Interim report 1 January – 31 March 2024

First quarter 2024

• Order intake was unchanged and amounted to SEK 8,037 million (8,076). Comparable units showed a decline of 3%.
• Net sales decreased by 4% to SEK 7,744 million (8,063). Comparable units showed a decline of 6%.
• EBITA decreased by 16% to SEK 1,033 million (1,225), corresponding to an EBITA margin of 13.3% (15.2%).
• Profit for the quarter decreased by 22% to SEK 588 million (752) and earnings per share amounted to SEK 1.61 (2.06).
• Cash flow from operating activities amounted to SEK 487 million (632).

CEO’s message

First quarter
In the first quarter of 2024, demand was stable and order intake amounted to SEK 8.0 billion, in line with the strong level in the corresponding period in the previous year. Organically, order intake showed a 3% decline, largely due to a lower number of working days. Many companies with customers in medical technology and pharmaceuticals, the process industry and the energy segment experienced strong demand. However, there was still a large variation in demand between different companies, with more subdued demand from customers in infrastructure and construction, and the engineering industry. The Life Science business area showed the most positive organic growth in order intake while Infrastructure & Construction showed the weakest performance.

Net sales for the quarter decreased from the previous year's strong levels and amounted to SEK 7.7 billion, corresponding to a decline of 6% in organic sales. This performance is mainly explained by the previous year’s strong comparative figures and fewer working days. A continuation of the strong market situation for many customers in the process industry and energy segment meant that organic sales in the Process, Energy & Water business area increased in the quarter. In the other business areas organic sales declined, for instance due to challenging comparative figures.

The combination of a weak organic sales trend and a slightly higher expense level affected profitability, and the EBITA margin amounted to 13.3% (15.2%). However, the gross margin strengthened, both compared with the corresponding period in the previous year and sequentially. The Life Science business area had the largest margin decline, mainly due to challenging comparative figures in the previous year when sales and deliveries to customers in pharmaceutical production were strong.

Working capital for comparable units was lower than in the corresponding period in the previous year and inventories were at approximately the same level as in the previous quarter. However, cash flow from operating activities weakened in the quarter and amounted to SEK 487 million (632), mainly due to the lower earnings. Despite a high acquisition pace during the quarter, the net debt/equity ratio is still low and the Group’s financial position remains strong.

Acquisitions
So far in 2024, we have welcomed seven new companies to Indutrade, with total annual sales of SEK 775 million. During the quarter, the German company pure!, the Swedish company SDT, the medical technology company MeHow in Ireland, ATLINE in Denmark, the Norwegian laboratory technology company Matriks and Hemomatik in Sweden, were acquired. Since the end of the quarter, we have also welcomed Geosense, a leading specialist in geotechnical monitoring products. The company is based in the UK and is one of Europe’s leading manufacturers in its field, operating in a niche with structural growth.

The inflow of acquisition candidates remains at a high level and we have several ongoing projects in different phases. In recent years, we have strengthened our acquisition capability and have experienced resources both centrally and in the business areas, as well as locally in our main countries, most recently through the establishment in northern Italy. These factors all point to a successful acquisition year for Indutrade.

Outlook
Demand was stable and high during the first quarter, but sales growth was negatively affected by high comparative figures and the number of working days. The uncertainty about the general state of the economy remains. The comparative figures are strong also for the second quarter, but the slightly improved order book along with good acquisition pace provide some optimism about the earnings trend for the rest of the year.

I am confident that our entrepreneurial, flexible companies are dealing effectively with the challenging market situation. Companies with a declining order intake are working actively on cost reductions, while those in a better market situation continue to pursue growth initiatives. Conditions are favourable for long-term positive growth in many industries, including those linked to the green technology transition and a growing medical technology and pharmaceutical sector. Many of our companies have strong positions and opportunities in these industries and, with the new Group structure, the stage is set for continued sustainable, profitable growth.

Bo Annvik, President and CEO

Note
This information is such information that Indutrade AB is obliged to make public in accordance with the EU Market Abuse Regulation. The information was released for publication by the contact persons below on 25 April 2024 at 7.30 a.m. CEST.

For further information, please contact:
Bo Annvik, President and CEO, tel. +46 8 703 03 00,
Patrik Johnson, CFO, tel. +46 70 397 50 30.

This report will be commented upon as follows:
A webcast of the report will be presented on 25 April at 9.30 a.m. CEST via the following link: https://ir.financialhearings.com/indutrade-q1-report-2024/register

To participate in the presentation by phone and ask questions, please register via the link below. After registration, you will receive a telephone number and conference ID to log into the conference call.

https://conference.financialhearings.com/teleconference/?id=50048721

About Indutrade
Indutrade is an international technology and industrial business group that today consists of approximately 200 companies in some 30 countries, mainly in Europe. In a decentralised way, we aim to provide sustainable profitable growth by developing and acquiring successful companies managed by passionate entrepreneurs. Our companies develop, manufacture, and sell components, systems and services with significant technical content in selected niches. Our value-based culture, where people make the difference, has been the foundation of our success since the start in 1978. Indutrade's net sales totalled SEK 32 billion in 2023, and the share is listed on Nasdaq Stockholm in Sweden.