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2/4/2025
Good morning, everybody, and welcome to the Nordic Waterproofing earnings conference call for the fourth quarter 2024 here. Let me start by pointing out that this meeting is being recorded and that the participants' names are visible for everyone. But having said that, let me then introduce our CEO and President Martin Ellis to start the presentation. Welcome, Martin.
Thank you very much, Palle. Can you hear me? OK.
Yes, I hear it loud and clear. Very good. Thanks.
So welcome all. Thanks for participating. Maybe our last quarterly conference call, but who knows? So the headline is soft markets continue basically. And we've had a bit of a profit erosion as a consequence of that. But we have also managed to keep our return on capital employed stable. So moving on to the next page. We can see that, as you probably noticed, Kingspan this morning announced the cash offer to the shareholders of our company. And the price is one hundred eighty two point five SEC per share. The board has evaluated the offer and anonymously recommends that shareholders accept the offer. We have the both has also obtained a fairness opinion from every according to which the offer from a financial perspective is fair to the shareholders of Nordic Board. Proving that's obviously the reason the board recommends accepting it. The offer period ends on March six and presently, Kingspan holds eighty seven point four percent of our shares already. Moving on. Talking about our quarterly results and business development. Our net sales decreased by 12 percent compared to the previous year in the quarter. And all of that is organic. No exchange effect, no acquisition effect. A bit. The decreased also to seventy one million compared to eighty nine million last year. Operating profits a similar decrease cash flow from operating activities was positive. This is quite normal in the quarter, but less so than last year. Last year we had a very aggressive reduction of our working capital, which we obviously can't repeat every year. And the result of that is that we reduced net debt again to seven sixteen million sake compared to seven forty nine previously. And the board would propose a four sake per share dividend. Moving on a few comments on our business environment. Demand is still impacted by slowdown commercial new building to higher interest rates. Renovation remains stable and residential new build continues the weaker in almost the entire geography we cover. Bitumen based waterproofing solutions are stable in Sweden, Norway and Denmark. And the market situation continues to remain more challenging in Finland compared to the other countries. Sales of our products, which is basically the European market, are slightly below last year, but we've been able to improve our margins there. Prefab elements, which has a high exposure to residential new buildings, obviously is badly impacted by the demand situation and had a negative development in sales. Profitability is still unsatisfactory, but we've put into place a number of turn around options and plans, which are, I would say, starting to show results, especially in Norwegian operation. And which we are confident will improve the situation throughout the year. Green infrastructure had somewhat negative development in sales and operating results, but we don't believe that we've lost any market share. So this is related demand related installation services for especially in roofing in Finland has decreased sales and weaker margins as a consequence. But operating results from the franchise units in Denmark, where we usually own about 40 percent on the same level. So very, very strong results there and also a good outlook. All the books for business units with installation are generally weaker compared to the same time last year. And again, Finland is the bigger factor in that business. A few more comments. We have had a good control of the cost situation and we've slightly deflated cost price developments in most of our input materials. We have focused on our debt level, and as you've seen, we've been able to improve that. We obviously expect acquisition opportunities, especially now in partnership with King's plan in the future. The expectation for demand remain at the current level for the beginning of the year. And we don't see any significant pickup in residential new built with the exception of Denmark. We think that 25 months in improvement in our main markets, but in Finland, there are so far no signs of any improvement. So the situation will probably remain unchanged in that country. With that, I turn it over to you. Yes,
thank you very much, Martin. Then let me go through some of the numbers here where we as we said, the net saves decrease in the quarter from one billion forty eight to nine twenty five with an organic development of minus 12 percent. No impact from acquisitions of currency on a yearly basis. We stand at four point one billion in turnover here. EBT decreased to seventy one million from eighty nine and operating profit from forty seven to twenty eight. The margin decreased to seven point six percent from eight point five and the full year margin is now at ten point six percent versus ten point four a year ago. Moving on to the next slide here and looking at the income statement, we can see the gross margin for the quarter was twenty four point two percent versus twenty four point six a year ago. Mainly impacted, I think, with the decrease from structural changes within the prefabricated elements business. And these financial items were minus one, where of interest was minus twelve. And then we had a positive impact from revaluation of outstanding options for for buying remaining shares in acquisitions. And our EBIT margin for the quarter was three point one percent versus four point five percent a year ago. And on the full year, we were at six point eight percent currently. Looking then at the balance sheet on the next slide, we say we have a continued solid balance sheet that allows us to do selective acquisitions. The interest bearing net debt decreased from seven hundred and twenty four million to six ninety five and the equity equity asset ratio now stands at almost fifty four percent. Net debt, the BTA ratio at one point seven is well below the covenants we have in our financing agreement. And as you can see on the interest bearing net debt graph at the bottom right here, we are we have a seasonal pattern here, of course, on our net debt and cash flow. Moving then on to the next slide with Rose. Rose stands now at ten point one percent. So that's been basically unchanged since a year ago. Excuse me. And we can see the capital employee development has decreased in recent quarters here. Cash flow from operations on a rolling twelve basis was at two hundred and eighty eight million versus five hundred and three a year ago. And as Martin said, we have very good changes in the working capital last year, among others, a significant decrease in our inventories. That's that's hard to repeat. Cash conversion at sixty seven percent versus one hundred and eight percent a year ago. And then we have our normal seasonal changes, as we mentioned, where we can see the other capital moves between the different quarters here. Again, in the environment we have, we of course closely monitor our operating receivables. Then looking a bit deeper into our segment products and solutions where we can see a decrease of eight percent in sales from from seven hundred and eighty million to six sixty two. It's all related to organic development. No currency or acquisition impact. We can see in Denmark that the sales increased while we saw a decrease in the other three Nordic markets here and on a rolling twelve basis or full year basis, we are at just about three billion currently on sales. EBJ decreased to fifty seven from seventy eight and operating profit from forty seven to twenty six. As well did the margins then decrease the EBJ margin from ten point nine to eight point seven. So generally the business is maintained or improved margins with the exception of the prefabricated elements business where the restructuring initiatives had a significant impact in the quarter. For full year EBJ margin stands at fourteen percent versus thirteen point one percent a year ago. Installation services. We saw a decrease in net sales of twenty percent and this is mainly related to Finland where the largest chunk of this business is located. No impact from acquisition so currency here either. And then EBJ decreased from twenty five to eighteen and operating profit from sixteen to nine. You can say for the full year the margin is four point one percent on EBJ level versus six percent a year ago. Challenging for the Finnish operations and somewhat improvement from the Norwegian entity, however still unsatisfactory. And in Denmark where we consolidate our share of the net result in our franchise network, we don't consolidate sales there. They maintain the result on a good level. Having said that, I mean for the financial targets I move it back to you Martin.
Yeah, thank you very much Palle. And that basically wraps up our presentation. So we think that we've definitely kept our market share. So in terms of sales growth we don't have any regrets. Profitability as you have seen is below albeit stable but below our 13 percent rosy threshold in a challenging market situation. Capital structure is solid as Palle described and the dividend policy with a four sec proposal obviously is above 50 percent of net profit as usual. So now we're looking forward to any questions.
Yes, thank you Martin. So if for you in the meeting if you want to ask a question here please raise your hand in the meeting or you can send a question into the Q&A feed here or you can actually also email me to me directly. If you're on the phone press star five to raise your hand for a question and then I will unmute you. So.
So if you're in the meeting so please raise your hand if you want to ask a question. Okay, it seems that there are
no questions from the audience here and I don't have any questions in my email either. So I think that's Martin you want to wrap up the meeting. Thank
you all for participating and yeah we'll see what happens. It's quite likely that this is our last call and for those of you who have been here for a while thank you very much for your interest.
Thank you very much everyone and good day.