Interim report second quarter and first half of 2021

Second quarter 2021

• Order intake rose by 30% to SEK 6,006 million (4,604). For comparable units, it was an increase of 26%.
• Net sales increased by 20% to SEK 5,552 million (4,614). For comparable units, it was an increase of 16%.
• EBITA increased by 40% to SEK 843 million (602), corresponding to an EBITA margin of 15.2% (13.0%).
• Profit for the quarter increased by 52% to SEK 562 million (370), and earnings per share amounted to SEK 1.54 (1.02).
• Cash flow from operating activities amounted to SEK 792 million (806).

1 January – 30 June 2021

• Order intake rose 17% to SEK 11,753 million (10,005). For comparable units, it was an increase of 14%.
• Net sales increased by 12% to SEK 10,699 million (9,590). For comparable units, it was an increase of 9%.
• EBITA increased by 28% to SEK 1,556 million (1,218), corresponding to an EBITA margin of 14.5% (12.7%).
• Profit for the period increased by 35% to SEK 1,023 million (758), and earnings per share amounted to SEK 2.81 (2.09).
• Cash flow from operating activities increased and amounted to SEK 1,281 million (1,227)

CEO’s message

Strong demand and record-high earnings for the second quarter.

Second quarter

Demand improved further during the second quarter and was considerably higher than during the same period last year. Growth was broad and most companies and segments developed positively. Order intake, which amounted to SEK 6.0 billion, grew organically by 26% and was 8% higher than the net sales. Customer segments that have been strong in the past, such as medical technology and pharmaceutical, infrastructure and the process industry continued to develop positively. The demand from customers in the engineering industry also increased and demonstrated a strong recovery. The organic order growth was good for all business areas, with the strongest performance from the DACH, UK and Fluid & Mechanical Solutions business areas. The business climate for valves for power generation remained favourable, albeit with lower demand compared to its high level during the corresponding period last year. 

Sales improved for all business areas and amounted to SEK 5.5 billion, corresponding to an organic growth rate of 16%. The UK and Industrial Components business areas demonstrated the strongest development, with growth in most companies and segments. For the Finland and Benelux business areas, net sales improved for comparable units to a somewhat lower degree, which was primarily attributable to strong comparison figures from the same period last year.

The EBITA result for the quarter increased by 40% to SEK 843 million and the EBITA margin improved to a record-high 15.2% (13.0%). The margin developed positively for seven of the eight business areas and the improvement was primarily driven by not only organic growth, but also by favourable performance in the newly acquired companies.

During the quarter, many companies continued to be affected by the shortage of components and longer delivery times, which hampered delivery and invoicing opportunities. Several companies were also impacted by higher costs for raw materials, components and freight. Thanks to quick, flexible action in combination with successful pricing efforts by our companies, the overall net impact for the Group was limited during the quarter.

The higher business volumes contributed to a higher working capital during the quarter, which slightly suppressed cash flow. However, working capital efficiency continued to improve during the quarter and the inventory for comparable units was, at the end of the quarter, lower than last year, despite the increased volumes. The Group’s financial position remains strong, with a relatively low debt/equity ratio.

Acquisitions

Three acquisitions were made during the quarter with total annual sales of approximately SEK 200 million. In April, the Danish company CKJ Steel was acquired, which is a leading engineering and manufacturing company offering process equipment as well as technical advice to the Danish pharmaceutical and biotechnology industries. In May, an add-on acquisition within the sealing segment was made by acquiring the Swedish company, Lamisa. In June, the Danish company Buhl & Bønsøe was acquired. It is a specialised technical trading company offering professional measurement instruments and solutions to customers in the Danish market. At the end of the quarter, the Swedish company Atlas Industrial Print was acquired. It is a niche manufacturer offering different types of product marking to Swedish industrial customers.

In total, we have acquired nine companies thus far in 2021 with total annual sales of slightly more than SEK 700 million. The market situation and inflow of interesting companies remains good. During the pandemic, we have intentionally chosen to lengthen our acquisition discussions somewhat in order to ensure that the right prerequisites exist for sustainable profitable growth with our potential acquisitions. Indutrade acquires companies with the intention of holding and developing them over the long term and we assess the future acquisition opportunities as good.

Outlook

At the end of the second quarter, the demand situation was positive, stable and overall, at a higher level than it was prior to the outbreak of the pandemic. We enter into the second half of 2021 with a strong backlog of orders and expect that demand will remain at this good level. We assume also that the level of activity and costs among our companies will gradually increase during the autumn. The continued strained situation for many suppliers in combination with the pandemic presents a certain risk.

Our success is based on decentralised decision-making by committed MDs who work closely with customers. I am convinced that we will continue to manage the changed conditions in an agile and successful way, thereby creating the prerequisites for continued competitive value creation.

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.

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