1 January-31 March 2016
First quarter 2016 – Yet another quarter of growth
· Order intake rose 5% to SEK 3,066 million (2,926). For comparable units,
order intake decreased by 1%.
· Net sales rose 14% to SEK 2,963 million (2,601). The increase for comparable
units was 8%.
· Operating profit before amortisation of intangible non-current assets
attributable to acquisitions (EBITA) rose 11% to SEK 311 million (280),
corresponding to an EBITA margin of 10.5% (10.8%).
· Profit after tax rose 15% to SEK 189 million (165).
· Earnings per share grew 15% to SEK 4.73 (4.13).
· Cash flow from operating activities was SEK 107 million (100).
CEO's message
Yet another quarter of continued growth despite challenging market conditions.
In recent years demand has varied between quarters, countries and product
segments at the same time that global growth has been low. The first quarter of
2016 did not differ from the preceding year, and industrial growth remains weak
overall. The lower price of oil that many countries have benefited from has not
led to an increase in industrial investment. On the contrary, oil producing
countries have scaled back on their investments, which on the whole has led to
weaker growth in global industrial production.
Moreover, it is difficult to find markets and countries with a favourable growth
outlook in the immediate future. During the first quarter, order intake and
invoicing were negatively affected by the fact that Easter fell in March this
year. Despite a challenging economic situation, Indutrade still continues to
grow.
First quarter
Sales increased by 14% during the quarter, of which 8% was organic.
Organic sales growth during the period was achieved primarily from favourable
performance in Sweden, Denmark, Benelux and Ireland.
Sweden and Denmark continue to show good growth, and the Benelux countries,
which historically have been dependent on development in Germany, outperformed
their neighbour in recent years. Ireland is experiencing strong growth in the
pharmaceutical industry, among other areas, which benefits our business.
The previous strong growth in the UK has subsided, owing in part to the negative
impact of the decline in the oil and gas sector and in part to mounting
uncertainty that is likely being caused by concerns over “Brexit” and the strong
pound sterling during the preceding year.
In Finland, which is an important market for Indutrade, the business climate was
weaker than expected.
Indutrade’s target to achieve at least 10% growth over an economic cycle is
based on a combination of organic and acquired growth. In the current market
climate, a larger share of growth will be achieved through acquisitions,
compared with the situation in a strong economy, where we would gain a boost
from a broad-based upswing in industrial production.
Acquisitions
Our acquisition prospects remain favourable, and during the year to date five
acquisitions have been carried out, of which two after the end of the first
quarter. Two of the acquisitions were carried out in the UK – one company that
manufactures advanced packings, and the other a distribution company for
hydraulic components. In Norway we acquired another distribution company
specialising in infrastructure. In the Netherlands a company was acquired that
complements our existing operations in fasteners. Our largest acquisition during
the period, of Senmatic in Denmark, strengthens the Group’s position in
temperature measurement, where we have since previously had a strong position in
Sweden and Finland.
Outlook
At present I do not see any general change in the demand situation. The
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 their customers – can act swiftly and adapt to
prevailing demand. The companies that have prospects to grow organically with
improved or maintained profitability are challenged to do so. Companies with a
high market share and that have a hard time growing, 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 200 companies in a diverse range of
countries and segments, we have favourable prospects to achieve profitable
growth this year as well.
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=1163003&s=1&k=4343E6C64C31537063
1
C00883C5AE62C
To participate, call SE: +46 8 566 426 62, UK: +44 203 008 98 13, US:
+1855 831 59 45
· Through a videotaped version available under the following link:
http://www.indutrade.com
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. Indutrade’s business is
distinguished by the following factors, among others:
- High-tech products for recurring needs
- Growth through a structured and tried-and-tested acquisition strategy
- A 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%.
