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Lindab International

Earnings Release Nov 1, 2010

2938_10-q_2010-11-01_dde7956e-69c4-4919-bdc3-f93ac38e33fe.pdf

Earnings Release

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Third quarter

  • •Sales revenue increased by 3 percent to SEK 1,881 m (1,825), an increase of 8 percent when adjusted for currency and structure.
  • •Operating profit (EBIT) increased by 46 percent to SEK 212 m (145), excluding one-off items of SEK –7 m (–35).
  • •The operating margin (EBIT), excluding one-off items, amounted to 11.3 percent (7.9).
  • •The after-tax result amounted to SEK 114 m (37).
  • •Earnings per share amounted to SEK 1.51 (0.49).
  • •Cash flow from operating activities amounted to SEK 172 m (329).

January–September

  • •Sales revenue decreased by 11 percent to SEK 4,830 m (5,417), a decrease of 6 percent when adjusted for currency and structure.
  • •Operating profit (EBIT) amounted to SEK 272 m (267), excluding one-off items of SEK 47 m (–47).
  • •The operating margin (EBIT), excluding one-off items, amounted to 5.6 percent (4.9).
  • •The after-tax result amounted to SEK 113 m (29).
  • •Earnings per share amounted to SEK 1.50 (0.39).
  • •Cash flow from operating activities amounted to SEK 67 m (474).
  • •A contract concerning the sale and lease-back of property in January 2010 generated cash flow of SEK 285 m, with a capital gain of SEK 73 m.
  • •Acquisition of the Finnish ventilation company IVK-Tuote Oy.

Lindab's President and CEO, David Brodetsky comments:

Our third quarter performance confirmed recent trends and expectations: we have seen positive signs in the Nordic residential markets; the non-residential markets have stabilised and we have been able to recover the increased cost of steel in our sales prices.

" I'd particularly like to highlight the Building Components business area's excellent performance in the quarter. Sweden stands out especially as the top performing market with September being the best ever month on record for Building Components in this market. The Building Systems business area also did very well to turn around from a loss in Q3, 2009 to good profitability in Q3, 2010 in large part due to improved sales in Eastern Europe stemming from orders booked in Q2. The Ventilation business area's markets remain weak but stable.

In overall terms, the new strategy is directing focus, attention and resources to the business segments where Lindab has clear strengths and where we see the most attractive markets. Geographically, we have good positions throughout the Nordic region, Western Europe and CEE. Of course we'll work to strengthen these but we also see main growth regions in Russia and CIS. We are now in the implementation phase with many activities in each business area focusing on the areas that will drive stronger growth and profitability in the coming years.

The market outlook is unchanged. We expect the residential segment to continue to confirm its recovery, particularly in the Nordic region. The non-residential market, on the other hand, remains stable overall. External indicators continue to point to the start of a recovery in this segment in the 2nd half of 2011.

The Lindab Group, third quarter and the period January – September 2010

Sales and markets

Sales revenue during the third quarter amounted to SEK 1,881 m (1,825), which is an increase of 3 percent compared with the third quarter of 2009. Adjusted for currency effects and structural changes, the increase was 8 percent compared with the same period the previous year. Currency effects have negatively affected sales revenue by 6 percentage points during the period. Structural changes, relating to the sale of Folke Perforering in the third quarter of 2009 and the acquisition of the Finnish ventilation company IVK-Tuote Oy in the first half of 2010, have positively affected sales revenue by 1 percentage point.

During the quarter, sales in the Nordic region have risen by 6 percent. Adjusted for currency and structure the increase was 9 percent. Overall, the Swedish market is showing continued strong demand. Sales in Western Europe decreased by 1 percent during the quarter, when adjusted for currency effects sales increased by 7 percent. Sales in the CEE/CIS increased by 4 percent and after adjustment for currency the increase was 12 percent.

Demand in the various market segments differs. The residential market is showing the clearest improvement in demand, which is positively affecting sales within Building Components. The market for non-residential construction, which is the main market for Ventilation and Building Systems, is continuing to show weak demand overall.

Sales revenue for the period January–September amounted to SEK 4,830 m (5,417), which is a decrease of 11 percent compared with the corresponding period the previous year. Adjusted for currency and structure the decrease amounted to 6 percent, of which currency effects represent 5 percent.

Profit

Operating profit (EBIT) for the third quarter increased by 46 percent to SEK 212 m (145), excluding one-off items of SEK –7 m (–35). One-off items for the current year relate to the restructuring of the Ventilation business area's operations in the USA, announced in September. The restructuring focused mainly on the streamlining of production. The annual cost saving is calculated to be SEK 9 m. The previous year's costs relate to the closure of the Building Systems plant in Hungary and the restructuring work within the Ventilation business area.

Higher volumes are the main reason for the increased profit. The price of steel, which is Lindab's main raw material, rose considerably at the beginning of the third quarter. Lindab has imple-

Sales revenue per market Rolling 12 months, SEK m

mented price increases to compensate for this cost increase.

The operating margin (EBIT), excluding one-off items, for the period July–September amounted to 11.3 percent (7.9).

The pre-tax result for the period amounted to SEK 159 m (76). The after-tax result increased to SEK 114 m (37). Earnings per share amounted to SEK 1.51 (0.49).

After the third quarter, the rolling twelve-month operating profit (EBIT), excluding one-off items, amounted to SEK 306 m (485). This corresponds to a margin of 4.8 percent (6.2).

Operating profit (EBIT) for the period January– September, excluding one-off items, amounted to SEK 272 m. The previous year's profit was SEK 267 m. Including one-off items, the profit amounted to SEK 319 m (220). One-off items for the year total SEK 47 m, with SEK 26 m comprising costs for restructuring measures and a capital gain of SEK 73 m from the property transaction completed in the first quarter in Luxembourg. During the same period in 2009, the profit was affected by one-off costs totalling SEK 47 m net.

The previously announced cost-reduction programmes, which are now fully implemented, have altogether decreased costs by SEK 560 m annually compared with the situation in 2008. During 2010, the programme has lowered costs by SEK 100 m compared with the previous year.

The operating margin (EBIT) for the same period, excluding one-off items, amounted to 5.6 percent (4.9).

The pre-tax result for the first nine months of the year amounted to SEK 191 m (121). The after-tax result amounted to SEK 113 m (29).

Earnings per share amounted to SEK 1.50 (0.39).

Dilutive effects have not been taken into account for the share warrants in the incentive programmes since the average share price for both the quarter

Sales revenue, SEK m

and the year is lower than the conversion rates in each of the programmes.

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 quarter, which gradually becomes a stock reduction during the second and third quarters as a result of increased activity within the construction market. During the third quarter, however, the value of the stock has increased owing to higher steel prices.

Investments

Net investments in fixed assets for the quarter amounted to SEK 43 m (21). Investment in the new Building Systems plant in Yaroslavl, Russia, was completed during the quarter with the acquisition of land for SEK 12 m. Operations in Folke Perforering were divested in the previous year for SEK 15 m.

Investments for the period January–September, excluding acquisitions, amounted to SEK 81 m (134). Acquisition of Group companies consisted of shares in IVK-Tuote Oy, Finland,

Operating profit (EBIT), SEK m*)

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

which was acquired for SEK 43 m. Because the acquisition was paid for using treasury shares, the cash flow from investing activities has only been affected positively by the company's SEK 4 m in cash and cash equivalents. Sales of fixed assets amounted to SEK 303 m (18), with the largest item comprising the sale of the Building Systems plant in Luxembourg, amounting to SEK 285 m. A leaseback agreement has been signed with the buyer.

Cash flow

Cash flow from operating activities amounted to SEK 172 m for the third quarter compared with SEK 329 m for the same period the previous year. The difference of SEK 157 m consists primarily of increased working capital tied up of SEK 268 m. A higher operating profit of SEK 95 m offsets this to some extent.

Stock has increased by SEK 141 m during the quarter, largely due to substantial steel price increases. In the previous year, stock decreased by SEK 171 m during the corresponding period.

The cash flow from investing activities amounted to SEK –43 m (–7). Adjusted for acquisitions and divestments this was SEK –43 m (–21). Gross fixed assets were acquired for SEK 43 m (27) and divested for SEK 0 m (6).

For the first nine months of the year, cash flow from operating activities amounted to SEK 67 m (474). The difference compared to 2009 amounts to SEK 407 m, which is explained on the one hand by higher working capital tied up of SEK 565 m, which has a negative effect, and on the other hand a higher operating profit of SEK 99 m, which has a positive effect.

Working capital increased by SEK 208 m during the year, as opposed to the previous year's decrease of SEK 357 m, owing to higher capital tied up in stock and operating receivables, which is partly offset by increased accounts payable. In the previous year the stock was reduced substantially, positively affecting the cash flow.

The cash flow from investing activities amounted to SEK 226 m (–115). When adjusted for acquisitions and divestments this was SEK 222 m (–116). During the year, shares in IVK-Tuote Oy, Finland, have been acquired for SEK 43 m. Because the payment was made using treasury shares, the cash flow from investing activities has only been affected by the company's SEK 4 m in cash and cash equivalents. Furthermore, the property transaction in Luxembourg was completed with a sale price of SEK 285 m.

Financing activities for the period January–September resulted in a net cash flow of SEK –307 m (–351) consisting of changes in borrowing of SEK –313 m (–145) and the payment of SEK 6 m (-) in premiums for warrants in the third incentive programme.

Financial position

The net debt was SEK 2,104 m (2,600) at 30 September 2010. The strong Swedish krona has decreased the net debt by around SEK 100 m since the start of the year. The equity/assets ratio

Operating profit (EBIT) Rolling 12 months, SEK m*)

Cash flow from operating activities, SEK m

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

amounted to 40 percent (38) and the net debtequity ratio was 0.7 (0.9).

Net financial income during the quarter was SEK –46 m (–34). For the first nine months of the year, net financial income amounted to SEK –128 m (–99). The increase is due to increased interest expenses resulting from raised interest rates.

Since December 2007, Lindab has had a binding five-year credit agreement with Nordea and Handelsbanken. The total credit limit is SEK 3.5 bn with a maturity date of 17 December 2012.

Unused credit facilities amounted to SEK 1,577 m (2,152). The decrease is mainly due to the credit limit being reduced from SEK 4.5 bn to SEK 3.5 bn when the agreement was renegotiated during the fourth quarter of 2009.

Company acquisitions

The Finnish company IVK-Tuote Oy was acquired at the end of March 2010. The company produces and sells ventilation products for indoor climate. In 2009, the company had sales of EUR 6 m and an operating profit of EUR 0.7 m. It had 57 employees. The purchase price amounted to EUR 4.4 m which was paid through the transfer of 559,553 Lindab treasury shares. The acquisition means that the net debt increased by SEK 10 m and consolidated goodwill increased by SEK 9 m.

Depreciation/amortisation

The total depreciation/amortisation for the quarter was SEK 42 m (56), of which SEK 1 m (3) related to consolidated amortisation of surplus value on intangible assets. For the period January–September, depreciation amounted to SEK 134 m (168), of which SEK 6 m (8) related to consolidated amortisation of surplus value on intangible assets.

The lower depreciation is due mainly to restructuring measures and Lindab had a lower investment pace in recent years. The sale of the property in Luxembourg has also affected the depreciation costs. For certain surplus value on intangible assets, the depreciation has been completed during the quarter.

Tax

Tax expenses for the quarter amounted to SEK 45 m (39). The pre-tax result amounted to SEK 159 m (76), giving an effective tax rate of 28 percent (51). The Group's average tax rate for the quarter is calculated at 23 percent (39), through a weighting that is based on subsidiaries' pre-tax result (EBT) multiplied by the local tax rate.

A reconciliation of the effective tax rate for the quarter using the average tax rate shows the following: The difference amounts to 5 percentage points (12) and notably comprises various fiscal adjustments to reported profit, such as non-deductible expenses of 3 percentage points (5), tax attributable to previous years 0 percentage points (–7), as well as corrections to loss carry forwards 0 percentage points (13) and other items of 2 percentage points (1) net. The largest single item in the previous year was the reversal of a portion of deferred tax on the deficit in Germany of SEK 10 m.

Tax expenses for the first nine months of the year were SEK 78 m (92). The pre-tax profit amounted to SEK 191 m (121), giving an effective tax rate of 41 percent (76). The average tax rate for the Group has been calculated at 26 percent (35).

Pledged assets and contingent liabilities

During the first quarter, Lindab submitted floating charges equivalent to SEK 313 m as security for its credit agreement. Otherwise, there have not been any significant changes to pledged assets and contingent liabilities.

The Parent Company

The parent company had no sales during the quarter. The after-tax result for the period amounted to SEK –19 m (101). For the period January– September, the corresponding result was SEK –52 m (78).

Noteworthy risks and uncertainties

There have been no changes to what was stated by Lindab in its Annual Report for 2009 regarding Noteworthy risks and uncertainties (pages 93–97).

Annual General Meeting 2011

The board has decided that the Annual General Meeting will be held on 11 May 2011. Notice to attend the meeting will be sent out in due course.

Strategy and financial targets

Lindab hosted an Investor Day in Stockholm on 14 June at which the company's new vision, updated strategy and financial targets were presented.

The vision is: "to be the preferred partner for building professionals in Lindab's core products Europewide".

The updated strategy focuses on profitable growth with clearer and more detailed action plans for the future direction of the three business areas.

The same occasion was used to communicate the revised financial targets. The annual organic growth target has been raised from 6 percent to 8 percent, in light of the updated strategy and the assumptions regarding market growth. The operating margin target remains at 14 percent and this is judged to be realistic in good economic conditions. The target for the net debt equity ratio has been lowered from an interval of 1.0–1.4 times to 0.8–1.2 times, which is in line with historical levels.

Incentive programme

The 2010 Annual General Meeting decided to continue the three-year Incentive Programme introduced in 2008, with stage three implemented during May. Of the programme's 784,000 warrants, 52,000 have been reserved for incoming executives in 2010. The remaining 732,000 warrants have been fully subscribed to by participants in the programme. Newly recruited executives will be invited to subscribe later in the year, but with conditions applicable at this later date based on the Black-Scholes option pricing model.

The price per warrant was established at SEK 8.40, entitling the holder to one share in Lindab International for SEK 93.00 between 1 June 2012 and 31 May 2013.

Employees

The number of employees at the end of the quarter, converted to full-time employment, totalled 4,485 (4,714) which is an increase of 50 people since the start of the year. Adjusted for the acquisition of IVK-Tuote Oy, the number of employees decreased by 6.

The Lindab Share

The highest price paid for Lindab shares during the period January–September was SEK 99.50 on 30 September, and the lowest was SEK 61.25 on 26 February. The closing price on 30 September 2010 was SEK 97.65. The average daily trading volume of Lindab shares was 140,131 shares per day (137,204).

Lindab holds 3,375,838 treasury shares (3,935,391), equivalent to 4.3 percent (5.0) of the total number of Lindab shares. The share buy-back was completed in 2008. The decrease is due to the acquisition of IVK-Tuote Oy paid using Lindab treasury shares, in which 559,553 shares were transferred to the seller of the company. The number of outstanding shares has therefore increased to 75,331,982 (74,772,429).

The biggest shareholders in relation to the number of outstanding shares are Ratos AB with 23.5 percent (23.7), Livförsäkringsaktiebolaget Skandia with 11.6 percent (12.6), Sjätte AP-fonden with 10.6 percent (11.8), Robur/Swedbank with 8.5 percent (7.3) and Lannebo Fonder with 4.6 percent (4.2). The holdings of the ten largest shareholders constitute 73.5 percent of the shares (75.1), excluding Lindab's own holding.

New segment reporting

From 1 January 2010, Lindab reports in three segments: the business areas of Ventilation, Building Components and Building Systems (the latter two were formerly included in the Profile business area). Historical financial information for the new segment breakdown is available on the Group's website, www.lindabgroup.com, under Investor Relations, Financial information.

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.

Sales revenue and growth

July-Sept 2010 July-Sept 2009 Jan-Sept 2010 Jan-Sept 2009 Jan-Dec 2009
Sales revenue, SEK m 1,881 1,825 4,830 5,417 7,019
Change, SEK m 56 –892 –587 –1,996 –2,821
Change, % 3 –33 –11 –27 –29
Of which
Volumes and prices, % 8 –37 –6 –34 –33
Acquisitions/divestments, % 1 1 0 2 1
Currency effects, % –6 3 –5 5 3

Sales revenue per market

SEK m July-Sept 2010 July-Sept 2009 Jan-Sept 2010 Jan-Sept 2009 Jan-Dec 2009
Nordic region 809 764 2,146 2,273 2,986
Western Europe 538 544 1,464 1,750 2,220
CEE/CIS 457 439 1,004 1,131 1,487
Other markets 77 78 216 263 326
Total 1,881 1,825 4,830 5,417 7,019

Sales revenue from external customers by segment (Sales revenue per business area)

SEK m July-Sept 2010 July-Sept 2009 Jan-Sept 2010 Jan-Sept 2009 Jan-Dec 2009
Ventilation 924 953 2,665 3,017 3,878
Building Components 695 650 1,580 1,601 2,144
Building Systems 262 219 585 780 978
Other operations - 3 - 19 19
Total 1,881 1,825 4,830 5,417 7,019
Gross internal sales all segments 10 9 21 21 28

Operating profit (EBIT) and result before tax (EBT)

SEK m July-Sept 2010 July-Sept 2009 Jan-Sept 2010 Jan-Sept 2009 Jan-Dec 2009
Ventilation 70 76 157 173 190
Building Components 123 93 159 91 135
Building Systems 28 –12 –9 25 7
Other operations –9 –12 –35 –22 –31
One-off items1) –7 –35 47 –47 –47
Total (EBIT) 205 110 319 220 254
Net financial income –46 –34 –128 –99 –135
Result before tax (EBT) 159 76 191 121 119

1) Operating profit (EBIT) for the third quarter of 2010 has been adjusted by SEK 7 m, relating to the closure of Ventilation's unit in Texas, USA.

For the nine month period of 2010, there is an additional preliminary estimated capital gain of SEK 73 m on the sale of property in Luxembourg plus restructuring costs.

The operating profit (EBIT) for the third quarter of 2009 has been adjusted by SEK –45 m relating to the cost reduction programme plus a return of SEK 10 m from the sale of Folke Perforering.

For the nine month period in 2009 there is an additional one-off cost of SEK 12 m relating to the closure of Lindab Plåt in Edsvära, Sweden.

Ventilation business area

  • •Sales revenue during the third quarter amounted to SEK 924 m (953), a decrease of 3 percent. Adjusted for currency effects and structure, sales increased by 1 percent.
  • •The operating profit (EBIT), excluding one-off items, decreased by 8 percent to SEK 70 m (76).
  • •Market remains weak unchanged demand.

Sales and markets

Sales revenue during the third quarter fell by 3 percent to SEK 924 m (953). Currency effects have reduced sales by 6 percentage points. The acquisition of IVK-Tuote Oy has positively affected sales by 2 percentage points. Price increases have positively affected sales revenue.

Demand within non-residential construction has been weak in most markets during the year, particularly in new construction that represents more than half of sales. The main markets for the business area, Nordic and Western Europe, showed a stabilisation in demand, albeit with wide variations between individual countries. In the Nordic region, the Swedish together with the Finnish market is showing a positive trend in demand. In Western Europe, the main markets UK and Germany are showing unchanged demand.

The Finnish company acquired in the first quarter, IVK-Tuote Oy, has performed positively and the integration work is proceeding to plan.

Sales for the first nine months of the year decreased by 12 percent to SEK 2,665 m (3,017). Adjusted for currency and structure the decrease was 7 percent.

Profit

The operating profit (EBIT) for the third quarter, excluding one-off items, amounted to SEK 70 m (76), which is a decrease of 8 percent compared with the previous year. The operating margin (EBIT) amounted to 7.6 percent (8.0). The reduced margin is explained by certain price pressures, but this is partially offset by lower fixed costs. One-off items amount to SEK –7 m and relate to a restructuring and streamlining of production in operations in the USA. The unit in Texas is being closed down and all production will take place in Portsmouth, Virginia. The annual cost saving is calculated at SEK 9 m and will take effect beginning in the fourth quarter of 2010. A total of 20 people are affected by the closure.

Operating profit (EBIT) for the first nine months of the year, excluding one-off items, amounted to SEK 157 m (173), which is a decrease of 9 percent.

Other

In order to focus operations and improve profitability, Lindab has signed a lease contract for a new factory directly adjacent to Lindab's existing major production unit in Karlovarska, outside Prague in the Czech Republic. The new factory, measuring 10,000 m2, provides space for further streamlining and centralisation of mainly indoor climate products (Comfort). The new factory is expected to be in operation during the second quarter of 2011.

Sales revenue per market Rolling 12 months, SEK m

Sales revenue per quarter, SEK m

Key figures Ventilation

July-Sept 2010 July-Sept 2009 Jan-Sept 2010 Jan-Sept 2009 Jan-Dec 2009
Sales revenue, SEK m 924 953 2,665 3,017 3,878
Operating profit (EBIT), SEK m1) 70 76 157 173 190
Operating margin (EBIT), %1) 7.6 8.0 5.9 5.7 4.9
No. of employees at close of period 2,519 2,659 2,519 2,659 2,555

1) Operating profit (EBIT) for the third quarter of 2010 has been adjusted by SEK 7 m, relating to the closure of Ventilation's unit in Texas, USA. For the nine month period of 2010, there are additional restructuring costs of SEK 11 m.

The operating profit (EBIT) for the third quarter and full year 2009 has been adjusted for one-off costs of SEK 19 m relating to the cost reduction programme.

Building Components business area

  • •Sales revenue during the third quarter amounted to SEK 695 m (650), an increase of 7 percent. Adjusted for currency effects the increase was 13 percent.
  • •The operating profit (EBIT), excluding one-off items, increased by 32 percent to SEK 123 m (93).
  • •Good demand during the quarter.

Sales and markets

Sales revenue rose by 7 percent to SEK 695 m (650) during the third quarter. Adjusted for currency fluctuations, sales increased by 13 percent during the quarter. Price increases to compensate for higher steel prices have positively affected sales revenue.

Building Components has seen good demand during the quarter, driven primarily by the Swedish market, which had its best ever sales month in September. All regions have shown organic growth during the quarter.

Sales for the first nine months of the year decreased by 1 percent to SEK 1,580 m (1,601). Adjusted for currency and structure sales increased by 3 percent.

Profit

Operating profit (EBIT) for the quarter, excluding one-off items, amounted to SEK 123 m (93), which is an improvement of 32 percent compared with the previous year. The operating margin (EBIT) amounted to 17.7 percent (14.3) for the quarter. Higher volumes are the main reason for the increased profit.

Operating profit (EBIT) for the first nine months of the year, excluding one-off items, amounted to SEK 159 m (91).

Other

Activities in line with the updated strategy are being implemented at a high pace. The Rainline roof drainage system is being given great priority and more than 40 Rainline Centres are now open in the CEE/CIS aimed at increasing the market penetration within the residential segment.

Sales revenue per market Rolling 12 months, SEK m

Sales revenue per quarter, SEK m

Key figures Building Components

July-Sept 2010 July-Sept 2009 Jan-Sept 2010 Jan-Sept 2009 Jan-Dec 2009
Sales revenue, SEK m 695 650 1,580 1,601 2,144
Operating profit (EBIT), SEK m1) 123 93 159 91 135
Operating margin (EBIT), %1) 17.7 14.3 10.1 5.7 6.3
No. of employees at close of period 1,090 1,070 1,090 1,070 1,003

1) Operating profit (EBIT) for the nine month period in 2009 has been adjusted by SEK 12 m in one-off costs relating to Lindab Plåt in Edsvära, Sweden, which was part of the cost reduction programme.

For the full year 2009, there are additional restructuring costs of SEK 12 m.

Building Systems business area

  • •Sales revenue during the third quarter amounted to SEK 262 m (219), an increase of 20 percent. Adjusted for currency effects the increase was 29 percent.
  • •Operating profit (EBIT), excluding one-off items, amounted to SEK 28 m (–12).
  • •Continued positive signals from the Russian market.

Sales and markets

Sales revenue rose by 20 percent to SEK 262 m (219) during the third quarter. Currency effects have negatively affected sales by 9 percent during the quarter. Deliveries relating to the strong order intake in the second quarter have begun. Price increases have been implemented to compensate for higher steel prices.

The main market, new construction of industrial buildings, remains weak in general. However, individual markets such as Russia and Poland show continued improvements.

Sales revenue for the first nine months of the year decreased by 25 percent to SEK 585 m (780). Adjusted for currency and structure the decrease was 19 percent.

Profit

Operating profit (EBIT) for the period, excluding one-off items, amounted to SEK 28 m (–12). The operating margin (EBIT) amounted to 10.7 percent (–5.5) for the quarter. One-off items for 2009 amounted to SEK 26 m, and refer to costs relating to the closure of the production unit in Hungary. Higher volumes and improved margins are the main reasons for the increased profit.

Operating profit (EBIT) for the first nine months of the year, excluding one-off items, amounted to SEK –9 m (25).

In the first quarter, a property was sold in Luxembourg generating SEK 285 m in cash flow and a capital gain of SEK 73 m. A lease-back agreement was simultaneously agreed for the same property.

Other

In line with the updated strategy, certain labour intensive production has been moved from Luxembourg to the Czech Republic. Capacity increases and efficiency measures have also been implemented in the Russian production plant in Yaroslavl. The investment was completed during the quarter with the acquisition of land.

Sales revenue per market Rolling 12 months, SEK m

Sales revenue per quarter, SEK m

Key figures Building Systems

July-Sept 2010 July-Sept 2009 Jan-Sept 2010 Jan-Sept 2009 Jan-Dec 2009
Sales revenue, SEK m 262 219 585 780 978
Operating profit (EBIT), SEK m1) 28 –12 –9 25 7
Operating margin (EBIT), %1) 10.7 –5.5 –1.5 3.2 0.7
No. of employees at close of period 773 854 773 854 756

1) Operating profit (EBIT) for the nine month period in 2010 has been adjusted by SEK 65 m, primarily relating to the preliminary estimated capital gain of SEK 73 m on the sale of property in Luxembourg plus costs for the closure of the Building Systems plant in Hungary.

In the previous year, a provision of SEK 26 m was made during the third quarter for restructuring costs. For the full year, the provision decreased to SEK 14 m.

Statement of comprehensive income (Income statement)

Rolling 12 M
Oct 2009–
Amounts in SEK m July-Sept 2010 July-Sept 2009 Jan-Sept 2010 Jan-Sept 2009 Sept 2010 Jan-Dec 2009
Sales revenue 1,881 1,825 4,830 5,417 6,432 7,019
Cost of goods sold –1,300 –1,296 –3,441 –3,941 –4,637 –5,137
Gross profit 581 529 1,389 1,476 1,795 1,882
Other operating income 8 31 147 118 174 145
Selling expenses –222 –233 –690 –765 –961 –1,036
Administrative expenses –132 –131 –395 –413 –521 –539
R & D costs –9 –13 –27 –39 –35 –47
Other operating expenses –21 –73 –105 –157 –99 –151
Total operating expenses –376 –419 –1,070 –1,256 –1,442 –1,628
Operating profit (EBIT)1) 205 110 319 220 353 254
Interest income 2 3 5 9 9 13
Interest expenses –46 –33 –133 –101 –174 –142
Other financial income and expenses –2 –4 0 –7 1 –6
Net financial income –46 –34 –128 –99 –164 –135
Result before tax (EBT) 159 76 191 121 189 119
Tax –45 –39 –78 –92 –71 –85
After tax result 114 37 113 29 118 34
–thereof attributable to parent company
shareholders 114 37 113 29 118 34
Other comprehensive income
Cash flow hedges 3 - –12 - –22 –11
Translation differences, foreign operations –103 –187 –274 –200 –243 –168
Income tax attributable to cash flow hedges –1 - 3 - 6 3
Other comprehensive income –101 –187 –283 –200 –259 –176
Total comprehensive income 13 –150 –170 –171 –141 –142
–thereof attributable to parent company
shareholders 13 –150 –170 –171 –141 –142
Earnings per share, SEK
Undiluted 1.51 0.49 1.50 0.39 1.56 0.45
Diluted 1.51 0.49 1.50 0.39 1.56 0.45
Dilutive effects have not been taken into account for share warrants in incentive programmes since the average share price is lower than the conversion rates in each of the programmes.
1) The operating profit (EBIT) has been affected by one-off items
amounting to: –7 –35 47 –47 47 –47
Operating profit (EBIT) excl. one-off items 212 145 272 267 306 301

Operating profit (EBIT) for the third quarter of 2010 has been adjusted by SEK 7 m, relating to the closure of Ventilation's unit in Texas, USA.

For the nine month period of 2010, there is an additional preliminary estimated capital gain of SEK 73 m on the sale of property in Luxembourg plus restructuring costs.

The operating profit (EBIT) for the third quarter of 2009 has been adjusted by SEK –45 m relating to the cost reduction programme plus a return of SEK 10 m from the sale of Folke Perforering.

For the nine month period in 2009 there is an additional one-off cost of SEK 12 m relating to the closure of Lindab Plåt in Edsvära, Sweden.

Statement of financial position (Balance sheet)

Amounts in SEK m 30 Sept 2010 30 Sept 2009 31 Dec 2009
Assets
Fixed assets
Goodwill 2,722 2,861 2,922
Other intangible fixed assets 49 61 61
Tangible fixed assets1) 1,166 1,559 1,336
Financial fixed assets, interest bearing 25 7 25
Other financial fixed assets 389 362 454
Total fixed assets 4,351 4,850 4,798
Current assets
Stock 1,200 1,001 896
Accounts receivable 1,212 1,263 976
Other current assets 265 345 304
Other receivables, interest bearing 35 56 3
Non-current assets held for sale1) - - 217
Cash and bank 212 266 248
Total current assets 2,924 2,931 2,644
TOTAL ASSETS 7,275 7,781 7,442
Shareholders' equity and liabilities
Shareholders' equity 2,882 2,969 3,003
Long-term liabilities
Interest-bearing provisions 124 108 133
Interest-bearing liabilities 2,083 2,740 2,384
Provisions 355 353 444
Other long-term liabilities 12 15 15
Total long-term liabilities 2,574 3,216 2,976
Current liabilities
Interest-bearing liabilities 170 81 181
Provisions 48 103 74
Accounts payable 762 595 550
Other short-term liabilities 839 817 658
Total current liabilities 1,819 1,596 1,463
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 7,275 7,781 7,442

1) Non-current assets held for sale at 31-12-2009 refer to the Building Systems production facilities in Nyiregyháza, Hungary and in Diekirch, Luxembourg.

Statement of cash flows

(Indirect method)

Amounts in SEK m July-Sept 2010 July-Sept 2009 Jan-Sept 2010 Jan-Sept 2009 Rolling 12 M
Oct 2009–
Sept 2010
Jan-Dec 2009
Operating activities
Operating profit 205 110 319 220 353 254
Reversal of depreciation/amortisation 42 56 134 168 191 225
Reversal of capital gains (–) / losses (+)
reported in operating profit 15 0 –75 0 –72 3
Provisions, not affecting cash flow –7 14 –29 –49 –47 –67
Adjustment for other items not affecting
cash flow
69 21 113 13 94 –6
Total 324 201 462 352 519 409
Interest received 2 6 8 9 10 11
Interest paid –49 –20 –125 –112 –173 –160
Tax paid –13 –34 –70 –132 –62 –124
Cash flow from operating activities before
change in working capital 264 153 275 117 294 136
Change in working capital
Stock (increase – /decrease +) –141 171 –375 617 –270 722
Operating receivables (increase – /decrease +) 28 8 –301 4 –3 302
Operating liabilities (increase + /decrease –) 21 –3 468 –264 291 –441
Total change in working capital –92 176 –208 357 18 583
Cash flow from operating activities 172 329 67 474 312 719
Investing activities
Acquisition of Group companies 0 –1 4 –14 –27 –45
Divestment of operations - 15 - 15 - 15
Investments in intangible fixed assets –3 –4 –8 –13 –15 –20
Investments in tangible fixed assets –40 –23 –73 –121 –114 –162
Change in financial fixed assets
Sale/disposal of intangible fixed assets
0
0
0
2
0
0
0
2
1
0
1
2
Sale/disposal of tangible fixed assets 0 4 303 16 308 21
Cash flow from investing activities –43 –7 226 –115 153 –188
Financing activities
Increase +/decrease – in borrowing –193 –363 –313 –145 –508 –340
Warrant premium payments - - 6 - 11 5
Dividend to shareholders - - - –206 - –206
Cash flow from financing activities –193 –363 –307 –351 –497 –541
Cash flow for the period –64 –41 –14 8 –32 –10
Cash and cash equivalents at start of the period 281 307 248 258 266 258
Effect of exchange rate changes on cash and
cash equivalents –15 0 –22 0 –22 0
Cash and cash equivalents at end of the period 212 266 212 266 212 248

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 2009 79 2,239 - 540 488 3,346
Total comprehensive income –8 –168 34 –142
Premiums for warrants1) 5 5
Dividend to shareholders –206 –206
Closing balance, 31 December 2009 79 2,244 –8 372 316 3,003
Opening balance, 1 January 2010 79 2,244 –8 372 316 3,003
Total comprehensive income –9 –274 113 –170
Premiums for warrants2) 6 6
Transfer of treasury shares in company acquisition 43 43
Closing balance, 30 September 2010 79 2,250 –17 98 472 2,882

1) The Annual General Meeting in 2009 resolved to issue 784,000 warrants to senior executives. SEK 5 m has been received as payment regarding these. 2) The Annual General Meeting in 2010 resolved to issue 784,000 warrants to senior executives. SEK 6 m has been received as payment regarding these.

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 (3,935,391) treasury shares, corresponding to 4.3 percent (5.0) of the total number of Lindab shares, following the buy-back in 2008. In the first quarter of 2010, the purchase price of EUR 4.4 m or SEK 43 m was paid for IVK-Tuote Oy through the transfer of 559,553 treasury shares.

Dividend to shareholders for the financial year 2009

The Annual General Meeting held on 11 May 2010 resolved that no dividend would be paid to shareholders.

Options

The 2010 Annual General Meeting resolved to continue the three year incentive programme that was introduced in 2008. The programme has the same structure as the ones subscribed to in 2008 and 2009.

Parent company

Income statement

Amounts in SEK m July-Sept 2010 July-Sept 2009 Jan-Sept 2010 Jan-Sept 2009 Jan-Dec 2009
Administrative expenses –2 –5 –6 –13 –15
Other operating expenses - 0 - –1 -
Operating profit –2 –5 –6 –14 –15
Profit from subsidiaries - 107 - 107 186
Interest expenses, internal –23 –3 –64 –24 –40
Result before tax –25 99 –70 69 131
Tax on profit for the period 6 2 18 9 –4
After tax result –19 101 –52 78 127

Balance sheet

Amounts in SEK m 30 Sept 2010 30 Sept 2009 31 Dec 2009
Assets
Fixed assets
Shares in Group companies 3,467 3,467 3,467
Financial fixed assets, interest bearing 11 - 11
Other long-term receivables 20 9 2
Total fixed assets 3,498 3,476 3,480
Current assets
Other receivables 10 24 18
Cash and bank 0 0 0
Total current assets 10 24 18
TOTAL ASSETS 3,508 3,500 3,498
Shareholders' equity and liabilities
Shareholders' equity 1,421 1,381 1,430
Long-term liabilities
Interest-bearing provisions 11 - 11
Liabilities to Group companies 2,073 2,111 2,051
Total long-term liabilities 2,084 2,111 2,062
Current liabilities
Non-interest-bearing liabilities 3 8 6
Total current liabilities 3 8 6
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 3,508 3,500 3,498

Key figures

Quarterly Periods
2010 2009 2008
July April Jan Oct July April
Jan
Oct July April Jan
SEK m unless otherwise specified Sept June March Dec Sept June
March
Dec Sept June March
Sales revenue 1,881 1,715 1,234 1,602 1,825 1,821
1,771
2,427 2,717 2,567 2,129
Operating profit, (EBITDA)1) 247 134 72 92 165 142
80
182 496 448 262
Operating profit, (EBITA)2) 206 92 27 37 113 88
27
117 447 399 209
Depreciation/amortisation 42 45 47 57 56 56
56
66 52 52 55
Operating profit, (EBIT)3) 205 89 25 34 110 85
25
115 445 396 207
Operating profit, (EBIT), excluding one-off items 212 110 –50 34 145 97
25
218 458 396 207
After tax result 114 27 –28 5 37 13
–21
46 294 266 117
Total comprehensive income 13 –26 –157 29 –150 53
–74
295 404 345 80
Operating margin (EBITA), %4) 11.0 5.4 2.2 2.3 6.2 4.8
1.5
4.8 16.5 15.5 9.8
Operating margin (EBIT), %5) 10.9 5.2 2.0 2.1 6.0 4.7
1.4
4.7 16.4 15.4 9.7
Operating margin (EBIT), excluding one-off items, % 11.3 6.4 –4.1 2.1 7.9 5.3
1.4
9.0 16.9 15.4 9.7
Undiluted average number of shares, (000's) 75,332 75,332 74,810 74,772 74,772 74,772 74,772 75,299 77,502 78,708 78,708
Diluted average number of shares, (000's)6) 75,332 75,332 74,810 74,772 74,772 74,772 74,772 75,299 77,502 78,708 78,708
Undiluted number of shares, (000's) 75,332 75,332 75,332 74,772 74,772 74,772 74,772 74,772 75,770 78,708 78,708
Diluted number of shares, (000's)6) 75,332 75,332 75,332 74,772 74,772 74,772 74,772 74,772 75,770 78,708 78,708
Undiluted earnings per share, SEK7) 1.51 0.36 –0.37 0.07 0.49 0.17
–0.28
0.61 3.79 3.38 1.49
Diluted earnings per share, SEK8) 1.51 0.36 –0.37 0.07 0.49 0.17
–0.28
0.61 3.79 3.38 1.49
Cash flow from operating activities 172 67 –172 245 329 332
–187
220 127 317 17
Cash flow from operating activities per share, SEK9) 2.28 0.89 –2.30 3.28 4.40 4.44
–2.50
2.92 1.64 4.03 0.22
Total assets 7,275 7,482 7,206 7,442 7,781 8,226
8,492
8,625 9,059 8,320 7,652
Net debt10) 2,104 2,243 2,286 2,422 2,600 2,906
3,004
2,774 2,863 2,430 2,270
Net debt/equity ratio, times11) 0.7 0.8 0.8 0.8 0.9 0.9
0.9
0.8 0.9 0.8 0.7
Equity 2,882 2,869 2,889 3,003 2,969 3,119
3,272
3,346 3,102 2,995 3,049
Undiluted equity per share, SEK12)
38.26 38.08 38.35 40.16 39.71 41.71
43.76
44.75 40.94 38.05 38.74
Diluted equity per share, SEK13) 38.26 38.08 38.35 40.16 39.71 41.71
43.76
44.75 40.94 38.05 38.74
Equity/asset ratio, %14) 39.6 38.3 40.1 40.4 38.2 37.9
38.5
38.8 34.2 36.0 39.8
Return on equity, %15) 4.0 1.4 0.9 1.1 2.4 10.5
18.6
23.4 31.3 33.9 33.8
Return on capital employed, %16) 6.6 4.7 4.5 4.3 5.4 10.9
16.0
20.0 25.0 25.3 24.4
Return on operating capital, %17) 6.7 4.7 4.5 4.3 5.6 11.2
16.9
20.7 26.0 26.3 25.3
Return on operating capital, excluding one-off items, % 5.8 4.4 4.0 5.1 8.1 13.4
18.8
22.8 26.3 26.3 25.3
Return on (total) assets, %18) 4.9 3.5 3.4 3.3 4.0 8.0
11.6
14.3 17.7 18.0 17.5
Interest coverage ratio, times19) 4.4 2.0 0.6 1.0 3.1 2.5
0.1
2.0 9.2 9.6 5.0
No. of employees at close of period 20) 4,485 4,444 4,394 4,435 4,714 4,898
4,981
5,291 5,576 5,366 5,206

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

Definitions

16

  • 1) The operating profit (EBITDA) comprises results before planned depreciation and before consolidated amortisation of surplus value on intangible assets.
  • 2) The operating profit (EBITA) comprises results following planned 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.
Year-to-date Jan-Sept Full-year Periods
2007
July
Sept
2006
July
Sept
2005
July
Sept
2010 2009 2008 2007 2006 2005 2009 2008 2007 2006 2005
2,494 2,045 1,685 4,830 5,417 7,413 6,795 5,457 4,360 7,019 9,840 9,280 7,609 6,214
475 414 286 453 387 1,206 1,094 833 530 479 1,388 1,512 1,103 751
426 365 236 325 228 1,055 946 685 386 265 1,172 1,318 942* 553*
51 53 50 134 168 159 155 156 144 225 225 203 209 194
424 363 236 319 220 1,048 939 678 386 254 1,163 1,309 894 557
424 338 226 272 267 1,061 939 653 376 301 1,279 1,309 933 550
321 251 151 113 29 677 654 460 228 34 723 901 585 351
285 296 221 –170 –171 829 706 341 363 –142 1,124 1,035 439 485
17.1 17.8 14.0 6.7 4.2 14.2 13.9 12.6 8.9 3.8 11.9 14.2 12.4* 8.9*
17.0 17.8 14.0 6.6 4.1 14.1 13.8 12.4 8.9 3.6 11.8 14.1 11.7 9.0
17.0 16.5 13.4 5.6 4.9 14.3 13.8 12.0 8.6 4.3 13.0 14.1 12.3 8.9
78,708 75,168 120,000 75,160 74,772 78,303 78,708 97,584 120,000 74,772 77,548 78,708 90,702 120,000
78,708 78,708 122,940 75,160 74,772 78,303 78,708 101,124 122,940 74,772 77,548 78,708 93,062 122,940
78,708 75,168 120,000 75,332 74,772 75,770 78,708 75,168 120,000 74,772 74,772 78,708 78,708 120,000
78,708 78,708 122,940 75,332 74,772 75,770 78,708 78,708 122,940 74,772 74,772 78,708 78,708 122,940
4.08 3.34 1.26 1.50 0.39 8.65 8.31 4.71 1.90 0.45 9.32 11.45 6.45 2.93
4.08 3.19 1.23 1.50 0.39 8.65 8.31 4.55 1.85 0.45 9.32 11.45 6.29 2.86
264 243 320 67 474 453 300 512 218 719 673 875 778 730
3.35 3.23 2.67 0.89 6.34 5.79 3.81 5.25 1.82 9.62 8.68 11.12 8.58 6.08
8,003 6,908 6,798 7,275 7,781 9,059 8,003 6,908 6,765 7,442 8,625 7,700 7,082 6,525
2,679 2,582 2,170 2,104 2,600 2,863 2,679 2,582 2,170 2,422 2,774 2,238 2,602 1,846
1.0 1.3 0.8 0.7 0.9 0.9 1.0 1.3 0.8 0.8 0.8 0.8 1.2 0.7
2,640 2,001 2,732 2,882 2,969 3,102 2,640 2,001 2,732 3,003 3,346 2,969 2,190 2,853
33.54 26.62 22.77 38.26 39.71 40.94 33.54 26.62 22.77 40.16 44.75 37.72 27.82 23.77
33.54 25.42 22.22 38.26 39.71 40.94 33.54 25.42 22.22 40.16 44.75 37.72 27.82 23.21
33.0 29.0 40.2 39.6 38.2 34.2 33.0 29.0 40.2 40.4 38.8 38.6 30.9 43.7
33.6 23.9 11.3 4.0 2.4 31.3 33.6 23.9 11.3 1.1 23.4 35.9 25.1 13.7
22.2 17.2 12.3 6.6 5.4 25.0 22.2 17.2 12.3 4.3 20.0 24.5 18.2 11.9
23.0 18.0 10.9 6.7 5.6 26.0 23.0 18.0 10.9 4.3 20.7 25.4 19.1 12.2
24.2 17.4 10.7 5.8 8.1 26.3 24.2 17.4 10.7 5.1 22.8 25.4 19.9 11.8
15.7 12.7 9.7 4.9 4.0 17.7 15.7 12.7 9.7 3.3 14.3 17.4 13.3 9.4
10.5 13.6 11.9 2.4 2.1 8.0 8.6 9.3 6.4 1.8 6.1 8.6 8.4 6.9
5,133 4,240 4,120 4,485 4,714 5,576 5,133 4,240 4,120 4,435 5,291 5,256 4,942 4,479
  • 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 result (rolling twelve-months), as a percentage of the average shareholders' equity* excluding minority interests.
  • 16) Return on capital employed comprises the profit after financial items plus financial costs (rolling twelve-months) as a percentage of average capital employed*. Capital employed consists of total assets less non-interest-bearing provisions and liabilities.
  • 17) Return on operating capital comprises the operating profit (EBIT, rolling twelvemonths) 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 third quarter of 2010, as for the annual accounts for 2009, 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 1.2, Supplementary Accounting Rules for Groups. However, from 1 January 2010 the name has been changed to RFR 1.3.

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 2009 with the following exceptions, owing to new or revised standards, interpretations and improvements that have been adopted by the EU and which must be applied from 1 January 2010. Only those changes that have had an effect on the Group are presented.

The parent company's financial statements are prepared in accordance with the Annual Accounts Act and RFR 2.3, Accounting for Legal Entities. Changes have been introduced in both regulatory frameworks from 1 January 2010. The Swedish Financial Accounting Standards Council has decided that the accounts must comply with IAS 1 as far as possible; however the alternative with an income statement and a separate statement of comprehensive income must be applied. The changes have not had any effect on the reports in question and they can be considered to have been prepared according to the same principles that were applied to the Annual Report for 2009.

New or revised standards

IFRS 3, Business Combinations (revised) The revised standard continues to require the application of the acquisition method for business combinations but with some substantial changes. All payments when buying a business must be carried at fair value on the acquisition date, while subsequent contingent payments are to be classified as liabilities that are subsequently re-evaluated via the income statement. All transaction costs relating to acquisitions must be carried as expenses.

The revised standard is applicable for financial years commencing from 1 July 2009. These changes have been taken into account for the acquisition made in the first quarter.

IAS 27R, Consolidated and Separate Financial Statements (revised)

The standard has changed regarding the reporting of changes in equity in subsidiaries, transactions with minority shareholders, and loss of control. The new rules will apply when relevant, but they have not had any direct impact on Lindab in this interim report.

Note 2 Effects of changes in accounting estimates

Significant estimates and assumptions are described in Note 4 in the Annual Report for 2009.

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

Note 3 Operating Segments

Operating segments are reported in accordance with IFRS 8 and IAS 34.

Lindab's operations are managed and reported by business area. From January 2010, Lindab reports in three segments: the business areas of Ventilation, Building Components and Building Systems (the latter two formerly constituted the Profile business area).

The Ventilation business area covers the Group's entire ventilation and indoor climate operations. The Building Components business area provides the construction industry with complete systems for roof drainage, lightweight construction and roof and facade solutions in steel. The Building Systems business area produces and sells preengineered steel building systems. Other comprises parent company functions including Group Treasury. Until 2009 also certain steel processing for external customers.

Information about revenues from external customers, operating profit and the pre-tax result by operating segment is shown in the tables on page 6.

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.

The assets per segment that have changed by more than ten percent compared with the previous year and at the end of 2009 are shown below:

Ventilation

Other assets have increased by 12 percent since the start of the year.

Building Components

Fixed assets have decreased by 11 percent. Stock has increased by 63 percent. Other assets have increased by 55 percent since the start of the year.

Building Systems

Fixed assets have decreased by 11 percent compared with the previous year. Stock has increased by 50 percent. Other assets have decreased by 55 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 2009 Annual Report.

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.

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

Båstad 31 October 2010

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

We have conducted a review of the attached Interim Report for the period 1 January to 30 September 2010. The Board of Directors and the CEO are responsible for the preparation and presentation of this Interim Report in accordance with the Swedish Annual Accounts Act (2010:1554) and IAS 34. Our responsibility is to express an opinion about this Interim Report based on our review.

The focus and scope of the review

We have 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, issued by FAR. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and a much narrower scope than an audit conducted in accordance with the Standards on Auditing in Sweden (RS) 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 this Interim Report has not, in all material respects, been prepared in accordance with IAS 34 and the Annual Accounts Act (1995:1554) for the Group, and in accordance with the Annual Accounts Act (1995:1554) for Lindab International AB.

Båstad 31 October 2010

Bertel Enlund Authorised Accountant Ernst & Young AB

Staffan Landén Authorised Accountant Ernst & Young AB

2011 financial reporting dates

Fourth quarter and Year End Report 2010 10 February 2011 Annual Report 2010 March/April 2011 Annual General Meeting 11 May 2011

For further information please contact:

David Brodetsky, CEO Nils-Johan Andersson, CFO Phone +46 (0) 431 850 00 Phone +46 (0) 431 850 00

Email [email protected] Email [email protected]

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

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 1 November 2010 at 07.40.

Lindab in brief

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

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, consideration towards the environment, and are delivered with high levels of service. Altogether, this increases customer value.

The Group had net sales of SEK 7,019 m in 2009, was established in 31 countries and had approximately 4,500 employees.

The main market is non-residential construction, which accounts for 80 percent of sales, while residential accounts for 20 percent of sales. During 2009, the Nordic market accounted for 42 percent, CEE/CIS (Central and Eastern Europe as well as other former Soviet states) for 21 percent, Western Europe for 32 percent and other markets for 5 percent of total sales.

The share is listed on the Nasdaq OMX Nordic Exchange, Stockholm, Large Cap, under the ticker symbol LIAB. The principal shareholders are Ratos, Sjätte AP-fonden and Skandia Liv.

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 Email [email protected] www.lindabgroup.com

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