Nordic Waterproofing (NWG) Q3 2024 earnings summary

Executive summary

• Profitability improved in Q3 2024 with higher EBITDA and EBIT, and gross margin rising to 28% despite a slight decline in net sales to SEK 1,167m.

• Kingspan increased its ownership to 62.6%, clarifying the ownership structure and paving the way for strategic synergies, with no mandatory public offer required and the company remaining listed on Nasdaq Stockholm.

• Cash flow from operations remained solid, with a rolling 12-month figure of SEK 399m and a cash conversion rate of 89%.

• ROCE improved to 10.7% from 10.2% last year, and EPS for Q3 rose 11% to SEK 3.87.

Financial highlights

• Net sales for Q3 were SEK 1,167m, with organic development at -2% and a negative currency impact of -2%.

• EBITDA reached SEK 177m (up from 159m), and EBIT was SEK 140m (up from 115m); EBITDA margin at 15.1% (13.1%), EBIT margin at 12% (9.5%).

• Gross margin improved to 28% from 25.3% last year.

• Net profit for Q3 was SEK 93m (up from 82m); net debt at SEK 815m (down from 985m a year ago); net debt/EBITDA at 1.8x.

• Cash flow from operations in Q3 was SEK 101m (down from 149m); principal external financing extended to June 2026.

Outlook and guidance

• Demand in commercial new build and renovation expected to remain stable for the rest of 2024 and into early 2025.

• Residential new build remains weak except in Denmark; improvement expected in 2025 except for Finland.

• Margin improvements are seen as sustainable, with input material costs flat or slightly deflated.