Interim report second quarter and first half of 2023

Second quarter 2023

• Order intake increased by 11% to SEK 7,829 million (7,029). For comparable units, it was a decrease of 1%.
• Net sales increased by 21% to SEK 8,100 million (6,683). For comparable units, it was an increase of 7%.
• EBITA increased by 19% to SEK 1,213 million (1,023), corresponding to an EBITA margin of 15.0% (15.3%).
• Profit for the quarter rose 7% to SEK 724 million (675), and earnings per share amounted to SEK 1.99 (1.85).
• Cash flow from operating activities amounted to SEK 1,112 million (622).

1 January – 30 June 2023

• Order intake increased by 13% to SEK 15,905 million (14,114). For comparable units, it was an increase of 1%.
• Net sales increased by 24% to SEK 16,163 million (13,081). For comparable units, it was an increase of 10%.
• EBITA increased by 23% to SEK 2,438 million (1,982), corresponding to an EBITA margin of 15.1% (15.2%).
• Profit for the period rose 12% to SEK 1,476 million (1,313), and earnings per share amounted to SEK 4.05 (3.60).
• Cash flow from operating activities amounted to SEK 1,744 million (898).

CEO’s message

Stable order intake and strong sales growth

Second quarter
Demand during the second quarter remained at a high and stable level. Order intake amounted to SEK 7.8 billion, corresponding to an increase of 11% compared to the corresponding period previous year. The majority of companies showed order growth, and despite strong comparison figures, aggregated organic order intake was essentially unchanged. There was still large variation in demand between companies, segments and countries, with the strongest growth in companies with customers in the water/wastewater segment and engineering industry. Demand was weakest for companies with customers in infrastructure and construction.

Net sales improved further during the quarter and amounted to a record-high SEK 8.1 billion, corresponding to a sales growth of 21% compared to the corresponding period previous year. Organically, growth was 7%, with a positive development in seven of the eight business areas. The strongest growth was in the Benelux and Industrial Components business areas, where most of the companies developed positively. Business area Finland had negative organic sales development, with a somewhat weakened development in several segments and companies.

EBITA increased by 19% to SEK 1.2 billion, corresponding to an EBITA margin of 15.0%. Earnings also include some nonrecurring items related to revaluation of contingent earn-out payments, among others, which in total had a positive impact of SEK 17 million. Excluding nonrecurring items, the EBITA margin amounted to 14.8%. The organic growth of the EBITA margin was somewhat dampened due to a higher level of expenses, which was primarily attributable to increased marketing activities and other growth initiatives in many companies. Thanks to successful pricing efforts, the gross margin remained at a high and stable level.

Cash flow increased compared to the corresponding period previous year, primarily thanks to a more favourable development of working capital. Inventories for comparable units decreased somewhat during the quarter, mainly due to high invoicing and fewer disturbances in the supply chains. All companies are working in a determined way to reduce inventories and the trend is going in the right direction. The Group’s financial position remains strong, which provides good conditions for additional value-creating acquisitions and investments for organic growth.

Acquisitions
In terms of acquisitions, the activity level remains high and thus far this year, we have acquired six companies, with total annual sales of approximately SEK 900 million. We welcomed three new companies in the second quarter – Safematic (Denmark), Labema (Finland) and I-tronik (Italy). Safematic is specialised in process and ventilation filtration and Labema offers diagnostic equipment and supplies to, among others, public healthcare, food industry and research laboratories. It is our first acquisition of a medical technology company in Finland. I-tronik is specialised in machinery, consumables, spare parts, and services for assembly and manufacturing of Printed Circuit Boards (PCBs). Through the acquisition of I-tronik we strengthen our position in northern Italy.

Despite the uncertain market situation, the inflow of new, interesting acquisition candidates is good and we remain active in our ongoing acquisition processes.

Outlook
Performance during the first half of 2023 remained positive, with a high and stable demand, even though the market situation varied for our companies. Among the larger customer segments, only infrastructure and construction has shown a slowdown. Our companies work closely with their customers and carefully monitor the market development on a continuous basis. The order backlog remains good, and several of our companies are well positioned in structurally growing market areas with good opportunities for continued growth. We are also convinced that our decentralised model – with local decision-making close to the customer – together with our well diversified structure, will enable us to manage any market fluctuations in a good way.

Indutrade's strategy works well and we have a good foundation for continued, long-term, sustainable and competitive 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 Regulation and the Securities Market Act. The information was submitted for publication by the agency of the following contact persons on 20 July 2023 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 20 July at 11.00 CEST via the following link: https://ir.financialhearings.com/indutrade-q2-2023/register

To participate in the conference call and ask questions, please register yourself via the link below. Once you have registered, you will be given the telephone number and a conference ID to login to the conference call. https://conference.financialhearings.com/teleconference/?id=2001158

About Indutrade
Indutrade is an international technology and industrial business group that today consists of approximately 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 27 billion in 2022, and the share is listed on Nasdaq Stockholm in Sweden.