Other Financial information
Profitability, financial position and cash flow
The return on equity at the end of the financial year was 28 percent (28), and return on capital employed was 22 percent (23). Return on working capital P/WC (EBITA in relation to working capital) amounted to 53 percent (53).
At the end of the financial year the equity ratio amounted to 39 percent (39). Equity per share, excluding non-controlling interest, totalled SEK 31.10 (25.45). The Group's net debt at the end of the year amounted to SEK 1,176 million (801), excluding pension liabilities of SEK 229 million (210). The net debt/equity ratio, calculated on the basis of net debt excluding provisions for pensions, amounted to 0.6 (0.5).
Cash and cash equivalents consisting of cash and bank equivalents and approved but non-utilised credit facilities amounted to SEK 573 million (818) at 31 March 2018.
Cash flow from operating activities amounted to SEK 539 million (551) during the financial year. Changes in working capital consist mainly of higher accounts receivable. Company acquisitions and disposals including settlement of contingent consideration regarding acquisitions implemented in previous years amounted to SEK 477 million (335). Investments in non-current assets totalled SEK 54 million (68) and disposal of non-current assets amounted to SEK 7 million (5). Dividend from associated company amounted to SEK 4 million (3). Repurchase of treasury shares amounted to SEK 31 million (40) and repurchase of call options amounted to SEK 5 million (6). Exercised and issued call options totalled SEK 36 million (18). Dividends paid to the shareholders of the Parent Company totalled SEK 235 million (218), corresponding to SEK 3.50 (3.25) per share.
Employees
At the end of the financial year, the number of employees was 2,358, compared to 2,176 at the beginning of the financial year. During the financial year, implemented acquisitions and the disposal increased the number of employees by 155. The average number of employees in the latest 12-month period was 2,283.
Ownership structure
At the end of the financial year the share capital stood at SEK 51.1 million.
| Class of shares | Number of shares | Number of votes | Percentage of capital | Percentage of votes |
|---|---|---|---|---|
| Class A shares, 10 votes per share | 3,229,500 | 32,295,000 | 4.7 | 33.2 |
| Class B shares, 1 vote per share | 64,968,996 | 64,968,996 | 95.3 | 66.8 |
| Total number of shares before repurchases | 68,198,496 | 97,263,996 | 100.0 | 100.0 |
| Of which repurchased class B shares | 1,206,145 | 1.8 | 1.2 | |
| Total number of shares after repurchases | 66,992,351 |
Addtech has four outstanding call option programmes, se table below. Call options issued on repurchased shares entail a dilution effect of about 0.3 percent during the latest 12-month period. Addtech's own shareholdings are estimated to meet the needs of the outstanding call option programmes.
| Outstanding programme | Number of options | Corresponding number of shares | Proportion of total shares | Initial exercise price | Adjusted exercise price | Expiration period |
|---|---|---|---|---|---|---|
| 2017/2021 | 300,000 | 300,000 | 0.4% | 178.50 | - | 14 Sep 2020 - 4 Jun 2021 |
| 2016/2020 | 300,000 | 300,000 | 0.4% | 159.00 | - | 16 Sep 2019 - 5 Jun 2020 |
| 2015/2019 | 350,000 | 430,500 | 0.6% | 154.50 | 125.10 | 17 Sep 2018 - 3 Jun 2019 |
| 2014/2018 | 178,600 | 219,678 | 0.3% | 116.70 | 94.50 | 17 Sep 2017 - 1 Jun 2018 |
| Total | 1,128,600 | 1,250,178 |
Acquisitions
During the period 1 April to 31 December 2017, the following acquisitions have been completed; Dovitech A/S, Altitech A/S, Ingenjörsfirma Pulsteknik AB, Sensor ECS A/S, Fintronic Oy and STIGAB Stig Ödlund AB to become part of the Components business area and Craig & Derricott Holdings Ltd and the Mobile Control Systems Companies to become part of the Power Solutions business area. The Group has also sold Batteriunion i Järfälla AB, formerly part of the Power Solutions Business Area.
On 2 January 2018, Finn-Jiit Oy, Finland, was acquired to become part of the Components business area. Finn-Jiit delivers customised subsystems in the field of machine components and flow technology. The business is mainly focused on the Nordic OEM market. The company has sales of around EUR 4 million, and ten employees.
On 2 January 2018, 2 Wave Systems AB, Sweden, was acquired to become part of the Components business area. 2 Wave Systems offers fibre and copper testing tools, and primarily has installation and telecom companies and network owners as customers. The company has sales of around SEK 16 million, and two employees. The operations will become part of an existing company.
On 3 January 2018, IPAS AS, Norway, was acquired to become part of the Energy business area. IPAS is a well established supplier of products and solutions within professional lighting in Norway. The company is established in the segments industrial lighting, outdoor lighting and indoor lighting. The products are sold to installers, wholesalers, industry and municipalities. The company has sales of around NOK 40 million, and ten employees.
| Acquisitions (disposals) | Closing | Net sales, SEKm* | Number of employees* | Business Area |
|---|---|---|---|---|
| Sammet Dampers Oy, Finland | April, 2016 | 45 | 12 | Industrial Process |
| Poryan China Company Ltd, China | April, 2016 | 50 | 22 | Power Solutions |
| E.T.S. Portsmouth Ltd, Great Britain | April, 2016 | 100 | 35 | Energy |
| Elektro-Tukku Oy, Finland | May, 2016 | 8 | 3 | Components |
| Penlink AB, Sweden | October, 2016 | 25 | 5 | Components |
| Itek AS, Norway | November, 2016 | 65 | 13 | Industrial Process |
| Carmac Inc (assets and liabilities), USA | December. 2016 | 10 | 2 | Power Solutions |
| Sensor Companies, Sweden | January, 2017 | 160 | 30 | Components |
| Vallentin Elektronik A/S, Denmark | January, 2017 | 20 | 4 | Components |
| EX-Tekniikka Oy, Finland | March, 2017 | 20 | 3 | Components |
| Dovitech A/S, Denmark | April, 2017 | 100 | 5 | Components |
| Craig & Derricott Holdings Ltd, Great Britain | April, 2017 | 110 | 90 | Power Solutions |
| Altitech A/S, Denmark | June, 2017 | 15 | 5 | Components |
| (Batteriunion i Järfälla AB, Sweden) | (June, 2017) | (140) | (16) | (Power Solutions) |
| Mobile Control Systems Companies, Belgium | October, 2017 | 50 | 17 | Power Solutions |
| Ingenjörsfirma Pulsteknik AB, Sweden | November, 2017 | 50 | 10 | Components |
| Sensor ECS A/S, Denmark | November, 2017 | 155 | 9 | Components |
| Fintronic Oy (assets and liabilities), Finland | December, 2017 | 7 | 1 | Components |
| STIGAB Stig Ödlund AB, Sweden | December, 2017 | 115 | 12 | Components |
| Finn-Jiit Oy, Finland | January, 2018 | 40 | 10 | Components |
| 2 Wave Systems AB, Sweden | January, 2018 | 16 | 2 | Components |
| IPAS AS, Norway | January, 2018 | 40 | 10 | Energy |
| Synthecs Group, Netherlands | April, 2018 | 145 | 50 | Components |
| Xi Instrument AB, Sweden | April, 2018 | 13 | 2 | Energy |
| KRV AS, Norway | April, 2018 | 55 | 27 | Industrial Process |
| Scanwill Fluid Power ApS, & Willtech ApS, Denmark | April, 2018 | 15 | 4 | Components |
| * Refers to assessed condition at the time of acquisition and disposal, respectively, on a full-year basis. | ||||
If all acquisitions during the financial year had been completed on 1 April 2017, their impact would have been an estimated SEK 700 million on Group net sales, about SEK 62 million on operating profit and about SEK 47 million on profit after tax for the period.
Addtech normally employs an acquisition structure comprising basic purchase consideration and contingent purchase consideration. The outcome of contingent purchase considerations is determined by the future results achieved in the companies and is subject to a set maximum level. Of considerations not yet paid for acquisitions during the period, the discounted value amounts to SEK 149 million. The contingent purchase considerations fall due for payment within three years and the outcome is subject to a maximum of SEK 182 million. If the conditions are not fulfilled, the outcome may fall within the range of SEK 0-182 million.
For acquisitions that resulted in an ownership transfer during the financial year, transaction costs totalled SEK 6 million (7) and are reported under selling expenses.
During the financial year contingent consideration was net revalued to SEK 9 million (12). The impact on profits is recognised in other operating income and other operating expenses, respectively.
According to the preliminary acquisitions analyses, the assets and liabilities included in the acquisitions were as follows, during the year:
| SEK, m | Carrying amount at acquisition date | Adjustment to fair value | Fair value |
|---|---|---|---|
| Intangible non-current assets | 0 | 323 | 323 |
| Other non-current assets | 10 | - | 10 |
| Inventories | 67 | - | 67 |
| Other current assets | 198 | - | 198 |
| Deferred tax liability/tax asset | -1 | -69 | -70 |
| Other liabilities | -166 | -8 | -174 |
| Acquired net assets | 108 | 246 | 354 |
| Goodwill | 314 | ||
| Non-controlling interests | - | ||
| Consideration 1) | 668 | ||
| Less: cash and cash equivalents in acquired businesses | -50 | ||
| Less: consideration not yet paid | -170 | ||
| Effect on the Group’s cash and cash equivalents | 448 | ||
| 1) The consideration is stated excluding acquisition expenses. | |||
Parent Company
Parent Company net sales amounted to SEK 58 million (54) and profit after financial items was SEK 247 million (312). Net investments in non-current assets were SEK 0 million (0). The Parent Company's net financial liabilities was SEK 69 million (88) at the end of the period.
Other Disclosures
Accounting policies
This interim report was prepared as per International Financial Reporting Standards (IFRS) and IAS 34 Interim Financial Reporting. The accounting policies and basis for calculations applied in the latest annual report were also used here. The interim report for the parent company was prepared in accordance with the Swedish Annual Accounts Act and the Securities Market Act, in compliance with recommendation RFR 2 Accounting for Legal Entites, of the Swedish Financial Reporting Board. The new and revised IFRS standards and IFRIC interpretations that come into force as of the 2016/2017 financial year have had no material effect on the Group's financial reports. Disclosure in accordance with IAS 34.16A is presented both in the financial statements and related notes, as well as in other parts of the interim report.
The new and revised IFRSs or IFRIC interpretations that are applicable as of the 2017/2018 financial year have not had any material impact on the Group’s financial statements. Preparations for the new IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers standards, have been made. Our view is that ultimately these standards will not have any material impact on the Group’s financial performance and position at adoption on 1 April 2018.
Alternative perfomance measures
The Company presents certain financial measures in the interim report that are not defined according to IFRS. The Company believes that these measures provide valuable supplemental information to investors and the Company's management as they allow for evaluation of trends and the Company's performance. Since all companies do not calculate financial measures in the same way, they are not always comparable to measures used by other companies. These financial measures should therefore not be considered to be a replacement for measurements as defined under IFRS. For definitions of the performance measures that Addtech uses, please see page 19.
Risks and factors of uncertainty
Addtech's profit and financial position, as well as its strategic position, are affected by a number of internal factors under Addtech's control and by a number of external factors over which Addtech has limited influence. The most important risk factors for Addtech are the state of the economy, combined with structural change and the competitive situation. Risk and uncertainty factors are the same as in previous periods, please see section Risks and uncertainties (page 22-25) in the annual report for 2016/2017 for further details. The Parent Company is indirectly affected by the above risks and uncertainty factors due to its role in the organisation.
Transactions with related parties
No transactions between Addtech and related parties that have significantly affected the Group's position and earnings have taken place during the period.
Seasonal effects
Addtech's sales of high-tech products and solutions in the manufacturing industry and infrastructure are not subject to major seasonal variations. The number of production days and customers' demand and willingness to invest can vary over the quarters.
Annual report 2017/2018
The annual report for 2017/2018 will be published on Addtech’s website www.addtech.com in July 2018. A printed version will be distributed to the shareholders who request this.
Annual General Meeting 2018
The Annual General Meeting (AGM) of Addtech AB will take place at 4:00 p.m on Thursday 30 August 2018 at IVA at the address Grev Turegatan 16 in Stockholm. A notice of the AGM will be published in July 2018 and will also be available on www.addtech.com.
The Board of Directors proposes dividend of SEK 4.00 (3.50) per share, which corresponds to a dividend payment of about SEK 268 million (235), which is in line with Addtech's dividend policy with the objective of a dividend that exceeds 30 percent of average Group profit after tax over a business cycle.
Significant events after the end of the period
On 3 April 2018, Synthecs Group, Netherlands, was acquired to become part of the Components business area. The group provides automation components and systems in the field of sensors, machine vision, industrial PC' s, Plc's etc. to the industrial sector in the Benelux. The company has sales of around EUR 14 million and 50 employees.
On 3 April 2018, Addtech acquired Xi Instrument AB, Sweden, to become part of the Energy Business Area. Xi Instrument imports electronic devices primarily for use in equipment for locating underground utilities. The company has sales of about SEK 13 million and two employees.
On 9 April 2018, KRV AS, Norway, was acquired to become part of the Industrial Process business area. KRV is a leading supplier and installer of sprinkler systems in Norway. The company has sales of about NOK 50 million and 27 employees.
On 9 April 2018, Scanwill Fluid Power ApS and Willtech ApS, Denmark, were acquired to become part of the Components Business Area. ScanWill designs and manufactures hydraulic pressure boosters, while Willtech produces expansion plugs for permanently sealing drilled holes in metal. The companies are being merged under the name of ScanWill and have sales of about DKK 13 million. The companies have four employees.
Stockholm, 15 May 2018
Johan Sjö
President and CEO
FURTHER INFORMATION |
PublicationThis information is information that Addtech AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out below, at 8.15 a.m CET on 15 May 2018. Future informationJuly 2018 Annual report 2017/2018 For further information, please contact:Johan Sjö, CEO and President, +46 8 470 49 00 |