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    ALLIGO B   SE0009922305

ALLIGO AB (PUBL)

(ALLIGO B)
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Delayed Nasdaq Stockholm  -  11:24 2022-08-19 am EDT
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07/15TRANSCRIPT : Alligo AB, Q2 2022 Earnings Call, Jul 15, 2022
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Momentum Group Interim report Q3 2021 ENG

10/29/2021 | 02:08am EDT

INTERIM REPORT - 9 MONTHS

1 January-30 September 2021

THIRD QUARTER (1 July-30 September 2021)

  • Revenue increased by 9 percent to MSEK 2,209 (2,029).
  • EBITA increased by 56 percent to MSEK 200 (128), corresponding to an EBITA margin of 9.1 percent (6.3).
  • Operating profit amounted to MSEK 68 (14) and the operating margin to 3.1 percent (0.7). Earnings were charged with items affecting comparability of MSEK -113(-97), of which MSEK -108 pertained to restructuring costs due to moving TOOLS' Swedish logistics operations to Alligo's central warehouse in Örebro.
  • Net profit for the quarter amounted to MSEK 38 (1) and earnings per share totalled SEK 0.75 (0).
  • Increased demand was noted from most customers, and both of the Group's business areas continued to deliver a positive performance. The Group maintained its ability to deliver despite certain challenges with materials shortages and increased prices for raw materials and transportation.
  • The decision was made to begin preparations ahead of the separate listing of the business area Components & Services, with the aim of listing during the first half of 2022. These preparations resulted in costs affecting comparability of MSEK 5, which were charged to operating profit for the quarter.

REPORTING PERIOD (1 January-30 September 2021)

  • Revenue amounted to MSEK 7,094 (5,856), with the change compared with the corresponding period in the preceding year partly attributable to the acquisition of Swedol, which closed in April 2020. Compared with revenue for the corresponding period in the preceding year including Swedol for the entire reporting period (MSEK 6,685), revenue increased by 6 percent.*
  • EBITA amounted to MSEK 539 (374), corresponding to an EBITA margin of 7.6 percent (6.4). The change compared with the preceding year is partly attributable to the acquisition of Swedol. Compared with EBITA for the corresponding period in the preceding year including Swedol (MSEK 417), EBITA increased by 29 percent and the EBITA margin amounted to 7.6 percent (6.2).*
  • Net profit for the period amounted to MSEK 260 (149) and earnings per share totalled SEK 5.15 (3.80).
  • The return on working capital (EBITA/WC) for the most recent 12-month period was 37 percent.
  • The equity/assets ratio was 40 percent at the end of the period.
  • Cash flow from operating activities amounted to MSEK 431 (702).
  • The business area Components & Services completed four corporate acquisitions during the period generating total annual revenue of approximately MSEK 285. The business area Alligo completed one corporate acquisition in Finland generating total annual revenue of approximately MEUR 5.

AFTER THE END OF THE REPORTING PERIOD

  • Components & Services acquired Intertechna, with closing taking place after the end of the reporting period, thereby strengthening its offering in digitised maintenance for Nordic industry.
  • Alligo acquired the workwear specialist RAF Romerike Arbeidstøy and signed an agreement to divest Gigant in order to refine the operations within the business area.

* ACQUISITION OF SWEDOL CLOSED AS OF 1 APRIL 2020

Momentum Group's acquisition of Swedol was completed during spring 2020 and closed on 1 April 2020. Any instances where the comparative figures in this report include Swedol for the period prior to the closing date on 1 April 2020 are specifically noted. The bases for the financial history including Swedol are presented in a separate press release dated 24 June 2020 - Supplementary financial information relating to the 2019/20 financial year for the Momentum Group.

Momentum Group AB (publ)

Mail address: PO Box 5900, SE-102 40 Stockholm, Sweden │ Visit: Östermalmsgatan 87 D, Stockholm │ Tel: +46 10 454 54 70

Org No: 559072-1352 Reg office: Stockholm │ www.momentum.group

Page 1 (19)

INTERIM REPORT - 9 MONTHS

1 JANUARY-30 SEPTEMBER 2021

PRESIDENT'S STATEMENT

FOCUS ON INCREASED GROWTH AND PROFITABILITY

During the quarter, we noted increased demand from most of our customers. The overall recovery was substantial but varied between our operations depending on their geographic markets and customer segments. Thanks to our proactive efforts, we have managed to maintain our ability to deliver even though we have been affected, to varying degrees, by challenges resulting from materials shortages and increased prices for raw materials and transportation.

The positive performance of most of the Group's operations in the previous quarter continued through the third quarter. Growth for comparable units was 6 percent, and margins and earnings improved in both business areas. In total, EBITA increased by 56 percent compared with the third quarter in the previous year.

Operating profit was charged with costs of MSEK 108 for a restructuring reserve in the business area Alligo regarding the previously announced move of TOOLS' Swedish logistics operations from Alingsås to Alligo's modern central warehouse in Örebro. The move, which is expected to be complete by May 2022, will gather the logistics operations in a modern and highly efficient logistics centre, enabling cost savings through a more efficient flow of goods and increased customer value in the form of better service.

INVESTMENTS FOR THE FUTURE

During the current year, we have carried out seven acquisitions to strengthen our position in each business area. The most recent acquisition in Components & Services is the company Intertechna, one of the leading companies in Sweden in digitised maintenance for industry, which strengthens our technical service offering. After the end of the period, Alligo acquired the Norwegian workwear specialist RAF Romerike Arbeidstøy, which strengthens our presence in Oslo.

SEPARATE LISTING OF BUSINESS AREA COMPONENTS & SERVICES

In September, the Board of Directors gave those of us in management the task of continuing to work on dividing the Group's operations into two independent companies, with the aim of carrying out a separate listing of the business area Components & Services on Nasdaq Stockholm during the first half of 2022.

The purpose of the split is to strengthen each business area's conditions for achieving its ambitions in the best possible way, thereby creating increased shareholder value. Ahead of the split, the Board of Directors will propose a name change from the current Momentum Group to Alligo, since it is planned that the business area Components & Services will be listed under the name Momentum Group.

The work to enable this split, where joint functions will be divided into two separate and independent companies, is proceeding according to plan. We have already carried out several activities and these measures have thus far resulted in costs affecting comparability of approximately MSEK 7 being charged to the operating profit for the reporting period.

With a sense of great confidence, I look forward to the planned split of the Group into two independent, listed companies that can each continue their fast-paced journeys. The "new" Momentum Group will continue its work on acquisition-driven growth and Alligo will continue its efforts to realise synergies and economies of scale through the coordination of TOOLS and Swedol. The split will create favourable conditions for long-term profitable growth for both Alligo and the "new" Momentum Group.

Stockholm, October 2021

Ulf Lilius

President & CEO

Page 2 (19)

INTERIM REPORT - 9 MONTHS

1 JANUARY-30 SEPTEMBER 2021

MOMENTUM GROUP IN SUMMARY

3 MONTHS ENDING

6 MONTHS ENDING

12 MONTHS ENDING

30 SEP

30 SEP

30 SEP

30 SEP

30 SEP

30 SEP

2021

2020

2021

2020

2021

2020

Revenue, MSEK

2,209

2,029

9%

7,094

5,856

21%

9,623

7,444

29%

Revenue including Swedol 2019/20 1

2,209

2,029

9%

7,094

6,685

6%

9,623

9,340

3%

Operating profit, MSEK

68

14

386%

370

228

62%

555

306

81%

of which: Items affecting comparability

-113

-97

-115

-106

-115

-115

of which: Amortisation of intangible assets incurred

in connection with corporate acquisitions

-19

-17

-54

-40

-70

-45

EBITA, MSEK

200

128

56%

539

374

44%

740

466

59%

EBITA including Swedol 2019/20 1

200

128

56%

539

417

29%

740

635

17%

Profit after financial items, MSEK

50

2

2400%

330

196

68%

502

268

87%

Net profit (after taxes), MSEK

38

1

3700%

260

149

74%

394

205

92%

Earnings per share, SEK

0.75

0.00

5.15

3.80

36%

7.85

5.75

37%

Operating margin

3.1%

0.7%

5.2%

3.9%

5.8%

4.1%

EBITA margin

9.1%

6.3%

7.6%

6.4%

7.7%

6.3%

EBITA margin including Swedol 2019/20 1

9.1%

6.3%

7.6%

6.2%

7.7%

6.8%

Profit margin

2.3%

0.1%

4.7%

3.3%

5.2%

3.6%

Return on equity

13%

10%

Return on working capital (EBITA/WC)

37%

29%

EBITA/WC including Swedol 2019/20 1

37%

29%

Equity per share, SEK

64.50

58.15

11%

Equity/assets ratio

40%

38%

40%

38%

Number of employees at the end of the period

2,810

2,513

12%

2,810

2,513

12%

  1. Calculated as though the acquisition of Swedol had closed on 1 April 2019.

REVENUE AND PROFIT

THIRD QUARTER (1 July-30 September 2021)

Revenue increased by 9 percent to MSEK 2,209 (2,029). Revenue for comparable units, measured in local currency and adjusted for the number of trading days, rose by approximately 6 percent compared with the corresponding quarter in the preceding year. Exchange-rate translation effects had an impact of MSEK +3 on revenue. The quarter contained the same number of trading days as the corresponding quarter in the preceding year.

Operating profit amounted to MSEK 68 (14). EBITA (operating profit excluding items affecting comparability and amortisation of intangible assets incurred in connection with corporate acquisitions) increased by 56 percent to MSEK 200 (128), equivalent to an EBITA margin of 9.1 percent (6.3). Exchange-rate translation effects had a net impact of MSEK 0 (-1) on operating profit. Operating profit was charged with items affecting comparability of MSEK -113(-97), of which MSEK -108 pertained to restructuring costs due to moving TOOLS' Swedish logistics operations to Alligo's central warehouse in Örebro. These restructuring costs consist of a restructuring reserve of MSEK 46 and impairment of non- current and right-of-use assets of MSEK 62 connected to the logistics facility in Alingsås. Items affecting comparability of MSEK 5 for the quarter (total of MSEK 7 for the reporting period) related to costs for preparations connected to the split of the business area Components & Services.

Profit after financial items totalled MSEK 50 (2) and net profit amounted to MSEK 38 (1), which corresponds to earnings per share of SEK 0.75 (0.00) for the quarter.

REPORTING PERIOD (1 January-30 September 2021)

Revenue amounted to MSEK 7,094 (5,856), with the change compared with the corresponding period in the preceding year partly attributable to the acquisition of Swedol, which closed in April 2020. Compared with revenue for the corresponding period in the preceding year including Swedol for the entire reporting period (MSEK 6,685), revenue increased by 6 percent. Revenue for comparable units (including Swedol), measured in local currency and adjusted for the number of trading days, increased by more than 4 percent compared with the corresponding period in the preceding year. Exchange-rate translation effects had an impact of MSEK -20 on revenue for comparable units (including Swedol). The reporting period contained the same number of trading days as the corresponding period in the preceding year.

Operating profit amounted to MSEK 370 (228), with the change compared with the corresponding period in the preceding year partly attributable to the acquisition of Swedol. EBITA (operating profit excluding items affecting comparability and amortisation of intangible assets incurred in connection with corporate acquisitions) amounted to MSEK 539 (374). Compared with EBITA for the corresponding period in the preceding year including Swedol for the entire reporting period (MSEK 417), EBITA increased by 29 percent, with an EBITA margin of 7.6 percent (6.2). Operating profit was charged with depreciation of MSEK -61(-33) on tangible non-current assets, amortisation of MSEK -86(-63) on intangible non- current assets and items affecting comparability of MSEK -115(-106).Exchange-rate translation effects had a net impact of MSEK 0 (-2) on operating profit.

Page 3 (19)

INTERIM REPORT - 9 MONTHS

1 JANUARY-30 SEPTEMBER 2021

Profit after financial items totalled MSEK 330 (196) and net profit amounted to MSEK 260 (149), which corresponds to earnings per share of SEK 5.15 (3.80) for the reporting period.

  • Since Momentum Group changed its financial year to the calendar year, the 2020 financial year covered the 1 April to 31 December 2020 period (9 months).

OPERATIONS

The Momentum Group comprises two business areas - Alligo and Components & Services. Group-wide includes the Group's management, finance function and support functions.

MARKET AND THE IMPACT OF THE COVID-19 PANDEMIC

General demand during the third quarter continued to recover compared with the 2020 financial year. An increasing number of customer segments saw positive changes in demand during the quarter. Due to a global increase in demand, the shortage of materials and resources in some of the Group's product areas as well as transportation disruptions dampened sales to a certain extent. The current situation has not led to any changes in material bases of judgement compared with those applied in the Annual Report for 2020.

Sales performance

QUARTER

REPORTING PERIOD

JUN-SEP 2021

JAN-SEP 20211

Change in revenue for:

Comparable units in local currency

6.0%

4.2%

Currency effects

0.1%

-0.3%

Number of trading days

0.0%

-0.1%

Acquisitions and other2

2.7%

2.3%

Total change

8.8%

6.1%

  • Swedol is included in "Comparable units" as though the acquisition had closed on 1 April 2019.
    2 Other acquisitions in 2020-2021 (excluding Swedol).

BUSINESS AREA ALLIGO

The business area comprises Swedol and TOOLS with Univern and Grolls, and Mercus Yrkeskläder, TriffiQ Företagsprofilering, Reklamproffsen and Company Line, which offer products and services related to tools, consumables, workwear, personal protective equipment, workplace equipment as well as promotional products for the industrial, construction and public sectors in the Nordic region, among others.

Comments from Clein Johansson Ullenvik, Business Area Manager:

During the quarter, we saw increased demand in Sweden, while growth in Norway and Finland was weaker. We implemented price increases during the period to compensate for the increases from our suppliers. Problems in the shipping market have led us to delay the launch of TOOLS' proprietary brands in the summer until the fourth quarter of 2021.

During the quarter, we announced that we are considering moving TOOLS' Swedish logistics operations from Alingsås to our central warehouse in Örebro. There are significant advantages to be gained by coordinating inventories and distribution in Sweden. Gathering all our logistics in a modern and highly efficient logistics centre will enable cost savings through a more efficient flow of goods and increased

Page 4 (19)

INTERIM REPORT - 9 MONTHS

1 JANUARY-30 SEPTEMBER 2021

customer value in the form of better service. The annual cost savings are expected to amount to approximately MSEK 25.

This decision means that we will not use the logistics centre in Alingsås for the remaining period of approximately six years, which in turn has resulted in restructuring costs related to the remaining time on the lease and other property-related expenses. These restructuring costs, which amount to MSEK 108, have thus been charged to operating profit for the quarter. The move also involves an investment of MSEK 19 in Örebro.

Several expansions and automated processes have been added to the logistics centre in Örebro since it went into operation in 2012. The entire facility was expanded as recently as 2020, and further investments in automation are now being made in order to handle volumes from TOOLS. We expect the move to be finished before May next year.

After the end of the quarter, an agreement was signed to divest Gigant, which offers comprehensive solutions for the workplace, lifting and loading as well as environmental assurance for warehouses, industrial operations and engineering businesses. It is unusual for us to divest companies, but this will simplify the structure in Alligo, since Gigant's customers are resellers and Alligo focuses on selling directly to the end customer. However, workplace equipment is an attractive area that Alligo will continue to invest in together with professional partners, including Gigant.

During the third quarter, we finished defining our strategic goals. These goals, together with our mission, vision and the values we launched during the second quarter, form a strategic map for Alligo that establishes how to effectively conduct operations going forward.

NOTE: The business area is presented below as of 1 April 2020, with comparative figures as though the acquisition of Swedol and other changes in the business area's structure had taken place as of 1 April 2019. For information about the outcome for each business area (operating segment) for the preceding year excluding Swedol, refer to the table in Note 2.

3 MONTHS ENDING

9 MONTHS ENDING

12 MONTHS ENDING

30 SEP

30 SEP

30 SEP

30 SEP

30 SEP

30 SEP

2021

2020

2021

2020

2021

2020

REVENUE, MSEK

Sweden

1,120

1,048

3,676

3,468

5,101

4,836

Norway

501

496

1,595

1,584

2,164

2,250

Finland

313

288

938

929

1,250

1,255

Other countries

9

7

24

20

35

30

Eliminations

-69

-58

-205

-156

-280

-182

Total BA

1,874

1,781

6,028

5,845

8,270

8,189

EBITA, MSEK

Sweden

127

63

331

217

464

353

Norway

19

17

48

39

71

67

Finland

8

14

27

52

34

65

Other countries

0

0

0

-1

1

0

Total BA

154

94

406

307

570

485

EBITA MARGIN, %

Sweden

11.3%

6.0%

9.0%

6.3%

9.1%

7.3%

Norway

3.8%

3.4%

3.0%

2.5%

3.3%

3.0%

Finland

2.6%

4.9%

2.9%

5.6%

2.7%

5.2%

Other countries

0.0%

0.0%

0.0%

-5.0%

2.9%

0.0%

Total BA

8.2%

5.3%

6.7%

5.3%

6.9%

5.9%

OTHER INFORMATION

Return on working capital (EBITA/WC), %

33.0%

25.0%

Revenue for comparable units rose by 5 percent during the quarter and EBITA increased by 64 percent compared with the corresponding quarter in the preceding year. This growth in sales and earnings was attributable to a recovery over the comparative period as well as stable organic growth in small and medium-sized companies in Sweden, price adjustments and synergy gains. Challenges remain within the industrial segment and we are continuing with planned store integrations, sales promotion improvements and better standardising of the range to be more efficient and to improve profitability going forward.

Page 5 (19)

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Momentum Group AB published this content on 29 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 October 2021 06:07:09 UTC.


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Sales 2022 8 888 M 839 M 839 M
Net income 2022 452 M 42,7 M 42,7 M
Net Debt 2022 2 294 M 217 M 217 M
P/E ratio 2022 10,6x
Yield 2022 3,39%
Capitalization 4 846 M 458 M 458 M
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Nbr of Employees 2 314
Free-Float 41,9%
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Spread / Average Target 53,6%
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Ulf Lilius President & Chief Executive Officer
Irene Christina Wisenborn Bellander Chief Financial Officer & Executive Vice President
Johan Olov Sj÷ Chairman
Stefan Hedelius Independent Director
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