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       SE0015949201

LIFCO AB (PUBL)

Real-time Estimate Quote. Real-time Estimate  - 07/29 11:07:08 am
249.7000 SEK   0.00%
08/26LIFCO : issues bond loan of SEK 750 million
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08/26Lifco Issues Bond Loan of SEK 750 Million
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Lifco : Interim Report January – June 2021

07/16/2021 | 01:45am EDT

16 July 2021

INTERIM REPORT JANUARY - JUNE 2021

Reporting period January - June

  • Net sales increased 24.6 per cent to SEK 8,370 (6,720) million. Organically, net sales grew by 16.8 per cent.
  • EBITA* increased 50.2 per cent to SEK 1,834 (1,221) million.
  • The EBITA margin* improved 3.7 percentage points to 21.9 (18.2) per cent.
  • Profit before tax grew 57.0 per cent to SEK 1,534 (977) million.
  • Net profit for the period grew 57.2 per cent to SEK 1,151 (732) million.
  • Earnings per share increased 56.2 per cent till SEK 2.50 (1.60).
  • Cash flow from operating activities decreased 6.4 per cent to SEK 1,179 (1,259) million
  • The pandemic did not negatively affect the market situation during the period.
  • Ten new businesses were consolidated during the period with total annual net sales of about SEK 1,240 million.

Reporting period April - June

  • Net sales increased 46.2 per cent to SEK 4,501 (3,079) million. Organically, net sales grew by 33.7 per cent.
  • EBITA* increased by 79.1 per cent to SEK 1,019 (569) million
  • The EBITA margin* improved 4.1 percentage points to 22.6 (18.5) per cent.
  • Profit before tax grew 95.9 per cent to SEK 866 (442) million.
  • Net profit for the period grew 95.8 per cent to SEK 650 (332) million.
  • Cash flow from operating activities increased 9.4 per cent to SEK 858 (784) million.

Summary of financial performance

SEK million

Net sales

EBITA*

EBITA margin*

Profit before tax

Net profit for the period Earnings per share2 Return on capital employed

Return on capital employed excl. goodwill

Rolling 12

FULL

SIX MONTHS

SECOND QUARTER

months

YEAR

2021

20201

change

2021

20201

change

change

20201

8,370

6,720

24.6%

4,501

3,079

46.2%

15,432

12.0%

13,782

1,834

1,221

50.2%

1,019

569

79.1%

3,315

22.7%

2,702

21.9%

18.2%

3.7

22.6%

18.5%

4.1

21.5%

1.9

19.6%

1,534

977

57.0%

866

442

95.9%

2,764

25.2%

2,207

1,151

732

57.2%

650

332

95.8%

2,104

24.9%

1,685

2.50

1.60

56.2%

1.41

0.73

93.2%

4.57

24.5%

3.67

22.7%

18.0%

4.7

22.7%

18.0%

4.7

22.7%

3.1

19.6%

159%

114%

45

159%

114%

45

159%

20

139%

* Before acquisition costs.

  • In the first quarter 2021, the Group changed its accounting policies concerning call/put options issued in non-controlling interests. Comparative figures have been recalculated for 2020 without this leading to any material impact on the reporting.
    For more information, see the section on accounting policies.
    2 Comparative figures have been recalculated after the share split in May 2021, whereby each share was split into five new shares of the same share class (split 5:1).

Lifco AB (publ)

Verkmästaregatan 1, SE-745 85 Enköping

Org nr 556465-3185 www.lifco.se

COMMENTS FROM THE CEO

Lifco's primary target is to increase its earnings every year through organic growth as well as acquisitions. Net sales increased by 24.6 per cent to SEK 8,370 (6,720) million in the first half of the year, driven by organic growth and acquisitions. Exchange rate effects negatively impacted sales. The generally favourable market environment was a strong contributing factor to the organic growth of 16.8%.

During the first half of the year, EBITA* increased by 50.2 per cent to SEK 1,834 (1,221) million and the EBITA margin* improved by 3.7 percentage points to 21.9 (18.2) per cent. Improvements in profitability are a result of organic growth, Lifco's continual focus on profit margins, acquisitions and continued low sales and marketing activities as a result of the pandemic. Earnings per share during the period increased 56.2 per cent till SEK 2.50 (1.60).

All three business areas reported good sales and earnings growth during the first half of the year, and the development was stable in all divisions, except for Forest, for the six-month period. The quarterly comparison is affected by the negative effects of the pandemic in 2020 that primarily occurred during the second quarter 2020 and mainly affected the Dental business area. During the first six months 2021 the pandemic did not have any significant negatively impact on Lifco's sales and profit.

During the first half of the year, Lifco consolidated ten acquisitions, of which four in the Dental business area, four in Systems Solutions and two in Demolition & Tools. The acquisitions in Dental mean that Lifco continued to strengthen its position in the German market with Kaniedenta, Kentzler-Kaschner and Rissmann Dental, and carried out a small bolt-on acquisition in the Czech Republic. Acquisitions in Demolition & Tools pertained to both of the Italian companies Cangini Benne and MultiOne. Cangini Benne is a leading manufacturer of attachments for excavators and front loaders and MultiOne manufactures mini loaders. Systems Solutions' business was expanded with three British companies: T. Freemantle, a global manufacturer of cartoning and sleeving machinery; Cleveland Cascades, a global manufacturer of bespoke dry bulk loading chutes; and Spinaclean, which develops and sells vacuum cleaners and pressure washers for indoor and outdoor high-level cleaning. An assets and liabilities acquisition was consolidated in Systems Solutions pertaining to the German company ErgoPack's distributor in the US. The acquisitions will have a positive impact on Lifco's results and financial position during the year.

In the second quarter, Lifco announced the acquisition of four companies that will be consolidated into Systems Solutions during the third quarter 2021. These acquisitions pertain to the Italian companies DVG De Vecchi and Next Hydraulics, the German company Bode Components and Swedish Elvärmeprodukter i Skellefteå. The first three are market leaders in their respective niches. DVG De Vecchi manufactures and distributes components for coffee machines and Next Hydraulics manufactures telescopic cranes mainly used on light vehicles and also produces stabilisers for vehicles. Bode Components manufactures safety products for elevators and Elvärmeprodukter i Skellefteå sells heating products for floor, roof, ground and frost protection.

Lifco's financial position remains solid and interest-bearing net debt amounted to 1.2 times EBITDA* at 30 June 2021, which is well in line with our target of interest-bearing net debt of a maximum of three times EBITDA* and means that Lifco possesses the financial scope to make additional acquisitions.

Per Waldemarson

President and CEO

2

GROUP PERFORMANCE IN JANUARY - JUNE

Sales increased 24.6 per cent to SEK 8,370 (6,720) million. Organic growth was 16.8 per cent, acquisitions attributed 10.8 per cent and exchange rate effects had a negative impact on sales of 3.0 per cent. During the first half of the year, the German company Rissmann Dental, the Czech company Medema and the British companies T. Freemantle, Cleveland Cascades and Spinaclean as well as the majority of the German companies Kaniedenta and Kentzler-Kaschner and the Italian companies Cangini Benne and MultiOne were consolidated. The assets and liabilities acquisition of German ErgoPack's distributor in the US was also consolidated during the period.

EBITA* increased 50.2 per cent to SEK 1,834 (1,221) million and the EBITA margin* improved 3.7 percentage points to 21.9 (18.2) as a result of organic growth, Lifco's continual focus on profit margins, acquisitions and continued low sales and marketing activities as a result of the pandemic. Exchange rate effects had a negative impact on EBITA* of 4.0 per cent. During the period, 39 (34) per cent of EBITA* was generated in EUR, 25 (29) per cent in SEK, 12 (14) per cent in NOK, 7 (7) per cent in GBP, 5 (8) per cent in DKK, 5 (3) per cent in USD and 7 (5) per cent in other currencies.

Net financial items were SEK -34(-28) million.

Profit before tax grew by 57.0 per cent to SEK 1,534 (977) million and net profit for the period increased by 57.2 per cent to SEK 1,151 (732) million.

Average capital employed excluding goodwill increased by SEK 141 million during the first half of the year, to SEK 2,079 million at 30 June 2021, compared with SEK 1,938 million at 31 December 2020. EBITA* in relation to average capital employed excluding goodwill increased during the period to 159 per cent from 139 per cent at year-end.

The Group's net debt increased by SEK 1,746 million from 31 December 2020 to SEK 6,522 million at 30 June 2021, of which liabilities related to put/call options and additional considerations for acquisitions amounted to SEK 1,348 (908) million. Interest-bearing net debt increased by SEK 1,244 million since year-end and amounted to SEK 4,486 (3,815) million at 30 June 2021.

The net debt/equity ratio at 30 June 2021 was 0.7 (0.7) and net debt/EBITDA* was 1.8 (1.9) times. Interest-bearing net debt/EBITDA* was 1.2 (1.4) times. At period-end, 45 (41) per cent of the Group's interest-bearing liabilities were denominated in EUR.

Cash flow from operating activities decreased by 6.4 per cent during the first half of the year, to SEK 1,179 (1,259) million, mainly on the back of the favourable market environment, which led to increased sales and therefore higher accounts receivable. Cash flow from investing activities was SEK -1,671(-871) million, which was mainly attributable to acquisitions.

3

GROUP PERFORMANCE IN THE SECOND QUARTER

Sales increased by 46.2 per cent to SEK 4,501 (3,079) million in the second quarter. Organic growth was 33.7 per cent, acquisitions contributed 15.0 per cent while foreign exchange gains had a negative impact of 2.5 per cent. The comparison is affected by the negative effects of the pandemic primarily for the second quarter of 2020 that chiefly affected the Dental business area.

EBITA* increased 79.1 per cent to SEK 1,019 (569) million and the EBITA margin* improved 4.1 percentage points to 22.6 (18.5) as a result of Lifco's continual focus on profit margins, acquisitions and continued low sales and marketing activities as a result of the pandemic. Exchange rate effects had a negative impact on EBITA* of 3.9 per cent. During the second quarter, 37 (32) per cent of EBITA* was generated in EUR, 26 (30) per cent in SEK and 13 (16) per cent in NOK, 8 (8) per cent in GBP, 5 (1) per cent in USD, 4 (7) per cent in DKK and 7 (6) per cent in other currencies.

Net financial items were SEK -20(-22) million.

Profit before tax grew by 95.9 per cent to SEK 866 (442) million. Net profit for the period grew 95.8 per cent to SEK 650 (332) million.

Average capital employed excluding goodwill increased by SEK 180 million to SEK 2,079 million at 30 June 2021, compared with SEK 1,899 million at 31 March 2021. EBITA* relative to average capital employed excluding goodwill increased from 151 per cent at 31 March 2021 to 159 per cent at 30 June 2021.

From 31 March 2021, the Group's net debt increased by SEK 618 million to SEK 6,522 million. Dividends amounted to SEK 620 (34) million for the quarter. At the Annual General Meeting on 23 April 2021, the dividend for the 2020 financial year was set at SEK 6.00 per share, which is equivalent to a dividend of SEK 1.20 per share after the share split in May 2021. The total dividend to shareholders for the 2020 financial year was SEK 545.1 million, and was paid on 30 April 2021.

Cash flow from operating activities increased 9.4 per cent to SEK 858 (784) million, mainly on the back of improved operating profit for the quarter. Cash flow from investing activities was SEK -799(-44) million, which was attributable to acquisitions and investments.

4

FINANCIAL PERFORMANCE - BUSINESS AREAS

Dental

SIX MONTHS

SECOND QUARTER

Rolling 12

FULL

months

YEAR

2020

SEK million

2021

change

2021

2020

change

change

2020

Net sales

2,656

2,012

32.0%

1,317

841

56.6%

4,934

15.0%

4,290

EBITA*

600

385

55.8%

297

144

106%

1,113

23.9%

898

EBITA margin*

22.6%

19.1%

3.5

22.6%

17.1%

5.5

22.6%

1.7

20.9%

The companies in Lifco's Dental business area are leading suppliers of consumables, equipment and technical service to dentists across Europe, and the business area also has operations in the US. Lifco sells dental technology to dentists in the Nordic countries and Germany, and develops and sells medical record systems in Denmark, Sweden and Germany. The business area also includes a number of manufacturers which produce fitting products for dentures, disinfectants, saliva ejectors, bite registration and dental impression materials, bonding agents and other consumables that are sold to dentists through distributors around the world. In recent years, Dental has through acquisitions and organic growth increased its earnings in manufacturing, dental technology and software faster than in distribution, which has had a positive impact on margin growth in the business area.

Net sales in Dental increased by 32.0 per cent to SEK 2,656 (2,012) million during the first half of the year, positively affected by organic growth and acquisitions. The quarterly comparison is affected by the negative effects of the pandemic in 2020 that primarily occurred during the second quarter of 2020.

EBITA* increased by 55.8 per cent to SEK 600 (385) million during the first half of the year and the EBITA margin* improved by 3.5 percentage points to 22.6 (19.1) per cent. Profitability was impacted positively from organic growth, Lifco's continual focus on profit margins, acquisitions and continued low sales and marketing activities as a result of the pandemic.

The dental market remains generally stable. The results of individual companies in Lifco's Dental business may in any individual quarter be influenced by significant fluctuations in exchange rates, calendar effects (such as Easter), gained or lost contracts in procurements of consumables by public- sector or major private-sector customers and fluctuations in the delivery of equipment. In the second quarter of the year, there were no individual events that had a substantial impact on the earnings of the Dental group as a whole.

As of January 2021, the German operations Kaniedenta and Rissmann Dental were consolidated. Kaniedenta produces and sells dental consumables primarily for the German market. The company had a turnover of about EUR 29 million in 2019 and has 35 employees. The acquisition comprised the majority of the shares. Rissmann Dental is a dental laboratory and had sales of approximately EUR

4.1 million in 2019. The company has about 50 employees. The acquisition was an assets and liabilities acquisition. As of February 2021, the majority of the German company Kentzler-Kaschner was consolidated, which sells consumables to the dental market, mainly in Germany. The company had a turnover of about EUR 3.6 million in 2020 and has 20 employees. As of March 2021, the Czech

5

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

Disclaimer

Lifco AB (publ) published this content on 16 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 July 2021 05:44:09 UTC.


ę Publicnow 2021
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Managers and Directors
Per Waldemarson President, Chief Executive Officer & Director
TherŔse Hoffman Chief Financial Officer
Carl Reinhold Adolf Bennet Chairman
Erik Henry Gabrielson Independent Director
Johan Erik Stern Vice Chairman
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