Interim report and Year-End report 2020

1 January - 31 December 2020

CEO’s message

With a strong finish to the quarter, Indutrade summarises 2020 as a successful year. Despite it being a turbulent year, with the ongoing COVID-19 pandemic and considerable uncertainty in the market, we are able to increase both sales and earnings. For the full year 2020, sales amounted to SEK 19.2 billion and the EBITA margin was a record high 13.6%. Thanks to the amazing efforts of our employees, we have been able to quickly and efficiently adapt to the prevailing circumstances and act on business opportunities.

Fourth quarter
Overall, demand during the fourth quarter was at a higher level than the corresponding period last year, although there was still variation across companies, segments and countries. Order intake increased by 7% organically and amounted to SEK 5.1 billion, driven primarily by the continued strong demand from customers in the medical technology and pharmaceutical segment. This was partly attributable to orders associated with the COVID-19 pandemic. Development was strong as well for infrastructure, wind power and the process industry. Demand also improved somewhat for the engineering industry compared to the previous quarter. The Industrial Components, DACH and Benelux business areas reported the strongest organic order growth, which is primarily attributable to higher demand from customers in the medical technology and pharmaceutical segment.

Sales increased by 3% to SEK 5.0 billion, of which 3% was organic. The strongest performance came from the Industrial Components and Flow Technology business areas, which was primarily driven by good development in the medical technology and pharmaceutical segment. Organic growth was weakest for the Measurement & Sensor Technology business area, which was due to suppressed demand from customers in, among others, the automotive industry and marine sector.  

The EBITA result improved by 13% to SEK 712 million, corresponding to an EBITA margin of 14.2% (13.0%), which is record high for a fourth quarter. Margins were strengthened for six of our eight business areas, with the strongest development in the Industrial Components and Flow Technology business areas. The improvement was primarily attributable to the strong performance of companies in the medical technology and pharmaceutical segment, as well as good cost management. Net profit for the period grew 14% to SEK 453 million.

During the quarter, most of the programs involving various types of temporary lay-offs and short-term work, which had been set up at the start of the pandemic, were terminated. Since the end of March 2020, the workforce has been permanently reduced by approximately 320 individuals, corresponding to 4%. 

Cash flow improved compared to the same period last year, primarily thanks to high earnings. Inventory remained at a somewhat high level, yet with a slightly downward trend. The Group's financial position remains strong. In December 2020, Indutrade executed a bonus issue aimed at increasing the liquidity in the share and further strengthening its financial position.

Indutrade has established a new sustainability vision and long-term sustainability objectives for 2030 to enhance business opportunities, drive sustainable profitable growth, and support the UN Sustainable Development Goals (SDGs). The sustainability vision is based on our shared commitment that the businesses within the Group continuously develop and improve in ways that are economically, environmentally and socially responsible. The objectives are based on three key elements: people, environment and profitable growth. To achieve the objectives by 2030, we will use measurable key enablers that will be followed up and evaluated annually.

Acquisitions
Growth, both organic and via acquisitions, is a key concept for Indutrade. In total, ten acquisitions were made in 2020. Another three acquisitions were made in January 2021, subsequent to the end of the quarter. The annual sales for these thirteen acquisitions amount to just over SEK 1.2 billion. 

Two acquisitions were made in the fourth quarter. Indutrade acquired the Czech company, Cheirón, which is specialised in medical technology products and the German company, X-RAY WorX, which is a leading niche manufacturer of X-ray tubes for industrial applications in non-destructive testing. Subsequent to the end of the quarter, Indutrade acquired the Finnish company Pistesarjat which offers advanced cable systems, the Dutch company Fire Proof BV, a specialised distributor of passive fire protection products and the German MedTech company, Tecno Plast. Tecno Plast is a leader within its niche in the German market, offering single-use tubing sets manufactured in clean rooms, PTFE and silicone hoses. The company both enhances and complements Indutrade's cluster of companies in the segment in which we see significant growth opportunities. 

There is a good inflow of interesting companies and we also assess our future acquisition opportunities as good. We continue, due to uncertainties in the market, to deliberately prolong our acquisition discussions somewhat to ensure that the right conditions exist for profitable growth in our acquisition candidates.

Outlook
Due to the ongoing pandemic, with new virus mutations, the business situation remains uncertain. Demand within the medical technology and pharmaceutical segment is expected to remain high, yet with a somewhat lower rate of growth. With time, as society gradually opens up again and demand improves, companies’ market activities and costs will also gradually increase. 

I am extremely impressed by our distinctly customer-oriented and earnings-focussed companies, led by dedicated MDs in a decentralised and entrepreneurial culture. We look forward to the next quarters with confidence and have strong belief that our companies will continue to manage the changed market conditions in an agile and successful way.

Bo Annvik, President and CEO

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 19.2 billion in 2020, and the share is listed on Nasdaq Stockholm in Sweden.

Tags: