Interim report second quarter and first half of 2022

Second quarter 2022

• Order intake increased by 17% to SEK 7,029 million (6,006). For comparable units, it was an increase of 7%.
• Net sales increased by 20% to SEK 6,683 million (5,552). For comparable units, it was an increase of 10%.
• EBITA increased by 21% to SEK 1,023 million (843), corresponding to an EBITA margin of 15.3% (15.2%).
• Profit for the quarter rose 20% to SEK 675 million (562), and earnings per share amounted to SEK 1.85 (1.54).
• Cash flow from operating activities amounted to SEK 622 million (792).

1 January – 30 June 2022

• Order intake increased by 20% to SEK 14,114 million (11,753). For comparable units, it was an increase of 9%.
• Net sales increased by 22% to SEK 13,081 million (10,699). For comparable units, it was an increase of 11%.
• EBITA increased by 27% to SEK 1,982 million (1,556), corresponding to an EBITA margin of 15.2% (14.5%).
• Profit for the period rose 28% to SEK 1,313 million (1,023), and earnings per share amounted to SEK 3.60 (2.81).
• Cash flow from operating activities amounted to SEK 898 million (1,281).

CEO’s message

Continued strong growth and new record earnings.

Second quarter
Demand remained strong and broad during the second quarter, with an improved order intake both compared to the corresponding period previous year and sequentially, despite challenging comparison figures. Overall, it resulted in a total order growth of 17%, of which 7% was organic. Demand was good in all of the major customer segments, with the strongest and most stable growth in the process industry. In other customer segments the demand was also good, but with a rising variation between companies and geographic areas, partly attributable to challenging comparison figures. Order backlog continued to grow during the quarter in all business areas and is of good quality.

Despite continued disruptions in supply chains, net sales increased by 20% to SEK 6.7 billion. Organically, growth was 10% driven both by higher volumes and price increases. In all business areas, net sales grew organically with the strongest growth occurring in Flow Technology and Industrial Components.

EBITA increased by 21% compared to the corresponding period previous year and surpassed SEK 1 billion for the first time ever in a single quarter. The EBITA margin for the second quarter improved to a record high 15.3%, primarily due to a favourable performance from new acquisitions and good price management in our companies. The business area Measurement & Sensor Technology had the highest margin, whereas the largest improvement was in the Benelux and Flow Technology business areas.

Disruptions and uncertainties in the supply chains, in combination with higher business volumes and price increases contributed to a further build-up in inventories and higher working capital, which dampened the development of cash flow. Working capital efficiency, measured as working capital in relation to sales, improved compared with the corresponding period previous year. Net debt increased compared to previous year due to a high rate of acquisition and a somewhat weaker operating cash flow. However, the financial position remains strong, with historically low indebtedness.

Acquisitions
The uncertain external factors have not affected the acquisition activity, which continues at a high level. Thus far this year, we have acquired ten companies, with total annual sales of approximately SEK 780 million. During the second quarter, we welcomed five new companies – four from the Nordic region and one from Germany. At the beginning of the quarter, the German company, Stabalux was acquired, along with the Swedish company, PMH International. Stabalux is a leading supplier of profile systems for façades and PMH International is a specialised technical trading company for lifting and material handling equipment as well as industrial/storage halls. In May, we acquired the Danish company, acti-Chem, which offers sustainable water treatment solutions. We also further strengthened our cluster of medical technology companies via the acquisition of the Swedish companies, Prodiagnostics – which supplies healthcare providers and companies with drug tests – and Oscar Medtec – a supplier of medical refrigerators and examination furniture.

Subsequent to the end of the quarter, we acquired three more companies. The German company, Beck Sensortechnik, develops, manufactures, and sells pressure switches and pressure transmitters. We also welcomed the Swedish company, Primed, which offers professional physiotherapy equipment. Further, OCI was acquired, a specialist within customised assemblies for energy and water applications. The market situation and inflow of interesting companies remains strong.

Outlook
The first half of 2022 has been characterized by a strong positive market situation without any clear indication of lower demand. Geopolitical tensions, continued disruptions in supply chains, rising inflation and higher interest rates mean increased uncertainties for the second half of the year. The disruptions in the supply chains are also expected to remain in the coming quarters, in all material respects. Nevertheless, I am convinced that our robust business model, which is based on decentralization and diversification, with decision power close to the customer, is able to cope with any changed conditions in a very good way. Our strong order backlog also gives us confidence regarding sales and earnings growth in the short term.

Overall, Indutrade is able to sum up a successful first half of the year, with very strong performances from our companies and with continued successful acquisition efforts, despite challenging external factors. We are continuously developing our ability to delivering sustainable, profitable growth and we have a stable platform as the starting point for continued value creation!

Bo Annvik, President and CEO

Note
The information in this report is such that Indutrade AB is obligated to make public in accordance with the EU Market Abuse Act and the Swedish Securities Market Act. The information was submitted for publication by the agency of the following contact persons on 19 July 2022 at 9.30 CEST.

For further information, please contact:
Bo Annvik, President and CEO, tel.: +46 8 703 03 00,
Patrik Johnson, CFO, tel.: +46 70 397 50 30

This report will be commented upon as follows:
A webcast of the report will be presented on 19 July at 11.00 CEST via the following link: https://tv.streamfabriken.com/indutrade-q2-2022

To participate in the conference call and to ask questions, please call:
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About Indutrade
Indutrade is an international technology and industrial business group that today consists of more than 200 companies in some 30 countries, mainly in Europe. In a decentralised way, we aim to provide sustainable profitable growth by developing and acquiring successful companies managed by passionate entrepreneurs. Our companies develop, manufacture, and sell components, systems and services with significant technical content in selected niches. Our value-based culture, where people make the difference, has been the foundation of our success since the start in 1978. Indutrade's net sales totalled SEK 21.7 billion in 2021, and the share is listed on Nasdaq Stockholm in Sweden.