AB Fagerhult : Fagerhult, Interim Report January-March 2021

Interim Report Q1

January-March 2021

AB Fagerhult (publ.)	[e-mail]
566 80 Habo	www.fagerhultgroup.com

Interim Report Q1 January - March 2021

1,854

Order intake, MSEK

Order intake was MSEK 1,854 (2,146), a decline of -13.6% adjusted to -7.4% for currency effects of MSEK -108 and disposals of MSEK -27

1,678

Net sales, MSEK

Net sales were MSEK 1,678 (1,689), a decline of -0.7% adjusted to +6.6% for currency effects of MSEK -97 and disposals of MSEK -24

153

Operating profit, MSEK

Operating profit was MSEK 152.9 (10.7), an increase of 1,329% with an operating margin of 9.1 (0.6)%

96

Net profit, MSEK

Earnings after tax were MSEK 96.2 (loss 16.4)

The first quarter

The Group continues to make good progress in recovering from the challenging pandemic conditions, demonstrated by an improved EBIT result. Improved digital processes and tools facilitate alternative ways of working for the Group, it's customers and suppliers.

Overall, the comparable quarter on quarter order intake levels continue to improve, although the levels vary depending on the pandemic conditions and lockdown situations in the different countries.

Order intake for the quarter at 1,854 (2,146) MSEK was -7.4% organically adverse. The quarter continues the steady improvement since the second quarter of last year and is the highest level since the start of Covid.

The order backlog has increased 200 MSEK since the start of the year and at the end of Q1 was 1,472 (1,568) MSEK.

Net sales at 1,678 (1,689) MSEK resulted in +6.6% organic growth. Currency headwinds at 97 MSEK remain significant. Last year we started to see the Covid effects on net sales only at the end of the quarter.

The operating profit of 152.9 (10.7) MSEK delivers an operating margin of 9.1 (0.6)%. In the period there was 5.1 (0) MSEK of government subsidy income and a reduction in selling and administration expenses of 106.9 MSEK compared to Q1 last year.

Operating cash flow was positive at 58.6 (87.9) MSEK for the quarter. Working capital increased 117.1 (26.3) MSEK in line with the quarter on quarter growth, mainly in accounts receivable and inventory. Taxes paid increased 49.1 MSEK and financial items were 22.2 (27.3) MSEK including 5.8 (7.5) MSEK for IFRS16.

0.53	As reported last quarter, supply chain disruption continues across some of the
component base. The disruption affects supplier deliveries and cost pressures.
Earnings per share, SEK	The Group's operations continue to take all appropriate measures.

Earnings per share were SEK 0.53 (loss 0.10)

59

Operating cash flow, MSEK

Cash flow from operating activities was

MSEK 58.6 (87.9)

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Interim Report Q1

January - March 2021

CEO comments

• The first quarter of 2021 was improved in many areas and we are satisfied with the steady progress and ongoing recovery from the effects of the pandemic.
• The quarterly operating margin at 9,1% is at a good level with the current market conditions.
• Whilst Covid persists and we still have a lot of extra measures in place, the new ways of working are effective, and the steady improvement is visible. As a result, we have currently decided to not provide detailed separate Covid updates. If the situation changes, we will of course review this.
• As a fundamental part of our connectivity and sustainability strategy, the acquisition of the balance 80% of the shares in Seneco is a significant step. From a sustainability perspective, the Seneco technology has a significant impact on reducing energy consumption in outdoor lighting.
• The Group now has connected solutions for both indoor and outdoor lighting where market demands continue to grow.
• The main focus for this quarter's strategy work is continued internal work with our Group core values and our sustainability strategy gathers pace. We are working on the Group materiality analysis with many stakeholder interviews as part of the process.

"We see signs of recovery from the Covid challenges and are cautiously optimistic about the future."

Bodil Sonesson, CEO and President

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Interim Report Q1

January - March 2021

Business areas

Net sales and operating profit by business area

		Net sales		Operating profit		Operating margin %
		Q1		Q1		Q1
		2021		2020	2021		2020	2021		2020
Collection	751.6		707.2	58.5		-36.0	7.8		-
Premium	609.1		669.4	69.4		47.1	11.4		7.0
Professional	234.3		190.0	19.7		-3.0	8.4		-
Infrastructure	166.3		190.0	16.2		25.5	9.7		13.4
Lighting Innovations	-		18.2	-		-5.3	-		-
Eliminations	-83.8		-85.4	-		-	-		-
Results by business area	1,677.5		1,689.4	163.8		28.3	9.8		1.7
IFRS 16	-		-	3.0		2.4	-		-
Unallocated cost	-		-	-13.9		-20.0	-		-
Operating profit	-		-	152.9		10.7	9.1		0.6
Financial items	-		-	-22.2		-27.3	-		-
Profit before tax	-		-	130.7		-16.6	-		-

Net sales per business area, MSEK	Sales share per business area, %

800								10%
700
600								13%
500								43%
400
300
200
100
0								34%
Q1	21	20	21	20	21	20	21	20

Operating profit per business area, MSEK

80
60
40
20
0
21	20	21	20	21	20	21	20
-20
-40
-60
Q1

Collection Premium

Professional Infrastructure

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Interim Report Q1 January - March 2021

Collection

Collection is home to our brands with a global market footprint. All have an international product portfolio and are well-renowned in the lighting designer and architect communities globally. They offer a wide product range with a focus on indoor and outdoor architectural applications.

Brands included are; ateljé Lyktan, iGuzzini, LED Linear and WE-EF with product development and manufacturing facilities in Sweden, Italy, Canada, China, Germany and Thailand. The business area also includes all sales companies for iGuzzini, LED Linear and WE-EF.

From their global network, the collaboration opportunities for future growth remain strong across the four businesses and we have chosen to focus on 4 strategic projects.

The negative effects of Covid on order intake continue but the effects reduce. The situation varies between geographical markets.

Business area order intake for the first quarter of 790 (920) MSEK shows an organic decline of -9.2%.

Net sales for the first quarter were 752 (707) MSEK, an organic increase of 13.0%.

Operating profits for the first quarter increased from a loss of 36.0 MSEK last year to a profit of 58.5 MSEK in 2021. Good growth and a lower cost base combined with the poor first quarter result last year all contributed to this improvement.

752

Net sales, MSEK

59

Operating profit, MSEK

7.8

Operating margin, %

Collection	Q1, 2021	Q1, 2020
Net sales	751.6	707.2
(of which, intercompany sales)	(21.3)	(22.3)
Operating profit	58.5	-36.0
Operating margin, %	7.8	-
Sales growth, %	6.3	39.0
Sales growth, adjusted for exchange rate differences , %	13.0	35.6

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