Inwido AB (FRA:5IW) Q3 2024 Earnings Call Highlights: Navigating Market Challenges with ...

GuruFocus News
4 min read

In This Article:

  • Order Intake: Grew by 3% organically compared to Q3 2023.

  • Order Backlog: Reached 2.6 billion SEK, up by 9% from the previous year.

  • Net Sales: Declined by 3% quarter on quarter; organically down by 1%.

  • Operating EBITA: 304 million SEK, a decrease of 4 million SEK from last year, with a margin of 13.4% up from 13.2% in 2023.

  • Net Debt to Operating EBITDA: Increased from 1.1 times last year to 1.2 times; 0.9 times excluding IFRS 16.

  • Cash Flow from Operating Activities: Increased by 2% to 335.7 million SEK.

  • Capex Level: Increased by 20% for Q3 compared to last year.

  • Return on Operating Capital: 13.1%, down from 16.2% in 2023.

  • Earnings Per Share: Decreased from 8.52 SEK last year to 6.12 SEK.

  • Scandinavia Sales: Down by 4% to 1.014 billion SEK.

  • Eastern Europe Sales: Down by 15% to 473 million SEK.

  • E-commerce Sales: Increased by 7% to 286 million SEK.

  • Western Europe Sales: Increased by 11% to 506 million SEK.

Release Date: October 22, 2024

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

Positive Points

  • Inwido AB (FRA:5IW) reported a 3% growth in order intake and a 9% increase in order backlog for Q3 2024, indicating strong demand.

  • The company's operating EBITA margin improved to 13.4% from 13.2% in Q3 2023, showcasing enhanced operational efficiency.

  • E-commerce business area showed robust growth, with a 7% increase in sales and improved margins, highlighting successful strategic initiatives.

  • Western Europe saw a significant margin uplift, driven by improved efficiency and market share gains, particularly in challenging markets like England.

  • Inwido AB (FRA:5IW) continues to invest in sustainability, with initiatives like the new paint line in Poland saving 23,000 liters of paint annually, reflecting a commitment to environmental responsibility.

Negative Points

  • Net sales declined by 3% quarter-on-quarter, with an organic decline of 1%, reflecting challenging market conditions.

  • Eastern Europe experienced a 15% drop in sales, indicating ongoing struggles in this region despite improved order intake.

  • The company's return on operating capital decreased to 13.1% from 16.2% in 2023, primarily due to lower sales volumes.

  • Net debt in relation to operating EBITDA increased from 1.1 times last year to 1.2 times, indicating a slight rise in leverage.

  • Scandinavia's market remains mixed, with Norway still facing challenges in both consumer and industry sales, impacting overall regional performance.

Q & A Highlights

Q: Can you break down the factors driving the strong gross margin this quarter, considering the mix effects and price pressures in some markets? A: We have a positive mix development with a higher degree of consumer sales compared to industry sales. Some of our most profitable business units have experienced higher growth. We've maintained pricing despite some material cost increases and improved efficiency through increased capex investments. This combination has positively impacted the gross margin. - Peter Welin, CFO and Deputy CEO

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