Nordic Waterproofing (NWG) Q2 2024 earnings summary

Executive summary

• Second quarter results aligned with expectations, with strong performance in Denmark and Sweden, but continued weak demand in Finland and Norway.

• Net sales declined 7% year-over-year to SEK 1,196m, with an 8% organic reduction and 1% growth from acquisitions.

• Demand for commercial new builds remains slow, renovation stable, and residential new builds still depressed except in Denmark.

• Restructuring programs are underway in underperforming areas, especially prefabricated elements and Taasinge group.

• Cash flow from operations was SEK 126m, down from SEK 157m, mainly due to seasonal inventory build-up.

Financial highlights

• Net sales fell from SEK 1,292m to SEK 1,196m, an 8% organic reduction.

• EBITDA decreased from SEK 186m to SEK 168m; EBITDA margin at 14.0% (14.4%).

• EBIT decreased from SEK 143m to SEK 131m; EBIT margin at 10.9% (11.0%).

• Gross margin improved to 28.2% from 27.0% year-over-year.

• Profit for the period was SEK 89m (103m), down 14% year-over-year.

Outlook and guidance

• Commercial new build and renovation demand expected to remain at current levels for 2024.

• Residential new build to stay depressed except in Denmark; 2025 expected to bring improved conditions in most markets except Finland.

• No significant price increases anticipated for the remainder of 2024 or into 2025 unless raw material costs rise.

• Continued focus on cost efficiency and readiness for expansion as opportunities arise.

• Order books for Installation Services stable in Finland and Denmark, weaker in Norway.