Q2 2024 Lindab International AB Earnings Call Transcript
Key Points
- Lindab International AB (FRA:L5E) achieved record sales in Q2, with a 5% increase in total sales and the highest ever operating profit for a single quarter.
- Ventilation Systems, which accounted for 75% of sales, saw a 7% increase in sales, driven by acquisitions, and achieved an operating margin of 10.4%.
- Profile Systems turned around from a loss in Q1 to an operating margin of 8.7% in Q2, indicating effective measures to strengthen profitability.
- The company signed a new long-term credit agreement, increasing its total credit facility by SEK1 billion and EUR50 million, ensuring strong financial positioning.
- Lindab International AB (FRA:L5E) continues to focus on acquisitions, adding almost SEK1 billion in revenue through acquisitions in 2024, with more expected to follow.
- Organic sales growth for Ventilation Systems was negative by 4%, indicating challenges in the core business despite overall sales growth.
- Germany, one of the largest markets for Lindab International AB (FRA:L5E), showed negative organic growth, impacting overall performance.
- The reduced construction activity continues to impact demand for Profile Systems, with net sales decreasing by 2% compared to the previous year.
- The company anticipates that organic growth for Ventilation Systems will not be seen until 2025, indicating a prolonged period of subdued market conditions.
- Net debt-to-EBITDA increased slightly to 2.1 times due to acquisitions, which could pose a risk if market conditions do not improve as expected.
Hello, and welcome to this call. My name is Ola Ringdahl, and I'm the President and CEO for Lindab Group, next to me I have our CFO, Lars Ynner. Let's start with the Q2 summary, the second quarter was a good quarter for Lindab. We increased both sales and operating profits and we managed to improve our operating margin despite tough market conditions. Business area Ventilation Systems accounted for 75% of sales during the quarter. Sales increased thanks to acquisitions and the operating margin strengthened to 10.4%.
Business area Profile Systems turned the first quarter's loss into an operating margin of 8.7% in the second quarter, a very welcome improvement. In total, Lindab Group sales was the highest ever for a single quarter, sales increased by 5% and we reached an operating margin of 9.6%. Cash flow from operating activities developed according to our expectations and increased compared to the same period previous year.
I'll now hand over to our CFO, Lars Ynner, for some more comments on the financial
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