Interim Report January-March 2017
Reporting period January – March
- Net sales increased by 18.1 per cent to SEK 2,423 (2,051) million. Organically, net sales grew by 7.5 per cent
- EBITA* increased by 40.6 per cent to SEK 385 (274) million
- The EBITA margin* increased to 15.9 (13.4) per cent
- Earnings before tax grew by 36.9 per cent to SEK 333 (243) million
- Net profit for the period grew by 36.9 per cent to SEK 250 (182) million
- Earnings per share increased by 36.7 per cent to SEK 2.72 (1.99)
- Cash flow from operating activities decreased by 5.6 per cent to SEK 136 (144) million
- During the period Lifco acquired two businesses with total annual sales of around SEK 212 million
- After the end of the quarter, the majority of Silvent AB has been acquired, which will be consolidated in business area Systems Solutions
Summary of financial performance
| FIRST QUARTER | Rolling 12 months | FULL YEAR | ||||
| SEK million | 2017 | 2016 | change | change | 2016 | |
| Net sales | 2,423 | 2,051 | 18.1% | 9,359 | 4.1% | 8,987 |
| EBITA* | 385 | 274 | 40.6% | 1,488 | 8.1% | 1,377 |
| EBITA margin* | 15.9% | 13.4% | 2.5 | 15.9% | 0.6 | 15.3% |
| Profit before tax | 333 | 243 | 36.9% | 1,308 | 7.4% | 1,219 |
| Net profit for the period | 250 | 182 | 36.9% | 994 | 7.3% | 927 |
| Earnings per share | 2.72 | 1.99 | 36.7% | 10.72 | 7.3% | 9.99 |
| Return on capital employed | 19.2% | 19.6% | -0.4 | 19.2% | 0.5 | 18.7% |
| Return on capital employed excl. goodwill | 146% | 128% | 18 | 146% | 5 | 141% |
* Before restructuring, integration and acquisition costs.
COMMENTS FROM THE CEO
Net sales increased by 18.1 per cent in the first quarter to SEK 2,423 (2,051) million, through organic growth, foreign exchange gains and acquisitions. Organic growth was positively affected by the fact that the first quarter of 2017 had more working days than the same period in 2016. The effect was particularly pronounced in Dental, but the companies in Demolition & Tools and Systems Solutions also benefited from this effect.
All three business areas reported robust sales and earnings growth for the period. All divisions in all business areas apart from Forest have had a good start to the year. The market environment in the three business areas remained generally favourable.
EBITA before restructuring, integration and acquisition costs increased by 40.6 per cent to SEK 385 (274) million during the year while the EBITA margin expanded by 2.5 percentage points to 15.9 (13.4) per cent. The profitability improved on the back of organic growth and acquisitions. Earnings per share increased by 36.7 per cent during the period, to SEK 2.72 (1.99).
Cash flow from operating activities decreased by 5.6 per cent during the period, to SEK 136 (144) million. Accounts receivable increased strongly during the period due to a large volume of deliveries in the last week of March. This was not the case in 2016, when Easter fell in late March.
In the first quarter Lifco consolidated two new businesses with total annual sales of around SEK 212 million. The acquisitions will have a positive impact on Lifco’s results and financial position in the current year.
Even after these acquisitions we still have considerable financial scope for further acquisitions, as net debt remains at 2.1 times EBITDA before restructuring, integration and acquisition costs, well below our target of a net debt of less than three times EBITDA.
Fredrik Karlsson
CEO
GROUP PERFORMANCE IN JANUARY – MARCH
Net sales increased by 18.1 per cent to SEK 2,423 (2,051) million, driven by acquisitions and organic growth. Exchange rate changes also added to the increase in net sales. Acquisitions contributed 8.7 per cent and organic growth 7.5 per cent while changes in exchange rates had a positive impact of 1.9 per cent. Two new businesses, Haglöf Sweden and Hultdin System, were consolidated during the three-month period.
EBITA* increased by 40.6 per cent to SEK 385 (274) million and the EBITA margin* improved to 15.9 (13.4) per cent. EBITA* improved on the back of organic growth and acquisitions. Changes in exchange rates had a positive impact on EBITA* of 1.9 percentage points. In the first three months 33 per cent of EBITA* was generated in SEK, 30 per cent in EUR, 15 per cent in NOK, 9 per cent in DKK, 4 per cent in GBP, 4 per cent in USD and 5 per cent in other currencies.
Earnings before tax increased by 36.9 per cent to SEK 333 (243) million. Net profit grew by 36.9 per cent to SEK 250 (182) million.
Average capital employed excluding goodwill increased by SEK 43 million over the three-month period, to SEK 1,017 million at 31 March 2017, compared with SEK 974 million at 31 December 2016. EBITA* in relation to average capital employed excluding goodwill increased to 146 (128) per cent at 31 March 2017, up from 141 per cent at year-end. The improvement was due chiefly to a higher profit and good control of capital employed.
The Group’s net interest-bearing debt increased by SEK 411 million from 31 December 2016 to SEK 3,429 million at 31 March 2017. The net debt/equity ratio was 0.7 (0.7) at 31 March 2017 and net debt to EBITDA* was 2.1 (2.1) times. At the end of the period 36 per cent of the Group’s interest-bearing liabilities were denominated in EUR.
Cash flow from operating activities decreased by 5.6 per cent to SEK 136 (144) million in the first three months. The decrease was due to a sharp increase in accounts receivable following a large volume of deliveries in the final week of the three-month period, in contrast to the previous year, when Easter fell at the end of March. Cash flow from investing activities was SEK -562 (-971) million, which was mainly attributable to acquisitions.
FINANCIAL PERFORMANCE – BUSINESS AREAS
Dental
| FIRST QUARTER | Rolling 12 months | FULL YEAR | ||||
| SEK million | 2017 | 2016 | change | change | 2016 | |
| Net sales | 1,000 | 868 | 15.1% | 3,722 | 3.7% | 3,590 |
| EBITA* | 185 | 155 | 19.0% | 684 | 4.5% | 655 |
| EBITA margin* | 18.5% | 17.9% | 0.6 | 18.4% | 0.2 | 18.2% |
The companies in Lifco’s Dental business area are leading suppliers of consumables, equipment and technical service to dentists across Europe and the business area also operates in the US. Lifco sells dental technology to dentists in the Nordic countries and Germany, and develops and sells medical record systems in Denmark and Sweden. The business area also includes a number of manufacturers which produce disinfectants, saliva ejectors, bite registration and dental impression materials, bonding agents and other consumables that are sold to dentists through distributors around the world.
Net sales in Dental increased by 15.1 per cent to SEK 1,000 (868) million in the first three months of the year. The comparison with the year-before period is affected by the fact that Easter fell in April this year, which resulted in a larger number of working days in the month of March compared with 2016. Consequently, Dental will see a corresponding negative seasonal effect in the second quarter of 2017.
EBITA* improved by 19.0 per cent to SEK 185 (155) million in the first three months and the EBITA margin* increased to 18.5 (17.9) per cent, partly due to the positive effect of Easter falling in April.
The dental market remains generally stable. The results of individual companies in Lifco’s dental business may in any individual quarter be influenced by significant fluctuations in exchange rates, calendar effects such as Easter, gained or lost contracts in procurements of consumables by public-sector or major private-sector customers and fluctuations in the delivery of equipment. Sales and earnings were affected by Easter falling in April this year.
Demolition & Tools
| FIRST QUARTER | Rolling 12 months | FULL YEAR | ||||
| SEK million | 2017 | 2016 | change | change | 2016 | |
| Net sales | 479 | 384 | 24.6% | 1,820 | 5.5% | 1,726 |
| EBITA* | 111 | 79 | 40.9% | 430 | 8.1% | 398 |
| EBITA margin* | 23.2% | 20.6% | 2.6 | 23.6% | 0.6 | 23.0% |
DDemolition & Tools develops, manufactures and sells equipment for the construction and demolition industries. The Group is the world’s leading supplier of demolition robots and crane attachments. The Group is also one of the leading global suppliers of excavator attachments. The operations are divided into two divisions, Demolition Robots and Crane & Excavator Attachments, which are roughly equal in terms of sales. As of March 2017 the business area includes Hultdins, a leading manufacturer of tools and attachments for forestry and construction machinery. The acquisition of Hultdins was announced in February this year.
Net sales increased by 24.6 per cent over the period to SEK 479 (384) million. The market situation was generally good. Among the larger markets, the US, Australia, UK and Germany saw the fastest growth.
EBITA* increased by 40.9 per cent over the period to SEK 111 (79) million and the EBITA margin* expanded by 2.6 percentage points to 23.2 (20.6) per cent.
Systems Solutions
| FIRST QUARTER | Rolling 12 months | FULL YEAR | ||||
| SEK million | 2017 | 2016 | change | change | 2016 | |
| Net sales | 944 | 799 | 18.3% | 3,817 | 4.0% | 3,671 |
| EBITA* | 116 | 64 | 82.9% | 474 | 12.5% | 421 |
| EBITA margin* | 12.3% | 8.0% | 4.3 | 12.4% | 0.9 | 11.5% |
Through its operating units, Systems Solutions operates in industries offering systems solutions. Systems Solutions is divided into five divisions: Construction Materials, Interiors for Service Vehicles, Contract Manufacturing, Environmental Technology and Forest.
Net sales in Systems Solutions increased by 18.3 per cent to SEK 944 (799) million and all divisions except Forest increased their sales during the period.
EBITA* increased by 82.9 per cent to SEK 116 (64) million in 2017. All divisions, with the exception of Forest, improved their results and the EBITA margin* increased by 4.3 percentage points to 12.3 (8.0) per cent.
Construction Materials reported good sales and earnings growth during the period thanks to robust organic growth and improved profitability in all areas of operation.
Interiors for Service Vehicles reported stronger sales as well as earnings for the period.
Contract Manufacturing improved its sales as well as profitability during the period. The market situation remained stable. The division’s customers include world-leading manufacturers of equipment for the pharmaceutical industry as well as manufacturers of railway equipment, which require a high standard of quality as well as delivery flexibility and documentation.
Environmental Technology performed well over the period as sales and profitability both improved.
In Forest, sales and earnings fell over the period, despite the consolidation from February 2017 of Haglöf Sweden, a world-leading supplier of instruments for professional forestry surveyors, which added to both sales and earnings. The acquisition of Haglöf Sweden was announced in December 2016. The decline in the division is due to continued problems in individual projects.
ACQUISITIONS
In the first three months of 2017 Lifco consolidated the following acquisitions:
| Consolidated from month | Acquisition | Business area | Net sales | Employees |
| February | Haglöf Sweden | Systems Solutions | SEK 60m | 43 |
| March | Hultdin System | Demolition & Tools | SEK 152m | 66 |
Further information on acquisitions is provided on page 14 of the interim report. The figures for net sales and number of employees refer to the estimated annual net sales and the number of employees at the acquisition date.
On 28 April, Lifco announced the acquisition of the majority of Silvent AB, a leading company within energy optimization and work environment. Silvent, with head office in Borås, Sweden, reported in 2016 net sales of approximately 120 MSEK and has about 70 employees. The company will be consolidated in business area Systems Solutions.
Taken together, the acquisitions will have a positive impact on Lifco’s results and financial position in the current year.
OTHER FINANCIAL INFORMATION
Employees
The average number of employees in the first quarter was 3,669 (3,561) and the number of employees at the end of the period was 3,740 (3,571). Acquisitions added 109 employees.
Events after the end of the reporting period
After the end of the reporting period the acquisition of the majority of Silvent AB has been announced.
Related party transactions
No significant transactions with related parties took place during the period.
Risks and uncertainties
The risk factors which have the biggest impact for Lifco are the competitive situation, structural changes in the market and general level of economic activity. Lifco is also exposed to financial risks, including currency risks, interest rate risks, credit and counterparty risks.
The Parent Company is affected by the above risks and uncertainties through its function as owner of the subsidiaries.
For further information on Lifco’s risks and risk management, see the annual report for 2016.
Accounting principles
The Group’s interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. In respect of the Parent Company, the report has been prepared in accordance with the Annual Accounts Act and Recommendation RFR 2 Financial Reporting for Legal Entities of the Swedish Financial Reporting Board. The accounting principles have been applied in accordance with those which are presented in the annual report for 2016 and should be read in conjunction with these.
The Group is currently evaluating the effects of those new accounting standards which become effective on 1 January 2018 (IFRS 9 and IFRS 15). Senior management’s current assessment is that the standards will not result in any significant differences for the Group.
This report has not been examined by the Company’s auditors.
DECLARATION OF THE BOARD OF DIRECTORS
The Board of Directors and Chief Executive Officer warrant and declare that this three-month report gives a true and fair view of the Parent Company’s and Group’s operations, financial positions and results, and that it describes significant risks and uncertainties faced by the Parent Company and the companies included in the Group.
Enköping, 4 May 2017
| Carl Bennet, Chairman of the Board | Gabriel Danielsson, Director | Ulrika Dellby, Director |
| Erik Gabrielson, Director Fredrik Karlsson, President and CEO, Director | Ulf Grunander,Director Annika Norlund, Director, employee representative | Annika Espander Jansson, Director Johan Stern, Vice Chairman |
| Axel Wachtmeister, Director | Hans-Eric Wallin, Director,employee representative |
FINANCIAL CALENDAR
The report for the second quarter will be published on 17 July
The report for the third quarter will be published on 26 October
The year-end report for 2017 will be published on 15 February 2018
ANNUAL GENERAL MEETING
The Annual General Meeting of Lifco AB will be held on Thursday 4 May 2017, at 3 p.m., at Bonnierhuset, Torsgatan 21, Stockholm.
FURTHER INFORMATION
Media and investor relations: Åse Lindskog, ir@lifco.se, telephone +46 (0)730 24 48 72
TELECONFERENCE
Media and analysts are welcome to call in to a teleconference, where CEO Fredrik Karlsson, CFO Therése Hoffman and Head of Business Area Dental Per Waldemarson will present the interim report. The presentation is expected to take around 20 minutes, after which participants will be invited to ask questions.
Time: Thursday 4 May, at 1 p.m.
Link to the presentation:
https://tv.streamfabriken.com/lifco-q1-2017
Telephone numbers:
Sweden: +46 8 566 426 93
UK: +44 203 008 98 01
US: +1 855 831 59 45
LIFCO IN BRIEF
Lifco acquires and develops market-leading niche businesses with the potential to deliver sustainable earnings growth and robust cash flows. The Group has three business areas: Dental, Demolition & Tools and Systems Solutions. Lifco is guided by a clear philosophy centred on long-term growth, a focus on profitability and a strongly decentralised organisation. At year-end the Lifco Group consisted of 132 companies in 26 countries. In 2016 Lifco reported EBITA of SEK 1,377 million on net sales of SEK 9.0 billion. The EBITA margin was 15.3 per cent. Read more at www.lifco.se
| This information constitutes information that Lifco AB is required to publish under the EU’s Market Abuse Regulation.The information was submitted for publication through the aforementioned contact person on 4 May 2017, at 11.30 a.m. CET. |
CONDENSED CONSOLIDATED INCOME STATEMENT
| FIRST QUARTER | FULL YEAR | |||
| SEK million | 2017 | 2016 | change | 2016 |
| Net sales | 2,423 | 2,051 | 18.1% | 8,987 |
| Cost of goods sold | -1,418 | -1,262 | 12.4% | -5,405 |
| Gross profit | 1,005 | 789 | 27.3% | 3,582 |
| Selling expenses | -258 | -183 | 41.1% | -831 |
| Administrative expenses | -374 | -342 | 9.4% | -1,412 |
| Development costs | -24 | -21 | 12.5% | -88 |
| Other income and expenses | -7 | 8 | -191% | 1 |
| Operating profit | 342 | 251 | 36.2% | 1,252 |
| Net financial items | -9 | -8 | 14.1% | -33 |
| Profit before tax | 333 | 243 | 36.9% | 1,219 |
| Tax | -83 | -61 | 36.9% | -292 |
| Net profit for the period | 250 | 182 | 36.9% | 927 |
| Profit attributable to: | ||||
| Parent Company shareholders | 248 | 180 | 37.1% | 908 |
| Non-controlling interests | 2 | 2 | - | 19 |
| Earnings per share before and after dilution for the period, attributable to Parent Company shareholders | 2.72 | 1.99 | 36.7% | 9.99 |
| EBITA* | 385 | 274 | 40.6% | 1,377 |
| Depreciation of tangible assets | 26 | 22 | 17.7% | 94 |
| Amortisation of intangible assets | 2 | 3 | -3.3% | 10 |
| Amortisation of intangible assets arising from acquisitions | 41 | 23 | 77.8% | 121 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| FIRST QUARTER | FULL YEAR | |||
| SEK million | 2017 | 2016 | change | 2016 |
| Net profit for the period | 250 | 182 | 36.9% | 927 |
| Other comprehensive income | ||||
| Items which can later be reclassified to profit or loss:Hedge of net investment | 10 | 18 | -44.4% | -23 |
| Translation differencesTax related to other comprehensive income | -23-2 | 14-4 | -262%-49.1% | 1594 |
| Total comprehensive income for the period | 235 | 210 | 11.6% | 1,067 |
| Comprehensive income attributable to: | ||||
| Parent Company shareholders | 233 | 208 | 11.8% | 1,046 |
| Non-controlling interests | 2 | 2 | - | 21 |
| 235 | 210 | 11.6% | 1,067 | |
SEGMENT OVERVIEW
Lifco’s operations are monitored and evaluated by the CEO and resources are allocated based on information from the three operating segments: Dental, Demolition & Tools and Systems Solutions. The defined quantitative limits have been exceeded only by Dental and Demolition & Tools. One further operating segment, Systems Solutions, is presented. This operating segment consists of a merger of those divisions which have similar economic characteristics and which do not individually meet the defined quantitative limits. These divisions are Construction Materials, Interiors for Service Vehicles, Contract Manufacturing, Environmental Technology and Forest.
NET SALES TO EXTERNAL CUSTOMERS
No sales are made between the segments.
| FIRST QUARTER | Rolling 12 months | FULL YEAR | ||||
| SEK million | 2017 | 2016 | change | change | 2016 | |
| Dental | 1,000 | 868 | 15.1% | 3,722 | 3.7% | 3,590 |
| Demolition & Tools | 479 | 384 | 24.6% | 1,820 | 5.5% | 1,726 |
| Systems Solutions | 944 | 799 | 18.3% | 3,817 | 4.0% | ,3,671 |
| Group | 2,423 | 2,051 | 18.1% | 9,359 | 4.1% | 8,987 |
EBITA
A breakdown of results by segment is made up to and including EBITA. EBITA is reconciled to profit before tax in accordance with the following table:
| FIRST QUARTER | Rolling 12 months | FULL YEAR | ||||
| SEK million | 2017 | 2016 | change | change | 2016 | |
| Dental | 185 | 155 | 19.0% | 684 | 4.5% | 655 |
| Demolition & Tools | 111 | 79 | 40.9% | 430 | 8.1% | 398 |
| Systems Solutions | 116 | 64 | 82.9% | 474 | 12.5% | 421 |
| Central Group functions | -27 | -24 | 13.2% | -100 | 3.2% | -97 |
| EBITA before restructuring, integration and acquisition costs | 385 | 274 | 40.6% | 1,488 | 8.1% | 1,377 |
| Restructuring, integration and acquisition costs | -2 | - | - | -6 | 67.8% | -4 |
| EBITA | 383 | 274 | 39.7% | 1,482 | 7.9% | 1,373 |
| Amortisation of intangible assets arising on acquisition | -41 | -23 | 77.8% | -139 | 14.8% | -121 |
| Net financial items | -9 | -8 | 14.1% | -34 | 3.6% | -33 |
| Profit before tax | 333 | 243 | 36.9% | 1,309 | 7.4% | 1,219 |
CONDENSED CONSOLIDATED BALANCE SHEET
| SEK million | 31 Mar 2017 | 31 Mar 2016 | 31 Dec 2016 |
| ASSETS | |||
| Intangible assets | 7,265 | 5,983 | 6,824 |
| Tangible fixed assets | 511 | 437 | 464 |
| Financial assets | 112 | 88 | 109 |
| Inventories | 1,214 | 1,135 | 1,155 |
| Accounts receivable - trade | 1,222 | 1,026 | 1,046 |
| Current receivables | 293 | 266 | 236 |
| Cash and cash equivalents | 255 | 438 | 293 |
| TOTAL ASSETS | 10,872 | 9,373 | 10,127 |
| EQUITY AND LIABILITIES | |||
| Equity | 4,988 | 4,174 | 4,758 |
| Non-current interest-bearing liabilities incl. pension provisions | 1,116 | 1,084 | 1,120 |
| Other non-current liabilities and provisions | 661 | 489 | 597 |
| Current interest-bearing liabilities | 2,568 | 2,150 | 2,191 |
| Accounts payable - trade | 595 | 549 | 507 |
| Other current liabilities | 944 | 927 | 954 |
| TOTAL EQUITY AND LIABILITIES | 10,872 | 9,373 | 10,127 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Attributable to Parent Company shareholders | ||||||
| SEK million | 31 Mar 2017 | 31 Mar 2016 | 31 Dec 2016 | |||
| Opening equity | 4,712 | 3,939 | 3,939 | |||
| Comprehensive income for the period | 233 | 208 | 1,046 | |||
| Dividend | - | - | -273 | |||
| Closing equity | 4,945 | 4,147 | 4,712 | |||
| Equity attributable to: | ||||||
| Parent Company shareholders | 4,945 | 4,147 | 4,712 | |||
| Non-controlling interests | 43 | 27 | 46 | |||
| 4,988 | 4,174 | 4,758 | ||||
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
| FIRST QUARTER | FULL YEAR | |||||||||
| SEK million | 2017 | 2016 | 2016 | |||||||
| Operating activities | ||||||||||
| Operating profit | 342 | 251 | 1,252 | |||||||
| Non-cash items | 69 | 35 | 211 | |||||||
| Interest and financial items, net | -9 | -8 | -33 | |||||||
| Tax paid | -110 | -88 | -295 | |||||||
| Cash flow before changes in working capital | 292 | 190 | 1,135 | |||||||
| Changes in working capital | ||||||||||
| Inventories | -23 | -62 | -57 | |||||||
| Current receivables | -188 | 18 | 11 | |||||||
| Current liabilities | 55 | -2 | -5 | |||||||
| Cash flow from operating activities | 136 | 144 | 1,084 | |||||||
| Business acquisitions and sales, net | -515 | -948 | -1,608 | |||||||
| Net investment in tangible fixed assets | -45 | -22 | -104 | |||||||
| Net investment in intangible assets | -2 | -1 | -9 | |||||||
| Cash flow from investing activities | -562 | -971 | -1,721 | |||||||
| Borrowings/repayment of borrowings, net | 394 | 797 | 710 | |||||||
| Dividends paid | -5 | -3 | -285 | |||||||
| Cash flow from financing activities | 389 | 794 | 425 | |||||||
| Cash flow for the period | -37 | -33 | -212 | |||||||
| Cash and cash equivalents at beginning of period | 293 | 464 | 464 | |||||||
| Translation differences | -1 | 7 | 41 | |||||||
| Cash and cash equivalents at end of period | 255 | 438 | 293 | |||||||
ACQUISITIONS IN 2017
Two new businesses were consolidated during the three-month period. The acquisitions refer to all shares of Haglöf Sweden and Hultdin System.
The purchase price allocation includes all acquisitions that were made in the first three months of the year. Purchase price allocations are preliminary until one year after the acquisition date.
Acquisition-related expenses of SEK 2 million are included in administrative expenses in the consolidated income statement for the first three months of 2017. If the businesses had been consolidated from 1 January 2017 consolidated net sales would have increased by around SEK 32 million. The acquisitions would have had a positive impact on earnings if the companies had been consolidated from 1 January 2017.
| Acquired net assets | |||
| Net assets, SEK million | Carrying amount | Value adjustment | Fair value |
| Trademarks, customer relationships, licences | - | 292 | 292 |
| Tangible assets | 29 | - | 29 |
| Inventory, trade and other receivables | 99 | -14 | 85 |
| Trade and other payables | -48 | -64 | -112 |
| Cash and cash equivalents | 77 | - | 77 |
| Net assets | 157 | 214 | 371 |
| Goodwill | - | 221 | 221 |
| Total net assets | 157 | 435 | 592 |
| Effect on cash flow, SEK million | |||
| Consideration | 592 | ||
| Cash and cash equivalents in acquired companies | -77 | ||
| Total cash flow effect | 515 | ||
FINANCIAL INSTRUMENTS
| CARRYING AMOUNT | FAIR VALUE | |||
| SEK million | 31 Mar 2017 | 31 Mar 2016 | 31 Mar 2017 | 31 Mar 2016 |
| Loans and receivables | ||||
| Accounts receivable - trade | 1,222 | 1,026 | 1,222 | ,1,026 |
| Other non-current financial receivables | 4 | 3 | 4 | 3 |
| Cash and cash equivalents | 255 | 438 | 255 | 438 |
| Total | 1,481 | 1,467 | 1,481 | 1,467 |
| Liabilities at fair value through profit or loss | ||||
| Other liabilities | 57 | 16 | 57 | 16 |
| Other financial liabilities | ||||
| Interest-bearing borrowings | 3,651 | 3,178 | 3,651 | 3,178 |
| Accounts payable - trade | 595 | 549 | 595 | 549 |
| Total | 4,303 | 3,743 | 4,303 | 3,743 |
Financial instruments at fair value are classified into different levels depending on how fair value is determined. All financial instruments at fair value in the Lifco Group have been classified as level 3, i.e. non-observable inputs. The fair value of short-term borrowings is equal to the carrying amount, as the discount effect is insignificant. Other liabilities classified as financial instruments refer to mandatory put/call options related to non-controlling interests.
KEY PERFORMANCE INDICATORS
| ROLLING TWELVE MONTHS TO | 201731 MAR | 201631 DEC | 201631 MAR | Net sales, SEKm | 9,359 | 8,987 | 8,204 | Change in net sales, % | 4.1 | 13.7 | 3.8 | EBITA*, SEKm | 1,488 | 1,377 | 1,218 | EBITA margin*, % | 15.9 | 15.3 | 14.8 | EBITDA*, SEK million | 1,596 | 1,481 | 1,313 | EBITDA margin, % | 17.1 | 16.5 | 16.0 | Capital employed, SEKm | 7,744 | 7,381 | 6,203 | Capital employed excl. goodwill and other intangible assets, SEK million | 1,017 | 974 | 952 | Return on capital employed, % | 19.2 | 18.7 | 19.6 | Return on capital employed excl. goodwill, % | 146 | 141 | 128 | Return on equity, % | 21.5 | 21.0 | 21.7 | Net interest-bearing debt, SEK million | 3,429 | 3,018 | 2,779 | Net debt/equity ratio | 0.7 | 0.6 | 0.7 | Net debt/EBITDA* | 2.1 | 2.0 | 2.1 | Equity/assets ratio, % | 45.9 | 47.0 | 44.5 | Number of shares, thousand | 90,843 | 90,843 | 90,843 | Average number of employees | 3,669 | 3,524 | 3,561 | |||||||
CONDENSED PARENT COMPANY INCOME STATEMENT
| FIRST QUARTER | FULL YEAR | ||
| SEK million | 2017 | 2016 | 2016 |
| Administrative expenses | -34 | -27 | -113 |
| Other operating income* | - | - | 90 |
| Operating profit | -34 | -27 | -23 |
| Net financial items** | 329 | 12 | 544 |
| Profit after financial items | 295 | -15 | 521 |
| Appropriations | - | - | -10 |
| Tax | 1 | 5 | 9 |
| Net profit for the period | 296 | -10 | 520 |
* Preliminary invoicing of Group-wide services.
** Net financial items include SEK 302 (-) million in dividends received during the three-month period.
CONDENSED PARENT COMPANY BALANCE SHEET
| SEK million | 31 Mar 2017 | 31 Mar 2016 |
| ASSETS | ||
| Tangible fixed assets | 0 | 0 |
| Financial assets | 3,988 | 3,385 |
| Current receivables | 3,701 | 2,946 |
| Cash and cash equivalents | 27 | 186 |
| TOTAL ASSETS | 7,716 | 6517 |
| EQUITY AND LIABILITIES | ||
| Equity | 2,729 | 2,176 |
| Untaxed reserves | 41 | 32 |
| Provisions | - | 2 |
| Non-current interest-bearing liabilities | 1,078 | 1,042 |
| Current interest-bearing liabilities | 2,556 | 2,124 |
| Current non-interest-bearing liabilities | 1,312 | 1,141 |
| TOTAL EQUITY AND LIABILITIES | 7,716 | 6,517 |
| Pledged assets | - | - |
| Contingent liabilities | 3 | 131 |
OBJECTIVE AND DEFINITIONS
| Return on equity | Net profit for the period divided by average equity. |
| Return on capital employed | EBITA before restructuring, integration and acquisition costs divided by capital employed. |
| Return on capital employed excluding goodwill and other intangible assets | EBITA before restructuring, integration and acquisition costs divided by capital employed excluding goodwill and other intangible assets. |
| EBITA | EBITA is a measure which Lifco considers relevant for investors who wish to understand the earnings generated after investments in tangible and intangible assets requiring reinvestment but before investments in intangible assets attributable to acquisitions. Lifco defines earnings before interest, tax and amortisation (EBITA) as operating profit before amortisation and impairment of intangible assets arising from acquisitions. In its financial reports Lifco excludes restructuring, integration and acquisition costs. This is indicated by an asterisk. |
| EBITA margin | EBITA divided by net sales. |
| EBITDA | EBITDA is a measure which Lifco considers relevant for investors who wish to understand the earnings generated before investments in fixed assets. Lifco defines earnings before interest, tax, depreciation and amortisation (EBITDA) as operating profit before depreciation, amortisation and impairment of tangible and intangible assets. In its financial reports Lifco excludes restructuring, integration and acquisition costs. This is indicated by an asterisk. |
| EBITDA margin | EBITDA divided by net sales. |
| Net debt/equity ratio | Net interest-bearing debt divided by equity. |
| Earnings per share | Profit after tax attributable to Parent Company shareholders divided by average number of outstanding shares. |
| Net interest-bearing debt | Lifco uses the alternative KPI net interest-bearing debt. Lifco considers that this is a useful additional KPI which allows users of the financial reports to assess the Group’s ability to pay dividends, make strategic investments and meet its financial obligations. Lifco defines the KPI as follows: current and non-current liabilities to credit institutions, bond loans and interest-bearing pension provisions less estimated contingent consideration for acquisitions, and cash and cash equivalents. |
| Equity/assets ratio | Equity divided by total assets (balance sheet total). |
| Capital employed | Capital employed is a measure which Lifco uses for calculating the return on capital employed and for measuring how efficient the Group is. Lifco considers that capital employed is useful in helping users of the financial reports to understand how the Group finances itself. Lifco defines capital employed as total assets less cash and cash equivalents, interest-bearing pension provisions and non-interest-bearing liabilities, calculated as the average of the last four quarters. |
| Capital employed excluding goodwill and other intangible assets | Capital employed excluding goodwill and other intangible assets is a measure which Lifco uses for calculating the return on capital employed and for measuring how efficient the Group is. Lifco considers that capital employed excluding goodwill and other intangible assets is useful in helping users of the financial reports to understand the impact of goodwill and other intangible assets on that capital which requires a return. Lifco defines capital employed excluding goodwill and other intangible assets as total assets less cash and cash equivalents, interest-bearing pension provisions, non-interest-bearing liabilities, goodwill and other intangible assets, calculated as the average of the last four quarters. |
RECONCILIATION OF ALTERNATIVE KEY PERFORMANCE INDICATORS
The interim report presents alternative key performance indicators for assessing the Group’s performance. The primary alternative KPIs presented in this interim report are EBITA, EBITDA, net debt and capital employed. Definitions of the alternative KPIs are presented on pages 17–18.
EBITA compared with financial statements in accordance with IFRS
| SEK million | 3 MONTHS2017 | 3 MONTHS2016 | FULL YEAR2016 |
| Operating profit | 342 | 251 | 1,252 |
| Amortisation of intangible assets arising from acquisitions | 41 | 23 | 121 |
| EBITA | 383 | 274 | 1,373 |
| Restructuring, integration and acquisition costs | 2 | - | 4 |
| EBITA* before restructuring, integration and acquisition costs | 385 | 274 | 1,377 |
EBITDA compared with financial statements in accordance with IFRS
| SEK million | 3 MONTHS2017 | 3 MONTHS2016 | FULL YEAR2016 |
| Operating profit | 342 | 251 | 1,252 |
| Depreciation of tangible assets | 26 | 22 | 94 |
| Amortisation of intangible assets | 2 | 3 | 10 |
| Amortisation of intangible assets arising from acquisitions | 41 | 23 | 121 |
| EBITDA | 411 | 299 | 1,477 |
| Restructuring, integration and acquisition costs | 2 | - | 4 |
| EBITDA* before restructuring, integration and acquisition costs | 413 | 299 | 1,481 |
Net interest-bearing debt compared with financial statements in accordance with IFRS
| SEK million | 31 Mar 2017 | 31 Mar 2016 | 31 Dec 2016 |
| Non-current interest-bearing liabilities incl. pension provisions | 1,116 | 1,084 | 1,120 |
| Current interest-bearing liabilities | 2,568 | 2,150 | 2,191 |
| Calculated contingent consideration for acquisitions | - | -17 | - |
| Cash and cash equivalents | -255 | -438 | -293 |
| Net interest-bearing debt | 3,429 | 2,779 | 3,018 |
Capital employed and capital employed excluding goodwill and other intangible assets compared with financial statements in accordance with IFRS
| SEK million | 31 Mar 2017 | 31 Dec 2016 | 30 Sep 2016 | 30 Jun 2016 |
| Total assets | 10,872 | 10,127 | 10,392 | 9,597 |
| Cash and cash equivalents | -255 | -293 | -410 | -428 |
| Interest-bearing pension provisions | -34 | -37 | -33 | -41 |
| Non-interest-bearing liabilities | -2,200 | -2,057 | -2,154 | -2,069 |
| Capital employed | 8,383 | 7,740 | 7,795 | 7,059 |
| Goodwill and other intangible assets | -7,265 | -6,824 | -6,756 | -6,063 |
| Capital employed excluding goodwill and other intangible assets | 1,118 | 916 | 1,039 | 996 |
Capital employed and capital employed excluding goodwill and other intangible assets calculated as the average of the last four quarters compared with financial statements in accordance with IFRS
| SEK million | Average | Q1 2017 | Q4 2016 | Q3 2016 | Q2 2016 |
| Capital employed | 7,744 | 8,383 | 7,740 | 7,795 | 7,059 |
| Capital employed excluding goodwill and other intangible assets | 1,017 | 1,118 | 916 | 1,039 | 996 |
| Total | |||||
| EBITA* | 1,488 | 385 | 380 | 316 | 407 |
| Return on capital employed | 19.2% | ||||
| Return on capital employed excl. goodwill and other intangible assets | 146% |
Tags: