Reporting period January – September
· Net sales increased by 17.9% to MSEK 5,780 (4,901). Organically, net sales
grew by 6.5%
· EBITA increased by 24.7% to MSEK 863 (692)
· EBITA margin increased to 14.9% (14.1%)
· Earnings before tax grew by 29.8% to MSEK 794 (611)
· Earnings after tax increased by 28.1% to MSEK 587 (458)
· Earnings per share increased by 27.4% to SEK 6.33 (4.97)
Reporting period July – September
· Net sales increased by 15.5% to MSEK 1,910 (1,653). Organically, net sales
grew by 6.5%
· EBITA increased by 23.5% to MSEK 280 (227)
· EBITA margin increased to 14.7% (13.7%)
· Earnings before tax grew by 33.1% to MSEK 257 (193)
· Earnings after tax increased by 31.3% to MSEK 190 (145)
· The dental company J.H. Orsing was acquired. After the end of the reporting
period, the dental company Smilodent was acquired.
Summary of financial performance
NINE THIRD Rolling 12
FULL
MONTHS QUARTER months
YEAR
MSEK 2015 2014 change 2015 2014 change
change 2014
Net sales 5,780 4,901 17.9% 1,910 1,653 15.5% 7,681
12.9% 6,802
EBITA 863 692 24.7% 280 227 23.5% 1,137
17.7% 966
EBITA margin 14.9% 14.1% 0.8 14.7% 13.7% 1.0 14.8%
0.6 14.2%
Profit before tax 794 611 29.8% 257 193 33.1% 946
23.9% 763
Profit after tax 587 458 28.1% 190 145 31.3% 699
22.6% 570
Earnings per 6.33 4.97 27.4% 2.02 1.57 28.7% 7.53[2] (http:/
22.2% 6.17
share[1] (http://#_
ftn1) /#_ftn2)
Return on capital 19.3% 19.2% 0.1 19.3% 19.2% 0.1 19.3%
0.5 18.8%
employed[3] (http:/
/#_ftn3)
Return on capital 118% 100% 18.0 118% 100% 18.0 118%
13.0 105%
em-ployed
excl.
goodwill[4] (http:/
/#_ftn4)
COMMENTS FROM THE CEO
Net sales increased by 17.9% to MSEK 5,780 (4,901) in the first nine months of
the year driven by sales growth in all three business areas. Sales increased
through organic growth as well as acquisitions and changes in currency exchange
rates. Organic growth was strong in the Demolition & Tools and Systems Solutions
business areas. The market situation was generally good in all business areas.
EBITA increased by 24.7% to MSEK 863 (692) in the first nine months of the year
while the EBITA margin expanded by 0.8 percentage points over the same period to
14.9% (14.1%). In 2014 consolidated earnings included MSEK 110 in costs related
to the initial public offering (“IPO”), of which MSEK 94 referred to the fourth
quarter. Excluding the IPO costs in the fourth quarter of 2014, rolling twelve
-month earnings per share were SEK 8.35 as of 30 September 2015.
The Dental business area had a stable performance both in terms of sales and
profitability over the first nine months of the year. Profitability in
Demolition & Tools and Systems Solutions increased significantly in the second
and third quarters after a weak first quarter. We work continuously to improve
our product portfolio, strengthen distribution systems and raise the
productivity of our companies. Although we would like to see greater stability
in the earnings impact of these measures in Demolition & Tools and Systems
Solutions, we need to expect that earnings in these business areas will
fluctuate from one quarter to the next.
So far this year we have made six acquisitions, one in Demolition & Tools, two
in Systems Solutions and three in Dental.
Dental has acquired two manufacturing dental companies: Top Dental in the UK,
which produces disinfectants, and J.H. Orsing in Sweden, which manufactures
saliva ejectors and saliva adaptors. After the end of the reporting period, the
German dental company Smilodent was acquired.
Demolition & Tools strengthened its offering by adding earth drills from Auger
Torque of the UK to its product portfolio.
In Systems Solutions the Environmental Technology division has been strengthened
through the addition of Sweden-based Rapid Granulator, which produces
granulators for plastic production waste, while the Interiors for Service
Vehicles division has acquired a Danish business.
Overall, demand is good in all three business areas and in the markets in which
they operate. We maintain our strategy of investing in market-leading niche
businesses with the potential to deliver sustainable earnings growth and robust
cash flows.
LIFCO IN BRIEF
Lifco acquires and develops market-leading niche businesses with the potential
to deliver sustainable earnings growth and robust cash flows. The Group has
three business areas: Dental, Demolition & Tools and Systems Solutions. Lifco is
guided by a clear philosophy centred on long-term growth, a focus on
profitability and a strongly decentralised organisation. The Lifco Group
comprises 118 companies in 28 countries. In 2014 the Group reported EBITA of SEK
966 million on net sales of around SEK 6.8 billion. The EBITA margin was 14.2%.
Read more at www.lifco.se
GROUP PERFORMANCE IN JANUARY – SEPTEMBER
Net sales increased by 17.9% to MSEK 5,780 (4,901), driven mainly by organic
growth and acquisitions. Acquisitions contributed 7.5%, organic growth 6.5% and
changes in exchange rates 3.9%. Organic growth was strong in the Demolition &
Tools and Systems Solutions business areas.
The acquisitions refer to the German dental company MDH, which was consolidated
from 1 April 2014 and thus affected the comparative figures for the first
quarter. In the first quarter of 2015 four acquisitions were made, which had an
impact on net sales and earnings in the second and third quarters. The
acquisition of J.H. Orsing in the third quarter has not had any significant
impact on the Group’s sales and earnings.
EBITA increased by 24.7% to SEK 863 (692) million and the EBITA margin was 14.9%
(14.1%). Organic growth, acquisitions and exchange rate changes had a positive
impact on EBITA in the first nine months of the year. Changes in currency
exchange rates accounted for 3.1% of the improvement in EBITA. In the first nine
months of the year 54% of EBITA was generated in EUR and DKK.
Net financial items were SEK -14 (-31) million, with the main positive impact
coming from a lower interest expense.
Profit before tax increased by 29.8% to MSEK 794 (611). Items related to
acquisition costs had a negative impact of MSEK 9 on earnings for the first nine
months of the year. Profit after tax grew by 28.1% to MSEK 587 (458).
Average capital employed excluding goodwill increased by just over MSEK 62 from
30 September 2014 to MSEK 965 (903). EBITA in relation to average capital
employed excluding goodwill was 118% (100%) at 30 September 2015 and 105% at
year-end. The improvement was due mainly to a higher profit and good control of
capital employed.
The Group’s net interest-bearing debt increased by MSEK 225 from 31 December
2014 to MSEK 2,238 at 30 September 2015. The net debt/equity ratio was 0.6 at 30
September, unchanged from year-end and 30 September 2014. Lifco issued a bond
loan in the second quarter.
Cash flow from operating activities improved in the first nine months of the
year to MSEK 610 (470) compared with the same period the year before. The higher
cash flow was primarily due to improved earnings. Cash flow from investing
activities was MSEK -570 (-1,333), which is mainly attributable to acquisitions
of subsidiaries in the first quarter. Cash flow was also affected by the
dividend payment in the second quarter, in the amount of MSEK 236.
GROUP PERFORMANCE IN THE THIRD QUARTER
Net sales for the three-month period increased by 15.5% to MSEK 1,910 (1,653),
driven mainly by acquisitions, which contributed 6.6%, and organic growth, which
added 6.5%. Changes in currency exchange rates added 2.4% to net sales. Net
sales in the Dental business area were affected by the sale of NETdental in June
2015. Acquisitions as well as organic growth contributed to the strong
performance of the Demolition & Tools and Systems Solutions business areas.
EBITA increased by 23.5% to MSEK 280 (227) and the EBITA margin expanded by 1.0
percentage point to 14.7% (13.7%). EBITA in the Dental business area was in line
with the same quarter in the previous year. EBITA increased sharply in the
Demolition & Tools and Systems Solutions business areas, driven by acquisitions
and organic growth. Business area Demolition & Tools showed the biggest margin
improvement in the quarter. Currency exchange rate changes also contributed to
the improvement in EBITA for the period, adding 2.7%. Out of the three-month
EBITA of MSEK 280 55% was generated in EUR and DKK.
Net financial items were MSEK -6 (-8).
Profit before tax increased by 33.1% to MSEK 257 (193). Profit after tax grew by
31.3% to MSEK 190 (145).
Average capital employed excluding goodwill increased by around MSEK 33 from
MSEK 932 at 30 June 2015 to MSEK 965 at the end of the third quarter. EBITA in
relation to average capital employed excluding goodwill was 118% at 30 September
2015, compared to 116% at 30 June this year. The improvement was due mainly to a
higher profit and good control of capital employed.
The Group’s net interest-bearing debt decreased by MSEK 151 from 30 June to 30
September 2015, to MSEK 2,238. The net debt/equity ratio was 0.6 at the end of
the quarter, which was an improvement of 0.1 percentage point from 30 June 2015.
At the end of the period 73% of the Group’s interest-bearing liabilities were
denominated in EUR.
Cash flow from operating activities increased slightly over the three-month
period to MSEK 248 (246) compared with the same period the year before. Cash
flow from investing activities was MSEK -54
(-23). The change was primarily due to the acquisition of J.H. Orsing.
FINANCIAL PERFORMANCE – BUSINESS AREAS
Dental
NINE THIRD Rolling FULL
MONTHS QUARTER 12 YEAR
months
MSEK 2015 2014 change 2015 2014 change change 2014
Net 2,513 2,348 7.0% 750 766 -2.1% 3,431 5.1% 3,266
sales
EBITA 450 394 14.1% 127 127 0.1% 599 10.2% 543
EBITA 17.9% 16.8% 1.1 16.9% 16.6% 0.3 17.5% 0.9 16.6%
margin
The companies in the Dental business area are leading suppliers of consumables,
equipment and technical service for dentists across Europe. Lifco also sells
dental technology to dentists in the Nordic countries and Germany, and develops
and sells medical record systems in Denmark and Sweden. The business area also
includes a number of smaller manufacturing companies that produce for instance
disinfectants and saliva ejectors.
Dental’s net sales increased by 7.0% to MSEK 2,513 (2,348) in the first nine
months of the year, boosted by the acquisition of MDH of Germany, which was
consolidated as of 1 April 2014. As of the second quarter of this year the MDH
acquisition thus no longer affects comparisons. Sales growth remained stable in
all regions in the first nine months of the year. In the third quarter net sales
decreased by -2.1% to MSEK 750 compared with the same period last year, which
was primarily due to the sale of NETdental in June 2015.
EBITA improved by 14.1% to MSEK 450 (394) in the first nine months of the year
and the EBITA margin increased to 17.9% (16.8%) due to positive impact from the
acquired MDH. EBITA increased marginally by 0.1% compared to the same period in
previous year while the EBITA margin increased from 16.6% to 16.9%.
The dental market remains generally stable. The results for individual companies
in Lifco’s dental business may in any individual quarter be influenced by
significant fluctuations in currency exchange rates, calendar effects (such as
Easter), gained or lost contracts in procurements of consumables by public
-sector or major private-sectors customers as well as fluctuations in the
delivery of equipment. In the first nine months of the year there was no
individual event having a substantial impact on the earnings of the dental group
as a whole.
On 10 July 2015 Lifco announced the acquisition of dental company J.H. Orsing,
which manufactures saliva ejectors and saliva adaptors. The company had a
turnover of around MSEK 20 in 2014 and was consolidated from August 2015. The
acquisition will not have a significant impact on Lifco’s results and financial
position in the current year. J.H. Orsing has production facilities in Råå
outside Helsingborg in Sweden and has nine employees.
Demolition & Tools
NINE THIRD Rolling FULL
MONTHS QUARTER 12 YEAR
months
MSEK 2015 2014 change 2015 2014 change change 2014
Net 1,138 934 21.8% 379 298 27.2% 1,493 15.8% 1,289
sales
EBITA 273 196 39.3% 89 57 56.9% 365 26.7% 288
EBITA 24.0% 21.0% 3.0 23.5% 19.1% 4.4 24.4% 2.1 22.3%
margin
Business area Demolition & Tools develops, manufactures and sells equipment for
the construction and demolition industries. Lifco is the world’s leading
supplier of demolition robots and crane attachments. The Company is also one of
the leading global suppliers of excavator attachments. The operations are
divided into two divisions – Demolition Robots and Crane & Excavator Attachments
– which are of roughly equal size in terms of sales.
Net sales increased by 21.8% in the first nine months of the year, to MSEK 1,138
(934). The market situation was generally good and sales increased in the
majority of markets. The UK was the fastest growing among the Company’s major
markets.
EBITA increased by 39.3% to MSEK 273 (196) in the first nine months of the year
compared with the same period in 2014. The EBITA margin improved by 3.0
percentage points over the period to 24.0% (21.0%). EBITA in the third quarter
was MSEK 89 and the EBITA margin 23.5%. Lifco works continuously to improve its
product portfolios, strengthen its distribution systems and improve productivity
in the Group’s companies. The earnings impact of such measures will fluctuate
from one quarter to the next, however.
Systems Solutions
NINE THIRD Rolling FULL
MONTHS QUARTER 12 YEAR
months
MSEK 2015 2014 change 2015 2014 change change 2014
Net 2,129 1,619 31.5% 781 589 32.5% 2,757 22.7% 2,247
sales
EBITA 204 157 30.1% 85 61 40.8% 258 22.4% 211
EBITA 9.6% 9.7% -0.1 10.9% 10.3% 0.6 9.4% - 9.4%
margin
Through its operating units business area Systems Solutions operates in
industries offering systems solutions. Systems Solutions is divided into five
divisions: Interiors for Service Vehicles, Contract Manufacturing, Environmental
Technology, Sawmill Equipment, and Relining (renovation of sewage pipes). The
divisions are leading players in their geographic markets.
Net sales in Systems Solutions increased by 31.5% to MSEK 2,129 (1,619) in the
first nine months of the year. All divisions increased their sales for the nine
-month period. In the third quarter net sales were up by 32.5% compared to the
same period in 2014.
EBITA increased by 30.1% to MSEK 204 (157) in the first nine months of the year
compared with the same period in 2014. Earnings improved or remained unchanged
for the period in all divisions except Relining. EBITA for the three-month
period was up by 40.8% compared to the same period the year before. The EBITA
margin was 9.6% (9.7%) in the first nine months of the year.
Interiors for Service Vehicles continued to grow both in terms of sales and
profitability in the first nine months of the year due to increased sales
activities and an improved product range. Earnings have improved in 2015 but the
level is not yet satisfactory. In the first quarter Lifco acquired Sanistål’s
Danish car interior business, making Lifco the leading supplier of interiors for
service vehicles in the Danish market. Sanistål was consolidated from 1 February
2015.
Contract Manufacturing had a weak start to the year due to slower sales, which
resulted in significantly lower earnings, but the market situation remained
stable. In the second and third quarters, however, sales increased sharply,
which compensated for a weak first quarter. Sales for the first nine-month
period of the year were higher and earnings were unchanged compared with the
same period in 2014. The division’s customers include world-leading
manufacturers of equipment for the pharmaceutical industry as well as
manufacturers of railway equipment, which require a high standard of delivery
flexibility and documentation quality.
Environmental Technology had a good first half and sales increased in the third
quarter, driven mainly by the acquisition of Rapid Granulator. The division also
reported strong earnings growth for the nine-month period. The acquisition of
Rapid Granulator, a leading global manufacturer of granulators for plastic
production waste, has given Lifco access to an entirely new area of products in
Environmental Technology. Rapid Granulator was consolidated from 1 March 2015.
Sawmill Equipment achieved good sales growth in the first nine months of the
year. One of the division’s ongoing projects was hit by cost increases, which
had an impact on earnings. Despite this, the division achieved strong earnings
growth for the nine-month period. Sales of pellet systems were particularly
strong and the division has attained a leading position in the Nordic, Baltic
and Russian markets.
Relining’s performance remained unsatisfactory in the first nine months due to
lower margins and productivity in certain projects. Sales remained stable,
however.
ACQUISITIONS AND SALES
Lifco has during the first nine months of the year made the following
acquisitions and sales:
Consolidated Acquisitions Business Net sales Employees
from month area
February Sanistål’s Danish car Systems MDKK 25 11
interior business Solutions
March Auger Torque Ltd Demolition MGBP 10 114
& Tools
rch Rapid Granulator AB Systems MSEK 300 139
Solutions
April Top Dental Ltd Dental MGBP 3.4 25
August J.H. Orsing AB Dental MSEK 20 9
Consolidated Sale Former Net sales Employees
until month business
area
May All shares of NETdental. Dental MSEK 140 13
Lifco owned 65% of the
shares.
Further information on acquisitions is provided on page 18 of the interim
report. The figures for net sales and number of employees refer to the estimated
annual net sales and the number of employees at the acquisition date.
OTHER FINANCIAL INFORMATION
Employees
The average number of employees during the last twelve months was 3,333
(3,006).The number of employees at the end of the period was 3,372 (3,033).
During the year 298 employees were added through acquisitions.
Events after the end of the reporting period
On November 3 the acquisition of the German dental company Smilodent was
announced. The company imports dental prosthetics that are offered to dentists
in Germany. Smilodent reported net sales of approximately 4.8 MEUR in 2014. The
company will be consolidated in Business Area Dental. The acquisition will not
have any significant effect on Lifco’s earnings or financial position in current
financial year.
Related-party transactions
No substantial transactions with related parties took place during the period.
Risks and uncertainties
The risk factors which have the biggest impact for Lifco are the competitive
situation, structural changes in the market and the strength of the economy.
Lifco is also exposed to financial risks, including currency risks, interest
rate risks, credit and counterparty risks.
The Parent Company is affected by the above risks and uncertainties through its
function as owner of the subsidiaries.
Accounting principles
The Lifco Group applies the International Financial Reporting Standards (IFRS),
as adopted by the EU. The applied accounting principles are consistent with
those described in Lifco’s annual report for 2014, which is available at
www.lifco.se. This interim report has been prepared in accordance with IAS 34
Interim Financial Reporting and the Swedish Annual Accounts Act. The Parent
Company applies the Swedish Annual Accounts Act and RFR 2 Financial Reporting
for Legal Entities of the Swedish Financial Accounting Standards Council. Under
RFR 2, the Parent Company is required to apply all EU-adopted IFRS and
interpretations in the interim report for the legal entity insofar as this is
possible under the Swedish Annual Accounts Act and Pension Obligations Vesting
Act and with regard to the relationship between accounting and taxation. There
are no new IFRS-standards or IFRIC-statements adopted by the EU that are
applicable to Lifco or will have a significant impact on the Group’s earnings
and financial position in 2015.
DECLARATION OF THE Board of Directors
The Board of Directors and Chief Executive Officer warrant and declare that this
nine-month report gives a true and fair view of the Parent Company’s and Group’s
operations, financial positions and results, and that it describes significant
risks and uncertainties faced by the Parent Company and the companies included
in the Group.
Enköping, 3 November 2015
Carl BennetChairman
of the Board
Gabriel Ulrika DellbyDirector Erik Gabrielson
DanielssonDirector Director
Ulf Fredrik Annika NorlundDirector,
GrunanderDirector KarlssonPresident and employee representative
CEO, Director
Johan SternDeputy Axel Peter WibergDeputy
Chairman WachtmeisterDirector Director, employee
representative
REPORT OF REVIEW OF INTERIM FINANCIAL INFORMATION
Introduction
We have reviewed the condensed interim financial information (interim report) of
Lifco AB (publ) as of 30 September 2015 and the nine-month period then ended.
The board of directors and the CEO are responsible for the preparation and
presentation of the interim financial information in accordance with IAS 34 and
the Swedish Annual Accounts Act. Our responsibility is to express a conclusion
on this interim report based on our review.
Scope of Review
We conducted our review in accordance with the International Standard on Review
Engagements ISRE 2410, Review of Interim Report Performed by the Independent
Auditor of the Entity. A review consists of making inquiries, primarily of
persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less in scope
than an audit conducted in accordance with International Standards on Auditing,
ISA, and other generally accepted auditing standards in Sweden. The procedures
performed in a review do not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the interim report is not prepared, in all material respects, in accordance
with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with
the Swedish Annual Accounts Act, regarding the Parent Company.
Enköping, 3 November 2015
PricewaterhouseCoopers AB
Magnus
Willfors
Martin Johansson
Authorized Public
Accountant Authorized
Public Accountant
Auditor-in-Charge
FINANCIAL CALENDAR
2016
The report for the fourth quarter and the year-end report for 2015 will be
published on 22 February at 11.30am CET
The report for the first quarter will be published on 12 May
The Annual General Meeting will be held 3pm CET 12 May at Bonnierhuset,
Torsgatan 21, Stockholm
The report for the second quarter will be published on 15 July
The report for the third quarter will be published on 25 October
ANNUAL GENERAL MEETING
The Annual General Meeting of Lifco AB will be held at 3pm CET on Thursday 12
May 2016 in Bonnierhuset, Torsgatan 21, Stockholm. Shareholders wishing to raise
an issue for discussion at the AGM on 12 May 2016 may do so by submitting their
proposal to the Chairman of Lifco by e-mail: ir@lifco.se or by post to: Lifco
AB, Attn: Bolagsstämmoärenden, Verkmästaregatan 1, SE-745 85 Enköping. To ensure
their inclusion in the notice and thus on the agenda for the AGM, proposals must
be received by the Company no later than 11 March 2016.
THE NOMINATON COMMITTEE
The nomination committee consists of Carl Bennet, Carl Bennet AB, Tomas Billing,
Nordstjernan, Anna-Karin Celsing, representative for minority shareholders, Per
Colleen, Fjärde AP-fonden, Hans Hedström, Carnegie fonder and Adam Nyström,
Didner & Gerge fonder. Carl Bennet is chairman of the nomination committee.
Shareholders who wish to submit proposals to the nomination committee for the
2016 Annual General Meeting can do so by e-mailing to ir@lifco.se or by mailing
to Lifco, Att: The Nomination Committee, Verkmästaregatan 1, SE-745 85 Enköping,
Sweden.
FURTHER INFORMATION
Media and investor relations: Åse Lindskog, ir@lifco.se, telephone +46 (0)730 24
48 72
TELECONFERENCE
Media and analysts are welcome to call in to a teleconference, where CEO Fredrik
Karlsson, CFO Therése Hoffman and Head of Business Area Dental Per Waldemarson
will present the interim report. The presentation is expected to take around 20
minutes, after which participants will be invited to ask questions.
Time: Tuesday 3 November, 3.00pm CET
Link to the presentation:
http://cloud.magneetto.com/wonderland/2015_1103_q3-1/view
Call-in numbers:
Sweden +46 8 566 426 66
UK +44 203 428 14 33
US +1 646 502 51 18
+------------------------------------------------------------------------+
|This information is released at 11:30am CET on Tuesday 3 November in |
|accordance with the Swedish Securities Market Act, the Swedish Financial|
|Instruments Trading Act and/or the regulations of Nasdaq Stockholm. |
+------------------------------------------------------------------------+
----------------------------------------------------------------------
[1] (http://#_ftnref1) Attributable to Parent Company shareholders.
[2] (http://#_ftnref2) Earnings for the second half of 2014 include MSEK 110 in
IPO-related costs of which MSEK 94 referred to the fourth quarter.
[3] (http://#_ftnref3) Rolling twelve months.
[4] (http://#_ftnref4) Rolling twelve months.
INTERIM REPORT JANUARY – SEPTEMBER 2015
| Quelle: Lifco AB
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