Reporting period January – June
· Net sales increased by 14.3 per cent to SEK 4,424 (3,870) million.
Organically, net sales grew by 6.2 per cent
· EBITA* increased by 16.9 per cent to SEK 681 (583) million
· The EBITA margin* amounted to 15.4 (15.1) per cent
· Earnings before tax grew by 13.9 per cent to SEK 612 (537) million
· Net profit for the period grew by 15.5 per cent to SEK 459 (397) million
· Earnings per share increased by 15.1 per cent to SEK 4.96 (4.31)
· Cash flow from operating activities remained strong, increasing by 17.3 per
cent to
SEK 425 (362) million
· In the first six months of the year Lifco acquired seven businesses with
combined annual sales of around SEK 870 million
Reporting period April – June
· Net sales increased by 11.8 per cent to SEK 2,373 (2,122) million.
Organically, net sales grew by 3.9 per cent
· EBITA* increased by 19.4 per cent to SEK 407 (341) million
· The EBITA margin* amounted to 17.2 (16.1) per cent
· Earnings before tax grew by 17.5 per cent to SEK 369 (314) million
· Net profit for the period grew by 19.1 per cent to SEK 277 (232) million
· Cash flow from operating activities was strong, increasing by 13.5 per cent
to
SEK 281 (247) million
Summary of financial performance
SIX SECOND Rolling FULL
MONTHS QUARTER 12 YEAR
months
SEK 2016 2015 change 2016 2015 change change 2015
million
Net sales 4,424 3,870 14.3% 2,373 2,122 11.8% 8,455 7.0% 7,901
EBITA* 681 583 16.9% 407 341 19.4% 1,284 8.3% 1,186
EBITA 15.4% 15.1% 0.3 17.2% 16.1% 1.1 15.2% 0.2 15.0%
margin*
Profit 612 537 13.9% 369 314 17.5% 1,156 6.9% 1,082
before
tax
Net 459 397 15.5% 277 232 19.1% 886 7.4% 825
profit
for the
period
Earnings 4.96 4.31 15.1% 2.98 2.50 18.8% 9.56 7.3% 8.91
per share
Return on 19.8% 18.9% 0.9 19.8% 18.9% 0.9 19.8% -0.1 19.9%
capital
employed
Return on 135% 116% 19.0 135% 116% 19.0 135% 12.0 123%
capital
employed
excl.
goodwill
* Before restructuring, integration and acquisition costs.
COMMENTS FROM THE CEO
Net sales increased by 14.3 per cent in the first half of 2016, to SEK 4,424
(3,870) million, through organic growth as well as acquisitions. Organic growth
was 6.2 per cent. All three business areas increased their sales and earnings in
the first six months. The market environment remained generally favourable in
the three business areas.
EBITA before restructuring, integration and acquisition costs increased by 16.9
per cent to SEK 681 (583) million in the first half of the year while the EBITA
margin expanded by 0.3 percentage points over the same period, to 15.4 (15.1)
per cent. Earnings per share increased by 15.1 per cent in the first half, to
SEK 4.96 (4.31).
Profitability in the Dental business was stable in the first six months.
Profitability in the Demolition & Tools business area was affected by normal
quarterly fluctuations. Systems Solutions saw a sharp improvement in
profitability during the six-month period.
Cash flow from operating activities remained strong, increasing by 17.3 per cent
to SEK 425 (362) million in the first half.
Lifco has subsidiaries which operate in the United Kingdom. We are keeping a
close eye on changes in the country’s relations with the EU but believe it is
not yet possible to assess the effects of Brexit.
We have continued to deliver on our strategy of investing in market-leading
niche businesses with the potential to deliver sustainable earnings growth and
robust cash flows. In the first half of the year Lifco consolidated seven new
businesses with combined annual sales of around SEK 870 million, see also pages
7 and 14. Taken together, the acquisitions will have a positive impact on
Lifco’s results and financial position in the current year. Even after these
acquisitions we still have significant financial scope for further acquisitions,
as net debt is 2.1 times EBITDA before restructuring, integration and
acquisition costs, well below our target of a net debt of less than three times
EBITDA.
Fredrik Karlsson
CEO
GROUP PERFORMANCE IN JANUARY – JUNE
Net sales increased by 14.3 per cent to SEK 4,424 (3,870) million, driven by
organic growth and acquisitions. Acquisitions contributed 9.6 per cent and
organic growth 6.2 per cent while changes in exchange rates had a negative
impact of 1.5 per cent. During the six-month period seven new businesses were
consolidated.
EBITA* increased by 16.9 per cent to SEK 681 (583) million and the EBITA margin*
improved to 15.4 (15.1) per cent. EBITA* improved on the back of organic growth
and acquisitions. Changes in exchange rates had a marginal negative impact on
EBITA* of 1.4 percentage points. In the first six months 40 per cent of EBITA*
was generated in EUR, 28 per cent in SEK, 12 per cent in NOK, 7 per cent in DKK,
4 per cent in GBP, 3 per cent in USD and 6 per cent in other currencies.
Net financial items were SEK -17 (-7) million.
Earnings before tax increased by 13.9 per cent to SEK 612 (537) million. Net
profit for the period grew by 15.5 per cent to SEK 459 (397) million.
Average capital employed excluding goodwill increased by SEK 20 million from 30
June 2015 to SEK 952 (932) million. EBITA* in relation to average capital
employed excluding goodwill increased to 135 (116) per cent at 30 June 2016. At
year-end the figure was 123 per cent. The improvement was due to a higher profit
and good control of capital employed.
The Group’s net interest-bearing debt increased by SEK 908 million from 31
December 2015 to SEK 2,858 million at 30 June 2016. The net debt/equity ratio
was 0.7 (0.7) at 30 June 2016 and net debt in relation to EBITDA* was 2.1 (2.0)
times.
Cash flow from operating activities improved by 17.3 per cent to SEK 425 (362)
million in the first six months. The continued strong cash flow was due to a
higher profit and good control of capital employed. Cash flow from investing
activities was SEK -1,006 (-516) million, which was mainly attributable to
acquisitions.
GROUP PERFORMANCE IN THE SECOND QUARTER
Net sales increased by 11.8 per cent to SEK 2,373 (2,122) million, driven by
organic growth and acquisitions. Acquisitions contributed 9.5 per cent and
organic growth 3.9 per cent while changes in exchange rates had a negative
impact of 1.6 per cent.
EBITA* increased by 19.4 per cent to SEK 407 (341) million and the EBITA margin*
improved by 1.1 percentage points to 17.2 (16.1) per cent. EBITA* improved on
the back of organic growth and acquisitions. Changes in exchange rates had a
negative impact on EBITA* of 1.4 percentage points. In the second quarter 40 per
cent of EBITA* was generated in EUR, 30 per cent in SEK, 13 per cent in NOK, 5
per cent in DKK, 4 per cent in USD, 3 per cent in GBP and 5 per cent in other
currencies.
Net financial items were SEK -9 (-9) million.
Earnings before tax increased by 17.5 per cent to SEK 369 (314) million. Net
profit for the period increased by 19.1 per cent to SEK 277 (232) million.
Average capital employed excluding goodwill remained largely flat over the
quarter, SEK 953 million at 30 June 2016 compared to SEK 952 million at 31 March
2016. EBITA in relation to average capital employed excluding goodwill improved
by 7.0 percentage points from 31 March 2016. The improvement was due chiefly to
a higher profit and good control of capital employed.
During the three-month period the Group’s net interest-bearing debt increased by
SEK 79 million to SEK 2,858 million. Dividend payments during the period
totalled SEK 277 (236) million. The net debt/equity ratio remained unchanged at
0.7. At the end of the period 50 per cent of the Group’s interest-bearing
liabilities were denominated in EUR.
Cash flow from operating activities improved by 13.5 per cent to SEK 281 (247)
million during the three-month period. The continued strong cash flow was due to
a higher profit and good control of capital employed. Cash flow from investing
activities was SEK -35 (-84) million.
FINANCIAL PERFORMANCE – BUSINESS AREAS
Dental
SIX SECOND Rolling FULL
MONTHS QUARTER 12 YEAR
months
SEK 2016 2015 change 2016 2015 change change 2015
million
Net 1,773 1,763 0.5% 904 869 4.0% 3,445 0.3% 3,435
sales
EBITA* 328 322 1.6% 172 153 13.0% 619 0.9% 614
EBITA 18.5% 18.3% 0.2 19.1% 17.6% 1.5 18.0% 0.1 17.9%
margin*
The companies in the Dental business area are leading suppliers of consumables,
equipment and technical service for dentists across Europe. Lifco 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 which produce
disinfectants, saliva ejectors and endodontic products.
Dental’s net sales grew by 0.5 per cent to SEK 1,773 (1,763) million. Net sales
were negatively affected by the sale of NetDental at the end of the second
quarter of 2015 while the acquisitions of J.H. Orsing, Smilodent, Preventum
Partner, Dens Esthetix and Praezimed had a positive impact on net sales in the
first six months.
EBITA* improved by 1.6 per cent to SEK 328 (322) million in the first six months
and the EBITA margin* increased to 18.5 (18.3) per cent.
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 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 quarter the early Easter in 2016 had a slight negative
impact on net sales and earnings. The early Easter 2016 had a correspondingly
positive impact on the dental business in the second quarter.
In the first quarter Lifco announced two acquisitions in Dental: The German
dental laboratory Dens Esthetix and the German dental company Praezimed. Dens
Esthetix had net sales of around EUR 1.4 million in 2015 and has 14 employees.
Praezimed provides servicing and repair of dental instruments used by dentists
and dental laboratories in Germany. Praezimed had net sales of around EUR 2.5
million in 2015 and has 15 employees. Both businesses were consolidated as of
February 2016. The acquisition of endodontic products that was announced in
December 2015 was consolidated as of January 2016. The business had a turnover
of around SEK 10 million in 2015.
Demolition & Tools
SIX SECOND Rolling FULL
MONTHS QUARTER 12 YEAR
months
SEK 2016 2015 change 2016 2015 change change 2015
million
Net 853 760 12.3% 469 430 9.0% 1,667 5.9% 1,574
sales
EBITA* 193 184 5.1% 114 117 -2.8% 405 2.3% 396
EBITA 22.6% 24.2% -1.6 24.3% 27.3% -3.0 24.3% -0.8 25.1%
margin*
DDemolition & 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.
In the first six months net sales increased by 12.3 per cent to SEK 853 (760)
million. The market situation was generally good and sales increased in the
majority of markets. Among the larger markets, Germany, France, China and the
Nordic region saw the fastest growth.
In the first six months EBITA* increased by 5.1 per cent to SEK 193 (184)
million. The EBITA margin* was 22.6 per cent (24.2) due to normal fluctuations
between the reporting periods. 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
SIX SECOND Rolling FULL
MONTHS QUARTER 12 YEAR
months
SEK 2016 2015 change 2016 2015 change change 2015
million
Net 1,798 1,348 33.5% 1,000 823 21.5% 3,343 15.6% 2,892
sales
EBITA* 208 119 74.9% 145 92 57.4% 352 33.8% 263
EBITA 11.6% 8.8% 2.8 14.5% 11.2% 3.3 10.5% 1.4 9.1%
margin*
Through its operating units 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 Construction Materials. The divisions are leading players in their
geographic markets. Following the acquisition of Cenika in January 2016, the
Relining division has changed its name to Construction Materials.
Net sales in Systems Solutions increased by 33.5 per cent to SEK 1,798 (1,348)
million and all divisions increased their sales in the first half of 2016.
EBITA* increased by 74.9 per cent to SEK 208 (119) million in the first half.
All divisions improved their results during the period and the EBITA margin*
increased to 11.6 (8.8) per cent. 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.
Interiors for Service Vehicles grew both in terms of sales and profitability in
the first six months of 2016 thanks to increased sales activities and an
improved product range. Despite this, the EBITA margin* had still not reached a
satisfactory level.
Contract Manufacturing performed well in a stable market. 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 quality as well as delivery flexibility and
documentation. At the end of December, it was announced that Lifco had acquired
Auto-Maskin of Norway, a leading supplier of control and monitoring systems for
marine diesel engines. Auto-Maskin generated net sales of around NOK 130 million
in 2015 and has 65 employees. The business was consolidated as of January 2016.
Environmental Technology had a good first half of the year. In January Redoma
Recycling was acquired. Redoma Recycling is a Swedish company specialising in
the development and manufacture of recycling machinery for small and medium
cables. Redoma Recycling generated net sales of around SEK 25 million in 2015
and has eight employees. In February it was announced that Lifco had acquired
TMC/Nessco of Norway, a world-leading supplier of marine compressors and spare
parts. TMC/Nessco generated net sales of approximately NOK 525 million in 2015
and has about 90 employees. The business was consolidated as of March 2016.
Sawmill Equipment increased its sales and earnings in the first half thanks to a
strong first quarter. The division sells projects, which means that sales and
earnings normally fluctuate from one quarter to another.
Construction Materials (formerly Relining) had a satisfactory sales and earnings
development during the three-month period due to the acquisition of a majority
stake in Cenika of Norway. Cenika, which was consolidated as of February 2016,
is a leading supplier of low-voltage electrical equipment. Cenika generated net
sales of NOK 160 million in 2015 and has about 30 employees.
ACQUISITIONS
In the first half of 2016 Lifco consolidated the following acquisitions:
+-----------------------+-------------------+-----------------+---------+-------
--+
|Consolidated from month|Acquisition |Business area |Net
sales|Employees|
+-----------------------+-------------------+-----------------+---------+-------
--+
|January |Auto-Maskin |Systems Solutions|NOK 130m |65
|
+-----------------------+-------------------+-----------------+---------+-------
--+
|January |Endodontic products|Dental |SEK 10m |-
|
+-----------------------+-------------------+-----------------+---------+-------
--+
|January |Redoma Recycling |Systems Solutions|SEK 25m |8
|
+-----------------------+-------------------+-----------------+---------+-------
--+
|February |Cenika |Systems Solutions|NOK 160m |30
|
+-----------------------+-------------------+-----------------+---------+-------
--+
|February |Dens Esthetix |Dental |EUR 1.4m |14
|
+-----------------------+-------------------+-----------------+---------+-------
--+
|February |Praezimed |Dental |EUR 2.5m |15
|
+-----------------------+-------------------+-----------------+---------+-------
--+
|March |TMC/Nessco |Systems Solutions|NOK 525m |90
|
+-----------------------+-------------------+-----------------+---------+-------
--+
Further information on acquisitions is provided on page 14 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.
Taken together, the acquisitions will have a positive impact on Lifco’s results
and financial position in the current year.
OTHER FINANCIAL INFORMATION
Employees
The average number of employees in the second quarter was 3,569 (3,323) and the
number of employees at the end of the period was 3,577 (3,367). Acquisitions
added about 220 employees in the six-month period, all in the first quarter.
Events after the end of the reporting period
No events of significance for the Group have occurred after the end of the
reporting period.
Related-party transactions
No significant transactions with related parties took place during the period.
Annual General Meeting 2016
The Annual General Meeting was held on 12 May in Stockholm. At the AGM the Board
of Directors and auditor were re-elected. Annika Espander Jansson was elected to
the Board as a new Director. Resolutions were adopted on Directors’ and
auditors’ fees, the payment of a dividend for 2015 and remuneration of senior
executives. The AGM approved the transfer of the subsidiary companies Proline
Iceland EFT and Proline Relining SL.
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.
For further information on Lifco’s risks and risk management, see the annual
report for 2015.
Accounting principles
The Group’s interim report has been prepared in accordance with IAS 34 Interim
Financial Reporting and the Swedish Annual Accounts Act. In respect of the
Parent Company the report has been prepared in accordance with the Annual
Accounts Act and Recommendation RFR 2 Financial Reporting for Legal Entities of
the Swedish Financial Reporting Board. The accounting principles have been
applied in accordance with those which are presented in the annual report for
2015 and should be read in conjunction with these. The interim report presents
alternative key performance indicators for assessing the Group’s performance.
The primary alternative KPIs presented in this interim report are EBITA, EBITDA,
net debt and capital employed. Definitions of the alternative KPIs are presented
on pages 17-18 and a reconciliation with the financial statements is presented
on pages 19-20.
This report has not been examined by the Company’s auditors.
DECLARATION OF THE BOARD OF DIRECTORS
The Board of Directors and Chief Executive Officer warrant and declare that this
six-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, 15 July 2016 Carl Bennet Chairman of
the Board
Gabriel Ulrika Annika Espander
Danielsson Director Erik Dellby Director Ulf Jansson
Gabrielson Grunander Director Johan Director Fredrik
Director Annika SternVice Karlsson President
Norlund Director, Chairman and CEO,
employee Director Axel
representative WachtmeisterDirector
Hans-Eric
Wallin Director,
employee
representative
FINANCIAL CALENDAR
The interim report for the third quarter of 2016 will be published on 25 October
2016 at 1 p.m CET.
The year-end report for 2016 will be published on 15 February 2017.
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: 15 July, 9 a.m. CET
Link to the presentation:
https://wonderland.videosync.fi/2016-07-15-lifco
-q2report (https://webmail.lifco.se/owa/redir.aspx?REF=FPvB7oVSyT7
-hZ87n9ZGcOKgFQgvFj24hrjhm2I6YKTr
-nehMp_TCAFodHRwczovL3dvbmRlcmxhbmQudmlkZW9zeW5jLmZpLzIwMTYtMDctMTUtbGlmY28tcTJy
Z
XBvcnQ.)
Telephone numbers:
Sweden: +46 8 566 426 91
US: +1 855 831 5946
UK: +44 203 008 9801
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 133 companies in 28 countries. In 2015 the Group reported EBITA of SEK
1,186 million on net sales of around SEK 7.9 billion. The EBITA margin was 15.0
per cent. Read more at www.lifco.se
+------------------------------------------------------------------------------+
|This information constitutes information that Lifco AB is required to publish |
|under the EU’s Market Abuse Regulation and the Swedish Securities Markets Act.|
|The information was submitted for publication through the aforementioned |
|contact person on 15 July 2016, at 7:30 a.m CET. |
+------------------------------------------------------------------------------+
CONDENSED CONSOLIDATED INCOME STATEMENT
SIX MONTHS SECOND QUARTER FULL YEAR
SEK million 2016 2015 change 2016 2015 change 2015
Net sales 4,424 3,870 14.3% 2,373 2,122 11.8% 7,901
Cost of goods sold -2,674 -2,383 12.2% -1,412 -1,310 7.8% -4,865
Gross profit 1,750 1,487 17.7% 961 812 18.2% 3,036
Selling expenses -395 -304 29.7% -212 -165 28.2% -625
Administrative -684 -597 14.7% -343 -303 13.3% -1,205
expenses
Development costs -45 -33 37.9% -23 -17 37.7% -73
Other income and 3 -9 -137% -5 -4 17.1% -26
expenses
Operating profit 629 544 15.6% 378 323 16.8% 1,107
Net financial items -17 -7 143% -9 -9 - -25
Profit before tax 612 537 13.9% 369 314 17.5% 1,082
Tax -153 -140 9.5% -92 -82 13.0% -257
Net profit for the 459 397 15.5% 277 232 19.1% 825
period
Profit attributable
to:
Parent Company 451 392 15.0% 271 227 18.8% 810
shareholders
Non-controlling 8 5 51.6% 6 5 32.6% 15
interests
Earnings per share 4.96 4.31 15.1% 2.98 2.50 18.8% 8.91
before and after
dilution for the
period,
attributable to
Parent Company
shareholders
EBITA* 681 583 16.9% 407 341 19.4% 1,186
Depreciation of 44 39 14.3% 23 21 8.8% 81
tangible assets
Amortisation of 5 5 - 2 3 -9% 10
intangible assets
Amortisation of 52 29 76.4% 29 16 77.1% 66
intangible assets
arising from
acquisitions
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
SIX SECOND FULL YEAR
MONTHS QUARTER
SEK million 2016 2015 change 2016 2015 change 2015
Net profit for the 459 397 15.5% 277 232 19.1% 825
period
Other comprehensive
income
Items which can 16 -2 -
later be
reclassified in
the income
statement: Hedge of
net
investment
Translation 63 -4 -58 -209% 49 0 -19 -351% -92 -
differences Tax
related to
other comprehensive
income
Total comprehensive 534 339 57.4% 324 213 52.2% 733
income for the
period
Comprehensive income -
attributable to:
Parent Company 525 335 56.8% 317 209 51.7% 720
shareholders
Non-controlling 9 4 101% 7 4 77.7%
interests 13
534 339 57.4% 324 213 52.2% 733
SEGMENT OVERVIEW
Lifco’s operations are monitored and evaluated by the CEO and resources are
allocated based on information from the three operating segments: Dental,
Demolition & Tools and Systems Solutions. The defined quantitative limits are
exceeded only by Dental and Demolition & Tools. One further operating segment,
Systems Solutions, is presented. This operating segment consists of a merger of
those divisions which have similar economic characteristics and which do not
individually meet the defined quantitative limits. These divisions are Interiors
for Service Vehicles, Contract Manufacturing, Environmental Technology, Sawmill
Equipment and Construction Materials (formerly Relining).
NET SALES TO EXTERNAL CUSTOMERS
No sales are made between the segments.
SIX SECOND Rolling FULL
MONTHS QUARTER 12 YEAR
months
SEK 2016 2015 change 2016 2015 change change 2015
million
Dental 1,773 1,763 0.5% 904 869 4.0% 3,445 0.3% 3,435
Demolition 853 760 12.3% 469 430 9.0% 1,667 5.9% 1,574
& Tools
Systems 1,798 1,348 33.5% 1,000 823 21.5% 3,343 15.6% 2,892
Solutions
Group 4,424 3,870 14.3% 2,373 2,122 11.8% 8,455 7.0% 7,901
EBITA
A breakdown of results by segment is made up to and including EBITA. EBITA is
reconciled to profit before tax in accordance with the following table:
SIX SECOND Rolling FULL
MONTHS QUARTER 12 YEAR
months
SEK million 2016 2015 change 2016 2015 change change 2015
Dental 328 322 1.6% 172 153 13.0% 620 0.9% 614
Demolition & 193 184 5.1% 114 117 -2.8% 405 2.3% 396
Tools
Systems 208 119 74.9% 145 92 57.4% 352 33.8% 263
Solutions
Central Group -48 -42 12.7% -24 -21 14.8% -93 6.1% -87
functions
EBITA before 681 583 16.9% 407 341 19.4% 1,284 8.3% 1,186
restructuring,
integration and
acquisition
costs
Restructuring, 0 -9 -99.4% 0 -1 -51.4% -4 -69.2% -13
integration and
acquisition
costs
EBITA 681 573 18.7% 407 340 19.7% 1,280 9.2% 1,173
Amortisation of -52 -29 76.4% -29 -16 77.1% -88 34.3% -66
intangible
assets arising
from
acquisitions
Net financial -17 -7 143% -9 -9 - -36 40.6% -25
items
Profit before 612 537 13.9% 369 314 17.5% 1,156 6.9% 1,082
tax
CONDENSED CONSOLIDATED BALANCE SHEET
SEK million 30 Jun 2016 30 Jun 2015 31 Dec 2015
ASSETS
Intangible assets 6,063 4,961 5,010
Tangible fixed assets 454 418 417
Financial assets 96 59 87
Inventories 1,130 999 960
Accounts receivable - trade 1,122 930 863
Current receivables 304 310 257
Cash and cash equivalents 428 537 464
TOTAL ASSETS 9,597 8,214 8,058
EQUITY AND LIABILITIES
Equity 4,226 3,576 3,964
Non-current interest-bearing 1,105 1,114 1,103
liabilities incl. pension
provisions
Other non-current liabilities 494 313 371
and provisions
Current interest-bearing 2,197 1,842 1,341
liabilities
Accounts payable – trade 550 422 370
Other current liabilities 1,025 947 909
TOTAL EQUITY AND LIABILITIES 9,597 8,214 8,058
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to Parent Company shareholders
SEK million 30 Jun 2016 30 Jun 2015 31 Dec 2015
Opening equity 3,939 3,455 3,455
Comprehensive income for the period 525 335 720
Dividend -273 -236 -236
Closing equity 4,191 3,554 3,939
Equity attributable to:
Parent Company shareholders 4,191 3,554 3,939
Non-controlling interests 35 22 25
4,226 3,576 3,964
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
SIX SECOND FULL
MONTHS QUARTER YEAR
SEK million 2016 2015 2016 2015 2015
Operating
activities
Operating 629 544 378 323 1,107
profit
Non-cash 88 73 54 39 157
items
Interest and -17 -7 -9 -9 -25
financial
items, net
Tax paid -165 -133 -77 -55 -239
Cash flow 535 477 346 298 1,000
before
changes in
working
capital
Changes in
working
capital
Inventories -61 -62 1 25 -59
Current -105 -183 -124 -71 -113
receivables
Current 56 130 58 -5 120
liabilities
Cash flow 425 362 281 247 948
from
operating
activities
Business -948 -460 - -46 -573
acquisitions
and sales,
net
Net -56 -45 -34 -32 -82
investment
in tangible
fixed assets
Net -2 -11 -1 -6 -9
investment
in
intangible
assets
Cash flow -1,006 -516 -35 -84 -664
from
investing
activities
Borrowings/re 818 400 21 -10 -88
payment of
borrowings,
net
Dividends -280 -245 -277 -236 -252
paid
Cash flow 538 155 -256 -246 -340
from
financing
activities
Cash flow -43 1 -10 -83 -56
for the
period
Cash and 464 536 438 624 536
cash
equivalents
at beginning
of period
Translation 7 0 0 -4 -16
differences
Cash and 428 537 428 537 464
cash
equivalents
at end of
period
ACQUISITIONS IN 2016
In the first half of 2016 seven new businesses were consolidated and are
included in the preliminary purchase price allocation. The acquisitions refer to
all shares of Auto-Maskin, Praezimed and TMC/Nessco as well as a majority stake
in Cenika. The acquisitions of Redoma Recycling, Dens Esthetix and endodontic
products were asset deals.
The preliminary purchase price allocation covers all acquisitions made in the
first half of the year.
Acquisition-related expenses of SEK 12 million are included in administrative
expenses in the consolidated income statement for the first half of 2016. If the
businesses had been consolidated from 1 January 2016 consolidated net sales
would have increased by around SEK 95 million. The acquisitions would have had a
positive impact on earnings if the companies had been consolidated from 1
January 2016.
Acquired net assets
Net assets, SEK Carrying amount Value adjustment Fair value
million
Trademarks, customer 1 559 560
relationships,
licences
Tangible assets 20 - 20
Trade and other 274 -9 265
receivables
Trade and other -201 -124 -325
payables
Cash and cash 111 - 111
equivalents
Net assets 205 426 631
Goodwill 427 427
Total net assets 205 853 1,058
Effect on cash flow,
MSEK
Consideration 1,058
Cash and cash -111
equivalents in the
acquired companies
Consideration paid 1
relating to
acquisitions from
previous years
Total cash flow effect 948
FINANCIAL INSTRUMENTS
CARRYING AMOUNT FAIR VALUE
SEK million 30 Jun 2016 30 Jun 2015 30 Jun 2016 30 Jun 2015
Loans and receivables
Accounts receivable - 1,122 930 1,122 930
trade
Other non-current 3 6 3 6
financial receivables
Cash and cash 428 537 428 537
equivalents
Total 1,553 1,473 1,553 1,473
Liabilities at fair
value through profit or
loss
Other liabilities 16 30 16 30
Other financial
liabilities
Interest-bearing 3,246 2,886 3,246 2,886
borrowings
Accounts payable - trade 550 422 550 422
Total 3,812 3,338 3,812 3,338
Financial instruments at fair value are classified into different levels
depending on how fair value is determined. All financial instruments at fair
value in the Lifco Group have been classified as level 3, i.e. non-observable
inputs. The fair value of short-term borrowings is equal to the carrying amount,
as the discount effect is insignificant. Other liabilities classified as
financial instruments refer to mandatory put/call options relating to non
-controlling interests. Changes in financial liabilities attributable to
mandatory put/call options are recognised in the income statement.
KEY PERFORMANCE INDICATORS
ROLLING TWELVE MONTHS TO 201630 JUNE 201531 DEC 201530 JUNE
Net sales, SEK million 8,455 7,901 7,424
Change in net sales, % 7.0 16.2 9.1
EBITA*, SEK million 1,284 1,186 1,083
EBITA margin*, % 15.2 15.0 14.6%
EBITDA*, SEK million 1,381 1,277 1,168
EBITDA margin*, % 16.3 16.2 15.7
Capital employed, SEK million 6,479 5,965 5,725
Capital employed excl. goodwill and 952 966 932
other intangible assets, SEK million
Return on capital employed, % 19.8 19.9 18.9
Return on capital employed excl. 135 123 116
goodwill, %
Return on equity, % 21.9 22.1 18.7
Net interest-bearing debt, SEK 2,858 1,950 2,389
million
Net debt/equity ratio 0.7 0.5 0.7
Net debt/EBITDA* 2.1 1.5 2.0
Equity/assets ratio, % 44.0 49.2 43.5
Number of shares, thousand 90,843 90,843 90,843
Average number of employees 3,569 3,369 3,323
CONDENSED PARENT COMPANY INCOME STATEMENT
SIX MONTHS SECOND QUARTER FULL YEAR
SEK million 2016 2015 2016 2015 2015
Administrative expenses -55 -50 -28 -24 -104
Other operating income* 40 - 40 - 84
Operating profit -15 -50 12 -24 -20
Net financial items 394 264 382 44 307
Profit after financial items 379 214 394 20 287
Appropriations - - - - -12
Tax 10 1 5 0 -8
Net profit for the period 389 215 399 20 267
* Preliminary invoicing of Group wide services.
CONDENSED PARENT COMPANY BALANCE SHEET
SEK million 30 Jun 2016 31 Dec 2015
ASSETS
Tangible fixed assets 0 0
Financial assets 1,985 3,369
Current receivables 4,467 2,223
Cash and cash equivalents 254 307
TOTAL ASSETS 6,706 5,899
EQUITY AND LIABILITIES
Equity 2,302 2,186
Untaxed reserves 32 32
Provisions - 4
Non-current interest-bearing liabilities 1,063 1,031
Current interest-bearing liabilities 2,171 1,330
Current non-interest-bearing liabilities 1,138 1,316
TOTAL EQUITY AND LIABILITIES 6,706 5,899
Pledged assets - -
Contingent liabilities 101 92
PURPOSE AND DEFINITIONS
Return on equity Net profit for the period divided by
average equity.
Return on capital employed EBITA before restructuring, integration
and acquisition costs divided by capital
employed.
Return on capital employed excluding EBITA before restructuring, integration
goodwill and other intangible assets and acquisition costs divided by capital
employed excluding goodwill and other
intangible assets.
EBITA EBITA is a measure which Lifco considers
relevant for investors who wish to
understand the earnings generated after
investments in tangible and intangible
assets requiring reinvestment but before
investments in intangible assets
attributable to acquisitions. Lifco
defines earnings before interest, tax
and amortisation (EBITA) as operating
profit before amortisation and
impairment of intangible assets arising
from acquisitions. In its financial
reports Lifco excludes restructuring,
integration and acquisition costs. This
is indicated by an asterisk.
EBITA margin EBITA divided by net sales.
EBITDA EBITDA is a measure which Lifco
considers relevant for investors who
wish to understand the earnings
generated before investments in fixed
assets. Lifco defines earnings before
interest, tax, depreciation and
amortisation (EBITDA) as operating
profit before depreciation, amortisation
and impairment of tangible and
intangible assets. In its financial
reports Lifco excludes restructuring,
integration and acquisition costs. This
is indicated by an asterisk.
EBITDA margin EBITDA divided by net sales.
Net debt/equity ratio Net interest-bearing debt divided by
equity.
Earnings per share Profit after tax attributable to Parent
Company shareholders divided by average
number of outstanding shares.
Net interest-bearing debt Lifco uses the alternative KPI net
interest-bearing debt. Lifco considers
that this is a useful additional KPI
which allows users of the financial
reports to assess the Group’s ability to
pay dividends, make strategic
investments and meet its financial
obligations. Lifco defines the KPI as
follows: current and non-current
liabilities to credit institutions, bond
loans and interest-bearing pension
provisions less estimated contingent
consideration for acquisitions, and cash
and cash equivalents.
Equity/assets ratio Equity divided by total assets (balance
sheet total).
Capital employed Capital employed is a measure which
Lifco uses for calculating the return on
capital employed and for measuring how
efficient the Group is. Lifco considers
that capital employed is useful in
helping users of the financial reports
to understand how the Group finances
itself. Lifco defines capital employed
as total assets less cash and cash
equivalents, interest-bearing pension
provisions and non-interest-bearing
liabilities, calculated as the average
of the last four quarters.
Capital employed excluding goodwill Capital employed excluding goodwill and
and other intangible assets other intangible assets is a measure
which Lifco uses for calculating the
return on capital employed and for
measuring how efficient the Group is.
Lifco considers that capital employed
excluding goodwill and other intangible
assets is useful in helping users of the
financial reports to understand the
impact of goodwill and other intangible
assets on that capital which requires a
return. Lifco defines capital employed
excluding goodwill and other intangible
assets as total assets less cash and
cash equivalents, interest-bearing
pension provisions, non-interest-bearing
liabilities, goodwill and other
intangible assets, calculated as the
average of the last four quarters.
RECONCILIATION OF ALTERNATIVE KEY PERFORMANCE INDICATORS
EBITA compared with financial statements in accordance with IFRS
SEK million SIX MONTHS2016 SIX MONTHS2015 FULL YEAR2015
Operating profit 629 544 1,107
Amortisation of intangible 52 29 66
assets arising from
acquisitions
EBITA 681 573 1,173
Restructuring, integration and 0 9 13
acquisition costs
EBITA before restructuring, 681 583 1,186
integration and acquisition
costs
EBITDA compared with financial statements in accordance with IFRS
SEK million SIX MONTHS2016 SIX MONTHS2015 FULL YEAR2015
Operating profit 629 544 1,107
Depreciation of tangible 44 39 81
assets
Amortisation of intangible 5 5 10
assets
Amortisation of intangible 52 29 66
assets arising from
acquisitions
EBITDA 730 617 1,264
Restructuring, integration and 0 9 13
acquisition costs
EBITA before restructuring, 730 626 1,277
integration and acquisition
costs
Net interest-bearing debt compared with financial statements in accordance with
IFRS
SEK million 30 Jun 2016 30 Jun 2015 31 Dec 2015
Non-current interest-bearing 1,105 1,114 1,103
liabilities incl. pension
provisions
Current interest-bearing 2,197 1,842 1,341
liabilities
Calculated contingent -16 -30 -30
consideration for acquisitions
Cash and cash equivalents -428 -537 -464
Net interest-bearing debt 2,858 2,389 1,950
Capital employed and capital employed excluding goodwill and other intangible
assets compared with financial statements in accordance with IFRS
+-----------------------------+-----------+-----------+-----------+----------+
|SEK million |30 Jun 2016|31 Mar 2016|31 Dec 2015|2015-09-30|
+-----------------------------+-----------+-----------+-----------+----------+
|Total assets |9,597 |9,373 |8,058 |8,447 |
+-----------------------------+-----------+-----------+-----------+----------+
|Cash and cash equivalents |-428 |-438 |-464 |-645 |
+-----------------------------+-----------+-----------+-----------+----------+
|Interest-bearing pension |-41 |-40 |-39 |-41 |
|provisions | | | | |
+-----------------------------+-----------+-----------+-----------+----------+
|Non-interest-bearing |-2,069 |-1,965 |-1,650 |-1,739 |
|liabilities | | | | |
+-----------------------------+-----------+-----------+-----------+----------+
|Capital employed |7,059 |6,930 |5,905 |6,022 |
+-----------------------------+-----------+-----------+-----------+----------+
|Goodwill and other intangible|-6,063 |-5,983 |-5,010 |-5,050 |
|assets | | | | |
+-----------------------------+-----------+-----------+-----------+----------+
|Capital employed excl. |996 |947 |895 |972 |
|goodwill and other intangible| | | | |
|assets | | | | |
+-----------------------------+-----------+-----------+-----------+----------+
Capital employed and capital employed excluding goodwill and other intangible
assets calculated as the average of the last four quarters compared with
financial statements in accordance with IFRS
+--------------------------------+-------+-------+------+------+------+
|SEK million |Average|Q2 2016|Q12016|Q42015|Q32015|
+--------------------------------+-------+-------+------+------+------+
|Capital employed |6,479 |7,059 |6,930 |5,905 |6,022 |
+--------------------------------+-------+-------+------+------+------+
|Capital employed excl. goodwill |952 |996 |947 |895 |972 |
|and other intangible assets | | | | | |
+--------------------------------+-------+-------+------+------+------+
| |Total | | | | |
+--------------------------------+-------+-------+------+------+------+
|EBITA* |1,284 |407 |274 |322 |281 |
+--------------------------------+-------+-------+------+------+------+
|Return on capital employed |19.8% | | | | |
+--------------------------------+-------+-------+------+------+------+
|Return on capital employed excl.|135% | | | | |
|goodwill and other intangible | | | | | |
|assets | | | | | |
+--------------------------------+-------+-------+------+------+------+
INTERIM REPORT JANUARY – JUNE 2016
| Source: Lifco AB
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