Momentum : Interim Report 6 months - 1 April-30 September 2020

SECOND QUARTER (1 July-30 September 2020)

· Revenue amounted to MSEK 2,029 (1,432), with the change compared with the preceding year primarily attributable to the acquisition of Swedol. 
Compared with revenue for the corresponding quarter in the preceding year including Swedol (MSEK 2,258), revenue declined by 10 percent.*
 
· EBITA amounted to MSEK 128 (80), corresponding to an EBITA margin of 6.3 percent (5.6). The change compared with the preceding year is primarily attributable to the acquisition of Swedol. 
Compared with EBITA for the corresponding quarter in the preceding year including Swedol (MSEK 161), EBITA declined by 20 percent while the EBITA margin amounted to 6.3 percent (7.1).*
 
· Operating profit amounted to MSEK 14 (75) and the operating margin to 0.7 percent (5.2). 
Earnings were affected by provisions for a restructuring reserve totalling MSEK 97 in the accounts for the second quarter of 2020. This reserve pertains to restructuring costs in connection with the integration of TOOLS and Swedol.
 
· Net profit amounted to MSEK 1 (56) and earnings per share totalled SEK 0.00 (2.00).
· Cash flow from operating activities improved to MSEK 220 (128).
· The COVID-19 pandemic continues to have a negative impact on the Group and the operations implement measures to improve sales and enhance efficiency continiously.

REPORTING PERIOD (1 April-30 September 2020)

· Revenue amounted to MSEK 4,317 (3,008). 
Compared with revenue for the corresponding period in the preceding year including Swedol (MSEK 4,757), revenue declined by 9 percent.*
 
· EBITA amounted to MSEK 283 (155), corresponding to an EBITA margin of 6.6 percent (5.2). 
Compared with EBITA for the corresponding period in the preceding year including Swedol (MSEK 329), EBITA declined by 14 percent while the EBITA margin amounted to 6.6 percent (6.9).*
 
· Net profit amounted to MSEK 95 (107) and earnings per share totalled SEK 1.85 (3.80).
· The return on working capital (EBITA/WC) for the most recent 12-month period (including Swedol) was 26 percent.*
· The equity/assets ratio was 38 percent at the end of the reporting period.

*   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.

 

PRESIDENT'S STATEMENT

2020 - A YEAR OF CHALLENGES AND OPPORTUNITIES

The first six months of the 2020 financial year for the Momentum Group were characterised by the integration of TOOLS and Swedol as well as the challenges entailed by the ongoing COVID-19 pandemic for us, our employees and our customers.

Sales and earnings performance during the reporting period 
The general demand situation over the past quarters was characterised by restraint and caution among customers in all of our main markets in the Nordic region, although with some variations between customer segments and countries. Revenue for the Group declined by a total of approximately 8 percent during the reporting period compared with the preceding year (for comparable entities including Swedol), with the negative sales trend due primarily to the pandemic.

Measures already implemented to increase efficiency and raise margins have yielded a stable earnings performance for the business area Components & Services, which exceeded the preceding year's performance with an EBITA margin of over 13 percent. EBITA for the business area Tools, Consumables, Workwear & Protective Equipment decreased by 18 percent during the period compared with the preceding year (including Swedol) and the business area is working on initiatives to improve sales and efficiency. Within the framework for the integration of TOOLS and Swedol, the business area's operating profit for the second quarter of 2020 has been charged with a restructuring reserve totalling MSEK 97 pertaining to non-recurring costs for store and product range coordination, etc. This reserve had no effect on the cash flow.

The Group's cash flow from operating activities improved during the period, despite the turbulent operating environment.

New Group structure creates opportunities for the future 
We are continuing to focus on what we can affect in our daily operations and the decentralised earnings responsibility entails, for example, that local measures are taken if and where needed. At the same time, the acquisition of Swedol and the new Group structure with two operationally independent business areas is creating new, interesting opportunities for the future.

Stockholm, October 2020

Ulf Lilius
President & CEO

 

Presentation of the Interim Report - 6 months 2020
Investors, analysts and media are welcome to participate in a webcast conference call in which CEO & President Ulf Lilius, CFO Niklas Enmark and Business Area Manager Clein Johansson Ullenvik will present the Report and current status for the integration of Swedol and answer any subsequent questions. The presentation will be held in English.

Time: Friday, 23 October 2020 at 11:00 a.m. CET.
Web link: https://financialhearings.com/event/12837.
Telephone no: SE [phone] / UK [phone] / US [phone]

Contact information
Ulf Lilius, President & CEO, Tel: [phone]
Mats Karlqvist, Head of Investor Relations, Tel: [phone]

The information in this report is such that Momentum Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 8:00 a.m. CEST on 23 October 2020.
   This document is in all respects a translation of the Swedish original Interim Report. In the event of any differences between this translation and the Swedish original, the latter shall prevail.

 

Momentum Group is a leading reseller of industrial consumables and components, service and maintenance to professional end users in the industrial and construction sectors in the Nordic region. The Group has annual revenue of approximately SEK 9,5 billion and approximately 2,700 employees. Momentum Group AB (publ) has been listed on Nasdaq Stockholm since June 2017. Read more at www.momentum.group.

https://news.cision.com/momentum-group-ab--publ-/r/interim-report-6-months---1-april-30-september-2020,c3219263

https://mb.cision.com/Main/18955/3219263/1323149.pdf

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