OTHER FINANCIAL INFORMATION

Profitability, financial position and cash flow
The return on equity at the end of the period was 26 percent (26), and return on capital employed was 17 percent (17). Return on working capital P/WC (EBITA in relation to working capital) amounted to 61 percent (51).

At the end of the period the equity ratio amounted to 32 percent (32). Equity per share, excluding non-controlling interest, totalled SEK 12.30 (10.40). The Group's net debt at the end of the period amounted to SEK 3,480 million (3,148), excluding pension liabilities of SEK 336 million (359). The net debt/equity ratio, calculated on the basis of net debt excluding provisions for pensions amounted to 1.0 (1.0).

Cash and cash equivalents consisting of cash and bank equivalents and approved but non-utilised credit facilities amounted to SEK 1,450 million (1,676) at 30 September 2021.

Cash flow from operating activities amounted to SEK 435 million (567) during the period. Company acquisitions and disposals including settlement of contingent consideration regarding acquisitions implemented in previous years amounted to SEK 592 million (888). Investments in non-current assets totalled SEK 36 million (33) and disposal of non-current assets amounted to SEK 6 million (4). Repurchase of call options amounted to SEK 36 million (22) and exercised call options totalled SEK 7 million (17). During the second quarter, dividend of SEK 1.20 (1.00) per share was paid, totalling SEK 323 million (269).

Employees
At the end of the period, the number of employees was 3,319 compared to 3,133 at the beginning of the financial year. During the period, completed acquisitions resulted in an increase of the number of employees by 198. The average number of employees in the latest 12-month period was 3,174.

Ownership structure
At the end of the period the share capital amounted to SEK 51.1 million.

In accordance with a resolution of the August 2021 AGM, 100 members of management were offered the opportunity to acquire 1,000,000 call options on repurchased Class B shares. In total, 768,070 options were subscribed for. Addtech has four outstanding call option programmes for a total of 3,315,070 shares. Call options issued on repurchased shares entail a dilution effect of about 0.3 percent during the latest 12-month period. Addtech's own shareholdings fully meet the needs of the outstanding call option programmes.

Acquisitions and disposals
During the period, 1 April to 30 June 2021 the following acquisitions were completed; ESi Controls Ltd., Great Britain, was acquired to become part of the Power Solutions business area. Hydro-Material Oy, Finland, was acquired to become part of the Components business area. IETV Elektroteknik AB, Sweden, was acquired to become part of the Energy business area. AVT Industriteknik AB, Sweden, was acquired to become part of the Automation business area.

During the second quarter, five acquisitions took place:

On 1 July, EK Power Solutions AB, Sweden, was acquired to become part of the Components business area. EK Power has a leading position in the development of power electronics and electric motor control. The company has 25 employees and sales of approximately SEK 40 million.

On 1 July, KZ moder AB (“KZ Group“), Sweden, was acquired to become part of the Industrial Process business area. KZ Group is a leading supplier of components, equipment and solutions for the water grid as well as treatment of water and wastewater. KZ Group has 29 employees and sales of around SEK 100 million.

On 5 July, Finnchain Oy, Finland, was acquired to become part of the Industrial Process business area. Finnchain is a market leader in the design, manufacture and delivery of chain-driven sludge conveyor systems that optimize the cleaning of wastewater and desalination of seawater. Finnchain has 20 employees and sales of approximately EUR 7 million.

On 3 August, Tritech Solutions AB, Sweden, was acquired to become part of the Automation business area. Tritech Solutions delivers customized embedded computer systems, primarily to OEM-customers within industrial automation, medical technology, telecommunication and transportation. The company has 8 employees and sales of around SEK 60 million.

On 1 September, Systerra Computer GmbH (”Systerra”), Germany, was acquired to become part of the Automation business area. Systerra delivers high-end standard, customized and own products within embedded computer systems and network solutions. The company has 16 employees and sales of around EUR 9,5 million.

The purchase price allocation calculations for the acquisitions completed during the period 1 April – 30 September 2020 have now been finalised. No significant adjustments have been made to the calculations. Acquisitions completed as of the 2020/2021 financial year are distributed among the Group’s business areas as follows:

If all acquisitions which have taken effect during the period had been completed on 1 April 2021, their impact would have been an estimated SEK 330 million on Group net sales, about SEK 40 million on operating profit and about SEK 30 million on profit after tax for the period.

Addtech normally employs an acquisition structure comprising basic purchase consideration and contingent consideration. The outcome of contingent purchase considerations is determined by the future earnings reached by the companies and is subject to a fixed maximum level. Of considerations not yet paid for acquisitions during the period, the discounted value amounts to SEK 97 million. The contingent purchase considerations fall due for payment within three years and the outcome is subject to a maximum of SEK 116 million. 

Transaction costs for acquisitions that resulted in an ownership transfer during the period, amounted to SEK 6 million (5) and are reported under Selling expenses.

Revaluation of contingent consideration had a negative net effect of SEK 4 million (7) during the period. The impact on profits are reported under Other operating income and Other operating expenses, respectively.

According to the preliminary acquisitions analyses, the assets and liabilities included in the acquisitions were as follows, during the period:

Parent Company

Parent Company net sales amounted to SEK 32 million (36) and profit after financial items was SEK -11 million (-1). Net investments in non-current assets were SEK 0 million (0). The Parent Company's financial net debt was SEK 315 million (654) at the end of the period.