Good morning, everybody, and welcome to this presentation of Inwido's third quarter 2021 results. My name is Henrik Hjalmarsson. I am the President and CEO, and with me I have Peter Welin, CFO and Deputy CEO. Next page, please, page two. We will spend the coming 25 minutes or so going through a brief introduction to Inwido for those of you who are new to us, giving an update on the Q3 highlights as well as the performance and the first nine months performance, a short update on M&A status, a look into the market outlook, as well as our short term priorities. Peter will go through the detailed financials. I will then close with a summary after which there will be plenty of time for questions. Next page, please. Page three.
Very briefly, for those of you who might be new to us, Inwido is a leading window group in Europe with a clear market leader position in the Nordic region as well as a strong presence in the U.K. and Ireland. We have net sales rolling 12 months of SEK 7.3 billion with an operating EBITDA margin of 12.2%, and we have roughly 4,600 employees in the 12 countries you see marked in dark blue on the right-hand side of the slide. The white dots that you see on the right-hand side picture are where we have production locations across Northern Europe, and we market and sell all the spectacular brands that you can see on the bottom part of this slide. Next page, please. Page four. We have a clear and proven value creation model to drive sustainable shareholder value over time.
It's based on five elements that ensure that we deliver long-term, cost-efficient, both customer as well as employee value in a sustainable way, and hence drive shareholder value over time. It's based on our proven ability to improve businesses based on the 50+ acquisitions that we made over the 25 and some change years. We effectively plug in acquired businesses here, but obviously being sensitive to the starting point of the businesses we acquire to protect the base and maximize any incremental value. The five elements is if we start from the top right-hand side, that we believe in a decentralized accountability model with a strong customer and business focus, as well as local leadership and drive. Effectively owning the agenda, the customer relationship, and the performance of the business locally.
We drive efficiency synergies from sourcing as well as technology, improving the profitability of the businesses within the group with efficiency and better prices. We drive a very clear and strong performance management structure with a balanced scorecard KPI sheet that drives the right behaviors across the business, delivering business improvements over time. We believe strongly in capital efficiency as well as smart capital allocation. Lastly, the fifth one, use this cash generated through the improved business performance through the synergies that we derive to do value creating M&A as well as to invest for growth. All in all, making sure that we do this in a sustainable way to be a sustainable business for a sustainable future. Next page, please. Page five. Looking at the Q3 highlights, which was again a strong quarter for Inwido.
We posted the 10th consecutive quarter of strength and margins as well as the 6th quarter in a row organic growth. We saw favorable markets in general, both on the consumer and the industry side, with a continued strong order intake for the group. We continue to see high price pressure on input materials as well as transportation, which we mitigated both with improvements in efficiency and improvement in the central cost level, as well as a strong proactive work with price increases to the markets. Next page, please. Page six. Looking at the numbers, we grew in the quarter with 11% to SEK 1.897 billion, organically up 10% year-over-year. We posted the highest operating EBITDA ever in a single quarter, SEK 275 million up from SEK 247 million last year, which means that the operating EBITDA margin came in 0.1 percentage points up versus last year at 14.5%.
We had a continued strong order intake up 22% year-over-year or 20% adjusted for acquisitions, which means that we closed the quarter with the highest order backlog ever, up 75% year-over-year to SEK 2.283 billion or up 68% adjusted for acquisitions. We continued with strong cash generation, closing the quarter with a net debt versus operating EBITDA excluding IFRS 16 of 0.7, which is down from 1.2 at the same time last year. Next page, please. Page seven. Looking briefly at the development the first nine months, sales has grown by 14% to SEK 5.55 billion. Organically, that's plus 15%. Our operating EBITDA has grown considerably to SEK 663 million up from 498 last year, which means that the operating EBITDA margin has improved by 1.7 percentage points to 11.9%.
Earnings per share has grown nicely, up almost SEK 3 per share to SEK 8.57 per share. Next page, please. Page eight. Looking at business area sales, as you can see in the ring chart on the right-hand side, we have the vast majority of the sales exposure here to the consumer market, which has allowed us to drive a continued profit growth in the business area in the quarter. The larger Danish units continued to grow sales as well as margins in an overall positive consumer market in Denmark. We've seen a good rebound in the Irish market after the COVID shutdowns, with a fairly strong market both for renovation as well as for new construction. E-commerce grew organically 7%, but against very high comparables. In Q3 2020, we grew organically by 42% in the e-commerce business.
Still with a strong order backlog up 35% year-over-year. Reported sales for the business area are up 11% organically. That's plus 12% to SEK 873 million, with an operating EBITDA margin of 23.6%, slightly down versus last year, mainly driven from strategic investments in marketing and partially IT for future growth. We closed the quarter with an order backlog up 53% versus last year. Next page, please. Page nine. Looking at Business Area North, if you look in the green chart here on the right-hand side, you can see that we have a bigger industry market exposure in North. In the quarter, we continued our growth and also grew the order backlog to very strong levels. Sales grew, fueled by strength in positions in general in all geographies in North, with a both positive and a consumer and industry market.
We saw a good development for one of our biggest businesses, Elitfönster, and particularly its consumer-facing installation brand, Elitfönster På Plats. The industry markets have recovered better than expected against the expectations, both by industry assessors as well as by ourselves. Reported sales grew 10%, organically plus 8% to SEK 983 million . Our operating EBITA margin came in at 7.9%, slightly down from last year, mainly driven from strategic marketing investments for future growth. The order backlog at the end of the quarter was up 92% versus last year. Next page, please. Page 10. Briefly, an update in terms of M&A. We do see an overall higher activity level in this area and also increased opportunities. As the markets open up and travel restrictions are lifted, there is an increasing ability to meet and interact with potential targets.
With our very strong balance sheet, our acquisition dialogue has been accelerated considerably during 2021, which means that we are presently in multiple talks with potential targets, which is well in line with our ambition to increase our total growth rate with value-creating acquisitions. Next page, please. Page 11. Looking then at the market outlook, we obviously enter Q4 with a very strong order backlog, which will help us deliver sales in the short term and overall strengthen positions in all our core markets. We see in the near term healthy activity levels on both the consumer and the industry side. However, it's hard to predict if and/or when input material inflation, transportation costs, as well as continually lifted COVID restrictions will impact market demand in 2022.
Long term, our outlook continues to be optimistic with regards to an increasing demand for energy efficient and energy saving windows and doors, driven by an increasing desire to invest in a sustainable and good life at home. Next page, please. Page 12. If we look briefly at the short-term priorities, they remain to a large extent the same. We will continue to keep a close eye on input material inflation, to make sure that we take swift and resolute action with regards to market pricing to compensate. We will maintain a strong customer-focused execution in a very dynamic environment that's out there at the moment. We will continue to increase our M&A efforts.
We will continue with our value-generating investments in growth initiatives, both on the market development side as well as on the supply chain side to drive further increases in capacity. And we will continue to increase our efforts to drive our sustainability agenda, both increasing the positive impact we can have with energy-saving windows and doors, but also continuously decreasing the impact that we have on the environment and the society around us. Next page, please. Page 13. With that, I'm going to hand over to Peter, who's going to take you through the financials. Peter, please.
Thank you so much, Henrik. Please turn page to page number 14. Page number 14. On this page, we can see the income statement for Q3, year to date, latest 12 months, as well as last year. If we start with the quarter, Q3, sales were up 11% compared to last year. If we then adjust the sales with acquisition as well as the currency impact, the organic sales growth was 10% compared to last year. Gross margin was slightly improved from 27.6% to 27.8%, and we have a negative impact from higher material costs. This has then been mitigated by higher sales prices, and also we have a higher volume, thereby higher capacity utilization and somewhat improved efficiency in the quarter. We also have a positive mix impact in the quarter, which has a positive contribution to the gross margin.
Our overhead cost have increased in the quarter, mainly sales expenses. We have higher sales expenses compared to last year, driven by higher volume, also driven by investment in marketing. We also have slightly higher administration costs compared to last year, driven by investment in IT. Looking at our profit levels of operating EBITDA, it has been improved by 12% from SEK 247 million last year to SEK 275 million this year. This is the highest result ever for a quarter. The margin has also been improved from 14.4% to 14.5%. EBITA is the same as operating EBITA in the quarter because we don't have any restructuring costs in this quarter. Last year, we had a restructuring cost of SEK 7 million in Q3.
Further down the income statement, we can see that profit after tax as well as earnings per share has been improved by 17% compared to last year. EPS was SEK 3.57 this year compared to SEK 3.5 last year. Year-to-date, we have a sales growth of 14%. Organically, it's plus 15%. The margin has been improved by 50 basis points from 25.7% to 26.3%, mainly thanks to improvement in the beginning of the year before material prices started to increase. Operating EBITA has been improved by 33%. EBITA has been improved by 37%. Profit after tax as well as earnings per share has been improved by 53% compared to last year. Earnings per share today on SEK 8.27 compared to SEK 5.68 last year.
For the period in the 12 months, meaning from October 2020 to end of September 2021, sales have increased and have reached SEK 7,349,000,000. And the operating EBITA margin has been improved and is today on 12.2%. Earnings per share is on SEK 11.59. Inwido has in October received information from Fora in Sweden that Inwido will receive repayment of group health insurance for workers in Sweden. The total amount is SEK 19 million. This repayment has not been booked in the Q3 results. It will be booked in Q4 and will have a positive impact of the result in Q4 of SEK 19 million before taxes. If we turn the page, we go to page number 15, please. On this page, we can see the sales development as well as the order intake development for Q3, year 2019, 2020 as well as 2021.
To the left, you can see the development of sales, and to the right, you can see the development of the order intake. Sales have increased and was +11% compared to last year, organically +10%, will reach a sales of SEK 1,897,000,000. And also above the level of 2019. The order intake was +22% compared to last year. If I take away the acquisition we made in April, the order intake is +20% compared to last year. Now, this is actually the highest order intake ever in a quarter, the first time ever Inwido was above SEK 2 billion in the order intake. South had an order intake improvement of 9%, North had an order intake improvement of 34% in total. If I take away the acquisition in Finland, it was +31% in the quarter compared to last year.
If we turn the page, we go to page number 16. This page is showing the order backlog end of each quarter from Q3 2017 up until Q3 2021. As you can see on this page, order backlog has increased and has reached the highest level ever. Thanks to the improved order intake in Q3, with order intake +22% and sales was only +11%, the order backlog was improved also in Q3 this year. We have a total order backlog of SEK 2,283 million, an increase of 75% compared to last year. If we take away the acquisition, the order backlog is +68% compared to last year. The higher backlog has prolonged delivery times. And most business units have today longer delivery times than we normally have this period of the year.
South has an order backlog increase of 53%, North has an order backlog increase of 92% compared to last year. The higher backlog end of September will have a positive impact on sales in Q4. If we turn the page, we go to page 17. This page is showing the operating EBITA and operating EBITA margin for Q3 as well as year-to-date. To the left, you can see the Q3 for 2019, 2020 as well as 2021. To the right, you can see year-to-date for the same period. This year, the margin has improved from 14.4% to 14.5%. The operating EBITDA instead was improved from SEK 247 million to SEK 275 million. Both North as well as South had lower margin compared to last year. However, we had somewhat a positive mix. South has been growing more than North. That has a positive contribution to the group margin.
We also have improved results within other. Other is internal companies supplying North as well as South with treated aluminum. They are growing internal sales as well as a positive result in the quarter compared to last year. We also have lower central project costs in the quarter compared to last year. In total, a positive margin improvement of 0.1% units compared to last year. Indeed, we have improved the margin 10 quarters in a row now. In 2019, the margin was 12.2%. January to September, the margin has been improved from 10.2% last year to 11.9% this year, and in 2019, the margin was 9% in the same period. If we then turn page, we go to page number 18. This page is showing net debt as well as net debt compared to operating EBITDA.
The net debt has been slightly reduced in the quarter, a reduction of about SEK 200 million compared to the end of June. Excluding IFRS 16, the reduction is SEK 198 million, and including IFRS 16, the reduction is SEK 209 million. The net debt normally decreases in the second half of the year due to seasonality within the business. This year, CapEx has been a little bit lower compared to last year. It is due to the fact that we have a longer delivery time on machinery that we have ordered, and the CapEx will come later during this year and also come from in the beginning of next year. Net debt/EBITDA, excluding IFRS 16, has been reduced from 1.2 last year to 0.7 end of September this year.
The IFRS 16 debt amounts to SEK 343 million, and net debt compared to EBITDA, including IFRS 16, has been reduced from 1.5 to 1.0. So, if we then turn page, we go to page number 19. This page is showing the performance of Inwido from the IPO 2014 until latest 12 months, September 2021. Sales have been improved from SEK 4.916 billion to SEK 7.349 billion, an increase of 49% since that year, equal to a CAGR of 6%. At the same time, operating EBITDA has been improved by 78%, and the margin has been improved from 10.2% units to 12.2% units. We had a good development in 2015 and 2016 on the margin. The margin was improved, mainly driven by higher consumer sales. In 2017, beginning 2017, we had some problems with sourcing, and we had quite a large extra cost from our sourcing problems in 2017.
Then, end of 2017 and 2018, we had higher increase of industry sales. And since we have a lower margin on industry sales compared to consumer sales, the margin was negatively impacted during this period. From 2019 and up until today, the consumer share has been improving. The margin has been improving. Inwido has improved the margin 10 quarters in a row, we also now see the latest quarters and higher organic sales growth, thereby higher capacity utilization and improved efficiency. The margin today is rolling on 12.2% end of September 2021. I'll hand over back to Henrik, he will make a short summary, we will open up for questions.
Next page, please, page 20. Summarizing the third quarter and the first nine months, we've seen strong sales and order intake growth, continually improved margins, strength in market positions in all our core markets with market share gains, an increase in M&A activity levels, also now facilitated by travel restrictions wearing off following the elimination of pandemic restrictions. Continuous ongoing investments for future profitable growth, both on the supply chain side as well as on the marketing market development side. Next page, please, page 21. With that, we open up for questions. I'll hand back to the operator, please.
Thank you. Ladies and gentlemen, if you wish to ask a question, please press zero-one on your telephone keypad. We have a first question from Adela Dashian from Handelsbanken. Madam, please go ahead.
Hi, good morning, everyone. This is Adela Dashian from Handelsbanken. First of all, I would just like to congratulate you on a strong quarter and the obviously improved margins despite inflationary pressures. My first question relates to that, and if you feel that your position in the market allows you to better control the cost increases, and if you expect the price adjustments that you've already initiated to be maintained in the long run?
Hi, Adela. Thanks very much. I guess on that question, I think the relative size that we have in the core markets, but actually even more so the leverage that we have on the sourcing side, given our scale and how we drive synergies from sourcing as a group, allows us to stay a bit more in control of timings as well as the overall development with regards to prices. I think it also, that level of control and, how should I say, information advantage also allows us to drive the narrative around price increases into the market a bit better than parts of our competition. In terms of the outlook going forward, we expect to see some continued, particularly in some areas, inflationary pressures going forward. We will hold on to the price increases that we have made. Potentially then take even further price increases to compensate for that.
Obviously, at some point, we'll see input material prices starting to come down again, and then we will likely have to pass some of that on back to the market. But for the moment, we see continued inflationary pressures, and we will hold on to the price increases and potentially take more.
Got it. All right. Then, secondly, on the order backlog, obviously it's very high, and I'm wondering if you could shed some more light on that, what it's driven by. Also if you see any capacity constraints that may limit you on delivering on that in the fourth quarter. I know it's your largest quarter, but I still think it's a question worth asking.
Yes. I think to answer the first part of the question, overall, we've seen a little bit of a shift in the back end of the third quarter where the order intake growth has really accelerated also in Business Area North, which is pleasing, obviously fueling the continued growth there. Across the board, the orders backlog situation is strong in general. Obviously the main driver has been strengthened positions. So, we've taken share in almost basically all of our geographies, but also a fundamentally favorable market development that has supported that. Looking at the capacity, I mean obviously the ability for strong relative growth in the short term is more limited in the high seasons of Q3 and Q4. We do think that there is some opportunity to grow versus last year. As you might remember, we had some operational disturbances last year.
For example, we had a mini-COVID related shutdown in parts of Denmark. We also had some COVID disturbances, so we think there is some opportunity to grow a bit further. Then I'll also highlight the fact that we are making continued supply chain investments to expand capacity to deliver on these expectations.
All right. My last question is on M&A, and I believe you previously stated that you aim to close on at least one or two, or maybe two more deals by the end of this year. Do you believe that that comment is still viable?
How should I say? M&A processes, as you know, are always somehow unpredictable. The ambition to close one more deal this year still stands. We have sufficient activity in the pipeline to support that. So that ambition is still there. Obviously at the moment, we're also very focused on building a strong pipeline in terms of M&A for 2022 and beyond. That work is also very much ongoing at the moment.
Got it. All right, great. Thank you very much.
Thank you.
Thank you. Next question from Kenneth Toll from Carnegie. Sir, please go ahead.
Yes. Two questions please. First on capacity utilization and how smooth your production has been during Q3. I'm thinking about shortage of materials, if you needed to take stock days and so on, or if you feel that you have had a good capacity utilization and good flow in production, so to speak.
Yeah. Thanks, Kenneth. Very relevant question, actually. We have seen operational disturbances in the quarter, I would say. All in all, probably as a whole for the group, a bit less than the COVID disturbances that we saw last year, but still disturbances. We've seen it particularly in Finland and in Sweden. It's been around both logistics, inbound logistics, but also actual access to some key raw materials, which has forced us to make some not material shutdowns, but some minor shutdowns here and there, a few days of parts of production. It has impacted efficiency negatively in the quarter.
Okay. Then the next question is that you had a very strong order book now in the end of Q3 that bodes very well for Q4. When the market is very strong, you could also have some sales volumes that spills over into Q1. I'm curious how you are planning to plan your manning during Q1, which is usually the low season for you. Last year you had a bit higher sales volumes in Q1. Do you see that also this year?
I think in general, if you look at the structure of the order backlog, it's fair to say that the order backlog is big, but it also means that it's long. In that sense, we do expect to need to man our factories on a slightly higher level than what would be normal in a low season in January and February. The perspective at this point, given the length of the order backlog, is that January looks okay from that perspective in terms of having to man. However, if you look at the back end of the quarter one, the visibility there is still a bit less. At least the start for the quarter, we will have to man our factories at a slightly higher level than we would typically do in the low season.
Okay. Sounds great. That's all from me. Thank you.
Thank you.
Thank you. No more questions for the moment. Ladies and gentlemen, if you wish to ask a question, please press zero-one on your telephone keypad. Thank you.
While we wait for any further questions, I'll just take the opportunity to remind everybody that you're cordially invited to Inwido's Capital Markets Day, which will be the 9th of December in Stockholm. As well as virtually, by the way. All the details is on our website, inwido.com.
Thank you. Gentlemen, we have no more questions by phone.
Okay. So if there are no further questions, I thank you all very much for your attention.