Interim Report Q3

January - September 2021

Interim Report Q3

January-September 2021

AB Fagerhult (publ.)

info@fagerhultgroup.com

566 80 Habo

www.fagerhultgroup.com

Interim Report Q3 January - September 2021

1,895

Order intake, MSEK

Order intake was MSEK 1,895 (1,664), an increase of +13.9% adjusted to +14.5% for currency effects of MSEK -7, acquisitions of MSEK +3 and disposals of MSEK -5

1,745

Net sales, MSEK

Net sales were MSEK 1,745 (1,700), an increase of +2.6% adjusted to +3.7% for currency effects of MSEK -5, acquisitions of MSEK +4 and disposals of MSEK -16

184

Operating profit, MSEK

Operating profit was MSEK 184.2 (66.8), an increase of +175,7% with an operating margin of 10.6 (3.9)%

184

Adjusted operating profit,

MSEK

Q3 2021 operating profit was MSEK 184.2 compared to a Q3 2020 adjusted operating profit of MSEK 144.1, an increase of +27.8% with an operating margin of 10.6 (adjusted 8.5)%

128

Net profit, MSEK

Earnings after tax were MSEK 127.6 (4.9)

0.72

Earnings per share, SEK

Earnings per share were SEK 0.72 (0.00)

202

Operating cash flow, MSEK

Cash flow from operating activities was MSEK 201.8 (388.8)

The third quarter

Market activity levels and customer demand remained strong during the third quarter. Order intake for the quarter at 1,895 (1,664) MSEK results in organic growth of +14.5%. The order backlog is 1,870 (1,417) MSEK, an increase of +32% from Q3 last year.

The recovery from the pandemic makes good progress and, earlier than expected. All key metrics; order intake, net sales, operating profit and operating margin being ahead of last year.

As the Group recovers from the impacts of the pandemic, the global supply chain challenges, related to materials and logistics create new headwinds. Net sales at 1,745 (1,700) MSEK for the quarter delivers +3.7% organic growth, despite being impacted approximately 68 MSEK by the new headwinds.

Operating profit in the quarter of 184.2 MSEK delivers an operating margin of 10.6% and compares to an adjusted operating profit of 144.1 MSEK and an adjusted operating margin of 8.5% from 2020, (refer to page 20). The results during Q3 2020 were adjusted due to the divestment of our South Africa investment.

We continue to have good cost control. In the quarter there was 8.4 (31.1) MSEK of government subsidy income and selling and administration expenses were 22.0 MSEK lower than 2020 and 109.2 MSEK lower than 2019.

Operating cash flow was positive at 201.8 (388.8) MSEK. Working capital increased 35.9 (reduction 184.2) MSEK and tax paid plus financial items increased 29.1 MSEK. Due to reduced interest costs and currency differences, financial items reduced 20.3 MSEK.

The Group continues to take all necessary steps to continue to provide good service to our customers, despite the global supply chain challenges. These have increased during the quarter, as we advised earlier, and some improvement will be seen in Q4 and into 2022.

1

Interim Report Q3

January - September 2021

CEO comments

  • We are delighted with the continued strong organic order intake, where, despite the supply chain challenges, the service to our customers is at a good level.
  • Order intake in the most recent three quarters is more than 1 BSEK ahead of the previous three quarters, evidencing the recovery from the pandemic.
  • The year to date operating margin at 10.4 (adjusted 6.0)% remains strong and at a good level compared to the market, despite the supply chain challenges.
  • The Group continues the focus on developing industry leading sustainable solutions. A great example of this is "Vitality ReLight" from Whitecroft which delivers solutions that regenerate and re-use rather than replace or re-new.
  • The Group's connected solutions, Organic Response and Seneco continue to grow. Organic Response volumes to the end of the quarter are almost at 100% of the full year 2020 levels.
  • Now that we have acquired the remaining shares in the North American subsidiary, we can move forward with a focused long-term strategic initiative in the region.

"The market remains healthy with demand levels increasing and we are prepared for further growth."

Bodil Sonesson, CEO and President

2

Interim Report Q3 January - September 2021

5,872

Order intake, MSEK

Order intake is MSEK 5,872 (5,465), an overall growth of +7.4% adjusted to +12.2% for currency effects of MSEK -225, acquisitions of MSEK +3 and disposals of MSEK -36

5,268

Net sales, MSEK

Net sales are MSEK 5,268 (5,116), an overall growth of +3.0% adjusted to +7.5% for currency effects of MSEK -184, acquisitions of MSEK +4 and disposals of MSEK -49

545

Operating profit, MSEK

Operating profit is MSEK 545.3 (231.1) an increase of +136.0% with an operating margin of 10.4 (4.5)%

545

Adjusted operating profit,

MSEK

Year to date 2021 operating profit is MSEK

545.3 compared to a year to date 2020 adjusted operating profit of MSEK 308.4, an increase of +76.8% with an operating margin of 10.4 (adjusted 6.0)%

362

Net profit, MSEK

Earnings after tax are MSEK 361.5 (87.3)

2.03

Earnings per share, SEK

Earnings per share are SEK 2.03 (0.46)

461

Operating cash flow, MSEK

Cash flow from operating activities was MSEK 460.7 (706.9)

January-September

The Group continues to grow. Market activity and customer demand levels have improved during the year and this results in continued performance improvement compared to last year.

The third quarter performance builds on a strong first half year. We view the supply chain challenges as temporary, lasting into early-mid 2022.

The Group enters the fourth quarter with a record order backlog, +47% ahead of the start of the year. Momentum is good and we anticipate further growth as we see increased activity and order intake.

The Group's year to date order intake of 5,872 (5,465) MSEK, shows a +7.4% increase, further increasing to +12.2% on a comparable basis.

The Group's year to date net sales of 5,268 (5,116) MSEK show a +3.0% increase, further increasing to +7.5% on a comparable basis.

The operating profit for the year to date 2021 of 545.3 MSEK delivers an operating margin of 10.4%. During the third quarter of 2020 the divestment of our South Africa investment resulted in a 2020 year to date adjusted operating profit of 308.4 MSEK and an adjusted operating margin of 6.0%, (refer to page 20).

In the year to date there is 16.7 (68.7) MSEK of government subsidy income and selling and administration expenses were 132.0 MSEK lower than 2020 and 182.4 MSEK lower than 2019.

Operating cash flow in the period was positive at 460.7 (706.9) MSEK with the increase in operating profit being offset by an increase in working capital of 190.0 MSEK and 98.2 MSEK increase in tax paid.

Financial items of 58.7 (88.7) MSEK include 12.6 (23.1) MSEK for IFRS16 and a 9.2 MSEK reduction in interest costs. The tax expense in the period of 125.1 (55.1) MSEK results in a 25.7 (38.7)% tax rate.

3

Interim report Q3

January - September 2021

Business areas

Net sales and operating profit by business area

Net sales

Operating profit

Operating margin %

Q3

Q1-3

Q3

Q1-3

Q3

Q1-3

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

Collection

763.8

769.1

2,337.4

2,287.0

55.8

52.0

194.9

107.3

7.3

6.8

8.3

4.7

Premium

629.3

571.8

1,896.0

1,852.9

97.8

66.8

257.5

164.4

15.5

11.7

13.6

8.9

Professional

262.0

220.7

761.0

627.7

21.9

10.5

69.4

23.9

8.4

4.8

9.1

3.8

Infrastructure

178.7

199.9

533.1

554.7

23.3

29.3

62.9

74.3

13.0

14.7

11.8

13.4

Lighting Innovations

-

7.9

-

29.2

-

-82.4

-

-94.5

-

-

-

-

Eliminations

-89.0

-69.1

-259.5

-235.8

-

-

-

-

-

-

-

-

Results by business area

1,744.8

1,700.3

5,268.0

5,115.7

198.8

76.2

584.7

275.4

11.4

4.5

11.1

5.4

IFRS 16

-

-

-

-

1.6

2.4

6.6

6.9

-

-

-

-

Unallocated cost

-

-

-

-

-16.2

-11.8

-46.0

-51.2

-

-

-

-

Operating profit

-

-

-

-

184.2

66.8

545.3

231.1

10.6

3.9

10.4

4.5

Financial items

-

-

-

-

-15.7

-36.0

-58.7

-88.7

-

-

-

-

Profit before tax

-

-

-

-

168.5

30.8

486.6

142.4

-

-

-

-

Net sales per business area, MSEK

Sales share per business area, %

2500

10%

2000

13%

43%

1500

1000

500

0

34%

Q 1-3

21

20

21

20

21

20

21

20

Operating profit per business area, MSEK

300

250

200

150

100

50

0

Q 1-3

21

20

21

20

21

20

21

20

Collection Premium

Professional Infrastructure

4

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Disclaimer

AB Fagerhult published this content on 28 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 October 2021 07:38:01 UTC.