25 October 2019, 08:00
Sdiptech AB (publ) publishes interim report for the third quarter (July - September) 2019
The report will be available on the company's website: www.sdiptech.com
CONTINUED ORGANIC PROFIT GROWTH AND STRONGER MARGINS
THIRD QUARTER 2019
FIRST NINE MONTHS 2019
COMMENTS BY THE CEO:
During the first nine months of the year, the organic profit growth amounted to 7 percent, of which 1 percent came from currency effects. The acquired profit growth amounted to 41 percent, which is well in line with our overall goal of increased earnings through both organic growth and acquisitions. Meanwhile, the EBITA margin* during the first nine months rose by 2.4 percentage points to 13.6 percent (11.2 percent).
THE THIRD QUARTER
I can confirm that the positive earnings trend also continued during the third quarter. Net sales in the third quarter amounted to SEK 442 million (361), EBITA* to SEK 64 million (42) and profit after tax to SEK 42 million (27). Cash flow from operating activities was good at SEK 88 million (18) during the quarter, after a strong performance and decrease in working capital. The market situation was generally good within the business areas with strong organic growth in most areas.
Our business areas with higher operating margins, Water & Energy and Special Infrastructure Solutions, showed good organic growth in net sales of +10 percent in total. The market situation in the business areas in general is good thanks to a long-term willingness among public and private sector customers to invest in this infrastructure.
Our business area with a lower operating margin, Property Technical Services, displayed lower net sales than the previous year, as expected, equivalent to -8 percent, but at the same time reported an increase in EBITA* equivalent to +3 percent. There were two reasons for this. Firstly, in our elevator operations we have concentrated on fewer but more profitable customers and net sales were consequently at lower levels, while conversely profits were higher compared to the previous year. Secondly, our shell completion operations reported lower sales than last year, which was expected and in line with our outlook.
So far this year, four acquisitions have been completed, equivalent to acquired EBITA of about SEK 90 million in total.
During the first half of 2019, three well-managed product companies were acquired and during the third quarter, the British company Auger Site Investigations Ltd was acquired.
Auger’s customers are insurance companies in the UK and the company is specialized in claims management of underground infrastructure, e.g. drainage and water mains. The market is non-cyclical and is showing slow but steady growth due to aging infrastructure as well as increasing pipe leakages and blockages. Auger Site Investigations Ltd fits well with our strategic focus areas for continued expansion and is included in our Special Infrastructure Solutions business area.
The market situation for the Group is generally good. The willingness to invest in our sectors is driven by a general undercapacity in infrastructure and a gradual introduction of stricter regulations for better environment and safety. Our business units generally perform reasonably well even in cyclical downturns, although individual companies in the Group can be adversely affected.
For Sdiptech, the market correction of the housing sector in Stockholm is mainly restricted to shell completion. The correction has been completed and going forward we are expecting a positive development in this business compared to the previous year.
Developments in the Water & Energy and Special Infrastructure Solutions business areas have been strong over the past twelve months, and Water & Energy is primarily facing high comparative figures in the coming quarters.
The target of an annual acquisition of SEK 90 million is calibrated against our other financial key ratios. The acquisition target was met already in August and should be seen as a goal over time.
By way of conclusion, I want to convey a big thank you to all of our dedicated employees for another strong quarter and I want to welcome the new shareholders who have joined Sdiptech.
President and CEO
For additional information, please contact:
Jakob Holm, CEO, +46 761 61 21 91, firstname.lastname@example.org
Bengt Lejdström, CFO, +46 702 74 22 00, email@example.com
Sdiptech's common share of series B share is traded under the short name SDIP B with ISIN code SE0003756758. Sdiptech AB's preferred shares are traded under the short name SDIP PREF with ISIN code SE0006758348. Sdiptech AB's Certified Adviser at Nasdaq First North Premier Growth Market is Erik Penser Bank, +468-463 83 00, firstname.lastname@example.org. Further information is available on the company's website: www.sdiptech.com
Sdiptech AB is a technology group with a primary focus on infrastructure segments critical to well-functioning societies and to welfare, e.g. water & sanitation, power & energy, transportation, energy efficiency and air climate. As part of our offering in urban areas, we also provide niched technical services for buildings and real-estate such as renovation of elevators and roofs. The company has approximately SEK 1,750 million in sales and is based in Stockholm.
Sdiptech AB (publ) is required to disclose this information pursuant to EU Market Use Regulation 596/2014. The company is based in Stockholm. The information was provided by the above contact person for publication 25 October 2019 at 08:00 CEST.