The fourth quarter gave a solid close to yet another strong year for Addtech. The financial year was characterized by a continued high level of customer activity, despite the general external uncertainty, and increased profitability in all business areas. Our strong positions and well-diversified operations, combined with considerable commitment and favourable achievements among the companies, have generated sales growth of 7 percent on highly challenging comparisons, as well as earnings growth of 13 percent and a strengthened EBITA margin of 14.3 percent (13.6). Our unique culture, with its focus on entrepreneurship and decentralised responsibility, continues to prove itself and to generate conditions for profitable growth.

FOURTH QUARTER

In general, the business situation remained stable at high levels in most of our key segments. Against tough comparison figures, sales for the quarter fell by 3 percent, with lower sales primarily in the Electrification and Energy business areas. Profit for the period was affected negatively by a customer claim in which we reached a settlement during the quarter that had a negative non-recurring effect on profit totalling SEK 39 million. Despite this, our total EBITA margin rose to a record 15.0 percent for the quarter and we defended the profit levels compared with the corresponding quarter last year. 

FULL YEAR

Despite the challenging external environment, we are summarising a year with favourable market conditions on the whole and in which we can conclude that Group have surpassed SEK 20 billion in sales. We saw a more normalised order intake from customers, as well as a certain hesitance in the willingness to invest in larger projects, although this varied between and within different customer segments. The market for infrastructure products for national and regional grids remained strong, while demand for products and solutions for the defence industry gradually strengthened over the year. On the whole, sales in the medical technology and engineering segments sector remained at stable high levels, while the business situation for special vehicles gradually weakened. 

Parts of the building, installation, data and telecom segments had a challenging year while the market situation in electronics weakened primarily in the second half of the year. Willingness to invest in new projects in the sawmill industry remained at low levels, while we saw a clearly positive trend in the marine segment and, towards the end of the year, we also saw positive signals in wind power. From a geographical perspective, the market situation was favourable in Sweden, stable in Finland, weak in Denmark and strong in Norway. In our principal markets outside the Nordic region, the business situation was stable in the Benelux countries and weak in the DACH area against tough comparisons, while the trend was positive for our companies in the UK. In accordance with our strategy, the Group’s international presence outside the Nordic region increased over the year, with the share now amounting to 38 percent of net sales.

Cash flow from operating activities for the full year was significantly better than for the preceding year, SEK 2,575 million (1,911) thanks to continued earnings growth, higher operating margins and measures to improve the efficiency of working capital, where we had, among other things, lowered our inventory levels during the period. Our long-term P/WC financial target strengthened from already high levels to 68 percent (66). Our focus on increasing the value added in our offering, strengthening our product mix and, in particular, on profitable acquisitions, clearly improved margins over the year.
 

ACQUISITIONS

Over the year, we continued to execute our clear strategy to use our own cash flow to acquire well-run companies with high value-add that strengthens and complements our strategically selected niches. A total of ten acquisitions were made, followed by three more after the end of the period. Combined, these have added about SEK 1,100 million in annual sales and 265 new employees to the Group. The share of acquisitions outside the Nordic region increased, accounting for slightly less than half of the sales acquired over the past year. It is important to emphasise that strategic and cultural matching is always decisive in the acquisitions we make, regardless of geography. Besides being a high performer in a technical niche, the acquired company must be a good cultural fit, as this is a decisive factor in our business model which builds on strictly decentralised responsibility.