Release Date: July 17, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Strong performance in Denmark and Sweden, maintaining stable demand.
- Improved profitability in the green infrastructure business despite decreased sales.
- Stable bitumen-based waterproofing operations in Sweden and Denmark.
- Continued focus on maintaining a solid balance sheet and low debt levels.
- Positive development in sales for prefab elements in the Danish market.
Negative Points
- Significant decrease in net sales from SEK1,292 million to SEK1.196 billion.
- Continued very weak demand in Finland, impacting overall performance.
- EBITDA and EBIT both decreased, indicating lower profitability.
- Installation services experienced lower sales and slightly decreased margins.
- Unsatisfactory profitability levels in the prefabricated elements group, requiring restructuring.
Q & A Highlights
Highlights of Nordic Waterproofing Holding AB (FRA:9ZQ, Financial) Earnings Call
Q: What's the special dynamic in Finland that prevents it from improving in 2025?
A: Finland has been impacted, possibly due to the Ukraine-Russian situation, which might explain its different behavior compared to the rest of Scandinavia. - Martin Ellis, President, Chief Executive Officer
Q: Are you expecting more new build starts from the beginning of 2025, impacting your P&L around mid-2025?
A: Yes, but it's early to confirm a demand change as it depends on Central Bank interest rate policy. A reduction in interest rates should lead to the expected dynamic. - Martin Ellis, President, Chief Executive Officer
Q: Can you talk about the measures taken for cost savings and future plans?
A: We've adapted to the current demand level without cutting more than necessary to maintain core business capabilities. Future cost savings are limited unless we change our policy. Focus is on loss-making businesses, especially in prefab elements in Denmark and Norway. - Martin Ellis, President, Chief Executive Officer
Q: Can you split out the price and volume in the organic growth number?
A: The situation is stable in terms of price, so the 8% organic reduction is mostly due to volume. - Martin Ellis, President, Chief Executive Officer
Q: What are your expectations on price changes for the second half of 2024 and into 2025?
A: We don't expect significant price increases. We may adjust prices for some builders merchants but not for direct sales to contractors unless raw material prices increase dramatically. - Martin Ellis, President, Chief Executive Officer
Q: What is your action plan to stabilize margins in the installation services segment?
A: We need higher volumes. There are significant inquiries for large projects, which could impact us positively next year. - Martin Ellis, President, Chief Executive Officer
Q: Can you provide details on the margin profile and restructuring plans for the prefabricated wood element business?
A: Volumes are low due to demand, and we have internal production control issues. We're implementing a proper ERP system to improve profitability. Volume increases and better control of material flow will help in the longer term. - Martin Ellis, President, Chief Executive Officer
Q: Will interest rate cuts have a significant positive impact on the renovation market?
A: Renovation hasn't seen a significant downturn. We are mainly concerned with new build development. Lower interest rates should reduce the housing deficit, leading to new demand for us. - Martin Ellis, President, Chief Executive Officer
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
