OTHER FINANCIAL INFORMATION
Profitability, financial position and cash flow
The return on equity at the end of the financial year was 32 percent (29), and return on capital employed was 21 percent (21). Return on working capital P/WC (EBITA in relation to working capital) amounted to 56 percent (53).
At the end of the financial year the equity ratio amounted to 36 percent (36). The implementation of IFRS 16 had a negative effect and increased the balance sheet total by SEK 624 million. Equity per share, excluding non-controlling interest, totalled SEK 44.95 (36.80). The Group's net debt at the end of the financial year amounted to SEK 2,253 million (1,700), excluding pension liabilities of SEK 332 million (260), including leasing liabilities from IFRS 16 totalling SEK 627 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 0.7 (0.7).
Cash and cash equivalents consisting of cash and bank equivalents and approved but non-utilised credit facilities amounted to SEK 2,407 million (566) at 31 March 2020. Before the end of the financial year, additional credits totalling SEK 1,500 million were granted. These became available on 31 March 2020, at which time SEK 200 million was also repaid. As a result, Addtech had a total credit framework of SEK 3,800 million as of 31 March 2020.
Cash flow from operating activities amounted to SEK 1,117 million (524) during the financial year. The implementation of IFRS 16 has increased cash flow from operating activities by SEK 154 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 disposals including settlement of contingent consideration regarding acquisitions implemented in previous years amounted to SEK 430 million (645). Investments in noncurrent assets totalled SEK 109 million (94) and disposal of non-current assets amounted to SEK 6 million (12). Dividend from associated companies amounted to SEK 1 million (2). Repurchase of treasury shares amounted to SEK 42 million (38) and repurchase of call options amounted to SEK 23 million (11). Exercised and issued call options totalled SEK 39 million (33). Dividends paid to the shareholders of the Parent Company totalled SEK 336 million (269), corresponding to SEK 5.00 (4.00) per share. The dividend was paid out in the second quarter.
At the end of the financial year, the number of employees was 2,981, compared to 2,759 at the beginning of the financial year. During the financial year, completed acquisitions resulted in an increase of the number of employees by 170. The average number of employees in the latest 12-month period was 2,913.
At the end of the financial year the share capital amounted to SEK 51.1 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||-1,049,918||1.5%||1.1%|
|Total number of shares after repurchases||67,148,578|
Addtech has four outstanding call option programmes for a total of 1,007,000 shares. Call options issued on repurchased shares entail a dilution effect of about 0.3 percent during the latest 12-month period. 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||107,000||107,000||0.2%||159.00||16 Sep 2019 - 5 Jun 2020|
Acquisitions and disposals
During the period, 1 April to 31 December 2019 the following acquisitions were completed; Omni Ray AG, Thiim A/S and Promector Oy to become part of the Automation business area, Thurne Teknik AB, AB N.O. Rönne and BKC Products Ltd. to become part of the Industrial Process business area, Best Seating Systems Walter Tausch GmbH to become part of the Power Solutions business area and Profelec Oy to become part of the Energy business area.
On 3 February Wireco-NB Oy, Finland, was acquired to become part of the Energy business area. Wireco is a supplier of special cables and cable accessories for industrial and mining applications, mainly in Finland. The company has sales of about EUR 2.2 million and 6 employees.
On 27 February Caligo Industria Oy, Finland, was acquired to become part of the Industrial Process business area. Caligo develops and supplies flue gas cleaning and heat recovery systems mainly to combined heat and powerplants and the wood processing industry in the Nordics and in France. The company has sales of about EUR 6.3 million and 9 employees.
On 2 March DMC Digital Motor Control GmbH, Germany, and Q-tronic B.V, Netherlands, was acquired to become part of the Power Solutions business area. DMC designs and produces electrical motor controllers for battery driven applications including electrical vehicles. Q-tronic provide electrical component solutions and subsystems for electrical vehicles in mainly Benelux countries. Together DMC and Q-tronic has sales of about EUR 7 million and 20 employees.
The purchase price allocation calculations for the acquisitions completed during the period 1 April 2018 - 31 March 2019 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:
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|
|Wireco-NB Oy, Finland||February, 2020||23||6||Energy|
|Caligo Industria Oy, Finland||February, 2020||70||9||Industrial Process|
|DMC Digital Motor Control GmbH, Germany||March, 2020||30||10||Power Solutions|
|Q-tronic B.V, Netherlands||March, 2020||45||10||Power Solutions|
|Elkome Group Oy, Finland||April, 2020||85||38||Automation|
|Peter Andersson AB, Sweden||April, 2020||30||9||Energy|
|Valutec Group AB, Sweden||April, 2020||350||45||Industrial Process|
* 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 financial year had been completed on 1 April 2019, their impact would have been an estimated SEK 750 million on Group net sales, about SEK 40 million on operating profit and about SEK 20 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 financial year, the discounted value amounts to SEK 67 million. The contingent purchase considerations fall due for payment within three years and the outcome is subject to a maximum of SEK 94 million.
Transaction costs for acquisitions that resulted in an ownership transfer during the financial year, amounted to SEK 7 million (7) and are reported under Selling expenses.
Revaluation of contingent consideration had a positive net effect of SEK 52 million (8) during the financial year. 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 year:
|SEKm||Carrying amount at acquisition date||Adjustment to fair value||Fair value|
|Intangible non-current assets||2||214||216|
|Other non-current assets||13||-||13|
|Other current assets||175||-||175|
|Deferred tax liability/tax asset||0||-36||-36|
|Acquired net assets||156||126||282|
|Less: cash and cash equivalents in acquired businesses||-65|
|Less: consideration not yet paid||-73|
|Effect on the Group’s cash and cash equivalents||352|
|1) Goodwill is justified by expected future sales trend and profitability as well as the personnel included in the acquired companies.|
|2) The consideration is stated excluding acquisition expenses.|