CEO´S COMMENTS
SECOND QUARTER – STABLE DEMAND AND STRONG GROWTH IN EARNINGS
In the second quarter too, Addtech developed very well and we are continuing to grow in all of our business areas. Despite strong comparison figures from the preceding year, sales increased by 25 percent, of which 17 percent was organic. EBITA rose by 41 percent and the operating margin continued to strengthen substantially.
Over all, the Group experienced favourable underlying demand during the quarter, although the market scenario varies between geographic regions and customer segments. In some segments, a slower pace can now be noted, with demand evening out at a high level, just as expected. This is most evident in the engineering and special vehicle segments. During the quarter, demand was also somewhat lower for aftermarket products for the forest industry, particularly the sawmill segment. Market segments where development remained favourable include components and solutions in electronics and wind power, where sales increased, and infrastructure products, where demand was still good.
Sales of our products and services regarding environmental improvement solutions remained very strong and, during this quarter too, accounted for a significant part of the Group’s organic growth. Demand in new projects for scrubber solutions was lower during the quarter, although we assess that the market situation remains favourable and we have a very good order backlog.
From a geographical perspective, the market situation remained most favourable in Norway and Finland. Our sales in Sweden and Denmark were stable, while the market situation for our operations outside the Nordic region was varied but somewhat subdued overall.
ACQUISITIONS
Since the beginning of the financial year, we have completed eight acquisitions in six different geographical markets. Combined, these acquisitions contribute annual sales of approximately SEK 570 million. We have good opportunities to carry out further acquisitions, particularly given our strong balance sheet and a very favourable cash flow during the period. We have numerous projects in progress, at various phases and in different geographical markets.
With our entrepreneurial and dynamic culture, Addtech has always been at the forefront in the developments – a topic discussed in depth at the well-attended and appreciated capital market day that we arranged in mid-September. Another aspect of our culture is our desire to contribute, not only to customers and suppliers, but also to the broader external society. We enjoy a unique position and have a long tradition of adding value between customers and suppliers, including from the perspective of sustainability. To further sharpen our offering in sustainable business, as increasingly demanded by customers and investors alike, we have now initiated extensive efforts to strengthen the link between our sustainability work and the UN’s global sustainability goals.
To sum up, we can affirm that the outcome of our operations remains favourable. Despite declining demand in certain segments and the prevailing uncertain global environment, I take a positive view of the Group’s future prospects. We have a strong business concept and a business model with niche units in many different industries and geographies, generating good opportunities for profitable growth that is sustainable in the long term.
Niklas Stenberg
President and CEO