Interim report 1 January – 31 March 2022

First quarter 2022

• Order intake increased by 23% to SEK 7,085 million (5,747). For comparable units, it was an increase of 12%.
• Net sales increased by 24% to SEK 6,398 million (5,147). For comparable units, it was an increase of 12%.
• EBITA increased by 35% to SEK 959 million (713), corresponding to an EBITA margin of 15.0% (13.9%).
• Profit for the quarter rose 38% to SEK 638 million (461), and earnings per share amounted to SEK 1.75 (1.27).
• Cash flow from operating activities amounted to SEK 276 million (489).

CEO’s message

Higher growth and record earnings

First quarter
Demand for the first quarter of 2022 was broad and strong, a sequential increase from the fourth quarter 2021. Order intake amounted to SEK 7.1 billion, which is an increase of 23% compared to previous year. Organically, the increase was 12% and all major customer segments developed positively, with the process industry and infrastructure sector being particularly strong. There was a favourable performance from all business areas and by most companies, with the highest organic order growth in the Finland and Flow Technology business areas.

Net sales improved in all business areas and amounted to SEK 6.4 billion, which is an increase of 24% compared to the same period last year. Organically, it was in increase of 12%, with the strongest growth in the Flow Technology, DACH and Fluids & Mechanical Solutions business areas.

As a consequence of Russia’s invasion of Ukraine, we have stopped all business with companies in Russia and Belarus. We condemn Russia’s actions and our thoughts are with everyone who has been affected. The Group does not have any subsidiaries or employees in Russia, Ukraine or Belarus and the direct business exposure is very limited. Also the indirect exposure is assessed as limited and the total effect on net sales during the first quarter is overall marginal.

EBITA improved by 35% and amounted to SEK 959 million, corresponding to an EBITA margin of 15.0% – the highest ever for a first quarter! The improvement was driven by both improved gross margins in comparable units and good margins in newly acquired companies. The EBITA margin increased in all business areas, with the largest increase in Finland and the UK.

During the quarter, our companies continued to be impacted by the disruptions in delivery chains, with long delivery times and component shortage without indication of any improvement. These disruptions, together with rising inflation, hampered and dampened our performance somewhat during the quarter, causing a rising challenge for our companies. Nevertheless, I am confident that our entrepreneurial, flexible companies will be able to continue managing the situation effectively through, for example, proactive purchasing efforts and successful pricing.

The supply chain disruptions also led to many companies having a higher amount of capital tied up in inventory during the first quarter. That, together with higher accounts receivable led to a decrease in cash flow. Working capital efficiency continued to improve however, and the Group’s financial position is still stable and strong with a historically low debt/equity ratio.

Acquisitions
The activity in our acquisition processes remained high during the first quarter. Thus far in 2022, we have completed four acquisitions corresponding to annual sales of around SEK 340 million. Liechtenstein-based NTi Audio AG is a leading provider of test and measurement equipment for acoustics, audio and vibration applications. The company works in a well-defined market niche with strong growth.  The British company, Autoroll, manufactures steel industrial doors and aluminium roller garage doors. It was an add-on acquisition to Ellard Group and together, it gives them a more complete and competitive product offering.

During April, we completed the acquisitions of the German company Stabalux and the Swedish company PMH International. Stabalux manufactures profile systems for curtain wall facades. PMH International is a specialised technical trading company operating in the market segments lifting and material handling equipment as well as industrial/storage halls.

Despite higher uncertainty, our assessment is that the acquisition climate in 2022 remains good. We have a high level of activity in our acquisition processes and are working continuously to strengthen our capacity, which puts the prerequisites in place for being able to continue making value-creating acquisitions.

Outlook
The geopolitical challenges, continued disruptions in supply chains and rising inflation contribute to a higher business risk ahead. However, the strong first quarter and our high order backlog give us confidence regarding sales and earnings growth in the short term. We continue focusing on organic growth, where, among other things, sustainability is an important business opportunity. Continuous innovation and development of products and solutions that makes customers’ operations more efficient and lowers the environmental impact, are key to strengthening competitiveness even further.

Our business model has historically proven itself to be very resilient and our entrepreneurs are skilled at navigating during volatile market conditions. The Group’s structure, with quick-to-respond, flexible, customer-oriented companies, together with a strong order backlog, provides us with a stable platform for continued long-term sustainable and profitable growth.

Bo Annvik, President and CEO

Note
The information in this report is such that Indutrade AB is obligated to make public in accordance with the EU Market Abuse Act. The information was submitted for publication by the agency of the following contact persons on 29 April 2022 at 7.30 CEST.

For further information, please contact:
Bo Annvik, President and CEO, tel.: +46 8 703 03 00,
Patrik Johnson, CFO, tel.: +46 70 397 50 30.

This report will be commented upon as follows:
A webcast of the report will be presented on 29 April at 9.30 CEST via the following link:

https://tv.streamfabriken.com/indutrade-q1-2022

To participate in the conference call and to ask questions, please call:
SE: +46 8 566 427 03
UK: +44 3333 00 92 64
US: +1 6 467 224 956

About Indutrade
Indutrade is an international technology and industrial business group that today consists of more than 200 companies in some 30 countries, mainly in Europe. In a decentralised way, we aim to provide sustainable profitable growth by developing and acquiring successful companies managed by passionate entrepreneurs. Our companies develop, manufacture, and sell components, systems and services with significant technical content in selected niches. Our value-based culture, where people make the difference, has been the foundation of our success since the start in 1978. Indutrade's net sales totalled SEK 21.7 billion in 2021, and the share is listed on Nasdaq Stockholm in Sweden.

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