Interim report third quarter 2015

Continued positive development for Indutrade

  • Order intake rose 12% to SEK 2,901 million (2,588). For comparable units, order intake decreased by 2%.
  • Net sales rose 26% to SEK 3,036 million (2,412). The increase for comparable units was 10%.
  • Operating profit before amortisation of intangible non-current assets attributable to acquisitions (EBITA) rose 32% to SEK 387 million (294), corresponding to an EBITA margin of 12.7% (12.2%).
  • Profit after tax rose 32% to SEK 242 million (183).
  • Earnings per share grew 32% to SEK 6.05 (4.60).
  • Cash flow from operating activities was SEK 356 million (210).

CEO's message

In a turbulent business environment, Indutrade continues to grow organically and through acquisitions. The focus on owning and developing companies in selected niches remains a continued success concept for 37 years running.

Indutrade can once again report a quarter of record highs, with positive development of order intake, invoicing and earnings.

Continued favourable order intake during the quarter, together with a high order book, also gives us a good base for the future.

In the current market situation, distinguished by a turbulent business environment and weak GDP growth in certain regions, Indutrade can manage these changes in a swift and effective manner through its product breadth and the geographic diversification provided by our 200 companies.

Profitable growth is a central concept in our financial governance. If a particular company’s market position makes it difficult to grow organically without losing margins, then the profit margin is prioritised over growth. This helps us formulate simple and clear guidelines for how the respective companies are to act based on their unique positions.

Third quarter

During the third quarter, order intake grew by 12%, invoicing by 26%, and earnings per share by 32%. Owing to continued strong order intake for valves for power generation in the energy segment, the order book is at a high level. The timing of orders can vary between months and quarters, and thus when making year-on-year comparisons, the extraordinary high order intake in the same segment that was reported during the third quarter of 2014 should be kept in mind.

Overall, the companies in our business areas showed stable, positive development of order intake, invoicing and earnings during the quarter.

Engineering & Equipment, Flow Technology, Fluids & Mechanical Solutions and Industrial Components posted higher earnings and improved margins compared with a year ago.

Most companies in Measurement & Sensor Technology reported continued high market activity and demand, at the same time that the EBITA margin was lower compared with a strong third quarter a year ago, mainly owing to a changed mix.

For Special Products, a combination of acquisitions and large project-related deliveries, together with continued favourable performance in the UK and Benelux, contributed to the strong earnings.

Acquisitions

Two acquisitions were carried out during the quarter, plus an additional one after the end of the quarter. Together the acquisitions carried out thus far during the year represent roughly SEK 1.1 billion in annual sales. We expect to make additional acquisitions before year-end.

Outlook

Our business model, which has proved its strength over the years, gives us favourable prospects to continue handling the volatility in demand between products, segments and markets. I believe that Indutrade stands well poised for the future.

Johnny Alvarsson, President and CEO

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