First quarter (1 April–30 June 2024)

• Revenue rose by 2 percent to MSEK 1,253 (1,228).
• EBITA increased by 13 percent to MSEK 119 (105) and the EBITA margin improved to 9.5 percent (8.6).
• Net profit rose by 21 percent to MSEK 58 (48).
• Cash flow from operating activities increased by 8 percent to MSEK 194 (179).
• Two acquisitions have been completed, one of which after the end of the period, with total annual revenue of approximately MSEK 75.
• Earnings per share for the most recent 12-month period amounted to SEK 7.40 before and after dilution, compared with SEK 7.15 for the 2023/2024 financial year.

CEO’s comments

A quarter that brought us closer to our goals

The new operating year began with a continued positive trend in earnings, profitability and cash flow. EBITA increased by 13 percent to MSEK 119 (105), the EBITA margin rose to 9.5 percent (8.6) and we have now improved our earnings for 18 consecutive quarters.
Revenue rose by 2 percent during the quarter. However, in organic terms, we saw a decline of 7 percent, mainly due to weaker underlying demand in both the construction and the manufacturing sectors. Nonetheless, our assessment is that demand has stabilised at the current level. Companies with low profitability continued to phase out low-margin business, which contributed to an increase in the contribution margin ratio of more than 1 percentage point during the quarter, and further efficiency improvements resulted in a continued reduction in the Group’s like-for-like costs. We continued to lower our working capital and reduced our inventories organically by over MSEK 200 year on year. The combination of increased earnings and lower working capital meant that profitability (P/WC) improved to 27 percent (22). Along with the fact that interest rates this quarter were on a par with the same quarter last year, this increase in operating profit meant that profit before tax increased by 19 percent to MSEK 74 million (62). Cash flow from operating activities rose to MSEK 194, enabling a continued reduction of the Group’s net loan liability despite completed acquisitions.

New division names reflect our broadened acquisition strategy

Ahead of the new financial year, we changed the names of our three divisions to better reflect our strategic development and the Group’s broader focus. The divisions are now called Core Solutions, Industrial Equipment and Safety Technology. The companies in Core Solutions offer products and solutions that form part of the customer’s end product – for example, fastening products, metal suspended ceilings, and fire seals for marine vessels. Industrial Equipment delivers solutions such as tools, instruments and machinery needed to complete the end customer’s products. Safety Technology focuses on safety products and solutions in areas such as personal safety, perimeter protection, technical safety and fire safety.

Our acquisition objectives remain unchanged

Since the beginning of the financial year, we have conducted two new acquisitions. The first was Maskinab, a leading supplier of machinery for sheet metal processing mainly to Swedish industrial customers. Together with our company Belano, which operates in the same niche but targets the construction market, we are becoming a leader in sheet metal processing machinery for the construction and manufacturing sectors. The most recent acquisition was Spraylat, a leading player that manufactures and sells temporary protective coatings for windows. Since both of these companies have profitability above 45 percent, our focus for them will be growth. We continue to see good market conditions for acquiring high-quality, niche B2B companies in line with our acquisition objectives, and we have the necessary funds, over SEK 1 billion, to finance and execute acquisitions.

Strong confidence in our decentralised governance model

Although several of our businesses are experiencing weak demand, we have strong confidence in our decentralised governance model, whereby each company acts on an individual basis. This includes streamlining and improving our product mix to strengthen the companies in the short term but also to position them to face a stronger market going forward. We invest for growth in companies with growth potential and satisfactory profitability. The Group’s broad exposure, with 31 profit centres in various sectors, combined with our acquisition strategy means we are well equipped to continue to deliver on our financial targets.

Stockholm, July 2024

Magnus Söderlind
President & CEO