Lindab International AB (publ): Lindab's Interim Report for the second quarter 2018

Second quarter 2018

• Net sales increased by 13 percent to SEK 2,392 m (2,118), of which organic growth amounted to 8 percent.
• Adjusted¹⁾ operating profit decreased by 2 percent to SEK 148 m (151). Operating profit amounted to SEK 129 m (151).
• Adjusted¹⁾ operating margin amounted to 6.2 percent (7.1).
• Profit for the period decreased by 14 percent to SEK 91 m (106).
• Earnings per share amounted to SEK 1.19 (1.39).
• Cash flow from operating activities amounted to SEK 51 m (162).
• On 18 June, Ola Ringdahl took office as new President and CEO replacing Fredrik von Oelreich, acting President and CEO. 

January - June 2018

• Net sales increased by 14 percent to SEK 4,545 m (3,976), of which organic growth amounted to 10 percent.
• Adjusted¹⁾ operating profit increased by 10 percent to SEK 252 m (230). Operating profit amounted to SEK 200 m (229).
• Adjusted¹⁾ operating margin amounted to 5.5 percent (5.8).
• Profit for the period decreased by 8 percent to SEK 136 m (148).
• Earnings per share amounted to SEK 1.79 (1.94).
• Cash flow from operating activities amounted to SEK 93 m (122). 

¹⁾ Adjusted operating profit/operating margin does not include significant one-off items and restructuring costs.

Lindab's President and CEO, Ola Ringdahl, commented:

"The second quarter had continued strong sales growth. Net sales increased by 13 percent to SEK 2,392 m and adjusted operating profit amounted to SEK 148 m.

Products & Solutions showed strong sales development with 9 percent organic growth. Net sales amounted to SEK 2,115 m, which is the highest sales amount ever achieved in a single quarter. Adjusted operating profit increased by SEK 6 m to SEK 167 m. The segment continued to have a lower gross margin compared with the corresponding period of the previous year. However, the difference was less, relative to the first quarter. Price increases were implemented during the quarter and further price increases are being carried out. The price of raw materials continued to increase during the second quarter. Market information indicates that the raw material prices will stabilise in the third quarter, which is expected to be positive for Lindab. 

As expected, Building Systems had a weak second quarter, which was negatively affected by the product mix. The market continues to develop strongly and during the period we signed nine major agreements each worth in excess of SEK 10 m. Production planning indicates that the second half of the year will be better than the previous year due to a larger backlog.

The strategic assessment of non-ventilation related business continues, the disposal of Building Systems being one of the options which are still being considered. The review of other non-ventilation related business has been completed and the potential next steps are being evalutated. 

The lower gross margin was partially offset by a decline in our sales and administration costs in relation to sales. However, we are not satisfied with the present operating margin. Additional price increases are being implemented along with efficiency measures. The long term target of an operating margin of 10 percent remains."