Interim report 1 January – 31 March 2019

First quarter 2019
• Order intake rose 10% to SEK 4,610 million (4,173). For comparable units the increase was 5%.
• Net sales rose 12% to SEK 4,366 million (3,897). For comparable units the increase was 6%.
• Operating profit before amortisation of intangible non-current assets attributable to acquisitions (EBITA) rose 19% to SEK 537 million (451), corresponding to an EBITA margin of 12.3% (11.6%).
• Profit for the quarter grew 19% to SEK 350 million (293), and earnings per share were SEK 2.90 (2.42).

CEO’s message
Indutrade started out 2019 with continued good growth and positive margin development.

First quarter
The market situation remained favourable during the first quarter of 2019, and demand in most sectors and market segments was at a stable high level. Demand related to large projects was slightly lower in certain markets and companies. Order intake grew 10% during the quarter, of which 5% was organic. Sales increased by 12%, of which 6% was organic. Organic growth during the quarter was generally good and came from positive development in all our geographic markets.

Order intake for the DACH business area performed strongly during the first quarter of the year through competitive companies concentrated in the chemical and pharmaceutical industries in Switzerland.

Uncertainty surrounding the Brexit negotiations affected the UK business area to a slightly higher extent during the first quarter than previously. Our British companies experienced both positive and negative impacts: higher sales coupled to inventory build-up ahead of potential future re-regulation, and a preference among some customers for other alternatives due to the elevated Brexit risk. On the whole, however, the impact has been limited.

The lower order intake for valves for power generation in autumn 2018 had a negative impact on the Benelux business area’s net sales and earnings during the quarter. Order intake for the segment recovered somewhat during the first quarter, and we are working with both short-term and strategic improvement measures.

On the whole, the companies in our business areas showed stable, positive development in order intake, invoicing and earnings during the quarter. It is positive that six of our eight business areas have posted improved earnings. The quarter’s EBITA margin of 12.3% (11.6%) is the highest level for a first quarter since the stock market introduction in 2005. Profit before tax for the quarter increased by 19% to SEK 442 m.

Cash flow from operating activities increased during the quarter, mainly driven by the improved earnings. As in the preceding year, working capital increased during the first quarter, partly owing to higher volumes and partly to higher capacity utilisation by many of our companies, customers and suppliers.

During the quarter, Indutrade became a signatory of the UN’s Global Compact sustainability initiative. In doing so Indutrade has committed itself to working actively with the Global Compact’s ten principles for sustainable development in the four areas of human rights, labour, environment and anti-corruption. Leading the Group in a responsible way is crucial for long-term sustainable growth, development and profitability.

Acquisitions
During the quarter, two acquisitions were carried out, and an additional one was carried out after the end of the quarter. The two acquisitions were of Weldability Sif, a British broad-range supplier of equipment, consumables and education services to the industrial welding market, and the Swedish company STRIHL, a supplier of outdoor light fixtures. After the end of the quarter the Swedish company Acumo was acquired. The company provides automation solutions in the areas of positioning, measurement and detection, and also specialises in sales of alarm sounders and related products, such as strobes and sirens.

We have had a good start to 2019, and with a strong pipeline of projects in various phases, our acquisition opportunities remain good.

Outlook
We are monitoring the market situation continuously and believe that on the whole the business climate remains favourable. The Group’s diversified structure, with more than 200 companies in various segments and countries, creates conditions for stability even if the economy slows down. Indutrade is well-poised for the future, and its prospects for continued positive development and to create sustainable, profitable growth are favourable.

Bo Annvik, President and CEO

This report will be commented upon as follows:
The report will be presented via a webcast at 3 p.m. (CET) on 25 April via the following link:

http://event.on24.com/wcc/r/1980980-1/03B5F5697E1B5200F1B20B5C76A614A3

To participate in the conference call and to ask questions, please call:
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The information in this report is such that Indutrade AB is obligated to make public in accordance with the EU Market Abuse Act and Swedish Securities Market Act. The information was submitted for publication by the agency of the following contact persons at 12 a.m. (CET) on 25 April 2019.