Lindab’s full year report 2022: All financial targets met in 2022

Lindab ended the year with a quarter of strong sales growth and improved cash flow. The operating margin for the fourth quarter was negatively impacted by high inflation and lower gross margin due to changes in raw material prices.

Overall, 2022 was a strong year for Lindab as all financial targets were met. The target of 10 percent growth was exceeded by far. The operating margin surpassed 10 percent and net debt was 1.6 times EBITDA. The Board of Directors proposes to increase the dividend by 30 percent to SEK 5.20 per share.

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

 

Fourth quarter 2022

 

• Net sales increased by 26 percent to SEK 3,223 m (2,560). Organic growth was 1 percent. Structural changes contributed positively by 20 percent.
• Adjusted1) operating profit amounted to SEK 244 m (311).
• Operating profit amounted to SEK 244 m (311).
• Adjusted1) operating margin amounted to 7.6 percent (12.1).
• Operating margin amounted to 7.6 percent (12.1).
• Profit for the period amounted to SEK 171 m (234).
• Earnings per share before dilution amounted to SEK 2.24 (3.05) and after dilution to SEK 2.24 (3.04).

 

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

• Profit for the period amounted to SEK 171 m (221).
• Earnings per share before dilution amounted to SEK 2.24 (2.88) and after dilution to SEK 2.24 (2.87).
• Cash flow from operating activities increased to SEK 527 m (215).

 

January – December 2022

 

• Net sales increased by 28 percent to SEK 12,366 m (9,648). Organic growth was 11 percent. Structural changes contributed positively by 13 percent.
• Adjusted1) operating profit increased to SEK 1,347 m (1,266).
• Operating profit increased to SEK 1,325 m (1,266).
• Adjusted1) operating margin amounted to 10.9 percent (13.1).
• Operating margin amounted to 10.7 percent (13.1).
• Profit for the period amounted to SEK 974 m (958).
• Earnings per share before dilution increased to SEK 12.73 (12.53) and after dilution to SEK 12.70 (12.50).

 

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

• Profit for the period increased to SEK 974 m (537).
• Earnings per share before dilution increased to SEK 12.73 (7.02) and after dilution to SEK 12.70 (7.00).
• Cash flow from operating activities amounted to SEK 691 m (704).
• The Board of Directors proposes a dividend of SEK 5.20 (4.00) per share.

 

 

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

 

 

Lindab’s President and CEO, Ola Ringdahl, comments:

“Lindab met all financial targets in 2022. Sales exceeded SEK 12 billion for the first time, driven by both organic and acquired growth. The operating margin exceeded the target of 10 percent, despite high inflation and a slightly weaker market. Cash flow strengthened in the latter part of the year and Lindab’s financial position is strong.

 

Uncertain market outlook

Lindab has been affected by fluctuations in raw material prices as we prioritise high delivery capacity and necessary safety stocks. In 2021, Lindab benefited from strong changes in material prices, which contributed to a high operating margin. In the fourth quarter of 2022, the effect was reversed and falling raw material prices put temporary pressure on the operating margin. Together with cost increases due to inflation, this led to an operating margin in the fourth quarter that was lower than desired.

 

New construction activity declined in the fourth quarter and market development in 2023 is difficult to predict. High inflation and rising interest rates are likely to lead to lower investments in new construction. There is, however, a possibility that the willingness to invest will increase when the interest rate situation stabilises.

 

We have a clear plan for how Lindab will continue to develop positively. We are implementing price adjustments and cost savings to ensure that Lindab delivers an operating margin that exceeds 10 percent per year, even in more challenging times.
 

Increased dividend

The record net profit, combined with Lindab’s strong financial position, enables a proposal for an increased dividend of SEK 5.20 per share, an increase of 30 percent. It is essential for us to reward our shareholders while further developing Lindab.

 

Acquired companies are performing well

In 2022, Lindab completed eight acquisitions. The acquired companies continue to develop very well within the Group. Acquisitions are an essential part of our strategy and we see good opportunities to make attractive future acquisitions. The ventilation market is fragmented and Lindab has a strong balance sheet.

 

Investments for increased efficiency

The transformation that Lindab is undergoing aims to create a stable platform that will allow us to continue to develop in a positive direction. After the streamlining of the business in recent years the companies in the Group are well-managed and profitable.

 

The pace of new investments will slow down in the future as we have completed a large part of the program in recent years. We are seeing results in increased production efficiency, higher capacity and safer working environment. These are key areas in our long-term plan to build a sustainable Lindab with high profitability.

 

Scientifically based sustainability goals

In early 2023, Lindab joined the Science Based Targets initiative. This means that we set science-based targets for our work to reduce greenhouse gas emissions. For us, sustainability is business-critical and an obvious customer requirement. Lindab is and will be the leader in climate-efficient ventilation solutions.

 

Focus on energy efficiency benefits Lindab

We are positive about the prospects for both the industry and Lindab, even though there are challenges in the short-term. High energy prices are putting focus on energy-efficient ventilation, which will benefit Lindab. We expect a longer period of renovation of public and private properties in Europe. In new construction, the requirements for sustainable and energy-efficient buildings will increase further, also to the advantage of Lindab and our leading product range.

 

All in all, with our strong local presence, stable supply chain, attractive products and efficient organisation, Lindab has excellent possibilities to further develop in a positive direction. For 2023, the financial targets remain unchanged and I am determined that we will achieve them.”

 

 

Press and analyst meeting:

A live webcast will be held at 10:00 am (CET) on February 9. The Interim Report will be presented by Ola Ringdahl, President and CEO, and Jonas Arkestad CFO.

 

If you wish to participate via webcast please use the link below.

https://ir.financialhearings.com/lindab-q4-2022

 

If you wish to participate via teleconference please register on the link below. After registration you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference.

https://conference.financialhearings.com/teleconference/?id=5001185

 

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This disclosure contains information that Lindab is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014) and the Swedish Securities Markets Act (2007:528). The information was submitted for publication, through the agency of the contact person, on 09-02-2023 07:40 CET.