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Interim report 1 January-31 March 2012

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1 JANUARY – 31 MARCH 2012

  • Net sales rose 9% during the quarter to SEK 1,982 million (1,816). The increase for comparable units was 6%.
  • Operating profit before amortisation of intangible non-current assets (EBITA) attributable to acquisitions rose 5% to SEK 192 million (183), and the EBITA margin was 9.7% (10.1%).
  • Profit after tax rose 9% to SEK 110 million (101).
  • Earnings per share were SEK 2.75 (2.53).

CEO’s message

Earnings rose during the first quarter even though we have not yet begun delivering the large orders we received from the energy sector last year. Order intake during the quarter was volatile, with a strong start and weaker finish. The market is showing a divergent demand situation. While the energy sector remains strong and the Finnish market is showing continued growth, customers in general have grown more cautious and are more uncertain about the future compared with a year ago. However, several major customers anticipate a stronger second half of 2012. 

First quarter
Order intake during the quarter totalled SEK 2,255 million (2,068), with a favourable performance for the Flow Technology, Engineering & Equipment and Special Products business areas. Industrial Components, which supplies industrial consumables to a higher degree than the other business areas, had weaker performance. The tendency during the quarter was that the first two months were stronger than the third. Overall, the increase in order intake was 9%, of which acquisitions accounted for 3%. 

Sales totalled SEK 1,982 million (1,816), an increase of 9%, of which 6% was organic. Order intake during the quarter thereby outpaced sales by 14%, which is positive for the future. 

The general unease about the development of the global economy is causing many customers to be more cautious and to not order more than their short-term needs. Another sign of slower growth than previously is that among many suppliers, capacity is more in sync with needs now than in 2011, although there are still exceptions. 

General engineering is the segment that is showing falling demand, which corresponds well to the picture communicated by many large engineering companies. 

Flow Technology posted favourable invoicing but lower earnings, as the share of project orders with low margin was higher during the quarter than normal. 

For Engineering & Equipment, which has its markets in Finland and the Baltic countries, the positive trend from last year continued. 

The Group's largest business area, Special Products, had continued strong order intake from the energy sector during the quarter and will begin delivering for the high level of orders received toward the end of last year in the coming quarter. 

Margin
The gross margin, at 33.9%, was marginally better than the corresponding period a year ago as well as the full year 2011. The differences between the quarters are due to changes in the product mix. The EBITA margin fell to 9.7% (10.1%), which is attributable to the product mix in Flow Technology and lower sales for Industrial Components. 

Acquisitions
Indutrade carried out two small acquisitions during the quarter – one in Switzerland and one in Sweden – and two larger ones – Dasa Control in Sweden and Geotrim in Finland. After the end of the quarter, the company Rubin Medical was acquired in Sweden. Thus during the year to date, companies with combined annual sales of nearly SEK 300 million have been acquired. 

Outlook
The energy sector will perform well during the year, and businesses in Flow Technology will also see stable demand. For our other business areas, it is not possible to make an accurate forecast. Several major customers have a positive outlook – above all for the latter part of the year – but I sense a high level of uncertainty. What's important for Indutrade's companies is to maintain a continued high level of cost flexibility. 

Johnny Alvarsson, President and CEO

The report will be commented upon as follows:

  • Via a conference call/webcast today at 3 p.m. at the following link:
    https://www.anywhereconference.com/?Conference=108269921&PIN=488835
    Participants are requested to call +46 (08) 566 363 52, +44 (0) 207 750 9950 or +1 866 676 5870
     
  • Via a videotaped version at the following links:
    http://www.indutrade.se
    http://www.playontv.se

For further information, please contact:
Johnny Alvarsson, President and CEO, tel: +46 70 589 17 95.

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