Third quarter 2016
·
Order intake rose 6% to SEK 3,082 million (2,901). For comparable units, order
intake decreased by 2%.
·
Net sales rose 5% to SEK 3,176 million (3,036). For comparable units, net sales
decreased by 3%.
·
Operating profit before amortisation of intangible non-current assets
attributable to acquisitions (EBITA) decreased by 3% to SEK 377 million (387),
corresponding to an EBITA margin of 11.9% (12.7%).
·
Net profit decreased by 1% to SEK 239 million (242), corresponding to earnings
per share of SEK 1.99 (2.02).
·
Bo Annvik was appointed as new President and CEO, and will take office not later
than the Annual General Meeting on 26 April 2017.
CEO's message
In a market characterised by tepid global growth and weak development of
industrial production, demand continues to vary between product segments,
countries and companies. In this challenging market situation, Indutrade has
grown during the year both through acquisitions and organically.
Third quarter
Following a succession of quarters with strong growth figures, growth was
slightly weaker during the third quarter of 2016.
During the quarter we completed an investment in a new manufacturing plant for
valves in the energy segment. Our operation in the Netherlands is our largest
unit in the energy sector and has expanded considerably in recent years. The new
plant creates conditions for continued development of our valve programme. The
market for valves used in power generation in the energy segment remains strong,
and our orderbook is at a favourable level. During the third quarter of 2015 a
number of very large project orders were completed and delivered. No
corresponding deliveries were made during the third quarter of this year, which
is reflected in both invoicing and earnings. In addition, order intake, which
varies widely between months and quarters, was lower than in the corresponding
period a year ago.
The month-on-month variation in order intake and invoicing was unusually large
during the third quarter, where a very weak month of July was not fully
compensated by the subsequent improvement that took place in August and
September. We believe one reason for this variation and the weak results for
July can be traced to the uncertainty created by Brexit, and the UK as a market
also showed weak performance during the quarter.
Finland has been a market without growth for many years, but we are now seeing
signs of higher demand. Aside from Ireland, with strong growth, our operations
in Denmark also continue to develop very positively, both organically and
through acquisitions.
For most product segments, demand was largely unchanged compared with the
immediately preceding quarter.
To adapt the organisation to the weak market situation in the marine segment,
restructuring is being conducted of the businesses that are directly affected.
Acquisitions
Achieving growth through acquisitions is a central part of the Indutrade model,
and the pace of acquisition is high. During the year a total of ten acquisitions
have been carried out, of which four during the third quarter. Annual sales for
these ten acquired companies together amount to a billion kronor. The following
companies were acquired during the third quarter: KA Olsson & Gems (Sweden),
which is a technology sales company; Vacuum Engineering (UK), which makes
equipment for leak detection; Crysberg (Denmark), which develops and makes
electronic control systems, mainly for irrigation systems; and Alphr Technology
(UK), which makes equipment for automated assembly and control of products in
production lines.
Activity remains high in the acquisition market, and we see that Indutrade’s
business model is attracting many business owners who are considering selling
their business.
Outlook
Indutrade’s business model remains firm, and we believe that through continued
acquisitions of well managed and profitable companies – together with
unrelenting work on developing existing companies – we have good prospects for
profitable growth also in a market characterised by weak international
development.
Johnny Alvarsson, President and CEO
This report will be commented upon as follows:
Through a conference call/webcast today at 10 a.m. (CET) under the following
link:
http://event.onlineseminarsolutions.com/r.htm?e=1284813&s=1&k=50C8E99DB10055C9B5
4
5855F3581097D
To participate, call
SE: +46 8 566 426 93
UK: +44 203 008 98 13
US: +1 855 831 59 45
For further information, please contact: Johnny Alvarsson, President and CEO:
+46 70 589 17 95
About Indutrade
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%.
www.indutrade.se
