increased product range and strengthens its presence further on Ireland. Irish Ventilation & Filtration Ltd. is registered in Crumlin, Ireland. The company has annual sales of approximately SEK 100 m and a higher operating margin than the Lindab Groups'. Irish Ventilation & Filtration Ltd. has 19 employees.
The purchase consideration of Irish Ventilation & Filtration Ltd. was mainly settled at time of acquisition. Transaction related costs amounted to SEK 3 m and these are recognised as other operating expenses.
According to preliminary purchase price allocation analysis, the acquisition resulted in a goodwill. This goodwill is, among other things, related to that Lindab strengthens its presence further on Ireland, access expertise within ventilation distribution and receive a wider product range of ventilation products. Identified intangible assets are mainly related to customer relations and the trademark Irish Ventilation & Filtration.
Notes (cont.)
Irish Ventilation & Filtration is consolidated in Lindab as of March 3, 2023. The acquisition has increased net sales of Lindab by SEK 39 m, from the time of acquisition until June 30 current year, and the net profit after tax is impacted positively. If the acquisition had been implemented as of January 1, 2023, the Group's net sales would have increased by SEK 56 m. The company is part of the Ventilation Systems segment.
Raab Lüftungstechnik GmbH
On February 28, 2023, Lindab acquired all shares and voting rights of the German ventilation company Raab Lüftungstechnik GmbH. The company is a leading manufacturer of high-quality rectangular ventilation ducts in southern Germany. By adding the company to Lindab's business, the Group further strengthens its position in Germany, a market that is assessed to have big potential for the Group going forward. Raab Lüftungstechnik GmbH is registered in Großmehring, north of Munich in Germany. The company has annual sales of approximately SEK 160 m and an operating margin in line with the Lindab Groups'. Raab Lüftungstechnik GmbH has 95 employees.
The preliminary purchase consideration of Raab Lüftungstechnik GmbH was mainly settled at time of acquisition. Transaction related costs amounted to SEK 3 m and these are recognised as other operating expenses.
According to preliminary purchase price allocation analysis, the acquisition resulted in a goodwill. This goodwill is, among other things, related to that Lindab strengthens its position on an important market, both related to sales and production of rectangular ventilation ducts. The acquisition is also expected to bring an even stronger customer offer together with Felderer GmbH, which was acquired in 2022, and possible forward looking buyer specific synergies. Identified intangible assets are mainly related to customer relations and the trademark Raab.
Raab Lüftungstechnik GmbH is consolidated in Lindab as of February 28, 2023. The acquisition has increased net sales of Lindab by SEK 53 m, from the time of acquisition until June 30 current year, and the net profit after tax is impacted positively. If the acquisition had been implemented as of January 1, 2023, the Group's net sales would have increased by SEK 82 m. The company is part of the Ventilation Systems segment.
Other
In terms of 2023, the cash flow related to acquisitions derives, beside previously mention transactions, from settlement of conditional additional purchase considerations of SEK 38 m in terms of previously made business combinations.
Acquired businesses 2023
| SEK m | 2023-06-30 1),2) |
|---|---|
| Intangible assets | 32 |
| Tangible fixed assets | 42 |
| Right-of-use assets | 26 |
| Deferred tax assets | 0 |
| Stock | 52 |
| Current assets | 37 |
| Cash and cash equivalents | 40 |
| Total acquired assets | 229 |
| Deferred tax liabilities | -8 |
| Non-current lease liabilities | -22 |
| Current lease liabilities | -5 |
| Current liabilities | -87 |
| Total acquired liabilities | -122 |
| Fair value of acquired net assets | 107 |
| Goodwill3) | 247 |
| Consideration including additional contingent | |
| consideration4) | 354 |
1) Acquired companies relate to Raab Lüftungstechnik GmbH, Irish Ventilation & Filtration Ltd, Firmac Ltd. and acquired business from Ventilace EU a.s. 2) The purchase price allocations were preliminary as of June 30 2023, due to not finally approved purchase price adjustment for Irish Ventilation & Filtration Ltd. respectively Ventilace EU and not finalised valuations of identified intangible assets.
3) No portion of reported goodwill is deductible for income tax.
4) The considerations are based on cash payments. The values include unconditional additional purchase considerations of SEK 13 m and conditional additional purchase considerations of SEK 45 m. The conditional additional purchase consideration will be settled fully or partly if future expectations of identified levels of sales and profitability are met during a period of 2 or 3 years. Total possible undiscounted amount for all recognised future conditional additional purchase consideration is between SEK 0-82 m. On June 30, 2023, it was considered likely that 96 percent of maximum potential remaining consideration would occur.
NOTE 4 – OPERATING SEGMENTS
The Group's segments comprise Ventilation Systems and Profile Systems. The basis for segmental reporting is the various customer offers provided by each business area. The customer offers within each segment were follows:
- Ventilation Systems offers air duct systems with accessories and indoor climate solutions for ventilation of heating and cooling to installers and other customers in the ventilation industry.
- Profile Systems offers the construction industry products and systems in sheet metal for rainwater systems, cladding for ceilings and walls as well as steel profiles for wall, ceiling and beam constructions.
Both Ventilation Systems' and Profile Systems' operations are managed based on geographically divided sales organisations, which are supported by a number of product and system areas with joint production and purchasing functions for each business area. What is reported under Other includes the Parent company and other common functions.
Information on income from external customers and adjusted operating profit per operating segment is presented in the tables on page 11. See also pages 9-10 for further segment information.
Notes (cont.)
Internal prices between the Group's segments are set based on the principle of arm's length, that is, between parties that are independent of each other, well-informed and have an interest in the transaction being carried out. Assets and investments are reported where the asset exists.
NOTE 5 – FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE
| SEK m | 30 June 2023 | 30 June 2022 | 31 December 2022 | |||
|---|---|---|---|---|---|---|
| Disclosures regarding the fair value by class | Carrying amount |
Fair value |
Carrying amount |
Fair value |
Carrying amount |
Fair value |
| Financial assets | ||||||
| Derivative receivables | 1 | 1 | 6 | 6 | 2 | 2 |
| Financial liabilities | ||||||
| Liabilities to credit institutions | 2,631 | 2,611 | 2,256 | 2,256 | 2,361 | 2,357 |
| Derivative liabilities | 24 | 24 | 21 | 21 | 21 | 21 |
Fair value
Derivatives relate to forward exchange contracts which are valued at fair value by discounting the difference between the contracted forward rate and the forward rate that can be subscribed for on the balance sheet date for the remaining contract term. The fair value of interest-bearing liabilities to credit institutions is provided for the purpose of disclosure and is calculated by discounting the future cash flows of principal and interest payments, discounted at current market interest rate.
The derivative assets and derivative liabilities that exist can all be found at Level 2 of the valuation hierarchy.
For other financial assets and liabilities, the carrying amount is deemed to be a reasonable approximation of fair value. The Group holdings of unlisted shares, the fair value of which cannot be estimated reliably, are recognised at acquisition cost. The carrying amount is SEK 4 m (4).
NOTE 6 – DISCOUNTINUED OPERATIONS
On September 23, 2021, Lindab signed an agreement to divest all shares and voting rights in the business area/segment Building Systems. Based on the decision to divest and the agreement as well as the current structure of the business, all prerequisites was assessed to be complied to in order to recognise Building Systems as an asset held for sale/a discontinued operation. This in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. The classification was applied as of the third quarter 2021.
The agreement to divest Building Systems was, among other things, conditioned and subject to anti-trust approval in Russia. During the fourth quarter, this approval was obtained from the Russian authority and the divestment of Building Systems was finalised by end of December 2021. As a consequence, Building Systems was recognised as discounted operations by end of the fourth quarter 2021.
For interim reports prepared in 2022 and later, the application of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations implies, among other things, that net profit after tax for Building Systems in the comparison period is recognised separately in the consolidated statement of profit or loss, distinguished from the continuing operations. In the consolidated statement of cash flow is operating profit for continuing respectively discontinued operations/operations held for sale recognised separately, but thereafter is the cash flow presented for Lindab as a Group. For information about Building Systems, see next page.
Notes (cont.)
Statement of Profit or loss, discontinued operations
| SEK m | 2023 Apr-Jun |
2022 Apr-Jun |
2023 Jan-Jun |
2022 Jan-Jun |
R 12M 2022 Jul 2023 Jun |
R 12M 2021 Jul 2022 Jun |
2022 Jan-Dec |
|---|---|---|---|---|---|---|---|
| Net sales | - | - | - | - | - | 576 | - |
| Cost of goods sold | - | - | - | - | - | -441 | - |
| Gross profit | - | - | - | - | - | 135 | - |
| Other operating income | - | - | - | - | - | 0 | - |
| Selling expenses | - | - | - | - | - | -42 | - |
| Administrative expenses | - | - | - | - | - | -44 | - |
| R&D expenses | - | - | - | - | - | -5 | - |
| Other operating expenses | - | - | - | - | - | -466 | - |
| Total operating expenses | - | - | - | - | - | -557 | - |
| Operating profit1) | - | - | - | - | - | -422 | - |
| Financial items | - | - | - | - | - | 3 | - |
| Earnings before tax | - | - | - | - | - | -419 | - |
| Tax on profit/loss for the period | - | - | - | - | - | 5 | - |
| Profit/loss for the period1) | - | - | - | - | - | -414 | - |
| Earnings per share before dilution, SEK | - | - | - | - | - | -5.42 | - |
| Earnings per share after dilution, SEK | - | - | - | - | - | -5.41 | - |
1) For the period R 12M 2021 July - 2022 June, one-off items and restructuring costs of SEK -456 m related to the divestment of Building Systems were recognised within operating profit. The value was a consequence of the made decision to divest Building Systems and mainly related to impairment of goodwill, when assessing the value to the lower of carrying amount and fair value less costs to sell. One-off items and restructuring costs impacting net profit amounted to SEK -441 m.
Statement of cash flow, discontinued operations
| SEK m | 2023 Apr-Jun |
2022 Apr-Jun |
2023 Jan-Jun |
2022 Jan-Jun |
R 12M 2022 Jul 2023 Jun |
R 12M 2021 Jul 2022 Jun |
2022 Jan-Dec |
|---|---|---|---|---|---|---|---|
| Cash flow from operating activities | - | - | - | - | - | -142 | - |
| Cash flow from investing activities | - | - | - | - | - | -9 | - |
| Cash flow from financing activities | - | - | - | - | - | -13 | - |
| Cash flow for the period | - | - | - | - | - | -164 | - |
NOTE 7 – RELATED PARTY TRANSACTIONS
Lindab's related parties and the extent of transactions with its related parties are described in Note 33 of the Annual Report for 2022.
At the Annual General Meeting in May 2023, it was resolved to adopt a share option program for senior executives. Under the program 225,500 share options were acquired by senior executives during the second quarter. See more under 'Share option program', page 7.
During the period, there have been no other transactions between Lindab and related parties which have had a significant impact on the company's position and profit.
The Board of Directors and the CEO hereby confirm that the interim report for Lindab International AB (publ) gives a true and fair picture of the company's and the Group's operations, financial position and results, and describes significant risks and uncertainties that the company and the companies in the Group are facing.
Båstad, 21 July 2023
Peter Nilsson Chairman of the Board
Per Bertland Sonat Burman-Olsson Viveka Ekberg Board member Board member Board member
Anette Frumerie Marcus Hedblom Staffan Pehrson Board member Board member Board member
Pontus Andersson Ulf Jönsson Employee representative Employee representative
Ola Ringdahl President and CEO
Reconciliations, key performance indicators not defined according to IFRS
The company presents certain financial measures in the interim report which are not defined according to IFRS. The company considers these measures to provide valuable supplementary information for investors and the company's management as they enable the assessment of relevant trends. Lindab's definitions of these measures may differ from other companies' definitions of the same terms. These financial measures should therefore be seen as a supplement rather than as a replacement for measures defined according
to IFRS. Definitions of measures which are not defined according to IFRS and which are not mentioned elsewhere in the interim report are presented below. Reconciliation of these measures is shown in the tables below. As the amounts in the tables below have been rounded off to SEK m, the calculations do not always add up due to round-off.
Reconciliations
Amounts in SEK m unless otherwise indicated.
| Return on shareholders' equity, including divested operations1) | 30 Jun 2023 30 Jun 2022 31 Dec 2022 | ||||
|---|---|---|---|---|---|
| Profit for the period, rolling twelve months | 858 | 655 | 974 | ||
| Average shareholders' equity | 6,697 | 5,694 | 6,180 | ||
| Return on shareholders' equity, % | 12.8 | 11.5 | 15.8 | ||
| Return on capital employed, including divested operations1) | 30 Jun 2023 30 Jun 2022 31 Dec 2022 | ||||
| Total assets | 14,516 | 12,660 | 12,957 | ||
| Provisions and deferred tax liabilities | 173 | 154 | 157 | ||
| Other non-current liabilities | 84 | 5 | 41 | ||
| Total non-current liabilities | 257 | 159 | 198 | ||
| Provisions | 12 | 9 | 11 | ||
| Accounts payable | 1,223 | 1,326 | 974 | ||
| Other current liabilities | 1,478 | 1,443 | 1,203 | ||
| Total current liabilities | 2,713 | 2,778 | 2,188 | ||
| Capital employed | 11,546 | 9,723 | 10,571 | ||
| Earnings before tax, rolling twelve months | 1,043 | 961 | 1,238 | ||
| Financial expenses, rolling twelve months | 133 | 66 | 93 | ||
| Total | 1,176 | 1,027 | 1,331 | ||
| Average capital employed | 10,671 | 8,356 | 9,428 | ||
| Return on capital employed, % | 11.0 | 12.3 | 14.1 | ||
| 2023 | 2022 | 2023 | 2022 | 2022 | |
| One-off items and restructuring costs | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec |
| Operating profit | 302 | 402 | 566 | 723 | 1,325 |
| Ventilation Systems | - | - | - | -19 | -22 |
| Profile Systems | - | - | - | - | - |
| Other operations | - | - | - | - | - |
| Adjusted operating profit | 302 | 402 | 566 | 742 | 1,347 |
For the period January-June one-off items and restructuring costs of SEK – m (-19) were reported. For the period January – December 2022 one-off items and restructuring costs of SEK -22 m were reported. All items related to Lindab's decision to close and later divest operations in Russia.
| 2023 | 2022 | 2023 | 2022 | 2022 | |
|---|---|---|---|---|---|
| Free cash flow | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec |
| Cash flow from operating activities | 323 | 161 | 678 | -52 | 691 |
| Cash flow from investing activities | -164 | -725 | -494 | -904 | -1,340 |
| Free cash flow | 159 | -564 | 184 | -956 | -649 |
| Cash flow related to acquisitions/divestments | -57 | -627 | -293 | -700 | -995 |
| Adjusted free cash flow | 216 | 63 | 477 | -256 | 346 |
| 2023 | 2022 | 2023 | 2022 | 2022 | |
|---|---|---|---|---|---|
| Adjusted operating profit and operating margin | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec |
| Adjusted operating profit | 302 | 402 | 566 | 742 | 1,347 |
| Operating profit | 302 | 402 | 566 | 723 | 1,325 |
| Net sales | 3,365 | 3,171 | 6,589 | 5,904 | 12,366 |
| Adjusted operating margin, % | 9.0 | 12.7 | 8.6 | 12.6 | 10.9 |
| Operating margin, % | 9.0 | 12.7 | 8.6 | 12.2 | 10.7 |
| Net debt | 30 Jun 2023 30 Jun 2022 31 Dec 2022 | ||
|---|---|---|---|
| Non-current interest-bearing provisions for pensions and similar obligations | 206 | 234 | 217 |
| Non-current liabilities to credit institutions | 2,619 | 2,252 | 2,349 |
| Non-current lease liabilities | 1,067 | 840 | 930 |
| Current interest-bearing liabilities | 496 | 310 | 324 |
| Total liabilities | 4,388 | 3,636 | 3,820 |
| Financial interest-bearing fixed assets | 25 | 30 | 25 |
| Other interest-bearing receivables | 3 | 8 | 4 |
| Cash and cash equivalents | 613 | 429 | 481 |
| Total assets | 641 | 467 | 510 |
| Net debt | 3,747 | 3,169 | 3,310 |
| Adjusted net debt | 30 Jun 2023 30 Jun 2022 31 Dec 2022 | ||
| Net debt | 3,747 | 3,169 | 3,310 |
| Liabilities related to leasing | -1,393 | -1,100 | -1,212 |
| Adjusted net debt | 2,354 | 2,069 | 2,098 |
| Net debt/EBITDA, including divested operations1) | 30 Jun 2023 30 Jun 2022 31 Dec 2022 | ||
|---|---|---|---|
| Average net debt | 3,392 | 2,088 | 2,851 |
| Adjusted operating profit, rolling twelve months Depreciation/amortisation and impairment losses, rolling twelve months, |
1,171 553 |
1,490 434 |
1,347 481 |
| excluding one-off items and restructuring costs EBITDA, rolling twelve months |
1,724 | 1,924 | 1,828 |
| Net debt/EBITDA, times | 2.0 | 1.1 | 1.6 |
| Net debt/equity ratio | 30 Jun 2023 30 Jun 2022 31 Dec 2022 | ||
|---|---|---|---|
| Net debt | 3,747 | 3,169 | 3,310 |
| Shareholders' equity including non-controlling interests | 7,158 | 6,087 | 6,751 |
| Net debt/equity ratio | 0.5 | 0.5 | 0.5 |
| Growth | 2023 Apr-Jun |
2022 Apr-Jun |
2023 Jan-Jun |
2022 Jan-Jun |
2022 Jan-Dec |
|---|---|---|---|---|---|
| Change Net sales | 194 | 670 | 685 | 1,304 | 2,718 |
| Of which | |||||
| Organic | -414 | 357 | -564 | 835 | 1,045 |
| Acquisitions/divestments | 447 | 238 | 997 | 309 | 1,303 |
| Currency effects | 161 | 75 | 252 | 160 | 370 |
| 2023 | 2022 | 2023 | 2022 | 2022 | |
|---|---|---|---|---|---|
| Growth, including divested operations1) | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec |
| Change Net sales | 194 | 670 | 685 | 1,304 | 1,747 |
| Of which | |||||
| Organic | -414 | 357 | -564 | 835 | 1,044 |
| Acquisitions/divestments | 447 | 238 | 997 | 309 | 333 |
| Currency effects | 161 | 75 | 252 | 160 | 370 |
| Interest coverage ratio | 2023 Apr-Jun |
2022 Apr-Jun |
2023 Jan-Jun |
2022 Jan-Jun |
2022 Jan-Dec |
|---|---|---|---|---|---|
| Earnings before tax | 263 | 381 | 493 | 688 | 1,238 |
| Interest expenses | 43 | 15 | 78 | 28 | 82 |
| Total | 306 | 396 | 571 | 716 | 1,320 |
| Interest expenses | 43 | 15 | 78 | 28 | 82 |
Interest coverage ratio, times 7.1 27.0 7.3 26.0 16.2
| Operating profit before depreciation/amortisation - EBITDA | 2023 Apr-Jun |
2022 Apr-Jun |
2023 Jan-Jun |
2022 Jan-Jun |
2022 Jan-Dec |
|---|---|---|---|---|---|
| Operating profit | 302 | 402 | 566 | 723 | 1,325 |
| Depreciation/amortisation and impairment losses | 148 | 112 | 290 | 220 | 483 |
| Of which one-off items and restructuring costs | - | - | - | 2 | 2 |
| Operating profit before depreciation/amortisation - EBITDA | 450 | 514 | 856 | 943 | 1,808 |
| Profit margin before tax | 2023 Apr-Jun |
2022 Apr-Jun |
2023 Jan-Jun |
2022 Jan-Jun |
2022 Jan-Dec |
| Net sales | 3,365 | 3,171 | 6,589 | 5,904 | 12,366 |
| Profit before tax | 263 | 381 | 493 | 688 | 1,238 |
| Profit margin before tax, % | 7.8 | 12.0 | 7.5 | 11.6 | 10.0 |
1) Key figures for periods earlier than 2022 include divested business (Building Systems), which results in that key figures for rolling 12 months in 2022 includes divested business.
Definitions
Key performance indicator according to IFRS
Earnings per share, SEK: Profit for the period attributable to Parent company shareholders to average number of shares outstanding, based on a rolling twelve-month calculation.
Key performance indicators not defined according to IFRS
Adjusted Free Cash Flow: Cash flow from operations and cash flow from investments, excluding company acquisitions/divestments.
Adjusted Net debt: Net debt excluding liabilities related to leasing.
Adjusted operating margin: Adjusted operating profit expressed as a percentage of net sales.
Adjusted operating profit: Operating profit adjusted for one-off items and restructuring costs when the amount is significant in size.
Cash flow from operating activities per share, SEK: Cash flow from operating activities to number of shares outstanding at the end of the period.
Continuing operations: Lindab Group excluding discontinued operations.
Discontinued operations: Business Area Building Systems, which was divested in December 2021.
Equity/asset ratio: Shareholders' equity including non-controlling interests, expressed as a percentage of total assets.
Free Cash Flow: Cash flow from operations and cash flow from investments.
Interest coverage ratio, times: Earnings before tax plus interest expense to interest expense.
Investments in intangible assets and tangible fixed assets: Investments excluding acquisitions and divestments of companies.
Net debt: Interest-bearing provisions and liabilities less interest-bearing assets and cash and cash equivalents. 1) Average capital is based on the quarterly value.
NET debt/EBITDA: Average net debt in relation to EBITDA, excluding one-off items and restructuring costs, based on a rolling twelve-month calculation.
Net debt/equity ratio: Net debt to shareholders' equity including non-controlling interests.
One-off items and restructuring costs: Items not included in the ordinary business transactions and when each amount is significant in size and therefore has an effect on the profit or loss and key performance indicators, are classified as one-off items and restructuring costs.
Operating margin: Operating profit expressed as a percentage of net sales.
Operating profit: Profit before financial items and tax.
Operating profit before depreciation/amortisation - EBITDA: Operating profit before planned depreciation/amortisation.
Organic growth: Change in sales adjusted for currency effects as well as acquisitions and divestments compared with the same period of the previous year.
Profit margin: Earnings before tax expressed as a percentage of net sales.
Return on capital employed: Earnings before tax after adding back financial expenses based on a rolling twelve-month calculation, expressed as a percentage of average capital employed1). Capital employed refers to total assets less non-interest-bearing provisions and liabilities.
Return on shareholders' equity: Profit for the period attributable to Parent company shareholders based on a rolling twelve-month calculation, expressed as a percentage of average shareholders' equity1) attributable to Parent company shareholders.
Shareholders' equity per share, SEK: Shareholders' equity attributable to Parent company shareholders to number of shares outstanding at the end of the period.
Total operations: Continuing operations and discontinued operations.
Lindab in brief
Lindab Group had sales of SEK 12,366 m in 2022. Lindab has approximately 5,000 employees in 20 countries.
Lindab is the market-leading ventilation company in Europe, specialised in air distribution and air diffusion.
In 2022, the Nordic region accounted for 53 percent, Western Europe for 34 percent, Central Europe for 12 percent and Other markets for 1 percent of total sales.
The share is listed on Nasdaq Stockholm, Large Cap, under the ticker LIAB.
Business concept
Lindab develops, manufactures, markets and distributes products for a better indoor climate and simplified construction.
Business model
Lindab's offering includes products and entire systems for energy-efficient ventilation and a healthy indoor climate. In some countries, Lindab also has an extensive range of roof, wall and rainwater systems.
The products are characterised by high quality, ease of installation, energy and environmental thinking and are delivered with a high level of service, which together gives an increased customer value.
Lindab's value chain is characterised by a good balance between centralised and decentralised functions. The distribution network has been built up with the goal of being close to the customer. Sales are made through approximately 150 own pro-shops and more than 3,000 independent retailers.
Lindab share
January - June 2023
| Share price performance: | 20% |
|---|---|
| Average share turnover/day: | 189,934 |
| Highest price paid (May 19): | 183.00 SEK |
| Lowest price paid (January 2): | 127.70 SEK |
| Closing price June 30: | 153.40 SEK |
| Market cap June 30: | SEK 11,757 m |
| Total no. of shares: | 78,842,820 |
| - whereof treasury shares: | 2,200,838 |
| - whereof outstanding shares: | 76,641,982 |
Share price performance 2022/2023, SEK
Press- and analyst meetings Calendar
A live webcast will be held at 10:00 am (CEST) on 21 July. The Interim Report will be presented by Ola Ringdahl, President and CEO, and Lars Ynner CFO.
If you wish to participate via webcast please use the link below.
https://ir.financialhearings.com/lindab-q2-2023
If you wish to participate via teleconference please register on the link below. After registration you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference.
https://conference.financialhearings.com/teleconference/?id=200880
For more information see lindabgroup.com
| Interim Report January - September | 26 October, 2023 |
|---|---|
| Year-End Report | 7 February, 2024 |
| All financial reports will be published at lindabgroup.com. |
|
This information is information that Lindab International AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out below, at 07:40 am (CEST) on 21 July, 2023.
For further information, please contact:
Ola Ringdahl, President and CEO | E-mail: [email protected] Lars Ynner, CFO | E-mail: [email protected] Catharina Paulcén, Corporate Communication | E-mail: [email protected]
Telephone +46 (0) 431 850 00 For more information, please visit lindabgroup.com.
