Other Financial information
Profitability, financial position and cash flow
The return on equity at the end of the period was 28 percent (22), and return on capital employed was 23 percent (17). Return on working capital P/WC (EBITA in relation to working capital) amounted to 53 percent (47).
At the end of the period the equity ratio amounted to 39 percent (40). Equity per share, excluding non-controlling interest, totalled SEK 27.40 (24.05). The Group's net debt at the end of the period amounted to SEK 945 million (652), excluding pension liabilities of SEK 218 million (200). The net debt/equity ratio, calculated on the basis of net debt excluding provisions for pensions, amounted to 0.5 (0.4).
Cash and cash equivalents consisting of cash and bank equivalents and approved but non-utilised credit facilities amounted to SEK 721 million (735) at 30 June 2017.
Cash flow from operating activities amounted to SEK 85 million (104) during the period. Company acquisitions and disposals including settlement of contingent consideration regarding acquisitions implemented in previous years amounted to SEK 172 million (75). Investments in non-current assets totalled SEK 9 million (10) and disposal of non-current assets amounted to SEK 1 million (1). Dividend from associated company amounted to SEK 3 million (3). Repurchase of call options amounted to SEK 0 million (6) and the exercise of call options amounted to SEK 18 million (0).
Employees
At the end of the period, the number of employees was 2,254, compared to 2,176 at the beginning of the financial year. During the period, completed acquisitions and disposal resulted in a net increase of the number of employees by 84. The average number of employees in the latest 12-month period was 2,170.
Ownership structure
At the end of the period the share capital amounted to 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 | 1,161,002 | 1.7 | 1.2 | |
| Total number of shares after repurchases | 67,037,494 |
Addtech has three outstanding call option programmes for a total of 1,161,000 shares. Call options issued on repurchased shares entail a dilution effect of about 0.2 percent during the latest 12-month period. Addtech’s own shareholdings fully 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 |
|---|---|---|---|---|---|---|
| 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 | 350,000 | 430,500 | 0.6% | 116.70 | 94.50 | 17 Sep 2017 - 1 Jun 2018 |
Acquisitions and disposal
On 3 April 2017, Dovitech A/S, Denmark, was acquired to become part of the Components business area. Dovitech delivers inductive special solutions as well as electromechanical- and automation products. The company has sales of around DKK 80 million and five employees.
On 6 April 2017, Craig & Derricott Holdings Ltd, Great Britain, was acquired to become part of the Power Solutions business area. Craig & Derricott is engaged in design, manufacturing and marketing of low voltage electrical control equipment and switchgear for the UK market and export markets. The company has sales of about GBP 10 million and 90 employees.
On 2 June 2017, Altitech A/S, Denmark, was acquired to become part of the Components business area. Altitech is a technology trading company that supplies specially made stands for machines and protectors as well as automation solutions to Danish industrial companies. The company has sales of about DKK 10 million and five employees. The operation will be included in an existing company.
On 12 June 2017, Batteriunion i Järfälla AB, which was part of the Power Solutions business area, was sold. The company has annual sales of about SEK 140 million and 16 employees.
Acquisitions and disposals (information in parentheses) completed as of the 2016/2017 financial year are distributed among the Group’s business areas as follows:
| Acquisitions (disposals) | Time | 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) |
| * Refers to assessed condition at the time of acquisition and disposal, respectively, on a full-year basis. | ||||
If all the acquisitions had been completed on 1 April 2017, their impact would have been an estimated SEK 61 million on Group net sales, about SEK 6 million on operating profit and about SEK 4 million on profit after tax for the period.
The amount of contingent consideration depends on future results achieved in the companies. The estimated outcome for the year's acquisitions amounts to SEK 62 million, which is due for payment within one to two years. The amounts are estimated to be able to reach a maximum total of SEK 72 million. Of the contingent consideration not yet paid for acquisitions during the period, the discounted value amounts to SEK 57 million.
Transaction costs for acquisitions that resulted in an ownership transfer during the period, amounted to SEK 3 million (5) and are reported under Selling expenses.
During the period contingent consideration was net revalued to SEK 1 million (5). The impact on profits are reported under 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 period:
| Carrying amount at acquisition date | Adjustment to fair value | Fair value | |
|---|---|---|---|
| Intangible non-current assets | 0 | 108 | 108 |
| Other non-current assets | 4 | - | 4 |
| Inventories | 24 | - | 24 |
| Other current assets | 58 | - | 58 |
| Deferred tax liability/tax asset | 0 | -20 | -20 |
| Other liabilities | -67 | -8 | -75 |
| Acquired net assets | 19 | 80 | 99 |
| Goodwill | 104 | ||
| Non-controlling interests | - | ||
| Consideration 1) | 203 | ||
| Less: cash and cash equivalents in acquired businesses | -5 | ||
| Less: consideration not yet paid | -59 | ||
| Effect on the Group’s cash and cash equivalents | 139 | ||
| 1) The consideration is stated excluding acquisition expenses. | |||
Parent Company
Parent Company net sales amounted to SEK 14 million (13) and profit after financial items was SEK 1 million (-5). Net investments in non-current assets were SEK 0 million (0). The Parent Company's net financial asset was SEK 245 million (176) 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 2017/2018 financial year have had no material effect on the Group's financial reports. New IFRS standards will come into force in the 2018/2019 financial year. For more information, see Note 1 Accounting and valuation policies in the annual report for 2016/2017. 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.
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 15.
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.
Significant events after the end of the period
No other events of significance to the Group occurred after the end of the reporting period.
Stockholm, 14 July 2017
Johan Sjö
President and CEO
This report has not been subject to review by the company's auditor.
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 8.30 a.m CET on 14 July 2017. Financial calender2017-08-31 The Annual General Meeting 2017 For further information, please contact:Johan Sjö, CEO and President, +46 8 470 49 00 |