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Lindab International

Annual Report Feb 14, 2012

2938_10-k_2012-02-14_22d5b85b-5ddf-4772-9688-7d2af150740c.pdf

Annual Report

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Fourth quarter 2011

  • •Sales revenue increased by 9 percent to SEK 1,855 m (1,697), an increase of 10 percent when adjusted for currency and structure.
  • •Operating profit (EBIT) amounted to SEK 107 m (75), excluding one-off items of SEK –42 m (–110).
  • •The operating margin (EBIT), excluding oneoff items, amounted to 5.8 percent (4.4).
  • •The after-tax result amounted to SEK –5 m (–86).
  • •Earnings per share amounted to SEK –0.07 (–1.14).
  • •Cash flow from operating activities amounted to SEK 252 m (324).

January–December 2011

  • •Sales revenue increased by 5 percent to SEK 6,878 m (6,527), an increase of 9 percent when adjusted for currency and structure.
  • •Operating profit (EBIT) amounted to SEK 407 m (347), excluding one-off items of SEK –59 m (–63).
  • •The operating margin (EBIT), excluding oneoff items, amounted to 5.9 percent (5.3).
  • •The after-tax result amounted to SEK 91 m (27).
  • •Earnings per share amounted to SEK 1.21 (0.36).
  • •Cash flow from operating activities amounted to SEK 345 m (391).
  • •Proposed dividend of SEK 1.00 (1.00).

Lindab's President and CEO, David Brodetsky comments:

" Overall it was a good quarter. The organic sales growth in the quarter was high (10 percent) and EBIT grew 43 percent from SEK 75 million to SEK 107 million, excluding one-off time costs.

The volume increase, which is the main reason for the growth in EBIT, was supported by continued good momentum in several markets as well as the mild winter weather. The Nordic region had high growth with Sweden, Denmark and Norway all performing strongly. In Western Europe, Lindab's major markets the UK and Germany contributed well whilst in CEE/CIS, Russia and Belarus were particularly strong. For the year as a whole, thanks to selective sales initiatives and in spite of challenging economic conditions, we increased market shares in many countries. This contributed to the full year organic sales growth of 9 percent in spite of an almost flat underlying market.

David Brodetsky President and CEO

2

Our business is late cyclical and no signs of changing demand due to the Euro crisis have been experienced so far. Demand in Q1 2012 will be more affected by the winter weather than by the current market uncertainty.

Spot prices for steel started to rise in December and are likely to continue upwards in the coming months. We will now start to adjust our sales prices accordingly to compensate.

" In early January we announced a new near term EBIT target of 10 percent with the goal of achieving this run rate before the end of 2013 and for the full year 2014. At the same time we also announced a SEK 150 m cost reduction programme, particularly targeting lower performance markets, which will support the near term target.

Grevie February 2012

David Brodetsky President and CEO

Think Less.

Why? Because at Lindab we think that less is more. We simplify construction for our customers while we are working to lessen the impact on the environment.

Our steel solutions help our customers to use less effort and less energy. At the same time, they generate less greenhouse gas emissions and lessen the carbon footprint.

www.lindab.com

Sales and markets

Sales revenue during the fourth quarter amounted to SEK 1,855 m (1,697), an increase of 9 percent compared with the fourth quarter of 2010. Adjusted for currency, the increase was 10 percent. Structural changes had a marginal effect on sales revenue.

All business areas and all of the principal regions contributed positively to the organic growth. The mild winter has contributed to the increased sales, especially for the Building Components business area. There was no impact on demand during the quarter stemming from the uncertain economic situation within the EU.

Sales in the Nordic region have risen during the quarter by 16 percent, also when adjusted for currency and structure. The region is showing good growth, with Sweden, Denmark and Norway, Lindab's largest markets in the region, all showing strong growth. The mild winter contributed towards the improvement compared with the previous year.

Sales in Western Europe increased by 6 percent when adjusted for currency and structure. The majority of markets in the region have contributed with positive growth, including the UK and Germany, which are the largest markets.

Sales in the CEE/CIS increased by 9 percent when adjusted for currency and structure. The region experienced slightly weaker growth than in previous quarters during the year. Russia and Belarus continued to contribute the strongest growth in the region, while markets such as Poland and Romania reported negative sales for the quarter.

Sales revenue for the period January–December amounted to SEK 6,878 m (6,527), which is an increase of 5 percent compared with the corresponding period the previous year. Adjusted for currency and structure, the increase amounted to 9 percent.

External market forecasts

Euroconstruct (an independent forecasting organisation for the construction industry that covers 19 European countries) issued its bi-annual report on 9 November, updating its construction forecasts for the coming years. In general, the forecasts are based on data that has been compiled in the early autumn and the forecasts have been revised downwards compared with the previous report in June 2011.

Adjusting Euroconstruct's forecasts to take account of Lindab's geographical mix, segment exposure and late cyclicality, Lindab's underlying market growth will amount to 1 percent for 2012 and just over 2 percent for 2013 (down from the previous figures of 2 and 3 percent respectively).

Profit

0

Operating profit (EBIT) for the fourth quarter amounted to SEK 107 m (75), excluding one-off items of SEK –42 m (–110), see note 5.

Increased volumes during the quarter are the

reason for the improved profit. Meanwhile, a somewhat higher cost level and lower gross margins affected the profit negatively in the quarter.

The cost-reduction programme announced at the start of 2012 includes a small number of activities that began in late 2011, which resulted in one-off costs of SEK 22 m for the quarter. Additional oneoff costs of SEK 20 m reserved during the quarter are explained by the change in management for the Building Systems business area as well as by the write-down of assets resulting primarily from overcapacity in production units in the CEE. For the corresponding quarter in 2010, one-off items amounted to SEK 110 m, see note 5.

The operating margin (EBIT) for the fourth quarter, excluding one-off items, amounted to 5.8 percent (4.4).

The pre-tax result for the quarter amounted to SEK 22 m (–79). The after-tax result amounted to SEK –5 m (–86). Earnings per share amounted to SEK –0.07 (–1.14). The average share price during the fourth quarter of 2011 has been lower than the conversion rates in the incentive programmes, therefore no dilutive effects have occurred.

Operating profit (EBIT) for the period January– December, excluding one-off items, increased by 17 percent to SEK 407 m (347). Higher volumes are the reason for the improved profit during the year. Meanwhile, lower gross profit margins and higher costs have had a negative impact. The lower gross margin is explained mainly by greater

SALES REVENUE, SEK M

SALES REVENUE PER MARKET ROLLING 12 MONTHS, SEK M

March June Sept Dec

IMPORTANT EVENTS SINCE Q3 REPORT

  • •Extended credit agreement.
  • •Change of business area manager within Building Systems.
  • •Cost reduction programme and revised financial targets announced in January.

price pressure combined with falling steel prices from the third quarter, making it difficult to compensate for goods produced with steel that had been bought earlier at higher prices. The higher costs are explained mainly by a number of strategic activities that have been undertaken during the year.

The profit for the period January–December has been affected by one-off costs totalling SEK –59 m (–63). The one-off costs are explained mainly by the cost reduction programme, management changes for the Building Systems and Ventilation business areas, the write-down of tangible fixed assets and the transfer of production from St. Petersburg in Russia to Tallinn in Estonia. One-off items for 2010 totalled SEK –63 m, see note 5.

The operating margin (EBIT) for the same period, excluding one-off items, amounted to 5.9 percent (5.3).

The pre-tax result for the period January–December amounted to SEK 186 m (112). The after-tax result amounted to SEK 91 m (27). Earnings per share amounted to SEK 1.21 (0.36).

Cost-reduction programme

On 10 January 2012, a cost-reduction programme was announced that is estimated to save approximately SEK 150 m annually. The plan has started to be rolled out and will be completed before the end of the second quarter. It is mainly aimed at low performing business units within the Group and includes a headcount reduction of 250 people, plus reduced operating expenses. A small number of activities that began in late 2011 have resulted in one-off costs of SEK 22 m for the quarter. The total one-off costs for the quarter are estimated at approximately SEK 110 m, which will be recorded up to the second quarter of 2012.

Seasonal variations

Lindab's operations are affected by seasonal variations in the construction industry, and the greatest proportion of sales is normally seen during the second half of the year. The most substantial seasonal variations are to be found within the Building Components and Building Systems business areas. The Ventilation business area is less dependent on seasons and the weather since the installation of ventilation systems is mainly carried out indoors.

There is normally a deliberate stock build-up of mainly finished goods during the first six months, which gradually becomes a stock reduction during the third and fourth quarters as a result of increased activity within the construction market.

Depreciation/amortisation and write-downs

Total depreciation/amortisation for the quarter amounted to SEK 34 m (36). In addition, there has been a SEK 11 m (0) write-down of tangible fixed assets. In 2010, a SEK 110 m write-down of goodwill was made relating to the Ventilation business area's operations in the USA.

Total depreciation/amortisation for the period January–December amounted to SEK 152 m (170), of which SEK 11 m (0) is attributable to the aforementioned write-downs, and SEK 0 m (6) relates to consolidated amortisation of surplus value on intangible assets. The lower depreciation/amortisation is mainly due to the implemented restructuring measures and the fact that Lindab has had a lower rate of investment in recent years. In 2010, there was a SEK 110 m write-down of goodwill, as detailed above. For certain intangible assets, the amortisation was completed during the third quarter of 2010.

Tax

-200 -100

Tax expenses for the quarter amounted to SEK 27 m (7). The pre-tax result amounted to SEK 22 m (–79). The actual tax rate for the quarter was 123 percent (23 excluding the write-down of goodwill in 2010). During the quarter, there was a SEK 19 m reversal of deferred taxes on losses carried forward.

OPERATING PROFIT (EBIT)*, SEK M

quarterJan-March April-June July-Sept Oct-Dec rolling *) Adjusted for one-off items.

OPERATING PROFIT (EBIT)* ROLLING 12 MONTHS, SEK M

CASH FLOW FROM OPERATING ACTIVITIES, SEK M

Rolling 12 months

-300 quarter Jan-March April-June July-Sept Oct-Dec rolling

0

Tax expenses for the full year were SEK 95 m (85). The pre-tax result amounted to SEK 186 m (112). The actual tax rate was 51 percent (38 excluding the write-down of goodwill in 2010). The higher actual tax rate for the year is explained primarily by a SEK 30 m reversal of deferred tax on losses carried forward and higher non-deductible expenses compared with last year.

The average tax rate was 25 percent (28 excluding the write-down of goodwill in 2010). The discrepancy between the actual and the average tax rate for the full year is primarily due to adjustments to taxes attributable to previous years, such as the reversal of deferred taxes on losses carried forward. Other influencing factors include fiscal adjustments to reported earnings, such as nondeductible expenses and non-capitalised tax on deficits in some Group companies.

Cash flow

Cash flow from operating activities amounted to SEK 252 m (324) for the fourth quarter, generated mainly through lower working capital of SEK 162 m (207). Tax payments have had a negative effect compared with the previous year, 2010, when tax reimbursements were received relating to 2009.

For the period January–December, the cash flow from operating activities decreased to SEK 345 m (391), despite the improved working capital of SEK 41 m (–1). In the previous year, the cash flow from operating activities, adjusted for items not affecting cash flow, contained a positive item relating to redeemed forward exchange agreements. The decrease is also explained by the negative impact of tax payments compared with the previous year.

Cash flow from investing activities is reported under the headings "Investments" and "Company acquisitions and divestments".

Financing activities for the period January–December gave a cash flow of SEK –202 m (–616) net, consisting mainly of SEK –127 m (–623) in decreased borrowing and SEK –75 m (0) in paid dividends.

Investments

Investments in fixed assets amounted to SEK

45 m (47) for the quarter, while divestments amounted to SEK 8 m (62). In the fourth quarter of 2010, some properties were sold for a total sum of SEK 49 m. Cash flow from investing activities amounted to SEK –43 m (15) net. When adjusted for acquisitions and divestments, the cash flow was affected by SEK –37 m (15).

Investments during the period January–December, excluding acquisitions and divestments, amounted to SEK 172 m (237). Investments amounted to SEK –143 m (–128), while divestments amounted to SEK 22 m (365). In the previous year, divestments consisted mainly of the sale of the Building Systems facility in Luxembourg for SEK 285 m. Building Systems has received Government grants of SEK 7 m (-) in Luxembourg for the partial funding of proprietary software. Cash flow from investing activities amounted to SEK –143 m (241) net, of which acquisitions amounted to SEK –32 m (4) and divestments totalling SEK 3 m (0).

Company acquisitions and divestments

On 1 November 2011, Lindab acquired Elia, a ventilation distributor with a strong local presence in southern France. The company has an annual turnover of approximately SEK 20 m and 5 employees. The purchase price amounted to SEK 6 m and the acquisition gave a consolidated goodwill of SEK 5 m. The cash flow was negatively affected by SEK 6 m.

On 21 July 2011, Lindab divested the Swiss subsidiary Benone, with operations in the Ventilation business area, an annual turnover of approx. SEK 30 m and 16 employees. The sale price amounted to SEK 4 m. The divestment positively affected cash flow by SEK 3 m, but there was no change in consolidated goodwill.

On 23 May 2011, Lindab acquired the Belgian company Airflux, a ventilation distributor with three outlets in Belgium, one of which is a distribution centre and two are unmanned branches. The company has an annual turnover of just over SEK 20 m and 5 employees. The purchase price amounted to SEK 14 m. The acquisition means that the consolidated goodwill increased by SEK 10 m and the cash flow was negatively affected by SEK 14 m.

The Danish distributor of ventilation fans, Juvenco, with an annual turnover of approximately SEK 13 m, was acquired on 19 April 2011. The purchase price amounted to SEK 12 m. The acquisition means that the consolidated goodwill increased by SEK 10 m and the cash flow was negatively affected by SEK 12 m. The company has 4 employees.

During the period January–December 2010, the property company Lindab Fastigheter AB was acquired (formerly LB Kiel Linden AB). The company leases out properties to Swedish companies in the Group. The purchase price amounted to SEK 1 m. At the end of March 2010, IVK-Tuote Oy in Finland was acquired for SEK 43 m. Because the acquisition was paid for using treasury shares, the cash flow from investing activities was only affected positively by the company's SEK 4 m in cash and cash equivalents.

Financial position

Net-debt decreased to SEK 1,747 m (1,856) at 31 December 2011. Currency fluctuations have had a marginal effect on the net debt during the year. In 2010, the strengthened Swedish krona resulted in the net-debt decreasing by approximately SEK 120 m. The equity/assets ratio amounted to 42 percent (42) and the net debtequity ratio was 0.6 (0.7).

Net financial income during the quarter was SEK –43 m(–44). For the period January–December, net financial income amounted to SEK –162 m (–172).

The existing credit agreement with Nordea and Handelsbanken has been extended. The total credit limit is SEK 3,000 m (previously SEK 3,500 m) and runs until February 2015.

Pledged assets and contingent liabilities

There have not been any significant changes to pledged assets and contingent liabilities during 2011.

The parent company

The parent company had no sales during the quarter. The after-tax result for the period amounted to SEK 59 m (61). For the period January–December, the corresponding result was SEK 0 m (9).

Noteworthy risks and uncertainties

There have been no changes to what was stated by Lindab in its Annual Report for 2010 under Risks and risk management (pages 94–98).

Employees

The number of employees at the end of the quarter, converted to full-time employment, totalled 4,347 (4,381).

Annual General Meeting 2012

The Board has decided that the Annual General Meeting will be held on 9 May 2012. Notice to attend the meeting will be sent out in due course.

Incentive programme

The Annual General Meeting 2011 decided, in accordance with the Board's proposal, to introduce a long-term incentive programme in the form of a performance-based share savings programme. The offer has been made to 92 participants in various management positions and senior executives at Lindab. Participation in the programme requires participants to make an initial investment in Lindab shares. The offer has been accepted by 79 people who have thereby acquired a total of 62,711 Lindab shares. Participation entitles the holder to receive new shares, provided that certain requirements are met. Performance is measured in the financial year for 2013 and compared to the financial year for 2010. On maximum allocation, 270,344 Lindab shares will be transferred to the participants. The cost of the programme is estimated to be about SEK 5 m. Further information can be found under Corporate Governance at www.lindabgroup.com.

The Lindab Share

The highest price paid for Lindab shares during the period January–December was SEK 95.80 on 18 January, and the lowest was SEK 31.84 on 14 December 2011. The closing price on 30 December 2011 was SEK 37.40. The average daily trading volume of Lindab shares was 159,200 shares per day (186,347).

Lindab holds 3,375,838 treasury shares (3,375,838), equivalent to 4.3 percent (4.3) of the total number of Lindab shares. The number of outstanding shares totals 75,331,982 (75,331,982), while the total number of shares is 78,707,820.

The biggest shareholders in relation to the number of outstanding shares are Ratos AB with 11.7 percent (11.7), Sjätte AP-fonden with 10.7 percent (10.7), Robur/Swedbank with 9.5 percent (9.9), Livförsäkringsaktiebolaget Skandia with 9.5 percent (11.2), and Lannebo Fonder with 7.0 percent (5.8). The holdings of the ten largest shareholders constitute 64.1 percent of the shares (63.5), excluding Lindab's own holding.

Proposed dividend to shareholders

Lindab's Board proposes that the Annual General Meeting on 9 May 2012 resolves to pay a dividend of SEK 1.00 per share, giving a total dividend of SEK 75 m. The proposed record day is 14 May 2012, after which it is estimated that the dividend will be paid on 18 May 2012.

Accounting principles

See note 1, page 18.

Unless otherwise specified in this Interim Report, all statements refer to the Group. Figures in parentheses indicate the outcome for the corresponding period in the previous year.

A compilation of key figures can be found on page 16.

One-off items are specified in note 5 on page 18.

Significant events following the close of the period

In light of the current economic climate, Lindab announced a new short term profitability target and a reworded growth target on 10 January:

  • Profitability target: The long-term target of 14 percent EBIT margin remains, but in the near term Lindab will target an EBIT margin of at least 10 percent.
  • Growth target: the annual organic growth shall exceed relevant construction market growth by 2–4 percentage points.

The cost reduction programme of SEK 150 m annually, described on page 4, was announced at the same time.

SALES REVENUE AND GROWTH

Oct-Dec 2011 Oct-Dec 2010 Jan-Dec 2011 Jan-Dec 2010
Sales revenue, SEK m 1,855 1,697 6,878 6,527
Change, SEK m 158 95 351 –492
Change, % 9 6 5 –7
Of which
Volumes and prices, % 10 12 9 –1
Acquisitions/divestments, % 0 1 0 0
Currency effects, % –1 –7 –4 –6

SALES REVENUE PER MARKET

SEK m Oct-Dec 2011 Oct-Dec 2010 Jan-Dec 2011 Jan-Dec 2010
Nordic region 891 765 3,158 2,911
Western Europe 486 462 1,949 1,926
CEE/CIS 431 412 1,553 1,416
Other markets 47 58 218 274
Total 1,855 1,697 6,878 6,527

SALES REVENUE FROM EXTERNAL CUSTOMERS BY SEGMENT (SALES REVENUE PER BUSINESS AREA)

SEK m Oct-Dec 2011 Oct-Dec 2010 Jan-Dec 2011 Jan-Dec 2010
Ventilation 938 870 3,612 3,535
Building Components 622 538 2,268 2,118
Building Systems 295 289 998 874
Other operations - - - -
Total 1,855 1,697 6,878 6,527
Gross internal sales all segments 5 6 32 27

OPERATING PROFIT (EBIT) AND RESULT BEFORE TAX (EBT)

SEK m Oct-Dec 2011 Oct-Dec 2010 Jan-Dec 2011 Jan-Dec 2010
Ventilation 45 32 221 189
Building Components 44 26 192 185
Building Systems 31 27 38 18
Other operations –13 –10 –44 –45
One-off items* –42 –110 –59 –63
Total (EBIT) 65 –35 348 284
Net financial income –43 –44 –162 –172
Result before tax (EBT) 22 –79 186 112

*) One-off items are described in Note 5 on page 18.

Ventilation business area

  • •Sales revenue for the fourth quarter amounted to SEK 938 m (870), an increase of 8 percent. Adjusted for currency effects and structure, sales revenue increased by 8 percent.
  • •Operating profit (EBIT) for the fourth quarter, excluding one-off items, amounted to SEK 45 m (32).
  • •Strengthened presence in the French market following the acquisition of a distributor.

Sales and markets

Sales revenue during the fourth quarter increased by 8 percent compared with the corresponding period the previous year, totalling SEK 938 m (870). Adjusted for currency effects and structure, sales revenue increased by 8 percent. The acquisitions of Juvenco, Airflux and Elia, plus the divestment of Benone, have marginally affected sales revenue during the quarter.

The business area's main segment is non-residential construction. Ventilation installations are generally conducted late in the construction phase so the recent increased market uncertainty has not affected demand. Sales in the business area are showing organic growth in all European regions. In the Nordic region, the three major markets of Sweden, Denmark and Norway, all contributed with positive growth. Demand has particularly increased in Denmark and Norway during the quarter. in Western Europe, the largest markets Germany and the UK show good growth. Central and Eastern Europe, which account for a small proportion of sales, have had very strong growth during the quarter, driven by the increased synergies with Building Systems in Belarus and the delivery of an order to Audi in Hungary.

Sales revenue for the year amounted to SEK 3,612 m (3,535). Adjusted for currency and structure, sales revenue increased by 5 percent.

The acquisitions made earlier in the year have shown positive growth during the quarter and the integration work has continued as planned.

Profit

Operating profit (EBIT) for the fourth quarter, excluding one-off items, amounted to SEK 45 m (32). The operating margin (EBIT) amounted to 4.8 percent (3.7). Higher volumes compared with the corresponding quarter last year are the reason for the improved profit.

One-off items for the quarter amounted to SEK –6 m (–110) and relate to restructuring costs. One-off items for the fourth quarter of 2010 related to the write-down of goodwill for the operating activities in Lindab Inc, USA.

Operating profit (EBIT) for the year, excluding oneoff items of SEK –23 m, amounted to SEK 221 m (189), corresponding to an increase of 17 percent. The operating margin (EBIT) for the year amounted to 6.1 percent (5.3).

Other

The market presence in southern France has been strengthened during the quarter through the acquisition of the French distributor Elia Sarl.

The business area has received a couple of significant orders during the quarter. An order of SEK 12 m is for a new production unit for Audi in Hungary, with deliveries commencing during the quarter. In December, an order was received worth just over SEK 10 m for a ventilation system in the construction of an underwater barrier that will protect Venice from flooding.

InCapsa was launched at the end of the quarter, a patent pending complete ventilation solution, which is aimed at improving energy efficiency for the residential sector in the Nordic market.

SALES REVENUE PER MARKET ROLLING 12 MONTHS, SEK M

SALES REVENUE PER QUARTER, SEK M

KEY FIGURES VENTILATION

Oct-Dec
2011
Oct-Dec
2010
Jan-Dec
2011
Jan-Dec
2010
Sales revenue, SEK m 938 870 3,612 3,535
Operating profit (EBIT)*, SEK m 45 32 221 189
Operating margin (EBIT)*, % 4.8 3.7 6.1 5.3
No. of employees at close of period 2,415 2,488 2,415 2,488

*) Excluding one-off items. One-off items are described in Note 5 on page 18.

INCAPSA

Lindab has developed a patent-pending "all-inone" system for energy-efficient ventilation, In-Capsa. It consists of Lindab's renowned ductsystem and discreet covering in white-lacquered steel. The ventilation installer completes the entire system including the covering five times quicker than with traditional methods.

Building Components business area

  • •Sales revenue for the fourth quarter amounted to SEK 622 m (538), an increase of 16 percent. Adjusted for currency effects, sales increased by 18 percent.
  • •Operating profit (EBIT) for the fourth quarter amounted to SEK 44 m (26).
  • •Record sales for the Swedish market.

Sales and markets

Sales revenue increased by 16 percent to SEK 622 m (538). Adjusted for currency effects, sales increased by 18 percent during the quarter.

The business area, which has sales within the residential and non-residential segments, showed strong growth during the quarter compared with the previous year. The mild winter has had a positive effect. Sales in the Nordic market are explained mainly by the extremely strong growth in the Swedish market, which recorded record sales both for the quarter and the full year. Sales in the CEE/CIS developed positively, driven mainly by the Czech Republic and Hungary, which are important markets for the business area.

Sales revenue for the year increased by 7 percent to SEK 2,268 m (2,118). Adjusted for currency and structure the increase was 10 percent.

Profit

Operating profit (EBIT) for the quarter, excluding one-off items, amounted to SEK 44 m (26). The operating margin (EBIT) amounted to 7.1 percent (4.8) for the quarter. Higher volumes are the reason for the improved profit. One-off items for the quarter amounted to SEK –20 m (0) and related to restructuring costs and the write-down of assets in production units in the CEE.

Operating profit (EBIT) for the year, excluding oneoff items of SEK –20m, amounted to SEK 192 m (185), corresponding to an increase of 4 percent. The operating margin (EBIT) for the year amounted to 8.5 percent (8.7).

Other

The focus on distribution is continuing and new branches opened during the quarter on the island of Gotland in Sweden and in southern Germany. The extended distribution is a co-operation with the Ventilation business area. 20 new Rainline/ Lindab centres were also added during the quarter.

The new roofing product, SRP Click, which was launched in 2011 and is aimed primarily at the residential market, has been positively received by customers.

In order to improve efficiency within production, the manufacture of façade cassettes has been moved from Farum in Denmark to the business area's central production unit in Förslöv, Sweden.

SALES REVENUE PER MARKET ROLLING 12 MONTHS, SEK M

SALES REVENUE PER QUARTER, SEK M

KEY FIGURES BUILDING COMPONENTS

Oct-Dec
2011
Oct-Dec
2010
Jan-Dec
2011
Jan-Dec
2010
Sales revenue, SEK m 622 538 2,268 2,118
Operating profit (EBIT)*, SEK m 44 26 192 185
Operating margin (EBIT)*, % 7.1 4.8 8.5 8.7
No. of employees at close of period 995 998 995 998

*) Excluding one-off items. One-off items are described in Note 5 on page 18.

RAINLINE

There is a Rainline colour for every taste. Here, a traditional Norwegian wood house beautifully complemented by Rainline roof drainage system in the colour Copper Metallic.

Building Systems business area

  • •Sales revenue for the fourth quarter amounted to SEK 295 m (289), an increase of 2 percent. Adjusted for currency effects, the increase amounted to 5 percent.
  • •Operating profit (EBIT) for the fourth quarter, excluding one-off items, amounted to SEK 31 m (27).
  • •Change of business area manager.

Sales and markets

Sales revenue increased by 2 percent to SEK 295 m (289) during the fourth quarter. Adjusted for currency effects, sales increased by 5 percent.

Sales for the business area showed positive growth but the growth rate is somewhat weaker than in previous quarters during the year. The order intake is higher than for the corresponding period in 2010, however.

Sales remained strong in Russia, which is the business area's largest market, and the important market in Belarus also continued to perform very well.

Sales revenue for the year increased by 14 percent to SEK 998 m (874). Adjusted for currency the increase was 21 percent.

Profit

Operating profit (EBIT) for the quarter, excluding one-off items, amounted to SEK 31 m (27). The operating margin (EBIT) amounted to 10.5 percent (9.3) for the quarter.

Higher volumes compared with the corresponding quarter last year are the reason for the improved profit. One-off items for the quarter amounted to SEK –16 m (0) and related to restructuring costs and costs relating to the change in management within the business area.

Operating profit (EBIT) for the year, excluding one-off items of SEK –16 m (65), amounted to SEK 38 m (18). The operating margin (EBIT) for the year amounted to 3.8 percent (2.1).

Other

During the quarter, Hans Berger, business unit manager for Lindab Inc., USA, has replaced Venant Krier as business area manager.

Six orders worth more than SEK 10 m each have been received in the CIS during the quarter, with four of these for Russia.

The new "Inside Gutter" integrated roof drainage was launched during the quarter.

SALES REVENUE PER MARKET ROLLING 12 MONTHS, SEK M

SALES REVENUE PER QUARTER, SEK M

KEY FIGURES BUILDING SYSTEMS

Oct-Dec
2011
Oct-Dec
2010
Jan-Dec
2011
Jan-Dec
2010
Sales revenue, SEK m 295 289 998 874
Operating profit (EBIT)*, SEK m 31 27 38 18
Operating margin (EBIT)*, % 10.5 9.3 3.8 2.1
No. of employees at close of period 821 788 821 788

*) Excluding one-off items. One-off items are described in Note 5 on page 18.

INNEOS

The "Inneos", building for a French business incubator in Buchelay, approximately 50 km from Paris, is hosting offices and business premises on two floors, as well as parking on the ground floor. The 6,000 m² Lindab building is formed of two separate buildings linked with a third one and was erected in one phase by Lindab builder ROC.

Statement of comprehensive income

(Income statement)

Amounts in SEK m Oct-Dec 2011 Oct-Dec 2010 Jan-Dec 2011 Jan-Dec 2010
Sales revenue 1,855 1,697 6,878 6,527
Cost of goods sold –1,365 –1,249 –4,987 –4,690
Gross profit 490 448 1,891 1,837
Other operating income 28 26 77 173
Selling expenses –254 –227 –939 –917
Administrative expenses –139 –124 –517 –519
R & D costs –11 –9 –40 –36
Other operating expenses –49 –149 –124 –254
Total operating expenses –425 –483 –1,543 –1,553
Operating profit (EBIT)* 65 –35 348 284
Interest income 3 4 8 9
Interest expenses –47 –46 –168 –179
Other financial income and expenses 1 –2 –2 –2
Net financial income –43 –44 –162 –172
Result before tax (EBT) 22 –79 186 112
Tax –27 –7 –95 –85
Profit for the period –5 –86 91 27
–thereof attributable to parent company
shareholders –5 –86 91 27
Other comprehensive income
Cash flow hedges 4 13 –2 1
Translation differences, foreign operations –126 –52 –54 –326
Income tax attributable to cash flow hedges –1 –3 1 0
Other comprehensive income –123 –42 –55 –325
Total comprehensive income –128 –128 36 –298
–thereof attributable to parent company
shareholders –128 –128 36 –298
Earnings per share, SEK
Undiluted –0.07 –1.14 1.21 0.36
Diluted –0.07 –1.14 1.21 0.36

*) One-off items are described in Note 5 on page 18.

Statement of cash flows

(Indirect method)

Amounts in SEK m Oct-Dec 2011 Oct-Dec 2010 Jan-Dec 2011 Jan-Dec 2010
Operating activities
Operating profit 65 –35 348 284
Reversal of depreciation/amortisation 45 146 163 280
Reversal of capital gains (–) / losses (+) reported in operating profit 1 9 4 –66
Provisions, not affecting cash flow 20 –5 6 –34
Adjustment for other items not affecting cash flow 17 –4 34 109
Total 148 111 555 573
Interest received 0 8 4 16
Interest paid –49 –47 –184 –172
Tax paid –9 45 –71 –25
Cash flow from operating activities before change in working capital 90 117 304 392
Change in working capital
Stock (increase – /decrease +) 215 176 68 –199
Operating receivables (increase – /decrease +) 245 348 –138 47
Operating liabilities (increase + /decrease –) –298 –317 111 151
Total change in working capital 162 207 41 –1
Cash flow from operating activities 252 324 345 391
Investing activities
Acquisition of Group companies –6 0 –32 4
Sales of Group companies - - 3 -
Investments in intangible fixed assets –12 –17 –32 –25
Investments in tangible fixed assets –33 –30 –111 –103
Change in financial fixed assets 0 0 0 0
Sale/disposal of intangible fixed assets 0 0 0 0
Sale/disposal of tangible fixed assets 8 62 22 365
Received Government grants - - 7 -
Cash flow from investing activities –43 15 –143 241
Financing activities
Increase +/decrease – in borrowing –256 –310 –127 –623
Warrant premium payments - 1 - 7
Dividend to shareholders - - –75 -
Cash flow from financing activities –256 –309 –202 –616
Cash flow for the period –47 30 0 16
Cash and cash equivalents at start of the period 295 212 239 248
Effect of exchange rate changes on cash and
cash equivalents –13 –3 –4 –25
Cash and cash equivalents at end of the period 235 239 235 239

Statement of financial position (Balance sheet)

Amounts in SEK m 31 Dec 2011 31 Dec 2010
Assets
Fixed assets
Goodwill 2,591 2,591
Other intangible fixed assets 66 61
Tangible fixed assets 1,084 1,161
Financial fixed assets, interest bearing 36 26
Other financial fixed assets 320 370
Total fixed assets 4,097 4,209
Current assets
Stock 962 1,040
Accounts receivable 1,023 897
Other current assets 154 164
Other receivables, interest bearing 8 21
Cash and bank 235 239
Total current assets 2,382 2,361
TOTAL ASSETS 6,479 6,570
Shareholders' equity and liabilities
Shareholders' equity
2,699 2,755
Long-term liabilities
Interest-bearing provisions 135 130
Interest-bearing liabilities 1,772 1,926
Provisions 338 352
Other long-term liabilities 13 12
Total long-term liabilities 2,258 2,420
Current liabilities
Interest-bearing liabilities 118 86
Provisions 49 43
Accounts payable 708 622
Other short-term liabilities 647 644
Total current liabilities 1,522 1,395
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 6,479 6,570

Statement of changes in equity

Equity relating to the parent company's shareholders
Amounts in SEK m Share
capital
Other
contributed
capital
Hedging
reserve
Foreign
currency
transl. adj.
Profit
brought
forward
Total equity
Opening balance, 1 January 2010 79 2,244 –8 372 316 3,003
Profit for the period 27 27
Other comprehensive income 1 –326 –325
Premiums for warrants1) 7 7
Transfer of treasury shares in company acquisition 43 43
Closing balance, 31 December 2010 79 2,251 –7 46 386 2,755
Opening balance, 1 January 2011 79 2,251 –7 46 386 2,755
Profit for the period 91 91
Other comprehensive income –1 –54 –55
Employee Incentive Programme 1 1
Hedging of option programme through share swaps2) –18 –18
Dividend to shareholders –75 –75
Closing balance, 31 December 2011 79 2,234 –8 –8 402 2,699

1) The Annual General Meeting in 2010 resolved to issue 784,000 warrant options to senior executives. 771,000 were subscribed to and SEK 7 m has been received as payment regarding these.

2) The 2011 Annual General Meeting resolved to implement a long-term share-based incentive programme. The offering has been aimed at 92 participants in various management positions and senior executives at Lindab. 79 have accepted the offer and have thus acquired 62,711 Lindab shares. Upon maximum allocation, 270,344 shares will be transferred to the participants. These have been secured through share swaps with third parties, which means no dilution occurs.

Share capital

The share capital of SEK 78,707,820 is divided among 78,707,820 shares with a face value of SEK 1.00. Lindab International holds 3,375,838 (3,375,838) treasury shares, corresponding to 4.3 percent (4.3) of the total number of Lindab shares, following the buy-back in 2008 and company acquisitions paid for using treasury shares in 2010.

Annual General Meeting

The Annual General Meeting on 11 May 2011 resolved to pay a dividend to shareholders of SEK 1.00 per share, corresponding to SEK 75 m. No dividend was paid in the previous year. The Annual General Meeting resolved that the remainder of the retained earnings of SEK 620 m would be carried forward.

The Annual General Meeting also resolved to introduce a long-term incentive programme in the form of a performance-based share savings programme for senior executives and key employees in the Group.

Parent company

Income statement

Amounts in SEK m Oct-Dec 2011 Oct-Dec 2010 Jan-Dec 2011 Jan-Dec 2010
Administrative expenses - –5 –3 2
Other operating income/expenses –2 2 –3 –11
Operating profit –2 –3 –6 –9
Profit from subsidiaries 111 111 111 111
Interest expenses, internal –30 –24 –106 –88
Result before tax 79 84 –1 14
Tax on profit for the period –20 –23 1 –5
Profit for the period* 59 61 0 9

*) Comprehensive income corresponds to profit for the period.

Balance sheet

Amounts in SEK m 31 Dec 2011 31 Dec 2010
Assets
Fixed assets
Shares in Group companies 3,467 3,467
Financial fixed assets, interest bearing 7 7
Other long-term receivables 2 4
Total fixed assets 3,476 3,478
Current assets
Other receivables 0 6
Cash and bank 7 1
Total current assets 7 7
TOTAL ASSETS 3,483 3,485
Shareholders' equity and liabilities
Shareholders' equity 1,407 1,482
Provisions
Interest-bearing provisions 10 8
Long-term liabilities
Liabilities to Group companies 2,064 1,991
Total provisions and long-term liabilities 2,074 1,999
Current liabilities
Non-interest-bearing liabilities 2 4
Total current liabilities 2 4
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 3,483 3,485

Key figures

Quarterly Periods
2011 2010 2009
Oct July April Jan Oct July April Jan Oct July April Jan
SEK m unless otherwise specified Dec Sept June March Dec Sept June March Dec Sept June March
Sales revenue 1,855 1,891 1,755 1,377 1,697 1,881 1,715 1,234 1,602 1,825 1,821 1,771
Operating profit, (EBITDA)1) 110 211 174 15 112 247 134 72 92 165 142 80
Operating profit, (EBITA)2) 65 172 135 –24 76 206 92 27 37 113 88 27
Depreciation/amortisation and write-downs 45 40 39 39 146 42 45 47 57 56 56 56
Operating profit, (EBIT)3) 65 172 135 –24 –35 205 89 25 34 110 85 25
Operating profit, (EBIT), excluding one-off items 107 172 135 –7 75 212 110 –50 34 145 97 25
After tax result –5 88 60 –52 –86 114 27 –28 5 37 13 –21
Total comprehensive income –128 86 153 –75 –128 13 –26 –157 29 –150 53 –74
Operating margin (EBITA), %4) 3.5 9.1 7.7 –1.7 4.5 11.0 5.4 2.2 2.3 6.2 4.8 1.5
Operating margin (EBIT), %5) 3.5 9.1 7.7 –1.7 –2.1 10.9 5.2 2.0 2.1 6.0 4.7 1.4
Operating margin (EBIT), excluding one-off items, % 5.8 9.1 7.7 –0.5 4.4 11.3 6.4 –4.1 2.1 7.9 5.3 1.4
Undiluted average number of shares, (000's) 75,332 75,332 75,332 75,332 75,332 75,332 75,332 74,810 74,772 74,772 74,772 74,772
Diluted average number of shares, (000's)6)
75,332 75,332 75,332 75,332 75,398 75,332 75,332 74,810 74,772 74,772 74,772 74,772
Undiluted number of shares, (000's) 75,332 75,332 75,332 75,332 75,332 75,332 75,332 75,332 74,772 74,772 74,772 74,772
Diluted number of shares, (000's)6) 75,332 75,332 75,332 75,332 75,398 75,332 75,332 75,332 74,772 74,772 74,772 74,772
Undiluted earnings per share, SEK7) –0.07 1.17 0.80 –0.69 –1.14 1.51 0.36 –0.37 0.07 0.49 0.17 –0.28
Diluted earnings per share, SEK8) –0.07 1.17 0.80 –0.69 –1.14 1.51 0.36 –0.37 0.07 0.49 0.17 –0.28
Cash flow from operating activities 252 115 217 –239 324 172 67 –172 245 329 332 –187
Cash flow from operating activities per share, SEK9) 3.35 1.54 2.88 –3.17 4.30 2.28 0.89 –2.30 3.28 4.40 4.44 –2.50
Total assets 6,479 7,207 7,122 6,674 6,570 7,275 7,482 7,206 7,442 7,781 8,226 8,492
Net debt10) 1,747 1,945 2,043 2,097 1,856 2,104 2,243 2,286 2,422 2,600 2,906 3,004
Net debt/equity ratio, times11) 0.6 0.7 0.7 0.8 0.7 0.7 0.8 0.8 0.8 0.9 0.9 0.9
Equity 2,699 2,827 2.758 2,680 2,755 2,882 2,869 2,889 3,003 2,969 3,119 3,272
Undiluted equity per share, SEK12) 35.83 37.53 36.61 35.58 36.57 38.26 38.08 38.35 40.16 39.71 41.71 43.76
Diluted equity per share, SEK13) 35.83 37.53 36.61 35.58 36.54 38.26 38.08 38.35 40.16 39.71 41.71 43.76
Equity/asset ratio, %14) 41.7 39.2 38.7 40.2 41.9 39.6 38.3 40.1 40.4 38.2 37.9 38.5
Return on equity, %15) 3.3 0.9 1.1
Return on capital employed, %16) 0.4 1.3 0.1 4.0 1.4 0.9 2.4 10.5 18.6
7.1 5.0 5.6 4.7 5.5 6.6 4.7 4.5 4.3 5.4 10.9 16.0
Return on operating capital, %17) 7.4 5.2 5.8 4.8 5.6 6.7 4.7 4.5 4.3 5.6 11.2 16.9
Return on operating capital, excluding one-off items, % 8.7 7.8 8.5 7.9 6.9 5.8 4.4 4.0 5.1 8.1 13.4 18.8
Return on (total) assets, %18) 5.2 3.6 4.1 3.5 4.1 4.9 3.5 3.4 3.3 4.0 8.0 11.6
Interest coverage ratio, times19) 1.5 4.1 3.4 –0.6 –0.7 4.4 2.0 0.6 1.0 3.1 2.5 0.1
No. of employees at close of period20) 4,347 4,491 4,487 4,395 4,381 4,485 4,444 4,394 4,435 4,714 4,898 4,981

*) Operating profit (EBITA) reported excluding one-off items, as reported originally.

Definitions

  • 1) The operating profit (EBITDA) comprises results before depreciation and before consolidated amortisation of surplus value on intangible assets.
  • 2) The operating profit (EBITA) comprises results following depreciation but before consolidated amortisation of surplus value on intangible assets.
  • 3) The operating profit (EBIT) comprises results before financial items and tax.
  • 4) The operating margin (EBITA) has been calculated as operating profit (EBITA) as a percentage of sales revenue during the period.

  • 5) The operating margin (EBIT) has been calculated as operating profit (EBIT) expressed as a percentage of sales revenue during the period.

  • 6) Calculation of the dilution from warrants issued by the Company is made in accordance with IAS 33. The calculation is only made when it can be assumed that the warrants will be redeemed, i.e. when the conversion price for the shares is lower than the average share price for the period.
  • 7) After tax result in relation to the undiluted average number of outstanding shares.

  • 8) After tax result in relation to the diluted average number of outstanding shares.

  • 9) Cash flow from operating activities in relation to the undiluted average number of outstanding shares during the period.
  • 10) The net debt consists of interest bearing liabilities and assets, as well as cash and bank.
  • 11) The net debt/equity ratio is expressed as the net debt in relation to shareholders' equity.
2009
2008
2007
2006
2011
2010
2009
2008
2007
2006
Oct
Oct
Oct
April
Jan
Dec
Dec
Dec
June
March
2,427
2,485
2,152
6,878
6,527
7,019
9,840
9,280
7,609
1,821
1,771
182
418
270
511
565
479
1,388
1,512
1,103
142
80
117
372
257
348
401
265
1,172
1,318
942
88
27
66
48
53
163
280
225
225
203
209
56
56
115
370
216
348
284
254
1,163
1,309
894
85
25
218
370
281
407
347
301
1,279
1,309
933
97
25
46
247
125
91
27
34
723
901
585
13
–21
295
329
98
36
–298
–142
1,124
1,035
439
53
–74
4.8
15.0
11.9
5.1
6.1
3.8
11.9
14.2
12.4

4.8
1.5
4.7
14.9
10.0
5.1
4.4
3.6
11.8
14.1
11.7
4.7
1.4
9.0
14.9
13.1
5.9
5.3
4.3
13.0
14.1
12.3
5.3
1.4
74,772 74,772 74,772 74,772
75,299
78,708
77,528
75,332
75,203
74,772
77,548
78,708
90,702
74,772 74,772 74,772 74,772
75,299
78,708
78,708
75,332
75,203
74,772
77,548
78,708
93,062
74,772 74,772 74,772 74,772
74,772
78,708
78,708
75,332
75,332
74,772
74,772
78,708
78,708
74,772 74,772 74,772 74,772
74,772
78,708
78,708
75,332
75,332
74,772
74,772
78,708
78,708
0.61
3.14
1.61
1.21
0.36
0.45
9.32
11.45
6.45
0.17
–0.28
0.61
3.14
1.59
1.21
0.36
0.45
9.32
11.45
6.29
0.17
–0.28
220
575
267
345
391
719
673
875
778
332
–187
2.92
7.31
3.39
4.58
5.20
9.62
8.68
11.12
8.58
4.44
–2.50
8,625
7,700
7,082
6,479
6,570
7,442
8,625
7,700
7,082
8,226
8,492
2,774
2,238
2,602
1,747
1,856
2,422
2,774
2,238
2,602
2,906
3,004
0.8
0.8
1.2
0.6
0.7
0.8
0.8
0.8
1.2
0.9
0.9
3,346
2,969
2,190
2,699
2,755
3,003
3,346
2,969
2,190
3,119
3,272
44.75
37.72
27.82
35.83
36.57
40.16
44.75
37.72
27.82
41.71
43.76
44.75
37.72
27.82
35.83
36.57
40.16
44.75
37.72
27.82
41.71
43.76
38.8
38.6
30.9
41.7
41.9
40.4
38.8
38.6
30.9
37.9
38.5
23.4
35.9
25.1
3.3
0.9
1.1
23.4
35.9
25.1
10.5
18.6
20.0
24.5
18.2
7.1
5.5
4.3
20.0
24.5
18.2
10.9
16.0
20.7
25.4
19.1
7.4
5.6
4.3
20.7
25.4
19.1
11.2
16.9
22.8
25.4
19.9
8.7
6.9
5.1
22.8
25.4
19.9
13.4
18.8
14.3
17.4
13.3
5.2
4.1
3.3
14.3
17.4
13.3
8.0
11.6
2.0
8.6
6.3
2.1
1.6
1.8
6.1
8.6
8.4
2.5
0.1
5,291
5,256
4,942
4,347
4,381
4,435
5,291
5,256
4,942
4,898
4,981
Full-year Periods
  • 12) Shareholders' equity in relation to the outstanding undiluted number of shares at the end of the period.
  • 13) Shareholders' equity in relation to the outstanding diluted number of shares at the end of the period.
  • 14) The equity ratio has been calculated as shareholders' equity as a percentage of total assets according to the balance sheet.
  • 15) Return on equity comprises the after-tax profit (rolling twelve-month value), as a percentage of the weighted average shareholders' equity** excluding shares without controlling interests.
  • 16) The return on capital employed comprises the pre-tax result plus financial items plus financial costs (rolling twelve-month value) as a percentage of capital employed**. Capital employed refers to total assets less noninterest-bearing provisions and liabilities.
  • 17) Return on operating capital comprises the operating profit (EBIT, rolling twelve months) as a percentage of average operating capital**. Operating capital refers to the total net debt and shareholders' equity.
  • 18) The return on (total) assets comprises the profit after financial items (EBT) plus financial costs (rolling twelve months) as a percentage of average total assets**.
  • 19) The interest coverage ratio has been calculated as the profit after financial items plus financial expenses in relation to financial expenses.
  • 20) The number of employees at the end of the period consists of the number of employees converted to full-time positions.

**) Average capital is based on the quarterly values.

Notes

NOTE 1 ACCOUNTING PRINCIPLES

The consolidated accounts for the fourth quarter and the period January–December 2011, as for the annual accounts for 2010, have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU, the Annual Accounts Act and the Swedish Financial Reporting Board RFR 1, Supplementary Accounting Rules for Groups.

This quarterly report has been prepared in accordance with IAS 34.

The Group uses the same accounting policies as described in the Annual Report for 2010. None of the new or revised standards, interpretations and improvements that have been adopted by the EU and that must be applied from 1 January 2011 have had an effect on the Group.

The parent company's financial statements are prepared in accordance with the Swedish Annual Accounts Act (ÅRL) and RFR 2, Accounting for legal entities, and according to the same principles that were applied to the Annual Report for 2010.

NOTE 2 EFFECTS OF CHANGES IN ACCOUNTING ESTIMATES

Significant estimates and assumptions are described in Note 4 in the Annual Report for 2010.

There have not been any changes made to anything that could have a material impact on the interim report.

NOTE 3 OPERATING SEGMENTS

Lindab's operations are managed and reported by business area, which is consistent with the segmentation.

The Ventilation business area offers duct systems and accessories, as well as indoor climate solutions for ventilation, cooling and heating. The Building Components business area offers steel products and systems for roof drainage, roof and wall cladding, as well as steel profiles for wall, roof and beam constructions. The Building Systems Systems business area offers complete pre-engineered steel building systems. Solutions comprise the entire outer shell with frames, walls, roofs and accessories. Other comprises parent company functions including Group Treasury.

Information about revenues from external customers, operating profit and the pre-tax result by operating segment is shown in the tables on page 7.

Revenues from other segments total small amounts and a breakdown of this sum by segment therefore does not offer any additional value.

Inter-segment transfer pricing is determined on an arms-length basis i.e. between parties that are independent of one another, are well informed and have an interest in the implementation of the transaction. Assets and investments are reported wherever the asset is located.

No changes have occurred in the fundamentals for segmentation or in the calculation of the segment's profit since the last Annual Report was issued.

Assets per segment that have changed by more than ten percent compared with the end of 2010 are shown below:

  • Ventilation: Other assets have increased by 12 percent since the start of the year.
  • Building Components: Other assets have increased by 24 percent since the start of the year.
  • Building Systems: Stock has decreased by 22 percent and other assets have decreased by 23 percent since the start of the year.

NOTE 4 TRANSACTIONS WITH RELATED PARTIES

Lindab's inner circle and the extent of transactions with related parties are described in note 30 of the 2010 Annual Report. IAS 24, Related party disclosures, has been amended and is effective for financial years beginning from and including January 2011. The changes have no impact on the Group however.

During the year, no transactions have taken place between Lindab and related parties that have had a significant impact on the company's position and results. However, the subsidiary Benone has been sold in part to the CEO in accordance with the resolution taken at the Annual General Meeting on 11 May 2011. The transfer does not have any material impact on the company's financial position and results.

NOTE 5 SPECIFICATION OF ONE-OFF ITEMS Reporting period outcome

Quarter
Current year
Ventilation Building
Components
Building
Systems
Other
operations
Total Operating profit
(EBIT) incl.
one-off items
Operating profit
(EBIT) excl.
one-off items
1/2011 –17 - - - –17 –24 –7
2/2011 - - - - - 135 135
3/2011 - - - - - 172 172
4/2011 –6 –20 –16 - –42 65 107
Total –23 –20 –16 - –59 348 407
Operating profit (EBIT) incl. one-off items, acc. 2011 198 172 22 –44 348
Operating profit (EBIT) excl. one-off items 221 192 38 –44 407
The previous year, acc. reporting period
1/2010 - - 75 - 75 25 –50
2/2010 –11 - –10 - –21 89 110
3/2010 –7 - - - –7 205 212
4/2010 –110 - - - –110 –35 75
Total –128 - 65 - –63 284 347
Operating profit (EBIT) incl. one-off items, acc. 2010 61 185 83 –45 284
Operating profit (EBIT) excl. one-off items 189 185 18 –45 347

Operating profit (EBIT) has been adjusted by the following one-off items per quarter:

1/2011 SEK –17 m regarding the transfer of Ventilation's production in St. Petersburg, Russia, to Tallinn, Estonia, and the change of business area manager.

4/2011 SEK –22 m relating to the cost-reduction programme and SEK –20 m relating the change in management for the Building Systems business area, and for the write-down of assets in production units in the CEE.

1/2010 SEK 75 m, relating to the capital gain on the sale of property in Diekirch, Luxembourg.

2/2010 SEK –21 m, mainly comprising restructuring costs.

3/2010 SEK –7 m, relating to the closure of the Ventilation unit in Texas in the USA.

4/2010 SEK –110 m, relating to the write-down of goodwill for the Ventilation business area's operations in the USA.

The interim report has been submitted following approval by the Board of Directors.

Båstad 13 February 2012

David Brodetsky President and CEO

The Auditors' review report

Auditors' report on the review of the interim report

To the Board of Directors of Lindab International AB (publ) Corporate ID no. 556606-5446

Introduction

We have performed a review of the condensed interim financial statements (fourth quarter and full year report) for Lindab International AB (publ) at December 31, 2011 and the twelve months' period then ended. The Board of Directors and the President are responsible for the preparation and presentation of this fourth quarter and full year report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this fourth quarter and full year report based on our review.

Scope of review

We conducted our review in accordance with the Standard on Review Engagements SÖG 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the International Standards on Auditing, ISA and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the fourth quarter and full year 2011 report, in all material aspects, is not prepared for the Group in accordance with IAS 34 and the Swedish Annual Accounts Act and for the Parent company in accordance with the Swedish Annual Accounts Act.

Båstad 13 February 2012

Bertel Enlund Authorised Accountant Ernst & Young AB

Staffan Landén Authorised Accountant

Ernst & Young AB

2012 financial reporting dates

Annual Report 2011 March/April 2012 Interim Report January–March, Q1 27 April 2012 Annual General Meeting 9 May 2012

For further information please contact:

David Brodetsky, CEO Per Nilsson, CFO Phone +46 (0) 431 850 00 Phone +46 (0) 431 850 00 E-mail [email protected] E-mail [email protected]

For more information please visit www.lindabgroup.com Subscribe to our customer magazine (Lindab Direct), press releases, Annual Reports and Interim Reports.

Lindab in brief

The Group had sales revenue of SEK 6,878 m in 2011 and is established in 31 countries with approximately 4,300 employees.

The main market is non-residential construction, which accounts for 80 per cent of sales, while residential accounts for 20 per cent of sales. During 2011, the Nordic market accounted for 46 percent, the CEE/CIS (Central and Eastern Europe plus other former Soviet states) for 23 percent, Western Europe for 28 percent and other markets for 3 percent of total sales.

The share is listed on the Nasdaq OMX Nordic Exchange, Stockholm List, Mid Cap, under the ticker symbol LIAB.

Business concept

Lindab develops, manufactures, markets and distributes products and system solutions in steel for simplified construction and improved indoor climate.

Business model

The business is carried out within three business areas, Ventilation, Building Components and Building Systems. The products are characterised by their high quality, ease of assembly, energy efficiency and environmentally-friendly design and are delivered with high levels of service. Altogether, this increases customer value.

Lindab's supply chain is characterised by a balance between centralised and decentralised functions. Steel is purchased and processed centrally. Parts of the production are highly automated (pressed ventilation and roof drainage fittings), others are located in low cost countries (mainly the Czech Republic) and some are local (e.g. bulky products). The distribution has been developed in order to be close to the customer. Sales for Ventilation and Building Components are made through more than 120 Lindab branches and more than 2,000 stock-keeping retailers, while Building Systems conducts sales through a network of more than 330 building contractors.

Business Areas: Ventilation

Duct systems with accessories, as well as solutions for ventilation, heating and cooling for a controlled indoor climate.

Building Components

Products and systems in sheet steel for roof drainage, roof and wall cladding, as well as steel profiles for walls, roof and beam constructions.

Building Systems

Pre-engineered steel building systems. A complete building solution comprising the outer shell with the main structure, wall, roof and accessories.

Lindab International AB

SE-269 82 Båstad Visiting address: Järnvägsgatan 41, Grevie Corporate identity number 556606-5446 Phone +46 ( 0 ) 431 850 00 Fax +46 ( 0 ) 431 850 10 E-mail [email protected] www.lindabgroup.com

The information here is that which Lindab International AB has willingly chosen to make public or that which it is obliged to make public according to the Swedish Securities Market Act and/or the Financial Instruments Trading Act. The information was made public on 14 February 2012 at 07.40.

Interim Report January–June, Q2 17 July 2012 Interim Report January–September, Q3 26 October 2012

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