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.

Ownership structure
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
Total 1,069,500 1,069,500

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
Inventories 64 - 64
Other current assets 127 - 127
Deferred tax liability/tax asset 0 -17 -17
Other liabilities -84 -52 -136
Acquired net assets 118 63 181
Goodwill 129
Non-controlling interests -3
Consideration 1) 307
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.

Parent Company

Parent Company net sales amounted to SEK 30 million (30) and profit after financial items was SEK -15 million (-11). Net investments in non-current assets were SEK 0 million (0). The Parent Company's financial net debt was SEK 310 million (147) at the end of the period. 

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