Interim report 1 January – 30 September 2023

2023-10-27

Third quarter 2023

  • Order intake increased by 11% to SEK 7,262 million (6,535). For comparable units, it was a decrease of 2%.
  • Net sales increased by 17% to SEK 7,851 million (6,707). For comparable units, it was an increase of 3%.
  • EBITA increased by 15% to SEK 1,190 million (1,035), corresponding to an EBITA margin of 15.2% (15.4%).
  • Profit for the quarter decreased by 2% to SEK 680 million (691), and earnings per share amounted to SEK 1.87 (1.90).
  • Cash flow from operating activities amounted to SEK 1,227 million (624).

1 January – 30 September 2023

  • Order intake increased by 12% to SEK 23,167 million (20,649). For comparable units, it was unchanged.
  • Net sales increased by 21% to SEK 24,014 million (19,788). For comparable units, it was an increase of 8%.
  • EBITA increased by 20% to SEK 3,628 million (3,017), corresponding to an EBITA margin of 15.1% (15.2%).
  • Profit for the interim period increased by 8% to SEK 2,156 million (2,004), and earnings per share amounted to SEK 5.92 (5.50).
  • Cash flow from operating activities amounted to SEK 2,971 million (1,522).

CEO’s message

Continued sales growth and strong earnings

Third quarter
Demand remained high during the third quarter and order intake increased by 11% to SEK 7.3 billion (6.5). Organically, order intake decreased by 2% from a strong level in the corresponding period previous year. Order intake was positively impacted by good demand for companies with customers in, among others, medical technology and pharmaceuticals and water/wastewater. However, the trend varied across companies, customer segments and geographic markets, with stable demand from customers in the process industry and energy segment and a weaker trend in infrastructure and construction and engineering.

Net sales amounted to SEK 7.9 billion (6.7) and increased organically by 3% compared to the corresponding period previous year. Six of the eight business areas grew organically, with the strongest performance in the Industrial Components and Fluids & Mechanical Solutions business areas, where the majority of the companies had a positive trend. Development was weakest in the DACH and Finland business areas due to strong comparison figures and a somewhat weakened development in several segments and companies.

Profitability was strong and EBITA increased during the third quarter to SEK 1,190 million (1,035), which means an improvement of 15%, of which 2% was organic. The EBITA margin remained high and amounted to 15.2%. Thanks to successful pricing efforts, the gross margin remained at a high and stable level, while a somewhat higher cost level dampened the EBITA margin development.

Cash flow improved to a record high SEK 1,227 million (624), which is primarily attributable to a more favourable development of working capital compared to the corresponding period previous year. Inventories decreased sequentially and our companies are continuing to work in a determined way to reduce inventories. Compared to the previous quarter, net debt also decreased, primarily thanks to the strong cash flow. Our net debt/equity ratio is well balanced, and the Group is maintaining its good financial position.

Acquisitions
Thus far in 2023, we have welcomed nine new companies to the Group, with total annual sales of approximately SEK 1.2 billion. In the third quarter, the Norwegian technical trading company Noby was acquired. Noby offers premium security products and systems, as well as fire alarm systems on the Norwegian B2B market. Subsequent to the end of the period we acquired two additional companies; Powerpoint Engineering in Ireland, which specialises in electrical test, monitoring and safety equipment and TSE Troller in Switzerland, which is a leading manufacturer of high-quality coating dies.

We have stepwise increased our acquisition capacity with the ambition to gradually increase the number of acquisitions. However, due to the uncertain general market situation, we have chosen to prolong some of our acquisition processes in 2023. Our balance sheet is strong and the inflow of interesting companies to acquire remains good.

Outlook
Overall, demand remained high during the third quarter, although somewhat dampened compared to the corresponding period previous year. The uncertainty around the general state of the economy remains for the coming quarters, but at the same time, structural investments in many industries linked to electrification and the green transition, among other things, continue. Many of our companies are well positioned to take advantage of these trends and they are good at quickly adapting operations to changing customer needs and market conditions.

Our business model has historically demonstrated very good resilience to changes in demand and our strong financial position offers us good conditions for continuing to generate sustainable profitable growth, both organically and through acquisitions.

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. The information was submitted for publication by the agency of the following contact persons on 27 October 2023 at 7.30 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 27 October at 9.30 CEST via the following link:
https://ir.financialhearings.com/indutrade-q3-report-2023/register

To participate in the conference call and to ask questions, please register via the link below. After registering, you will receive a telephone number and conference ID to login to the conference call.

https://conference.financialhearings.com/teleconference/?id=5001349

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.

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