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Interim Report - 6 months 1 January-30 June 2021

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SECOND QUARTER (1 April-30 June 2021)

  • Revenue increased by 12 percent to MSEK 2,560 (2,288).
  • EBITA increased by 38 percent to MSEK 214 (155), corresponding to an EBITA margin
    of 8.4 percent (6.8).
  • Operating profit amounted to MSEK 194 (134) and the operating margin to 7.6 percent (5.9).
  • Net profit for the quarter increased by 54 percent to MSEK 145 (94) and earnings per share
    to SEK 2.85 (1.85).
  • Demand and the earnings trend in both of the Group’s business areas continued to recover during the quarter compared both with the preceding quarter and with the preceding year, which was characterised by uncertainty and the measures taken by companies and societies at large in the wake of the COVID-19 pandemic.
  • The integration between Swedol and TOOLS continues according to plan and with an undiminished focus within the Group’s business area Alligo.
  • A new organisational structure was established in the business area Components & Services during the quarter in order to support the continued operational and acquisition driven focus.
  • In the beginning of April, the Board of Directors decided to assign Group management the task of investigating the conditions for splitting the Group into two separate listed companies. The aim is to create increased shareholder value through increased focus. The Board intends to present further information on the results of the investigation during the financial year.
  • Momentum Group’s Annual General Meeting was held on 11 May 2021 and the dividend was set at SEK 1.50 per share (–).

REPORTING PERIOD (1 January-30 June 2021)

  • Revenue amounted to MSEK 4,885 (3,827), with the change from the preceding year partly attributable to the acquisition of Swedol, which closed in April 2020. 
    Compared with revenue for the corresponding period in the preceding year including Swedol for the entire reporting period (MSEK 4,656), revenue increased by 5 percent.*
     
  • EBITA amounted MSEK 339 (246), corresponding to an EBITA margin of 6.9 percent (6.4). The change compared with the preceding year is partly attributable to the acquisition of Swedol. 
    Compared with EBITA for the corresponding period in the preceding year including Swedol (MSEK 289), EBITA increased by 17 percent and the EBITA margin amounted to 6.9 percent (6.2).*
     
  • Net profit for the period amounted to MSEK 222 (148) and earnings per share totalled SEK 4.40 (3.80).
  • The return on working capital (EBITA/WC) for the most recent 12-month period (including Swedol) was 33 percent.*
  • The equity/assets ratio was 39 percent at the end of the period.
  • Cash flow from operating activities amounted to MSEK 486 (482).
  • The business area Components & Services completed four corporate acquisitions during the period generating total annual revenue of approximately MSEK 285. The business area Alligo completed one corporate acquisition in Finland generating total annual revenue of approximately MEUR 5.

*   ACQUISITION OF SWEDOL CLOSED AS OF 1 APRIL 2020
Momentum Group’s acquisition of Swedol was completed during spring 2020 and closed on 1 April 2020. Any instances where the comparative figures in this report include Swedol for the period prior to the closing date on 1 April 2020 are specifically noted.
The bases for the financial history including Swedol are presented in a separate press release dated 24 June 2020 – Supplementary financial information relating to the 2019/20 financial year for the Momentum Group.

PRESIDENT’S STATEMENT

POSITIVE PERFORMANCE CONTINUES FOR THE GROUP’S OPERATIONS
Most of the Group’s operations delivered a positive sales and earnings performance during the second quarter after a more hesitant start to the financial year. EBITA for the entire Group increased by 38 percent during the quarter. Many of the Group’s customers have also indicated that they are optimistic about the outlook for the rest of the year, which hopefully indicates continued increases in volumes going forward. At the same time, the efficiency measures we have taken, and are continuing to take as needed, have a positive contribution to our earnings performance and we are continuing to generate strong cash flows. This provides us with favourable conditions for continued profitable growth.

The integration between TOOLS and Swedol in the business area Alligo continues with an undiminished focus, with the aim of achieving our goals in terms of synergies and economies of scale over time. The establishment of a joint product range with new purchasing agreements and the introduction of proprie­tary product brands in additional businesses within the business area, along with the coordination of stores, are proceeding according to plan.

In the business area Components & Services, we are continuing our efforts to achieve acquisition-driven growth (while maintaining profitability) and the four acquisitions we completed during the first quarter are now integrated in the business area and contribute to sales and earnings performance. We are already seeing interesting collaboration opportunities between these newly acquired companies and our existing operations. During the quarter, a new organisational structure was implemented to strengthen our focus on growth, both organic and through acquisitions.

PRIORITIES FOR THE FUTURE
Despite the positive signals from our customers and suppliers, uncertainty continues in our operating environment and in the Group’s markets. We are seeing this in the form of the effect on demand, prices and supply chains. There is currently a surplus demand for certain product areas which, in combination with a shortage of materials and disruptions to the global logistics chain, leads to a significant increase in prices within a number of areas and for raw materials and transportation. Our decentralised profit responsibility, proximity to customers and ability to quickly adapt to changes in our operating environment remain the key to our success.

The Group’s priorities for the coming quarter include securing our own ability to deliver products to our customers through proactive procurement and analyses. We continue to take appropriate measures in our operations, focus on the coordination project and realising synergies within the business area Alligo and to increase sales to new and existing customers in our daily work. In the business area Components & Services, we are also focusing on establishing contacts with and visiting potential acquisition candidates.

In addition to these priorities, as previously announced, the Board has assigned Group management the task of investigating the possibility of splitting the Group into two separate listed companies. The purpose is to strengthen each business area’s conditions for achieving its ambitions in the best possible way and thereby creating increased shareholder value. The Board intends to present further information on the results of the investigation during the financial year.

Stockholm, July 2021

Ulf Lilius
President & CEO
 

Presentation of the Interim Report – 6 months 2021
Investors, analysts and media are welcome to participate in a webcast conference call in which CEO & President Ulf Lilius, CFO Niklas Enmark and Business Area Manager Clein Johansson Ullenvik will present the Report and answer any subsequent questions. The presentation will be held in English.

Time: Thursday, 15 July 2021 at 11:00 a.m. CEST.
Web link: https://financialhearings.com/event/13464.
Telephone no: SE +46 8 505 583 53 / UK +44 33 330 090 30 / US +1 83 324 984 05

Contact information

Ulf Lilius, President & CEO, Tel: +46 10 454 54 70
Mats Karlqvist, Head of Investor Relations, Tel: +46 70 660 31 32
 

The information in this report is such that Momentum Group 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 above, at 8:00 a.m. CEST on 15 July 2021.
   This document is in all respects a translation of the Swedish original Interim Report. In the event of any differences between this translation and the Swedish original, the latter shall prevail.
 

Momentum Group is a leading reseller of industrial consumables and components, service and maintenance to professional end users in the industrial and construction sectors in the Nordic region. The Group has annual revenue of approximately SEK 9,5 billion and approximately 2,700 employees. Momentum Group AB (publ) has been listed on Nasdaq Stockholm since June 2017. Read more at www.momentum.group.

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