STOCKHOLM--(BUSINESS WIRE)--Reporting period January – June
- Net sales increased by 14.3 per cent to SEK 4,424 (3,870) million. Organically, net sales grew by 6.2 per cent
- EBITA* increased by 16.9 per cent to SEK 681 (583) million
- The EBITA margin* amounted to 15.4 (15.1) per cent
- Earnings before tax grew by 13.9 per cent to SEK 612 (537) million
- Net profit for the period grew by 15.5 per cent to SEK 459 (397) million
- Earnings per share increased by 15.1 per cent to SEK 4.96 (4.31)
-
Cash flow from operating activities remained strong, increasing by
17.3 per cent to
SEK 425 (362) million - In the first six months of the year Lifco acquired seven businesses with combined annual sales of around SEK 870 million
Reporting period April – June
- Net sales increased by 11.8 per cent to SEK 2,373 (2,122) million. Organically, net sales grew by 3.9 per cent
- EBITA* increased by 19.4 per cent to SEK 407 (341) million
- The EBITA margin* amounted to 17.2 (16.1) per cent
- Earnings before tax grew by 17.5 per cent to SEK 369 (314) million
- Net profit for the period grew by 19.1 per cent to SEK 277 (232) million
-
Cash flow from operating activities was strong, increasing by 13.5 per
cent to
SEK 281 (247) million
Summary of financial performance
| SIX MONTHS | SECOND QUARTER | Rolling 12 months | FULL YEAR | ||||||
| SEK million | 2016 | 2015 | change | 2016 | 2015 | change | change | 2015 | |
| Net sales | 4,424 | 3,870 | 14.3% | 2,373 | 2,122 | 11.8% | 8,455 | 7.0% | 7,901 |
| EBITA* | 681 | 583 | 16.9% | 407 | 341 | 19.4% | 1,284 | 8.3% | 1,186 |
| EBITA margin* | 15.4% | 15.1% | 0.3 | 17.2% | 16.1% | 1.1 | 15.2% | 0.2 | 15.0% |
| Profit before tax | 612 | 537 | 13.9% | 369 | 314 | 17.5% | 1,156 | 6.9% | 1,082 |
| Net profit for the period | 459 | 397 | 15.5% | 277 | 232 | 19.1% | 886 | 7.4% | 825 |
| Earnings per share | 4.96 | 4.31 | 15.1% | 2.98 | 2.50 | 18.8% | 9.56 | 7.3% | 8.91 |
| Return on capital employed | 19.8% | 18.9% | 0.9 | 19.8% | 18.9% | 0.9 | 19.8% | -0.1 | 19.9% |
| Return on capital employed excl. goodwill | 135% | 116% | 19.0 | 135% | 116% | 19.0 | 135% | 12.0 | 123% |
* Before restructuring, integration and acquisition costs.
COMMENTS FROM THE CEO
Net sales increased by 14.3 per cent in the first half of 2016, to SEK 4,424 (3,870) million, through organic growth as well as acquisitions. Organic growth was 6.2 per cent. All three business areas increased their sales and earnings in the first six months. The market environment remained generally favourable in the three business areas.
EBITA before restructuring, integration and acquisition costs increased by 16.9 per cent to SEK 681 (583) million in the first half of the year while the EBITA margin expanded by 0.3 percentage points over the same period, to 15.4 (15.1) per cent. Earnings per share increased by 15.1 per cent in the first half, to SEK 4.96 (4.31).
Profitability in the Dental business was stable in the first six months. Profitability in the Demolition & Tools business area was affected by normal quarterly fluctuations. Systems Solutions saw a sharp improvement in profitability during the six-month period.
Cash flow from operating activities remained strong, increasing by 17.3 per cent to SEK 425 (362) million in the first half.
Lifco has subsidiaries which operate in the United Kingdom. We are keeping a close eye on changes in the country’s relations with the EU but believe it is not yet possible to assess the effects of Brexit.
We have continued to deliver on our strategy of investing in market-leading niche businesses with the potential to deliver sustainable earnings growth and robust cash flows. In the first half of the year Lifco consolidated seven new businesses with combined annual sales of around SEK 870 million, see also pages 7 and 14. Taken together, the acquisitions will have a positive impact on Lifco’s results and financial position in the current year. Even after these acquisitions we still have significant financial scope for further acquisitions, as net debt is 2.1 times EBITDA before restructuring, integration and acquisition costs, well below our target of a net debt of less than three times EBITDA.
Fredrik Karlsson
CEO
GROUP PERFORMANCE IN JANUARY – JUNE
Net sales increased by 14.3 per cent to SEK 4,424 (3,870) million, driven by organic growth and acquisitions. Acquisitions contributed 9.6 per cent and organic growth 6.2 per cent while changes in exchange rates had a negative impact of 1.5 per cent. During the six-month period seven new businesses were consolidated.
EBITA* increased by 16.9 per cent to SEK 681 (583) million and the EBITA margin* improved to 15.4 (15.1) per cent. EBITA* improved on the back of organic growth and acquisitions. Changes in exchange rates had a marginal negative impact on EBITA* of 1.4 percentage points. In the first six months 40 per cent of EBITA* was generated in EUR, 28 per cent in SEK, 12 per cent in NOK, 7 per cent in DKK, 4 per cent in GBP, 3 per cent in USD and 6 per cent in other currencies.
Net financial items were SEK -17 (-7) million.
Earnings before tax increased by 13.9 per cent to SEK 612 (537) million. Net profit for the period grew by 15.5 per cent to SEK 459 (397) million.
Average capital employed excluding goodwill increased by SEK 20 million from 30 June 2015 to SEK 952 (932) million. EBITA* in relation to average capital employed excluding goodwill increased to 135 (116) per cent at 30 June 2016. At year-end the figure was 123 per cent. The improvement was due to a higher profit and good control of capital employed.
The Group’s net interest-bearing debt increased by SEK 908 million from 31 December 2015 to SEK 2,858 million at 30 June 2016. The net debt/equity ratio was 0.7 (0.7) at 30 June 2016 and net debt in relation to EBITDA* was 2.1 (2.0) times.
Cash flow from operating activities improved by 17.3 per cent to SEK 425 (362) million in the first six months. The continued strong cash flow was due to a higher profit and good control of capital employed. Cash flow from investing activities was SEK -1,006 (-516) million, which was mainly attributable to acquisitions.
GROUP PERFORMANCE IN THE SECOND QUARTER
Net sales increased by 11.8 per cent to SEK 2,373 (2,122) million, driven by organic growth and acquisitions. Acquisitions contributed 9.5 per cent and organic growth 3.9 per cent while changes in exchange rates had a negative impact of 1.6 per cent.
EBITA* increased by 19.4 per cent to SEK 407 (341) million and the EBITA margin* improved by 1.1 percentage points to 17.2 (16.1) per cent. EBITA* improved on the back of organic growth and acquisitions. Changes in exchange rates had a negative impact on EBITA* of 1.4 percentage points. In the second quarter 40 per cent of EBITA* was generated in EUR, 30 per cent in SEK, 13 per cent in NOK, 5 per cent in DKK, 4 per cent in USD, 3 per cent in GBP and 5 per cent in other currencies.
Net financial items were SEK -9 (-9) million.
Earnings before tax increased by 17.5 per cent to SEK 369 (314) million. Net profit for the period increased by 19.1 per cent to SEK 277 (232) million.
Average capital employed excluding goodwill remained largely flat over the quarter, SEK 953 million at 30 June 2016 compared to SEK 952 million at 31 March 2016. EBITA in relation to average capital employed excluding goodwill improved by 7.0 percentage points from 31 March 2016. The improvement was due chiefly to a higher profit and good control of capital employed.
During the three-month period the Group’s net interest-bearing debt increased by SEK 79 million to SEK 2,858 million. Dividend payments during the period totalled SEK 277 (236) million. The net debt/equity ratio remained unchanged at 0.7. At the end of the period 50 per cent of the Group’s interest-bearing liabilities were denominated in EUR.
Cash flow from operating activities improved by 13.5 per cent to SEK 281 (247) million during the three-month period. The continued strong cash flow was due to a higher profit and good control of capital employed. Cash flow from investing activities was SEK -35 (-84) million.
FINANCIAL PERFORMANCE – BUSINESS AREAS
Dental
| SIX MONTHS | SECOND QUARTER | Rolling 12 months | FULL YEAR | ||||||
| SEK million | 2016 | 2015 | change | 2016 | 2015 | change | change | 2015 | |
| Net sales | 1,773 | 1,763 | 0.5% | 904 | 869 | 4.0% | 3,445 | 0.3% | 3,435 |
| EBITA* | 328 | 322 | 1.6% | 172 | 153 | 13.0% | 619 | 0.9% | 614 |
| EBITA margin* | 18.5% | 18.3% | 0.2 | 19.1% | 17.6% | 1.5 | 18.0% | 0.1 | 17.9% |
The companies in the Dental business area are leading suppliers of consumables, equipment and technical service for dentists across Europe. Lifco sells dental technology to dentists in the Nordic countries and Germany, and develops and sells medical record systems in Denmark and Sweden. The business area also includes a number of smaller manufacturing companies which produce disinfectants, saliva ejectors and endodontic products.
Dental’s net sales grew by 0.5 per cent to SEK 1,773 (1,763) million. Net sales were negatively affected by the sale of NetDental at the end of the second quarter of 2015 while the acquisitions of J.H. Orsing, Smilodent, Preventum Partner, Dens Esthetix and Praezimed had a positive impact on net sales in the first six months.
EBITA* improved by 1.6 per cent to SEK 328 (322) million in the first six months and the EBITA margin* increased to 18.5 (18.3) per cent.
The dental market remains generally stable. The results for individual companies in Lifco’s dental business may in any individual quarter be influenced by significant fluctuations in exchange rates, calendar effects (such as Easter), gained or lost contracts in procurements of consumables by public-sector or major private-sectors customers as well as fluctuations in the delivery of equipment. In the first quarter the early Easter in 2016 had a slight negative impact on net sales and earnings. The early Easter 2016 had a correspondingly positive impact on the dental business in the second quarter.
In the first quarter Lifco announced two acquisitions in Dental: The German dental laboratory Dens Esthetix and the German dental company Praezimed. Dens Esthetix had net sales of around EUR 1.4 million in 2015 and has 14 employees. Praezimed provides servicing and repair of dental instruments used by dentists and dental laboratories in Germany. Praezimed had net sales of around EUR 2.5 million in 2015 and has 15 employees. Both businesses were consolidated as of February 2016. The acquisition of endodontic products that was announced in December 2015 was consolidated as of January 2016. The business had a turnover of around SEK 10 million in 2015.
Demolition & Tools
| SIX MONTHS | SECOND QUARTER | Rolling 12 months | FULL YEAR | ||||||
| SEK million | 2016 | 2015 | change | 2016 | 2015 | change | change | 2015 | |
| Net sales | 853 | 760 | 12.3% | 469 | 430 | 9.0% | 1,667 | 5.9% | 1,574 |
| EBITA* | 193 | 184 | 5.1% | 114 | 117 | -2.8% | 405 | 2.3% | 396 |
| EBITA margin* | 22.6% | 24.2% | -1.6 | 24.3% | 27.3% | -3.0 | 24.3% | -0.8 | 25.1% |
D Demolition & Tools develops, manufactures and sells equipment for the construction and demolition industries. Lifco is the world’s leading supplier of demolition robots and crane attachments. The company is also one of the leading global suppliers of excavator attachments. The operations are divided into two divisions – Demolition Robots and Crane & Excavator Attachments – which are of roughly equal size in terms of sales.
In the first six months net sales increased by 12.3 per cent to SEK 853 (760) million. The market situation was generally good and sales increased in the majority of markets. Among the larger markets, Germany, France, China and the Nordic region saw the fastest growth.
In the first six months EBITA* increased by 5.1 per cent to SEK 193 (184) million. The EBITA margin* was 22.6 per cent (24.2) due to normal fluctuations between the reporting periods. Lifco works continuously to improve its product portfolios, strengthen its distribution systems and improve productivity in the Group’s companies. The earnings impact of such measures will fluctuate from one quarter to the next, however.
Systems Solutions
| SIX MONTHS | SECOND QUARTER | Rolling 12 months | FULL YEAR | ||||||
| SEK million | 2016 | 2015 | change | 2016 | 2015 | change | change | 2015 | |
| Net sales | 1,798 | 1,348 | 33.5% | 1,000 | 823 | 21.5% | 3,343 | 15.6% | 2,892 |
| EBITA* | 208 | 119 | 74.9% | 145 | 92 | 57.4% | 352 | 33.8% | 263 |
| EBITA margin* | 11.6% | 8.8% | 2.8 | 14.5% | 11.2% | 3.3 | 10.5% | 1.4 | 9.1% |
Through its operating units Systems Solutions operates in industries offering systems solutions. Systems Solutions is divided into five divisions: Interiors for Service Vehicles, Contract Manufacturing, Environmental Technology, Sawmill Equipment and Construction Materials. The divisions are leading players in their geographic markets. Following the acquisition of Cenika in January 2016, the Relining division has changed its name to Construction Materials.
Net sales in Systems Solutions increased by 33.5 per cent to SEK 1,798 (1,348) million and all divisions increased their sales in the first half of 2016.
EBITA* increased by 74.9 per cent to SEK 208 (119) million in the first half. All divisions improved their results during the period and the EBITA margin* increased to 11.6 (8.8) per cent. Lifco works continuously to improve its product portfolios, strengthen its distribution systems and improve productivity in the Group’s companies. The earnings impact of such measures will fluctuate from one quarter to the next, however.
Interiors for Service Vehicles grew both in terms of sales and profitability in the first six months of 2016 thanks to increased sales activities and an improved product range. Despite this, the EBITA margin* had still not reached a satisfactory level.
Contract Manufacturing performed well in a stable market. The division’s customers include world-leading manufacturers of equipment for the pharmaceutical industry as well as manufacturers of railway equipment, which require a high standard of quality as well as delivery flexibility and documentation. At the end of December, it was announced that Lifco had acquired Auto-Maskin of Norway, a leading supplier of control and monitoring systems for marine diesel engines. Auto-Maskin generated net sales of around NOK 130 million in 2015 and has 65 employees. The business was consolidated as of January 2016.
Environmental Technology had a good first half of the year. In January Redoma Recycling was acquired. Redoma Recycling is a Swedish company specialising in the development and manufacture of recycling machinery for small and medium cables. Redoma Recycling generated net sales of around SEK 25 million in 2015 and has eight employees. In February it was announced that Lifco had acquired TMC/Nessco of Norway, a world-leading supplier of marine compressors and spare parts. TMC/Nessco generated net sales of approximately NOK 525 million in 2015 and has about 90 employees. The business was consolidated as of March 2016.
Sawmill Equipment increased its sales and earnings in the first half thanks to a strong first quarter. The division sells projects, which means that sales and earnings normally fluctuate from one quarter to another.
Construction Materials (formerly Relining) had a satisfactory sales and earnings development during the three-month period due to the acquisition of a majority stake in Cenika of Norway. Cenika, which was consolidated as of February 2016, is a leading supplier of low-voltage electrical equipment. Cenika generated net sales of NOK 160 million in 2015 and has about 30 employees.
ACQUISITIONS
In the first half of 2016 Lifco consolidated the following acquisitions:
| Consolidated from month | Acquisition | Business area | Net sales | Employees |
| January | Auto-Maskin | Systems Solutions | NOK 130m | 65 |
| January | Endodontic products | Dental | SEK 10m | - |
| January | Redoma Recycling | Systems Solutions | SEK 25m | 8 |
| February | Cenika | Systems Solutions | NOK 160m | 30 |
| February | Dens Esthetix | Dental | EUR 1.4m | 14 |
| February | Praezimed | Dental | EUR 2.5m | 15 |
| March | TMC/Nessco | Systems Solutions | NOK 525m | 90 |
Further information on acquisitions is provided on page 14 of the interim report. The figures for net sales and number of employees refer to the estimated annual net sales and the number of employees at the acquisition date.
Taken together, the acquisitions will have a positive impact on Lifco’s results and financial position in the current year.
OTHER FINANCIAL INFORMATION
Employees
The average number of employees in the second quarter was 3,569 (3,323) and the number of employees at the end of the period was 3,577 (3,367). Acquisitions added about 220 employees in the six-month period, all in the first quarter.
Events after the end of the reporting period
No events of significance for the Group have occurred after the end of the reporting period.
Related-party transactions
No significant transactions with related parties took place during the period.
Annual General Meeting 2016
The Annual General Meeting was held on 12 May in Stockholm. At the AGM the Board of Directors and auditor were re-elected. Annika Espander Jansson was elected to the Board as a new Director. Resolutions were adopted on Directors’ and auditors’ fees, the payment of a dividend for 2015 and remuneration of senior executives. The AGM approved the transfer of the subsidiary companies Proline Iceland EFT and Proline Relining SL.
Risks and uncertainties
The risk factors which have the biggest impact for Lifco are the competitive situation, structural changes in the market and the strength of the economy. Lifco is also exposed to financial risks, including currency risks, interest rate risks, credit and counterparty risks.
The Parent Company is affected by the above risks and uncertainties through its function as owner of the subsidiaries.
For further information on Lifco’s risks and risk management, see the annual report for 2015.
Accounting principles
The Group’s interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. In respect of the Parent Company the report has been prepared in accordance with the Annual Accounts Act and Recommendation RFR 2 Financial Reporting for Legal Entities of the Swedish Financial Reporting Board. The accounting principles have been applied in accordance with those which are presented in the annual report for 2015 and should be read in conjunction with these. The interim report presents alternative key performance indicators for assessing the Group’s performance. The primary alternative KPIs presented in this interim report are EBITA, EBITDA, net debt and capital employed. Definitions of the alternative KPIs are presented on pages 17-18 and a reconciliation with the financial statements is presented on pages 19-20.
This report has not been examined by the Company’s auditors.
DECLARATION OF THE BOARD OF DIRECTORS
The Board of Directors and Chief Executive Officer warrant and declare that this six-month report gives a true and fair view of the Parent Company’s and Group’s operations, financial positions and results, and that it describes significant risks and uncertainties faced by the Parent Company and the companies included in the Group.
| Enköping, 15 July 2016 | Carl Bennet Chairman of the Board | |
|
Gabriel Danielsson Director Erik Gabrielson Director Annika Norlund Director, employee representative |
Ulrika Dellby Director Ulf Grunander Director Johan Stern Vice Chairman | Annika Espander Jansson Director Fredrik Karlsson President and CEO, Director Axel Wachtmeister Director |
| Hans-Eric Wallin Director, employee representative |
FINANCIAL CALENDAR
The interim report for the third quarter of 2016 will be published on 25 October 2016 at 1 p.m CET.
The year-end report for 2016 will be published on 15 February 2017.
FURTHER INFORMATION
Media and investor relations: Åse Lindskog, ir@lifco.se , telephone +46 (0)730 24 48 72
TELECONFERENCE
Media and analysts are welcome to call in to a teleconference, where CEO Fredrik Karlsson, CFO Therése Hoffman and Head of Business Area Dental Per Waldemarson will present the interim report. The presentation is expected to take around 20 minutes, after which participants will be invited to ask questions.
Time: 15 July, 9 a.m. CET
Link to the presentation:
https://wonderland.videosync.fi/2016-07-15-lifco-q2report
Telephone numbers:
Sweden: +46 8 566 426 91
US: +1 855 831 5946
UK: +44 203 008 9801
LIFCO IN BRIEF
Lifco acquires and develops market-leading niche businesses with the potential to deliver sustainable earnings growth and robust cash flows. The Group has three business areas: Dental, Demolition & Tools and Systems Solutions. Lifco is guided by a clear philosophy centred on long-term growth, a focus on profitability and a strongly decentralised organisation. The Lifco Group comprises 133 companies in 28 countries. In 2015 the Group reported EBITA of SEK 1,186 million on net sales of around SEK 7.9 billion. The EBITA margin was 15.0 per cent. Read more at www.lifco.se
| This information constitutes information that Lifco AB is required to publish under the EU’s Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication through the aforementioned contact person on 15 July 2016, at 7:30 a.m CET. |
CONDENSED CONSOLIDATED INCOME STATEMENT
| SIX MONTHS | SECOND QUARTER | FULL YEAR | |||||
| SEK million | 2016 | 2015 | change | 2016 | 2015 | change | 2015 |
| Net sales | 4,424 | 3,870 | 14.3% | 2,373 | 2,122 | 11.8% | 7,901 |
| Cost of goods sold | -2,674 | -2,383 | 12.2% | -1,412 | -1,310 | 7.8% | -4,865 |
| Gross profit | 1,750 | 1,487 | 17.7% | 961 | 812 | 18.2% | 3,036 |
| Selling expenses | -395 | -304 | 29.7% | -212 | -165 | 28.2% | -625 |
| Administrative expenses | -684 | -597 | 14.7% | -343 | -303 | 13.3% | -1,205 |
| Development costs | -45 | -33 | 37.9% | -23 | -17 | 37.7% | -73 |
| Other income and expenses | 3 | -9 | -137% | -5 | -4 | 17.1% | -26 |
| Operating profit | 629 | 544 | 15.6% | 378 | 323 | 16.8% | 1,107 |
| Net financial items | -17 | -7 | 143% | -9 | -9 | - | -25 |
| Profit before tax | 612 | 537 | 13.9% | 369 | 314 | 17.5% | 1,082 |
| Tax | -153 | -140 | 9.5% | -92 | -82 | 13.0% | -257 |
| Net profit for the period | 459 | 397 | 15.5% | 277 | 232 | 19.1% | 825 |
| Profit attributable to: | |||||||
| Parent Company shareholders | 451 | 392 | 15.0% | 271 | 227 | 18.8% | 810 |
| Non-controlling interests | 8 | 5 | 51.6% | 6 | 5 | 32.6% | 15 |
| Earnings per share before and after dilution for the period, attributable to Parent Company shareholders | 4.96 | 4.31 | 15.1% | 2.98 | 2.50 | 18.8% | 8.91 |
| EBITA* | 681 | 583 | 16.9% | 407 | 341 | 19.4% | 1,186 |
| Depreciation of tangible assets | 44 | 39 | 14.3% | 23 | 21 | 8.8% | 81 |
| Amortisation of intangible assets | 5 | 5 | - | 2 | 3 | -9% | 10 |
| Amortisation of intangible assets arising from acquisitions | 52 | 29 | 76.4% | 29 | 16 | 77.1% | 66 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| SIX MONTHS | SECOND QUARTER | FULL YEAR | |||||
| SEK million | 2016 | 2015 | change | 2016 | 2015 | change | 2015 |
| Net profit for the period | 459 | 397 | 15.5% | 277 | 232 | 19.1% | 825 |
| Other comprehensive income | |||||||
| Items which can later be reclassified in the income statement: Hedge of net investment | 16 | -2 | - | ||||
| Translation differences Tax related to other comprehensive income | 63 -4 | -58 | -209% | 49 0 | -19 | -351% | -92 - |
| Total comprehensive income for the period | 534 | 339 | 57.4% | 324 | 213 | 52.2% | 733 |
| Comprehensive income attributable to: | - | ||||||
| Parent Company shareholders | 525 | 335 | 56.8% | 317 | 209 | 51.7% | 720 |
| Non-controlling interests | 9 | 4 | 101% | 7 | 4 | 77.7% | 13 |
| 534 | 339 | 57.4% | 324 | 213 | 52.2% | 733 | |
SEGMENT OVERVIEW
Lifco’s operations are monitored and evaluated by the CEO and resources are allocated based on information from the three operating segments: Dental, Demolition & Tools and Systems Solutions. The defined quantitative limits are exceeded only by Dental and Demolition & Tools. One further operating segment, Systems Solutions, is presented. This operating segment consists of a merger of those divisions which have similar economic characteristics and which do not individually meet the defined quantitative limits. These divisions are Interiors for Service Vehicles, Contract Manufacturing, Environmental Technology, Sawmill Equipment and Construction Materials (formerly Relining).
NET SALES TO EXTERNAL CUSTOMERS
No sales are made between the segments.
| SIX MONTHS | SECOND QUARTER | Rolling 12 months | FULL YEAR | ||||||
| SEK million | 2016 | 2015 | change | 2016 | 2015 | change | change | 2015 | |
| Dental | 1,773 | 1,763 | 0.5% | 904 | 869 | 4.0% | 3,445 | 0.3% | 3,435 |
| Demolition & Tools | 853 | 760 | 12.3% | 469 | 430 | 9.0% | 1,667 | 5.9% | 1,574 |
| Systems Solutions | 1,798 | 1,348 | 33.5% | 1,000 | 823 | 21.5% | 3,343 | 15.6% | 2,892 |
| Group | 4,424 | 3,870 | 14.3% | 2,373 | 2,122 | 11.8% | 8,455 | 7.0% | 7,901 |
EBITA
A breakdown of results by segment is made up to and including EBITA. EBITA is reconciled to profit before tax in accordance with the following table:
| SIX MONTHS | SECOND QUARTER | Rolling 12 months | FULL YEAR | ||||||
| SEK million | 2016 | 2015 | change | 2016 | 2015 | change | change | 2015 | |
| Dental | 328 | 322 | 1.6% | 172 | 153 | 13.0% | 620 | 0.9% | 614 |
| Demolition & Tools | 193 | 184 | 5.1% | 114 | 117 | -2.8% | 405 | 2.3% | 396 |
| Systems Solutions | 208 | 119 | 74.9% | 145 | 92 | 57.4% | 352 | 33.8% | 263 |
| Central Group functions | -48 | -42 | 12.7% | -24 | -21 | 14.8% | -93 | 6.1% | -87 |
| EBITA before restructuring, integration and acquisition costs | 681 | 583 | 16.9% | 407 | 341 | 19.4% | 1,284 | 8.3% | 1,186 |
| Restructuring, integration and acquisition costs | 0 | -9 | -99.4% | 0 | -1 | -51.4% | -4 | -69.2% | -13 |
| EBITA | 681 | 573 | 18.7% | 407 | 340 | 19.7% | 1,280 | 9.2% | 1,173 |
| Amortisation of intangible assets arising from acquisitions | -52 | -29 | 76.4% | -29 | -16 | 77.1% | -88 | 34.3% | -66 |
| Net financial items | -17 | -7 | 143% | -9 | -9 | - | -36 | 40.6% | -25 |
| Profit before tax | 612 | 537 | 13.9% | 369 | 314 | 17.5% | 1,156 | 6.9% | 1,082 |
CONDENSED CONSOLIDATED BALANCE SHEET
| SEK million | 30 Jun 2016 | 30 Jun 2015 | 31 Dec 2015 |
| ASSETS | |||
| Intangible assets | 6,063 | 4,961 | 5,010 |
| Tangible fixed assets | 454 | 418 | 417 |
| Financial assets | 96 | 59 | 87 |
| Inventories | 1,130 | 999 | 960 |
| Accounts receivable - trade | 1,122 | 930 | 863 |
| Current receivables | 304 | 310 | 257 |
| Cash and cash equivalents | 428 | 537 | 464 |
| TOTAL ASSETS | 9,597 | 8,214 | 8,058 |
| EQUITY AND LIABILITIES | |||
| Equity | 4,226 | 3,576 | 3,964 |
| Non-current interest-bearing liabilities incl. pension provisions | 1,105 | 1,114 | 1,103 |
| Other non-current liabilities and provisions | 494 | 313 | 371 |
| Current interest-bearing liabilities | 2,197 | 1,842 | 1,341 |
| Accounts payable – trade | 550 | 422 | 370 |
| Other current liabilities | 1,025 | 947 | 909 |
| TOTAL EQUITY AND LIABILITIES | 9,597 | 8,214 | 8,058 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Attributable to Parent Company shareholders | ||||
| SEK million | 30 Jun 2016 | 30 Jun 2015 | 31 Dec 2015 | |
| Opening equity | 3,939 | 3,455 | 3,455 | |
| Comprehensive income for the period | 525 | 335 | 720 | |
| Dividend | -273 | -236 | -236 | |
| Closing equity | 4,191 | 3,554 | 3,939 | |
| Equity attributable to: | ||||
| Parent Company shareholders | 4,191 | 3,554 | 3,939 | |
| Non-controlling interests | 35 | 22 | 25 | |
| 4,226 | 3,576 | 3,964 | ||
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
| SIX MONTHS | SECOND QUARTER | FULL YEAR | ||||||||
| SEK million | 2016 | 2015 | 2016 | 2015 | 2015 | |||||
| Operating activities | ||||||||||
| Operating profit | 629 | 544 | 378 | 323 | 1,107 | |||||
| Non-cash items | 88 | 73 | 54 | 39 | 157 | |||||
| Interest and financial items, net | -17 | -7 | -9 | -9 | -25 | |||||
| Tax paid | -165 | -133 | -77 | -55 | -239 | |||||
| Cash flow before changes in working capital | 535 | 477 | 346 | 298 | 1,000 | |||||
| Changes in working capital | ||||||||||
| Inventories | -61 | -62 | 1 | 25 | -59 | |||||
| Current receivables | -105 | -183 | -124 | -71 | -113 | |||||
| Current liabilities | 56 | 130 | 58 | -5 | 120 | |||||
| Cash flow from operating activities | 425 | 362 | 281 | 247 | 948 | |||||
| Business acquisitions and sales, net | -948 | -460 | - | -46 | -573 | |||||
| Net investment in tangible fixed assets | -56 | -45 | -34 | -32 | -82 | |||||
| Net investment in intangible assets | -2 | -11 | -1 | -6 | -9 | |||||
| Cash flow from investing activities | -1,006 | -516 | -35 | -84 | -664 | |||||
| Borrowings/repayment of borrowings, net | 818 | 400 | 21 | -10 | -88 | |||||
| Dividends paid | -280 | -245 | -277 | -236 | -252 | |||||
| Cash flow from financing activities | 538 | 155 | -256 | -246 | -340 | |||||
| Cash flow for the period | -43 | 1 | -10 | -83 | -56 | |||||
| Cash and cash equivalents at beginning of period | 464 | 536 | 438 | 624 | 536 | |||||
| Translation differences | 7 | 0 | 0 | -4 | -16 | |||||
| Cash and cash equivalents at end of period | 428 | 537 | 428 | 537 | 464 | |||||
ACQUISITIONS IN 2016
In the first half of 2016 seven new businesses were consolidated and are included in the preliminary purchase price allocation. The acquisitions refer to all shares of Auto-Maskin, Praezimed and TMC/Nessco as well as a majority stake in Cenika. The acquisitions of Redoma Recycling, Dens Esthetix and endodontic products were asset deals.
The preliminary purchase price allocation covers all acquisitions made in the first half of the year.
Acquisition-related expenses of SEK 12 million are included in administrative expenses in the consolidated income statement for the first half of 2016. If the businesses had been consolidated from 1 January 2016 consolidated net sales would have increased by around SEK 95 million. The acquisitions would have had a positive impact on earnings if the companies had been consolidated from 1 January 2016.
| Acquired net assets | |||
| Net assets, SEK million | Carrying amount | Value adjustment | Fair value |
| Trademarks, customer relationships, licences | 1 | 559 | 560 |
| Tangible assets | 20 | - | 20 |
| Trade and other receivables | 274 | -9 | 265 |
| Trade and other payables | -201 | -124 | -325 |
| Cash and cash equivalents | 111 | - | 111 |
| Net assets | 205 | 426 | 631 |
| Goodwill | 427 | 427 | |
| Total net assets | 205 | 853 | 1,058 |
| Effect on cash flow, MSEK | |||
| Consideration | 1,058 | ||
| Cash and cash equivalents in the acquired companies | -111 | ||
| Consideration paid relating to acquisitions from previous years | 1 | ||
| Total cash flow effect | 948 | ||
FINANCIAL INSTRUMENTS
| CARRYING AMOUNT | FAIR VALUE | |||
| SEK million | 30 Jun 2016 | 30 Jun 2015 | 30 Jun 2016 | 30 Jun 2015 |
| Loans and receivables | ||||
| Accounts receivable - trade | 1,122 | 930 | 1,122 | 930 |
| Other non-current financial receivables | 3 | 6 | 3 | 6 |
| Cash and cash equivalents | 428 | 537 | 428 | 537 |
| Total | 1,553 | 1,473 | 1,553 | 1,473 |
| Liabilities at fair value through profit or loss | ||||
| Other liabilities | 16 | 30 | 16 | 30 |
| Other financial liabilities | ||||
| Interest-bearing borrowings | 3,246 | 2,886 | 3,246 | 2,886 |
| Accounts payable - trade | 550 | 422 | 550 | 422 |
| Total | 3,812 | 3,338 | 3,812 | 3,338 |
Financial instruments at fair value are classified into different levels depending on how fair value is determined. All financial instruments at fair value in the Lifco Group have been classified as level 3, i.e. non-observable inputs. The fair value of short-term borrowings is equal to the carrying amount, as the discount effect is insignificant. Other liabilities classified as financial instruments refer to mandatory put/call options relating to non-controlling interests. Changes in financial liabilities attributable to mandatory put/call options are recognised in the income statement.
KEY PERFORMANCE INDICATORS
| ROLLING TWELVE MONTHS TO | 2016 30 JUNE | 2015 31 DEC | 2015 30 JUNE |
| Net sales, SEK million | 8,455 | 7,901 | 7,424 |
| Change in net sales, % | 7.0 | 16.2 | 9.1 |
| EBITA*, SEK million | 1,284 | 1,186 | 1,083 |
| EBITA margin*, % | 15.2 | 15.0 | 14.6% |
| EBITDA*, SEK million | 1,381 | 1,277 | 1,168 |
| EBITDA margin*, % | 16.3 | 16.2 | 15.7 |
| Capital employed, SEK million | 6,479 | 5,965 | 5,725 |
| Capital employed excl. goodwill and other intangible assets, SEK million | 952 | 966 | 932 |
| Return on capital employed, % | 19.8 | 19.9 | 18.9 |
| Return on capital employed excl. goodwill, % | 135 | 123 | 116 |
| Return on equity, % | 21.9 | 22.1 | 18.7 |
| Net interest-bearing debt, SEK million | 2,858 | 1,950 | 2,389 |
| Net debt/equity ratio | 0.7 | 0.5 | 0.7 |
| Net debt/EBITDA* | 2.1 | 1.5 | 2.0 |
| Equity/assets ratio, % | 44.0 | 49.2 | 43.5 |
| Number of shares, thousand | 90,843 | 90,843 | 90,843 |
| Average number of employees | 3,569 | 3,369 | 3,323 |
CONDENSED PARENT COMPANY INCOME STATEMENT
| SIX MONTHS | SECOND QUARTER | FULL YEAR | |||
| SEK million | 2016 | 2015 | 2016 | 2015 | 2015 |
| Administrative expenses | -55 | -50 | -28 | -24 | -104 |
| Other operating income* | 40 | - | 40 | - | 84 |
| Operating profit | -15 | -50 | 12 | -24 | -20 |
| Net financial items | 394 | 264 | 382 | 44 | 307 |
| Profit after financial items | 379 | 214 | 394 | 20 | 287 |
| Appropriations | - | - | - | - | -12 |
| Tax | 10 | 1 | 5 | 0 | -8 |
| Net profit for the period | 389 | 215 | 399 | 20 | 267 |
* Preliminary invoicing of Group wide services.
CONDENSED PARENT COMPANY BALANCE SHEET
| SEK million | 30 Jun 2016 | 31 Dec 2015 |
| ASSETS | ||
| Tangible fixed assets | 0 | 0 |
| Financial assets | 1,985 | 3,369 |
| Current receivables | 4,467 | 2,223 |
| Cash and cash equivalents | 254 | 307 |
| TOTAL ASSETS | 6,706 | 5,899 |
| EQUITY AND LIABILITIES | ||
| Equity | 2,302 | 2,186 |
| Untaxed reserves | 32 | 32 |
| Provisions | - | 4 |
| Non-current interest-bearing liabilities | 1,063 | 1,031 |
| Current interest-bearing liabilities | 2,171 | 1,330 |
| Current non-interest-bearing liabilities | 1,138 | 1,316 |
| TOTAL EQUITY AND LIABILITIES | 6,706 | 5,899 |
| Pledged assets | - | - |
| Contingent liabilities | 101 | 92 |
PURPOSE AND DEFINITIONS
| Return on equity | Net profit for the period divided by average equity. |
| Return on capital employed | EBITA before restructuring, integration and acquisition costs divided by capital employed. |
| Return on capital employed excluding goodwill and other intangible assets | EBITA before restructuring, integration and acquisition costs divided by capital employed excluding goodwill and other intangible assets. |
| EBITA | EBITA is a measure which Lifco considers relevant for investors who wish to understand the earnings generated after investments in tangible and intangible assets requiring reinvestment but before investments in intangible assets attributable to acquisitions. Lifco defines earnings before interest, tax and amortisation (EBITA) as operating profit before amortisation and impairment of intangible assets arising from acquisitions. In its financial reports Lifco excludes restructuring, integration and acquisition costs. This is indicated by an asterisk. |
| EBITA margin | EBITA divided by net sales. |
| EBITDA | EBITDA is a measure which Lifco considers relevant for investors who wish to understand the earnings generated before investments in fixed assets. Lifco defines earnings before interest, tax, depreciation and amortisation (EBITDA) as operating profit before depreciation, amortisation and impairment of tangible and intangible assets. In its financial reports Lifco excludes restructuring, integration and acquisition costs. This is indicated by an asterisk. |
| EBITDA margin | EBITDA divided by net sales. |
| Net debt/equity ratio | Net interest-bearing debt divided by equity. |
| Earnings per share | Profit after tax attributable to Parent Company shareholders divided by average number of outstanding shares. |
| Net interest-bearing debt | Lifco uses the alternative KPI net interest-bearing debt. Lifco considers that this is a useful additional KPI which allows users of the financial reports to assess the Group’s ability to pay dividends, make strategic investments and meet its financial obligations. Lifco defines the KPI as follows: current and non-current liabilities to credit institutions, bond loans and interest-bearing pension provisions less estimated contingent consideration for acquisitions, and cash and cash equivalents. |
| Equity/assets ratio | Equity divided by total assets (balance sheet total). |
| Capital employed | Capital employed is a measure which Lifco uses for calculating the return on capital employed and for measuring how efficient the Group is. Lifco considers that capital employed is useful in helping users of the financial reports to understand how the Group finances itself. Lifco defines capital employed as total assets less cash and cash equivalents, interest-bearing pension provisions and non-interest-bearing liabilities, calculated as the average of the last four quarters. |
| Capital employed excluding goodwill and other intangible assets | Capital employed excluding goodwill and other intangible assets is a measure which Lifco uses for calculating the return on capital employed and for measuring how efficient the Group is. Lifco considers that capital employed excluding goodwill and other intangible assets is useful in helping users of the financial reports to understand the impact of goodwill and other intangible assets on that capital which requires a return. Lifco defines capital employed excluding goodwill and other intangible assets as total assets less cash and cash equivalents, interest-bearing pension provisions, non-interest-bearing liabilities, goodwill and other intangible assets, calculated as the average of the last four quarters. |
RECONCILIATION OF ALTERNATIVE KEY PERFORMANCE INDICATORS
EBITA compared with financial statements in accordance with IFRS
| SEK million | SIX MONTHS 2016 | SIX MONTHS 2015 | FULL YEAR 2015 |
| Operating profit | 629 | 544 | 1,107 |
| Amortisation of intangible assets arising from acquisitions | 52 | 29 | 66 |
| EBITA | 681 | 573 | 1,173 |
| Restructuring, integration and acquisition costs | 0 | 9 | 13 |
| EBITA before restructuring, integration and acquisition costs | 681 | 583 | 1,186 |
EBITDA compared with financial statements in accordance with IFRS
| SEK million | SIX MONTHS 2016 | SIX MONTHS 2015 | FULL YEAR 2015 |
| Operating profit | 629 | 544 | 1,107 |
| Depreciation of tangible assets | 44 | 39 | 81 |
| Amortisation of intangible assets | 5 | 5 | 10 |
| Amortisation of intangible assets arising from acquisitions | 52 | 29 | 66 |
| EBITDA | 730 | 617 | 1,264 |
| Restructuring, integration and acquisition costs | 0 | 9 | 13 |
| EBITA before restructuring, integration and acquisition costs | 730 | 626 | 1,277 |
Net interest-bearing debt compared with financial statements in accordance with IFRS
| SEK million | 30 Jun 2016 | 30 Jun 2015 | 31 Dec 2015 |
| Non-current interest-bearing liabilities incl. pension provisions | 1,105 | 1,114 | 1,103 |
| Current interest-bearing liabilities | 2,197 | 1,842 | 1,341 |
| Calculated contingent consideration for acquisitions | -16 | -30 | -30 |
| Cash and cash equivalents | -428 | -537 | -464 |
| Net interest-bearing debt | 2,858 | 2,389 | 1,950 |
Capital employed and capital employed excluding goodwill and other intangible assets compared with financial statements in accordance with IFRS
| SEK million | 30 Jun 2016 | 31 Mar 2016 | 31 Dec 2015 | 2015-09-30 |
| Total assets | 9,597 | 9,373 | 8,058 | 8,447 |
| Cash and cash equivalents | -428 | -438 | -464 | -645 |
| Interest-bearing pension provisions | -41 | -40 | -39 | -41 |
| Non-interest-bearing liabilities | -2,069 | -1,965 | -1,650 | -1,739 |
| Capital employed | 7,059 | 6,930 | 5,905 | 6,022 |
| Goodwill and other intangible assets | -6,063 | -5,983 | -5,010 | -5,050 |
| Capital employed excl. goodwill and other intangible assets | 996 | 947 | 895 | 972 |
Capital employed and capital employed excluding goodwill and other intangible assets calculated as the average of the last four quarters compared with financial statements in accordance with IFRS
| SEK million | Average | Q2 2016 | Q1 2016 | Q4 2015 | Q3 2015 |
| Capital employed | 6,479 | 7,059 | 6,930 | 5,905 | 6,022 |
| Capital employed excl. goodwill and other intangible assets | 952 | 996 | 947 | 895 | 972 |
| Total | |||||
| EBITA* | 1,284 | 407 | 274 | 322 | 281 |
| Return on capital employed | 19.8% | ||||
| Return on capital employed excl. goodwill and other intangible assets | 135% |
This information was brought to you by Cision http://news.cision.com