TROAX GROUP: Interim report January - September 2018
Hillerstorp 8th of November 2018, 12.00 CET
JULY - SEPTEMBER
- Order intake increased by 14 per cent to 40,1 (35,3) MEUR. Adjusted for currency the increase was 15 per cent.
- Sales increased by 13 per cent to 39,7 (35,2) MEUR. Adjusted for currency and the IFRS 15 adjustment the increase was 14 per cent.
- Operating profit increased to 8,6 (7,5) MEUR.
- Operating margin increased to 21,7 (21,3) per cent.
- Financial net was -0,3 (-0,3) MEUR.
- Profit after tax increased to 6,3 (5,3) MEUR.
- Earnings per share after dilution increased to 0,31 (0,27) EUR.
JANUARY - SEPTEMBER
- Order intake increased by 9 per cent to 123,3 (113,6) MEUR. Adjusted for currency the increase was 11 per cent.
- Sales increased by 6 per cent to 117,5 (111,1) MEUR. Adjusted for currency and the IFRS 15 adjustment the increase was 8 per cent.
- Operating profit increased to 22,7 (22,3) MEUR.
- Operating margin increased to 19,3 (20,1) per cent.
- Financial net was -0,7 (-4,9) MEUR of which -2,3 MEUR is related to a one-time cost related to the redemption of the bond.
- Profit after tax increased to 16,5 (13,0) MEUR.
- Earnings per share after dilution increased to 0,82 (0,65) EUR.
CEO COMMENTS
The Group’s development during the third quarter 2018 continued in the same way as the first six months of the year. The third quarter orders showed an organic growth of around 15 per cent excluding currency impact. During the third quarter, we have again received several important orders from customers within automation, warehouse and property, and have also during this quarter, similar to the past quarter, experienced lower activity within the automotive sector. The integration of the US based company Folding Guard that was acquired in late 2016 is generally following their plans. The market conditions in the US have during the third quarter been good but somewhat turbulent mainly due to raw material price increases. We have implemented price increases to reflect the higher cost for purchased steel but there is a time lag before we see the full impact from the price increases. Consequently, this can still be noted in the numbers for the third quarter for our US operation. Steel prices have generally gone up but the impact is most apparent in the US where the domestic vendors have increased prices on tube and steel significantly which is a natural effect following the implementation of tariffs on imports.
Our assessment for this quarter is that the market has grown approximately as expected. The indication is that the order books of our customers are well filled and their investment in our solutions has continued on a high level. The development for the Group has been positive in most markets and our assessment is that we are continuing to take market share on many markets. The orderbook at the end of the quarter is on a satisfying level.
The integration work of the company Folding Guard is progressing. Most of the organisational changes that were planned have now been made. The focus to realize the growth synergies from the acquisition remains strong but is not expected to deliver positive effects until the later part of the year. We see continued good opportunities to take market share for both brands in the important market of North America. During the third quarter of 2018, test production has started of Troax products in our Chicago factory.
Sales increased in the quarter by 14 per cent compared with the same period last year (including currency the increase is 13 per cent). The progress has been positive especially in the continental Europe and New markets.
The result for the quarter is above prior year. The increase can be attributed mainly to increased sales and a high capacity utilization at our main factory in Hillerstorp. The operating result for the quarter was 8,6 (7,5) MEUR, which corresponds to a profit margin of 21,7 per cent to be compared with 21,3 per cent last year. The consolidation of Folding Guard still decreases the margin in percentage terms. We do however see clear possibilities to increase the margin also for Folding Guard long term. The Net result amounts to 6,3 MEUR for the quarter compared to 5,3 MEUR last year. The increase is mainly due to the higher EBIT.
Earnings per diluted share for the third quarter is 0,31 EUR to be compared with 0,27 EUR in the same quarter of 2017.
Working Capital is on an expected level. Accounts receivables have increased somewhat due to the increase in sales whereas inventory is on a low level. Cash flow from operations, 5,7 MEUR during the quarter, is on the same level as the same period last year. The key figure of our net debt in comparison with the 12-month rolling EBITDA is now 1,6 which clearly is below our target for the Group. The production capacity in our main factory in Hillerstorp will be increased at the end of the year through an investment of approximately 5 MEUR. Most of this investment has impacted the cash flow during the first nine months of 2018. The Company has also decided to invest approximately 6,5 MEUR in an increase of the warehouse area and an improved inventory handling system in the factory in Hillerstorp. This investment will mainly impact the cash flow in 2019.
Thomas Widstrand, President and CEO
PHONE CONFERENCE
Invitation to presentation of the third quarter result:
Thomas Widstrand, CEO presents the result on a phone conference on the 8th of November 2018 at 16:00 CET. The conference will be held in English. For more information, please refer to https://www.troax.com/en/news.
This information is information that Troax Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was submitted for publication, through the agency of the contact person set out above, at 12:00 CET on the 8th of November 2018.
For additional information, please contact:
Thomas Widstrand
President and CEO
Troax Group AB
Box 89
335 04 Hillerstorp
Sweden
Tel 46 (0)370-82831
thomas.widstrand@troax.com
About Troax
Troax is the leading global supplier of indoor perimeter protection (“metal-based mesh panel solutions”) for the market segments: Machine guarding, Warehouse partitioning and Property Protection. Troax develops high quality and innovative safety solutions to protect people, property and processes.
Troax Group AB (publ), Reg. No. 556916-4030, has a global organisation with a strong sales force and efficient logistics setup, enabling local presence and short delivery times in 36 countries.
In 2017 Troax net sales amounted to around 152 MEUR and the number of employees amounted to abtou 670 persons. The Company’s head office is located in Hillerstorp, Sweden.
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