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Lindab International

Quarterly Report Apr 28, 2022

2938_10-q_2022-04-28_db54f805-ca53-4eed-a657-d51a26f17ace.pdf

Quarterly Report

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Lindab International AB (publ) Interim Report January - March 2022

Record strong start of the year

Sales remained high during the first quarter and the adjusted operating margin was further strengthened. Both the Ventilation Systems and Profile Systems business areas reported strong organic sales growth and high profitability.

First quarter 2022

As of 2022 Lindab's business consists of business area Ventilation Systems and Profile Systems. Unless otherwise stated the comparative numbers exclude the divested business area Building Systems, which was divested in December 2021.

  • Net sales increased by 30 percent to SEK 2,733 m (2,099). Organic growth was 23 percent.
  • Adjusted1) operating profit increased by 63 percent to SEK 340 m (208).
  • Operating profit increased to SEK 321 m (208).
  • Adjusted1) operating margin increased to 12.4 percent (9.9).
  • Operating margin increased to 11.7 percent (9.9).
  • Profit for the period increased to SEK 236 m (157).
  • Earnings per share before dilution increased to SEK 3.09 (2.05) and after dilution to SEK 3.08 (2.05).
  • Three acquisitions were announced during the quarter representing an annual sales of approximately SEK 785 m.

The comparable numbers for the following key figures includes the business divested in previous year.

  • Profit for the period increased to SEK 236 m (140).
  • Earnings per share before dilution increased to SEK 3.09 (1.83) and after dilution to SEK 3.08 (1.83).
  • Cash flow from operating activities amounted to SEK -213 m (60).
Key Figures 2022
Jan-Mar
2021
Jan-Mar
Change,
%
2021
Jan-Dec
Net sales, SEK m 2,733 2,099 30 9,648
Adjusted1) operating profit, SEK m 340 208 63 1,266
Operating profit, SEK m 321 208 54 1,266
Adjusted1) operating margin, % 12.4 9.9 - 13.1
Operating margin, % 11.7 9.9 - 13.1
Profit for the period, SEK m 236 157 50 958
Earnings per share after dilution, SEK 3.08 2.05 50 12.50
Comparable numbers include divested business:
Profit for the period, SEK m 236 140 68 537
Earnings per share after dilution, SEK 3.08 1.83 68 7.00
Cash flow from operating activities, SEK m -213 60 - 704

1) Adjusted operating profit/operating margin does not include significant one-off items and restructuring costs. See 'Reconciliations' page 22.

A word from the CEO

Lindab started 2022 with another strong quarter. Sales growth was high thanks to a combination of good demand for Lindab's products and necessary price increases. The operating margin increased as an effect of focus on core operations, implemented investments and proactive pricing. Lindab delivers a record strong first quarter which, by a good margin, exceeds the financial targets.

Steel prices have risen further during the first quarter, from the already high prices during the second half of last year. Lindab has handled the price increases well and has prioritised delivery performance, which is one of Lindab's most appreciated customer benefits. Long-term agreements and well-established relationships with steel suppliers have secured access to steel. Inventory levels have increased as a consequence of higher material prices and Lindab's ambition to provide customers with the best possible availability.

"Lindab delivers a record strong first quarter which, by a good margin, exceeds the financial targets."

Well prepared for an uncertain environment

In February, the world was hit by an attack on democracy and freedom with Russia's invasion of Ukraine. Over the past three years, we have divested or discontinued most of the operations in Russia and Belarus, as part of focusing sales and purchases to Europe. At the beginning of 2022, Russia, Belarus and Ukraine accounted for 0.5 percent of our sales. The remaining operations in Russia are now being phased out. Activities and financial donations are being carried out all around Lindab to support Ukraine and those fleeing the war.

The war in Ukraine has led to an increase in the already high prices of energy, fuel and raw materials. We are preparing for an uncertain economic situation with a risk of reduced construction activity. We are cautious with taking on new costs and evaluate each project carefully. Lindab's good earnings capacity and strong financial position make us well prepared to handle the uncertain world we are in.

Lindab benefits from an increased focus on energy savings

We see increased demand for energy-efficient ventilation when energy prices rise. Heating, cooling and ventilation account for a large part of a building's operating costs and high energy prices can increase the pace of the renovation wave needed for the EU to meet its climate goals. Demand for efficient ventilation may partly offset the uncertain economic outlook for the construction industry.

"Lindab's good earnings capacity and strong financial position make us well prepared to handle the uncertain world we are in."

The investment program continues

Our investment program continues to be implemented according to plan. It results in efficiency gains while helping us to deal with the growing shortage of labour in large parts of Europe. In addition, modernisation of our production is an important step in continuing to improve the working environment for our employees.

Strengthened position in Germany with acquisition of Felderer

In early March, we announced the acquisition of the ventilation distributor Felderer in Germany. The German market has great potential for Lindab. Like in the Nordic countries, buildings are well insulated and need efficient, high-quality ventilation. In addition, German authorities are focusing on reducing energy consumption in both new and existing buildings. It is a perfect combination for Lindab. With the acquisition, sales in Germany will more than double and Lindab gains a strong position throughout the country.

We look forward to more acquisitions in 2022 to strengthen our growth. With our presence throughout Europe and a robust supply chain, we are well positioned to continue to develop our business in a positive direction, even in turbulent times.

Grevie, April 2022

Ola Ringdahl President and CEO

Financial targets

Lindab has financial targets for growth, profitability and net debt. During the third quarter 2021, Lindab raised its targets for growth and profitability. For 2021 and 2022, the outcome regarding annual growth and adjusted operating margin is reported excluding divested business, while net debt/EBITDA is reported including divested business.

  • 1) Growth excluding currency effects.
  • 2) The outcome for annual growth including divested business was 22.7 percent in 2022 R 12M and 18.5 percent in 2021. Adjusted operating margin was 13.0 percent in 2022 R 12M and 12.2 percent in 2021.

3) Excluding the effect of implemented new accounting standard IFRS 16 Leases, operating margin amounted to 13.4 percent in 2022 R 12M, 12.9 percent in 2021, 9.7 percent in 2020 and 9.0 percent in 2019.

4) Excluding the effect of implemented accounting standard IFRS 16 Leases, net debt to EBITDA amounted to 0.6 in 2022, 0.6 in 2021, 0.8 in 2020 and 1.0 in 2019.

5) Adjusted for one-off items and restructuring costs.

Lindab's sustainability plan - For a better climate

Lindab's sustainability plan includes goals and activities within three areas:

  • Create healthy buildings
  • Reduce the environmental impact from customers
  • Drive a sustainable business

tonne/SEK m

3

CO2 emissions

Lindab's CO2 emissions decreased by 28 percent to 1.70 tonne per SEK m in sales from 2019 to 2021 (scope 1 and 2). This corresponds to a total reduction from 23.3 ktonnes to 16.4 ktonnes. This was mainly attributable to the increased modernisation of Lindab's facilities.

Work-related accidents

In monitoring the number of work-related accidents, Lindab applies the key figure LTIF, representing the number of accidents per million hours worked. In 2021, LTIF increased slightly to 7.3, compared with 6.7 the previous year. The number of serious accidents decreased. The target is an LTIF of less than 4 by 2026.

In 2021, Lindab has refined the sustainability plan. Goals and activities have been detailed and data has been collected in order to further improve the analysis. As part of improving our own operations, we measure development in a number of areas. Five of the most important key figures are presented below. Lindab's annual report contains detailed information about the updated plan.

18%

Certified suppliers

For recurring suppliers, a certification process has been introduced. In 2021, 18 percent were certified. The focus has been on suppliers in countries with the highest risk. The objective is 100 percent certified suppliers by 2023.

91%

Attractive employer

The target is for 90 percent to recommend Lindab as an employer. In 2021, we reached 91 percent.

2%

Share of renewable fuel

The objective is for 100 percent of our own trucks to use renewable fuel by the year 2040. We are only at the beginning of this transition. In 2021, we achieved 2 percent.

Sales, profit and cash flow

Sales and market

Net sales during the quarter amounted to SEK 2,733 m (2,099), an increase of 30 percent. Organic growth was 23 percent and currency effects amounted to 4 percent. Structural changes contributed positively by 3 percent.

The high sales has mainly been positively affected by the price increases that have been implemented to compensate for the historically high raw material prices. The demand for Lindab's products remained strong during the first quarter of the year, where the Group as a whole reported its highest first quarter ever, in terms of sales. Sales in the comparison period were also affected by the uncertainty related to covid-19, which also contributed to the strong sales growth.

Ventilation Systems reported strong organic growth in all geographic regions. The sales growth was particularly strong in Central Europe, followed by the Nordics and Western Europe. Profile Systems' positive growth was mainly a result of increased sales of industrial projects, primarily in the Nordics, but also increased sales of rainwater systems, cladding and steel profiles for wall, roof and floor construction on several markets.

The price of steel, which is Lindab's most important commodity, has increased as a consequence of Russia's invasion of Ukraine. Lindab has announced further price increases to customers to compensate for the high raw material prices.

For information about net sales for discontinued operations, see Note 6.

Profit

Adjusted operating profit for the quarter increased to SEK 340 m (208). Operating profit was adjusted with one-off items and restructuring costs of SEK -19 m (-), related to the phase-out of the operations in Russia, see Reconciliations page 22. Adjusted operating margin increased to 12.4 percent (9.9).

Ventilation Systems' adjusted operating profit increased to SEK 235 m (163) and Profile Systems' increased to SEK 122 m (58).

The improved adjusted operating profit is mainly explained by significant sales growth and positive effects from structural changes as a result of completed acquisitions. Gross margin was in line with previous year.

Profit for the quarter increased to SEK 236 m (157). Earnings per share before dilution amounted to SEK 3.09 (2.05) and after dilution to SEK 3.08 (2.05).

For information about profit for discontinued operations, see Note 6.

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 106 m (92), of which SEK 7 m (7) was related to intangible assets and SEK 57 m (50) was related to the right-of-use assets attributable to rental and lease agreements. Impairment losses in the quarter amounted to SEK 2 m (2). Impairment losses for the current 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.

For information about depreciation/amortisation and impairment losses for discontinued operations, see Note 6.

Tax

Earnings before tax increased to SEK 307 m (198) in the quarter and tax on profit amounted to SEK 71 m (41). The effective tax rate amounted to 23 percent (21). The average tax rate was 20 percent (20). The higher effective tax rate compared to the average tax rate was mainly explained by that Lindab was not able to fully recognise the carry-forward tax losses generated in the quarter to reduce the total tax on profit. Also the effect from non-deductible costs/non-taxable income contributed to the higher effective tax rate compared with the average tax rate. The difference between the effective tax rate in the quarter and the corresponding tax rate in the previous year was mainly explained by the same reasons.

For information on tax for discontinued operations, see Note 6.

Net sales, SEK m Adjusted operating profit, SEK m

Sales, profit and cash flow (cont.)

Cash flow (comparable numbers include divested business)

Cash flow before change in working capital increased by SEK 99 m and amounted to SEK 315 m (216). The improvement is mainly explained by an increase in the underlying operating profit, excluding divested business, by SEK 113 m and the operating profit amounted to SEK 321 m (208). The underlying operating profit included one-off items and restructuring costs corresponding to SEK -19 m, which is mainly not affecting cash flow. These items are related to the phase-out of operations in Russia.

The quarter's change in working capital amounted to SEK -528 m (-156). In comparison with the corresponding period previous year, the development from working capital was mainly related to increased capital tied up in stock and a lower positive effect from operating liabilities. The increased capital tied up in stock is primarily related to the strategic decision to secure access to raw materials and to prioritise delivery performance, but also a consequence of high steel prices. The change in operating liabilities compared with the previous year was mainly related to the previous year's raw material price development. In addition, discontinued operations contributed positively with cash advances from customers in the previous year. Cash flow from operating activities amounted to SEK -213 m (60) for the quarter.

Cash flow from financing activities for the quarter amounted to SEK 239 m (20). This included amortisation of SEK -57 m (-57) related to lease liabilities. Other changes in financing activities were related to changes in borrowing and utilisation of credit limits.

For information on cash flow per category for discontinued operations, see Note 6.

Cash flow from investing activities is explained under the headings 'Investments' and 'Business combinations'.

Investments and financial position

Investments (comparable numbers include divested business)

Investments in intangible assets and tangible fixed assets amounted to SEK 106 m (107) during the quarter, of which SEK 6 m (3) were related to investments in intangible assets. The previous year included investments in tangible fixed assets of SEK 5 m related to discontinued operations.

Cash flow from investing activities, excluding business combinations, amounted net to SEK -106 m (-105) during the quarter. The cash flow included an effect from the sale of tangible fixed assets of SEK 0 m (2).

Business combinations

On January 11, 2022, Lindab completed the acquisition of all shares and voting rights of the Swedish company Alig Ventilation AB. The business is primarily focused on counseling and sales of ventilation products to house manufacturers, construction contractors and private individuals. The purpose of the acquisition is to extend the Group's expertise within ventilation for smaller residential buildings. Alig Ventilation AB is based in Mariestad, Sweden. The company has an annual sales of approximately SEK 65 m and has 15 employees.

On January 20, 2022, Lindab acquired all shares and voting rights of the Swedish company Nord Trade AB. The company is a distributor of Lindab's building products and will broaden its range by including Lindab's ventilation products in the future. With the acquisition Lindab strengthens its presence in northern Sweden with the acquisition. Nord Trade AB is based in Skellefteå, Sweden. The company has an annual sales of approximately SEK 20 m and has two employees.

On March 1, 2022, Lindab signed an agreement to acquire all shares and voting rights of the German ventilation distributor Felderer AG. The company is one of Germany's largest distributors of ventilation products such as ducts, silencers, diffusers and fire protection products. Felderer AG is based in Feldkirchen, Germany. The company has an annual sales of approximately SEK 700 m and has 160 employees. The acquisition was subject to approval by the German anti-trust authorities, which was obtained on March 30. The transaction is expected to close on April 29, when Lindab is also expected to gain control over Felderer AG.

For more information about above and company acquisitions during the first quarter of 2022, see Note 3.

No acquisitions or divestments have occured in the corresponding period previous year.

Financial position (comparable numbers include divested business)

Net debt amounted to SEK 2,155 m (1,759) on March 31, 2021. Currency effects increased net debt by SEK 15 m (24) during the quarter.

The equity/assets ratio was 54 percent (54) and the net debt/equity ratio was 0.4 (0.3). Financial items for the quarter amounted to SEK -14 m (-10). The change in net financial items is mainly due to higher interest expenses due to a higher net debt.

The current credit limits of SEK 1,300 m with Nordea and Raiffeisen Bank International and EUR 70 m with Raiffeisen Bank International are valid until second quarter 2024. The agreements contain a covenant, which is monitored quarterly. Lindab fulfilled the condition as per March 31, 2022.

Pledged assets and contingent liabilities

In connection with the divestment of Building Systems, at the end of December 2021, Lindab continued to be responsible for certain operational guarantee commitments amounting to EUR 30 m in favor of Building Systems. At the time of the divestment, Lindab received a Parent company guarantee from the buyer of Building Systems, which corresponded to the value of the above mentioned guarantee commitments. During the first quarter of 2022, remaining operational warranty commitments essentially passed from Lindab to the buyer of Building Systems. The remaining guarantee commitments as of March 31 are of minor value and is still covered by the buyer's Parent company guarantee.

In other respects, no significant changes took place in pledged collateral and contingent liabilities during the first quarter.

Investment program

  • Lindab has an investment program with the objective of achieving increased capacity, higher efficiency and a safer work environment.
  • During the quarter, continued investments were made in the Ventilation Systems and Profile Systems segments. The largest projects concern automated production for rainwater systems in Förslöv (SE), expansion of production facilities in Uddevalla (SE) and automation of production lines in Haderslev (DK) and in Grevie (SE).

Other

Parent company

Lindab International AB (publ), corporate identification number 556606-5446, is a registered limited liability company with its domicile in Båstad, Sweden. Lindab's shares are listed on Nasdaq Stockholm, Large Cap.

Net sales for the quarter amounted to SEK 1 m (1). Loss for the period amounted to SEK 2 m (1).

Significant risks and uncertainties

Significant risks and uncertainties are described in Lindab's Annual Report for 2021 under Risks and Risk Management (pages 69-72). In addition to Risks and Risk Management described, there are in 2022 also estimation uncertainty related to Russia's invasion of Ukraine, see Note 2.

Employees

The number of employees, calculated as full-time equivalent employees, was 4,579 (4,413) at the end of the quarter. Adjusted for acquisitions and divestment, the net increase was 71 employees compared with the same period previous year.

Annual General Meeting

The Board of Directors has decided that the Annual General Meeting will be held on May 12, 2022. Notice to the meeting has been given via press release.

Dividend

Lindab´s Board of Directors proposes that the Annual General Meeting on May 12, 2022 approves a dividend of SEK 4.00 per share. This is in accordance with the dividend policy with a dividend corresponding to minimum 40 percent of Lindab's net profit. The proposed dividend corresponds to a total transfer of SEK 306 m. The dividend is proposed to be split and paid out in two equal portions of SEK 2.00 per occasion. The preliminary record dates are May 16, 2022 and November 7, 2022 with payment expected on May 19, 2022 and on November 10, 2022, respectively.

Significant events during the reporting period

In January, Lindab International was transferred from Nasdaq Stockholm, Mid Cap to Nasdaq Stockholm, Large Cap.

In January, Lindab completed the acquisition of the Swedish ventiliation company Alig Ventilation AB, see Note 3.

In January, Lindab acquired the Swedish company Nord Trade AB, distributor of building products, see Note 3.

In March, Lindab signed an agreement to acquire the German ventilation distributor Felderer AG, see page 6.

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

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 2022
Jan-Mar
2021
Jan-Mar
2021
Jan-Dec
Net sales, SEK m 1,897 1,469 6,391
Net sales growth, % 29 -3 13
Adjusted1) operating profit, SEK m 235 163 822
Adjusted1) operating margin, % 12.4 11.1 12.9
Number of employees by end of period 3,592 3,505 3,565

1) In the period January-March 2022, one-off items and restructuring costs of SEK -19 m (-) were recognised, see 'Reconciliations' page 22.

Sales and market

Net sales during the quarter amounted to SEK 1,897 m (1,469), an increase of 29 percent. Organic growth amounted to 21 percent and currency effects were 5 percent. Structural changes contributed positively by 3 percent.

The sales development during the quarter remained positive with strong organic growth in all geographical regions. Sales growth was particularly strong in Central Europe, followed by the Nordics and Western Europe. The high sales have been positively affected by the price increases that have been implemented to compensate for the historically high raw material prices. A number of markets were also affected by the uncertainty related to covid-19 during the comparison period.

Sales in Central Europe increased compared with the same period previous year. All of the larger markets, Poland, Hungary and the Czech Republic, reported strong organic growth during the quarter. In the Nordics, all markets reported positive organic growth. Sales were particularly strong in Lindab's largest market, Sweden, but also in Finland and Norway. All of Lindab's markets in Western Europe reported positive organic growth. Sales growth in Ireland and Germany was strong, partly because these markets were affected by covid-19 during the comparison period.

Profit

Ventilation Systems' adjusted operating profit during the quarter increased to SEK 235 m (163). Operating profit was adjusted with one-off items and restructuring costs of SEK -19 m (-), related to the phase-out of the operations in Russia, see Reconciliations page 22. Adjusted operating margin increased to 12.4 percent (11.1).

The improved adjusted operating profit, which is the highest ever for a first quarter, is mainly explained by a strong sales growth and positive effects from structural changes. The costs have been normalised in Lindab's production facilities compared to the same period previous year, when utilisation level was slightly lower.

Activities

In January, Lindab completed the acquisition of the Swedish ventilation company Alig Ventilation AB. With the acquisition, Lindab will have access to increased expertise in ventilation in single houses and other smaller residential buildings.

In March, Lindab signed an agreement to acquire the German ventilation distributor Felderer AG. The company is one of Germany's largest distributors of ventilation products such as ducts, dampers, baffles and fire protection products. The acquisition was conditional of approval by German anti-trust authorities, which was received on March 30. The transaction is expected to be completed on April 29, when Lindab is also expected to gain a control over Felderer AG.

8 Lindab International AB (publ), Corporate identification number 556606-5446, www.lindabgroup.com

Segment – Profile Systems

Key performance indicators 2022
Jan-Mar
2021
Jan-Mar
2021
Jan-Dec
Net sales, SEK m 836 630 3,257
Net sales growth, % 33 7 27
Adjusted1) operating profit, SEK m 122 58 505
Adjusted1) operating margin, % 14.6 9.2 15.5
Number of employees by end of period 936 857 933

1) No one-off items or restructuring costs have been reported in 2022 or 2021.

Sales and market

Net sales during the quarter amounted to SEK 836 m (630), an increase of 33 percent. Organic growth amounted to 26 percent and currency effects were 2 percent. Structural changes contributed positively by 5 percent.

The first quarter of the year is the quarter that is most affected by prevailing weather conditions. This in combination with the delivery of major individual construction projects can have a significant impact on sales and profit.

Sales continued to develop well for Profile Systems during the quarter as a result of strong demand, primarily in the Nordics. Sales have also been positively affected by the price increases that have been implemented to compensate for the historically high raw material prices.

The organic sales growth during the quarter mainly relates to the largest region, the Nordics, where significant deliveries have been made to several individual construction projects. Sweden, which is the largest market in terms of sales, also reported strong growth of rainwater systems, cladding and steel profiles for wall, roof and floor construction. The Swedish market has a major impact on the segment, as it accounts for slightly more than half of Profile Systems' total sales.

The sales development in Central Europe was positive but varied between individual markets. Particularly strong organic growth was reported in Poland, the Czech Republic, Romania and Slovakia, while sales decreased in the region's largest market, Hungary. The lower relative sales in Hungary is explained by significant deliveries of industrial construction projects during the corresponding period previous year.

Sales in Western Europe increased slightly, but the impact was marginal as the region only represents a small part of Profile Systems' total sales.

Profit

Profile Systems' adjusted operating profit during the quarter increased to SEK 122 m (58). Adjusted operating margin increased to 14.6 percent (9.2). The improved adjusted operating profit, which is the highest ever for a first quarter, is mainly explained by a strong sales growth and strengthened gross margin as a result of a changed product and customer mix.

Activities

In January, Lindab acquired the Swedish distributor Nord Trade AB. Nord Trade AB, which is geographically located in Skellefteå, Sweden, is a wholesaler of Lindab's construction products. Through the acquisition, Lindab strengthens its presence in northern Sweden.

Net sales and segments

Net sales and growth

SEK m 2022
Jan-Mar
2021
Jan-Mar
2021
Jan-Dec
Net sales 2,733 2,099 9,648
Change 634 2 1,428
Change, % 30 0 17
Of which
Organic, % 23 3 17
Acquisitions/divestments, % 3 1 2
Currency effects, % 4 -4 -2

Net sales per region

2022 2021 2021
SEK m Jan-Mar % Jan-Mar % Jan-Dec %
Nordic region 1,520 56 1,151 55 5,296 55
Western Europe 833 30 659 31 2,842 29
Central Europe 346 13 254 12 1,351 14
Other markets 34 1 35 2 159 2
Total 2,733 100 2,099 100 9,648 100

Net sales per segment

2022 2021 2021
SEK m Jan-Mar % Jan-Mar % Jan-Dec %
Ventilation Systems 1,897 69 1,469 70 6,391 66
Profile Systems 836 31 630 30 3,257 34
Total 2,733 100 2,099 100 9,648 100
Gross internal sales all segments 11 9 36

Operating profit, operating margin and earnings before tax1)

SEK m 2022
Jan-Mar
% 2021
Jan-Mar
% 2021
Jan-Dec
%
Ventilation Systems 235 12.4 163 11.1 822 12.9
Profile Systems 122 14.6 58 9.2 505 15.5
Other operations -17 - -13 - -61 -
Adjusted operating profit 340 12.4 208 9.9 1,266 13.1
One-off items and restructuring costs2) -19 - - - - -
Operating profit 321 11.7 208 9.9 1,266 13.1
Net financial items -14 - -10 - -43 -
Earnings before tax 307 11.2 198 9.4 1,223 12.7

1) For information about operating profit and profit before tax for discontinued operation (segment Building Systems), see Note 6. 2) One-off items and restructuring costs are described in 'Reconciliations' page 22.

Number of employees by end of period

2022 2021 2021
Jan-Mar % Jan-Mar % Jan-Dec %
Ventilation Systems 3,592 79 3,505 79 3,565 78
Profile Systems 936 20 857 20 933 21
Other operations 51 1 51 1 51 1
Total 4,579 100 4,413 100 4,549 100

Consolidated statement of profit or loss

SEK m 2022
Jan-Mar
2021
Jan-Mar
R 12M
2021 Apr
2022 Mar
R 12M
2020 Apr
2021 Mar
2021
Jan-Dec
Net sales 2,733 2,099 10,282 8,222 9,648
Cost of goods sold -1,913 -1,490 -7,123 -5,828 -6,700
Gross profit 820 609 3,159 2,394 2,948
Other operating income 39 10 102 74 73
Selling expenses -302 -268 -1,148 -1,009 -1,114
Administrative expenses -149 -119 -542 -442 -512
R&D expenses -15 -13 -55 -54 -53
Other operating expenses -72 -11 -137 -147 -76
Total operating expenses -499 -401 -1,780 -1,578 -1,682
Operating profit1) 321 208 1,379 816 1,266
Interest income 1 1 3 6 3
Interest expenses -13 -9 -43 -39 -39
Other financial income and expenses -2 -2 -7 -4 -7
Financial items -14 -10 -47 -37 -43
Earnings before tax 307 198 1,332 779 1,223
Tax on profit for the period -71 -41 -295 -203 -265
Profit for the period, continuing operations 236 157 1,037 576 958
Discontinued operations
Profit/loss for the period from discontinued operations,
net after tax
- -17 -404 24 -421
Profit/loss for the period, discontinued operations - -17 -404 24 -421
Total operations
Profit/loss for the period, total operations 236 140 633 600 537
–attributable to the Parent company's shareholders 236 140 633 600 537
–attributable to non-controlling interests - 0 0 0 0
Earnings per share, before dilution, SEK2) 3.09 1.83 8.28 7.85 7.02
–of which relates to continuing operations 3.09 2.05 13.57 7.53 12.53
Earnings per share, after dilution, SEK2) 3.08 1.83 8.25 7.85 7.00
–of which relates to continuing operations 3.08 2.05 13.53 7.53 12.50

1) One-off items and restructuring costs, which are included in operating profit, are described in 'Reconciliations' on page 22.

2) Based on the number of outstanding shares, i.e. excluding treasury shares.

Consolidated statement of comprehensive income

2022 2021 R 12M
2021 Apr
R 12M
2020 Apr
2021
SEK m Jan-Mar Jan-Mar 2022 Mar 2021 Mar Jan-Dec
Profit for the period, total operations 236 140 633 600 537
Items that will not be reclassified to the statement
of profit or loss
Actuarial gains/losses, defined benefit plans -3 11 -9 21 5
Deferred tax attributable to defined benefit plans 1 -2 3 -4 0
Total -2 9 -6 17 5
Items that will later be reclassified to the statement
of profit or loss
Translation differences, foreign operations 55 113 90 -333 148
Hedges of net investments -9 -21 49 111 37
Tax attributable to hedges of net investments 2 4 -10 -24 -8
Total 48 96 129 -246 177
Other comprehensive income, net of tax 46 105 123 -229 182
Total comprehensive income 282 245 756 371 719
–attributable to the Parent company's shareholders 282 245 756 371 719
–attributable to non-controlling interests - 0 0 0 0

Consolidated statement of cash flow

SEK m 2022
Jan-Mar
2021
Jan-Mar
R 12M
2021 Apr
2022 Mar
R 12M
2020 Apr
2021 Mar
2021
Jan-Dec
OPERATING ACTIVITIES
Operating profit 321 208 1,379 816 1,266
Operating profit, discontinued operations1) - -15 -410 39 -425
Reversal of depreciation/amortisation and impairment losses 108 104 808 444 804
Reversal of capital gains (-)/losses (+) reported in operating profit 0 -1 -2 -4 -3
Provisions, not affecting cash flow -4 -2 6 37 8
Adjustment for other items not affecting cash flow -4 -2 -8 -5 -6
Total 421 292 1,773 1,327 1,644
Interest received 1 2 7 10 8
Interest paid -12 -9 -55 -44 -52
Tax paid -95 -69 -230 -211 -204
Cash flow from operating activities before change in working
capital
315 216 1,495 1,082 1,396
Change in working capital
Stock (increase -/decrease +) -324 -131 -1,016 -44 -823
Operating receivables (increase -/decrease +) -347 -337 -502 -35 -492
Operating liabilities (increase +/decrease -) 143 312 454 160 623
Total change in working capital -528 -156 -1,064 81 -692
Cash flow from operating activities -213 60 431 1,163 704
INVESTING ACTIVITIES
Acquisition of Group-/associated companies -73 - -251 -310 -178
Divestment of Group companies - - 159 67 159
Investments in intangible assets -6 -3 -23 -23 -20
Investments in tangible fixed assets -100 -104 -371 -376 -375
Change in financial fixed assets 0 0 0 0 0
Disposal of intangible assets - - 1 - 1
Disposal of tangible fixed assets 0 2 7 7 9
Cash flow from investing activities -179 -105 -478 -635 -404
FINANCING ACTIVITIES
Proceeds from borrowings 296 77 443 77 224
Repayment of borrowings - - -63 -133 -63
Repayment of leasing-related liabilities -57 -57 -233 -222 -233
Issue of share options/shares - - 13 4 13
Dividend to shareholders - - -260 -134 -260
Cash flow from financing activities 239 20 -100 -408 -319
Cash flow for the period -153 -25 -147 120 -19
Cash and cash equivalents at start of the period 542 541 531 450 541
Effect of exchange rate changes on cash and cash equivalents 2 15 7 -39 20
Cash and cash equivalents at end of the period 391 531 391 531 542

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 31 Mar 2022 31 Mar 2021 31 Dec 2021
ASSETS
Non-current assets
Goodwill 3,102 3,299 3,014
Other intangible assets 105 110 101
Tangible fixed assets 1,814 1,601 1,679
Right-of-use assets 810 961 869
Financial interest-bearing fixed assets 28 30 28
Other financial fixed assets 26 26 26
Deferred tax assets 65 91 82
Total non-current assets 5,950 6,118 5,799
Current assets
Stock 2,437 1,578 2,090
Accounts receivable 1,912 1,575 1,602
Other current assets 328 263 268
Other interest-bearing receivables 12 7 4
Cash and cash equivalents 391 531 542
Total current assets 5,080 3,954 4,506
TOTAL ASSETS 11,030 10,072 10,305
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity attributable to Parent company shareholders 5,932 5,423 5,650
Non-controlling interest - 0 -
Total shareholders' equity 5,932 5,423 5,650
Non-current liabilities
Interest-bearing provisions for pensions and similar obligations 275 273 270
Liabilities to credit institutions 1,309 1,042 1,110
Lease liabilities 638 725 643
Deferred tax liabilities 107 111 107
Provisions 5 22 5
Other non-current liabilities 4 8 7
Total non-current liabilities 2,338 2,181 2,142
Current liabilities
Other interest-bearing liabilities 152 25 14
Lease liabilities 212 262 233
Provisions 13 24 18
Accounts payable 1,262 1,025 1,062
Other current liabilities 1,121 1,132 1,186
Total current liabilities 2,760 2,468 2,513
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 11,030 10,072 10,305

Consolidated statement of changes in equity

Shareholders' equity attributable to Parent company shareholders

SEK m Share
capital
Other
contributed
capital
Foreign
currency
translation
reserve
Profit brought
forward
incl. profit
for the year
Total Non
controlling
interests
Total
sharehol
ders' equity
Closing balance, 31 December 2020 79 2,262 3 2,834 5,178 0 5,178
Profit for the period 140 140 0 140
Other comprehensive income, net of tax
Actuarial gains/losses, defined benefit plans 9 9 - 9
Translation differences, foreign operations 113 113 0 113
Hedges of net investments -17 -17 - -17
Total comprehensive income - - 96 149 245 0 245
Closing balance, 31 March 2021 79 2,262 99 2,983 5,423 0 5,423
Profit for the period 397 397 0 397
Other comprehensive income, net of tax
Actuarial gains/losses, defined benefit plans -4 -4 - -4
Translation differences, foreign operations 35 35 0 35
Hedges of net investments 46 46 - 46
Total comprehensive income - - 81 393 474 0 474
Issuance of shares 0 10 10 - 10
Issuance of share options 3 3 - 3
Dividends to shareholders -260 -260 - -260
Transactions with shareholders 0 10 - -257 -247 - -247
Closing balance, 31 December 2021 79 2,272 180 3,119 5,650 - 5,650
Profit for the period 236 236 - 236
Other comprehensive income, net of tax
Actuarial gains/losses, defined benefit plans -2 -2 - -2
Translation differences, foreign operations 55 55 - 55
Hedges of net investments -7 -7 - -7
Total comprehensive income - - 48 234 282 - 282
Closing balance, 31 March 2022 79 2,272 228 3,353 5,932 - 5,932

Share capital

At March 31, 2022 the share capital equalled SEK 78,842,820 (78,732,820) divided among 78,842,820 (78,732,820) shares with a face value of SEK 1.00. Lindab International AB (publ) holds 2,375,838 (2,375,838) treasury shares, corresponding to 3.0 percent (3.0) of the total number of Lindab shares. The number of outstanding shares totals 76,466,982 (76,356,982).

Proposed dividend to shareholders

Lindab's Board of Directors proposes the Annual General Meeting on May 12, 2022, to resolve on a dividend distribution of SEK 4.00 (3.40) per share, distributed on two occasions, and the remaining retained earnings to be carried forward.

Parent company

Statement of profit or loss

SEK m 2022
Jan-Mar
2021
Jan-Mar
2021
Jan-Dec
Net sales 1 1 5
Administrative expenses -2 -1 -8
Operating profit -1 0 -3
Profit from subsidiaries - - 25
Interest expenses, internal -2 -1 -5
Earnings before tax -3 -1 17
Tax on profit for the period 1 0 -3
Profit or loss for the period1) -2 -1 14

1) Comprehensive income corresponds to profit for all periods.

Statement of financial position

SEK m 31 Mar 2022 31 Mar 2021 31 Dec 2021
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 26
Prepaid expenses and accrued income 1 - -
Cash and cash equivalents 0 0 0
Total current assets 1 1 26
TOTAL ASSETS 3,474 3,474 3,499
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 1,996 2,233 1,982
Profit/loss for the period -2 -1 14
Total shareholders' equity 2,871 3,109 2,873
Provisions
Interest-bearing provisions 5 4 5
Total provisions 5 4 5
Current liabilities
Liabilities to Group companies 595 357 615
Accounts payable - 0 -
Current tax liability 1 2 4
Accrued expenses and deferred income 2 2 2
Total current liabilities 598 361 621
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 3,474 3,474 3,499

Key performance indicators

2022 2021 2020
SEK m Jan-Mar Oct-Dec Jul-Sep Apr-Jun Jan-Mar Oct-Dec Jul-Sep Apr-Jun Jan-Mar
Net sales 2,733 2,560 2,488 2,501 2,099 2,082 2059 1,982 2,097
Growth, % 30 23 21 26 0 -5 -2 -9 3
of which organic 23 20 19 28 3 -2 0 -8 1
of which acquisitions/divestments 3 3 3 2 1 1 1 0 0
of which currency effects 4 0 -1 -4 -4 -4 -3 -1 2
Operating profit before depreciation/amortisation and impairment
losses
429 418 500 440 302 316 337 263 270
Operating profit 321 311 403 344 208 225 250 133 182
Adjusted operating profit 340 311 403 344 208 225 246 207 182
Earnings before tax 307 298 394 333 198 216 242 123 171
Profit for the period 236 234 299 268 157 169 186 64 135
Operating margin, % 11.7 12.1 16.2 13.8 9.9 10.8 12.1 6.7 8.7
Adjusted operating margin, % 12.4 12.1 16.2 13.8 9.9 10.8 11.9 10.4 8.7
Profit margin before tax, % 11.2 11.6 15.8 13.3 9.4 10.4 11.8 6.2 8.2
Comparable numbers including divested business
Net sales 2,733 2,846 2,778 2,747 2,248 2,314 2,302 2,218 2,332
Growth, % 30 23 21 24 -4 -8 -6 -14 1
of which organic 23 20 20 26 0 -4 -4 -12 -1
of which acquisitions/divestments 3 3 2 2 1 1 1 0 0
of which currency effects 4 0 -1 -4 -5 -5 -3 -2 2
Operating profit before depreciation/amortisation and impairment
losses
429 393 494 462 297 350 363 289 282
Operating profit 321 286 6 356 193 248 266 148 184
Adjusted operating profit 340 324 424 356 193 248 262 222 184
Earnings before tax 307 275 -2 346 183 239 257 139 176
Profit for the period 236 221 -102 278 140 186 198 76 136
Operating margin, % 11.7 10.0 0.2 13.0 8.6 10.7 11.6 6.7 7.9
Adjusted operating margin, % 12.4 11.4 15.3 13.0 8.6 10.7 11.4 10.0 7.9
Profit margin before tax, % 11.2 9.7 -0.1 12.6 8.1 10.3 11.1 6.3 7.5
Comparable numbers including divested business
Cash flow from operating activities -213 215 202 227 60 356 452 295 26
Cash flow from operating activities per share, SEK -2.79 2.82 2.64 2.97 0.79 4.66 5.92 3.87 0.34
Free cash flow -392 202 8 135 -45 107 276 190 -107
Adjusted free cash flow -319 110 107 147 -45 241 346 229 -107
Cash flow, investments in intangible assets/tangible fixed assets -106 -105 -97 -86 -107 -115 -110 -67 -133
Total operations1)
Number of shares outstanding, thousands 76,467 76,467 76,467 76,357 76,357 76,357 76,357 76,332 76,332
Average number of shares outstanding, thousands 76,423 76,396 76,368 76,353 76,347 76,357 76,334 76,332 76,332
Earnings per share, before dilution, SEK 3.09 2.88 -1.33 3.64 1.83 2.43 2.59 1.00 1.78
Earnings per share, after dilution, SEK 3.08 2.87 -1.34 3.64 1.83 2.43 2.59 1.00 1.78
Shareholders' equity attributable to Parent company shareholders 5,932 5,650 5,358 5,440 5,423 5,178 5,127 4,976 5,182
Shareholders' equity attributable to non-controlling interests - - - 0 0 0 0 0 -
Shareholders' equity per share, SEK 77.58 73.89 70.07 71.24 71.02 67.82 67.15 65.19 67.89
Net debt 2,155 1,696 1,836 1,777 1,759 1,640 1,740 1,859 2,093
Adjusted net debt 1,305 820 864 806 772 663 671 894 1,077
Net debt/equity ratio, times 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4
Equity/asset ratio, % 53.8 54.8 49.8 51.8 53.8 55.1 52.2 52.1 52.0
Return on equity, % 11.4 9.9 9.5 15.3 11.5 11.6 10.9 11.4 13.7
Return on capital employed, % 12.3 11.0 10.6 14.1 11.4 11.5 11.0 11.2 12.5
Interest coverage ratio, times 24.9 26.7 0.8 34.8 18.4 23.2 24.9 12.8 15.9
Net debt/EBITDA, excl. one-off items and restructuring costs 1.0 1.0 1.1 1.2 1.3 1.4 1.5 1.5 1.5
Number of employees by end of period 4,579 4,549 5,182 5,187 5,098 5,078 4,955 4,981 5,162
of which employees in discontinued operations - - 683 680 685 692 706 711 715

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 are calculated on both outcomes, including and excluding divested business.

Key performance indicators (cont.)

2021 2020 2019
SEK m Jan-Dec Jan-Dec Jan-Dec
Net sales 9,648 8,220 8,512
Growth, % 17 -3 3
of which organic 17 -2 1
of which acquisitions/divestments 2 0 0
of which currency effects -2 -1 2
Operating profit before depreciation/amortisation and impairment losses 1,660 1,185 1,183
Operating profit 1,266 790 830
Adjusted operating profit 1,266 860 830
Earnings before tax 1,223 752 778
Profit for the period 958 554 593
Operating margin, % 13.1 9.6 9.8
Adjusted operating margin, % 13.1 10.5 9.8
Profit margin before tax, % 12.7 9.1 9.1
Key performance indicators including divested business1)
Net sales 10,619 9,166 9,872
Growth, % 16 -7 6
of which organic 17 -6 3
of which acquisitions/divestments 2 1 0
of which currency effects -3 -2 3
Operating profit before depreciation/amortisation and impairment losses 1,645 1,284 1,315
Operating profit 841 846 915
Adjusted operating profit 1,297 916 915
Earnings before tax 802 811 881
Profit for the period 537 596 678
Operating margin, % 7.9 9.2 9.3
Adjusted operating margin, %
Profit margin before tax, %
12.2
7.6
10.0
8.8
9.3
8.9
Key performance indicators including divested business1)
Cash flow from operating activities 704 1,129 1,017
Cash flow from operating activities per share, SEK 9.22 14.79 13.32
Free cash flow 300 466 717
Adjusted free cash flow 319 709 751
Cash flow, investments in intangible assets/tangible fixed assets -395 -425 -278
Key performance indicators including divested business1)
Number of shares outstanding, thousands 76,467 76,357 76,332
Average number of shares outstanding, thousands 76,396 76,340 76,332
Earnings per share, before dilution, SEK 7.02 7.80 8.89
Earnings per share, after dilution, SEK 7.00 7.80 8.89
Dividend per share, SEK 4.002) 3.40 1.75
Shareholders' equity attributable to Parent company shareholders 5,650 5,178 5,027
Shareholders' equity attributable to non-controlling interests - 0 -
Shareholders' equity per share, SEK 73.89 67.82 65.86
Net debt 1,696 1,640 1,771
Adjusted net debt 820 663 732
Net debt/equity ratio, times 0.3 0.3 0.4
Equity/asset ratio, % 54.8 55.1 53.3
Return on equity, % 9.9 11.6 14.3
Return on capital employed, % 11.0 11.5 13.6
Interest coverage ratio, times 20.0 19.0 18.8
Net debt/EBITDA, excl. one-off items and restructuring costs 1.0 1.4 1.6
Number of employees by end of period 4,549 5,078 5,196
of which employees in discontinued operations - 692 727

1) Corresponding definitions of total operations, i.e. Ventilation Systems, Profile Systems and divested business (Building Systems).

2) Proposed dividend for 2021.

Notes

NOTE 1 – ACCOUNTING POLICIES

The consolidated accounts for the interim report have, like with the annual consolidated accounts for 2021, 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 2021.

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 2021.

NOTE 2 – EFFECTS OF CHANGES IN ACCOUNTING ESTIMATES AND JUDGEMENTS

Significant estimates and judgements are described in Note 4 in the Annual Report for 2021. In addition to estimates and judgments described, there are in 2022 also estimates uncertainty related to Russia's invasion of Ukraine. The military invasion of Ukraine, that Russia initiated in February, has created an uncertain situation in the world. Lindab does not have any business activities in Belarus or Ukraine and during the first quarter there was a decision to phase-out the remaining business in Russia. The decision has resulted in one-off items and restructuring costs of SEK -19 m in the first quarter of 2022. In the beginning of 2022, the three mentioned countries accounted for 0.5 percent of the Group's sales. The significant estimates and judgments made have been partly related to expected costs to close the business in Russia and partly related to possible indirect effects on other businesses, since a long and/or intensified conflict may result in increased risks for the Group. The development of the conflict is closely monitored by Lindab and the Group continuously evaluates different scenarios in order to be able to adapt its operations to prevailing circumstances.

With exception of the added significant estimates and judgements related to Russia´s war against Ukraine, no essential changes, which could have a material impact on this interim report, have been made to what is described in the Annual Report.

NOTE 3 – BUSINESS COMBINATIONS

Business combinations 2022

Alig Ventilation AB

On January 11, 2022, Lindab completed the acquisition of all shares and voting rights of the Swedish company Alig Ventilation AB. The company has focused on ventilation for smaller properties and handles both new construction and renovation. With the acquisition, Lindab will obtains access to increased expertise for ventilation of single houses and smaller residential buildings. In addition, the acquisition provides established relationships with Swedish manufacturers of single-family homes and a direct sales channel to consumers. Alig Ventilation AB is registered in Mariestad, Sweden. The company has an annual sales of approximately SEK 65 m and has 15 employees.

The purchase consideration of Alig Ventilation AB was mainly settled at time of acquisition. Transaction related costs amounted to SEK 1 m, recognised as other operating expenses. The costs have mainly been recognised in 2021.

According to preliminary purchase price allocation analysis, the acquisition resulted in a goodwill. This goodwill is primarily related to increased expertise for ventilation of single residential houses. Identified intangible assets are mainly related to customer relations.

Alig Ventilation AB was consolidated in Lindab as of January 11, 2022. The acquisition has limited impact on the consolidated statement of profit or loss as well as the consolidated statement of financial position. The company is part of the Ventilation Systems segment.

Nord Trade AB

On January 20, 2022, Lindab acquired all shares and voting rights of the Swedish company Nord Trade AB. The company is a distributor of Lindab's building products and will broaden its range by including Lindab's ventilation products in the future. Lindab strengthens its presence in northern Sweden with the acquisition of Nord Trade AB. Nord Trade AB is registered in Skellefteå, Sweden. The company has an annual sales of approximately SEK 20 m and has two employees.

The purchase consideration of Nord Trade AB was mainly settled at time of acquisition. Transaction related costs amounted to SEK 0 m, recognised as other operating expenses.

According to primarily purchase price allocation analysis, the acquisition resulted in a goodwill. This goodwill is primarily related to that Lindab strengthens its presence in northern Sweden. Identified intangible assets are mainly related to customer relations.

Nord Trade AB was consolidated in Lindab as of January 20, 2022. The acquisition has limited impact on the consolidated statement of profit or loss as well as the consolidated statement of financial position. The company is part of the Profile Systems segment.

Notes (cont.)

Felderer AG

On March 1, 2022, Lindab signed an agreement to acquire all shares and voting rights of the German ventilation company Felderer AG. The company is one of Germany's largest distributors of ventilation products such as ducts, silencers, diffusers and fire protection products. They also manufacture circular ventilation ducts. The acquisition complements Lindab in many levels and is expected to significantly expand and broaden the Group's ventilation offering in Germany. With the acquisition Lindab more than doubles its sales in Germany and gains a strong position throughout the country.

Felderer AG is registered in Feldkirchen, Germany. The company has an annual sales of approximately SEK 700 m, has an operating margin that is currently lower than Lindab's operating margin and the company has 160 employees. The acquisition was subject to approval by the German anti-trust authorities, which was obtained on March 30. The transaction is expected to close on April 29, when Lindab is also expected to gain control over Felderer AG. The company will be part of the Ventilation Systems segment.

Other

In terms of 2022, the cash flow related to acquisitions derives, beside previously mention transactions, from settlement of conditional additional purchase considerations of SEK 4 m in terms of previously made business combinations.

Acquired businesses

SEK m 31 Mar 20221)
Intangible assets 4
Tangible fixed assets 9
Right-of-use assets 0
Financial fixed assets -
Stock 9
Current assets 10
Cash and cash equivalents 29
Total acquired assets 61
Deferred tax liabilities -2
Non-current lease liabilities 0
Non-current liabilities 0
Current lease liabilities 0
Current liabilities -13
Total acquired liabilities -15
Fair value of acquired net assets 46
Goodwill2) 63
Consideration including additional
contingent consideration3)
109

1) Acquired businesses related to Alig Ventilation AB and Nord Trade AB.

2) The purchase price allocations were preliminary as of March 31, due to not finalised valuations of identified intangible assets.

3) No portion of reported goodwill is deductible for income tax.

4) Includes conditional additional purchase considerations of SEK 12 m, which will be settled fully or partly if future expectations of identified levels of sales and profitability are met during a period of 3 years. Total possible undiscounted amount for all recognised future conditional additional purchase consideration is between SEK 0-24 m. On March 31, 2022, it was considered likely that a maximum of potential remaining consideration would occur.

Business combinations 2021

There were no acquisitions or divestments during the first quarter of 2021.

NOTE 4 – OPERATING SEGMENTS

The Group's segments comprise Ventilation Systems and Profile Systems. In December 2021 the segment Building Systems was divested, see Note 6, and is therefore no longer included in the segment information.

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 10. See also pages 8-9 for further segment information.

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.

Notes (cont.)

NOTE 5 – FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE THROUGH THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS

SEK m 31 Mar 2022
31 Mar 2021
31 Dec 2021
Disclosures regarding the fair value by class Carrying
amount
Fair
value
Carrying
amount
Fair
value
Carrying
amount
Fair
value
Financial assets
Derivative receivables 9 9 5 5 2 2
Financial liabilities
Liabilities to credit institutions 1,313 1,317 1,047 1,048 1,114 1,119
Derivative liabilities 5 5 7 7 10 10

Description of 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, derivative liabilities and interest-bearing liabilities to credit institutions 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, 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 in the comparison period 2021, see page 21.

Notes (cont.)

Statement of Profit or loss, discontinued operations

R 12M
2022 2021 2020 Apr 2021
SEK m Jan-Mar Jan-Mar 2021 Mar Jan-Dec
Net sales - 149 860 971
Cost of goods sold - -119 -645 -746
Gross profit - 30 215 225
Other operating income - 4 6 4
Selling expenses - -24 -83 -86
Administrative expenses - -21 -77 -85
R&D expenses - -3 -10 -12
Other operating expenses - -1 -12 -471
Total operating expenses - -45 -176 -650
Operating profit1) - -15 39 -425
Financial items - 0 0 4
Earnings before tax - -15 39 -421
Tax on profit/loss for the period - -2 -15 0
Profit/loss for the period - -17 24 -421
Earnings per share before dilution, SEK - -0.22 0.32 -5.51
Earnings per share before dilution, SEK - -0.22 0.32 -5.50

1) For the period January-December, 2021, were one-off items and restructuring costs related to the divestment of Building Systems recognised within operating profit. These one-off items and restructuring costs amounted to SEK -456 m. 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. For the period January-December, 2021, were one-off items and restructuring costs impacting net profit by SEK -441 m.

Statement of cash flow, discontinued operations

R 12M
SEK m 2022
Jan-Mar
2021
Jan-Mar
2020 Apr
2021 Mar
2021
Jan-Dec
Cash flow from operating activities1) - 114 221 38
Cash flow from investing activities - -5 -6 -16
Cash flow from financing activities - -6 -134 -24
Cash flow for the period - 103 81 -3

1) In cash flow from operating activities reversal of amortisation, depreciation and impairment losses is included of SEK 10 m for the period January-March 2021 and SEK 410 m for the period January-December 2021.

NOT 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 2021.

During the period, there have been no transactions between Lindab and related parties which have had a significant impact on the company's position and profit.

This interim report for Lindab International AB (publ) has been submitted following approval by the Board of Directors.

Båstad, 28 April 2022

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. Continuing operations include business area Ventilation Systems and Profile Systems. Total operations include divested business in comparable numbers.

Return on shareholders' equity, total operations1) 31 Mar 2022 31 Mar 2021 31 Dec 2021
Profit for the period, rolling twelve months 633 600 537
Average shareholders' equity 5,561 5,204 5,410
Return on shareholders' equity, % 11.4 11.5 9.9
Return on capital employed, total operations1) 31 Mar 2022 31 Mar 2021 31 Dec 2021
Total assets 11,030 10,072 10,305
Provisions and deferred tax liabilities 112 133 112
Other non-current liabilities 4 8 7
Total non-current liabilities 116 141 119
Provisions
Accounts payable
13
1,262
24
1,025
18
1,062
Other current liabilities 1,121 1,132 1,186
Total current liabilities 2,396 2,181 2,266
Capital employed 8,518 7,750 7,920
Earnings before tax, rolling twelve months 927 818 802
Financial expenses, rolling twelve months 55 48 52
Total 982 866 854
Average capital employed 7,961 7,595 7,741
Return on capital employed, % 12.3 11.4 11.0
2022 2021 2021
One-off items and restructuring costs, excluding divested operations Jan-Mar Jan-Mar Jan-Dec
Operating profit 321 208 1,266
Ventilation Systems -19 - -
Profile Systems - - -
Other operations
Adjusted operating profit
-
340
-
208
-
1,266
During the first quarter 2022 operating profit is excluding one-off items and restructuring costs of SEK -19 m related to Lindab's decision to close business in
Russia.
Free cash flow, total operations1) 2022
Jan-Mar
2021
Jan-Mar
2021
Jan-Dec
Cash flow from operating activities -213 60 704
Cash flow from investing activities -179 -105 -404
Free cash flow -392 -45 300
Cash flow related to divestments and acquisitions -73 - -19
Adjusted free cash flow -319 -45 319
Adjusted operating profit and operating margin 31 Mar 2022 31 Mar 2021 31 Dec 2021
Adjusted operating profit 321 208 1,266
Operating profit 340 208 1,266
Net sales 2,733 2,099 9,648
Adjusted operating margin 12.4 9.9 13.1
Operating margin 11.7 9.9 13.1
Net debt, total operations1)
Non-current interest-bearing provisions for pensions and similar obligations
275 31 Mar 2022 31 Mar 2021 31 Dec 2021
273
270
Non-current liabilities to credit institutions 1,309 1,042 1,110
Non-current lease liabilities 638 725 643
Current interest-bearing liabilities 364 287 248
Total liabilities 2,586 2,327 2,270
Financial interest-bearing fixed assets 28 30 28
Other interest-bearing receivables 12 7 4
Cash and cash equivalents 391 531 542
Total assets 431 568 574
Net debt 2,155 1,759 1,696
Adjusted net debt, total operations1) 31 Mar 2022 31 Mar 2021 31 Dec 2021
Net debt 2,155 1,759 1,696
Liabilities related to leasing -850 -987 -876
Adjusted net debt 1,305 772 820
Net debt/EBITDA, total operations1) 31 Mar 2022 31 Mar 2021 31 Dec 2021
Average net debt 1,860 1,774 1,787
Adjusted operating profit, rolling twelve months 1,444 925 1,297
Depreciation/amortisation and impairment losses, rolling twelve months,
excluding one-off items and restructuring costs
429 404 424
EBITDA, rolling twelve months 1,873 1,329 1,721
Net debt/EBITDA, times 1.0 1.3 1.0
Net debt/equity ratio, total operations1) 31 Mar 2022 31 Mar 2021 31 Dec 2021
Net debt 2,155 1,759 1,696
Shareholders' equity including non-controlling interests 5,932 5,423 5,650
Net debt/equity ratio 0.4 0.3 0.3
2022 2021 2021
Organic growth, excluding divested operations Jan-Mar Jan-Mar Jan-Dec
Change Net sales 634 2 1,428
Of which
Organic 478 75 1,432
Acquisitions/divestments 71 21 179
Currency effects 85 -94 -183
Organic growth, total operations1) 2022
Jan-Mar
2021
Jan-Mar
2021
Jan-Dec
Change Net sales 634 -84 1,453
Of which
Organic 478 9 1,513
Acquisitions/divestments 71 21 179
Currency effects 85 -114 -239
Interest coverage ratio, total operations1) 2022
Jan-Mar
2021
Jan-Mar
2021
Jan-Dec
Earnings before tax 307 183 802
Interest expenses 13 11 42
Total 320 194 844
Interest expenses 13 11 42

Interest coverage ratio, times 24.9 18.4 20.0

Operating profit before depreciation/amortisation
EBITDA, excluding divested operations
2022
Jan-Mar
2021
Jan-Mar
2021
Jan-Dec
Operating profit 321 208 1,266
Depreciation/amortisation and impairment losses 108 94 394
Of which one-off items and restructuring costs 2 - -
Operating profit before depreciation/amortisation-EBITDA 429 302 1,660
Operating profit before depreciation/amortisation
EBITDA, total operations1)
2022
Jan-Mar
2021
Jan-Mar
2021
Jan-Dec
Operating profit 321 193 841
Depreciation/amortisation and impairment losses 108 104 804
Of which one-off items and restructuring costs 2 - 380
Operating profit before depreciation/amortisation-EBITDA 429 297 1,645
Profit margin before tax, excluding divested operations 2022
Jan-Mar
2021
Jan-Mar
2021
Jan-Dec
Net sales 2,733 2,099 9,648
Profit before tax 307 198 1,223
Profit margin before tax 11.2 9.4 12.7

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 are calculated on both outcomes, including and excluding 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 9,648 m in 2021 and is established in 20 countries with approximately 4,500 employees.

Lindab should be the market-leading ventilation company in Europe, specialised in air distribution and air diffusion.

In 2021, the Nordic region accounted for 55 percent, Western Europe for 29 percent, Central Europe for 14 percent and Other markets for 2 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 140 own pro-shops and more than 3,000 independent retailers.

Lindab share

January - March 2022

Share price performance: -25%
Average share turnover/day: 212,441
Highest price paid (January 3): 325.00 SEK
Lowest price paid (March 7): 203.40 SEK
Closing price March 31: 241.00 SEK
Market cap March 31: SEK 18,429 m
Total no. of shares: 78,842,820
- whereof treasury shares: 2,375,838
- whereof outstanding shares: 76,466,982

Share price performance 2021/2022, SEK

Press- and analyst meetings Calendar

A live audiocast will be held at 1:00 pm (CEST) on April 28. The Interim Report will be presented by Ola Ringdahl, President and CEO, and Jonas Arkestad CFO.

To access the audiocast, please call:

Phone +46 (0) 8 505 583 55 Alternatively phone +44 333 300 9272

The audiocast and presentation can be followed live via Lindab's homepage.

For more information see www.lindabgroup.com

Annual General Meeting 12 May, 2022
Interim Report January - June 20 July, 2022
Interim Report January - September 25 October, 2022
All financial reports will be published at
www.lindabgroup.com.

This is information is information that Lindab International AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below, at 07:40 am (CEST) on 28 April, 2022.

For further information, please contact:

Ola Ringdahl, President and CEO | E-mail: [email protected] Jonas Arkestad, CFO | E-mail: [email protected] Catharina Paulcén, Corporate Communication | E-mail: [email protected]

Telephone +46 (0) 431 850 00 For more information, please visit www.lindabgroup.com.

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