Profitability, financial position and cash flow
The return on equity was 30 percent (33), and return on capital employed was 24 percent (26).
Return on working capital P/WC (operating profit in relation to working capital) amounted to 45 percent (47) at the end of the period.
At the end of the period the equity ratio stood at 36 percent (36). Equity per share, excluding non-controlling interest, totalled SEK 18.30 (15.90). The Group's net debt at the end of the period stood at SEK 621 million (477), excluding pension liabilities of SEK 250 million (240). The net debt/equity ratio, calculated on the basis of net debt excluding provisions for pensions, totalled 0.5 (0.5).
Cash and cash equivalents, consisting of cash and bank balances together with approved but non-utilised credit facilities, totalled SEK 494 million (572) at 31 December 2013.
Cash flow from operating activities reached SEK 375 million (295) during the period. Company acquisitions including settlement of consideration regarding acquisitions implemented in previous years amounted to SEK 163 million (223). Investments in non-current assets were SEK 42 million (31) and disposal of non-current assets totalled SEK 3 million (2). The exercise of call options totalled SEK 27 million (14) and the repurchase of own shares totalled SEK 15 million (0).
At the end of the period, the number of employees was 2,134, compared to 2,011 at the beginning of the financial year. During the period, implemented acquisitions led to an increase of 87 in the number of employees. Temporary positions of employment in the production also increased the number of employees by 53. The average number of employees during the latest 12-month period was 2,063 (1,736).
At the end of the period the share capital stood at SEK 51.1 million.
|Class of shares||Number of shares|
|Class A shares||3,253,800|
|Class B shares||64,944,696|
|Total number of shares before repurchases||68,198,496|
|Total number of repurchased class B shares||-2,128,500|
|Total number of shares after repurchases||66,069,996|
The extraordinary general meeting of Addtech AB on 19 November 2013 decided to implement a share split by dividing each share into three (3) shares. The number of shares in the company increased to 68,198,496, of which 3,253,800 are Class A shares and 64,944,696 are Class B shares; each share having a quotient value of SEK 0.75. The share spilt took place on 13 December. The split also means that each call option outstanding entitles the holder to three Class B shares.
During the quarter, 50,900 treasury shares were repurchased, which, after the split, corresponds to 152,700 shares. The own holding of 2,128,500 Class B shares corresponds to 3.1 percent of the total number of shares and 2.2 percent of the votes. The average purchase price for repurchased shares amounts to SEK 45.60 per share. The most recent price paid for the Addtech share on 10 February 2014 was SEK 97.00. The average number of treasury shares held during the period was 2,227,345 (2,870,431).
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 repurchased Class B shares. The programme was fully subscribed for. If the options are fully exercised, the number of Class B shares outstanding will increase by 540,000, 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 (market) value of the options based on an external valuation.
The exercise price for shares attributable to issued call options regarding the share-based incentive programme for 2010 is SEK 54.90; the exercise period is 16 September 2013 until 30 May 2014 inclusive. During the period 16 September until 31 December 2013 inclusive, 92,200 options, of a total of 221,700, were exercised for shares.
The exercise price per share attributable to issued call options regarding the share-based incentive scheme for 2011 is SEK 59.80; the exercise period is 15 September 2014 until 29 May 2015, inclusive.
The exercise price per share attributable to issued call options regarding the share-based incentive scheme for 2012 is SEK 71.50; the exercise period is 14 September 2015 until 3 June 2016, inclusive.
The exercise price per share attributable to issued call options regarding the share-based incentive programme for 2013 is SEK 106.13; the exercise period is 19 September 2016 until 2 June 2017 inclusive.
Issued call options for repurchased shares represent a potential dilution effect of approximately 0.5 percent during the last 12-month period (0.2). The corresponding dilution effect is 0.6 percent for the latest accounting period (0.3) and 0.9 percent for the latest quarter (0.2). The share price at 31 December 2013 was SEK 105.50.
During the period 1 April to 30 September 2013 Addtech acquired the Rutab Group to become part of the Energy business area, Holger Eldfast AB to join the Industrial Solutions business area and Vimex AS to the Life Science business area. For more information on these acquisitions see previous interim reports and Addtech's website.
Two company acquisitions took place in the third quarter:
On 1 October, Addtech acquired Sittab AB, which became part of the Industrial Solutions business area. Sittab is a niche company that delivers ergonomic solutions for driver seats, mainly for construction machinery and buses. The acquired company has 26 employees and sales of about SEK 65 million.
Valnor AS was acquired to be part of the Components business area on 2 December. Valnor is a technology trading company that supplies components in the field of valves for instrumentation and piping installation. The company has 12 employees and sales of about NOK 50 million.
The total consideration for the period's five acquisitions was SEK 228 million. The combined effect of the acquisitions on the Addtech Group's net sales was SEK 148 million, on operating profit it was SEK 9 million and on profit after tax for the period it was SEK 6 million. Had the acquisitions been completed on 1 April 2013, their impact would have been an estimated SEK 223 million on Group net sales, about SEK 16 million on operating profit and some SEK 11 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||135||136|
|Other non-current assets||18||-||18|
|Other current assets||94||-||94|
|Deferred tax liability/tax asset||-8||-32||-40|
|Acquired net assets||50||100||150|
|Less: cash and cash equivalents in acquired businesses||-15|
|Less: consideration not yet paid||-64|
|Effect on the Group’s cash and cash equivalents||149|
|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.
Of the consideration not yet paid for acquisitions during the period, estimated contingent consideration amounts to SEK 19 million, which constitutes about 62 percent of the maximum outcome. The outcome depends on the results achieved in the companies and has a set maximum level. During the quarter correction of a previous preliminary acquisition analysis took place, which resulted in adjustment of a previously recognised minority of SEK 15 million, which decreased the equity.
Revaluation of liabilities for contingent, not yet paid, consideration added income of SEK 14 million (4) during the period, which is recognised under 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.
Recalculation of historical key figures per share took place following the split into three shares in the third quarter.
The amended IAS 19, Employee Benefits, has been applies 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 is calculated excluding provisions for pensions.
Extended disclosure 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.
Parent Company net sales totalled SEK 35 million (34) and profit after financial items was SEK 12 million (26). Income from interests in Group companies is included and totals SEK 8 million (20). Net investments in non-current assets were SEK 4 million (0). The Parent Company's net financial debt was SEK 31 million at the end of the period, compared to SEK 44 million at the start of the financial year.
The 2013 Annual General Meeting authorised the Board Chairman to establish a nomination committee for upcoming elections to the Board, by appointing members from among representatives of the five shareholders who controlled the largest number of votes in the Company at 31 December 2013, to serve with the Chairman on the nomination committee. In accordance with the above, the committee comprises these appointed members: Anders Börjesson (Chairman of the Board), Tom Hedelius, Marianne Nilsson (appointed by Swedbank Robur), Martin Wallin (appointed by Lannebo Fonder) and Johan Strandberg (appointed by SEB Fonder). Information on how to contact the committee is available on the Addtech website.
Transactions with related parties
No transactions between Addtech and related parties that materially affected the Group's position and profit took place during the period.
Events after the end of the interim period
On 2 January 2014 the business in Hantor-Mittaus OY was acquired to become part of the Components business area. Hantor-Mittaus is a technology trading company that supplies measuring instruments to industry and the public sector. The company has 5 employees and sales of about SEK 10 million.
No other events of significance to the Group occurred after the end of the reporting period.
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 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.
Stockholm, 11 February 2014
|President and Director|
This report has not been subject to review by the Company's autitor.
The year-end report for the period 1 April 2013 - 31 March 2014 will be published on 14 May 2014.
The Annual General Meeting (AGM) of Addtech AB (publ.) will be held at 4.00 p.m. on 27 August 2014. For more information see 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