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Interim Report Q2 1 April - 30 September 2018

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Second quarter (1 July - 30 September 2018)

  • Net sales increased by 24 percent and amounted to SEK 2,338 million (1,892).
  • Operating profit before amortisation of intangible non-current assets (EBITA) increased by 27 percent and amounted to SEK 270 million (213) corresponding to an EBITA margin of 11.5 percent (11.2).
  • Operating profit increased by 25 percent and amounted to SEK 226 million (181) corresponding to an operating margin of 9.7 percent (9.6).
  • Profit after tax increased by 29 percent and amounted to SEK 174 million (135) and earnings per share before dilution amounted to SEK 2.60 (1.95). 

Period (1 April - 30 September 2018)

  • Net sales increased by 22 percent and amounted to SEK 4,733 million (3,871).
  • Operating profit before amortisation of intangible non-current assets (EBITA) increased by 24 percent and amounted to SEK 530 million (427 including items affecting comparability of SEK +12 million) corresponding to an EBITA margin of 11.2 percent (11.0).
  • Operating profit increased by 24 percent and amounted to SEK 447 million (362) corresponding to an operating margin of 9.5 percent (9.4).
  • Profit after tax increased by 21 percent and amounted to SEK 336 million (278) and earnings per share before dilution amounted to SEK 4.95 (4.05). For the latest twelve month period earnings per share before dilution amounted to SEK 8.60 (7.20). 
  • Return on working capital amounted to 53 percent (53). 
  • Return on equity amounted to 29 percent (29) and the equity ratio amounted to 33 percent (36). 
  • Cash flow from operating activities amounted to SEK 145 million (136). For the latest twelve month period, cash flow per share from operating activities amounted to SEK 8.20 (7.10).
  • Since the start of the financial year twelve acquisitions have been completed, of which one after the end of the period, with total annual sales of about SEK 890 million.

CEO's comments

First quarter – conditions favourable for business and profit growth still strong
My introduction to the role as new CEO of Addtech has been quite busy. After eight years at Addtech, latterly as Business Area Manager, Power Solutions, the Group’s strategy, business model and corporate culture is in my blood. I am now spending a great deal of time on getting to know the operations in the Group’s other three business areas better. My impressions from these meetings are very positive. In addition, the business climate in most markets where our companies operate remains buoyant. Our organic growth of 5 percent during the quarter, along with several acquisitions, generated strong profit growth. The Group’s operating margin continued to grow, and remained above 10 percent in all business areas during the second quarter.

Market development
The overall demand for our products and solutions remained good. From a geographical perspective, we recorded very strong sales growth in all the Nordic countries, and we also benefited from a business climate that remained positive for our operations outside the Nordic region.

With regard to the market in our various customer segments, sales of production components for manufacturing companies in machinery production, electronics, special vehicles and marine increased, with the two last-mentioned contributing significantly. Demand was also strong in wind power and medical technology. The oil & gas customer segment continued to show positive growth, but demand from customers in the telecom segment was weak.

Demand for aftermarket products for the manufacturing industry and for the forest and process industry showed positive growth. We recorded strong sales for electricity-related products for building and installation customers and demand for infrastructure products from power grid companies in the Nordic region was stable.

Acquisitions
We are maintaining a high pace of acquisitions. With no less than twelve acquisitions since the beginning of the financial year the overall contribution of acquisitions to aggregate annual sales is approximately SEK 890 million. There are ongoing discussions about acquisitions of independent, profitable technology companies with market-leading niche positions, as well as smaller complementary acquisitions that can strengthen the market positions and profitability of our existing companies. There are great opportunities to make further acquisitions, not least considering our strong balance sheet.

Addtech’s business model and uniquely strong corporate culture have long proved to be highly successful. I look forward with great enthusiasm to continue to develop our excellent business together with all my colleagues, with focus on sustainable profitable growth.

Stockholm, 25 October 2018

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 25 October 2018.

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 billion. Addtech is listed on the Nasdaq Stockholm.

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