HTC Group – Positive cash flow and a record profitability during continued growth
- Report for the first half of 2012
The parent company HTC Sweden AB was founded in 1987 as an entrepreneurial company. Today, HTC Group consists of the parent company HTC Sweden AB in Söderköping with sales offices in France, UK, Germany and USA. Additional export sales are made through distributors in about 60 countries on all continents. The Group develops, manufactures and sells complete solutions for most floor applications such as surface leveling, grinding, renovation and maintenance, and daily cleaning. The product range consists mainly of grinding machines, dust extractors, diamond tools and diamond impregnated cleaning pads. Customers include: professional flooring contractors, machine rental companies for construction businesses and cleaning companies. HTC Superfloor™, the proprietary concept for polished concrete floors, is established globally through distributors and certified contractors. The company has also invented and developed the patented diamond-based cleaning system Twister™, a revolutionary method of chemical-free floor cleaning. The company’s production is based in Söderköping, Sweden with parts of the Twister™ production also in the subsidiary in Knoxville, Tennessee, USA.
Revenue and profit
The first half of 2012 was, when it comes to revenue and profit, the best ever and the positive trend from 2011 continues. The company’s turnover during the first half of 2012 was MSEK 185,8, an increase of 12% compared with the previous year. Order intake was MSEK 192,5 (169,3), an increase of 14% compared with the previous year.
The turnover growth has led to a very strong earnings performance, where EBIT (Earnings Before Interest and Tax) has more than tripled and totaled MSEK 17,6 (3,8), an increase of 363%. The half-year result before tax was MSEK 12,3 (0,9), a margin of 6,6%. The company’s gross margins have been strengthened and the result and profit margin improved significantly through the increased turnover. A continued focus on working capital has resulted in a decrease during the first half of 2012, which therefore has improved the operating cash flow notably.
The Group is well equipped to deal with an expected and continued increase in demand for both the business area Hardware and the business area Twister.
The development has been pushed mainly due to a strong growth in USA during the first half of 2012, and with a positive but slightly weaker development in Europe.
All product groups experienced positive sales growth compared to 2011 and the demand for the company’s solutions and systems increased and gained market shares from competitive traditional methods for floor preparation and cleaning. The main product group with the strongest percentage growth is dust extractors, where a number of new models have been recently launched. The main contributor to revenue growth is primarily the Black Line, the conventional machine range. The product group for daily chemical-free floor cleaning and periodic maintenance, Twister, is the Group’s fastest growing and continues to grow by double digits.
A continued focus on developing new and improved products with a strong customer demand enables HTC to continue leading and developing the flooring industry.
Amongst other things, HTC has refined the product range of diamond impregnated cleaning pads for chemical-free cleaning, which is sold under the brand name Twister™, with more variations customized for particular floor care programs. In hardware the new dust extractors have been launched with very good outcomes and in the near future, more products in all product groups will be launched, which will enhance the competitiveness of grinding as a method from both a cost and efficiency point of view.
In addition, there are a number of exciting applications where new methods are under development.
Business development and Group structure
To increase our focus in the different areas where HTC is active, the business area Twister was turned into two separate companies at the start of the year, HTC Cleaning Technology AB in Sweden and Twister Inc. in USA. Thus, today the HTC Group consists of 7 companies. During the current year, significant investments has also been made to improve the efficiency, quality assure and to improve the production capacity in the Twister area.
Record in both turnover and order intake.
- The first half of 2012 is the Group’s best ever with a turnover of MSEK 185,8 (165,8), an increase of 12% compared with the previous year.
- Order intake was MSEK 192,5 (169,3), an increase of 14% compared with the previous year.
A strong profit growth.
- EBIT more than tripled and was MSEK 17,6 (3,8), an increase of 363%.
- The half-year result before tax was MSEK 12,3 (0,9), a margin of 6,6% (0,5% 2011).
Continuing strong cash flow.
- Operating cash flow after investments was MSEK 25,1 (19,0), an increase of 32%.
- The ratio of interest-bearing net debt relative to operating profit before depreciation improved from 1,3 times to 0,9 times.