Reporting period January – September
· Net sales increased by 13.4 per cent to SEK 6,552 (5,780) million.
Organically, net sales grew by 4.1 per cent
· EBITA* increased by 15.5 per cent to SEK 997 (863) million
· The EBITA margin* increased to 15.2 (14.9) per cent
· Earnings before tax grew by 12.0 per cent to SEK 889 (794) million
· Net profit for the period grew by 13.5 per cent to SEK 667 (587) million
· Earnings per share increased by 13.4 per cent to SEK 7.18 (6.33)
· Cash flow from operating activities remained strong, increasing by 7.5 per
cent to
SEK 655 (610) million
· During the period Lifco acquired nine businesses with combined annual sales
of around SEK 1,200 million
Reporting period July – September
· Net sales increased by 11.4 per cent to SEK 2,128 (1,910) million,
organically net sales decreased by 0.2 per cent
· EBITA* increased by 12.6 per cent to SEK 316 (280) million
· The EBITA margin* increased to 15.2 (14.7) per cent
· Earnings before tax grew by 8.0 per cent to SEK 277 (257) million
· Net profit for the period grew by 9.5 per cent to SEK 208 (190) million
· Cash flow from operating activities decreased by 6.8 per cent to SEK 230
(248) million
· During the three-month period Lifco acquired two businesses with combined
annual sales of around SEK 300 million
· After the end of the period two companies in the Sawmill Equipment division
have been sold
Summary of financial performance
NINE THIRD Rolling FULL
MONTHS QUARTER 12 YEAR
months
SEK 2016 2015 change 2016 2015 change change 2015
million
Net sales 6,552 5,780 13.4% 2,128 1,910 11.4% 8,673 9.8% 7,901
EBITA* 997 863 15.5% 316 280 12.6% 1,319 11.3% 1,186
EBITA 15.2% 14.9% 0.3 15.2% 14.7% 0.5 15.2% 0.2 15.0%
margin*
Profit 889 794 12.0% 277 257 8.0% 1,177 8.8% 1,082
before
tax
Net 667 587 13.5% 208 190 9.5% 904 9.6% 825
profit
for the
period
Earnings 7.18 6.33 13.4% 2.22 2.02 10.0% 9.76 9.5% 8.91
per share
Return on 19.1% 19.3% -0.2 19.1% 19.3% -0.2 19.1% -0.8 19.9%
capital
employed
Return on 136% 118% 18 136% 118% 18 136% 13 123%
capital
employed
excl.
goodwill
* Before restructuring, integration and acquisition costs.
COMMENTS FROM THE CEO
Net sales increased by 13.4 per cent in the first nine months of 2016, to SEK
6,552 (5,780) million, driven by organic growth as well as acquisitions. All
three business areas increased their sales and earnings in the first nine months
of the year. The weaker organic development in the third quarter relates to
lower net sales in the Sawmill Equipment division. The market environment
remained generally favourable in the three business areas.
EBITA before restructuring, integration and acquisition costs increased by 15.5
per cent to SEK 997 (863) million during the nine-month period while the EBITA
margin expanded by 0.3 percentage points, to 15.2 (14.9) per cent. Earnings per
share increased by 13.4 per cent in the first nine months, to SEK 7.18 (6.33).
Profitability in the Dental business area remained stable in the first nine
months. Profitability in the Demolition & Tools and Systems Solutions business
areas showed strong performance during the same period. However, the third
quarter was slightly weaker in the Systems Solutions business area, mainly due
to the development within the Sawmill Equipment division. 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.
Cash flow from operating activities remained strong, increasing by 7.5 per cent
to SEK 655 (610) million in the first nine months.
Our Estonian subsidiary Hekotek, which sells equipment to sawmills and the
biofuel industry, has been named Company of the Year and Export Company of the
Year by Estonian Employers’ Confederation, Enterprise Estonia and the Estonian
Chamber of Commerce and Industry. This is an important recognition of the
successful work performed by Hekotek’s management and employees.
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 nine months of the year Lifco consolidated nine
new businesses with combined annual sales of around SEK 1,200 million, see also
pages 7 and 16. Taken together, the acquisitions will have a positive impact on
Lifco’s results and financial position in the current year. After the end of the
quarter we concluded an agreement for the sale of two companies in Systems
Solutions, which sells equipment to sawmills. The two companies had a combined
turnover of SEK 153 million in 2015 and had 63 employees in total. The sale will
not have a significant impact on Lifco’s financial position and performance in
the current year.
Even after the nine acquisitions we still have significant financial scope for
further acquisitions, as net debt is 2.3 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 – SEPTEMBER
Net sales increased by 13.4 per cent to SEK 6,552 (5,780) million, driven by
acquisitions and organic growth. Acquisitions contributed 10.4 per cent and
organic growth 4.1 per cent while changes in exchange rates had a negative
impact of 1.1 per cent. Nine new businesses were consolidated during the nine
-month period.
EBITA* increased by 15.5 per cent to SEK 997 (863) million and the EBITA margin*
improved to 15.2 (14.9) per cent. EBITA* improved on the back of organic growth
and acquisitions. Changes in exchange rates had a negative impact on EBITA* of
1.0 percentage points. In the first nine months 40 per cent of EBITA* was
generated in EUR, 28 per cent in SEK, 11 per cent in NOK, 6 per cent in DKK, 4
per cent in GBP, 4 per cent in USD and 7 per cent in other currencies.
Earnings before tax increased by 12.0 per cent to SEK 889 (794) million. Net
profit grew by 13.5 per cent to SEK 667 (587) million.
Average capital employed excluding goodwill increased marginally from 30
September 2015 to SEK 969 (964) million. EBITA* in relation to average capital
employed excluding goodwill increased to 136 (118) per cent at 30 September
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 1,345 million from 31
December 2015 to SEK 3,295 million at 30 September 2016. The net debt/equity
ratio was 0.7 (0.6) at 30 September 2016 and net debt in relation to EBITDA* was
2.3 (1.8) times.
Cash flow from operating activities improved by 7.5 per cent to SEK 655 (610)
million in the first nine 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 -1,600 (-570) million, which was mainly attributable to
acquisitions.
GROUP PERFORMANCE IN THE THIRD QUARTER
Net sales increased by 11.4 per cent to SEK 2,128 (1,910) million, driven by
acquisitions. Acquisitions contributed 12.1 per cent, organically net sales
decreased by 0.2 per cent while changes in exchange rates had a negative impact
of 0.4 per cent. The weaker organic development in the third quarter relates to
lower net sales in the Sawmill Equipment division.
EBITA* increased by 12.6 per cent to SEK 316 (280) million and the EBITA margin*
improved by 0.5 percentage points to 15.2 (14.7) per cent. Acquisitions and
organic growth had a positive impact on EBITA*. Changes in exchange rates had a
negative impact on EBITA* of 0.3 percentage points. In the first nine months 41
per cent of EBITA* was generated in EUR, 26 per cent in SEK, 10 per cent in NOK,
6 per cent in DKK, 5 per cent in USD, 5 per cent in GBP and 7 per cent in other
currencies.
Earnings before tax increased by 8.0 per cent to SEK 277 (257) million. Net
profit grew by 9.5 per cent to SEK 208 (190) million.
Average capital employed excluding goodwill increased by SEK 16 million over the
three-month period, to SEK 969 million at 30 September 2016, compared with SEK
953 million at 30 June 2016. EBITA in relation to average capital employed
excluding goodwill improved by 1.0 percentage point from 30 June 2016. The
improvement was due chiefly to a higher profit and good control of capital
employed.
The Group’s net interest-bearing debt increased by SEK 437 million to SEK 3,295
million over the three-month period. The net debt/equity ratio remained
unchanged at 0.7. At the end of the period 45 per cent of the Group’s interest
-bearing liabilities were denominated in EUR.
Cash flow from operating activities decreased by 6.8 per cent to SEK 230 (248)
million during the three-month period. Cash flow from investing activities was
SEK -594 (-54) million, which was mainly attributable to acquisitions.
FINANCIAL PERFORMANCE – BUSINESS AREAS
Dental
NINE THIRD Rolling FULL
MONTHS QUARTER 12 YEAR
months
SEK 2016 2015 change 2016 2015 change change 2015
million
Net 2,576 2,513 2.5% 804 750 7.2% 3,499 1.9% 3,435
sales
EBITA* 472 450 5.0% 144 127 13.5% 636 3.6% 614
EBITA 18.3% 17.9% 0.4 17.9% 16.9 1.0 18.2% 0.3 17.9%
margin* %
The companies in the Dental business area are leading suppliers of consumables,
equipment and technical service for dentists across Europe and the business area
also has operations in the US. 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 as well as
material for bite registration, impressions and bonding sold to dentists through
distributors across the world.
Net sales in Dental increased by 2.5 per cent to SEK 2,576 (2,513) in the first
nine months of the year. Net sales were negatively affected by the sale of
NetDental at the end of the second quarter 2015 while the acquisitions of
Smilodent, Preventum Partner, Dens Esthetix, Praezimed and Parkell had a
positive impact on net sales for the nine-month period.
EBITA* improved by 5.0 per cent to SEK 472 (450) million in the first nine
months and the EBITA margin* increased to 18.3 (17.9) 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 nine months of the year there was no individual event
having a substantial impact on the earnings of the dental group as a whole.
In February Lifco consolidated 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. 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. In the third quarter the
acquisition of the US dental company Parkell was completed. The company produces
and sells dental consumables and smaller equipment used by dentists. The
products are sold mainly in the US but to some extent also internationally.
Parkell had a turnover of around USD 29 million in 2015. The company was
consolidated from September 2016.
Demolition & Tools
NINE THIRD Rolling FULL
MONTHS QUARTER 12 YEAR
months
SEK 2016 2015 change 2016 2015 change change 2015
million
Net 1,284 1,138 12.8% 431 379 13.8% 1,719 9.3% 1,574
sales
EBITA* 297 273 8.8% 104 89 16.6% 420 6.1% 396
EBITA 23.1% 24.0% -0.9 24.1% 23.5% 0.6 24.4% -0.7 25.1%
margin*
DDemolition & Tools develops, manufactures and sells equipment for the
construction and demolition industries. The Group is the world’s leading
supplier of demolition robots and crane attachments. The Group 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 nine months net sales increased by 12.8 per cent to SEK 1,284
(1,138) 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 nine months EBITA* increased by 8.8 per cent to SEK 297 (273)
million. The EBITA margin* was 23.1 (24.0) per cent, with the main negative
impact coming from the weakening of the British pound. 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
SEK 2016 2015 change 2016 2015 change change 2015
million
Net 2,692 2,129 26.4% 893 781 14.3% 3,455 19.5% 2,892
sales
EBITA* 296 204 44.9% 88 85 3.0% 355 34.8% 263
EBITA 11.0% 9.6% 1.4 9.8% 10.9% -1.1 10.3% 1.2 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 26.4 per cent to SEK 2,692 (2,129)
million and all divisions, with the exception of Sawmill Equipment, increased
their sales in the first nine months of the year.
EBITA* increased by 44.9 per cent to SEK 296 (204) million in the first nine
months of the year. All divisions, with the exception of Sawmill Equipment,
improved their results during the period and the EBITA margin* increased to 11.0
(9.6) 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 nine months of the year thanks to increased sales activities and an
improved product range, as well as an increased number of light trucks
registered in Europe.
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 company was consolidated from January 2016.
Environmental Technology performed well in the first nine months of the year. In
January Lifco acquired Redoma Recycling, 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 company was consolidated from March 2016.
In Sawmill Equipment net sales and earnings have declined over the past two
quarters following a strong first quarter. The decline is due to certain
problems in individual projects. After the end of the quarter Lifco has
concluded an agreement for the sale of AriVislanda AB and Renholmen AB in the
Sawmill Equipment division. Both companies sell equipment to sawmills and had a
combined turnover of SEK 153 million in 2015. The companies have 63 employees in
total.
Construction Materials (formerly Relining) had a good sales and earnings
performance during the nine-month period due to the acquisition of a majority
stake in Cenika of Norway at the beginning of the year. Cenika, which was
consolidated from 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. In August, Lifco announced that it had acquired Nordesign of
Norway, a supplier of LED lighting for the Scandinavia market. Nordesign
generated net sales of approximately NOK 64 million in 2015 and has 18
employees. The company was consolidated from September 2016.
ACQUISITIONS
In the first nine months 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
|
+-----------------------+-------------------+-----------------+---------+-------
--+
|September |Nordesign |Systems Solutions|NOK 64m |18
|
+-----------------------+-------------------+-----------------+---------+-------
--+
|September |Parkell |Dental |USD 29m |100
|
+-----------------------+-------------------+-----------------+---------+-------
--+
Further information on acquisitions is provided on page 16 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 third quarter was 3,662 (3,333) and the
number of employees at the end of the period was 3,663 (3,372). Acquisitions
added 340 employees.
Events after the end of the reporting period
After the end of the quarter Lifco has concluded agreements for the sale of
AriVislanda AB and Renholmen AB in the Sawmill Equipment division in the Systems
Solutions business area. Both companies sell equipment to sawmills and had a
combined turnover of SEK 153 million in 2015. The companies have 63 employees in
total. The companies are not significant to the Group’s or the Sawmill Equipment
division’s financial position and the sale will not have a significant impact on
Lifco’s financial position and performance in the current year. The companies’
net assets have been reclassified in the consolidated financial statements as
“Assets held for sale”.
Related-party transactions
No significant 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.
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 19-20 and a reconciliation with the financial statements is presented
on pages 21-22.
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, 25 October 2016
Carl Bennet Gabriel Danielsson Director Ulrika Dellby Director
Chairman of the
Board
Annika Espander Erik Gabrielson Director Annika Ulf Grunander
Jansson Norlund Director, employee Director Johan Stern Vice
Director Fredrik representative Chairman
Karlsson
President
and CEO, Director
Axel Wachtmeister Peter Wiberg Deputy
Director 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 2016 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, 25 October 2016
PricewaterhouseCoopers
Magnus Willfors
Martin Johansson
Auktoriserad revisor
Auktoriserad revisor
Huvudansvarig revisor
FINANCIAL CALENDAR 2017
The report for the fourth quarter and year-end report 2016 will be published at
noon on 15 February
The annual report for year 2016 will be published during the week of 3-7 April
The report for the first quarter will be published on 4 May
The Annual General Meeting will be held at 3 pm on 4 May at Bonnierhuset,
Torsgatan 21, Stockholm
The report for the second quarter will be published on 17 July
The report for the third quarter will be published on 26 October
ANNUAL GENERAL MEETING
The Annual General Meeting of Lifco AB will be held on Thursday 4 May 2017, at 3
pm, in Bonnierhuset, Torsgatan 21, Stockholm. Shareholders wishing to raise an
issue for discussion at the AGM on 4 May 2017 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 2 March 2017.
THE NOMINATION COMMITTEE
Prior to the Annual General Meeting 2017 the Nomination Committee consists of
Carl Bennet, Carl Bennet AB, Anna-Karin Celsing, representative of small
shareholders, Per Colleen, the Fourth Swedish National Pension Fund (AP4), Hans
Hedström, Carnegie Fonder, Marianne Nilsson, Swedbank Robur Fonder and Adam
Nyström, Didner & Gerge Fonder. Carl Bennet is chairman of the Nomination
Committee.
Shareholders wishing to submit proposals to the Nomination Committee for the
2017 AGM may do so by send an e-mail to ir@lifco.se or writing to: Lifco, Attn:
Valberedningen, 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: 25 October, 3 pm
Link to the presentation:
https://wonderland.videosync.fi/lifco-q3-report
-2016 (https://webmail.lifco.se/owa/redir.aspx?REF=FRJdX3je69oZ4MGyUtDwHcAkOvbT4
D
IhjWL9LTYAjvdIyxliefDTCAFodHRwczovL3dvbmRlcmxhbmQudmlkZW9zeW5jLmZpL2xpZmNvLXEzLX
J
lcG9ydC0yMDE2)
Call-in numbers:
Sweden: +46 8 566 426 93
UK: +44 203 008 98 01
US: +1 855 831 59 45
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. At year-end, the Lifco
Group consisted of 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.The information was submitted for |
|publication through the aforementioned contact person on |
|25 October 2016, at 1 pm. |
+-----------------------------------------------------------------------------+
CONDENSED CONSOLIDATED INCOME STATEMENT
NINE MONTHS THIRD QUARTER FULL YEAR
SEK million 2016 2015 change 2016 2015 change 2015
Net sales 6,552 5,780 13.4% 2,128 1,910 11.4% 7,901
Cost of goods sold -3,975 -3,592 10.7% -1,301 -1,209 7.7% -4,865
Gross profit 2,577 2,188 17.8% 827 701 17.9% 3,036
Selling expenses -592 -449 31.8% -197 -144 36.3% -625
Administrative -1,007 -868 16.1% -323 -271 19.1% -1,205
expenses
Development costs -65 -52 24.9% -20 -19 2.9% -73
Other income and -3 -11 -71.9% -7 -4 84.3% -26
expenses
Operating profit 910 808 12.7% 280 263 6.6% 1,107
Net financial items -21 -14 52.7% -3 -6 -47.2% -25
Profit before tax 889 794 12.0% 277 257 8.0% 1,082
Tax -222 -207 7.7% -69 -67 3.8% -257
Net profit for the 667 587 13.5% 208 190 9.5% 825
period
Profit attributable
to:
Parent Company 653 575 13.4% 202 183 10.0% 810
shareholders
Non-controlling 14 12 19.9% 6 7 -4.9% 15
interests
Earnings per share 7.18 6.33 13.4% 2.22 2.02 10.0% 8.91
before and after
dilution for the
period,
attributable to
Parent Company
shareholders
EBITA* 997 863 15.5% 316 280 12.6% 1,186
Depreciation of 69 60 14.7% 24 21 15.5% 81
tangible assets
Amortisation of 7 7 - 2 2 - 10
intangible assets
Amortisation of 83 46 79.2% 31 17 84.1% 66
intangible assets
arising from
acquisitions
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
NINE THIRD FULL YEAR
MONTHS QUARTER
SEK million 2016 2015 change 2016 2015 change 2015
Net profit for the 667 587 13.5% 208 190 9.5% 825
period
Other comprehensive
income
Items which can -5 - - -21 - - -
later be
reclassified
to profit or
loss:Hedge of net
investment
Translation 1600 -29- -643%- 974 29- 235%- -92-
differencesTax
related to
other comprehensive
income
Total comprehensive 822 558 47.3% 288 219 31.7% 733
income for the
period
Comprehensive -
income attributable
to:
Parent Company 804 546 47.1% 279 212 31.8% 720
shareholders
Non-controlling 18 12 56.6% 9 7 28.8%
interests 13
822 558 47.3% 288 219 31.7% 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.
NINE THIRD Rolling FULL
MONTHS QUARTER 12 YEAR
months
SEK 2016 2015 change 2016 2015 change change 2015
million
Dental 2,576 2,513 2.5% 804 750 7.2% 3,499 1.9% 3,435
Demolition 1,284 1,138 12.8% 431 379 13.8% 1,719 9.3% 1,574
& Tools
Systems 2,692 2,129 26.4% 893 781 14.3% 3,455 19.5% 2,892
Solutions
Group 6,552 5,780 13.4% 2,128 1,910 11.4% 8,673 9.8% 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:
NINE THIRD Rolling FULL
MONTHS QUARTER 12 YEAR
months
SEK million 2016 2015 change 2016 2015 change change 2015
Dental 472 450 5.0% 144 127 13.5% 636 3.6% 614
Demolition & 297 273 8.8% 104 89 16.6% 420 6.1% 396
Tools
Systems 296 204 44.9% 88 85 3.0% 355 34.8% 263
Solutions
Central Group -68 -64 7.2% -20 -21 -3.9% -92 5.2% -87
functions
EBITA before 997 863 15.5% 316 280 12.6% 1,319 11.3% 1,186
restructuring,
integration and
acquisition
costs
Restructuring, -4 -9 -56.5% -5 0 951% -8 -41.0% -13
integration and
acquisition
costs
EBITA 993 854 16.3% 311 280 11.3% 1,311 11.9% 1,173
Amortisation of -83 -46 79.2% -31 -17 84.1% -102 56.0% -66
intangible
assets arising
from
acquisitions
Net financial -21 -14 52.7% -3 -6 47.2% -32 28.4% -25
items
Profit before 889 794 12.0% 277 257 8.0% 1,177 8.8% 1,082
tax
CONDENSED CONSOLIDATED BALANCE SHEET
SEK million 30 Sep 2016 30 Sep 2015 31 Dec 2015
ASSETS
Intangible assets 6,756 5,050 5,010
Tangible fixed assets 459 423 417
Financial assets 105 60 87
Inventories 1,163 998 960
Accounts receivable - trade 1,119 929 863
Current receivables 354 341 257
Cash and cash equivalents 410 645 464
Assets held for sale 26 - -
TOTAL ASSETS 10,392 8,446 8,058
EQUITY AND LIABILITIES
Equity 4,516 3,795 3,964
Non-current interest-bearing 1,121 1,137 1,103
liabilities incl. pension
provisions
Other non-current liabilities 518 323 371
and provisions
Current interest-bearing 2,600 1,777 1,341
liabilities
Accounts payable - trade 528 438 370
Other current liabilities 1,109 976 909
TOTAL EQUITY AND LIABILITIES 10,392 8,446 8,058
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to Parent Company shareholders
SEK million 30 Sep 2016 30 Sep 2015 31 Dec 2015
Opening equity 3,939 3,455 3,455
Comprehensive income for the period 804 546 720
Dividend -273 -236 -236
Closing equity 4,470 3,765 3,939
Equity attributable to:
Parent Company shareholders 4,470 3765 3,939
Non-controlling interests 46 30 25
4,516 3,795 3,964
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
NINE THIRD FULL
MONTHS QUARTER YEAR
SEK million 2016 2015 2016 2015 2015
Operating
activities
Operating 910 808 280 263 1,107
profit
Non-cash 132 113 44 40 157
items
Interest and -21 -14 -3 -6 -25
financial
items, net
Tax paid -232 -183 -67 -50 -239
Cash flow 789 724 254 247 1,000
before
changes in
working
capital
Changes in
working
capital
Inventories -60 -75 1 -13 -59
Current -118 -223 -13 -39 -113
receivables
Current 44 184 -12 53 120
liabilities
Cash flow 655 610 230 248 948
from
operating
activities
Business -1,517 -498 -569 -38 -573
acquisitions
and sales,
net
Net -80 -64 -24 -19 -82
investment
in tangible
fixed assets
Net -3 -8 -1 3 -9
investment
in
intangible
assets
Cash flow -1,600 -570 -594 -54 -664
from
investing
activities
Borrowings/re 1,174 319 356 -82 -88
payment of
borrowings,
net
Dividends -283 -245 -3 - -252
paid
Cash flow 891 74 353 -82 -340
from
financing
activities
Cash flow -54 114 -11 112 -56
for the
period
Cash and 464 536 429 537 536
cash
equivalents
at beginning
of period
Cash and -24 - -24 - -
cash
equivalents
in
operations
held for
sale
Translation 24 -5 16 -4 -16
differences
Cash and 410 645 410 645 464
cash
equivalents
at end of
period
ACQUISITIONS IN 2016
In the first nine months of the year nine new businesses were consolidated and
are included in the preliminary purchase price allocation. The acquisitions
refer to all shares of Auto-Maskin, Praezimed, TMC/Nessco and Parkell as well as
a majority stakes in Cenika and Nordesign. 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 nine months of the year.
Acquisition-related expenses of SEK 17 million are included in administrative
expenses in the consolidated income statement for the first nine months of 2016.
If the businesses had been consolidated from 1 January 2016 consolidated net
sales would have increased by around SEK 306 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 4 914 918
relationships,
licences
Tangible assets 29 - 29
Trade and other 360 -17 343
receivables
Trade and other -227 -139 -366
payables
Cash and cash 139 - 139
equivalents
Net assets 305 758 1,063
Goodwill 634 634
Total net assets 305 1,392 1,697
Effect on cash flow,
SEK million
Consideration 1,697
of which -42
considerations not
paid
Cash and cash -139
equivalents in the
acquired companies
Consideration paid 1
relating to
acquisitions from
previous yearsk
Total cash flow effect 1,517
FINANCIAL INSTRUMENTS
CARRYING AMOUNT FAIR VALUE
SEK million 30 Sep 2016 30 Sep 2015 30 Sep 2016 30 Sep 2015
Loans and receivables
Accounts receivable - 1,119 929 1,119 929
trade
Other non-current 3 6 3 6
financial receivables
Cash and cash 410 645 410 645
equivalents
Total 1,532 1,580 1,532 1,580
Liabilities at fair
value through profit or
loss
Other liabilities 16 - 16 -
Other financial
liabilities
Interest-bearing 3,672 2,842 3,672 2,842
borrowings
Accounts payable - 528- 43830 528- 43830
tradeOther liabilities
Total 4,216 3,310 4,216 3,310
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 profit or loss.
CONDENSED PARENT COMPANY INCOME STATEMENT
NINE MONTHS THIRD QUARTER FULL YEAR
SEK million 2016 2015 2016 2015 2015
Administrative expenses -79 -74 -24 -24 -104
Other operating income* 40 - - - 84
Operating profit -39 -74 -24 -24 -20
Net financial items** 376 277 -18 14 307
Profit after financial items 337 203 -42 -10 287
Appropriations - - - - -12
Tax 28 5 17 4 -8
Net profit for the period 365 208 -25 -6 267
* Preliminary invoicing of Group-wide services.
** Net financial items include received dividends of SEK 407 (227) million
during the nine-month period.
CONDENSED PARENT COMPANY BALANCE SHEET
SEK million 30 Sep 2016 31 Dec 2015
ASSETS
Tangible fixed assets 0 0
Financial assets 4,243 3,369
Current receivables 2,819 2,223
Cash and cash equivalents 210 307
TOTAL ASSETS 7,272 5,899
EQUITY AND LIABILITIES
Equity 2,278 2,186
Untaxed reserves 32 32
Provisions - 4
Non-current interest-bearing liabilities 1,088 1,031
Current interest-bearing liabilities 2,573 1,330
Current non-interest-bearing liabilities 1,301 1,316
TOTAL EQUITY AND LIABILITIES 7,272 5,899
Pledged assets - -
Contingent liabilities 42 92
INTERIM REPORT JANUARY – SEPTEMBER 2016
| Source: Lifco AB
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