Lagercrantz Interim Report 2021/22 Q3

Third quarter (1 October – 31 December 2021)

• Net revenue increased by 30% to MSEK 1,405 (1,078).
  • Organically, net revenue increased by 14%.
• Operating profit (EBITA) increased by 35% to MSEK 226 (168), equivalent to an operating margin of 16.1% (15.6).
• Profit after financial items increased by 37% to MSEK 191 (139).
• Profit after taxes increased by 33% to MSEK 148 (111).
• Cash flow from operating activities amounted to MSEK 172 (226).
• Return on equity for the latest 12-month period amounted to 29% (22) and the equity ratio at the end of the period was 36% (40).

Nine months (1 April – 31 December 2021)

• Net revenue increased by 31% to MSEK 3,907 (2,973).
  • Organically, net revenue increased by 15%.
• Operating profit (EBITA) increased by 49% to MSEK 630 (424), equivalent to an operating margin of 16.1% (14.3).
• Profit after financial items increased by 57% to MSEK 527 (336) and profit after taxes increased by 54% to MSEK 403 (262).
• Earnings per share after dilution for the latest 12-month period amounted to SEK 2.59, compared to SEK 1.91 for the 2020/21 financial year.
• Cash flow from operating activities amounted to MSEK 426 (552).
• During the nine month period, five acquisitions were carried out, CW Lundberg, Libra, AC Antennas, Geonor and GM Scientific with a total annual business volume of approx. MSEK 420. After the end of the period, the acquisitions of Westmatic and ARAS Security were also carried out.

Statement of the Chief Executive

The third quarter of the financial year offered a continued strong performance in most of the Group’s businesses where the sales volume, both organically and including acquisitions, increased at about the same level as earlier in the year. In numerical terms, the total increase in net revenue was 30% in the quarter and 31% for the first nine months of the year, and organically the equivalent figure was 14% for the quarter and 15% for the nine-month period.

Earnings in the nine-month period were therefore strong where the operating profit (EBITA) increased by 49% to MSEK 630 (424). The majority of this, equivalent to approximately 60% of the improved operating profit, came from organic improvements. The operating margin amounted to 16.1% (14.3) and profit after net financial items increased by 57% to MSEK 527 (336) compared to the previous nine-month period. Taken together, these improvements mean that earnings per share, after dilution, increased by 45% in one year to SEK 2.59 per share – a new record level, and that the return on equity also reached a new all-time-high of 29% (22). 

It is particularly gratifying that the improvements are continuing to come on a broad front from many parts of the Group.  This is apparent, in the increased earnings in all five divisions, among other things. Our starting point for continued growth from last spring – what we call “Lagercrantz towards one billion” – has created a common goal. By further developing the focus of the divisions, we are concentrating on attractive product areas and markets with structural growth and clear goals regarding sustainability. This creates clarity and ambition that attracts the acquisition market, employees, customers, suppliers and the stock market, which further improves the potential for growth.

It is also important to highlight the twelve acquisitions we carried out in the past twelve months, of which seven were during the present financial year. We see along the way that Lagercrantz’s ability to nurture, further develop and internationalise owner-led product companies in particular, is attracting more and more sellers of companies. We are therefore proud and happy that the owners of CW Lundberg in Sweden, Libra and Geonor in Norway, AC Antennas in Denmark, GM Scientific in the UK – and now most recently Westmatic in Sweden and ARAS Security in Denmark – have chosen to let their life’s work become a part of Lagercrantz. In total, these companies add approximately MSEK 665 in business volume with good profitability. We are looking forward with great responsibility, clear decentralisation and management by objectives, in most cases together with the previous owners, to take these companies to new heights.

Ahead of the coming quarters, I am still optimistic. The pandemic is certainly reappearing with increased spread of infection and high absence due to illness within the Group and among our customers, but it already seems to be easing in the countries that were affected by Omicron early on. Incoming orders remain at a good level and so far we have effectively handled rising raw material and freight costs and component shortages through price adjustments and creativity. Taken together, this gives me great confidence about Lagercrantz’s prospects both in the short and long term.

Jörgen Wigh
President and CEO

Stockholm 4 February 2022

Lagercrantz Group AB (publ)

A phone conference will be held 4 February at 10 am CET, in English.
Phone: +46 8 619 7530. PIN: 332347#
Link to presentation: 
https://www.lagercrantz.com/en/reports-and-presentations

This disclosure contains information that Lagercrantz Group is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact persons, on 4 February 2022 08:00 CET.

For further information please contact:
Jörgen Wigh, President and CEO, Lagercrantz Group AB, +46 8 700 66 70
Peter Thysell, CFO, Lagercrantz Group AB, phone +46 70 661 05 59

LAGERCRANTZ GROUP IN BRIEF
Lagercrantz Group is a technology group that offers world-leading, value-creating technology, using either proprietary products or products from leading suppliers. The Group consists of some 60 companies, each with a focus on a specific sub-market – a niche.  Lagercrantz Group is active in nine countries in Northern Europe as well as in China, India and in the USA. The Group has approximately 1,850 employees and annual revenue of about MSEK 5,000 in 2021. The Company is listed on Nasdaq Stockholm since 2001. Read more on www.lagercrantz.com

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