Welcome to the Inwido Q2 2024 Report Presentation. For the first part of the conference, participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing hash five on their telephone keypad. Now, I will hand the conference over to CEO Fredrik Meuller and CFO Peter Welin. Please go ahead.
Good morning, and welcome to this webcast and telephone conference covering Inwido's Second Quarter and Half Year Performance in 2024. My name is Fredrik Meuller, and since the tenth of April this year, I'm the President and CEO of Inwido. Joining me today here in our Malmö head office is also Peter Welin, our Group CFO. Over the past three months, I've had an intense but fun and promising onboarding to our group, including visits to many of our sites in Sweden, Norway, Finland, Denmark, Poland, England, and Scotland. I met with a lot of our coworkers, and I certainly know more about the window and door business now than I did before. Above all, I can conclude that Inwido is in a good place.
It is well-functioning, professional in all aspects, our current activity level is high, and I notice a lot of smiles on people's faces, which bodes well for what's to come. While many of you are, of course, familiar with Inwido, it may be worth reiterating that our 34 business units comprise what is de facto Europe's leading window group. The strongholds are in the Nordic region, plus the UK and Ireland, but we actually cover 12 European countries in total. Our rolling 12-month turnover equals SEK 8.8 billion, with return on operating capital of 13.1%. Furthermore, we're not just producing high-quality windows and doors. We also improve people's indoor life through our energy efficient and aesthetically appealing solutions. We are on an exciting journey towards doubling the size of the company by 2030.
I find it achievable, as there are still many profitable growth opportunities for us to pursue, and based on my impressions from these first three months, I dare to say that we have only scratched the surface, yet. We enjoy a strong value proposition for the years to come, and our proven performance track record gives us comfort and credibility. Me and my management team are in the process of clarifying our vital few strategic priorities, as well as determining how we can speed up their execution a bit. In short, it's about realizing organic and acquisitive growth options while getting that volume flowing through a more efficient setup, harvesting on recent investments made in our people and in our operations. Let me now turn your attention to the quarter that just passed.
I'm proud to report that we, as a group, are back on a positive growth trajectory, with order intake increasing across all of our four business areas. Our order backlog went up by an impressive 68%, largely driven by our Sidey acquisition and an uptick in consumer sentiment, in turn, boosted by lower inflation and interest rates. It was particularly pleasing to note our performance leap within e-commerce, more than doubling its profitability and within Western Europe, where our Irish entity, Carlson, booked Inwido's largest order to date. All of this gives us cautious optimism for the second half of the year. Still, I, of course, remain humble over the fact that uncertainty still prevails in the marketplace, particularly given the continued low new build activity, hampering industry and project-related demand overall, particularly in Sweden and in Finland.
With regards to acquisitions, which form an important growth driver for us, we have noted a higher activity level in Q2 and can conclude that our target funnel is healthy. Last but not least, the green transition is definitely gaining momentum, and here, Inwido is getting quite a lot of positive recognition for both our positioning and our efforts. If we then look at the quarterly figures, order intake grew by 22% and by 10% organically relative to last year's Q2. Our order backlogs increase of an impressive 68%, of course, includes last year's acquisition of Sidey Group, but even if adjusted for this, it grew by 10%. Net sales were up 3% quarter-on-quarter, but declined organically by 5%. I can conclude that several entities have gained market share during spring, in most cases, with maintained margins.
Our operating EBITDA reached SEK 263 million , equaling a margin of 11.4%, up from SEK 261 million , but down from 11.66%, respectively. Net debt in relation to operating EBITDA went up from 0.7 times last year to 1.4 times now, or 1.1, if not applying IFRS 16 in accounting. Still safely within our set target, though. As usual, certain achievements are worth celebrating a bit extra, and this quarter is no exception. First, I'm very pleased about our healthy progress within e-commerce, displaying strong growth in top line and translating that to a profit more than twice the size of where it was one year ago. So well done, Bo and team. Secondly, our long-standing efforts and our favorable position within sustainability are getting more external recognition.
Here, exemplified by Financial Times listing of Inwido as one of Europe's top 500 climate leaders, and by TMF, the Swedish Wood and Furniture Manufacturers Association, handing its Nova Award to our Elitfönster entity for their innovative work on total window recycling. And this is also worth highlighting, of course. Our Ireland-based entity, Carlson, which joined Inwido already in 2006, booked a record high order in the quarter, worth around EUR 9 million, and spanning over a timeline of almost two years from now. This is a sign of trust from our customers, and of Carlson being perceived as the clear leader in its field. Congratulations are definitely in order for Michael and his team. As you know, sustainability is high on both our management and board agendas, and it is gradually becoming a part of our company DNA.
Visiting our site recently, I noted with satisfaction our particular efforts within work safety. While our vision for lost time accidents is zero, our trend line continues to slope downward, which is very, very positive. Some of the patterns seen and communicated already in the first quarter have also been present in Q2. In terms of challenges, I'm again thinking primarily of the soft market for new build, what we typically refer to as industry or projects. In the case of Sweden and Finland, activity is still at historically low levels here. Accordingly, this has hampered our performance for the full six-month period, causing net sales to decline by 13% organically, relative to the same period last year, and our Operating EBITDA margin to decline from 9.9% to 8.5%.
The negative delta in earnings per share from 5.26 SEK last year to 2.89 SEK in the first half of 2024, is largely related to items affecting comparability and to positive currency effects in last year's financial net. Now it's time to dig deeper into our consolidated Q2 numbers, as well as our business areas performance, and I therefore hand over to you, Peter. Please go ahead.
Thank you so much, Fredrik. We start with this page. This page is then showing the income statement. To the left, you can see the Q2, in the middle, you can see the year- to- date, and to the right, you can see the rolling 12 months as well as last year. Starting with the Q2, net sales is up by 3% compared to last year. Organically, it's down by 5%. Gross profit is slightly down, -1%, and a gross margin went from 26.7% in a quarter to 25.6% this year. However, Inwido has taken some restructuring costs in the quarter of about SEK 23 million, related to the one factory project in Vetlanda, and also due to write downs of inventories.
Thereby, the gross profit has been impacted negatively by these two restructuring costs. Excluding these restructuring costs, the gross profit margin was more or less the same as last year. Operating EBITDA was up 3%, and the margin was the same as last year, 14.8%. Operating EBITDA is up by 1% compared to last year, meaning the margin went from 11.6% to 11.3%. I will come back more to when it comes to operating EBITDA margin. The EBITDA was down from SEK 262 million last year to SEK 240 million. The restructuring costs then impacted this SEK 23 million. That's the difference between operating EBITDA and EBITDA. Further down the income statement, we can see the profit after tax is down by 22%.
Inwido had also last year, in Q2 last year, a positive currency impact in the financial net. So when comparing the financial net compared to last year, we have a positive impact last year, and that's thereby lower result this year. So profit after tax, as well as earnings per share, was then negatively impacted by the restructuring costs of this year, and when compared to last year, we had a positive currency impact. Thereby, lower earnings per share, even though operating EBITDA was more or less than the same level as last year.
Looking at year- to- date, Q1 plus Q2, sales is down by 5%, and operating EBITDA is down by 18%, from SEK 430 million to SEK 354 million, due to the performance in Q1, the more normal Q1, I'd like to say, compared to previous years, where we had a positive COVID impact in Q1, and the margin has declined from 9.9% to 8.5%. Earnings per share is down from SEK 5.27 to SEK 2.89. Rolling 12 months, or later 12 months, sales is about SEK 8.8 billion, operating EBITDA is 10.9%, and the earnings per share is SEK 9.35. This page is showing the development and the calculation of organic growth. We do it a little bit differently compared to other companies, because we change the history. In that sense, we make a pro forma.
So starting from the left, sales last year was SEK 2.263 billion. Then we add on the acquisitions, their sales, that's what they had in Q2 last year, so meaning, Sidey had sales of in the Q2 last year of SEK 196 million, meaning we went on a pro forma from SEK 2.263 billion to SEK 2.459 billion. The acquisition gave us 9%. Then we recalculate the pro forma with the currency of this year, and now this year, it is quite small impact, only SEK + 1 million, and the percentage is more or less the same.
Then we compare the pro forma last year with the effects of this year compared to the sales in this year, and then we have a decline of 5% organically, then -5%, meaning SEK -128 million. So the total sales is +3%, organically, it's -5%, when comparing to a pro forma last year, adjusted with the currency of this year. Let's start with the business area. We go, starting with, Scandinavia. Scandinavia continued to be impacted by low volumes in the new builds market, especially in Sweden, where the Danish business units benefits from increased activities in the consumer market. Sales is down by 7% to SEK 1.170 billion.
Operating EBITDA margin was more or less the same as last year, 14.2% this year, compared to 14.3% last year. The order intake was improved by 4%, and the order backlog end of the quarter is +6%. To the right, you can see in the graph, you can see the development, the rolling 12 months sales, as well as the rolling 12 month operating EBITDA margin. And as you can see, the peak was in Q4 2022, and the sales is now rolling 12 months, 21% behind the sales in Q4 2022, and the margin has, even though, despite the sales decline, been quite stable.
If we then go over to Eastern Europe, Eastern Europe has continued to be a challenging market, especially the Finnish markets. And Finland is hampered by the strong volume decline in the new build segment, and we have taken actions, however, we've not been able to keep the operating EBITDA margin, but of course, the decline in Q2 this year was -22% in sales. Went from SEK 569 million to SEK 441 million. The operating EBITDA margin went from 13% to 5.5%. The order intake in the quarter was, however, positive, +2% compared to last year, and the backlog is more or less the same as last year, -4%.
You can see the same graph to the right, showing the development from Q2 to 2022, the sales latest 12 months, as well as the operating EBITDA margin, latest 12 months. And as you can see, compared to the peak in Q1 2023, sales is now 29% lower compared to Q1 2023, and the margin has declined latest two quarters. Next one is e-commerce. E-commerce has a positive development. We have increased the market share, and we have substantial profit growth. So we continue to have a positive development in all markets when it comes to e-commerce sales, and April was actually the all-time high monthly order intake for e-commerce. In a quarter, sales is +50%, from SEK 271 million to SEK 311 million.
The operating EBITDA margin has been improved from 3.9% to 10.8%, meaning the operating EBITDA in the quarter was +220%. The order intake is +60% in the quarter, and the backlog end of the quarter is -6%. Here you can see that to the right, same development, same graph showing developments in Q2 in 2022. Sales have started to increase, and the margin has started to increase as well. We have to see a positive development latest two quarters when it comes to the operating EBITDA margin. Going over to Western Europe. In Western Europe, we have a positive order intake, and we have improved profitability. We have continued profit growth in the second quarter, both organically as well as acquired.
In England, we have gained new customers since some of our competitors have gone bankrupt, and in Scotland, Sidey, we continue to have a good development, and we have also good development in Ireland, when in our business unit, Carlson. In the quarter, sales is +108%, from SEK 237 million to SEK 471 million. The operating EBITDA margin has been improved from 6.8% to 11.4%, and the order intake is +SEK 169 million. Of course, positively impacted by Sidey acquisition, as well as the largest order ever for Inwido, taken by Carlson in Ireland, as Fredrik mentioned. And the order backlog is +480%.
Here, Sidey has a different business model with large order backlog compared to the rest of the group, and thereby, we have a high growth in the constant order backlog. This page is showing the sales development, as well as the operating EBITDA development from Q2 2022, sorry, 2023 to Q2 2024. Starting with sales, we can see we have lower sales and decline sales in Scandinavia, Eastern Europe, whereas we have growth in e-commerce and in Western Europe. Looking at the EBITDA, we can say that we have a decline in Scandinavia by SEK 12 million. Eastern Europe was down by SEK 49 million. However, e-commerce has improved the result by SEK 23 million, and Western Europe has improved the result by SEK 38 million.
The reason why we are lower operating EBITDA margin this quarter, went from 11.6 to 11.3, is due to development of Eastern Europe, where sales declined by 22%. Scandinavia, their margin was more or less the same as last year, and we have higher margin or improved margin in e-commerce as well as Western Europe. And when comparing the margin compared to previous years, Q2 previous year, we can see the margin this year is more or less the same as it was pre-pandemic, or even higher than pre-pandemic. Indeed, we had a really high margin in Q2 2021 due to the pandemic, especially due to the performance of e-commerce.
So the margin this year is slightly down compared to last year, from 11.6% to 11.3%, once again, due to Eastern Europe, meaning due to Finland, and the margin for total group is more or less what it was pre-pandemic. Looking at the cash flows, the cash flow, excluding acquisitions of subsidiaries, is more or less the same as last year, -2%. Cash flow from operating activities is -2%. Then we have a positive deviation when it comes to changes in working capital. Minor adjustments when it comes to inventory, we have a positive cash flows from operating liabilities and negative from operating receivables, and a total impact of +8% compared to last year. And this changes in working capital has then compensated a higher CapEx in the quarter.
CapEx in the quarter is +22% compared to last year. To the graph to the right, you can see to the graph to the right, you can see the development when it comes to CapEx since 2019. Before 2019, the normal CapEx level of Inwido was 3%-3.5%. Then during the COVID time, the CapEx was reduced due to different circumstances, and now in 2023, as well as the beginning of this year, the CapEx level has increased, and we are today in a rolling 12-month level on 4.1%. We must compensate the lower CapEx that we did during COVID, so instead of being on 3%-3.5%, we should be on 3%, 3.5%, and 4% the coming years.
So with a strong cash flow in the quarter, more or less the same as last year, the net debt is more or less the same in Q2 as it was in Q1, meaning the cash flows generated in Q2 has compensated the dividend payment that we did in May, Q2 this year. So net debt is more or less the same as in Q2, and net debt in relation to EBITDA is today 1.4, same as in Q1, sorry, for Q1, and it was 0.7 last year when we include IFRS 16. Excluding IFRS 16, net debt with EBITDA is 1.1, compared to 0.4 Q2 last year. This page is showing the return operating capital.
Return on operating capital has declined, and is now at 13.1% compared to the target of 15%, still above the pre-pandemic level. The main reason why we have lower return on operating capital is a lower EBIT intake compared to one and one and a half years ago. This page is then showing the order intake and the order backlog. To the left, you can see the order intake development in Q2 2019 to 2024, and to the right, we can see the order backlog from 2019 until 2024, end of Q2. The total order intake was +22%, excluding acquisitions, meaning excluding Sidey, is +10%, and all business areas have higher order intake compared to last year.
Scandinavia +4%, Eastern Europe +2%, e-commerce +16%, and Western Europe +169%. Excluding Sidey and excluding a large order in Carlson, Western Europe has still a positive order intake. And then the order backlog is +68% compared to last year. Excluding acquisition, it's also here +10%, where we have higher backlog in Scandinavia as well as in Western Europe. And now I hand over back to Fredrik. He will make a summary and outlook.
Thank you very much, Peter. Excellent run through as always. To sum up, we can conclude that Inwido is back on a growth track. While markets remain uncertain, particularly in the new build segment, we have grown our order intake across all four business areas. We've raised sales, and we've raised profits, too. And we do see macroeconomic signs of consumer sentiment moving in the right direction. This morning's inflation figure in Sweden is one good example of that. The M&A climate is also improving, meaning that altogether, we are cautiously optimistic about what the second half of the year has in store for us. The green transition is gaining momentum across Europe, which is also exciting for the medium to long term.
Before we open up for Q&A, we would like to make some noise about our upcoming events, so please make a note of these in your calendars already now, particularly our Capital Markets Day that will take place in Stockholm. As always, you can also find a lot of useful information on our webpage and via our frequent posts on LinkedIn. And now, Peter and I would be delighted to answer any of the questions that you may have.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Albin Nordmark from Nordea. Please go ahead.
Hi, Peter and Fredrik. Thank you for taking my questions. So a couple of questions. Firstly, regarding the gross margin, which seems to be increasing across three of the four business areas, how should we think about the gross margin looking ahead?
It's a very valid question. Looking ahead, we can see that we have been able to keep our sales prices on a good level. And we have also been able to reduce the cost in connection to the lower volume that we had in this year, Q1 as well as in Q2. Because we have a volume decline compared to last year, looking at the productions, then the order intake is positive. So we have been able to keep the sales. We have a positive material impact in Q2 compared to previous years and also compared to Q1. However, we see that the material prices is going to be more stabilized and perhaps some materials are going to be slightly up. So in our expectations, we see a quite flat development the next coming period.
Okay, thanks. Within e-commerce, key comment on the margin there, we had the, I think you had some 17% margin before the pandemic, and then you were down really low, and now you're getting up again. So what's the normal margin there? And also, if you can comment on, is it just Denmark that's going well there, or is any other country picking up? Yeah.
If you go back to pre-pandemic, the margin of the e-commerce business was 10, around between 10 and 12%. That was quite a normal business. Then during the pandemic, the margin increased quite rapidly because the market increased very quickly, and we had limitations on how quick we can increase the capacity. So the way for us to reduce the order intake was actually to increase sales prices. And so, and that had a positive impact on the margin, and then we went up to 15, 16, 17% during the pandemic. Then we have seen higher competition in the e-commerce business. We have seen last year, some new have entered the market, and when the market has declined, the price competition has been much tougher compared to the level pre-pandemic.
So we foresee that it will take some years until we can come back to the level that we had pre-pandemic, this 10%. It will not be done during this year. It will take some years, but we are on the right path towards the target of 10%+ in EBIT margin. The other question you had was which markets? We have a positive growth, more or less in all markets, so it's not only Denmark. Denmark is the biggest market for e-commerce, but we also have positive growth in the other markets, and we also entered some new markets during this year.
Can I ask you what markets you entered this year?
We entered the Netherlands that was mentioned in Q1. And of course, we have other markets to penetrate as well on our action list. At the same time, we have quite a lot more to do on a positive note in the existing markets that we're in. Denmark is, of course, we're more heavily tilted towards Denmark, which is great. But we also want to grow the other jurisdictions as well beyond Denmark. So that's also proceeding very nicely.
Great. Thank you. My last question: can you comment some overall comments on the M&A market, and also specifically, is it likely to close any acquisitions during 2024?
Yeah, as mentioned, first of all, M&A is important for us, as you know. If we count backwards from the 2030 ambition of being twice the size of where we are today, we, of course, need to grow the whole group by a CAGR of 10% - 15% per annum. And let's say roughly half of that could and should come from acquisitions, where we also have a very positive track record. Just looking at Sidey is one excellent example of that. We have noted definitely an uptick in M&A activity as such, which I think is a good sign for the outlook of the market and the industry also as such.
I think also, I think what we and I reflected on already in the Q1 report, Inwido is quite an attractive buyer. I don't feel that we have really missed out on any major or more attractive opportunities. Rather, there are quite a few coming, knocking on our door, wanting to be part of the Inwido Group going forward, which is great news, of course. While we had an attractive funnel and an excellent process already in place before Q2, that has been even further solidified, and, for us, it's, we're not stressed up about it. We want to continue to do the right deals, and, yeah, everyone involved in M&A knows that it sometimes has to take time before we get to the finish line.
I'm not in a position to say that we will close a deal within the next 6 months. We're moving forward on a couple of discussions. It's, of course, also a matter for me to build those important, really crucial relationships with senior management and owners of these businesses that we are talking to. So, yeah, I can just conclude and note with pleasure that there's a high activity level here, both in the market and within Inwido, so that's very promising.
Okay. Thanks a lot. That's all for me.
Thank you.
The next question comes from Sofia Sörling from Carnegie. Please go ahead.
Hi, Fredrik and Peter, and congratulations to a great report, Q2. I have a couple of questions, so let me first start with the non-recurring items that you recognized during the quarter. Could you give the split between what is related to the restructuring related part and the inventory losses? And then also this type of inventory losses, what type of product is it, and the reason for this non-recurring item?
Okay. The main part is the inventory, and the reason for that is that we have some old inventories in the books, and we also made some platform changes, and thereby we had some old inventory with it too. And then the rest of the part is the restructuring connected to Vetlanda. But the main part is the inventory.
All right. And, should we expect any similar, cost recognitions ahead, or is this all?
No, not, no, not when it comes to the inventory. It's not when it comes to Vetlanda, it might be some small as well in Q3, because we cannot take everything at once. We have to take it when it comes, and that is the cost connected to moving the machine. But most of the cost is now taken, but some minor can be also in Q3.
Okay, thank you. And, you mentioned that the consumer behavior was strong in Denmark. Could you say anything about the consumer behavior in the other regions that you operate in?
Yeah, it's, I think related to what we actually communicated in the Q1 report. Denmark, as a, as a country, as a market, has, from the macroeconomic perspective, been a little bit ahead of the other Nordic countries. And we, you know, with lower inflation and lower interest rates.
We're beginning to see some of that trickle through to Sweden, first of all, and then Finland, and to some extent, Norway are still lagging, as mentioned. So in Sweden, it's, I think weather has also been a positive factor. I think I speak for all of us, that the winter was just miserable, and that has had now the spring and early summer has added to people, consumers being a bit more buoyant, and then, inflation being low, as witnessed again this morning in Sweden, that's indicating, most likely that interest rates will continue to go down a bit already this year, which is typically a positive signal for our market. England is still a bit slow, a bit, yeah, a bit on the softer side.
All right. But you mentioned also that it's very strong momentum now in Ireland, for example. What is the main reason for that, would you say? And would you say that it's currently very, at very high level, a momentum, and you should not expect that to continue, or is this something that you expect will continue?
The total market in Ireland has been positive, and then we have been able to gain some quite large orders, and we have also gained some market share in Ireland. How the market will develop next in the future, we still are positive on the Irish market. We don't expect high growth, but we still expect that to continue for the next coming periods, that the market will be stable.
Okay.
I think we're, if I may add to that, and more of a personal reflection, having visited Scotland and England, not Ireland, but Scotland and England recently, it is, of course, a lot happening in around the green transition. The full evidence, I guess, has, and the full action plans have yet to be seen in all jurisdictions. But, for example, in England there is talk about, of course, the whole market and the standard going from, you know, single glazing to triple glazing windows, more or less overnight, and that could happen already next summer, so in one year's time. It's just a sign of the momentum now picking up speed, the whole transition picking up momentum, which is rather exciting, of course, and where Inwido should be and is in a rather favorable position.
Okay, interesting.
So that would relate to the Irish market as well, medium to long term.
Okay, thank you. You mentioned quite a lot that the order intake was positive, but actually if we look at the order backlog year-over-year, it was down in several of the business areas. How would you interpret that? Is that like, more of a negative order intake trend than in the later part of the quarter? Or how should we view that?
Where we have a negative is the e-commerce market, e-commerce business, and that order take is, order backlog is quite small in that sense. It's quite because we only work in the consumer sales with a short order backlog. Looking at Finland, because we also have we have a positive in Scandinavia, we have a positive in Western Europe, even though we take away the Sidey. And then we have a negative also then in Eastern Europe. But Eastern Europe was a bit differently compared to that last year, backlog of Eastern Europe was quite big. We ended 2023 with a big backlog, large backlog in Eastern Europe and Finland. And then we worked from that backlog during the first three quarters for more or less the whole year. So When looking at Eastern Europe, we are comparing to quite a high backlog.
Okay, great. When we talk about Eastern Europe, do you have any specific action plan for Eastern Europe to improve the margin within this business area? Or how do you view to...? Yeah, what is your action plan within Eastern Europe, would you say?
I think, first of all, one needs to acknowledge the fact that top line is down by, what is it? 22%. That's not something you can compensate for just overnight. We've done a great job, as always, with, within Inwido, in trying to align the cost base as much as we can, but without hampering the future, you know, the near to medium term. Because w e do need both blue-collar and white-collar employees for the, for when the market comes back, both from a competence and from a capacity point of view. So we have taken measures. I'm rather impressed by that. We have not destroyed the business, 'cause we're in it for the long run.
Yes, we continue to have our ears close to the ground, and if we need to adjust more, we will do that, certainly. But we're in a good spot. I think we have fared better than many of our peers, to be very honest. We have a good mix. We have the right team in place, and I'm absolutely certain we will bounce back in not only in Finland, but in Eastern Europe as a whole.
All right.
And
Thank you. Yes, sorry.
No, just adding one thing. Yes, it's down 32% in Q2, but year to date, we are down 33% this year. So it's quite a massive drop for Eastern Europe and then especially Finland.
Yeah.
And again, if you look, if you look at new build in Finland, you have to go back to the 1940s to find the same low levels in, in terms of new build.
Yeah.
So, we're at extraordinary, low levels. I think that's worth noting.
Yeah. Okay, thank you. Actually, I have two more questions, if you don't mind. One is about the competitive landscape. If you can give us how you view the competitive landscape at the moment, and perhaps in the different geographical regions that you operate in. Do you see more now price pressure, more fierce competition, or is it maybe the opposite, lower pressure due to bankruptcies among smaller players? What do you see?
Then we have to take a little bit region by region. So if you start off with Scandinavia nothing has happened when it comes to, there's some companies have financial problems, but there are no companies that are really financially stressed. The material prices has gone down during the last quarters. And that also mean, that also means that the prices have been bit gone down in that sense. So we see a little bit, also, some companies are trying to buy volumes at the moment. So we see in some markets, we see a tendency to lower prices to, to buy volumes, especially when coming into the product market.
Okay.
When we go over to look at U.K., there is a different situation. Because in U.K., three of the largest competitors have gone into bankruptcy during the latest 8-9 months. We have gained new customers due to that. We have taken some new customers, so even though the market is still declining in U.K., in Q2 this year, we have increased our sales because we have gained market share, taking over some new customers.
All right. And, let's see, that was U.K. and Eastern Europe. Did you have any specific there, or did I miss?
Sorry, yeah, Eastern Europe, Finland. Also here we can see a quite tough in some segments there, we also see a price pressure, the price has gone down. And we have also been a little bit forced in that sense to also reduce the prices somewhat.
Okay. All right, thank you. That was actually all my questions. Thank you so much for all your answers.
Thank you, Sofia.
There are no more phone questions at this time, so I hand the conference back to the speakers for written questions and any closing comments.
Okay, we have received one question from Hugo Mörse . We have already talked about this, but still read it because a little bit more sense to hear. The question is: Would you mind talking about the situation in Finland? Do you witness some positive signs in the new build activity? Given order intake is increasing Q2, should we expect better situations in second half of this year, or do you take actions to reduce cost base there? If yes, should we see already better EBITDA margin in second half of this year? We talked about Finland. Finland is still a tough market. The new build market is still very tough, and in some way, the consumers also the consumers are hesitating. And yes, we have taking a higher order intake in Q2 this year compared to last year in Finland.
However, it doesn't mean that the market has been increased. It's more that we have gained market shares during this period. We should not expect a better EBITDA margin for the next coming quarter, because we are now still comparing to really good profitability during last year. So we still see positive development in Finland, and we see a positive signs on our, especially on our activity, not so much on the market, but our performance, we see a positive sign. But we are still comparing to very strong margins last year in Q3 as well as in Q4. When it comes to cost reductions, yes, we have taken down the cost. Once again, the sales is down by 33% in Eastern Europe, and we are still making profits.
Smaller profit, we are still making profit in Eastern Europe, and, we have reduced the cost. And for us, it's a little bit of balance right now, because if we take too much cost, then we will not be able to fulfill the higher order take that we have. So it's a little bit of balance right now, how much cost reduction we can have compared to the market situations and our order take. See here, then, we have some other questions, but they have already been answered. So, no new questions.
That we say, we conclude there. Thank you, everyone. What remains is for Peter and me is to, to wish you all a very nice summer. So thank you, and, take care.