Interim report January – March 2018

Continued organic growth

First quarter 2018 

  • Revenue amounted to MEUR 71.6 (73.3)
  • Organic growth was 2.7%
  • The gross margin was 41.4% (42.7)
  • Adjusted EBITA amounted to MEUR 5.1 (6.8), corresponding to a margin of 7.2% (9.3)
  • EBIT amounted to MEUR 3.9 (4.6), corresponding to a margin of 5.5% (6.3) 
  • Postponed deliveries within Vehicle Accessibility had a negative impact on revenue and EBITA by c. MEUR 2 and MEUR 1, respectively.
       

CEO’s comments 

Organic growth amounted to 2.7% and the adjusted EBITA margin to 7.2%. A distributor was acquired in Patient Handling, North America in the beginning of the quarter. In line with our strategy and with the aim of increasing the sales focus, our ambition is to further strengthen the sales organisation during the year.  

The first quarter — continued growth in stairlifts and lower sales in Patient Handling
During the first quarter, revenue increased organically by 2.7% and the adjusted EBITA margin amounted to 7.2% (9.3). We continued to strengthen our market position in stairlifts. Organic growth totalled 10% for stairlifts and in North America alone, the increase was 33%. As previously announced in the Year-end report, Volkswagen did not deliver any minibuses to the Norwegian market in the first quarter. This impacted our Vehicle Accessibility delivery capacity and, accordingly, revenue was negatively affected by about MEUR 2 and EBITA by slightly more than 1 MEUR, compared with the corresponding quarter previous year. However, deliveries resumed in the second quarter and our assessment is that the main part of the lost revenues will be recovered during the remainder of the year. Sales in Patient Handling, North America, continued a cautious trend with lower quarter-on-quarter sales. However, compared with the fourth quarter of 2017, revenue grew organically by 14%. Patient Handling Europe developed in line with the previous year. Strong project sales in Puls resulted in organic growth in revenue of 29%. 

A distributor was acquired in Patient Handling, North America in the beginning of the year. Even though we value the company’s sales organisation and geographic reach on the acquisition date, naturally, when making this type of acquisition, our aim is for the acquired company to only sell our products. The transition to our product portfolio has been started, however this means that revenue from this acquisition in the first quarter was limited.

Increased sales focus within the organisation
Our medium-term ambition is to grow by 10% per year, of which 4–6% organic, with an adjusted EBITA margin exceeding 12%. We established our financial targets and “Commercial Excellence Strategy” in 2017 and have since worked consistently toward achieving a more sales-oriented organisation, through our internal sales excellence programme and through organisational changes. In 2018, we will take the next step to further strengthen the sales focus, by flattening the organisation between management and sales, and by reducing administrative resources in favour of expansion of the sales organisation. This will entail some initial costs, but in the longer term, will generate cost savings and higher sales.

To sum up, I am particularly pleased with the development within stairlifts while I am cautiously optimistic about the development within Patient Handling. The macrotrends continue to benefit us and we remain well-positioned for profitable growth.

Asbjørn Eskild
President and CEO
   

Telephone conference
A telephone conference, hosted by Asbjørn Eskild, President and CEO, and Stephan Révay, CFO, will be held at 10:00 a.m. CET on 8 May 2018.
To participate, please register in advance using the following link
http://emea.directeventreg.com/registration/7897376
   

For more information, contact:

Asbjørn Eskild, CEO, Tel: +47 905 633 04
Stephan Révay, CFO, Tel: +46 729 666 532
Boel Sundvall, IR, Tel: +46 723 747 487

This information is information that Handicare Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 8:00 a.m. CET on 8 May 2018.
  
  

About Handicare
Handicare offers solutions to increase the independence of disabled or elderly people, and to facilitate for their care providers and family. The offering encompasses a comprehensive range of curved and straight stairlifts, transfer, lifting and repositioning aids, vehicle adaptations and medical equipment. Handicare is a global company with sales in more than 20 countries and is a market leader in this field. The head office is in Stockholm, Sweden and manufacturing is located at six sites distributed across North America, Asia and Europe. In the 12-month period to March 2018, revenue amounted to MEUR 283 and the adjusted EBITA margin was 8.7%. Employees numbered around 1,200 and the share is listed on Nasdaq Stockholm. For more information, see www.handicaregroup.com.

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