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• Net Sales: SEK1.167 billion, a decrease with a minus 2% organic development.

• EBITDA: SEK177 million, up from SEK159 million last year.

• EBIT: SEK140 million, compared to SEK115 million last year.

• Cash Flow from Operating Activities: SEK101 million, down from SEK149 million last year.

• Net Debt: SEK815 million, down from SEK985 million a year ago.

• Gross Margin: 28%, up from 25.3% last year.

• EBITDA Margin: 15.1%, increased by 2 percentage points.

• EBIT Margin: 12%, up from last year.

• ROCE: Improved to 10.7% from 9.7% last year.

• Cash Conversion: 89% on a rolling 12-month basis.

• Products & Solutions EBITDA Margin: 18.2% for the quarter, up from 15.6% last year.

• Installation Services Net Sales: Decreased by 8% organically.

• Equity/Asset Ratio: Approximately 50%.

• Net Debt-to-EBITDA Ratio: 1.8, below financing covenants.

• Warning! GuruFocus has detected 5 Warning Sign with FRA:9ZQ.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Nordic Waterproofing Holding AB (FRA:9ZQ) reported improved profitability in the third quarter compared to last year, with EBITDA increasing to SEK177 million from SEK159 million.

• The company experienced a significant reduction in net debt, standing at SEK815 million compared to SEK985 million a year ago.

• The acquisition of a further 26.5% of shares by Kingspan, bringing their total ownership to 62.6%, is seen positively by management, with potential synergies anticipated.

• The company's green infrastructure business showed improved operating results over the previous year.

• The EBITDA margin for the third quarter increased by 2 percentage points to 15.1%, marking a record third quarter for EBITDA.

Negative Points

• Net sales decreased by 2% due to negative currency effects and a slowdown in commercial new builds.

• Cash flow from operating activities decreased to SEK101 million from SEK149 million, attributed to a significant inventory decrease last year.

• The market situation in Finland and Norway remains challenging, impacting bitumen-based waterproofing operations.

• The residential new build sector continues to be weak across most geographies, affecting demand.

• Order books for installation services are generally weaker compared to the same time last year, particularly in Finland.

Q & A Highlights

Q: Can you provide more details on the synergies expected from Kingspan's acquisition of a majority stake in Nordic Waterproofing? A: Martin Ellis, President and CEO, explained that the synergies include offering package solutions with Kingspan's insulation materials, which will enhance customer offerings. Additionally, strategic synergies could involve further acquisitions in the Nordics, where Kingspan has a lesser presence.