Interim report second quarter and first half of 2018

Second quarter 2018
• Order intake rose 11% to SEK 4,391 million (3,952). For comparable units the increase was 2%.
• Net sales rose 17% to SEK 4,390 million (3,749). For comparable units the increase was 6%.
• Operating profit before amortisation of intangible non-current assets attributable to acquisitions (EBITA) rose 19% to SEK 543 million (458), corresponding to an EBITA margin of 12.4% (12.2%).
• Profit for the quarter grew 20% to SEK 364 million (303) and earnings per share were of SEK 3.01 (2.52).

1 January – 30 June 2018
• Order intake rose 12% to SEK 8,564 million (7,624). For comparable units the increase was 2%.
• Net sales rose 14% to SEK 8,287 million (7,282). For comparable units the increase was 3%.
• Operating profit before amortisation of intangible non-current assets attributable to acquisitions (EBITA) rose 15% to SEK 994 million (864), corresponding to an EBITA margin of 12.0% (11.9%).
• Profit for the period grew 16% to SEK 657 million (564), and earnings per share were SEK 5.43 (4.69).

CEO’s message
A quarter of strong earnings and favourable growth.
Second quarter
The market situation remained favourable, and sales rose 17% during the second quarter, of which 6% was organic. The favourable organic sales growth can be credited primarily to strong performance for companies in the Industrial Components and UK business areas. Demand in most sectors and market segments remained at a stable, high level. Order intake increased by 11%, of which 2% was organic. Sales and order intake during the quarter were positively affected by both exchange rate movements and slightly more invoicing days than the same quarter a year ago.
Most of the business areas showed favourable development during the quarter and reported good growth. In the Industrial Components business area, which offers technically advanced consumables in a number of different segments and sectors primarily in Scandinavia, the market situation was particularly strong, and sales grew 27%, of which 14% was organic. We also saw favourable development in the UK business area, with higher sales and improved earnings.
We saw weaker performance in the DACH business area, however, where organic growth was negatively affected by lower construction activity in the process industry in Switzerland. Owing to large orders and projects during the preceding year, growth for the Measurement & Sensor Technology business area was somewhat weaker during the quarter, but nevertheless remained at a satisfactory level.
Our customer- and result-oriented companies are working continuously to strengthen their profitability, which led to a 19% improvement in EBITA during the quarter, of which 5% was organic, to SEK 543 million. The EBITA margin for the second quarter was 12.4%, which is a high level in a historical perspective and an increase over the EBITA margin for the same period a year ago, which was 12.2%.
The cash flow continued to be adversely affected by high capacity utilization and longer lead times from our suppliers.
Acquisitions
During the second quarter the British company Precision UK Ltd was acquired and a few add-on acquisitions. Precision UK Ltd is a manufacturer and supplier of medical gas pipeline equipment that is used in hospitals and healthcare facilities to supply and regulate medical gases. Its proprietary products are sold under the CPX brand. After the end of the quarter the Norwegian company Norsecraft Tec was acquired, a leading technical trading company that
offers automated lubrication systems for construction machinery and industrial applications.
Indutrade is a stable owner that takes responsibility for its subsidiaries’ long-term development. Of the more than 200 companies in the Group, there are only a few businesses with less satisfactory profitability. We are working actively and focused with action programmes for these companies.
Our acquisition opportunities continue to be favourable, with a steady stream of attractive companies. Our decentralised structure with a high degree of autonomy continues to attract entrepreneurs who are considering selling their companies.
Outlook
Our business model – to develop and acquire successful companies with technological niche expertise – works well. We experienced favourable development during the first half of 2018, and the prevailing business climate gives us confidence about positive development also during the second half of the year. We continue to work for sustainable, profitable growth in order to generate a competitive return to our shareholders.

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 and the Swedish Securities Market Act. The information was submitted for publication by the agency of the following contact persons at 1 p.m. (CET) on 25 July 2018.

This report will be commented upon as follows:
The interim report will be presented via a webcast at 2 p.m. (CET) on 25 July under the following link: https://bit.ly/2zsQv7y

To participate via conference call and ask questions, call:
UK: +44 203 008 9809
SE: +46 8 566 426 96
US: +1 8 558 315 946

For further information, please contact:

Bo Annvik, President and CEO
Tel. +46 8 703 03 00

About Indutrade

Indutrade markets and sells components, systems and services with a high-tech content within selected niches. Indutrade’s business is distinguished by

- High-tech products for recurring needs
- Growth through a structured and tried-and tested acquisition strategy
- A decentralised organisation characterised by an entrepreneurial spirit

The Group is organised into eight Business Areas: Benelux, DACH, Finland, Flow Technology, Fluids & Mechanical Solutions, Industrial Components, Measurement & Sensor Technology and UK. Indutrade’s sales totalled SEK 14,847 million in 2017, generating an operating profit of SEK 1,613 million before amortisation of intangible assets. Indutrade is listed on Nasdaq Stockholm. Please read more at www.indutrade.com

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