Ladies and gentlemen, thank you all for standing by, and welcome to the Inwido Q1 Report Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session, at which time, if you wish to ask a question, you will need to press star and the number 1 on your telephone and wait for your name to be announced. I must advise you all that this conference is being recorded today, Thursday, the 26th of April, 2018. I would now like to hand the conference over to our first speaker for today, Mr. Håkan Jeppsson. Please go ahead, sir.
Thank you very much, and good morning to you all out there. My name is Håkan Jeppsson. I'm the CEO of Inwido, and together with me here is Peter Welin, our CFO, and we will guide you through this slightly complicated quarter with all the winter effects coming up. Let's turn to Slide 2. Talk a little bit about the highlights in the quarter. I would first like to say that strategically, our actions are overall in line with our plans, and I would say that we continue to do what we say in our plan and in our strategy and what has been communicated before. First of all, we are glad to see that we're holding up sales in a difficult low season. Normally, the first quarter is low season, as always, and much lower quarter than the other quarters of a year, of course.
The long, harsh, and late winter, of course, cost us some challenges in this quarter. I'm also glad to say that Inwido has never been bigger as a company, and after Quarter One of 2018, we have reached our biggest level ever according to sales. There is a winter effect both on sales and order intake, and we are coming back to that, of course. We launched efficiency programs late last year in Q3 and Q4, and they are running according to plan. We are aiming at saving from various activities, around SEK 100 million. We are taking the last restructuring cost in this quarter of that program, around SEK 19 million for closure of one of the factories in Sweden. I'm also glad to say that we have launched a lot of new products with big potential in several of our markets.
Actually, I don't think that during my time, we have had so many product launches coming up, both in windows, doors, and also for the smart home, and basically all our markets are included in the launches. New slim dimensions, more energy-efficient products, and more digital solutions also for the more efficient and comfortable homes. We are consolidating our leading e-commerce position with the acquisition of Bedst & Billigst, B&B. We closed it per April 1. From the second quarter of 2018, we will also include figures for that company. We have also taken full control during February of our acquisition, Outline, in Denmark. That has been in our figures a couple of years, but we have now complete ownership of the company since February. The winter cost a rather unfavorable segment mix. New build increased. New build is more steady over the year.
The construction companies continue to build also during the wintertime, whereas consumers are normally more hesitant during December, January, February. They are always, or normally at least, waiting for spring, and this happened also this year. I've seen that also from other companies reporting the last couple of days that there is very high capacity utilization in many areas, and we can also see the first signs of inflation when it comes to raw material. What normally is not a big challenge for us. We have a trend of passing the raw material price increases on to our customers normally.
Turning to Slide three, talking about the market development, you will hear the words late winter and probably also the words cold and long several times during this presentation, and we have seen those effects in all our markets. It seems to be all over Europe, a colder winter than normal. The big problem for us is that the winter came late. It's not a big problem for us when we have winter in December or January, February, but when winter is turning up rather late in March and even beginning of April when our season is due, it's a bigger challenge for us to plan production and to get the orders in.
It has been tougher than usual, and we must also remember that the winters the last couple of years also in Northern Europe has been rather mild, and that has also been very positive for Inwido. If you can remember, we had a very strong start of last year when we had basically no winter in big parts of Europe. The adverse weather conditions affect both volumes and competition and prices, lower volumes, lower order intake in general, I would say. It doesn't mean that is a change in real underlying demand, but because of the cold times, we get less orders in because customers and consumers are waiting. This also causes harder competition and lower prices to a great extent because we see more campaigns from competitors and from customers to fill up production and sales.
We have seen more winter price campaigns than I think I've ever seen during my nine years in the company. It's been a harder competition to get business, and therefore, I'm still glad that we have been able to hold up sales as well as we have been during the quarter. Consumer confidence seems to be leveling out or dropping a little bit. It's still on a high level in general, but it's especially in Sweden, I would say, impacted by the real estate markets, probably. Of course, as earlier, also in U.K. and all the Brexit effects that we don't have more energy to talk about any longer, I guess. The other markets are unstable, but not increasing anymore, but standing on high levels. As stated, raw material prices in an upward trend. We're looking at aluminum, we're looking at glass, timber to some extent.
We have seen very high prices for aluminum in the London Metal Exchange, as high as around US$2,500 per ton during last week. Because of the Russian sanctions, of course, and also the threat of trade wars and tariffs for sending material to U.S. has also caused some unrest in the raw material markets. It's also impacted by the strong economic cycle, where capacity utilization is very high in many industries and creating some bottlenecks. I think we have it under control, and I will come back to that later. Some winter effects and some supply effects right now in the market development. At the same time, very high GDP growth in general. We see strong economies, real income is increasing, very low interest rates, low unemployment rate, and it seems like house owners are very well off right now in most markets.
The healthy underlying demand still exists. There is lack of dwellings, there is need for renovation, and there is high wish for new smart solutions and better and more well-designed houses out there. We don't see a shift in the healthy underlying demand at this stage. Turning to slide 4, talking about our performance in Q1, again affected by the long, late, and cold winter, holding up sales +2% only, I would say, -2% organically, including all currency effects. We have never been larger as a company, and actually, Inwido has grown by almost 50% since the first quarter 2014. The steady development becoming a bigger and more profitable company continues, also during very tough conditions.
It was also, as usual these days, a quarter where the months differed quite substantially, where January was okay, February started off rather well, and with the harsh winter, there was a downturn at the second half of the quarter, and especially in the month of March. Q1 2018 was actually the second-best quarter ever for Inwido with an operating EBIT of SEK 56 million. This was still impacted by a weaker and a worse segment in customer mix for us. I would say too much industry sales still holding up sales, and consumers very hesitant, especially, I would say, in Sweden and Finland. This created also lower volumes than expected, and also what we have or had anticipated and what we had capacity for. This also put some pressure on our margins.
On top of that, we got tougher competition and some price pressure, as I talked about before. Then on top of all this, there is also this Easter effect. Last year, we had Easter in Q2, and this year we had Easter in Q1. That also is something you have to take into consideration when you compare figures and also looking into sales in the quarter, but also order intake for the coming quarter. Still, I think that we have strengthened our position in the Nordics and also in U.K. during the quarter. We haven't all the figures yet, but in the markets where we can see the overall market development, it's quite clear that Inwido is a stronger company and more well-positioned today than one or two quarters ago.
Order intake, -6%, organically -10%, must be seen in the light of the very late and hard winter, of course. Denmark continues the positive development. A very strong market there. We are strong and we think that 2018 will continue in that way in Denmark. Also very positive with Emerging Business Europe, with e-commerce business unit heading, the business area EBE improves both sales and earnings development. We can see that the cost savings and restructuring is paying off in several of the markets there. We actually reach break even for the first time in a Q1 in EBE, and that is something that tends to come in Q2 normally. e-commerce continues to grow by 10% in the quarter and is now almost 7% of total group sales, including the newest acquisition. We are absolutely the leading player in e-commerce in our industry in Europe.
Going through the business areas, turning to slide five, talking about Sweden and Norway, where I think we have seen challenges, of course. The difficult times from the weather perspective created a changed segment in customer mix and affected our margins negatively. Actually, our consumer share in the individual market, Sweden, was as low as below 50% in Q1 because of the hesitance from the consumers. We expect that to come back in the quarters to come, of course. Consumer confidence, however, is declining somewhat. Consumers are hesitant from all restrictions they have seen in the last couple of years when it comes to lower subsidies, demand for amortizations, and lending restrictions, of course. New build seems to be easing off a little bit. We see from all official statistics that there will be fewer dwellings built in the coming years.
House manufacturers are still very positive and have a good order intake and full order books for at least 2018. All in all, it seems like the market is more or less the same situation as it has been the last couple of years. Again, mixed prices and order intake in the wrong direction to some extent because of the weather. We could also see that the construction material went down in the retail segment in the full market of Sweden by 10% in the month of March. Meant that Q1 was more or less 0% for all materials in the first quarter in the Swedish market. It was a weakening demand towards the end of the quarter there.
Norway we see with a positive profitability trend, the new organization, a more slim one. Combined with the Swedish administration, is now paying off. That is, of course, very positive. We are hopeful that this will continue over the year. Reported sales Sweden/Norway, -3%, same figure organically. Order backlog per annum quarter, -18%. Of course, this is affected by the lower order intake, especially in the month of March. We expect order intake and consumers to come back with spring coming around the corner. Turning to slide six, looking into Finland, where we have seen sales growth, but in less margin favorable channels.
It's more or less the same development as we have seen in Sweden and Sweden/Norway, a much lower consumer share of total sales, actually far below 70%, that is not something we are used to in the Finnish market. Still, GDP development and consumer confidence is still on a high level in Finland, the Finnish economy seems to be very strong, no worries there. The higher share of industry sales, of course, affected our margins and our profitability negatively in the period, we have expectations that we will regain strength and higher margins with also milder weather in Finland. Very tough competition in Finland, I would say, to get orders. Price pressure because of the, also in Finland, much tougher winter than normal put pressure on our gross margins.
Actually, in January, February, there were six to seven days all in all where we could do no installation at all because of the very low temperatures, that is rather unusual. Actually, the output in the Finnish window industry in the first quarter was as low as minus 18%, this is, I would say, only because of the tough weather conditions. Some competitors in Finland in financial distress, that also means that some of them are chasing orders rather hard. We have to put some attention to this and protect the market shares that we do have. I think that we have been able to protect our market shares also, both in Q4 and in Q1 of 2018. Reported sales, plus 7%. A lot of currency effect in that, 2% organically adjusted for currency.
Positive that we have been able to grow even though the growth has come from new build and industry sales mostly. Order backlog per annum quarter, plus 1% at the end of March. Turning to slide seven, looking at Denmark, the bright star that we do have in our company, had a good quarter again in a stable market. Consumer share is very high. It's almost 100% in Denmark. We see strong market indicators and very high and unchanged consumer confidence in Denmark. Also here, the long, late, and cold winter affected volumes. We had less snow in Denmark, but unusually cold. We could also see that orders are very fast picking up in April when the temperature started to rise. We have no worries about the Danish development this year. Continued positive margin development also in the quarter.
Our Danish operation is very efficient, with some extra new effects from the restructuring efficiency program that we launched and are now implementing, we could also see that that is paying off on our margins. Reported sales, minus 3% organically and including currency effects, minus 7%. I would say nothing to worry about from that respect. It's because of the low figures in March. Order backlog prior to quarter, minus 16%, also because of that. Tough comparable figures when you compare to 2017, with shorter delivery times there, I'm not worried about that figure at all at this stage. Turning to slide eight, talking about EBE. EBE, Emerging Business Europe, all the business outside the Nordics and including the e-commerce. We had a reasonable start of the year, our e-commerce business continues to grow in a profitable way.
Actually, e-commerce grew by 10% in the quarter in a falling market, to be noted. With the latest acquisition of B&B, as I said, we are approaching a more than 7% of total group sales pro forma. We are really happy about that development, even though we can see that competition is also sharpening in the e-trade channel at this stage. More players are, of course, coming. We are not alone seeing the development in that channel, as it is in many other industries, of course. We have seen the efficiency measures in U.K. and in Austria paying off, and they are coming according to plan. Breakeven in the first quarter is positive. We can also see good development in the lower-priced window market in U.K., where we sell our PVC windows. It's developing in a positive way. Ireland is very strong.
Poland is a strong market, and we have developed there quite positively the last couple of years, and this continues in the first quarter. However, as I said, consumer confidence to some extent in U.K., not surprisingly, is turning down a bit, and you could not expect otherwise. Reported sales, plus 4%, more or less unchanged sales organically and currency adjusted in the first quarter. Order backlog per end of quarter, also minus 12%, affected by the same things, same weather effects that we have seen in all other markets during late February and March. Slide nine, looking into the outlook, we still see that the underlying conditions are very healthy. The need for our products we feel is strong. There is a need for new developed dwellings. There is a need for a lot of renovation in many markets and many segments.
People wish for new designs, new concepts for a more healthy and comfortable home and living. Hopefully, we expect this to turn into healthy demand going forward also in 2018. Inwido is very well-positioned also within digital. We have a lot of new smart home and connected products, and we are also implementing digital solutions internally and also in the cooperation with our partners, both up and downstream the value chain. We are comfortable in that we are on the right path there also. We are the clear market leader in e-commerce in Europe, and we continue to grow in a profitable way, and that is something we have the absolute ambition to continue to do going forward.
As I said before, many new products launched in many markets for new designs, for digital solutions, lower energy values. It goes for Sweden, Norway, Finland, Denmark, Poland, and we are also soon launching some new interesting products in the U.K. market. We are well-positioned when it comes to the product launches and concept launches going forward. Challenges we've seen is, of course, the late winter. I hope that the late and harsh and cold winter is now over, but it will be impacting the beginning and part of Q2 because we got too few orders too late. It's not a change in the underlying demand, but it's just because customers and consumers waited too long.
Of course, with four to five to six weeks of lead time producing the made-to-order product, it will have an impact on the Q2 sales, especially in the beginning of the quarter, even if we can see that order intake clearly is picking up in April, of course, with the warmer and more sunny weather that we are now seeing. There are more uncertainty in some markets than last few quarters. It's not a huge shift or a huge change, but Sweden, Norway, U.K., we can see that the house market discussions and the discussions and debate about the real estate sector, house prices, et cetera, is to some extent impacting the consumers. Of course, as all other companies in all other industries, we see the same financial and political risks.
To some extent also right now, rather highly valued stock markets that could also be a risk that share prices will come down to low levels, and that could impact consumers to some extent. Uncertainty in some raw material supplies could impact our product cost in the coming quarters. There is some bottlenecks in supply chain in general right now, not in Inwido, but we can clearly see that we have to be on our toes towards our big partners within timber, glass, aluminum, coating, et cetera, so that we secure our lead times and our production efficiency. We are right now not in any trouble at all, but we see that there are many companies reporting bottlenecks in various parts of the economy.
When it comes to aluminum, what is a bigger share of our products right now and continuously increasing, we have secured our supplies over at least Q2, and we think we are really well-positioned there. Of course, with the great movements we have seen in that market, we have to continue to be very alert and make sure that we handle the aluminum supplies in a good way also for the fall. Going to slide 10, talking about the focus areas near term. Obviously, the pricing and the segment mix is very important for us. We have to make sure that we compensate ourselves for those potential raw material price increases that we see. We would like to bring in more consumer sales going forward.
It's very clear that we prioritize profitability before volume, to make sure that we have the right profitable gross margins also going forward that we have seen over the last couple of years within the Inwido system. We would continue to consolidate and normalize the supply chain after some of the challenges we had last year. We are glad that we are now back on track, but we should also continue to improve continuously the efficiency, the lead times, and the security in our deliveries can always be improved so that we meet our customers' expectations in a good way. A very clear target for us is to continue to create organic and acquisition-based growth. We continue to work on the target list when it comes to further acquisitions, to be able to some extent consolidate European very fragmented landscape within windows and doors.
We have a very focused work within this also going forward right now. We spend a lot of time on that issue, of course. Number four, efficiency and cost improvements. We have our program running. We now should make sure to generate those effects that we have promised ourselves and the market, but also to improve competitiveness going forward, of course. We see that program coming on very well right now. The fifth focus area is, of course, to continue to launch interesting, attractive product concepts, but also processes to improve efficiency, and this goes especially within what we call E. That goes for internal production, supply chain processes, digital products for consumers and customers, but also the interaction with partners up and downstream the value chain, where we can continuously, of course, improve, and we spend time, effort, and money to improve ourselves there.
By that, I hand over to Peter so he can guide you through the figures of the first quarter 2018.
Thank you, Håkan. Then we turn page, and we go to page number 12. On this page number 12, you can see the results for Q1 2018 to the left, as well as the results for Q1 2017. As Håkan said before, sales was up 2% in reported figures, adjusted for currency as well as for acquisitions, sales were down 2%. So organic growth in the quarter was negative by 2%. Gross margin declined due to higher degree of intra-group sales. The longer winter affected mainly consumer sales, whereas the industry sales had a positive growth in the quarter. A higher degree of intra-group sales means negative impact on gross margin as well as on operating margin in the quarter. Operating EBITDA ended at SEK 56 million compared to SEK 83 million last year, a deviation of 33%.
Inwido had a restructuring cost of SEK 90 million in the first quarter. This SEK 19 million was communicated in the Q4 report. The SEK 90 million is then connected to a factory in Sweden, and it's included in the cost-saving program that was launched in last year. We had also a positive net financial effect due to positive currency impacts on our loans, reducing the differences compared to last year on profit after tax. Profit after tax was SEK 33 million in the quarter compared to SEK 45 million last year, a deviation of 27%. If we then turn page to page number 13 Reported sales for 2016, 2017, 2018 in Q1. To the right, you can see the order take for 2016, 2017, and 2018. As I said before, reported sales was +2% compared to 2017, adjusted for currency and acquisitions, sales was down by 2%.
The order take was -6% in the reported figures. If we adjust it for currency, the order take was -10%. The order take, as well as sales, had a positive growth in January. The year started well. Also the first week in February was good. The longer and colder winter affected especially the order take in February and March. The deviation was at most in March. Easter had a negative impact when comparing to last year. If we turn page to page 14. On this page, you can see the operating EBITDA result in Q1 for 2013-2018. You can also see the gross operating EBITDA margin for the Q1 during these years. Q1 last year was a historic strong quarter with high degree of consumer sales, 72%. There was no Easter impact in the first quarter of 2017.
Due to the seasonality within this business, the Q1 result is always the lowest result for Inwido. Normally, the result margin is a break even or close to 3%. As you can see on this chart, you can see that we had a negative result in 2013. In 2014, we had a break even. In 2015, 2016, we were just on a margin around 3%. If you go further down into the history, we can see the same results. Last year was a really strong result with SEK 83 million in profits and a margin above 6%. This year, you can see that the result for Q1 this year is above the average for the last year. The main reason behind the margin decline compared to last year is lower degree of consumer sales in Sweden, Norway, and also in Finland.
The total consumer share dropped from 72% in Q1 last year to 69% this year. If we turn page to page 15. This page shows the order backlog end of each quarter from 2013 Q1 until Q1 2018. As I said before, the year started well with a positive order take in January. The order take declined, especially in the second half of February and March. The backlog declined as a consequence. The backlog is 8% behind last year in SEK. If we adjust it for the currency impact, the backlog is 12% behind last year. The lower backlog end of March will have a negative impact on sales in the beginning of the second quarter when comparing to last year due to our lead times in our productions.
Still, the backlog is above 2016. In a historic perspective, it is still a strong backlog if we are not only comparing to 2017. If we turn page to page 16. On this page, you can see operating EBITDA and operating EBITDA margin for Q1 2016, 2017 and 2018. As I said before, the result this year was SEK 56 million compared to SEK 83 million. The margin was 4% compared to 6.1% last year. As I said before, the longer winter, lower degree of consumer sales has made an impact when it comes to margins. The lower volume has also impacted the margin when comparing to 2017. However, when compared to 2016, we can see a positive development when it comes to operating EBITDA in SEK as well as on the margin, 4% this year compared to 3.5% 2016.
If we then turn page to the last page before we open up for questions, to page number 17. This page shows net debts for each quarter and also net debt versus operating EBITDA rolling 12 months. The net debt has increased in Q1 compared to Q4, and this is normal due to our seasonality. We have always increasing net debt in Q1 compared to Q4. However, this year has increased a bit more due to the currency. We have several loans in other currencies than Swedish krona, and this means that when consolidating, we have a higher degree of net debt due to the weaker Swedish krona end of March compared to end of December. We have also increased the working capital in the Q1, especially inventory. We have today a little bit higher safety inventory as a consequence of the production disturbances we had last year.
We have a little more safety inventory in our factories, and also somewhat higher inventory due to lower volume than expected end of the first quarter. The net debt versus EBITDA ended at 2.5 rolling 12 months.
Thank you, ladies and gentlemen. We will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star and one should you wish to ask a question. Again, star and one should you wish to ask a question. Your first question comes from the line of Fredrik Meuller. Your line is now open. Please ask your question.
Thank you very much. Could you talk a little bit more about the backlog and what we should expect in Q2? Is it only winter sales effect? Could we see some catch-up effect or timing effect here where you regain some lost business? Also maybe the order intake, is that a good representation on where we should see sort of the organic level for Q2?
Obviously we will regain some business that was not done towards the end of Q1. To talk about catch-up effects, I don't know if you should talk about catch-up effects, but we can clearly see that orders are now coming with the mild weather or the milder weather. It's cold today in Stockholm, I guess, but the milder weather. Time is to some extent our enemy. When we get the orders, and if we get too many orders at the same time, we have the capacity we have short term, so to regain everything. You should expect that there could be an impact on top line in Q2 because of the late, so to speak, order intake.
If we get orders now in mid April or second half of April, because, what happened earlier, then of course it will be difficult then to get back fully on track in Q2. I don't see that as being a shift in the market, though. It will be more a time effect for us.
Okay. Speaking of the order intake again, could you maybe give us some hint as to how Q2 has started so far?
I think I did give a hint. There is a mix between the market. They're all in plus, of course, but you also have to remember that, when we have winter effects or Easter effects, there is a short-term effect, or midterm effect, both on sales and on order intake. Last year we had Easter, if I remember it right, in the middle of April. The comparison figures for us now is quite weak. We see very good development in some markets, and they're all in a positive mode right now, without exception. We are coming back on track. It's very hard to predict exactly how this will be fulfilled through the whole quarter. Right now it looks good.
Mm-hmm. Right. You have talked about improving consumer sales, especially in Sweden, I think. Yet, new building seems to be increasing every quarter. Could you just maybe tell us a bit more on the strategy going forward, as to how to increase the consumer share of sales?
Yeah, I think we do a lot of different things. We have strengthened the organization. We have launched a lot of new products in several markets, also in Sweden and Norway. We are coming closer to the customers and consumers in various ways. I think the effect that we see towards the end of Q4, but especially in Q1, is more related to only the winter effect, I would say. I can't see that we are continuing to losing out on the consumer side for more structural reasons. It's about the weather. We should also remember that competition has sharpened, that some of our big retail customers have more suppliers. Competition is also tougher for us, and it's quite clear that for us, a general rule is always profitability before volume.
We are not chasing volumes in the consumer sector just to get orders in our factory. It's a combination of a lot of measures and there will be more measures going forward, and I'm quite optimistic that we will come back on track. Especially now with the winter gone, we can clearly see that orders are now coming back in the consumer sector much more than they are in the industry sector.
Okay. In the report you also write that you had some increased market shares in 2017. Could you give us just an update on where you stand here in the respective countries right now?
Yeah, I think we increased market share dramatically, I would say, in Norway, that was not so difficult. We came from a low level. We are more or less even in Sweden, I would say. Finland is increasing dramatically. We have never been in a stronger position than right now in Finland. When it comes to Denmark, we have continuously over the last, I would say six to seven years, strengthened our market shares even organically, but also with the acquisitions we have done. All in all, in the Nordic region, I think we are in a stronger position right now. It's not giant leaps we're taking, but we have consolidated our position, and we are stronger now than we used to be at least one year ago. It looks optimistic.
When it comes to the European markets, the statistics are not that valid, it's hard to measure, I'm quite sure that we have increased our position in the medium to low price segment in U.K. with the PVC, where we are continuously growing. Our position in the timber segment in Poland, for sure. Right now it looks positive also in Europe, it's, of course, very tiny figures we have in the European markets, and with not very secure statistics to lean on.
Okay, thank you very much.
Thank you.
Again, ladies and gentlemen, should you wish to ask a question, please press star and one on your telephone keypad. Your next question comes from the line of Johan Dahl. Your line is now open. Please ask your question.
Thanks. Hi Håkan and Peter. Håkan, you talked about the increased price competition. I think you mentioned Sweden and Finland, for example.
Yeah.
To what extent do you believe that is driven by the temporary winter effects, to what extent is it structural as you face in some of these markets, probably slowing demand?
I think it's actually both. The extended price pressure and the harder competition we see, we always see that clearly in the winter season because of the winter campaigns, there are many of our competitors running out of orders, and they try to fill up the factories to just make them run. With this harsh winter, we have clearly seen that much more than normal, I would say. Also we see some of the competitors in some of our markets, I would say especially Finland, struggling a little bit financially. We have seen that many times before, that when you're struggling, you have a tendency that you go even lower to secure money into the company and orders into the factory.
Clearly, most of what we have seen in the first quarter has been winter effects, I would say, and to some extent, structural effects also in Finland, not negative for us, but for some of the other players, I would say. Long term, there has been increased general competition, I would say, in the Nordic region, and I would say especially in Sweden. The Swedish market has over the last six to seven years, actually, we have seen increasing amount of the so-called bigger players trying to create stronger positions and being more active and more aggressive in some of the key segments. We can also see clearly that the big retail chains within construction material today also work with more suppliers in our area, and that also means that we face more competition also in some of our core channels. It's both.
I think the shift or the change that you see in this report is not that the structural competition has increased further, it's much more or basically only connected to the late and cold winter.
Got you. You mentioned that you're rolling out record number of innovations, I think you mentioned.
Yeah.
Can you put any sort of numbers to that, and what do you expect the impact to be for the group due to that?
No, I won't give you any impact on that. It's very hard to calculate. I think we have some years back, we almost had no sales of new developed products, and we measure this very clearly now. I think at the latest report we had between 7% and 8% of total sales was actually newly launched products and increasing very fast. This is a high figure in our industry, and we have a clear target there. That does not really include the newest launches. I expect that figure to increase quite dramatically going forward. This looks very positive. It's taken some years to come there, but now we clearly roll out much more interesting products for the markets, and that will have an impact.
To measure that and to give you a forecast on that or to guide you on that is not something we will do.
All right. Just on production in Sweden, Norway, how concerned should we be that you repeat the problems you had last year as orders are now pushed in late for delivery in Q2, and you have the strain which you talked about in the supply chain? Could you just elaborate a bit on how you look on that?
Yeah, I'm quite sure that some of the mistakes we did on our own, we will not repeat. That I'm quite sure of. What happens in the supply markets with the big materials is something that we, of course, try to prevent from happening. There are clearly some risks that there will be bottlenecks within the big material suppliers because they deliver to many different industries, a lot of materials, and with the economic boom that we see right now in many industries, of course, we cannot guarantee that we are not affected by that. Right now it looks quite promising. Our production is running smooth and fine, and I can't really foresee that we should run into dramatic problems this year again.
That is what we can see for now, and our factories is actually now back on track and with very, or rather good figures from all aspects when it comes to lead time, delivering the right amount on time, et cetera. I'm right now quite calm from that perspective. It can change quickly, of course.
The factories that had problems last year, are they currently in full swing, or?
The problems are not in full swing, I hope. The problems are more or less gone. We are made to order a couple of million windows and doors every year in 29, or today, I would say 31 factories with the two newest acquisitions. Of course, with made to order, you have to be very humble and follow the situation very carefully. This is not a steel mill or anything else running. This is very made to order, and you plan your orders and your production with a lot of different models every day. Right now it's working as it has done before the challenges we had in Q2 and Q3 last year. I sleep well at night.
Okay. Just finally, the SEK 100 million savings program. Can you just update us where you stand on that, the progress you're making and confidence in realizing it?
We are rather confident. We are realizing the savings. We are following the program, I am today rather sure that we will fulfill that program completely with the full year 2019 as we have promised before.
Okay, thanks.
Thank you. Your next question comes from the line of Emmanuel de. Your line is now open. Please ask your question.
Good morning. This is Emmanuel from LBV Asset Management. I really just had a question on the aluminum and input prices. Because of what's happening to aluminum, can you just help us a little bit with some sensitivity? Namely, how much is aluminum costs in your production Inwido? If the aluminum prices stay elevated for longer, basically would we start seeing some pressure in your margins in the second half? Thank you.
Yeah, we work very closely to the big players in aluminum. Of the raw material cost, aluminum is 10% of the total cost. It's a minor impact. That means that it's around 5% of the sales cost. It's of course, and it's increasing because aluminum is more and more put on our products in most markets, so it's increasing. We are securing the aluminum supply and the prices a couple of quarters ahead. We are secure now for the first half and the second quarter and partly also already in the third quarter. We have always time to adjust. Of course, if there continue to be such dramatic volatility as we have seen, you cannot rule out that we will be, to some extent, impacted. Of course we have to push price increases or cost increases to our customers.
Right now it seems like the situation is rather under control. Since one of the Russian guys with this company, Rusal, he was off the list, or he actually left control of that business. You could also see that he could be off the list maybe from the sanctions or not impacting at least the aluminum market. That also meant that prices came down. There is some unrest in the aluminum market right now and for various reasons. We have to be very on our toes to make sure that we handle it in a good way.
Okay. Just to follow up on that. Since listing 2014, you've consistently had an EBITDA margin in excess of 13%, with the exception of last year for the production issues you've commented in numerous occasions. Do you think it's reasonable with the amount of information we have today and in April to think that in 2018 we can go back to the, let's say, 13% plus EBITDA margin on a full year basis?
We don't give usually any forecast. We try to guide on what we're doing and how we see the market develops. I think what I've just said about our position in our key markets, that has been strengthened the last couple of years, and our efficiency improvements in our factories with the exception of the extraordinary challenge we had last year for various reasons, I think there is reason to believe that we will continue to deliver very good results. Of course, it depends on how the channels, how the segments develop. The general demand will of course have an impact on what kind of margin we can take out. We don't see a dramatic shift this year in comparison to 2016 and 2017 from other aspects than those that we have discussed earlier in this call.
Okay. Thank you.
No further questions at this time. Please continue, sir.
Okay. We think this conference call is over, and we wish everybody a happy day, happy week, and a happy life. Thank you very much.
Okay, that just concludes our conference for the day. Thank you all for participating.