INTERIM REPORT 1 APRIL - 31 DECEMBER 2020
Niklas Stenberg, President and CEO, and Malin Enarson, CFO
THIRD QUARTER HIGHLIGHTS
Net sales
SEK 2,881 m, +1%
EBITA margin
10.6%
From 8.3%
2
- Clear recovery in demand and stable margin thanks to efforts to adjust to lower business volumes
- Favourable market development adjusted for the cyber attack and the sharp decline in sales of scrubber related products
- Substantial variations between customers, segments and geographic markets remain
- Totally thirteen acquisitions so far this year
- Positive trend in working capital and strong cash flow
QUARTER 3: NET SALES
NET SALES INCREASED TO SEK 2,881 M (2,846), +1%
- On the whole, the outcome for the third quarter was in line with our expectations
- Of the organic decline of about 4 percent, a significant part was related to decreased sales of solutions for scrubber installations. There was still a certain negative impact on sales from Covid-19
- The acquired growth contributed 8 percent
- Substantial variations between customers, segments and geographic markets remain; In the engineering sector and in special vehicles, the market situation improved sequentially, in electronics and medical technology, the business situation was stable while demand in the marine segment remained weak. Demand in the forest industry, especially the sawmill market, was very good and sales in wind power and infrastructure products for national and regional grids was strong
- We noted a continued recovery in most of our geographic markets, albeit to varying degrees. Overall, the strongest recovery in the third quarter was among the companies in Sweden and European markets outside the Nordic region, although the increase in demand among the latter geographies was from very low levels. In Denmark, Finland and Norway, the recovery in the business situation was somewhat weaker, although it did improve compared with the second quarter
3
QUARTER 3: EBITA DEVELOPMENT
EBITA INCREASED TO SEK 304 M (236), +28%
- The EBITA margin amounted to 10.6 percent, due to short term cost reductions, long term adjustments of operating costs as well as favourable contributions from acquisitions
- At the end of the quarter, approximately 240, corresponding to about 8%, of the Group's employees had been notified of redundancy and a further 200 employees are affected by short- term lay-offs
- Operating profit increased with 27 percent to SEK 238 m (188) and the operating margin amounted to 8.3% (6.6)
- Net financial items were SEK -12 m (-9) and profit after financial items increased with 26 percent to SEK 226 m (179)
- Profit after tax increased by 22 percent to SEK 174 m (142)
4
AUTOMATION
Quarter 3:
- Net sales increased by 6 percent to SEK 625 m (588)
- EBITA increased by 13 percent to SEK 58 m (51)
- The business area was affected marginally negatively by Covid-19
- During the quarter, demand increased for the companies exposed to the Nordic engineering sector
- In other segments of importance for the business area, such as medical technology, the defence industry and the data and telecommunications segment, the market situation remained positive with stable sales
- The business situation among the companies operating in the markets outside the Nordic region remained affected by shutdowns and restrictions
5
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3 months ending |
9 months ending |
12 months ending |
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|
31 Dec 20 |
31 Dec 19 |
31 Dec 20 |
31 Dec 19 |
31 Dec 20 |
31 Mar 20 |
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|
Net Sales, SEK m |
625 |
588 |
6% |
1,770 |
1,731 |
2% |
2,464 |
2,425 |
|
EBITA, SEK m |
58 |
51 |
13% |
168 |
168 |
0% |
267 |
267 |
|
EBITA-margin, % |
9.2 |
8.7 |
- |
9.5 |
9.7 |
- |
10.8 |
11.0 |
AUTOMATION
MOTION & DRIVES
INDUSTRIAL IT & SENSORS
FIBER-OPTIC COMMUNICATION
COMPONENTS
Quarter 3:
- Net sales increased by 2 percent to SEK 498 m (489)
- EBITA decreased by 9 percent to SEK 37 m (41)
- On the whole, the business area was affected moderately negatively by Covid-19
- In Denmark and Sweden the market situation over the quarter was favourable, in Norway it was stable, while in Finland the business situation was varied
- Demand remained favourable in the wind power market and the automotive and engineering industries saw a certain degree of recovery from low levels, while the business situation in electronics was stable
- Currency effects, product mix and non-recurring items in the form of restructuring costs had a negative effect on outcomes and margins
6
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3 months ending |
9 months ending |
12 months ending |
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31 Dec 20 |
31 Dec 19 |
31 Dec 20 |
31 Dec 19 |
31 Dec 20 |
31 Mar 20 |
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|
Net Sales, SEK m |
498 |
489 |
2% |
1,481 |
1,504 |
-2% |
2,059 |
2,082 |
|
EBITA, SEK m |
37 |
41 |
-9% |
137 |
153 |
-10% |
202 |
218 |
|
EBITA-margin, % |
7.5 |
8.3 |
- |
9.3 |
10.2 |
- |
9.8 |
10.5 |
COMPONENTS
DENMARK
FINLAND
NORWAY
SWEDEN
ENERGY
Quarter 3:
- Net sales increased by 10 percent to SEK 657 m (596)
- EBITA increased by 42 percent to SEK 87 m (62)
- The business situation in the business area remained highly favourable in the third quarter, affected only marginally by Covid-19
- Sales of infrastructure products for upgrading and building out national and regional grids and for wind power, maintained high levels and the market situation remained stable throughout the quarter
- The market situation for the units active in sales of niche products for electrical power distribution and for building and installation stabilised during the quarter
7
|
3 months ending |
9 months ending |
12 months ending |
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|
31 Dec 20 |
31 Dec 19 |
31 Dec 20 |
31 Dec 19 |
31 Dec 20 |
31 Mar 20 |
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|
Net Sales, SEK m |
657 |
596 |
10% |
1,973 |
1,808 |
9% |
2,577 |
2,412 |
|
EBITA, SEK m |
87 |
62 |
42% |
247 |
204 |
21% |
325 |
282 |
|
EBITA-margin, % |
13.3 |
10.3 |
- |
12.5 |
11.3 |
- |
12.6 |
11.7 |
ENERGY
ENERGY PRODUCTS
ENERGY SUPPLY
INDUSTRIAL PROCESS
Quarter 3:
- Net sales decreased by 12 percent to SEK 707 m (800)
- EBITA decreased by 10 percent to SEK 86 m (95)
- The business area was affected very negatively by the effects of Covid-19
- In the process industry, the business situation was stable and demand for projects in the forest industry remained high
- Demand for solutions for scrubber installations remained low and sales decreased by approximately 80 percent compared with the corresponding period in the preceding year
- The market situation developed favourable for the companies within special vehicles and the engineering sector
8
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3 months ending |
9 months ending |
12 months ending |
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31 Dec 20 |
31 Dec 19 |
31 Dec 20 |
31 Dec 19 |
31 Dec 20 |
31 Mar 20 |
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|
Net Sales, SEK m |
707 |
800 |
-12% |
2,056 |
2,472 |
-17% |
2,788 |
3,204 |
|
EBITA, SEK m |
86 |
95 |
-10% |
236 |
332 |
-29% |
349 |
445 |
|
EBITA-margin, % |
12.1 |
11.9 |
- |
11.5 |
13.4 |
- |
12.5 |
13.9 |
INDUSTRIAL
PROCESS
PROCESS TECHNOLOGY
INDUSTRIAL SOLUTIONS
POWER SOLUTIONS
Quarter 3:
- Net sales increased by 6 percent to SEK 398 m (377)
- EBITA increased by 38 percent to SEK 50 m (36)
- The business area was affected moderately negatively by the effects of Covid-19
- The market situation for the operations within special vehicles stabilised and demand increased
- Demand was favourable for customised battery solutions and for the companies operating in power supply
- In wind power the business situation remained favourable over the quarter and in data and telecommunications it was stable
9
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3 months ending |
9 months ending |
12 months ending |
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|
31 Dec 20 |
31 Dec 19 |
31 Dec 20 |
31 Dec 19 |
31 Dec 20 |
31 Mar 20 |
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|
Net Sales, SEK m |
398 |
377 |
6% |
1,144 |
1,196 |
-4% |
1,578 |
1,630 |
|
EBITA, SEK m |
50 |
36 |
38% |
146 |
163 |
-10% |
214 |
231 |
|
EBITA-margin, % |
12.6 |
9.7 |
- |
12.8 |
13.6 |
- |
13.6 |
14.2 |
POWER
SOLUTIONS
BATTERY SYSTEMS
CUSTOMISED SOLUTIONS
POWER SYSTEMS
PERIOD APRIL 1 - DECEMBER 31
NET SALES AMOUNTED TO SEK 8,409 M (8,697)
- Net sales decreased by 3% to SEK 8,409 m (8,697)
- For the Group in total EBITA was affected positively by approximately the equivalent of 0.5% of sales due to governmental support measures
- EBITA decreased by 4% and amounted to SEK 916 m (957) corresponding to an EBITA margin of 10.9% (11.0)
- Operating profit decreased by 11% and amounted to SEK 723 m (809) corresponding to an operating margin of 8.6% (9.3)
- Profit after tax decreased by 12% and amounted to SEK 539 m (608)
- Earnings per share before dilution amounted to SEK 1.95 (2.25)
- Cash flow from operating activities amounted to SEK 1,050 m (667)
10
THIRTEEN ACQUISITIONS SO FAR THIS YEAR
|
Acquisitions |
Business Area |
Access |
Net Sales, SEK m* |
Number of |
|||
|
employees* |
|||||||
|
Elkome Group Oy |
Automation |
April, 2020 |
85 |
38 |
|||
|
Peter Andersson AB |
Energy |
April, 2020 |
30 |
9 |
|||
|
Valutec Group AB |
Industrial Process |
April, 2020 |
350 |
45 |
|||
|
Fluidcontrol Oy |
Components |
September, 2020 |
41 |
20 |
|||
|
Kaptas Oy |
Automation |
September, 2020 |
41 |
27 |
|||
|
Elsystem i Perstorp AB |
Automation |
September, 2020 |
40 |
18 |
|||
|
Martin Bruusgaard AS |
Industrial Process |
September, 2020 |
108 |
30 |
|||
|
Satco Komponent AB |
Components |
October, 2020 |
18 |
2 |
|||
|
Skyltar & Märken Gruppen AB |
Energy |
October, 2020 |
60 |
23 |
|||
|
OF-Beteiligungs AG |
Power Solutions |
December, 2020 |
170 |
35 |
|||
|
Powernor AS |
Power Solutions |
January, 2021 |
35 |
6 |
|||
|
Synective Labs AB |
projects |
Automation |
January, 2021 |
30 |
27 |
||
|
Impact Air Systems Ltd. och Impact Technical |
Industrial Process |
January, 2021 |
95 |
33 |
|||
|
Services Ltd. |
|||||||
|
11 |
*Refers to assessed condition at the time of acquisition and disposal, respectively, on a full-year basis |
FINANCIAL POSITION
12
INCOME STATEMENT, CONDENSED
|
3 months ending |
9 months ending |
12 months ending |
||||
|
(SEKm) |
31 Dec 20 |
31 Dec 19 |
31 Dec 20 |
31 Dec 19 |
31 Dec 20 |
31 Mar 20 |
|
Net Sales |
2,881 |
2,846 |
8,409 |
8,697 |
11,447 |
11,735 |
|
Cost of sales & op. expenses |
-2,633 |
-2,668 |
-7,668 |
-7,928 |
-10,404 |
-10,664 |
|
Other operating items |
-10 |
10 |
-18 |
40 |
32 |
90 |
|
Operating profit |
238 |
188 |
723 |
809 |
1,075 |
1,161 |
|
Financial income & expenses |
-12 |
-9 |
-37 |
-37 |
-56 |
-56 |
|
Profit after financial items |
226 |
179 |
686 |
772 |
1,019 |
1,105 |
|
Income tax expense |
-52 |
-37 |
-147 |
-164 |
-215 |
-232 |
|
Net profit |
174 |
142 |
539 |
608 |
804 |
873 |
|
Earnings per share, SEK |
0.65 |
0.55 |
1.95 |
2.25 |
2.90 |
3.20 |
|
EBIT margin, % |
8.3 |
6.6 |
8.6 |
9.3 |
9.4 |
9.9 |
|
EBITA margin, % |
10.6 |
8.3 |
10.9 |
11.0 |
11.6 |
11.6 |
13
BALANCE SHEET, CONDENSED
|
(SEKm) |
31 Dec 20 |
31 Dec 19 |
31 Mar 20 |
|
Goodwill |
2,604 |
1,896 |
1,997 |
|
Other intangible non-current assets |
1,728 |
1,183 |
1,243 |
|
Property, plant and equipment |
965 |
824 |
936 |
|
Non-current financial assets |
61 |
60 |
64 |
|
Inventories |
1,716 |
1,623 |
1,642 |
|
Current receivables |
1,835 |
2,126 |
2,261 |
|
Cash and cash equivalents |
454 |
316 |
363 |
|
Total assets |
9,363 |
8,028 |
8,506 |
|
Total equity |
3,084 |
2,710 |
3,076 |
|
Interest-bearing provisions & liabilities |
3,817 |
3,078 |
2,948 |
|
Non-interest-bearing prov. & liabilities |
2,462 |
2,240 |
2,482 |
|
Total equity & liabilities |
9,363 |
8,028 |
8,506 |
14
CASH FLOW STATEMENT, CONDENSED
|
3 months ending |
9 months ending |
12 months ending |
||||
|
(SEKm) |
31 Dec 20 |
31 Dec 19 |
31 Dec 20 |
31 Dec 19 |
31 Dec 20 |
31 Mar 20 |
|
Profit after financial items |
226 |
179 |
686 |
772 |
1,019 |
1,105 |
|
Adj. for non cash items |
133 |
93 |
400 |
278 |
476 |
354 |
|
Income tax paid |
-100 |
-71 |
-239 |
-187 |
-325 |
-273 |
|
Changes in working capital |
224 |
-53 |
203 |
-196 |
330 |
-69 |
|
Cash flow from operating activities |
483 |
148 |
1,050 |
667 |
1,500 |
1,117 |
|
Net investment in non-current assets |
-16 |
-16 |
-45 |
-73 |
-74 |
-102 |
|
Acquisitions and disposals |
-166 |
-15 |
-1,054 |
-310 |
-1,174 |
-430 |
|
Dividend paid |
- |
- |
-269 |
-336 |
-269 |
-336 |
|
Repurchase of own shares/options |
25 |
8 |
20 |
-34 |
28 |
-26 |
|
Other financing activities |
-315 |
-64 |
434 |
103 |
186 |
-145 |
|
Period's cash flow |
11 |
61 |
136 |
17 |
197 |
78 |
15
CASH FLOW R12
Cash flow from operating and investing activities
16
KEY FINANCIAL INDICATORS
|
(SEKm) |
31 Dec 20 |
31 Mar 20 |
31 Dec 19 |
|
Total equity (SEKm) |
3,084 |
3,076 |
2,710 |
|
Equity per share, SEK |
10.60 |
11.25 |
9.90 |
|
Equity ratio, % |
33 |
36 |
34 |
|
Return on working capital (P/WC), % |
54 |
56 |
54 |
|
Return on equity, % |
27 |
32 |
31 |
|
Return on capital employed, % |
17 |
21 |
20 |
|
Financial net debt (SEKm) |
3,363 |
2,585 |
2,762 |
|
- of which pension liability |
387 |
332 |
373 |
|
- of which other liabilites |
2,976 |
2,253 |
2,389 |
|
Financial net debt / EBITDA |
2.1 |
1.6 |
2.1 |
|
Net debt / equity ratio, times |
1.1 |
0.8 |
1.0 |
|
Interest coverage ratio, times |
17 |
21 |
24 |
|
Average number of employees |
3,025 |
2,913 |
2,849 |
|
Number of employees at end of period |
3,103 |
2,981 |
2,931 |
17
APPROACH TO NET DEBT / EQUITY RATIO
▪ Besides P/WC, no specific targets for gearing and debt
▪ Debt rate bound to move up and down periodically with business like ours
▪ Our target to acquire on our own cashflow is working well
18
KEY TAKE AWAYS
- Clear recovery in demand and continued cost control create resilicence in earnings performance
-
- Recovery in most market segments
- Long term cost reductions gradually replace short term savings
- Successful work with aquisitions
-
- Thirteen acquistions so far this year
- Strong pipeline of new potential acquistions
- Strong Balance Sheet
-
- Strong cash flow
- Focus on improved working capital has given the desired effect
- Outlook
-
- Continued gradual normalisation of demand expected but continued uncertainty due to Covid-19 remains
- The level of activity is expected to remain low in the market for scrubber installations
- Continued focus on maintaining good cost control in taking advantage of growth opportunities
- Focused measurements towards increased digitalisation and sustainability
- Great confidence in our growth strategies, scalable business model and entrepreneurial corporate culture
19
NETWORK FOR GROWTH
20
EFFICIENT ORGANISATIONAL STRUCTURE
|
AUTOMATION |
COMPONENTS |
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ENERGY |
INDUSTRIAL PROCESS |
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POWER SOLUTIONS |
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BATTERY |
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MOTION & DRIVES |
DENMARK |
ENERGY |
PROCESS |
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PRODUCTS |
TECHNOLOGY |
SYSTEMS |
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INDUSTRIAL IT |
FINLAND |
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ENERGY |
CUSTOMISED |
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INDUSTRIAL |
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& SENSORS |
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NORWAY |
SUPPLY |
SOLUTIONS |
SOLUTIONS |
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FIBER-OPTIC |
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POWER |
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COMMUNICATION |
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SWEDEN |
SYSTEMS |
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21
Q&A
Attachments
Disclaimer
Addtech AB published this content on 04 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 February 2021 13:32:28 UTC.