Fourth quarter – Continued Earnings Growth
· Order intake rose 11% to SEK 2,579 million (2,317). For comparable units,
order intake increased by 1%.
· Net sales rose 13% to SEK 2,654 million (2,352). For comparable units, net
sales increased by 1%.
· Operating profit before amortisation of intangible non-current assets
attributable to acquisitions (EBITA) rose 18% to SEK 334 million (283),
corresponding to an EBITA margin of 12.6% (12.0%).
· Profit after tax rose 24% to SEK 220 million (178).
· Earnings per share grew 24% to SEK 5.50 (4.45).
· Cash flow from operating activities was SEK 378 million (407).
1 January – 31 December 2014
· Order intake rose 11% to SEK 10,000 million (9,014). For comparable units,
order intake increased by 1%.
· Net sales rose 10% to SEK 9,746 million (8,831). For comparable units, the
change was marginal.
· Operating profit before amortisation of intangible non-current assets
attributable to acquisitions (EBITA) rose 15% to SEK 1,134 million (990),
corresponding to an EBITA margin of 11.6% (11.2%).
· Profit after tax rose 20% to SEK 703 million (587).
· Earnings per share grew 20% to SEK 17.60 (14.68).
· Cash flow from operating activities was SEK 904 million (859).
· The Board proposes a dividend of SEK 7.75 per share (7.05).
·
CEO’s message
In summing up 2014 we can affirm that Indutrade is once again reporting a
successful year with growth in sales and earnings. Despite a challenging market
situation, with low GDP growth in the countries in which our companies are
active, we have achieved the overall financial target of growth in excess of
10%. Growth has been achieved largely through continued successful acquisitions,
but also through favourable performance by existing companies on the whole.
In a market where demand has varied a lot from month to month as well as between
customers, segments and countries, we have now reached a new level with order
intake of SEK 10 billion for the full year. The trend in demand in the countries
that are most important for Indutrade has been mixed – continued strong in the
UK, at the same time that we have noted a continued negative trend in Finland.
For other countries demand was relatively stable on a yearly basis.
Order intake in the energy segment improved gradually during the year after a
weak start. Other segments related to the European process industry also had
favourable development.
It is also gratifying to note that we succeeded in achieving continued
profitable growth with improved margins and higher capital efficiency. This
means that we exceeded Indutrade’s overarching financial targets, which are
essential for governance and monitoring of the companies in the Group.
Fourth quarter
As a whole the fourth quarter was our best ever, with sales and earnings
reaching new record levels. Sales grew 13%, the EBITA margin was 12.6% (12.0%),
earnings before tax rose 25%, and earnings per share rose 24%.
However, the variations were great between the different business areas. Flow
Technology, Fluids & Mechanical Solutions and Special Products saw improved
earnings at the same time that Engineering & Equipment, which operates mainly in
Finland, continued to be hurt by weak demand. Industrial Components, whose
companies are primarily in Sweden, showed poorer margins as a result of the
weaker Swedish krona, as higher purchasing prices in foreign currency could not
be compensated during the quarter.
Acquisitions
Growth – organic and through acquisitions – is a central concern for Indutrade.
In all, twelve acquisitions were carried out during the year, eleven of which
possession was transferred in 2014. After the end of the quarter, in January
2015, an additional three acquisitions were carried out. Annual sales for these
15 companies amount to nearly SEK 1 billion. Most of the acquisitions were made
outside Sweden, in companies with own production and proprietary brands,
entailing continued expansion outside of the Nordic countries and a slight
decrease in the share of traditional trading companies.
Outlook
At present I do not see any general change in the demand situation. Volatility
in the market will remain, and our challenge is to capture market shares in a
market with low organic growth.
Indutrade, whose companies are small, flexible and close to customers, can act
swiftly and adapt to current demand. The companies that have the conditions to
grow organically with higher or maintained profitability are challenged to do
so. Companies with a high market share and that work in areas in which it is
difficult to grow, such as traditional trading companies, are focusing on
profitability and cash flow, which enables a continued high level of acquisition
activity.
With this combination of strategies and a group of nearly 200 companies in a
diversity of countries and segments, we have favourable prospects to create
profitable growth also in the years ahead.
Johnny Alvarsson, President and CEO
This report will be commented upon as follows:
Through a conference call/webcast today at 3 p.m. (CET) under the following
link:
http://event.onlineseminarsolutions.com/r.htm?e=928133&s=1&k=0E3B583159BF3A9B562
5
730EBE1D79BD
To participate, please call
SE: +46 8 566 426 61
UK: +44 203 428 14 00
US: +1 646 502 51 16
For further information, please contact: Johnny Alvarsson, President and CEO: 46
70 589 17 95
Indutrade markets and sells components, systems and services with a high-tech
content to industrial customers in selected niches. The Group creates value for
its customers by structuring the value chain and increasing the efficiency of
its customers’ use of technological components and systems. For the Group’s
suppliers, value is created through the offering of an efficient sales
organisation with high technical expertise and well developed customer
relations.
Indutrade’s business is distinguished by the following factors, among others:
High-tech products for recurring needsGrowth through a structured and tried-and
-tested acquisition strategyA decentralised organisation characterised by an
entrepreneurial spirit. The Group is structured into six business areas:
Engineering & Equipment, Flow Technology, Fluids & Mechanical Solutions,
Industrial Components, Measurement & Sensor Technology and Special Products.
The Group’s financial targets (per year across a business cycle) are to grow by
a minimum of 10%, to attain a minimum EBITA margin of 10% and a minimum return
on operating capital of 20%.
