The meeting.
Thank you very much. Good morning, everybody, and welcome to this presentation of Inwido's third quarter results 2020. I am Henrik Hjalmarsson, President and CEO. With me I have Peter Welin, CFO and Deputy CEO. Next page, please. page two. For the coming 25 minutes or so, we'll take you through just a brief introduction to Inwido for those of you who are new, go through some of the details around our Q3 performance, as well as the performance to date, a brief look into our updated sustainability compass, going into an update on the market outlook, our views on that, as well as some of our key short-term priorities. Peter will go through the numbers in a bit more detail. I will wrap up with a summary. There will, as usual, be plenty of time for questions at the end. Next page, please. page three.
For those of you who are new to us, Inwido is the largest window group in Europe and a leading door manufacturer. We're a clear market leader in the Nordic region with a strong presence in the U.K. and Ireland and, I would say, an emerging position in, amongst others, Germany and Poland. We have LTM Q3 2020 net sales of 6.7 billion SEK with an operating EBITDA margin of 10.6%. We have approximately 4,200 employees across 12 countries, then predominantly Northern Europe. We market and sell all the fantastic brands that you see on the bottom part of this slide. Next page, please. Page four. Summary, quarter three for Inwido then. I'm really happy to say that the quarter three was the best quarter to date for the Inwido group in terms of results.
We showed healthy organic growth and the sixth consecutive quarter with strength and margins. Continued strong cash flows in the quarter. I'll come back to that. Increased order intake as well as increased order backlog at the end of the quarter compared to the same period last year. Overall, in the quarter, we've seen positive consumer markets. However, the industry markets in general, and particularly in Business Area North, remain a bit more cautious, and I'll come back a bit to that as well. In e-commerce, we saw a strong organic growth of 42%, really showing that the long-term investments for growth we've been making, coupled with a strong local management, is really paying off. E-commerce was 13% of group sales in the quarter. Next page, please. Page four. Sorry, page five. Looking at a bit more of the details in the quarter.
Sales grew organically by 4% to SEK 1.716 billion. Operating EBITDA grew considerably to SEK 247 million, up from SEK 203 million last year, which means that the operating EBITDA margin came in at 14.4%, 2.2 percentage points up from the same quarter last year. Order intake was healthy, 7% up year-over-year, which means that the order backlog at the end of the quarter was up 18%. Altogether, this means that the net debt versus operating EBITDA, excluding IFRS 16, was 1.2, which is considerably down then from the 2.5 at the same point in time last year. Next page, please. Page six. In terms of COVID-19, we've actually seen, from a group perspective, relatively limited operational and financial impact in total in the quarter.
The number of confirmed infected employees still stay at relatively low levels. We have, however, seen some operational disturbances, particularly in Business Area North. That's been linked to higher than normal sick leave that has impacted our efficiency negatively, then predominantly in production. The U.K. and Irish units, following the shutdown early in Q2, have continued to successfully ramp up. Are not yet fully at the pre-COVID activity levels, although moving in that direction. We've seen robust consumer markets overall. Likely actually a positive COVID demand impact on particularly e-commerce, with more people staying at home. However, in summary, the long-term effects of COVID-19 still remain hard to predict. We stay very close to the situation on a business unit by business unit level and are ready with actions if and when needed. Next page, please. Page seven.
If we look into the business areas, starting with Business Area South, we saw strong profitable growth in the quarter. If we look at the ring chart on the right-hand side, you can see that the Business Area South has the vast majority of sales targeting the consumer segment, which we capitalized well on in the quarter. E-commerce, as I mentioned, grow considerably organically 42%, also with a strong order intake up 26% and a strong order backlog at the end of the quarter, 13% up. We saw a continued strong delivery in the larger Danish units, really capitalizing well on a robust consumer market. As I mentioned, the U.K. and Irish business units continue to open up towards pre-COVID-19 activity levels.
Reported sales increased by 9% or organically 10% up to 790 million SEK. The operating EBITDA margin strengthened considerably by six percentage points to 24.7% in the quarter. The order backlog at the end of the quarter was +36%. Next page, please. Page eight. If we look then into Business Area North, we saw a slight recovery in the consumer market in the quarter. If we look at the ring chart again, on the right-hand side of the slide, we see a substantially bigger exposure to the industrial market in the Business Area North, which also impacted the quarter. We saw a strong performance by the more consumer-oriented business units in Sweden, really capitalizing on some of the recovery in their targeted segments.
The industry markets overall, however, particularly in Finland, do remain cautious, and we're also yet to see full recovery of the in-home consumer sales segment in Finland. We did pleasingly, however, see margin improvement in Norway despite the quite considerable currency headwinds with the Norwegian kroner weakening. As I mentioned previously, we have had some operational disturbances from high sick leave, particularly in Sweden. Reported sales shrunk slightly by 1%, but organically a slight growth to 894 million SEK. The operating EBITA margin strengthened by 0.2 percentage points to 8.2%, and the order backlog at the end of the quarter was 7% up versus the same time last year. Page nine, please. Looking at Inwido's development the first nine months, I think we can summarize that in three bullets. We've seen strong e-commerce performance capitalizing on a strong underlying trend with good profit development.
We've capitalized well on robust consumer markets overall, particularly in Denmark. We've shown good cost management through this turbulent period, really bolstering our margins throughout the period coming up till today. Sales has grown organically by 2% to SEK 4.882 billion, the operating EBITA has strengthened to SEK 498 million versus SEK 435 million last year, which means we have increased the operating EBITA margin by 1.2 percentage points to 10.2%. Operating cash flow has been good in the first nine months, up to SEK 872 million versus SEK 532 million in the same period last year. Next page, please, page 10. Just to give you an update on our updated sustainability compass.
In terms of sustainability, that's really at the heart of what we do at Inwido, given that a large part of our business is actually about replacing older, less energy-efficient windows with newer, more energy-efficient ones, thus contributing to better energy efficiency in homes and offices and reducing energy consumption and consequentially, then, climate impact. Our motto is quite simple: We give more than we take, and we do that because sustainable business drives sustainable value. Our updated compass has three pillars to it, where the first is to be an environmental friend because we need natural resources to do responsible business. This is obviously to a large extent about reducing our climate impact, but it's also about making sure that we use raw materials from renewable sources, reducing our air emissions, and for example, also making sure that we reduce waste in our factories.
Our second pillar is to be a good place to work because empowered colleagues make a difference. Here, it's also obviously to a large extent about ensuring a safe and healthy workplace for our employees to come to every day. For example, we also invest in leadership to make sure that our leaders, as well as the rest of our employees, are the best people they can every day at work. The third pillar is to be a responsible business because aligning with society and society's expectations creates more opportunities. Part of this is obviously about making sure that we're compliant and that we continue to do business in a responsible way. As an example, we also invest in our local communities to make sure that our local businesses can thrive in their surroundings for a long time to come. Next page, please, page 11.
Looking then at our view on the market outlook, we enter Q3 and the winter season, which normally has lower seasonal demand, particularly consumer activity, but we do so with a stronger order backlog than at the same time last year. We see in the near term overall positive consumer demand fueled partially by rising house prices, but also changes in behavior, and we see pockets of potential government stimuli in some of our geographies. We see an industry market in the near term in Sweden and Finland that is still a question mark and a bit uncertain in terms of development. We do see underlying demand potential in Ireland and the U.K., creating some market potential, but obviously dependent on the COVID-19 development as well as the Brexit negotiations and the outcome of those.
Last but not least, we see a strong underlying growth potential in e-commerce with new customer behavior starting to cement. Next page, please, page 12. If we look at our short-term priorities, they remain largely the same, focusing on managing our way through COVID-19 while building for growth. We will continue to strengthen our positions in our key geographies in these quite dynamic market conditions under COVID times. We will continue our investments for e-commerce growth. We will continue with the proactive cost management in the face of the changing demand and challenging markets, if and where we see them. We will make sure to have an ongoing screening of and in dialogue with select acquisition targets to also put some more efforts into our inorganic growth journey.
We will continue our actions to drive growth and capitalize on market opportunities where we see them. Next page, please. Page 13. With that, I hand over to Peter, who's going to take you through a bit more of the numbers. Please, Peter.
Thank you so much, Henrik. I go to page number 14, please. On this page, we can see the income statement for the group. To the left, we can see Q3 2020 as well as 2019. In the middle, we can see year to date, and then further to right, we can see rolling 12 months as well as 2019. If we start with the quarter, sales was plus 3%. Organically, it was plus 4%. The adjustment then is only within the currency. Gross margin was improved this quarter from 26.6% to 27.6%. In combination with higher sales and also with higher gross margin and also lower overhead cost, operating EBITDA was improved by 22%, from SEK 203 - SEK 247 million. In the quarter, Inwido had restructuring cost of SEK 7 million, mainly related to closed some of central project as well as cost connected to COVID-19.
EBITDA ended at SEK 240 million compared to SEK 203 million last year. Further down the income statement, we can see that earnings per share was up 19% compared to last year, from SEK 256 -SEK 305. If we then look at the year-to-date figures, sales is +1%. Organically, it's +2%, also then only adjusted for currency. Operating EBITDA +40% from SEK 435 -SEK 495 million. Earnings per share is up 8%, from SEK 52 -SEK 561. That gives a rolling 12-month sales of SEK 6.695 billion and operating EBITDA margin of 10.6%. Inwido has now the latest six quarters been able to improve operating EBITDA, and thereby we are up to 10.6% in operating EBITDA margin. If we then turn page, we go to page number 15.
This page is showing sales for the quarter to the left and the order take for the quarter to the right, 2020, 2019, and 2018. We can see that sales was +3% in the quarter. Once again, the organic was +4%. North had the same organic sales, more or less in the level of last year, where South had a growth of 10%, where e-commerce was +42%. We have e-commerce in Denmark, Sweden, Norway, and Germany mainly. The other brands in Denmark had also positive growth in the quarter, where sales in U.K. and Ireland had declined in the quarter. In total, we had higher sales within consumer sales, which is also positive for the margins. If we look at the order take, the order take was +7%.
North had a growth of 3% and South had a growth of 13%, where e-commerce was +26%. Also the other Danish unit had a growth when it comes to order intake. Also in Ireland, we had a positive growth when it comes to order intake. If we then turn page, we go to page number 16. This page is showing the backlog end of each quarter from Q3 2015 until Q3 2020. Inwido started this quarter, Q3 2020, with a higher backlog compared to last year. In the quarter, order take was +7% and sales was only +3%. Had the backlog continued to grow and was end of the quarter +18% compared to last year, equal to SEK 1,308 million, meaning SEK 201 million higher backlog compared to last year. This is the highest backlog ever for Inwido.
North was +7% end of the quarter, and South is +36% end of the quarter compared to last year. We turn page, we go to page number 17. This page shows operating EBITDA and operating EBITDA margin for the quarter to the left and year to date to the right for 2018, 2019, as well as 2020. We can now see that the margin has been improved in the quarter, 14.4% compared to 12.2% last year. In 2018, it was 12%. Looking at the year to date, it has been improved from 9% last year to 10.2% this year. In 2018, we had 9.2%. The improvement comes from higher sales. We are in the quarter +4% organically, year to date +2%. We have a higher gross margin, 1% higher per unit in the quarter. We have also lower overhead costs.
In combination of that, we then improve the margin to 14.4% in the quarter. Looking at the year to date and an operating EBITDA of SEK 498 million is the highest to date for Inwido for the period January to September. If we then turn page, we go to page number 18, please. This page is showing the net debt end of each quarter as well as the net debt versus EBITDA, and these figures are excluding IFRS 16. Net debt has decreased in the quarter and was end of the quarter SEK 1.017 billion, excluding IFRS 16, a reduction of SEK 993 million compared to last year. Net debt versus EBITDA has been reduced from 2.5 last year to 1.2, and in September 2018, the net debt versus EBITDA was 3.0. Inwido has deferred of taxes and the fees of SEK 54 million in Q3 related to COVID-19.
If these would have been paid in Q3, the net debt versus EBITDA would have instead of being 1.3 and not 1.2. Including IFRS 16, the net debt would have increased by SEK 361 million and the net debt versus EBITDA would instead of being 1.3 instead of 1.2. The cash flow has been improved also in Q3. You can see it to the right, the cash flow from operating activities year to date for 2017, 2018, 2019, and 2020. Please notice that 2017 and 2018 are excluding IFRS 16, whereas 2019 and 2020 are including IFRS 16. The operating cash flow has been improved in 2020, thanks to higher results, less tax payments, and improved working capital. For working capital, the main driver has been increase in operating liabilities.
This includes the deferral of taxes and fees of SEK 54 million, which are related to COVID-19, which will be paid in Q4 instead. Now I hand over back to Henrik.
Next page, please, page 19. If we summarize quarter three, we saw overall good consumer activity with, again, a strong e-commerce performance. We had healthy organic growth and the sixth consecutive quarter of strength and margins, leading to the best operating EBITDA results to date for the Inwido Group. We saw continued good cash flows throughout the quarter, building on strong cash flow performance earlier quarters, which has now enabled intensified M&A activities. COVID-19 impact in the quarter is limited, although as I mentioned before, it has held back activity and also impacted efficiency negatively in pockets in the Group. We enter the Q4 with a stronger order backlog than at the same time last year, and a relatively stable consumer market outlook. As said before, the long-term COVID-19 consequences are still difficult to predict. Next page, please, page 20.
Before I open up for questions, I'm just going to remind you that we have a virtual capital markets day on November 5th between 10:00 and 12:00 CET. You're very welcome to register, and you'll find the link on our website, inwido.com. With that, I will leave room for questions and I'll hand over to the operator. Operator, please.
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press zero one on your telephone keypad now. That is zero one to register for a question. Our first question comes from the line of Adela Dashian from Handelsbanken. Please go ahead. Your line is open.
Hi, good morning, and thanks for taking my questions. My first question relates to the consumer market. Could you please give us some insight in what's going on in the specific countries that you operate in, and especially as it relates to Business Area North? You mentioned that consumer-oriented business units in Sweden are holding up quite nicely while consumers in Norway and Finland are acting more cautiously. Overall, I noticed that sales within consumer within this area declined by 2% year-over-year. At the same time, your order backlog increased by 7% for this Business Area. How much of that is driven by the consumer market, and what are your expectations as it relates to demand for Norway and Finland going forward?
Thanks, Adela Dashian. Henrik here. To try to answer that as succinctly as I can, a couple of dimensions to take into consideration. The first one is the development of the consumer market has been a bit disparate for the different segments. What we typically call small works, which is smaller window orders in the range of, let's say, ordering two to five windows, doing smaller repairs and refurbishments on your home. That segment has been quite strong overall, and that's what we refer to as a robust consumer market overall, and we've seen some of that hence also where we mentioned a slight positive COVID-19 impact on e-commerce sales, partly due to that.
The larger projects on the consumer side, big renovations and big additions, that market in general and particularly in Business Area North, has been a little bit softer and potentially as consumers have been a bit more hesitant to take on too big projects given the uncertainty of the economic outlook. The situation is such that in the Danish geography, typically we are stronger positioned against small works, whereas our position in Finland is quite general across the segment. In Sweden, if anything, we're probably more targeting in our businesses, the bit larger project side. Another factor to factor in is the fact that the in-home consumer sales segment in Finland, which is a quite large part of the Finnish market, has still not quite recovered from the limitations put by governments and authorities following COVID-19.
To do in-home sales and particularly proactive in-home sales, which is a reasonable part of our sales there, has been more difficult. To answer your other question about predictions going forward, it's very difficult obviously, because there is a lot of uncertainty due to COVID-19. Our short-term impression is that the consumer market looks to be quite stable for the coming period. Obviously, we always have a seasonal impact in the winter season, but if we look at it from a seasonal perspective, quite stable, at least in the near term. In the long term, I would say there's a lot of factors playing in, so it's a bit more difficult to predict.
Thank you so much. That makes total sense. I could also move on to the industry market then, I noticed declining growth in Business Area North, but pretty solid developments in Business Area South. What is driving this development? Is it related to a specific region or market or something else? I think growth was up about 44% within industry in Business Area South.
If you looked at that, obviously the base for industrial sales in Business Area South is relatively small, so any changes in mix and some more project sales in some of the key business units there will have an impact. That's probably more the explanation of that. If you look at Business Area North, where we have bigger industrial market exposure, the market has been quite hesitant, and it was also to some extent, I think, in terms of pace of work impacted by COVID-19, and we've seen that probably more so in Finland even than in Sweden. Overall, it has been impacted negatively, I'd say. The industrial market has been a bit softer. How much of that is a temporary COVID-19 impact and how much of that is an impact on building starts is a bit too early for us to say, really.
We have seen some of that impact in the quarter.
Got it. Finally on the U.K. and Ireland, you mentioned that operations have reopened, but not running at the same capacity as pre-pandemic levels. Could you give us some details on what capacity levels you're currently running at and how customers within these markets are acting given all the uncertainty that's going around?
Yeah. I think at the moment, obviously, if we start with the first part of that question, if we looked at that, we see that customers are a bit hesitant for two reasons. One is obviously COVID-19 and the reopening following that, but there is also the second aspect of the Brexit negotiations, which is entering some sort of critical phase, which is partially impacting that. If you look in the quarter in total, I would say that we ran on average at maybe 75% of the pre-COVID capacity level, something like that, 70%, 75%, and maybe even a little bit more of that towards the end. It's still not at full capacities. Part of it is actually just a timing and resource allocation issue.
It takes some time to recover from the full shutdown that us and the rest of the industry were forced to do early in Q2.
That's all for me for now. Thank you so much for answering my questions.
Thank you very much.
Our next question comes from the line of Victor Hansen from Nordea. Please go ahead. Your line is open.
Hi, Henrik. Hi, Peter. This is Victor from Nordea. Thank you for taking my questions. I'll start off with, is the better Danish and Swedish performance in particular due to the market growth, or is it good performance specifically for Inwido, possibly due to your e-commerce or the sort?
Hi, Victor. I think there were three things to keep in mind there. Number one, we've made some conscious investments to capitalize on the type of market development that we're seeing now. From that respect, I think that there's probably a slight advantage for us versus competition, given those. The second one to keep in mind is that from a mix perspective and how we're positioned with the strong e-commerce position that we've had and that we've consciously built up over time, obviously we're benefiting from it. I would say that in totality, there is a bit of a mix. To your question, and this is a bit speculative actually because we don't really have full market share data, but I would expect us to do slightly better than competition in some of those pockets.
Definitely there is a good underlying demand, and as I alluded to in the presentation, we have seen some positive COVID impact, particularly for e-commerce, that we're able to capitalize on, but that's also obviously impacting competition positively.
Very interesting. Thank you. For the second question, you talked a lot about upcoming M&A. Can we expect something already this year? Could you possibly elaborate on the characteristic of the acquisition, if it will be within e-commerce, a new technology, a new geography or maybe something related to your green profile, for instance?
In terms of timing, I wish I could shed more light on that, but it's very difficult, partially because obviously doing these processes at the moment is a bit complex with limitations in travel. Secondly, also because it takes two to tango, and we're going to make sure that the price, the target, and the integration plan is right before we do anything. We have a number of ongoing dialogues. We're looking at targets actually at the moment across both Business Area North and Business Area South, and I would say that in general, we're interested in continuing to strengthen the positions that we have in the store segment, including in e-commerce. We're interested in further expanding our portfolio to take a bigger chunk of our customer sales where we are strong.
We're also interested over time to strengthen the overall sustainability aspect of our offering and to make that further stronger. Not able to shed much more light than that, other than to confirm that discussions are ongoing and timing will unfortunately have to be when timing will be.
Very interesting. One further question on M&A. Will the acquisition be a bolt-on or possibly an additional business unit? Can we expect margins in line with the group or maybe it's early to tell?
We've said normally that we look in acquisitions in three levels of tiers really. The first one being what's typically then a little bit smaller acquisitions, which would be bolt-ons to be used either to strengthen the geographic footprint or to add something onto their portfolio. We're looking at what we call business area bolt-ons, which is actually with an existing geography, for example, we would acquire something that's big enough to be a standalone business unit, but which would add some sort of dimension or proposition or customer segment to that geography. The third level then being something bigger that will be more transformational in new geographies or whatever. I would say at the moment, we're looking predominantly at those two first ones and both of those.
It could be something that would be a new business unit or it could be a bolt-on to an existing business unit. In terms of how margin accretive it will be, it is very difficult to say because both the level of integration synergies and the absolute margin levels of the businesses we are looking at is quite disparate. I cannot really give a real rule of thumb in that respect.
Okay, I understand. Business Area South, the EBITDA margin were six percentage points better than last year. Could you please shed some light on how much of the improvement came from lower discretionary spending and how much were from e-commerce or other accretive actions?
I can't give you an exact number, but I want to say that there were three clear elements to it. Number one is mix, so good performance in the segments and the business units where we have stronger margins. Two was actually a sheer volume impact. As you see, we've had good organic and absolute growth. Obviously that growth has then helped us prop up margins because we get better variable contribution with new volumes. The last one is obviously we've done still a good job despite the volume growth then with cost control overall in both the Business Area North and Business Area South, but it's supporting margins positively in South.
Yeah. Okay. Two more questions, if I may. Did you repay any government postponed tax in Q3 that you got from Q2?
I'll let Peter answer that one.
Yes. Some were repaid. We have taxes and VAT, especially in Denmark, that were paid in Q3 that were related to Q2. We have another payment of SEK 54 million that are related to Q3 that will be paid in Q4 instead.
Got it. The last question. Yeah, thank you. How are you preparing for a second virus wave?
I think overall we've been quite, I would almost say, relentless and ultra-disciplined. We've been very clear and have actually done quite a lot of work already coming back after the seasonal holidays in the industry to not let down the guard in this respect. To most respects, the precautionary measures and the activities that we've taken are in effect. I think the key area, in terms of protecting our employees and doing our part to limiting the spread, which have been two very important priorities for us, we have good experiences from this spring and we're keeping the pressure high. I think the area which is more unpredictable and in some respects perhaps more difficult is if we see any substantial impact on demand as a consequence of a, call it second wave or whatever you will.
The thing in that respect, we stay very close to the issue business unit by business unit. We continue to be very cautious with cost and particularly not to accelerate cost now because we've had a, what we'll have to say is a good quarter, but actually to stay very tight on cost and also be prepared to do more in that respect if we have to.
Okay. Thank you very much, Henrik and Peter. That's all for me.
Thank you.
I remind you that if you want to ask a question, please press zero, one on your telephone keypad now. Our next question comes from the line of Kenneth Toll from Carnegie. Please go ahead.
Yeah. Thank you. I have one question on the overall cost. The demand in some areas has been improved by the COVID-19 related effects on how we live our lives and so on. Also. I was interested on the overhead costs like SG&A costs and so on. Do you feel that your sales force is up traveling again and that the cost side have normalized after the COVID-19 in both North and South?
Hi, Kenneth. On a relative level, I would say that there are probably pockets of lagging COVID-19 pickup left, but from a group perspective, almost not on a material level. Particularly at the back end of the quarter, I would say that we're up to more normal levels from an SG&A and overhead perspective. We have obviously been quite good at holding back general activities, and if we take away sort of business-based travel so as to go see customers and sell, et cetera, so conferences and things like that in general is obviously still being held back. Whether that's the new normal or not, I guess it remains to be seen, but there the cost levels are still a bit lower. On a general level, yes, we are basically up to sort of overall pre-COVID-19 activity levels. Probably with some exceptions.
That has obviously ramped up continuously in the quarter. At the start of the quarter, started a bit softer, but activity levels more and more regained over the quarter.
The majority of the improved margins more comes from the business mix that you have more consumers in your business and the growth there, rather than costs being very low at the moment?
That's correct. Yes. The biggest proportion comes from the business unit and the customer segment mix.
Mm-hmm. Excellent. Then, I'm again surprised and impressed about the growth in e-commerce being very strong. Can you talk a little bit about that? I'm interested in the drivers. Do you see cannibalization in other businesses you have due to this? When will you run into capacity problems to produce this?
If we start with the drivers, I think we're quite proud actually of the work that we've done. Obviously, a lot of the credit should go to the leaders in the business. We've also made some quite conscious, both investments, but obviously acquisitions here in the last six, seven years to build the business. Looking at the drivers, I think the drivers are quite similar to the overall drivers of e-commerce behavior in the industry. It's about transparency and it's to some extent actually about convenience. Not to forget here also, we still have quite a broad proposition. What I think that we've done really well as an industrial player entering this is that we've built a very strong integrated supply chain. We control the manufacturing of the product, the shipping of the product, the pricing of the product, the configuration of the product.
This is an e-commerce business, but it's still very much a window business at heart, which I think is a strength for us in this respect. If we look at the capacity perspective, fortunately, we've made some investments in 2018 into expansions in our Estonian plant that supports the e-commerce business. In 2018 when we acquired a business, we also got with that acquisition, a plant in Romania that supports the growth. I think we've done a really good job here in the period capitalizing on this. We have high expectations and plans for this business going forward, so we will likely have to continue with some decent investment levels into these supply chains to continue to support the growth.
Okay. It's more expanding the capacity in the existing plants rather than building a large new plant somewhere?
That's correct. Yes. I think that if we were to increase our capacity in any dimension, we'd look at either synergy with our other production sites, obviously. Alternatively, as we look at acquisitions in general going forward, this is one dimension to take into consideration that we've got an opportunity here to drive volume in an e-commerce business that could help us fill factories depending on what type of acquisitions we make.
Okay, great. That's all for me. Thank you.
Thank you very much, Kenneth.
Our next question comes from the line of Roland Kunen from Veljo Holdings. Please go ahead. Your line is open.
Yes, good morning from my side. Congrats to the results. Very strong. Just one question is left. It's a housekeeping question concerning the tax line. You had considerably lower taxes or tax rate in two Hello?
Sorry, we lost that.
Yeah. Unfortunately, the line broke for Roland, so maybe he will dial back in again. In the meantime, we have a question from Julius Rapelye from SEB. Please go ahead. Your line is open.
Good morning, Jens, and thanks for taking my question and congrats on an impressive report. Only one question from my side regarding the competitive situation within the different markets and especially regarding pricing. Could you just comment a bit on the pricing situation in different markets at the moment and what you're seeing and how this COVID crisis is impacting the situation? Thanks.
Yeah. Thanks, Julius. In general, it's as normally in ours. It's a bit standardized almost the answer, but it is quite disparate as is our businesses and the channel structure in the different geographies. We have probably pockets in the very strong consumer performance, particularly in e-commerce probably I would say. In that type of growth situation, obviously a lot less price pressure because capacity becomes almost a constraint. Whereas in other geographies, and if we look for example at the industrial markets in Business Area North, probably a bit more price pressure in general. It varies a little bit across the different geographies. I want to say overall, I think in the last quarters, we've done a good job trying to turn our mix to the more favorable pricing developments and try to capitalize where there is opportunity.
Obviously we will try to continue that work going forward. It's hard to do any sort of real predictions on the development going forward. It's also difficult as the situation is, if anything, unusually dynamic.
All right. Perfect. Thanks.
Thanks.
There are no further questions registered, so I hand back to the speakers for any closing remarks.
Yeah. Okay, we have a couple of questions via email as well.
The first question that come from Sandor Interman is asking regarding government support programs in the quarter. It has been reducing of costs in COGS or in overhead costs. The answer is yes. We have received SEK 2 million in the quarter, we have booked that as reduced cost in the quarter. SEK 2 million is the answer. We see some questions from Joel Forsberg. The first question is related to U.K. How would a Brexit without a trade deal affect Inwido?
Yeah, I think in general, it's obviously, as for everybody, a complicated question to answer. I think in general, we're in quite a good situation to manage even a hard Brexit deal, mainly as our U.K. units have the majority of their supply locally, and in general, quite local supply chains. Now obviously, if there is a hard Brexit deal, to get a full view on the end-to-end supply chain, further steps back from yourself is very difficult, but at least in the short term, we're in a relatively good position. Secondly, the U.K. is, from our perspective, a relatively limited part of our overall revenue. I guess one of the challenges we have would be then transportation, particularly into our Irish businesses, but I think we have a relatively good plan for that as well.
It would definitely, as for everybody, be a bit of a challenge, but I think we stand relatively well prepared to manage that compared to other industries and other competitors.
The second question from Joel Forsberg is regarding backlog. The South order backlog is huge. The margin will be a lot higher in the future. Is that a correct assumption?
We don't forecast margins on any level, but the facts are that we have a strong order backlog for Business Area South, and we have shown over time a good operating EBITDA margin development for Business Area South.
I will see the question from Harald Haven. He's asking regarding that we mentioned pockets of potential government stimulus. Could you please elaborate on this per Inwido market?
Yeah, I think actually it's quite hard to give a summary by market because the situation is a bit different in different geographies. There have been and are some ongoing discussions to expand partially existing programs or to do new ones. We have seen some in the U.K. on the supporting renovations. We have seen some discussions in Denmark. The exact status of that I actually am not fully up to date on, but we have an ongoing dialogue about that. We have seen some discussions in Finland predominantly. Those are the three main ones regarding this. We're not banking any of these in terms of our outlooks, but we wouldn't be surprised either if we see in at least one geography some sort of stimuli program.
As I said, it's a bit too early to say exactly what it's going to be and what it's going to mean for us.
We hand over back to the operator because I think Roland, the person who was disconnected, is back online again, so he can ask his question.
Yes, indeed. The next question comes from the line of Roland Koehler from Valeo Holdings. Please go ahead, your line is open.
Yes, thanks a lot. Sorry for this technical issue. I was disconnected. Thanks for taking my question again. It's just a housekeeping question concerning the tax line. You had a really low tax rate in 2020. What are the reasons for that, and is this tax rate sustainable for the next years? Thanks a lot.
If you look at year-to-date, the tax is 90% of earnings, the result before taxes, and the last year we were on 20%, so it's a difference of 1%, and that is more related to mix, and also that we have some unused tax losses that were not used in some countries, especially in Norway, that we now can utilize, meaning when we now make profit in Norway, we don't have to pay taxes because we have that on our balance sheet. Going for the future, I think the normal conversation is around 20%.
Okay, thanks a lot.
We have no further questions registered, so I hand back to the speakers.
We actually had one last question then also, which was what kind of acquisitions do we aim at, more regular brick-and-mortar or some kind of specialized company? I think we've already answered that question in terms of our M&A plans going forward. With that, we thank you very much for your attention and we close the call there. Thank you very much. Bye-bye everybody.