Interim report fourth quarter and year-end report 2015

2016-02-16

Fourth quarter

Continued strong growth

  • Order intake rose 20% to SEK 3,086 million (2,579). The increase for comparable units was 8%.
  • Net sales rose 21% to SEK 3,219 million (2,654). The increase for comparable units was 9%.
  • Operating profit before amortisation of intangible non-current assets attributable to acquisitions (EBITA) rose 19% to SEK 398 million (334), corresponding to an EBITA margin of 12.4% (12.6%).
  • Profit after tax rose 17% to SEK 258 million (220).
  • Earnings per share grew 17% to SEK 6.43 (5.50).
  • Cash flow from operating activities was SEK 493 million (378).

1 January – 31 December

  • Order intake rose 19% to SEK 11,939 million (10,000). The increase for comparable units was 4%.
  • Net sales rose 22% to SEK 11,881 million (9,746). The increase for comparable units was 7%.
  • Operating profit before amortisation of intangible non-current assets attributable to acquisitions (EBITA) rose 26% to SEK 1,427 million (1,134), corresponding to an EBITA margin of 12.0% (11.6%)
  • Profit after tax rose 27% to SEK 894 million (703).
  • Earnings per share grew 27% to SEK 22.33 (17.60).
  • Cash flow from operating activities was SEK 1,076 million (904).
  • The Board of Directors proposes a dividend of SEK 9.00 (7.75) per share for 2015.
  • The Board of Directors proposes a 2-for-1 bonus issue.

CEO´s message

With a strong final quarter, Indutrade can sum up a successful year in 2015. In a time of challenging market conditions, we continue to generate profitable growth through the acquisition and development of stable and profitable companies in selected niches – what we call the Indutrade model.

In a turbulent market in which demand has varied sharply between markets, customers, segments and countries, we have now reached a new level of order intake and invoicing, approaching SEK 12 billion for the full year. The Group’s mix of companies with an international base, together with the long-term work on increasing the share of proprietary products, has strengthened our ability to adapt to changed market conditions.

Demand in the most important countries for Indutrade was again mixed – growth in Sweden and Benelux countered continued weak performance in Finland. In the UK, growth has remained favourable, even though a slight slowing was noted during the final months of the year. For other countries, performance on an annual basis has been relatively stable.

For most industrial segments, demand improved somewhat compared with the preceding year, although exceptions could be found in certain sub-segments, such as the oil and gas industry, and the marine sector. In the energy segment, order intake and invoicing related to valves for power generation were very strong during the year.

All of our business areas posted higher earnings than a year ago, and the EBITA margin for the Group as a whole improved to 12.0% (11.6%).

Fourth quarter

Overall the fourth quarter was Indutrade’s best quarter historically, with both sales and earnings reaching new, record highs. Sales increased by 21%, the EBITA margin was 12.4% (12.6%), pre-tax earnings rose 19%, and earnings per share grew by 17%.

Both order intake and invoicing related to valves for power generation in the energy segment were strong during the quarter, and the order book is at a continued high level. All in all, the companies in our business areas showed stable, positive development in order intake, invoicing and earnings, even though Engineering & Equipment, whose operations are all in Finland,continues to struggle with a challenging market situation.

All of the business areas reported higher earnings, and for three of the six business areas, the EBITA margin also improved.

Acquisitions

A total of 13 acquisitions, with possession taking place in 2015, were carried out during the year. After the end of the quarter an additional acquisition was carried out, in January 2016. Annual sales of these 14 companies in total amount to nearly SEK 1.2 billion.

We find that the Indutrade model continues to attract owners who are considering selling their companies, and thus the conditions for continued acquisitions in and outside the Nordic region are very favourable.

Outlook

My view is that the market volatility will continue, which puts high demands on our companies’ ability to adapt to the prevailing opportunities and challenges. Our decentralised business model, in which the managements of our 200 companies can make quick decisions in close proximity to their operations, inspires commitment and responsibility. This Indutrade model creates good conditions for continued profitable growth.

Johnny Alvarsson, President and CEO

This report will be commented upon as follows:

  • Through a conference call/webcast today at 3 p.m. (CET) under the following link:
    http://event.onlineseminarsolutions.com/r.htm?e=1121938&s=1&k=244E9591AD8DAE305FF94E7362408696
    To participate, call
    SE: +46 8 566 426 66, UK: +44 203 008 98 13 or
    US: +1 855 831 59 46
  • Through a videotaped version available under the following link:
    http://www.indutrade.se

For further information, please contact: Johnny Alvarsson, President and CEO: 46 70 589 17 95

About Indutrade
Indutrade markets and sells components, systems and services with a high-tech content within selected niches. Indutrade’s business is distinguished by high-tech products for recurring needs, growth through a structured and tried-and tested acquisition strategy and a decentralised organisation characterised by an entrepreneurial spirit.

The Group is organised into six business areas: Engineering & Equipment, Flow Technology, Fluids & Mechanical Solutions, Industrial Components, Measurement & Sensor Technology and Special Products. Indutrade’s sales totalled SEK 11,881 million in 2015, generating operating income of SEK 1,427 million before depreciation of intangible assets. Indutrade is listed on the Nasdaq Stockholm.

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