CEO´s message

Strong organic growth and improved margins.

Third quarter

The market situation was stable during the quarter. Demand in Europe is developing well, particularly in all of the Nordic countries as well as in Benelux and Germany. HoweThe market situation was stable during the quarter. Demand in Europe is developing well, particularly in all of the Nordic countries as well as in Benelux and Germany. However there is some uncertainty in the UK due to Brexit, but thus far this has not had any major impact on our companies’ business situation.

Demand in most sectors and market segments is favourable. The measurement technology area continues to develop favourably, but is facing a challenge in the form of high capacity utilisation among our own companies as well as among customers and suppliers.
Continued strong demand combined with our companies’ competitiveness and development work resulted in a 15% rise in order intake and a 14% increase in invoicing during the quarter. I am also happy that we had organic growth of 7% in both order intake and invoicing.

Our companies are working continuously to strengthen their profitability and we improved EBITA by 19%, of which 12% was organic, to SEK 450 million (377), corresponding to an EBITA margin of 12.4% (11.9%).

All of our business areas performed well during the period, and our companies are doing a tremendous job. Flow Technology, which had a relatively low EBITA margin for a period, continues to be negatively affected by companies in the weak marine segment. Excluding these businesses the EBITA margin was close to the level that applies for the Group as a whole, however.

Indutrade has historically been very successful at acquiring well managed and profitable companies, and of the more than 200 companies in the Group, there are only a handful of businesses in which we have profitability problems. We are working actively to remedy these.

Acquisitions

We carried out ten acquisitions during the first nine months of the year, and in November we intend to complete our second direct investment in Germany with the acquisition of Inovatools. The company develops and manufactures quality metalcutting tools and has annual sales of approximately SEK 320 million, with the potential for continued profitable growth internationally. In addition, Inovatools strengthens our base in Germany and creates conditions for further acquisitions there.

Our acquisition ambitions remain high, and we have a strong platform to work from, based on a solid reputation as an owner. In addition we have a continued good inflow of acquisition candidates.
We will also be strengthening the team that works with acquisitions in order to proactively manage succession and our ability to handle more projects going forward.

Outlook

Based on a stable business climate and good underlying demand, combined with focused development work out in the Group’s companies, we have good prospects for continued profitable growth.

Bo Annvik, President and CEO