Interim report second quarter and first half of 2024

Second quarter 2024

• Order intake increased by 6% to SEK 8,296 million (7,829). For comparable units, the increase was 1%.
• Net sales increased by 5% to SEK 8,491 million (8,100). For comparable units, the increase was 1%.
• EBITA increased by 3% to SEK 1,253 million (1,213), corresponding to an EBITA margin of 14.8% (15.0%).
• Profit for the quarter increased by 1% to SEK 730 million (724) and earnings per share amounted to SEK 2.00 (1.99).
• Cash flow from operating activities amounted to SEK 1,029 million (1,112).

CEO’s message

Second quarter
Demand during the second quarter remained stable and at a high level. Order intake amounted to SEK 8.3 billion (7.8), an increase of 6% compared with the corresponding period in the previous year. Organic order intake growth was 1%. There was still a large variation in demand between companies, segments and countries, with the strongest growth for companies with customers in the medical technology and pharmaceuticals segment. Demand remained strong for companies with customers in the process industry, stable in the engineering industry and slightly subdued overall in infrastructure and construction.

Despite strong comparative figures, net sales in the quarter increased by 5%, amounting to a record-high SEK 8.5 billion (8.1). Organic sales growth was 1%, primarily due to a higher number of working days, with three of five business areas showing a positive development. The Life Science business area showed the strongest performance, driven by increased deliveries to customers in pharmaceuticals production in Denmark and distribution of medical technology products in the Nordic countries.

EBITA increased by 3% and amounted to SEK 1.3 billion (1.2). The EBITA margin was 14.8%, in line with the underlying EBITA margin in the previous year. The margin was positively impacted by newly acquired companies but offset slightly by the organic development. Thanks to continued successful work on pricing in many companies, the gross margin increased compared with the previous year. The EBITA margin increased in three of five business areas, with the strongest performance in Technology & Systems Solutions. The margin decreased marginally in the business areas Industrial & Engineering and Life Science.

Inventories for comparable units declined slightly compared with the first quarter. However, total working capital showed a slight increase and working capital efficiency remained at approximately the same level as in the previous year. Cash flow from operating activities declined slightly compared with the previous year and amounted to SEK 1.0 billion (1.1). Our net debt/equity ratio is well balanced, and the Group maintains its solid financial position.

We are continuously working on initiatives to strengthen our strategic platform for continued, sustainable profitable growth. This applies to growth driven by acquisitions as well as organically. In the first half-year, we largely focused on the implementation of our new Group structure, with many companies confirming that there are clear advantages to be had from a structure which groups together companies within similar segments or sectors. We continued to make progress in sustainability, where our activities in the quarter included naming the companies that won Indutrade’s annual sustainability awards. Since the end of the quarter, we have also applied to have our updated climate targets validated by SBTi (Science Based Targets initiative).

Acquisitions
Indutrade has had a high acquisition pace in 2024. We have so far welcomed 12 new companies to the Group, with total annual sales of around SEK 1.1 billion. We announced five acquisitions in the second quarter and have acquired one more company after the end of the quarter. The most recent acquisition is Miclev, a Swedish technology trading company specialising in high-quality products for the detection, identification and elimination of, and protection against, micro-organisms.

The inflow of new acquisition candidates remains at a high level, with several ongoing projects in different phases. Our overarching ambition is to acquire around 20 companies per year, and the conditions for a successful acquisition year are favourable.

Outlook
Demand was slightly subdued in a couple of large customer segments in the first half of the year, but the order intake was nevertheless at a high and stable level overall. The comparative figures from the previous year have been challenging, especially in terms of sales. Going forward, there is still uncertainty around the general state of the economy. The high acquisition pace, combined with a good, high-quality order book, and somewhat weaker comparative figures, provide some comfort about the earnings trend in the second half of the year. In addition, many of our companies are operating in markets driven by structural trends, which provides resilience and long-term, organic growth potential.

Our scalable, decentralised business model – comprising flexible companies driven by committed entrepreneurs – together with our new Group structure, which provides new, long-term growth opportunities, gives us good conditions to continue to generate sustainable value creation over time.

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 and the Securities Market Act. The information was released for publication by the contact persons below on 18 July 2024 at 9.30 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 18 July at 11.00 a.m. CEST via the following link:
https://ir.financialhearings.com/indutrade-q2-report-2024

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=50048722

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.