The report is available on the company's website: www.sdiptech.se
GOOD DEMAND, SOLID CASH FLOW AND AN ORGANISATION POSITIONED FOR CONTINUED GROWTH
Comments refer to continuing operations unless otherwise stated
THIRD QUARTER 2024
- Net sales increased by 7% to SEK 1,210 million (1,129). In total for the Group, organic sales growth was 1%, excl. currency effects.
- EBITA, amounted to SEK 238 million (266), corresponding to an EBITA margin of 19.7% (23.6)
- Adjusted EBITA was unchanged SEK 231 million (231), corresponding to an adjusted EBITA margin of 19.1% (20.5). Organic adjusted EBITA growth for the Group was -8%, excl. currency effects.
- Profit before tax amounted to SEK 134 (168) million and profit after tax amounted to SEK 91 million (130). Profit attributable to divestment activities amounted to SEK -53 million (2). Attributable to the Parent Company's shareholders of the Group's total profit was SEK 37 million (132).
- Cash flow from operating activities amounted to SEK 167 million (247), corresponding to a cash conversion of 67% (92).
- Earnings per ordinary share (average number), less minority interests and dividends on preference shares, amounted to SEK 2.28 (3.34). Total earnings, including discontinued operations, per ordinary share amounted to SEK 0.88 (3.38).
- During the quarter, it was decided to restructure the Group's business areas as of 1 January 2025 in order to optimise resources and strengthen the opportunities for continued growth. It was also decided to initiate a divestment of the Group's unit for manufacturing of special elevators, installation and elevator service in Central Europe. This unit is reported separately
in the interim report under discontinued operations.
FIRST NINE MONTHS 2024
- Net sales increased by 17% to SEK 3,830 million (3,280). In total for the Group, organic sales growth was 6%, excl. currency effects.
- EBITA increased by 10% to SEK 777 million (707), corresponding to an EBITA margin of 20.3% (21.6)
- Adjusted EBITA increased by 13% to SEK 751 million (664), corresponding to an adjusted EBITA margin of 19.6% (20.2). Organic adjusted EBITA growth for the Group was 1%, excl. currency effects.
- Profit before tax amounted to SEK 472 (472) million and profit after tax amounted to SEK 328 million (354). Results attributable to divestment activities amounted to SEK -66 million (0). Attributable to the Parent Company's shareholders of the Group's total profit was SEK 259 million (353).
- Cash flow from operating activities amounted to SEK 533 million (428), corresponding to a cash conversion of 74% (62).
- Earnings per ordinary share (average number), less minority interests and dividends on preference shares, amounted to SEK 8.27 (9.03). Total earnings, including discontinued operations, per ordinary share amounted to SEK 6.54 (9.03).
- During the period, the acquisition of JR Industries Ltd in the UK and WaterTech of Sweden AB was completed. Frigotech AB was divested.
SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
No significant events are noted after the period.
COMMENTS BY THE CEO
The market situation remained stable for most of Sdiptech's units. Despite high comparative figures from last year's strong Q3, we have been able to maintain the same high level during the quarter, with sales increasing by 7 percent, of which 1 percent organically excl. currency. The Group's adjusted EBITA amounted to last year's level of SEK 231 million, with an operating margin in adjusted EBITA of 19.1 percent (20.5) for remaining units.
Group development
As previously communicated, the Group's elevator unit is not included in the long-term strategic plan, which is why it was decided during the quarter to initiate a divestment. The elevator unit will from now on be reported separately in accordance with IFRS 5. The discontinued operations impacted profit before tax by SEK -53 million, which includes impairment of goodwill of SEK -33 million and restructuring costs.
Special Infrastructure Solutions had a sales increase of 7 percent during the quarter. Adjusted EBITA was unchanged from the previous year and amounted to SEK 157 million. During the same period last year, we had very strong organic growth for most of the business area's units. We are pleased to be able to maintain last year's high levels, through good sales in, for example, the units for insurance claims management of underground infrastructure and equipment for winter road maintenance.
Resource Efficiency's sales growth of 7 percent in the quarter was mainly driven by good sales from several units, such as the business area's operations in chemical water treatment, temporary electricity and charging equipment for electric vehicles. At the same time, adjusted EBITA increased by 1 percent and amounted to SEK 92 million. Several units also had strong organic development during the same period last year.
Looking at the first nine months of the year, we have had a solid development. Sales increased by 17 percent of which 6 percent organically excl. currency effects. This demonstrates continued overall good demand. At the same time, our adjusted EBITA in the first three quarters increased by 13 percent, of which 1 percent organic excl. currency. The margin was 19.6 percent in adjusted EBITA.
Cash flow generation amounted to 67 percent for the quarter, and 74 percent for the year, resulting in a cash flow from operating activities of SEK 533 million, of which SEK 167 million in Q3.
We continue to reduce our debt/equity ratio. Our net financial debt to adjusted EBITDA ratio was 2.09 (2.29) at the end of the quarter. The total net debt/equity ratio, including provisions for future earn-outs, amounted to 3.08 (3.44).
Outlook
In connection with Sdiptech's growth and with the aim of creating an even more dynamic and focused business, we have established a new organisational structure consisting of four business areas. The new organisation will apply from 1 January 2025 and consist of the following areas with clear common driving forces:
- Supply Chain & Transportation operates in modernizing and streamlining transport and supply chains, driven by an increased demand for more sustainable and efficient logistics solutions.
- Energy & Electrification provides niche solutions in energy efficiency, electrification, power supply and temporary electricity, driven by the demand for sustainable and efficient energy systems.
- Water & Bioeconomy provides systems and technology in water, waste management and efficient and circular use of natural resources, driven by population growth, urbanization and increased environmental demands.
- Safety & Security offers solutions in physical security, increased safety in public environments and information security, driven by technological developments, changing societal needs and increased security requirements.
We are confident that the new structure will add further value to the business and will provide a clearer description of how these strong trends are driving growth. We will present a more detailed description and breakdown of the four business areas in our year-end report.
In addition to the Group's elevator operations, our units are progressing according to plan, and our assessment is that long-term order intake remains steady. At the same time, it should be noted that growth was very strong, also in the fourth quarter last year.
We are experiencing a more favourable acquisition climate and have many positive dialogues with entrepreneurs. With a very good pipeline, we look forward to welcoming more high-quality companies to the Group shortly.
In conclusion, I would like to express my thanks to our shareholders for their continued confidence, as well as to all employees for your great commitment.
Bengt Lejdström
President and CEO
For additional information, please contact:
Susanna Zethelius, CFO, +46 704 44 00 92, susanna.zethelius@sdiptech.com
My Lundberg, Head of Sustainability & IR, +46 703 61 18 10, my.lundberg@sdiptech.com
About Us
Sdiptech is a technology group that acquires and develops market-leading niche operations that contribute to creating more sustainable, efficient and safe societies. Sdiptech has approximately SEK 5,000 million in sales and is based in Stockholm.
Sdiptech's common shares of series B are traded on Nasdaq Stockholm under the short name SDIP B with ISIN code SE0003756758. Sdiptech's preferred shares are traded under the short name SDIP PREF with ISIN code SE0006758348. Further information is available on the company's website: www.sdiptech.se
This information is information that Sdiptech is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2024-10-25 08:00 CEST.
