OTHER FINANCIAL INFORMATION
Profitability, financial position and cash flow
The return on equity at the end of the period was 33 percent (29), and return on capital employed was 22 percent (21). Return on working capital P/WC (EBITA in relation to working capital) amounted to 56 percent (53).
At the end of the period the equity ratio amounted to 32 percent (33). The implementation of IFRS 16 had a negative effect and increased the balance sheet total by SEK 574 million. Equity per share, excluding non-controlling interest, totalled SEK 38.35 (31.40). The Group's net debt at the end of the period amounted to SEK 2,543 million (1,953), excluding pension liabilities of SEK 374 million (252), including leasing liabilities from IFRS 16 totalling SEK 576 million. The net debt/equity ratio, calculated on the basis of net debt excluding provisions for pensions but including leasing liabilities according to IFRS 16, amounted to 1.0 (0.9).
Cash and cash equivalents consisting of cash and bank equivalents and approved but non-utilised credit facilities amounted to SEK 773 million (378) at 30 September 2019.
Cash flow from operating activities amounted to SEK 519 million (145) during the period, affected primarily from a decrease of working capital mainly accounts receivables. The implementation of IFRS 16 has increased cash flow from operating activities by SEK 72 million and decreased cash flow from financing activities by the corresponding amount, on account of the fact that the amortization portion of lease payments is recognized as payments in the financing activities. Company acquisitions and divestments including settlement of contingent consideration regarding acquisitions implemented in previous years amounted to SEK 295 million (500). Investments in non-current assets totalled SEK 61 million (28) and disposal of non-current assets amounted to SEK 3 million (5). Dividend from associated companies amounted to SEK 1 million (2). Repurchase of treasury shares amounted to SEK 42 million (38). Repurchase of call options amounted to SEK 23 million (11) and the exercise of call options amounted to SEK 23 million (18). During the second quarter, dividend of SEK 5.00 (4.00) per share was paid, totalling SEK 336 million (269).
At the end of the period, the number of employees was 2,941, compared to 2,759 at the beginning of the financial year. During the period, completed acquisitions and disposals resulted in a net increase of the number of employees by 135. The average number of employees in the latest 12-month period was 2,790.
At the end of the period the share capital amounted to SEK 51.5 million.
|Class of shares||Number of shares||Number of votes||Percentage of capital||Percentage of votes|
|Class A shares, 10 votes per share||3,229,500||32,295,000||4.7%||33.2%|
|Class B shares, 1 vote per share||64,968,996||64,968,996||95.3%||66.8%|
|Total number of shares before repurchases||68,198,496||97,263,996||100.0%||100.0%|
|Repurchased class B shares||-1,112,418||1.6%||1.1%|
|Total number of shares after repurchases||67,086,078|
In accordance with a resolution of the August 2019 AGM, 25 members of management were offered the opportunity to acquire 300,000 call options on repurchased Class B shares. The programme was fully subscribed. Addtech has four outstanding call option programmes for a total of 1,069,500 shares. Call options issued on repurchased shares entail a dilution effect of about 0.1 percent during the latest 12-month period. During the quarter, 150,000 treasury shares were repurchased. Addtech's own shareholdings fully meet the needs of the outstanding call option programmes.
|Outstanding programme||Number of options||Corresponding number of shares||Proportion of total shares||Exercise price||Expiration period|
|2019/2023||300,000||300,000||0.4%||321.80||5 Sep 2022 -2 Jun 2023|
|2018/2022||300,000||300,000||0.4%||232.90||6 Sep 2021 - 3 Jun 2022|
|2017/2021||300,000||300,000||0.4%||178.50||14 Sep 2020 - 4 Jun 2021|
|2016/2020||169,500||169,500||0.2%||159.00||16 Sep 2019 - 5 Jun 2020|
Acquisitions and disposal
During the period, 1 April to 30 June 2019 the following acquisitions were completed; Omni Ray AG and Thiim A/S to become part of the Automation business area, Thurne Teknik AB and AB N.O. Rönne to become part of the Industrial Process business and Best Seating Systems Walter Tausch GmbH to become part of the Power Solutions business area.
During the second quarter, three company acquisition took place:
On 3 July Profelec Oy, Finland, was acquired to become part of the Energy business area. Profelec is a leading supplier of professional electronics in Finland and Baltic States representing several international high value brands in the areas of Test & Measurement and System Components. The company has sales of about EUR 0.6 million and 2 employees.
On 12 August BKC Products Ltd., Great Britain was acquired to become part of the Industrial Process business area. BKC specialise in providing engineered solutions and improvements to power transmission, conveying, and general machine applications. The company has sales of about GBP 1 million and 5 employees.
On 29 August Promector Oy, Finland, was acquired to become a part of the Automation business area. Promector Oy designs and produces unique production line equipment and they specialize in the field of pharmaceutical and diagnostics. The company has sales of about EUR 2.3 million and 20 employees.
The purchase price allocation calculations for the acquisitions completed during the period 1 April – 30 September 2018 have now been finalised. No significant adjustments have been made to the calculations. Acquisitions completed as of the 2018/2019 financial year are distributed among the Group’s business areas as follows:
|Acquisitions (disposals)||Closing|| Net sales, |
|Number of employees*||Business Area|
|Synthecs Group, Netherlands**||April, 2018||145||50||Automation|
|Xi Instrument AB, Sweden||April, 2018||13||2||Energy|
|KRV AS, Norway||April, 2018||55||27||Industrial Process|
|Scanwill Fluid Power ApS, & Willtech ApS, Denmark||April, 2018||15||4||Components|
|Duelco A/S, Denmark||July, 2018||150||30||Energy|
|Prisma Teknik AB and Prisma Light AB, Sweden||July, 2018||70||27||Energy|
|Fibersystem AB, Sweden**||July, 2018||140||12||Automation|
|TLS Energimätning AB, Sweden||July, 2018||50||9||Industrial Process|
|Diamond Point International (Europe) Ltd, Great Britain**||July, 2018||40||9||Automation|
|Power Technic ApS, Denmark||July, 2018||50||6||Power Solutions|
|(Solar Supply Sweden AB, Sweden)||(August, 2018)||(80)||(5)||(Power Solutions)|
|Nordautomation Oy, Finland||September, 2018||155||85||Industrial Process|
|Wood Recycling Sweden AB, Sweden||October, 2018||7||2||Industrial Process|
|Nylund Industrial Electronics (assets and liabilities), Finland||January, 2019||35||3||Components|
|Birepo A/S, Denmark||January, 2019||35||10||Components|
|Omni Ray AG, Switzerland||April, 2019||330||65||Automation|
|Thurne Teknik AB, Sweden||April, 2019||100||19||Industrial Process|
|AB N.O. Rönne, Sweden||April, 2019||8||4||Industrial Process|
|Best Seating Systems Walter Tausch GmbH, Austria||May, 2019||23||5||Power Solutions|
|Thiim A/S, Denmark||June, 2019||70||15||Automation|
|Profelec Oy, Finland||July, 2019||6||2||Energy|
|BKC Products Ltd., Great Britain||August, 2019||12||5||Industrial Process|
|Promector Oy, Finland||August, 2019||24||20||Automation|
|* Refers to assessed condition at the time of acquisition and disposal, respectively, on a full-year basis.|
|**Previous to April 1, 2019, the company belonged to the Components business area.|
If all acquisitions which have taken effect during the period had been completed on 1 April 2019, their impact would have been an estimated SEK 270 million on Group net sales, about SEK 11 million on operating profit and about SEK 8 million on profit after tax for the period.
Addtech normally employs an acquisition structure comprising basic purchase consideration and contingent consideration. The outcome of contingent purchase considerations is determined by the future earnings reached by the companies and is subject to a fixed maximum level. Of considerations not yet paid for acquisitions during the period, the discounted value amounts to SEK 31 million. The contingent purchase considerations fall due for payment within four years and the outcome is subject to a maximum of SEK 43 million.
Transaction costs for acquisitions that resulted in an ownership transfer during the period, amounted to SEK 3 million (5) and are reported under Selling expenses.
Revaluation of contingent consideration had a positive net effect of SEK 16 million (2) during the period. The impact on profits are reported under Other operating income and Other operating expenses, respectively.
According to the preliminary acquisitions analyses, the assets and liabilities included in the acquisitions were as follows, during the period:
|Carrying amount at acquisition date||Adjustment to fair value||Fair value|
|Intangible non-current assets||1||132||133|
|Other non-current assets||10||-||10|
|Other current assets||127||-||127|
|Deferred tax liability/tax asset||0||-17||-17|
|Acquired net assets||118||63||181|
|Less: cash and cash equivalents in acquired businesses||-30|
|Less: consideration not yet paid||-41|
|Effect on the Group’s cash and cash equivalents||236|
|1) The consideration is stated excluding acquisition expenses.|