Interim Report - 9 months 1 April-31 December 2019
Third quarter (1 October-31 December 2019)
- Revenue increased by 2 percent to MSEK 1,588 (1,552).
- EBITA (excluding items affecting comparability of MSEK –9 related to costs arising from the ongoing acquisition of Swedol) increased by 3 percent to MSEK 92 (89), corresponding to an EBITA margin of 5.8 percent (5.7).
- Adjusted operating profit (excluding items affecting comparability) increased to MSEK 87 (85), corresponding to an adjusted operating margin of 5.5 percent (5.5). Operating profit amounted to MSEK 78 (85) and the operating margin to 4.9 percent (5.5).
- Profit after financial items totalled MSEK 72 (84).
- Net profit amounted to MSEK 56 (64).
- Earnings per share for the most recent 12-month period totalled SEK 7.95, compared with SEK 8.20 for the 2018/19 financial year.
- Cash flow from operating activities for the most recent 12-month period improved to MSEK 468.
- The return on equity for the most recent 12-month period was 17 percent (18) and the return on working capital (P/WC) was 25 percent (24).
- The operational net loan liability amounted to MSEK 198 (297) and the equity/assets ratio was 40 percent at the end of the reporting period.
- A merger of TOOLS and Swedol creates favourable opportunities.
On 11 November 2019, Momentum Group announced a recommended public offer to the shareholders of Swedol. A merger of TOOLS and Swedol will create an attractive business partner for Nordic customers, including both smaller and larger companies in the industrial and construction sectors. The acceptance period for the offer will run until 20 March 2020.
Reporting period (1 April-31 December 2019)
- Revenue increased by 3 percent to MSEK 4,596 (4,464).
- EBITA (excluding items affecting comparability of MSEK –9) rose by 5 percent to MSEK 247 (235), corresponding to an EBITA margin of 5.4 percent (5.3).
- Adjusted operating profit (excluding items affecting comparability) increased by 4 percent to MSEK 232 (223), corresponding to an adjusted operating margin of 5.0 percent (5.0). Operating profit amounted to MSEK 223 (223).
- Profit after financial items decreased to MSEK 209 (219).
- Net profit amounted to MSEK 163 (170).
PRESIDENT’S STATEMENT
ACQUISITION OF SWEDOL – Together we are creating a stronger partner in the market
In mid-November 2019, Momentum Group took a strategically important step through the offer for Swedol. We are confident that the combination of TOOLS and Swedol’s complementary customer focus and sales channels will help our two companies to become an even stronger and more attractive business partner for our customers, suppliers and employees in the areas of tools, workwear, personal protective equipment and consumables. Together, we will be able to strengthen our product ranges, procurement channels and logistics solutions, increase the proportion of proprietary product brands and develop an even better service offering and new digital solutions. I have been following Swedol for quite some time and I am impressed by their development over the past few years. The merger is logical from an industrial perspective and will create favourable opportunities to continue to generate value for our owners. The Norwegian competition authority approved of the acquisition at the beginning of February and we are now awaiting corresponding approvals of the merger from the national competition authorities in Sweden and Finland. We hope to thereafter be able to complete the offer during March 2020.
2019/20 FINANCIAL YEAR – Continued positive earnings performance during the year
Revenue for the Group remained stable during the first nine months of the financial year, compared with the preceding year. The end of the third quarter was characterised by somewhat lower activity among customers, but trends varied significantly between different customer segments and product areas. It is nevertheless encouraging to see healthy revenue growth in Norway, where demand in the oil and gas sector in particular remained favourable. It is also positive that our acquired businesses have contributed by approximately 4 percent to revenue growth so far this year.
Operating profit for the reporting period includes items affecting comparability of MSEK 9 pertaining to costs arising from the ongoing acquisition of Swedol. Adjusted for these items affecting comparability, EBITA rose by 5 percent to MSEK 247 (235) for the period. Additionally, extra costs of approximately MSEK 12 pertaining to the expansion of the logistics function in TOOLS Norway (of which MSEK 4 arose during the third quarter) had a negative impact on earnings. The logistics project was expanded during late autumn to encompass more local units. Thanks to our focused initiatives, our cash flow from operating activities strengthened during the reporting period, even when adjusted for IFRS 16 effects.
FOCUS ON ACQUISITIONS CONTINUES – Creating opportunities for the future
Increased coordination and shared resources within areas such as logistics, IT, offering and purchasing are key success factors, which we are now strengthening through the acquisition of Swedol in the business area Tools & Consumables. At the same time, we are continuing to evaluate attractive acquisition opportunities in the business area Components & Services that would further strengthen our position.
Stockholm, February 2020
Ulf Lilius
President & CEO
Presentation of the Financial Report – 9 months 2019/20
Investors, analysts and media are welcome to participate in a webcast conference call in which CEO & President Ulf Lilius and CFO Niklas Enmark will present the Financial Report and answer any subsequent questions. The presentation will be held in English.
Time: Wednesday, 12 February 2020 at 11:00 a.m. CET.
Web link: https://financialhearings.com/event/12129.
Telephone no: SE +46 8 505 583 51 / UK +44 33 330 092 70 / US +1 83 352 683 84
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. The information was submitted for publication, through the agency of the contact persons set out above, at 8:00 a.m. CET on 12 February 2020.
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 6 billion and approximately 1,700 employees. Momentum Group AB (publ) has been listed on Nasdaq Stockholm since June 2017. Read more at www.momentum.group.