Year-end report 1 January-31 December 2012

1 JANUARY – 31 DECEMBER 2012

  • Net sales rose 5% to SEK 8,384 million (7,994). The increase for comparable units was 1%.
  • Operating profit before amortisation of intangible non-current assets attributable to acquisitions (EBITA) decreased by 1% to SEK 905 million (917), and the EBITA margin was 10.8% (11.5%).
  • Profit after tax rose 5% to SEK 565 million (540).
  • Earnings per share were SEK 14.13 (13.50).
  • Cash flow from operating activities totalled SEK 519 million (709), corresponding to SEK 12.98 per share (17.73).
  • The Board of Directors proposes a dividend of SEK 7.05 per share (6,75).

FOURTH QUARTER 2012

  • Net sales rose 5% during the fourth quarter, to SEK 2,267 million (2,158). The increase for comparable units was 0.5%.
  • Operating profit before amortisation of intangible non-current assets attributable to acquisitions (EBITA) rose 4% to SEK 260 million (251), and the EBITA margin was 11.5% (11.6%).
  • Profit after tax was SEK 189 million (155).
  • Earnings per share were SEK 4.73 (3.88).

CEO'S MESSAGE

Sales in 2012 reached a record high level and passed the SEK 8 billion mark by a good margin. Order intake during the year exceeded sales, despite a weaker last quarter. The year was characterised by gradually softer demand in many markets and niches. The downturn has been most apparent in the forest, marine and wind power sectors. Other segments also noted a downturn, but to a much lesser degree. Some of the Group's companies were able to compensate for the decline by capturing market shares. The major exception to the general downturn was products for the conventional energy sector, which performed very strongly.  

Fourth quarter
In my comments on the previous quarter's results I expressed great uncertainty about the market situation – a view that I held through the end of the year. Most customers had short order books. This resulted in reductions in production capacity and thereby also in demand. 

The month of December contained an unusually few number of work days throughout Europe. In Finland, where our Engineering & Equipment business area conducts most of its business, there were even fewer work days due to the country's Independence Day followed by a day off prior to the weekend. Invoicing in December was thereby low in general. 

Margins
The accumulated gross margin of 33.9% (34.1%) was on a par with 2011. Historically the Group's gross margin is in the range of 33%-34%. This level has been stable for many years.  

The EBITA margin was 10.8% (11.5%) for the full year, while it was 11.5% for the fourth quarter (11.6%). The high margin of 16.8% (15.5%) for Special Products in the fourth quarter is mainly due to high invoicing in the energy segment. 

Acquisitions
During the year, twelve acquisitions of varying sizes were carried out. Of these companies, approximately 60% have proprietary products/trademarks, which is higher than the average for the Group. 

During the final quarter of the year, Indutrade acquired Krämer AG (Switzerland), with customers in the pharmaceutical industry, Nolek AB (Sweden), which specialises in equipment for leak testing, and Thermotech AS (Norway), with business in the offshore industry. Possession of Thermotech took place in January 2013. All three of these are interesting companies with good development potential. 

Outlook
2012 was a year marked by great anxiety in the international economy and also in industry. The year ended on a weak note. The start of 2013 has brought more positive signs, however. Optimism has risen in general, which also has an impact on business climate. 

The indications that are now coming from China and the USA, along with a somewhat calmer situation in the euro zone, give me reason to be somewhat optimistic about the trend in 2013.

Johnny Alvarsson, President and CEO

The report will be commented upon as follows:

For further information, please contact:
Johnny Alvarsson, President and CEO, tel: +46 70 589 17 95.