INDUTRADE AB Second quarter 2020
· Order intake fell -1% to
it was a decrease of -5%. The decrease was mainly due to the covid-19
pandemic.
· Net sales rose 1% to
was a decrease of -5%.
· EBITA rose 5% to
of 13.0% (12.5%).
· Profit for the quarter rose 1% to
share were
· Cash flow from operating activities increased and amounted to
million (488).
1 January -
· Order intake rose 8% to
it was an increase of 1%.
· Net sales rose 7% to
was a decrease of -1%.
· EBITA rose 10% to
margin of 12.7% (12.4%).
· Profit for the period grew 6% to
share were
· Cash flow from operating activities increased and amounted to
million (656).
CEO's message
Strong earnings despite lower demand and uncertain market conditions.
Second quarter
As a result of the covid-19 pandemic, uncertainty has characterised the second
quarter, and overall, demand was at a lower level than in the past. The
development varied however considerably across companies, segments, and
geographic markets. Order intake amounted to
-1% of which -5% organically. Demand remained strong for companies with
customers in the medical technology and pharmaceutical industries, which was
partly attributable to covid-19. In the construction and infrastructure
industries, demand from the Nordic customers was good and the power generation
segment was strong during the quarter. The development in the engineering
industry was weaker, particularly in the automotive industry. However, the
situation improved slightly towards the end of the quarter. Demand fell in the
aircraft industry as well.
Sales rose 1% in total during the second quarter but declined -5% organically.
The Benelux and Flow Technology business areas reported the most positive
development in organic sales growth, driven by valves for power generation and
good performance by companies in the medical technology and marine segments.
The weakest performance was by companies in the
Technology
of weaker demand and uncertain market conditions due to covid-19.
Profitability improved for the Group as a whole and the EBITA margin was 13.0
% (12.5%). The improved margin derived mainly from strong performance in
companies with customers within medical technology, pharmaceuticals and
energy. For the companies with decreased net sales the earnings drop was
dampened by temporary cost saving measures and lay-offs. Operating margin
improved for five of the eight business areas, with the strongest performance
in business area
the
lower sales, unfavourable mix adjustments and under absorption of production
costs.
The health and safety of our employees, customers and suppliers is always the
highest priority and determined efforts are ongoing throughout the Group to
cope with and manage this challenging situation. Our decentralised structure,
with agile companies working closely with their customers, has facilitated
both the financial as well as the operational adaptations that were necessary
to do. All companies that experienced a decline in order intake have actively
pursued cost saving measures during the quarter. The furlough support that has
been available in several countries has helped many companies with
considerably declining volumes avoid permanent staff reductions. Of our 7,400
employees in total, approximately 1,500 were affected by various types of
temporary lay-offs and short-term work during the quarter. Those figures
declined somewhat towards the end of the second quarter, such that
approximately 1,000 were still affected in this way, which corresponds to 14%
of the Group's employees. Several of our companies are evaluating the need to
make permanent staff reductions.
The Group's financial position remains strong. Cash flow improved thanks to
greater working capital performance compared to last year. Inventories
remained however at a slightly high level, but activities to lower inventory
levels have intentionally been restrained so that we can ensure delivery
service and availability to customers during these uncertain market
conditions. Receivables fell in line with the decline in sales.
The transformation in digitalisation and sustainability have accelerated due
to the pandemic. These are two important areas that both strengthen
competitiveness and generate new business opportunities. Activities to further
speed up development in these areas were initiated during the quarter.
Acquisitions
We purposely did not complete any acquisitions during the quarter, but several
discussions with interesting companies are ongoing. Due to the unstable market
situation, we have decided to extend the acquisition processes to ensure that
the right conditions exist for profitable growth in our acquisition
candidates. Acquisition opportunities remain favourable, with a good inflow of
interesting companies.
Outlook
The current market situation involves both challenges and opportunities and I
am confident that our entrepreneurial MDs are doing their utmost to ensure the
long-term growth and success of their companies. We have also noticed a
gradual improvement as countries and markets have started opening up again.
The pace of improvement varies however considerably across companies, segments
and geographic markets. Our diversified structure with more than 200 companies
in a variety of segments and countries gives us good risk diversification,
which creates conditions for stability despite the challenging market
conditions.
foundation for continued long-term, competitive value creation. Our
performance is based on our skilled and dedicated employees working in all the
Group's companies, and I would like to sincerely thank each and everyone for
amazing efforts during these challenging and turbulent times.
Note
The information in this report is such that
public in accordance with the EU Market Abuse Act and the
Market Act. The information was submitted for publication by the agency of the
following contact persons at
Further information
For further information, please contact:
70 930 93 24.
This report will be commented upon as follows:
The interim report will be presented in a webcast on 17 July at
(CEST) via the following link:
https://onlinexperiences.com/Launch/QReg/ShowUUID=53DF5716-0F6E-48F4-9982
-5C11E30E3F25
To participate via conference call and ask questions, call:
SE: +46 8 505 58 366
US: +1 6 467 224 956
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