Lindab’s full year report 2021: Record results for a transformed Lindab

Lindab International AB (publ)

Full year report 2021

Record results for a transformed Lindab

Sales remained high during the fourth quarter and Lindab's sales for the full year reached a new record level. Both Business Areas Ventilation Systems and Profile Systems reported high organic sales growth and strengthened profitability. The adjusted operating profit continued to improve, both during the quarter and the full year. At the end of the year, the divestment of Business Area Building Systems was completed, as part of Lindab's strategy to focus on the core business.

Fourth quarter 2021

• Lindab's divestment of the business area Astron Building Systems was completed at the end of the year. In this interim report Building Systems is reported as "discontinued operations".

Continuing operations

• Net sales increased by 23 percent to SEK 2,560 m (2,082). Organic growth was 20 percent.
• Adjusted1) operating profit increased to SEK 311 m (225).
• Operating profit increased to SEK 311 m (225).
• Adjusted1) operating margin increased to 12.1 percent (10.8).
• Operating margin increased to 12.1 percent (10.8).

Total operations

• Profit for the period increased to SEK 221 m (186) and was affected by one-off items and restructuring costs of
  SEK -23 m (-) related to Building Systems.
• Earnings per share before dilution increased to SEK 2.88 (2.43) and after dilution to SEK 2.87 (2.43).
• Cash flow from operating activities amounted to SEK 215 m (356).

January - December 2021

Continuing operations

• Net sales increased by 17 percent to SEK 9,648 m (8,220). Organic growth was 17 percent.
• Adjusted1) operating profit increased to SEK 1,266 m (860).
• Operating profit increased to SEK 1,266 m (790).
• Adjusted1) operating margin increased to 13.1 percent (10.5).
• Operating margin increased to 13.1 percent (9.6).
• Earnings per share after dilution amounted to SEK 12.50 (7.25).

Total operations

• Profit for the period amounted to SEK 537 m (596). The profit was affected by one-off items and restructuring costs of SEK -455 m (-64), which were mainly not impacting cash flow.
• Earnings per share before dilution amounted to SEK 7.02 (7.80) and after dilution to SEK 7.00 (7.80).
• Cash flow from operating activities amounted to SEK 704 m (1,129).
• The Board of Directors proposes a dividend of SEK 4.00 (3.40) per share, split and paid out on two occasions.

	2021	2020	Change,	2021	2020	Change,
Key Figures	Oct-Dec	Oct-Dec	%	Jan-Dec	Jan-Dec	%
Continuing operations2)
Net sales, SEK m	2,560	2,082	23	9,648	8,220	17
Adjusted1) operating profit, SEK m	311	225	38	1,266	860	47
Operating profit, SEK m	311	225	38	1,266	790	60
Adjusted1) operating margin, %	12.1	10.8	-	13.1	10.5	-
Operating margin, %	12.1	10.8	-	13.1	9.6	-
Total operations3)
Profit for the period, SEK m	221	186	19	537	596	-10
Earnings per share before dilution, SEK	2.88	2.43	19	7.02	7.80	-10
Earnings per share after dilution, SEK	2.87	2.43	18	7.00	7.80	-10
Cash flow from operating activities, SEK m	215	356	-40	704	1,129	-38

1. Adjusted operating profit/operating margin does not include significant one-off items and restructuring costs. See 'Reconciliations' page 27.
2. Continuing operations, Lindab Group excluding discontinued operations, i.e. excluding Building Systems.
3. Total operations, continuing operations and discontinued operations.

Lindab full year report 2021

A word from the CEO

Foto: Mette Ottosson

Lindab ends 2021 with yet another strong quarter. Sales were record high, both during the quarter and for the full year. The adjusted operating margin for the full year was 13.1 percent for continuing operations, which is well above the financial target of at least a 10 percent operating margin.

Demand for Lindab's products is strong and customers have appreciated our delivery performance, especially in times when there has been a shortage of steel and other materials. Sales have benefited from high steel prices, as Lindab has been proactive

in pricing. This has helped to maintain gross margins even when purchasing costs have increased.

"The adjusted operating margin of 13.1 percent is well above the financial target of at least a 10 percent operating margin."

Streamlining the business increases profitability

During the quarter, Lindab completed the divestment of Astron Building Systems. Astron has ended the year positively and we are proud to hand over a well-run business to the new owners.

The divestment of Astron was an important step in a three-year process to streamline operations. In 2020, we sold IMP Klima, which manufactures air handling units. We have also reduced the number of countries in which we operate, from 32 countries to 20. Increased focus on our prioritised products and markets is a key reason why Lindab has increased the adjusted operating margin significantly in recent years, from 6.8 percent in 2018 to 13.1 percent in 2021. The strategic transformation of the business has now been completed and Lindab is entering a new phase with focus on organic and acquisition-driven growth.

The investment program is proceeding according to plan

Lindab has high competence in advanced production methods, and we implement an ambitious investment program. Increased automation ensures higher capacity, more efficient production and smarter logistics. This contributes to strengthened competitive-

ness and the opportunity to grow organically with good profitabili- ty. The investments also contribute to a safer work environment.

"The strategic transformation of the business has now been completed and Lindab is entering a new phase with focus on profitable growth."

Acquisitions contribute to growth

In 2021, Lindab acquired five well-managed companies with strong customer relationships. Our strategy is that the acquired companies continue to work independently, but we see that there are many positive synergies that are attractive to everyone involved. Our sales target is to grow by ten percent per year and we estimate that two thirds of the sales increase will come from acquisitions.

Increased dividend

Considering the strong earnings in continuing operations and a strong financial position, the Board of Directors proposes an increased dividend to SEK 4.00 (3.40).

The demand for healthy indoor environments is increasing

The long-term demand for Lindab's ventilation products benefits from an increased interest in solutions that create healthy indoor environments and reduce energy consumption. With more efficient ventilation, the customer gets lower operating costs while the indoor air quality is improved. The importance of sustainable solutions that are also financially favourable is constantly increa- sing. Lindab's product offering meets several important requirements in order to position itself well in this area. The development is also driven by rising energy costs, EU's directives for renovation and new construction of properties, including the EU Green Deal, and various new national support packages.

Lindab has a strong and motivated organisation. With our presence throughout Europe and a robust supply chain, we are well positioned to continue to develop the business in a positive direction.

2021 has been a year when we further strengthened Lindab. Thank you to all customers who continue to choose Lindab.

Thank you to all employees for your efforts during the year.

Grevie, February 2022

Ola Ringdahl

President and CEO

2	Lindab International AB (publ), Corporate identification number 556606-5446, www.lindabgroup.com

Lindab full year report 2021

Financial targets

Lindab has financial targets for growth, profitability and net debt. During the third quarter 2021, Lindab raised its targets for growth and profitability. For 2021 the outcome regarding annual growth and adjusted operating margin is reported for continuing operations, while net debt/EBITDA is reported for total operations.

Annual growth, >10%1)	19.62)
	8.9
3.7		3.3
			-5.2
2017	2018	2019	2020	2021

Adjusted operating margin, >10%

				13.12,3)
		9.33)	10.03)
6.2	6.8
2017	2018	2019	2020	2021

Net debt/EBITDA, <3,05)

2.2
	1.6	1.64)	1.44)
		1.04)
2017	2018	2019	2020	2021

1. Growth excluding currency effects.
2. The outcome for total operations was 18.5 percent for annual growth and 12.2 percent for adjusted operating margin.
3. Excluding the effect of implemented new accounting standard IFRS 16 Leases, operating margin amounted to 12.9 percent in 2021, 9.7 percent in 2020 and 9.0 percent in 2019.

1. Excluding the effect of implemented accounting standard IFRS 16 Leases, net debt to EBITDA amounted to 0.6 in 2021, 0.8 in 2020 and 1.0 in 2019.
2. Adjusted for one-off items and restructuring costs.

Lindab's sustainability plan - For a better climate

Lindab's sustainability plan includes activities and targets in three areas.

Create healthy buildings

During the year, Lindab has continued to spread knowledge about the importance of a healthy indoor climate and pursued issues about building standards in the industry organizations where we are represented. Lindab has, for example, been the driving force for an improved standard for environmental product declarations for ventilation products (EPD).

Reduce the environmental impact from customers

Lindab contributes to reducing the environmental impact from customers by offering energy-efficient products for renovation and new construction. As an example, the launch of Ultra BT makes it possible to renovate buildings and install demand-controlled ventilation without major impact on the building. Significant energy savings of up to 70 percent are possible according to a customer study.

Drive a sustainable business

There are detailed goals and plans for Lindab's own operations. Five goals are highlighted as prioritised:

• Reduce CO2 emissions (scope 1 and 2) with 50 percent until 2030, compared to 2019. Set a target for scope 3 in 2022.
• Sustainability certification of 100 percent of the recurring supp- liers until 2023.
• Use 100 percent renewable fuel in Lindab's transport vehicles until 2040.
• Reduce the number of workplace accidents per million hours worked (LTIF) to 4 or lower by 2026. Long-term vision of zero accidents.
• Be recommended as an employer by at least 90 percent of the employees.

A detailed follow-up of the results is published in Lindab's annual report.

Indoor	Buildings		In
for our	energy		and	-
percent	customers,	-	nable
bute to	mental		chain
well-being and productivity.	energy-efficient products and systems	transports - must reduce the resources
Create healthy	Reduce the	-	Drive a sustainable
	with a high degree of renvironcycling.		used and thus lower the carbon dioxide
buildings	mental impact from	emissionsbusiness. Lindab should be a work-
	customers		place that employees are proud of.

Lindab International AB (publ), Corporate identification number 556606-5446, www.lindabgroup.com

3

Lindab full year report 2021

Sales, profit and cash flow

Sales and market - continuing operations

Net sales during the quarter amounted to SEK 2,560 m (2,082), an increase of 23 percent. Organic growth was positive by 20 percent and the currency effects was neutral at 0 percent. Structural changes contributed positively by 3 percent.

The demand remained strong for the Group during the quarter. Both Ventilation Systems and Profile Systems reported strong organic growth.

Ventilation Systems reported organic growth in most of the markets Lindab operates on. Sales growth was particularly strong in the Nordics and Eastern Europe. Profile Systems' positive growth was mainly a result of increased sales of industrial projects, primarily in the Nordics, but also increased sales of rainwater products, roof and wall cladding and steel profiles in several markets. The strong sales in both business areas have been affected by the implemented price increases during the year to compensate for the historically high raw material prices. The comparison period started with lower demand due to the uncertainty related to covid- 19, which also contributed to the relative sales growth.

Net sales during the period January-December amounted to SEK 9,648 m (8,220), an increase of 17 percent compared to the same period previous year. Organic growth was positive by 17 percent while currency effects had a negative impact on growth of 2 percent. Structural changes contributed positively by 2 percent.

Profit - continuing operations

Adjusted operating profit for the quarter increased to SEK 311 m (225). No one-off items or restructuring costs were reported during the quarter or in the same period previous year, see reconciliation page 27. Adjusted operating margin increased to

12.1 percent (10.8).

Ventilation Systems' adjusted operating profit increased to

SEK 210 m (152) and Profile Systems increased to SEK 118 m (84).

The improved adjusted operating profit is mainly explained by significant sales growth and positive effects from structural changes as a result of completed acquisitions. Costs have been normali- sed in Lindab's production facilities in comparison with the same period previous year, when the utilisation level was slightly lower due to covid-19.

Adjusted operating profit for the period January-December increased to SEK 1,266 m (860). No one-off items or restructuring costs were reported during the quarter compared to SEK -70 m in the same period previous year. See reconciliation page 27. Adjusted operating margin increased to 13.1 percent (10.5).

Sales and market, profit/loss - total operations

Net sales during the quarter amounted to SEK 2,846 m (2,314), an increase of 23 percent. Net sales during the period January- December amounted to SEK 10,619 m (9,166), an increase of

16 percent compared to the same period previous year.

Adjusted operating profit for the quarter increased to SEK 324 m (248). Adjusted operating margin increased to 11.4 percent (10.7).

Profit for the quarter increased to SEK 221 m (186) and earnings per share after dilution amounted to SEK 2.87 (2.43). The profit for the quarter included one-off items and restructuring costs of SEK -23 m (-), of which SEK -38 m (-) was reported in operating profit. All one-off items and restructuring costs are reported in discontinued operations.

Adjusted operating profit for the period January-December increased to SEK 1,297 m (916). Adjusted operating margin increased to 12.2 percent (10.0). Adjusted operating profit is adjusted with one-off items and restructuring cost of SEK -456 m (-70), related to the divestment of Building Systems. The one-off items and restructuring cost for the period are reported in discontinued operations.

Profit for the period January-December amounted to SEK 537 m

1. and earnings per share after dilution amounted to SEK 7.00
   (7.80). Profit for the period include one-off items and restructuring costs of SEK -455 m (-64), related to the divestment of Building Systems. Of the one-off items and restructuring costs for the period, SEK -441 m is reported in discontinued operations.

Seasonal variations - continuing operations

Lindab's business is affected by seasonal variations in the construction industry, and the highest proportion of net sales is normally seen during the second half of the year. The largest

Net sales, SEK m

Continuing operations

3,000										10,000
2,400										8,000
1,800										6,000
1,200										4,000
600										2,000
0	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	0
Quarter	2019		2020			2021		R 12M
			Quarter			R 12M

Adjusted operating profit, SEK m

Continuing operations

500										1,500
400										1,250
300										1,000
										750
200										500
100										250
0	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	0
Quarter	2019		2020			2021		R 12M
			Quarter			R 12M

4	Lindab International AB (publ), Corporate identification number 556606-5446, www.lindabgroup.com

Lindab full year report 2021

Sales, profit and cash flow (cont.)

seasonal variations can be found in the segment Profile Systems. Ventilation products are mainly installed indoors which is why the Ventilation Systems segment is less dependent on season or weather conditions.

Depreciation/amortisation and impairment losses- continuing operations

Depreciation and amortisation for the quarter amounted to

SEK 106 m (90), of which SEK 10 m (10) was related to intangible assets and SEK 60 m (50) was related to the right of use assets attributable to rental and leasing agreements. Impairment losses in the quarter amounted to SEK 1 m (1).

For the period January-December depreciation and amortisation amounted to SEK 391 m (352), of which SEK 31 m (29) was related to intangible assets and SEK 215 m (199) was related to the right of use assets attributable to rental and leasing agreements. Impairment losses in the period amounted to SEK 3 m (43). Of the impairment losses previous year, SEK 42 m were reported as other operating expenses in the statement of profit or loss, of which SEK 40 m were classified as one-off items and restructuring costs.

Depreciation/amortisation and impairment losses- total operations

Depreciation and amortisation for the quarter amounted to

SEK 106 m (100). Impairment losses amounted to SEK 1 m (1). No depreciation, amortisation or impairment loss were reported in the quarter for discontinued operations.

For the period January-December depreciation and amortisation amounted to SEK 421 m (395) of which SEK 30 m (43) related to discontinued operations. Impairment losses in the period amounted to SEK 383 m (43), of which SEK 380 m (40) were classified as one-off items and restructuring costs. The impairment of

SEK 380 m referred to goodwill related to Building Systems and is reported in discontinued operations.

Tax - continuing operations

Tax on profit for the quarter amounted to SEK 64 m (47). Earnings before tax was SEK 298 m (216). The effective tax rate was

22 percent (22). The average tax rate was 21 percent (20). The slightly higher effective tax rate during the quarter, compared to the average tax rate, was mainly explained by the effects from non-deductiblecosts/non-taxable income and by adjustments attributable to previous years.

Tax on profit for the period January-December amounted to

SEK 265 m (198). Earnings before tax was SEK 1,223 m (752). The effective tax rate decreased to 22 percent (26). The average tax rate was 20 percent (20). The lower effective tax rate during the period, compared to the same period previous year, was mainly explained by that Lindab during 2020 was not able to fully recognise carry-forward tax losses to reduce the total tax on profit. Further, the effective tax rate was negatively impacted by withholding tax during previous year. In 2021, Lindab divested Building Systems, resulting in termination of the Group's German tax union. Consequently, Lindab has revaluated deferred tax assets related to previously recognised carry-forward tax losses in Germany, which have had a negative effect on the effective tax rate in the period. The revaluation of deferred tax assets was also the main explanation to the difference between the effective tax rate and the average tax rate in the period.

Tax - total operations

Tax on profit for the quarter amounted to SEK 54 m (53), whereof a positive tax effect of SEK 10 m (negative tax effect of 6) was recognised as discontinued operations. Earnings before tax, was SEK 275 m (239), whereof SEK -23 m (23) was recognised as discontinued operations. The effective tax rate decreased to

20 percent (22). The average tax rate was 20 percent (20).

Tax on profit for the period January-December amounted to SEK 265 m (215), whereof SEK 0 m (17) was recognised as discontinued operations. Earnings before tax, excluding impairment of goodwill, was SEK 1,182 m (811), whereof SEK -41 m (59) was recognised as discontinued operations. The effective tax rate decreased to 22 percent (27). The average tax rate was

19 percent (20).

Net sales by region,

last 12 months

Continuing operations

14% 2%

55%

29%

Nordic region		Western Europe
CEE/CIS		Other markets

Cash flow from operating activities, SEK m

Total operations

500										1, 200
400										900
300
										600
200
100										300
0	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	0
Quarter	2019		2020			2021		R 12M
			Quarter			R 12M

Lindab International AB (publ), Corporate identification number 556606-5446, www.lindabgroup.com

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