CEO comment Q3, 2020
Following the challenging second quarter, the third quarter was characterised by stabilisation and recovery for several of our businesses. The picture is however fragmented as various market segments and geographies are in different phases of the pandemic, with different implications depending on the governmental restrictions in place. The health and wellbeing of our employees, customers and partners continues to be a priority, and I would again like to take this opportunity to thank all employees for their excellent and hard work during these unprecedented times.
During the quarter we noted a fast order recovery in the retail segment, backed by low interest rates and the recent upswing in home renovation supported by the growing stay-at-home trend. As a result, we began to allocate more resources to this segment towards the end of the quarter, whilst still being mindful of costs due to the current uncertainty. The project market remains negatively impacted, especially in the UK, with both social housing and the London property market lagging behind pre-pandemic activity levels. The Danish market has remained strong with growth in all segments.
The overall Group organic sales trend was down 2% in the third quarter. The Nordic region was 3% ahead mainly due to the continued strong performance in Denmark, while the UK was down 9%, impacted by the project market. Central Europe reported double-digit growth. Operating profit for the Group was SEK 195m (267), cash flow remained solid and the net debt/equity ratio, excluding IFRS 16 leases, decreased to a record low level of 12% (38).
Looking ahead, the near future still holds business uncertainties as new restrictions may come into force, but we currently deem the risk of temporary factory closures to be limited. As long as we can continue to operate in a normal manner, we believe that the growing trend in home renovations, growth in online visits and digital design appointments will convert into growing order books over time.
I am confident that our strong customer commitment, the agility in which our employees operate in this new environment, and a solid balance sheet to support our strategic agenda will provide business opportunities in both the short- and long term.
President and CEO