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    ALLIGO B   SE0009922305

ALLIGO AB (PUBL)

(ALLIGO B)
  Report
Delayed Nasdaq Stockholm  -  11:24 2022-08-18 am EDT
96.00 SEK   +0.52%
07/15TRANSCRIPT : Alligo AB, Q2 2022 Earnings Call, Jul 15, 2022
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07/15Alligo Interim Report 1 january-30 june 2022
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07/14Alligo AB Reports Earnings Results for the Second Quarter and Six Months Ended June 30, 2022
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Momentum : Interim Report Q2 2021 Eng

07/15/2021 | 02:07am EDT

INTERIM REPORT - 6 MONTHS

1 January-30 June 2021

SECOND QUARTER (1 April-30 June 2021)

  • Revenue increased by 12 percent to MSEK 2,560 (2,288).
  • EBITA increased by 38 percent to MSEK 214 (155), corresponding to an EBITA margin of 8.4 percent (6.8).
  • Operating profit amounted to MSEK 194 (134) and the operating margin to 7.6 percent (5.9).
  • Net profit for the quarter increased by 54 percent to MSEK 145 (94) and earnings per share to SEK 2.85 (1.85).
  • Demand and the earnings trend in both of the Group's business areas continued to recover during the quarter compared both with the preceding quarter and with the preceding year, which was characterised by uncertainty and the measures taken by companies and societies at large in the wake of the COVID-19 pandemic.
  • The integration between Swedol and TOOLS continues according to plan and with an undiminished focus within the Group's business area Alligo.
  • A new organisational structure was established in the business area Components & Services during the quarter in order to support the continued operational and acquisition driven focus.
  • In the beginning of April, the Board of Directors decided to assign Group management the task of investigating the conditions for splitting the Group into two separate listed companies. The aim is to create increased shareholder value through increased focus. The Board intends to present further information on the results of the investigation during the financial year.
  • Momentum Group's Annual General Meeting was held on 11 May 2021 and the dividend was set at
    SEK 1.50 per share (-).

REPORTING PERIOD (1 January-30 June 2021)

  • Revenue amounted to MSEK 4,885 (3,827), with the change from 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 4,656), revenue increased by 5 percent.*
  • EBITA amounted MSEK 339 (246), corresponding to an EBITA margin of 6.9 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 289), EBITA increased by 17 percent and the EBITA margin amounted to 6.9 percent (6.2).*
  • Net profit for the period amounted to MSEK 222 (148) and earnings per share totalled SEK 4.40 (3.80).
  • The return on working capital (EBITA/WC) for the most recent 12-month period (including Swedol) was 33 percent.*
  • The equity/assets ratio was 39 percent at the end of the period.
  • Cash flow from operating activities amounted to MSEK 486 (482).
  • 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.
    • 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 - 6 MONTHS

1 JANUARY-30 JUNE 2021

PRESIDENT'S STATEMENT

POSITIVE PERFORMANCE CONTINUES FOR THE GROUP'S OPERATIONS

Most of the Group's operations delivered a positive sales and earnings performance during the second quarter after a more hesitant start to the financial year. EBITA for the entire Group increased by 38 percent during the quarter. Many of the Group's customers have also indicated that they are optimistic about the outlook for the rest of the year, which hopefully indicates continued increases in volumes going forward. At the same time, the efficiency measures we have taken, and are continuing to take as needed, have a positive contribution to our earnings performance and we are continuing to generate strong cash flows. This provides us with favourable conditions for continued profitable growth.

The integration between TOOLS and Swedol in the business area Alligo continues with an undiminished focus, with the aim of achieving our goals in terms of synergies and economies of scale over time. The establishment of a joint product range with new purchasing agreements and the introduction of proprietary product brands in additional businesses within the business area, along with the coordination of stores, are proceeding according to plan.

In the business area Components & Services, we are continuing our efforts to achieve acquisition- driven growth (while maintaining profitability) and the four acquisitions we completed during the first quarter are now integrated in the business area and contribute to sales and earnings performance. We are already seeing interesting collaboration opportunities between these newly acquired companies and our existing operations. During the quarter, a new organisational structure was implemented to strengthen our focus on growth, both organic and through acquisitions.

PRIORITIES FOR THE FUTURE

Despite the positive signals from our customers and suppliers, uncertainty continues in our operating environment and in the Group's markets. We are seeing this in the form of the effect on demand, prices and supply chains. There is currently a surplus demand for certain product areas which, in combination with a shortage of materials and disruptions to the global logistics chain, leads to a significant increase in prices within a number of areas and for raw materials and transportation. Our decentralised profit responsibility, proximity to customers and ability to quickly adapt to changes in our operating environment remain the key to our success.

The Group's priorities for the coming quarter include securing our own ability to deliver products to our customers through proactive procurement and analyses. We continue to take appropriate measures in our operations, focus on the coordination project and realising synergies within the business area Alligo and to increase sales to new and existing customers in our daily work. In the business area Components

  • Services, we are also focusing on establishing contacts with and visiting potential acquisition candidates.

In addition to these priorities, as previously announced, the Board has assigned Group management the task of investigating the possibility of splitting the Group into two separate listed companies. The purpose is to strengthen each business area's conditions for achieving its ambitions in the best possible way and thereby creating increased shareholder value. The Board intends to present further information on the results of the investigation during the financial year.

Stockholm, July 2021

Ulf Lilius

President & CEO

Page 2 (19)

INTERIM REPORT - 6 MONTHS

1 JANUARY-30 JUNE 2021

MOMENTUM GROUP IN SUMMARY

3 MONTHS ENDING

6 MONTHS ENDING

12 MONTHS ENDING

30 JUN

30 JUN

30 JUN

30 JUN

30 JUN

30 JUN

2021

2020

2021

2020

2021

2020

Revenue, MSEK

2,560

2,288

12%

4,885

3,827

28%

9,443

6,847

38%

Revenue including Swedol 2019/20 1

2,560

2,288

12%

4,885

4,656

5%

9,443

9,569

-1%

Operating profit, MSEK

194

134

45%

302

214

41%

501

367

37%

of which: Items affecting comparability

-2

-4

-2

-9

-99

-18

of which: Amortisation of intangible assets incurred

in connection with corporate acquisitions

-18

-17

-35

-23

-68

-33

EBITA, MSEK

214

155

38%

339

246

38%

668

418

60%

EBITA including Swedol 2019/20 1

214

155

38%

339

289

17%

668

668

0%

Profit after financial items, MSEK

182

120

52%

280

194

44%

454

337

35%

Net profit (after taxes), MSEK

145

94

54%

222

148

50%

357

260

37%

Earnings per share, SEK

2.85

1.85

54%

4.40

3.80

16%

7.10

7.75

-8%

Operating margin

7.6%

5.9%

6.2%

5.6%

5.3%

5.4%

EBITA margin

8.4%

6.8%

6.9%

6.4%

7.1%

6.1%

EBITA margin including Swedol 2019/20 1

8.4%

6.8%

6.9%

6.2%

7.1%

7.0%

Profit margin

7.1%

5.2%

5.7%

5.1%

4.8%

4.9%

Return on equity

12%

15%

Return on working capital (EBITA/WC)

33%

29%

EBITA/WC including Swedol 2019/20 1

33%

29%

Equity per share, SEK

63.50

58.20

9%

Equity/assets ratio

39%

38%

39%

38%

Number of employees at the end of the period

2,779

2,370

17%

2,779

2,370

17%

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

REVENUE AND PROFIT

SECOND QUARTER (1 April-30 June 2021)

Revenue increased by 12 percent to MSEK 2,560 (2,288). 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 +22 on revenue for comparable units. The quarter included one more trading day than the corresponding quarter in the preceding year.

Operating profit increased by 45 percent to MSEK 194 (134). EBITA (operating profit excluding items affecting comparability and amortisation of intangible assets incurred in connection with corporate acquisitions) increased by 38 percent to MSEK 214 (155), equivalent to an EBITA margin of 8.4 percent (6.8). Exchange-rate translation effects had a net impact of MSEK +1 (0) on operating profit.

Profit after financial items totalled MSEK 182 (120) and net profit amounted to MSEK 145 (94), which corresponds to earnings per share of SEK 2.85 (1.85) for the quarter.

REPORTING PERIOD (1 January-30 June 2021)

Revenue amounted to MSEK 4,885 (3,827), 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 4,656), revenue increased by 5 percent. Revenue for comparable units (including Swedol), measured in local currency and adjusted for the number of trading days, increased by more than 3 percent compared with the corresponding period in the preceding year. Exchange-rate translation effects had an impact of MSEK -23 on revenue for comparable units (including Swedol). The reporting period contained the same number of trading days as the corresponding period in the preceding financial year.

Operating profit amounted to MSEK 302 (214), 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 339 (246). Compared with EBITA for the corresponding period in the preceding year including Swedol for the entire reporting period (MSEK 289), EBITA increased by 17 percent, with an increase in the EBITA margin to 6.9 percent (6.2). Operating profit was charged with depreciation of MSEK -31(-18) on tangible non-current assets and amortisation of MSEK -56(-36) on intangible non-current assets. Exchange-rate translation effects had a net impact of MSEK 0 (-1) on operating profit.

Profit after financial items totalled MSEK 280 (194) and net profit amounted to MSEK 222 (148), which corresponds to earnings per share of SEK 4.40 (3.80) for the reporting period.

Page 3 (19)

INTERIM REPORT - 6 MONTHS

1 JANUARY-30 JUNE 2021

  • 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 (including internal communications, investor relations and legal affairs).

MARKET AND THE IMPACT OF THE COVID-19 PANDEMIC

Overall demand continued to recover during the second quarter of 2021 compared with the 2020 financial year, which was characterised by the uncertainty and the stringent measures taken by companies and societies at large due to the COVID-19 pandemic. The largest changes in demand during the quarter were attributable to large, export-oriented customers in the industrial sector, which were widely impacted by developments in the global markets. Demand from small and medium-sized customers remained stable. Performances also continued to vary between countries. A shortage of materials and resources in some of the Group's product areas as well as transportation disruptions have had a certain dampening effect on sales. Accordingly, it is not currently possible to predict with any certainty how the pandemic and other market conditions will affect Momentum Group in the coming quarters of 2021. 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

APR-JUN 20211

JAN-JUN 20211

Change in revenue for:

Comparable units in local currency

6.2%

3.4%

Currency effects

1.0%

-0.5%

Number of trading days

2.3%

-0.2%

Other units2

2.4%

2.2%

Total change

11.9%

4.9%

  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 Gigant, 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:

The sales trend in Alligo was positive during the second quarter and we noted a certain degree of recovery. Overall, sales increased by approximately 4 percent, adjusted for the number of trading days and in local currency. However, the sales performance in the industrial segment remained challenging, and we are implementing numerous purposeful initiatives as part of our targeted, long-term efforts to reverse this trend.

During the quarter, we have launched and established our new values throughout the business area. We also continued work to define our strategic goals, which will be determined in early autumn. We will thus have a joint mission, vision, values and clear strategic goals in place to conduct operations more efficiently in the future.

Page 4 (19)

INTERIM REPORT - 6 MONTHS

1 JANUARY-30 JUNE 2021

Other aspects of the integration have proceeded according to plan. Work to develop a joint Nordic product range is finalised and the launch will begin in the autumn. To date, we have carried out 11 store integrations in Sweden and four in Norway. After integrating TOOLS in Finland into our joint IT platform during the first quarter, we have gone further and started an analysis to identify the preconditions for integrating TOOLS in Sweden and Norway, and to simplify the legal structure.

In the second quarter, we have carried out ISO 9001, 14001 and 45001 audits in Sweden and Norway with positive results.

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

6 MONTHS ENDING

12 MONTHS ENDING

30 JUN

30 JUN

30 JUN

30 JUN

30 JUN

30 JUN

2021

2020

2021

2020

2021

2020

REVENUE, MSEK

Sweden

1,349

1,267

2,556

2,420

5,029

4,856

Norway

547

482

1,094

1,088

2,159

2,363

Finland

339

315

625

641

1,225

1,284

Other countries

9

7

15

13

33

29

Eliminations

-72

-59

-136

-98

-269

-146

Total BA

2,172

2,012

4,154

4,064

8,177

8,386

EBITA, MSEK

Sweden

131

94

204

154

400

372

Norway

18

5

29

22

69

75

Finland

18

23

19

38

40

72

Other countries

0

0

0

-1

1

-1

Total BA

167

122

252

213

510

518

EBITA MARGIN, %

Sweden

9.7%

7.4%

8.0%

6.4%

8.0%

7.7%

Norway

3.3%

1.0%

2.7%

2.0%

3.2%

3.2%

Finland

5.3%

7.3%

3.0%

5.9%

3.3%

5.6%

Other countries

0.0%

0.0%

0.0%

-7.7%

3.0%

-3.4%

Total BA

7.7%

6.1%

6.1%

5.2%

6.2%

6.2%

OTHER INFORMATION

Return on working capital (EBITA/WC), %

29%

26%

Demand in the business area Alligo was stable during the second quarter of the financial year, and revenue for comparable units in the business area increased by a total of 4 percent1 during the quarter, with the comparative period characterised by a great deal of uncertainty and more or less stringent measures taken by companies and societies at large due to the COVID-19 pandemic. The different countries in the business area therefore demonstrate certain variations in sales and earnings trends for comparable units during the quarter. While the integration, which includes the coordination of stores and new joint purchasing agreements, has had a positive impact during the quarter, other activities and measures are continuously being carried out to increase sales and margins and improve efficiency.

Revenue for the operations in Sweden increased by a total of approximately 3 percent2 during the quarter compared with the previous year. Sales to small and medium-sized customers continued to perform particularly well. Several activities and measures are continuously being carried out to increase sales to larger industrial companies. The earnings trend was relatively strong during the quarter, and the integration had a positive impact in the form of synergies and cost-saving measures. The comparison with the corresponding quarter in the preceding year for the specialist companies in Workwear & Profile Materials is affected by a number of one-time transactions, primarily within personal protective equipment in 2020.

Revenue for the operations in Norway increased by approximately 4 percent2 during the quarter. The pandemic and the stringent measures that companies and society at large took in 2020 have had a major impact on demand in the Norwegian market, not least in the oil & gas sector. This has had a negative impact on sales to both retail and direct sales customers, but there was a slight recovery in the operations' sales and earnings during the quarter. Store integrations and cost-saving measures continue to be implemented, including in the logistics functions.

Revenue for the operations in Finland increased by approximately 10 percent2 during the quarter. Demand in the relatively export-dependent Finnish industrial sector, including the pulp & paper and shipbuilding industries, recovered somewhat during the quarter. The operations are continuously implementing customised cost-saving measures with the aim of reversing the negative earnings trend.

1 Comparable units (including Swedol), measured in local currency and adjusted for the number of trading days this year compared with the preceding year.

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 15 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 July 2021 06:06:03 UTC.


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Financials
Sales 2022 8 888 M 851 M 851 M
Net income 2022 452 M 43,2 M 43,2 M
Net Debt 2022 2 294 M 219 M 219 M
P/E ratio 2022 10,6x
Yield 2022 3,39%
Capitalization 4 846 M 464 M 464 M
EV / Sales 2022 0,80x
EV / Sales 2023 0,73x
Nbr of Employees 2 314
Free-Float 41,9%
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Last Close Price 96,00 SEK
Average target price 147,50 SEK
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
Ulf G÷ran Nńsholm Independent Director
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