Finishing strongly, we summarise a successful financial year for Addtech, with favourable performance among the companies generating conditions for continued profitable growth. Despite the uncertainty in the general business environment, the year has been characterised by a high level of activity, resulting in a sales increase of 9 percent, with organic growth in all quarters, earnings growth of 14 percent and a strengthened EBITA margin of 15.0 percent (14.3). With a high rate of acquisitions combined with the strength of our well-diversified business of entrepreneurial niche companies in strong positions, we have once again managed the challenges, while capturing the potential of the market in a highly satisfactory manner.

FOURTH QUARTER

Overall, the market situation strengthened somewhat in the fourth quarter, although variations remained between different customer segments. Total sales increased by 13 percent, of which 2 percent was organic, with solid contributions from four out of five business areas, with Energy showing the strongest sales trend and Automation the weakest. EBITA increased by 15 percent to SEK 880 million with an EBITA margin of 15.3 percent (15.0).

During the quarter, two acquisitions were completed; Italian Coel Motori S.r.l, which manufactures electric brake motors and patented brake modules, and German Rosho Automotive Solutions GmbH, which designs and configures safety and driver assistance systems based on camera technology.

FULL YEAR

Despite a generally subdued economic climate and differences in market conditions between different segments, overall customer activity remained stable at a high level over the year. With a clear focus on a favourable product mix, active pricing, and profitable acquisitions, we have created good growth and increased both our margins and profitability.

The market for infrastructure products for national and regional grids, as well as products and solutions for the defence and marine segments, has been strong and has also strengthened sequentially over the year. The overall business situation in the medical technology, electronics, wind power, and mechanical and process industry segments has remained at stable high levels. Building and installation, as well as data and telecommunications, excluding data halls, had a challenging year. The willingness to invest in new projects in the sawmill industry and demand for special vehicles, particularly construction machinery, remained weak.

From a geographical perspective, the market situation over the year was stable in Sweden and Denmark, weak in Finland and strong in Norway. In our primary markets outside the Nordic region, business conditions were weak in DACH, stable in the Benelux countries and generally favourable for our UK companies. Our sales outside the Nordic region continued to increase over the year and amount to about 40 percent of our total sales on a rolling 12-month basis.

Cash flow from operating activities strengthened from already high levels and amounted to SEK 2,709 million (2,575) for the full year, driven by continued earnings growth, a stronger operating margin and focus on efficient working capital, and our long-term financial target P/WC increased to 76 percent (68).

ACQUISITIONS

Over the financial year, we continued to acquire at a high rate, on own cash flow, high-performing companies that strengthen our niches. In total, twelve companies were welcomed to the Group, followed by two more after the end of the period, adding a total of approximately SEK 1,900 million and 405 new employees to the Group.

The share of acquisitions outside the Nordic region increased, accounting for nine out of twelve acquisitions over the year, or about 62 percent of the added sales. In early April, two more acquisitions were completed, Canadian Novatech Analytical Solutions Inc, which supplies analytical instrumentation and engineered systems for measuring gases and liquids to customers in the process and energy segments, and British AMP Power Protection Ltd, which develops, supplies and supports rugged uninterruptible power supplies (UPS) and power protection systems for harsh environments to the defence, marine and transport industries. Accordingly, we have again demonstrated that, as long as we safeguard a strategic and cultural match, we can successfully scale the business model based on our business units’ niche strategies in selected geographic markets.

In general, we retain a positive view of the acquisition market and, with our strong financial position, increased interest in becoming part of Addtech and a well-filled pipeline, we are well placed to maintain a high pace over the current financial year.