Profitability, financial position and cash flow
Return on equity was 30 percent (34), and return on capital employed was 24 percent (31).
Return on working capital, P/WC (operating profit in relation to working capital), stood at 45 percent (53) at the end of the period.
The equity ratio at the end of the period stood at 38 percent (39). Equity per share, excluding non-controlling interests, amounted to SEK 55.65 (48.20). At the end of the period, the Group's financial net debt amounted to SEK 799 million (550), including pension liability of SEK 247 million (243). Financial net debt in relation to operating profit with amortisation and depreciation added back (EBITDA) amounted to 1.4 (1.0).
Change in the calculation of the net debt/equity ratio
Changes to IAS 19 have meant that as of 1 April the Group has recognised pension liability increased by SEK 38 million and equity reduced by SEK 25 million, net. The new accounting rules, in which the corridor method is eliminated, entail higher volatility in these items. As a consequence of this, Addtech will change its reporting of the net debt/equity ratio as of the current quarter, whereby the net loan debt is calculated excluding provisions for pensions. Based on the new definition, the net debt/equity ratio amounted to 0.4 (0.3) compared to 0.6 (0.5) according to the definition applied previously.
Cash and cash equivalents, consisting of cash and bank balances, together with granted but unused credit totalled SEK 659 million (715) at 30 June 2013.
Cash flow from operating activities amounted to SEK 74 million (44) during the period. Investments in non-current assets were SEK -11 million (-10) and company acquisitions including settlement of additional purchase consideration for acquisitions implemented in previous years totalled SEK -80 million (-31). The exercise of call options amounted to SEK 8 million (0).
At the end of the period the number of employees was 2,081, which can be compared to 2,011 at the beginning of the financial year. The period's acquisitions increased the number of employees by 40 people, and positions of temporary employment in production have increased the number of employees by 46. The average number of employees during the most recent 12-month period was 1,902 (1,649).
Share capital amounted at the end of the period to SEK 51.1 million.
|Class of shares||Number of shares|
|Class A shares||1,086,380|
|Class B shares||21,646,452|
|Total number of shares before repurchases||22,732,832|
|Total number of repurchased class B shares||-750,800|
|Total number of shares after repurchases||21,982,032|
The 750,800 class B shares held in treasury correspond to 3.3 percent of the total number of shares outstanding and 2.3 percent of the votes. The average acquisition cost for repurchased shares was SEK 124 per share. The last price paid for the Addtech share on 17 July 2013 was SEK 226.50 The average number of shares held in treasury during the period was 884,750 (986,800).
In the period, 60,600 call options attributable to the 2009 share-related incentive programme were exercised. All of the programme's 236,000 options have thus been exercised for shares.
The redemption price of issued call options attributable to the share-based incentive scheme for 2010 is SEK 164.70; the redemption period is 16 September 2013 until 30 May 2014, inclusive.
The redemption price of issued call options attributable to the share-based incentive scheme for 2011 is SEK 179.40; the redemption period is 15 September 2014 until 29 May 2015, inclusive.
The redemption price of issued call options attributable to the share-based incentive scheme for 2012 is SEK 214.50; the redemption period is 14 September 2015 until 3 June 2016, inclusive.
Issued call options for repurchased shares represent a potential dilution of approximately 0.2 percent during the last 12-month period (0.2). The corresponding dilution effect is 0.5 percent for the latest quarter (0.4). The market price of the share was SEK 225.00 as of 30 June 2013.
One company was acquired during the period 1 April-30 June 2013:
On 2 April Addtech acquired 80 percent of the shares in the Rutab-group, which will form part of the Addtech Energy business area. Rutab is a supplier of electro-technical materials and components for automation technology with focus on cable glands, grommets and conduits for cabling solutions as well as machinery cables. Rutab has 40 employees and sales of around SEK 150 million.
The total purchase consideration for the period's acquisition was SEK 79 million. The acquisition had an effect of SEK 40 million on the Addtech Group's revenue, SEK 3 million on operating profit and SEK 2 million on profit after tax for the period.
According to the preliminary acquisition analyses, the assets and liabilities included in the acquisition were as follows:
|Carrying amount at acquisition date||Adjustment to fair value||Fair value|
|Intangible non-current assets||-||51||51|
|Other non-current assets||5||-||5|
|Other current assets||49||-||49|
|Deferred tax liability/tax asset||-4||-11||-15|
|Acquired net assets||7||40||47|
|Less: cash and cash equivalents in acquired businesses||-3|
|Less: consideration not yet paid||-11|
|Effect on the Group’s cash and cash equivalents||65|
|1) The consideration is stated excluding acquisition expenses.|
For the acquisition that resulted in ownership transfer during the financial year, transaction costs totalled SEK 1 million and are recognised in selling expenses.
Out of total consideration not yet paid for acquisitions made during the financial year, calculated contingent considerations amount to SEK 11 million, which comprises about 95 percent of the maximum outcome. The amount is dependent on achieved profits in the companies and has a maximum limit.
The revaluation of liabilities for contingent, not yet paid considerations gave rise to an expense of SEK 1 million during the period, recognised in other operating expenses.
This interim report was prepared as per IFRS and IAS 34 Interim Financial Reporting. The accounting policies and basis for calculations applied in the latest annual report were also used here with the exception of the changes in IAS 19.
The amended IAS 19, Employee Benefits, has been applied since 1 April 2013. The change eliminates the option of deferring actuarial gains and losses according to the corridor method. The standard also contains new rules for the reporting of special employer's contribution. The standard applies with retroactive effect, which means that the comparative figures in the balance sheet have been recalculated. As at 31 March 2013 pension liabilities rose by SEK 38 million, including special employer's contribution of SEK 13 million, and equity fell by SEK 25 million, net, of which SEK 9 million via comprehensive income. As at 31 March 2012 pension liabilities rose by SEK 49 million, including special employer's contribution of SEK 11 million, and equity fell by SEK 33 million, net. The effect on the income statements is deemed negligible, so recalculation has not been performed. On the basis of the changes in IAS 19 the Company has decided to change the definition for the calculation of the net debt/equity ratio, where the net debt is calculated excluding provisions for pensions.
Extended disclosure requirements for fair value according to IFRS 7 and for financial instruments according to IFRS 13 have been included in this report.
The interim report for the parent company was prepared in accordance with the Swedish Annual Accounts Act (1995:1554) and the Securities Market Act (2007:528), in compliance with recommendation RFR 2 Accounting for Legal Entities, of the Swedish Financial Reporting Board.
The Parent Company's net sales amounted to SEK 12 million (12), and profit after financial items to SEK 2 million (2). This amount includes revenues of SEK 0 million (0) from shares in Group companies. The Parent Company's financial net asset at the end of the period amounted to SEK 57 million, compared with a financial net debt of SEK 44 million at the beginning of the period.
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.
Events after the end of the interim period
One company acquisition took place after the end of the reporting period:
On 2 July Holger Eldfast AB was acquired to become part of the Addtech Industrial Solutions business area. Holger Eldfast runs agency operations in fire-resistant materials, mainly in the Swedish market. The company has sales of about SEK 15 million and two employees.
The acquisition analysis is not yet complete and will be presented in the next interim report. No other events of significance to the Group occurred after the end of the reporting period.
Risks and factors of uncertainty
Addtech's income 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. Since no material changes occurred during the period relating to risks and factors of uncertainty please refer to section Risks and uncertainties (page 24-26) in Addtech's 2012/2013 annual report for further details.
The Parent Company is indirectly affected by the above risks and uncertainty factors due to its role in the organisation.
Stockholm, 18 July 2013
President and CEO
This report has not been subject to review by the Company's
auditor. The interim report for the period
1 April - 30 September 2013 will be published on 25 October 2013.
The Annual General Meeting will be held in Stockholm at 4 p.m. on 28 August 2013. More information about the AGM will be published on Addtech's website.
For further information, please contact:
Johan Sjö, President and CEO, +46 8 470 49 00
Kristina Willgård, CFO, +46 8 470 49 10