1 April 2012 - 31 March 2013
The Board of Directors and the CEO of Addtech AB, company ID number 556302-9726, hereby submit the annual accounts and consolidated financial statements for the 2012/2013 financial year.
Market trend during the year
The business climate on many of the Group's markets was hesitant and uneven during the year. Demand varied between the months, but on the whole sales and profit for comparable units fell for the full year. Including the sales and profit contribution from the acquired companies, the Group's net sales increased by a total of 4 percent. Operating profit fell slightly from the previous year, however. During the course of the year, the market was fragmented, with business climate variations between different geographic markets, customer segments and product niches. In particular, sales to customers in the vehicle, paper and pulp, and engineering industries fell during the financial year. The Group's operations focusing on medical technology and energy-related market segments, and on Nordic healthcare, continued to perform well. In the production components market for Nordic manufacturing companies, the operations in Sweden and Denmark in particular were affected by a weaker business climate during the year. The Group's operations in Norway and Finland, and on non-Nordic markets, generally performed more strongly during the year.
Performance by quarter
- First quarter. The financial year started with relatively stable demand, despite the unease prevailing on many of the Group's markets. On the whole, the Group did not show any underlying growth in the quarter, and the 8 percent sales increase was mainly attributable to acquisitions. The market was fragmented, and the business climate varied between different geographic markets, customer segments and product niches. Demand in many product and market areas remained stable, but the market for production components from Nordic manufacturing companies featured greater caution. The Industrial Solutions business area in particular was affected by customer restraint during the quarter. For the Components business area, demand was relatively stable, but the trend was fragmented between the different geographic markets. The Energy and Life Science business areas enjoyed robust demand despite a more hesitant market in individual niches.
- Second quarter. In the second quarter, sales fell by 2 percent. There was a drop in production component sales to several of the Group's manufacturing customers. We saw greater caution among customers, resulting in delayed delivery plans. The Group's sales for comparable units declined in the quarter, while the contribution of acquired companies to sales and profit was as expected. The market was unchanged from the first quarter, with business climate variations between different geographic markets, customer segments and product niches. Both the Components and Industrial Solutions business areas experienced sustained subdued demand from Nordic manufacturing companies, particularly in the vehicle and engineering industry segments during the quarter. Demand was relatively stable for the Energy business area, although greater customer caution was noted here too, with delays in deliveries in certain segments. For the Life Science business area, demand remained robust for both diagnostic equipment and measuring and analysis instruments for the Nordic process industry.
- Third quarter. The unease prevailing on most of the Group's markets in the first two quarters continued into the third quarter. Sales increased by 2 percent. Demand varied between the months, but on the whole sales for comparable units fell in the quarter. In particular, sales of production components for manufacturing customers in the vehicle, paper and pulp and engineering industry fell. Several customers in manufacturing chose to shut down their production for a longer period in December this year than in previous years. During the quarter, the Group initiated activities to address the cost and working capital situation in the operations experiencing a poorer business climate. Sustained market weakness affected the Components operations, chiefly in Sweden and Denmark. For Industrial Solutions, the weakening trend seen in previous quarters continued into the third quarter and was noted in more market segments than before. New projects were delayed and demand for electromechanical components declined from several large customers in the special vehicles industry. The operations of the Energy business area showed overall stable demand, with many operations being affected by a weaker market, while others continued to enjoy a positive business climate. The robust demand for Life Science continued for diagnostic equipment and reagents.
- Fourth quarter. In the final quarter of the year, net sales rose by 7 percent. Comparable units fell by 2 percent and acquired growth totalled 11 percent. In the fourth quarter, the business climate in certain areas stabilised slightly and the decrease for comparable units was lower in the fourth quarter than in the second and third quarters. During the quarter, work continued on measures to adapt costs and working capital in selected operations. On the whole, the adaptations affected around 100 employees. For the Components and Industrial Solutions business areas, demand was relatively weak, chiefly from Nordic manufacturing companies in the vehicle and engineering industry segments. On the whole, the Energy business area enjoyed sound business activity in the quarter, although we noted variations between the different operations here too. Demand remained solid mainly for niche products in electrical power distribution. Life Science ended the year on a strong note, recording its highest ever sales. The sales and profit growth was generated both by its own operations and successful acquisitions. The market remained upbeat for diagnostic equipment. Sales of measuring and analysis instruments to the Nordic process industry were slightly weaker in the quarter due to shifts in deliveries in certain projects, while the sale of laboratory equipment ended on a strong note with several substantial instrument sales.
Key events during the year
To sum up, the 2012/2013 financial year featured a hesitant and uneven business climate with major variations between the months. The market is fragmented, with business climate variations between different geographic markets, customer segments and product niches. Focus during the year has been on enhancing the various operations and carrying out acquisitions in selected segments and niches. Eight companies were acquired in three of our business areas. The acquired companies have performed well, making a positive contribution to both sales and profit, and compensating for the overall weaker organic trend. During the year the Group has worked more actively on measures that affect the cost and working capital situation of the operations that are experiencing a less favourable business climate. The activities continue, and on the whole the adjustments have affected around 100 employees so far.
Financially, the Group's position was strong during the year. The equity/assets ratio remains high, and the net debt/equity ratio is low. The Group's profitability measured as P/WC came down from 53 percent to 45 percent during the year. The measures being taken in the various operations will lead to a better adapted cost level and reduced working capital which, combined with a strong financial position, give solid future opportunities. The Group is well-equipped for further expansion of its business.