Interim report 1 January – 30 September 2019

Third quarter 2019
•    Order intake rose 13% to SEK 4,638 million (4,106).  The increase for comparable units was 5%. 
•    Net sales rose 12% to SEK 4,595 million (4,115). The increase for comparable units was 3%.
•    Operating profit before amortisation of intangible non-current assets attributable to acquisitions (EBITA) rose 12% to SEK 588 million (525), corresponding to an EBITA margin of 12.8% (12.8%). 
•    Profit for the quarter rose 8% to SEK 369 million (342), and earnings per share were SEK 3.05 (2.83).
•    Cash flow from operating activities totalled SEK 534 million (472).

1 January – 30 September 2019
•    Order intake rose 10% to SEK 13,901 million (12,670). The increase for comparable units was 3%.
•    Net sales rose 9% to SEK 13,548 million (12,402). The increase for comparable units was 3%.
•    Operating profit before amortisation of intangible non-current assets attributable to acquisitions (EBITA) rose 12% to SEK 1,699 million (1,519), corresponding to an EBITA margin of 12.5% (12.2%).
•    Profit for the period rose 9% to SEK 1,084 million (999), and earnings per share were SEK 8.97 (8.26).
•    Cash flow from operating activities totalled SEK 1,190 million (766). 
 

CEO’s message
Stable level of earnings and continued high pace of acquisitions.

Third quarter
The market situation was stable, and demand in general remained at a good level. However, the variation in demand between companies and segments increased during the quarter, and demand overall flattened out.  

Order intake grew by 13% during the quarter, of which 5% was organic. Performance in the Benelux business area was especially positive, driven by improved order intake for valves for power generation. Despite a dampening of demand from Germany, the DACH business area also showed strong organic order development, mainly driven by demand from the chemical and pharmaceutical industry in Switzerland.

Sales increased by 12%, of which 3% was organic. Sales grew organically in seven of our eight business areas, with the strongest growth in the DACH and Industrial Components business areas.

The continued uncertainty surrounding Brexit has impeded business opportunities for our British companies, and the UK business area was negatively affected to a greater extent than earlier in the year. We are seeing a reduced willingness to invest and greater variation among the various companies and sectors, and as a result of this the business area’s sales and margin decreased somewhat during the quarter. Profitability remained at a favourable level.  

EBITA improved by 12% to SEK 588 million (525), corresponding to an EBITA margin of 12.8% (12.8%). The Finland and Fluids & Mechanical Solutions business areas reported the strongest margin improvements compared with a year ago. In Finland the improvement was mainly a result of cost efficiency measures and positive effects of the extraordinary divestments. In the Fluids & Mechanical Solutions business area, good organic development for a number of companies contributed, especially in the vehicle aftermarket segment.

Acquisitions
Acquisition activity remained high, and we closed four acquisitions during the third quarter. After the end of the quarter we also acquired Uniska, a specialist supplier of glass partition systems to customers in the Swiss market, and the Dutch niche manufacturer Leiderdorp Instruments, which develops and produces sensors for geotechnical measurement solutions.

In total this year we have acquired 14 companies with combined annual sales of approximately SEK 1.5 billion. Our decentralised structure with the subsidiaries having local earnings and business responsibility is attractive for entrepreneurs who are considering selling their companies, and we see continued good opportunities for future acquisitions.

Outlook
Demand is still favourable, but is flattening out and varies among the companies. Uncertainty about the macroeconomic development is growing, but our diversified structure with agile companies that work near their customers makes us well-prepared for changes in the market situation. We are convinced that our business model of developing and acquiring small and medium-sized entrepreneur-led companies will continue to be successful. We have a stable platform that gives us favourable prospects for continued sustainable, profitable growth going forward.

Bo Annvik, President and CEO
 

Note
The information in this report is such that Indutrade AB is obligated to make public in accordance with the EU Market Abuse Act and Swedish Securities Market Act. The information was submitted for publication by the agency of the below contact person at 7.30 a.m. (CET) on 25 October 2019.
 
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