Interim report and Year-End report

1 January – 31 December 2018
Fourth quarter 2018
• Order intake rose 13% to SEK 4,403 million (3,895). For comparable units the increase was 6%.
• Net sales rose 13% to SEK 4,446 million (3,932). For comparable units the increase was 7%.
• EBITA excluding restructuring costs in 2017 rose 32% to SEK 568 million (431), corresponding to an EBITA margin of 12.8% (11.0%).
• Profit for the quarter grew 113% to SEK 369 million (173), and earnings per share were SEK 3.05 (1.42).
• Cash flow from operating activities increased by 16% to SEK 594 million (513).

1 January – 31 December 2018
• Order intake rose 13% to SEK 17,073 million (15,051). For comparable units the increase was 4%.
• Net sales rose 13% to SEK 16,848 million (14,847). For comparable units the increase was 4%.
• EBITA excluding restructuring costs in 2017 rose 20% to SEK 2,087 million (1,745), corresponding to an EBITA margin of 12.4% (11.8%), the highest ever for a full year.
• Profit for the year grew 33% to SEK 1,368 million (1,030), and earnings per share were SEK 11.31 (8.54).
• Cash flow from operating activities decreased by 12% to SEK 1,360 million (1,554).
• The Board of Directors proposes a dividend for 2018 of SEK 4.50 per share (3.75).

CEO’s message

2018 was a strong year for Indutrade, with focus on profitable growth. Sales increased by 13%, resulting in full-year sales of nearly SEK 17 billion and an EBITA margin of 12.4%, which is an all-time high for Indutrade. We have continued to deliver on our strategy – to generate profitable growth through acquisitions and development of stable and profitable companies in selected niches.

Fourth quarter
The business climate remained favourable during the fourth quarter, and demand in most sectors and market segments remained stable at a high level.

Order intake was strong and grew 13%, of which 6% was organic. Most of the business areas showed good growth, but development was especially strong for companies in the UK and DACH business areas. The DACH business area benefited primarily by successful work in the process industry in Switzerland. Demand in the business area Finland remained high, but owing to fewer projects, order growth was slightly negative.

Sales rose 13%, of which 7% was organic. All of the business areas developed well, with the strongest growth in UK and Fluids & Mechanical Solutions. The companies in these business areas are well-positioned and competitive, and in UK demand was strong both for export- and domestic-oriented companies. The Fluids & Mechanical Solutions business area also showed a broad improvement, with the strongest growth in the industry and infrastructure segments.

Profitability developed well in the majority of our companies, and seven of our eight business areas showed improved margins compared with a year ago. The companies’ dedicated customer- and result-oriented work is generating profitable growth, and it is impressive to see the level of drive and commitment within the Group. The EBITA margin for the Group as a whole improved to 12.8% (7.6%) for the fourth quarter. The earnings improvement is partly explained by the fact that profit for 2017 was charged with SEK 132 million in restructuring costs for the Sander Meson Group. This restructuring went according to plan and is now basically concluded.

Cash flow improved during the quarter, but tied-up capital is still at a slightly high level as a result of longer lead times from suppliers and high capacity utilisation in our production.

Acquisitions
During the quarter two add-on acquisitions were carried out with combined annual sales of SEK 175 million: Thermo Electric (Netherlands), which develops and manufactures temperature sensors, and NRG Automation (UK), which is a system supplier of door and shutter automation solutions. Both acquisitions strengthen our market positions and give us further growth opportunities

During 2018 we carried out a total of nine acquisitions with combined annual sales of SEK 660 million. The majority of the acquired companies have their own products, which improves the balance between companies with proprietary products and technical trading companies. The acquisitions will have a positive impact on our earnings and financial position during the coming year. We sense that Indutrade’s business model continues to attract owners who are considering selling their companies, and we have a positive outlook on our prospects for continued acquisitions in and outside of the Nordic region.

Outlook
2019 has begun with continued high and stable demand for most of our companies, but we are closely watching developments given the prevailing uncertain macroeconomic and political climates. Our decentralised business model, where the management teams of our more than 200 companies can make quick operational decisions, creates commitment, responsibility and opportunity for the companies to adapt their operations in the face of changed demand.

I and my colleagues look forward to work together on further developing Indutrade in 2019 into an even more profitable, growing company. My hope and ambition is that Indutrade will provide our shareholders a competitive return also in 2019.

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. The information was submitted for publication by the agency of the following contact persons at 7.30 a.m. (CET) on 13 February 2019.

This report will be commented upon as follows:
The report will be presented via a webcast at 11 a.m. (CET) on 13 February via the following link:
http://event.on24.com/wcc/r/1919079-1/516315636BD441035A7AE73833EF94E0?partnerref=rss-events

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