Profitability, financial position and cash flow
Return on equity was 32 percent (34), and return on capital employed was 24 percent (29).
Return on working capital, P/WC (operating profit in relation to working capital), stood at 46 percent (50) at the end of the period.
The equity ratio at the end of the period stood at 36 percent (34). Equity per share, excluding non-controlling interests, amounted to SEK 50.90 (42.65). At the end of the period, the Group's financial net debt amounted to SEK 645 million (561), excluding pension liability of SEK 249 million (241). The net debt/equity ratio, calculated on the basis of net debt excluding pension provisions, stood at 0.6 (0.6).
Cash and cash equivalents, consisting of cash and bank balances, together with granted but unused credit totalled SEK 539 million (471) at 30 September 2013.
Cash flow from operating activities amounted to SEK 174 million (89) during the period. Investments in non-current assets were SEK 30 million (19) and divestments of non-current assets totalled SEK 2 million (1). Company acquisitions including settlement of additional purchase prices for acquisitions implemented in previous years totalled SEK 92 million (125). The exercise of call options amounted to SEK 18 million (13).
During the most recent quarter, a dividend of SEK 8.00 per share was paid, totalling SEK 176 million (174).
At the end of the period the number of employees was 2,088, which can be compared to 2,011 at the beginning of the financial year. The period's acquisitions increased the number of employees by 49. In addition, positions of temporary employment in production increased the number of employees by 40. The average number of employees during the most recent 12-month period was 1,988 (1,681).
Share capital amounted at the end of the period to SEK 51.1 million.
|Class of shares||Number of shares|
|Class A shares||1,084,600|
|Class B shares||21,648,232|
|Total number of shares before repurchases||22,732,832|
|Total number of repurchased class B shares||-685,650|
|Total number of shares after repurchases||22,047,182|
The 685,650 class B shares held in treasury correspond to 3.0 percent of the total number of shares outstanding and 2.1 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 24 October 2013 was SEK 305.00. The average number of shares held in treasury during the period was 822,955 (986,349).
In accordance with a resolution of the August 2013 AGM, 25 members of management were offered the opportunity to acquire 180,000 call options on Class B shares repurchased by the Company. The programme was fully subscribed for. If the options are fully exercised, the number of Class B shares outstanding will increase by 180,000, equivalent to 0.8 percent of the total number of shares and 0.6 percent of the votes. The call options were transferred at a price of SEK 21.20 per option, equivalent to the fair value of the options based on an external valuation.
The exercise price of issued call options attributable to the share-based incentive scheme for 2010 is SEK 164.70; the exercise period is 16 September 2013 until 30 May 2014, inclusive. During the period 16 September to 30 September 2013 inclusive, 65,150 options, of a total of 221,700 options, were exercised for shares.
The exercise price of issued call options attributable to the share-based incentive scheme for 2011 is SEK 179.40; the exercise period is 15 September 2014 until 29 May 2015, inclusive.
The exercise price of issued call options attributable to the share-based incentive scheme for 2012 is SEK 214.50; the exercise period is 14 September 2015 until 3 June 2016, inclusive.
The exercise price of issued call options attributable to the share-based incentive scheme for 2013 is SEK 318.40; the exercise period is 19 September 2016 until 2 June 2017, inclusive.
Issued call options for repurchased shares represent a potential dilution of approximately 0.3 percent during the last 12-month period (0.2). The corresponding dilution effect is approximately 0.7 percent for the latest quarter (0.3). The market price of the share was SEK 282.00 as of 30 September 2013.
During the period 1 April to 30 June 2013, Addtech acquired the Rutab-group to form part of the Addtech Energy business area. For more information on this acquisition see the previous interim report and Addtech's website.
Two company acquisitions took place in the second quarter:
On 1 July Addtech acquired Holger Eldfast AB, which became 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 two employees and sales of SEK 15 million.
On 6 August Addtech acquired Vimex AS, which became part of the Addtech Life Science business area. Vimex's operations focus on analysis products for the shipping industry. The company has seven employees and sales of NOK 13 million.
The total consideration for the period´s three acquisitions was SEK 89 million. The combined effect of the acquisitions on the Addtech Group´s net sales was SEK 82 million, on operating profit SEK 6 million and on profit after tax for the period SEK 3 million. Had the acquisitions been carried out at 1 April 2013, they would have had an effect of about SEK 88 million on consolidated net sales, about SEK 7 million on operating profit and about SEK 4 million on profit after tax for the period.
According to the preliminary acquisition analyses, the assets and liabilities included in the acquisitions were as follows:
|Carrying amount at acquisition date||Adjustment to fair value||Fair value|
|Intangible non-current assets||1||59||60|
|Other non-current assets||5||-||5|
|Other current assets||53||-||53|
|Deferred tax liability/tax asset||-4||-13||-17|
|Acquired net assets||3||43||46|
|Less: cash and cash equivalents in acquired businesses||-4|
|Less: consideration not yet paid||-12|
|Effect on the Group’s cash and cash equivalents||73|
|1) The consideration is stated excluding acquisition expenses.|
For acquisitions that resulted in ownership transfer during the interim period, transaction costs totalled SEK 1 million and are recognised in selling expenses.
Out of total consideration not yet paid for acquisitions made during the period, calculated contingent considerations amount to SEK 12 million, which comprises about 86 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 income of SEK 2 million during the period, recognised in other operating income.
This interim report was prepared as per IFRSs 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 23 million (23), and profit after financial items to SEK 10 million (25). This amount includes revenues of SEK 8 million (20) from shares in Group companies. Net investments in non-current assets totalled SEK 0 million (0). The Parent Company's financial net debt at the end of the period amounted to SEK 8 million, compared to SEK 44 million at the beginning of the fiscal 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 1 October, Addtech acquired Sittab AB, which became part of the Addtech Industrial Solutions business area. Sittab is a niche company that delivers ergonomic solutions for driver seats, mainly for construction equipment and buses. The company has 26 employees and sales of about SEK 65 million.
The acquisition analyses are 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. Risk and uncertainty factors are the same as in previous periods, please refer to section Risks and uncertainties (page 24-25) 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.
The Board of Directors and the President deem that the interim report on the first six months gives a true and fair picture of the Company's and the Group's operations, position and earnings, and describes the significant risks and uncertainty factors to which the Company and the Group are exposed.
Stockholm, 25 October 2013
This report has not been subject to review by the Company's autitor.
The interim report for the period 1 April 2013 - 31 December 2013 will be published on 11 February 2014.
For further information, please contact:
Johan Sjö President and CEO, +46 8 470 49 00
Kristina Willgård, CFO, +46 8 470 49 10