Clean air with Nederman solutions for industrial air filtration

Interim report January-March 2020

Quarter 1, 2020

  • Incoming orders amounted to SEK 995m (1,019), equivalent to a currency-neutral decrease of 3.6 percent compared with the same period last year.
  • Net sales amounted to SEK 981m (1,036), equivalent to a currency-neutral decrease of 6.6 percent compared with the same period last year.
  • Operating profit was SEK 64.2m (72.1), giving an operating margin of 6.5 percent (7.0).
  • Adjusted operating profit was SEK 65.1m (73.1), giving an adjusted operating margin of 6.6 percent (7.1).
  • Net profit was SEK 34.2m (46.2).
  • Earnings per share were SEK 0.98 (1.32).
  • As previously communicated, the Board of Directors has decided to withdraw its proposal of dividend to the AGM 2020.

CEO’s comments

The corona pandemic is currently impacting the entire world. Many countries have put their entire populations into quarantine and closed all businesses not deemed to be essential. Naturally, this has had far-reaching effects on all economic activity. In the first quarter of the year, the effects on Nederman were relatively limited. The Group has implemented a number of measures to address the situation and has plans prepared for further actions to manage this unique situation and to ensure that we have a strong and vibrant Nederman once the pandemic abates.

Relatively limited effects on earnings in first quarter
Sales for the quarter amounted to SEK 981m (1,036) and the adjusted operating profit was SEK 65.1m (73.1). Some delivery problems were encountered during the quarter, primarily to and from China, and certain projects in Europe and North America were delayed, which had a negative effect on sales and result.

The closedown of China at the beginning of the quarter obviously had a negative impact on demand. In other markets, we saw how demand began to decrease throughout March. At the end of the quarter, we noted a slight recovery in the Chinese market.

During the entire quarter, we were able to essentially maintain our operations and were not affected by disruptions to production. The foremost reason for this is that Nederman reacted very early to the serious signals emanating from China and accumulated inventory of critical components and identified alternative suppliers. Some of our plants were closed during parts of the quarter due to official decisions in countries affected.

Nederman – The Clean Air Company
Nederman celebrated 75 years as a company in 2019. Today, we are one of the world’s leading companies in our field and our aim is to further strengthen our ability to contribute to better air quality the world over. With the lockdowns that have been implemented, the corona pandemic has demonstrated how quickly the world’s air quality can be improved. The examples from China and Italy are clear. Nederman’s key role in society has become equally apparent. According to the Health Effects Institute, five million people died prematurely in 2017 from diseases related to air pollution. Our products and systems can make a decisive contribution to keeping air clean, even during normal industrial production. This means that we can help save a large number of human lives each year.

High preparedness for the future
It is evident that the situation for the global economy is serious and it is being made more difficult because it is currently impossible to say when this situation will improve or at what pace the recovery will occur. Regarding the second quarter, we anticipate experiencing a significantly negative impact on our business. It is not possible at the present time to make long-term assessments.

To date, Nederman has implemented measures in the form of temporary lay-offs and short-time working. The company’s Board has withdrawn its proposed dividend to the AGM in order to protect the company’s liquidity in the short term, and will evaluate the possibilities of a dividend payment later this year. We have also expanded the Group’s credit facilities.

In addition to this, we have prepared plans for more far-reaching measures and we have a high level of readiness to implement these plans if developments should require so.

Nederman has a diversified business
The effects of the ongoing pandemic will impact Nederman’s different divisions at varying times. The Process Technology division works with long-term projects that will in all probability be implemented, but with some delays. Accordingly, the immediate effects for this division are expected to be more limited. Other divisions have a more fast-moving business involving the sales of products and smaller systems. We expect to see a more immediate decline in sales in this area, but we also make the assessment that the subsequent recovery will likely be more rapid.

Sven Kristensson, CEO

For further information, please contact:

Sven Kristensson, CEO                                                                      
Telephone: +46 42 18 87 00                                                            
e-mail:
sven.kristensson@nederman.com

Matthew Cusick, CFO
Telephone: +46 42 18 87 00
e-mail:
matthew.cusick@nederman.com

This information is information that Nederman Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 a.m. CET on April 21, 2020.

About Nederman
Nederman is a global leader in industrial air filtration dedicated to capturing, measuring, controlling and cleaning air to make industrial production more efficient, safe and sustainable. Based on industry leading products, solutions and services in combination with an innovative IoT platform we deliver knowledge and facts needed to optimise performance and guarantee emissions compliance.  

The Nederman Group is listed on Nasdaq Stockholm. The Group has approximately 2600 employees and presence in more than 50 countries. Learn more at nedermangroup.com

Nederman Holding AB (publ), P.O. Box 602, SE-251 06 Helsingborg, Sweden. 
Corporate registration number: 556576-4205

The full report (PDF)