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Interim Report  Q3 1 April - 31 December 2018

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Third quarter (1 October - 31 December 2018)

  • Net sales increased by 26 percent and amounted to SEK 2,551 million (2,030).
  • Operating profit before amortisation of intangible non-current assets (EBITA) increased by 29 percent and amounted to SEK 246 million (190) corresponding to an EBITA margin of 9.7 percent (9.4). 
  • Operating profit increased by 31 percent and amounted to SEK 203 million (155) corresponding to an operating margin of 7.9 percent (7.7).
  • Profit after tax increased by 36 percent and amounted to SEK 156 million (115) and earnings per share before dilution amounted to SEK 2.25 (1.70). 

Period (1 April - 31 December 2018)

  • Net sales increased by 23 percent and amounted to SEK 7,284 million (5,901).
  • Operating profit before amortisation of intangible non-current assets (EBITA) increased by 26 percent and amounted to SEK 776 million (617 including items affecting comparability of SEK +12 million) corresponding to an EBITA margin of 10.7 percent (10.5). 
  • Operating profit increased by 26 percent and amounted to SEK 650 million (517) corresponding to an operating margin of 8.9 percent (8.8).
  • Profit after tax increased by 25 percent and amounted to SEK 492 million (393) and earnings per share before dilution amounted to SEK 7.20 (5.75).
  • Return on working capital (P/WC) amounted to 53 percent (53) and return on equity amounted to 29 percent (29).
  • The equity ratio amounted to 35 percent (36).
  • Cash flow from operating activities amounted to SEK 320 million (388).
  • Fourteen acquisitions have been completed since the start of the financial year with total annual sales of about SEK 960 million.

CEO´s comments

Third quarter - strong profit growth and high demand
The third quarter was characterised by continued high activity in the market, and I proudly point out that the Group recorded organic sales growth of 9 percent. EBITA increased strongly by 29 percent in the quarter, which is better than the increase we profited from earlier in the year. All business areas contributed to the improvement. The EBITA margin increased to 9.7 percent. Both acquisitions and higher sales contributed to the improved EBITA margin.

Market development
Demand for our products and solutions remained firm in most of our markets, and no clear indications of economic downturn in our business areas have been identified. Geographically, the highest growth rate was reached in Norway, while the business climate improved from an already high level in Finland. Also, in Denmark and Sweden, overall demand was positive, as was the business climate outside the Nordic region. Our UK units are experiencing a degree of Brexit-related uncertainty.

As a result of firm demand in our various customer segments, we increased sales of production components to manufacturers such as special vehicles, machinery, electronics, wind power and medical. Demand was stable in the telecom segment, and increased slightly in oil & gas.

Developments in the marine segment remained highly positive. Demand for aftermarket products for the forest and process industry showed a favourable trend, as did sales to the manufacturing industry. Sales of infrastructure products to power grid companies in the Nordic region increased, while demand for niche products in electric power distribution and electricity-related products from construction and installation customers remained stable.

Acquisitions
We continuously evaluate acquisitions of independent, profitable technology companies with market-leading niche positions as well as bolt-on acquisitions via our existing companies, in order to strengthen market positions and profitability in attractive segments. Since the beginning of the financial year, we have made fourteen acquisitions, two of which were completed after the end of the quarter. Of the businesses acquired, eleven were independent companies and three bolt-on acquisitions, twelve based in the Nordic region, one in the UK and one in the Netherlands. The acquisitions together add annual sales of around SEK 960 million and bring 276 employees to the Group.

Many privately owned companies view Addtech as an attractive buyer, as they keep their decentralised responsibilities while simultaneously benefiting from support for development via an active, long-term owner. Addtech’s acquisition process is well integrated in the organisation
and we have the financial capacity to maintain a normal pace of acquisition going forward. We see high potential for further acquisitions both in the Nordic 
region and in northern Europe.

Stockholm, 7 February 2019

Niklas Stenberg
President and CEO

This information is information that Addtech AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out below, at 8.15 a.m CET on 7 February 2019.

For further information, please contact:
Niklas Stenberg, President and CEO, +46 702 679 499 
Malin Enarson, CFO, +46 705 979 473 

Addtech in brief
Addtech is a technology trading group that provides technological and economic value added in the link between manufacturers and customers. Addtech operates in selected niches in the market for advanced technology products and solutions. Its customers primarily operate in the manufacturing industry and infrastructure. Addtech has about 2,600 employees in approximately 130 subsidiaries that operate under their own brands. The Group has annual sales of about SEK 9.5 billion. Addtech is listed on the Nasdaq Stockholm.

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