Q2 Interim report second quarter

and first half of 2022

Second quarter 2022

Order intake increased by 17% to SEK 7,029 million (6,006). For comparable units, it was an increase of 7%.
Net sales increased by 20% to SEK 6,683 million (5,552). For comparable units, it was an increase of 10%.
EBITA increased by 21% to SEK 1,023 million (843), corresponding to an EBITA margin of 15.3% (15.2%).
Profit for the quarter rose 20% to SEK 675 million (562), and earnings per share amounted to SEK 1.85 (1.54).
Cash flow from operating activities amounted to SEK 622 million (792).

1 January – 30 June 2022

Order intake increased by 20% to SEK 14,114 million (11,753). For comparable units, it was an increase of 9%.
Net sales increased by 22% to SEK 13,081 million (10,699). For comparable units, it was an increase of 11%.
EBITA increased by 27% to SEK 1,982 million (1,556), corresponding to an EBITA margin of 15.2% (14.5%).
Profit for the period rose 28% to SEK 1,313 million (1,023), and earnings per share amounted to SEK 3.60 (2.81).
Cash flow from operating activities amounted to SEK 898 million (1,281).

Financial Development

	2022	2021		2022	2021		2021/22	2021
SEK million	Apr-Jun	Apr-Jun	Change	Jan-Jun	Jan-Jun	Change	Moving 12 mos	Jan-Dec
Order intake	7,029	6,006	17%	14,114	11,753	20%	25,835	23,474
Net sales	6,683	5,552	20%	13,081	10,699	22%	24,097	21,715
Operating profit	908	751	21%	1,757	1,374	28%	3,208	2,825
EBITA	1,023	843	21%	1,982	1,556	27%	3,628	3,202
EBITA margin, %	15.3	15.2		15.2	14.5		15.1	14.7
Profit before taxes	871	722	21%	1,685	1,316	28%	3,094	2,725
Net profit	675	562	20%	1,313	1,023	28%	2,387	2,097
Earnings per share before dilution, SEK	1.85	1.54	20%	3.60	2.81	28%	6.55	5.76
Return on capital employed, %	23	21		23	21		23	22
Cash flow from operating activities	622	792	-21%	898	1,281	-30%	2,470	2,853
Net debt/equity ratio, %	64	59		64	59		64	53

Indutrade AB (publ.), Reg.no. 556017-9367. Box 6044, SE-164 06 Kista. Visiting address: Raseborgsgatan 9. Tel: +46 8 703 03 00. www.indutrade.com «

Q2 CEO's message

Continued strong growth and new record earnings.

Second quarter

Demand remained strong and broad during the second quarter, with an improved order intake both compared to the corresponding period previous year and sequentially, despite challenging comparison figures. Overall, it resulted in a total order growth of 17%, of which 7% was organic. Demand was good in all of the major customer segments, with the strongest and most stable growth in the process industry. In other customer segments the demand was also good, but with a rising variation between companies and geographic areas, partly attributable to challenging comparison figures. Order backlog continued to grow during the quarter in all business areas and is of good quality.

Despite continued disruptions in supply chains, net sales increased by 20% to SEK 6.7 billion. Organically, growth was 10% driven both by higher volumes and price increases. In all business areas, net sales grew organically with the strongest growth occurring in Flow Technology and Industrial Components.

EBITA increased by 21% compared to the corresponding period previous year and surpassed SEK 1 billion for the first time ever in a single quarter. The EBITA margin for the second quarter improved to a record high 15.3%, primarily due to a favourable performance from new acquisitions and good price management in our companies. The business area Measurement & Sensor Technology had the highest margin, whereas the largest improvement was in the Benelux and Flow Technology business areas.

Disruptions and uncertainties in the supply chains, in combination with higher business volumes and price increases contributed to a further build-up in inventories and higher working capital, which dampened the development of cash flow. Working capital efficiency, measured as working capital in relation to sales, improved compared with the corresponding period previous year. Net debt increased compared to previous year due to a high rate of acquisition and a somewhat weaker operating cash flow. However, the financial position remains strong, with historically low indebtedness.

Acquisitions

The uncertain external factors have not affected the acquisition activity, which continues at a high level. Thus far this year, we have acquired ten companies, with total annual sales of approximately SEK 780 million. During the second

quarter, we welcomed five new companies – four from the Nordic region and one from Germany. At the beginning of the quarter, the German company, Stabalux was acquired, along with the Swedish company, PMH International. Stabalux is a leading supplier of profile systems for façades and PMH International is a specialised technical trading company for lifting and material handling equipment as well as industrial/storage halls. In May, we acquired the Danish company, acti-Chem, which offers sustainable water treatment solutions. We also further strengthened our cluster of medical technology companies via the acquisition of the Swedish companies, Prodiagnostics – which supplies healthcare providers and companies with drug tests – and Oscar Medtec – a supplier of medical refrigerators and examination furniture.

Subsequent to the end of the quarter, we acquired three more companies. The German company, Beck Sensortechnik, develops, manufactures, and sells pressure switches and pressure transmitters. We also welcomed the Swedish company, Primed, which offers professional physiotherapy equipment. Further, OCI was acquired, a specialist within customised assemblies for energy and water applications. The market situation and inflow of interesting companies remains strong.

Outlook

The first half of 2022 has been characterized by a strong positive market situation without any clear indication of lower demand. Geopolitical tensions, continued disruptions in supply chains, rising inflation and higher interest rates mean increased uncertainties for the second half of the year. The disruptions in the supply chains are also expected to remain in the coming quarters, in all material respects. Nevertheless, I am convinced that our robust business model, which is based on decentralization and diversification, with decision power close to the customer, is able to cope with any changed conditions in a very good way. Our strong order backlog also gives us confidence regarding sales and earnings growth in the short term.

Overall, Indutrade is able to sum up a successful first half of the year, with very strong performances from our companies and with continued successful acquisition efforts, despite challenging external factors. We are continuously developing our ability to delivering sustainable, profitable growth and we have a stable platform as the starting point for continued value creation!

Bo Annvik, President and CEO

Group performance

Order intake

The market situation during the quarter remained strong and demand was higher than it was during the same quarter previous year and in line with the end of the first quarter. A continued positive trend was noted for all major customer segments, but with higher variation between companies and countries. The most favourable improvement in demand was noted in the process industry.

Order intake was 5% higher than invoicing and amounted to SEK 7,029 million (6,006), which is an increase of 17% compared to the same period previous year. Comparable units increased by 7%, acquisitions contributed with 7% and currency movements had a positive impact of 3%.

Order intake increased organically in most business areas, with the strongest growth from Industrial Components and Flow Technology. The positive trend was broad in both business areas and the order intake improved during the quarter in most companies. Weakest was the trend in the Measurement & Sensor Technology business area, primarily due to the high comparison figures previous year for some companies, and a somewhat lower investment activity from some customers.

Order intake during the period January-June amounted to SEK 14,114 million (11,753), an increase of 20%. Comparable units increased by 9%, acquisitions contributed with 7% and currency movements had a positive impact of 4%.

Net sales

During the second quarter, net sales increased by 20% compared to the corresponding period previous year and amounted to SEK 6,683 million (5,552). Comparable units increased by 10%, acquisitions contributed with 7% and currency movements had a positive impact of 3%.

Net sales increased organically in all business areas compared to the same period last year. The strongest performance was in the Flow Technology and Industrial Components business areas, where most companies and customer segments developed positively.

No improvement regarding the disruptions in the supply chains was seen during the quarter. Long delivery times from suppliers, along with shortage of components and certain products continued to hamper delivery and invoicing for many companies.

As a consequence of Russia's invasion of Ukraine, all business with companies in Russia and Belarus has been stopped. The direct exposure to these countries is very limited and the Group does not have any subsidiaries or employees in Russia, Ukraine or Belarus. During 2021, net sales to these countries accounted for less than 1% of Indutrade's total sales. The effect on net sales during the second quarter is assessed overall as marginal.

Net sales for the period January-June increased by 22% to SEK 13,081 million (10,699). Comparable units increased by 11%, acquisitions contributed with 7% and currency movements had a positive impact of 4%.

Q Earnings

Operating profit before amortisation of intangible assets attributable to acquisitions (EBITA) amounted to SEK 1,023 million (843) for the second quarter, which is an improvement of 21%. Comparable units increased by 9%, acquisitions contributed with 8% and currency movements had a positive impact of 4%. The EBITA margin increased and amounted to 15.3% (15.2%).

The margin improvement was primarily attributable to good profitability in newly acquired companies and organically improved gross margin. The organic growth of the EBITA margin was, however, somewhat dampened due to strong comparison figures in many companies, along with higher activity levels and overhead costs.

Many companies were challenged during the quarter by further price increases from suppliers, but thanks to strong pricing efforts, the gross margin improved and amounted to 34.9% (34.8%). Accumulated for the first half of the year, the gross margin was 34.7% (34.6%).

In half of the business areas, the EBITA margin improved during the quarter. The Benelux business area had the strongest increase, which is among other things attributable to a positive trend for valves for power generation.

Net financial items during the second quarter amounted to SEK -37 million (-29). Tax on profit for the quarter amounted to SEK -196 million (-160), corresponding to a tax charge of 23% (22%). Profit for the quarter increased by 20% to SEK 675 million (562). Earnings per share before dilution increased by 20% and amounted to SEK 1.85 (1.54).

Operating profit before amortisation of intangible assets attributable to acquisitions (EBITA) amounted to SEK 1,982 million (1,556) for the period January-June, which is an increase of 27%. Comparable units increased by 14%, acquisitions contributed 9% and currency movements had a positive impact of 4%. The EBITA margin increased and amounted to 15.2% (14.5%).

Net financial items for the period January-June amounted to SEK -72 million (-58). Tax on profit for the year amounted to SEK -372 million (-293), corresponding to a tax charge of 22% (22%). Profit for the period increased by 28% and amounted to SEK 1,313 million (1,023). Earnings per share before dilution increased by 28% and amounted to SEK 3.60 (2.81).

Return

Higher profitability and improved working capital efficiency led to a higher return on capital employed compared to previous year and it amounted to 23% (21%). Return on equity amounted to 23% (23%).

Business Areas

Benelux

The companies in this business area offer custom-manufactured niche products, design solutions, aftermarket service and assembly, and customisation. The business area includes companies with a considerable amount of own manufacturing and proprietary products. Customers are in the energy, construction & infrastructure, and healthcare segments. Product areas include valves, hydraulic and industrial equipment, and measurement technology. The business area has strong market positions in the Benelux area (Belgium, the Netherlands and Luxembourg).

	2022	2021		2022	2021		2021/22	2021
SEK million	Apr-Jun	Apr-Jun	Change	Jan-Jun	Jan-Jun	Change	Moving 12 mos	Jan-Dec
Net sales	970	864	12%	1,919	1,665	15%	3,585	3,331
EBITA	155	122	27%	293	237	24%	520	464
EBITA margin, %	16.0	14.1		15.3	14.2		14.5	13.9

Net sales increased by 12% during the second quarter to SEK 970 million (864). Comparable units increased by 9% and currency movements had a positive impact of 3%.

Demand during the quarter was overall somewhat higher than in the corresponding period previous year. The strongest performance was noted in valves for power generation, while the demand from customers in the medical technology and pharmaceutical segment was somewhat lower than during the corresponding period previous year. Order intake was 10% higher than invoicing.

EBITA increased during the second quarter by 27% to SEK 155 million (122), corresponding to an EBITA margin of 16.0% (14.1%). Comparable units increased by 23% and currency movements had a positive impact of 4%.

The improved EBITA margin was primarily driven by a favourable trend for valves for power generation, along with an improved gross margin in many companies.

DACH

This business area includes companies that offer custom manufactured niche products, design solutions, aftermarket service and assembly, and customisation. The business area includes companies with a considerable amount of own manufacturing and proprietary products. Customers are in the construction & infrastructure, engineering, healthcare and chemical industries. Product areas include construction material, hydraulic and industrial equipment and valves. Each of the individual companies has a strong market position in the DACH area (Germany, Austria and Switzerland), and most companies are market leaders in their fields.

	2022	2021		2022	2021		2021/22	2021
SEK million	Apr-Jun	Apr-Jun	Change	Jan-Jun	Jan-Jun	Change	Moving 12 mos	Jan-Dec
Net sales	521	409	27%	1,025	780	31%	1,906	1,661
EBITA	78	59	32%	148	104	42%	280	236
EBITA margin, %	15.0	14.4		14.4	13.3		14.7	14.2

Net sales increased during the second quarter by 27% to SEK 521 million (409). Comparable units increased by 9%, acquisitions contributed with 10% and currency movements had a positive impact of 8%.

Overall, demand during the quarter was higher than in the corresponding period previous year, primarily due to a positive trend in the process industry. Demand from customers in the engineering industry was somewhat lower than in the corresponding period previous year. Order intake was 6% higher than invoicing.

EBITA increased during the second quarter by 32% to SEK 78 million (59), corresponding to an EBITA margin of 15.0% (14.4%). Comparable units increased by 11%, acquisitions contributed with 13% and currency movements had a positive impact of 8%.

The improved EBITA margin was primarily attributable to a higher gross margin in several companies along with good profitability in newly acquired companies.

Finland

The Finland business area includes companies that offer sales of components as well as customisation, combinations and installations of products from various suppliers. Customers are in the construction & infrastructure, engineering, water/wastewater, energy and chemical industries. Products range from hydraulics and industrial equipment to measurement technology, valves, service, filters and process technology. The business area has a strong market position in Finland.

	2022	2021		2022	2021		2021/22	2021
SEK million	Apr-Jun	Apr-Jun	Change	Jan-Jun	Jan-Jun	Change	Moving 12 mos	Jan-Dec
Net sales	545	453	20%	1,050	839	25%	2,037	1,826
EBITA	96	76	26%	169	121	40%	331	283
EBITA margin, %	17.6	16.8		16.1	14.4		16.2	15.5

Net sales increased during the second quarter by 20% to SEK 545 million (453). Comparable units increased by 11%, acquisitions contributed with 6% and currency movements had a positive impact of 3%.

Demand during the quarter was higher than in the corresponding period previous year, with positive development in the majority of the business area's companies. Order intake was 7% higher than invoicing. EBITA increased during the second quarter by 26% and amounted to SEK 96 million (76), corresponding to an EBITA margin of 17.6% (16.8%). Comparable units increased by 17%, acquisitions contributed with 5% and currency movements had a positive impact of 4%.

The improved EBITA margin was primarily attributable to a positive non-recurring effect from a property sale. Not including the property sale, the margin was somewhat lower than last year, primarily due to a strong second quarter previous year for many companies.

Flow Technology

Companies in this business area offer components and systems for controlling, measuring, monitoring and regulating flows. The business area includes companies that specialise in various areas of industrial flow technology. Customers are in the process industry, food and pharmaceutical industries, water/wastewater, energy and marine industries. Product areas include valves, pipes and pipe systems, measurement technology, pumps, hydraulics and industrial equipment. The business area has a strong market position especially in Sweden, but also in the Northern Europe.

	2022	2021		2022	2021		2021/22	2021
SEK million	Apr-Jun	Apr-Jun	Change	Jan-Jun	Jan-Jun	Change	Moving 12 mos	Jan-Dec
Net sales	1,385	1,144	21%	2,650	2,147	23%	4,804	4,301
EBITA	236	185	28%	436	325	34%	779	668
EBITA margin, %	17.0	16.2		16.5	15.1		16.2	15.5

Net sales increased during the second quarter by 21% to SEK 1,385 million (1,144). Comparable units increased by 14%, acquisitions contributed with 4% and currency movements had a positive impact of 3%.

Demand during the quarter was higher than in the corresponding period previous year. Improvements were seen in the majority of companies, with a particularly strong demand from customers in the process industry and the medical technology and pharmaceutical segment. Order intake was 2% higher than invoicing.

EBITA increased during the second quarter by 28% to SEK 236 million (185), corresponding to an EBITA margin of 17.0% (16.2%). Comparable units increased by 22%, acquisitions contributed with 2% and currency movements had a positive impact of 4%.

The improved EBITA margin is primarily explained by higher gross margin for comparable units and a positive non-recurring effect from a property sale.

Fluids & Mechanical Solutions

Companies in this business area offer technological components (both hydraulic and mechanic), as well as solutions that have a high technological content to the industry in, primarily Scandinavia and Europe, but also USA and Asia. The companies have a considerable amount of own manufacturing and proprietary products, as well as technical trading companies. Important product areas include filters, hydraulics, auto repair, tools & transmission, industrial springs, water & wastewater and lighting. The business area has a strong market position in the Nordic region.

	2022	2021		2022	2021		2021/22	2021
SEK million	Apr-Jun	Apr-Jun	Change	Jan-Jun	Jan-Jun	Change	Moving 12 mos	Jan-Dec
Net sales	753	603	25%	1,475	1,128	31%	2,714	2,367
EBITA	116	96	21%	229	169	36%	442	382
EBITA margin, %	15.4	15.9		15.5	15.0		16.3	16.1

Net sales increased during the second quarter by 25% to SEK 753 million (603). Comparable units increased by 11%, acquisitions contributed with 12% and currency movements had a positive impact of 2%.

Demand during the quarter was higher than in the corresponding period previous year for most of the business area's companies, with, among other things, strong demand from customers in the industrial, medical technology and pharmaceutical segments. In the automotive aftermarket segment, order intake decreased somewhat due to such things as terminated business with Russia and Belarus. Order intake was 6% higher than invoicing.

EBITA increased during the second quarter by 21% to SEK 116 million (96), corresponding to an EBITA margin of 15.4% (15.9%). Comparable units increased by 2%, acquisitions contributed with 18% and currency movements had a positive impact of 1%.

The weakened EBITA margin is primarily explained by a worsened result in the automotive aftermarket segment.

Industrial Components

Companies in this business area are mainly technical trading companies and offer a wide range of technically advanced components and systems for industrial production and maintenance, as well as medical technology equipment. The products consist mainly of consumables. Its customers exist in the following segments: engineering, healthcare, construction and infrastructure. The product areas include hydraulics and industrial equipment, chemical technology and fasteners. The business area has a strong market position in the Nordic countries.

	2022	2021		2022	2021		2021/22	2021
SEK million	Apr-Jun	Apr-Jun	Change	Jan-Jun	Jan-Jun	Change	Moving 12 mos	Jan-Dec
Net sales	1,342	1,113	21%	2,612	2,266	15%	4,819	4,473
EBITA	218	196	11%	436	382	14%	787	733
EBITA margin, %	16.2	17.6		16.7	16.9		16.3	16.4

Net sales increased during the second quarter by 21% to SEK 1,342 million (1,113). Comparable units increased by 13%, acquisitions contributed with 6% and currency movements had a positive impact of 2%.

Demand during the quarter was stronger than in the corresponding period previous year. Most segments had a positive development, with the strongest performance in the medical technology, transmission and automation segments. Order intake was 3% higher than invoicing.

EBITA increased during the second quarter by 11% to SEK 218 million (196), corresponding to an EBITA margin of 16.2% (17.6%). Comparable units increased by 2%, acquisitions contributed with 7% and currency movements had a positive impact of 2%.

The weaker EBITA margin was primarily attributable to favourable deliveries associated with the pandemic during the previous year and somewhat lower gross margin for comparable units.

Q Measurement & Sensor Technology 2

Companies in this business area sell measurement instruments, measurement systems, sensors, control and regulating technology, and monitoring equipment for various industries. All of the business area's companies have proprietary products based on advanced technological solutions and own development, design and manufacturing. Its customers exist in a variety of areas, such as various types of manufacturing industries like electronics, vehicles and energy. Companies in this business area work globally and have the entire world as the market for their products, with established production and sales companies on six continents.

	2022	2021		2022	2021		2021/22	2021
SEK million	Apr-Jun	Apr-Jun	Change	Jan-Jun	Jan-Jun	Change	Moving 12 mos	Jan-Dec
Net sales	692	610	13%	1,379	1,180	17%	2,571	2,372
EBITA	128	113	13%	259	212	22%	475	428
EBITA margin, %	18.5	18.5		18.8	18.0		18.5	18.0

Net sales increased by 13% during the second quarter to SEK 692 million (610). Comparable units increased by 1%, acquisitions contributed with 7% and currency movements had a positive impact of 5%.

Demand during the quarter varied between the business area's companies and was overall somewhat lower than in the corresponding period previous year, in part due to strong comparison figures previous year for many companies and in part due to somewhat lower investment activity from some of the companies' customers. Order intake was, however, 8% higher than invoicing.

EBITA increased during the second quarter by 13% and amounted to SEK 128 million (113), corresponding to an EBITA margin of 18.5% (18.5%). Comparable units decreased by 1%, acquisitions contributed with 9% and currency movements had a positive impact of 5%.

Many of the companies improved the gross margin somewhat during the quarter, but the trend was counteracted by higher activity levels and overhead costs.

UK

The companies in this business area offer custom-manufactured niche products, design solutions, aftermarket service and assembly, and customisation. They have a considerable amount of own manufacturing and proprietary products. Customer segments include construction and infrastructure, engineering and commercial vehicles. Examples of product areas are springs, piston rings, press work, valve channels, pipes and pipe systems. The individual companies all have strong market positions in the UK, and most are market leaders in their respective niches.

	2022	2021		2022	2021		2021/22	2021
SEK million	Apr-Jun	Apr-Jun	Change	Jan-Jun	Jan-Jun	Change	Moving 12 mos	Jan-Dec
Net sales	504	375	34%	1,024	730	40%	1,761	1,467
EBITA	59	45	31%	127	83	53%	202	158
EBITA margin, %	11.7	12.0		12.4	11.4		11.5	10.8

Net sales increased during the second quarter by 34% to SEK 504 million (375). Comparable units increased by 2%, acquisitions contributed with 27% and currency movements had a positive impact of 5%.

Demand during the quarter varied between the business area's companies and was overall approximately on par with the same period previous year. Order intake was 2% higher than invoicing.

EBITA increased during the second quarter by 31% to SEK 59 million (45), corresponding to an EBITA margin of 11.7% (12.0%). Comparable units decreased by 9%, acquisitions contributed with 36% and currency movements had a positive impact of 4%.

The lower EBITA margin was primarily attributable to increased activity levels and overhead costs in combination with weaker growth for some companies in the marine, infrastructure and construction segments.

Other financial information

Financial position

Shareholders' equity amounted to SEK 11,005 million (9,072) and the equity ratio to 44% (45%). Cash and cash equivalents amounted to SEK 1,265 million (1,433). In addition to that, there were unutilised credit commitments of SEK 4,957 million (4,981). Interest-bearing net debt amounted to SEK 6,998 million (5,389) at the end of the quarter. The increase compared to previous year is primarily attributable to a high rate of acquisition during the last year and a somewhat lower operating cash flow.

The net debt/equity ratio was 64% (59%) at the end of the period.

Indutrade's financing is primarily managed by the Parent Company and it consists of loans from financial institutions, corporate bonds and commercial paper programmes. During the quarter, an unsecured bond loan was issued for SEK 1,000 million with a tenor of 5 years, primarily intended for general business purposes, including acquisitions.

At the end of the quarter, the Parent Company's short-term borrowing amounted to SEK 1,131 million and long-term unutilised credit facilities amounted to SEK 3,500 million.

1) Pertains to the Parent Company, which is responsible for most of the Group's financing. Excluding leasing according to IFRS 16.

Cash flow, capital expenditures and depreciation

Cash flow from operating activities decreased during the second quarter and amounted to SEK 622 million (792). The deterioration is primarily attributable to a higher amount of capital tied up in inventory, driven by disruptions in the supply chains and higher purchase prices. Working capital efficiency, measured as working capital in relation to sales moving 12 months for comparable units, was, however, better than during the same period previous year.

Cash flow from operating activities amounted to SEK 898 million (1,281) for the interim period January-June. Cash flow after net capital expenditures in intangible non-current assets and in property, plant and equipment (excluding company acquisitions) amounted to SEK 664 million (1,132).

The Group's net capital expenditures, excluding company acquisitions, totalled SEK 234 million (149). Depreciation of property, plant and equipment totalled SEK 350 million (319). Investments in company acquisitions amounted to SEK 608 million (567). In addition, earn-out payments pertaining to previous years' acquisitions totalled SEK 107 million (15). Divestments amounted to SEK 0 million (2).

In cash flow from operating activities, depreciation of leased assets in the amount of SEK 194 million (175) has been added back during the interim period January-June in accordance with IFRS 16. Lease amortisation is reported as cash flow from financing activities.

Employees

The number of employees was 8,397 at the end of the period, compared with 8,185 at the start of the year.

Company acquisitions

The Group acquired the following companies, which are consolidated for the first time in 2022.

Month acquired	Acquisitions	Business area	Net sales/SEK m*	No. of employees*
January	Autoroll UK Ltd	UK	67	31
February	NTi Audio AG	Measurement & Sensor Technology	90	43
April	Stabalux GmbH	Fluids & Mechanical Solutions	40	16
April	PMH International AB	Industrial Components	140	26
May	acti-Chem A/S	Flow Technology	50	15
May	Pro Diagnostics Scandinavia AB	Industrial Components	50	11
June	Oscar Medtec AB	Industrial Components	70	29
Total			507	171

*) Estimated annual sales and number of employees at the time of acquisition.

Further information about completed company acquisitions can be found on page 20 of this interim report.

Q Events after the end of the reporting period 2

On 6 July, Beck Sensortechnik GmbH was acquired. For more information, please see page 21.

On 7 July, Primed Fysio och Rehab AB was acquired. For more information, please see page 21.

On 13 July, OCI B.V. was acquired. For more information, please see page 21.

Parent company

The main functions of Indutrade AB are to take responsibility for business development, talent development, sustainability, acquisitions, financing, business control, analysis and communication. The Parent Company's sales, which consist exclusively of intercompany invoicing of services, amounted to SEK 0 million (0) for the period January-June. The Parent Company's financial fixed assets consist mainly of shares in subsidiaries. During the period January-June, the Parent Company acquired shares in six companies. The Parent Company has not made any major investments in intangible assets or in property, plant and equipment. The number of employees as of 30 June was 20 (19).

Risks and uncertainties

The Indutrade Group conducts business in some 30 countries, on six continents, via more than 200 companies. This diversification, together with a large number of customers in various industries and a large number of suppliers, mitigates the business and financial risks. Besides the risks and uncertainties described in the Indutrade Annual Report for 2021, Indutrade has assessed that no additional significant risks or uncertainties have arisen or dissipated.

As a consequence of Russia's invasion of Ukraine, Indutrade has stopped all business activities with companies in Russia and Belarus. The direct exposure to these countries is very limited and the Group does not have any subsidiaries or employees in Russia, Ukraine or Belarus. During 2021, net sales to these countries accounted for less than 1% of Indutrade's total sales. Also, the indirect exposure is assessed as limited.

Since the Parent Company is responsible for the Group's financing, it is exposed to financing risk. The Parent Company's other activities are not exposed to risks other than indirectly via subsidiaries. For a more detailed account of risks that affect the Group and Parent Company, please see the 2021 Annual Report.

Related party transactions

No transactions took place during the period between Indutrade and related parties that have significantly affected the Company's financial position or result of operations.

Accounting principles

Indutrade reports in accordance with International Financial Reporting Standards (IFRS). This interim report has been prepared in accordance with IAS 34 and RFR 1. The Parent Company applies RFR 2. The same accounting principles and calculation methods have been used for the Group and Parent Company in this report as those in the most recent annual report. There are no new IFRSs or IFRIC pronouncements endorsed by the EU that are applicable for Indutrade or that have a significant impact on the Group's result of operations and position in 2022.

Financial Calendar

28 October 2022: Interim report 1 January – 30 September 2022
2 February 2023: Year-end report 1 January–31 December 2022

Save the date: Capital Markets Day on 8 November 2022

Indutrade will hold a capital markets day on 8 November 2022. Members of the Group management team will be presenting Indutrade's strategy and priorities for continued sustainable profitable growth. The capital markets day will be held as a physical event in central Stockholm. An invitation that will include the agenda and registration details will be published through a press release, as the date approaches.

The Board's assurance

The Board of Directors and President certify that the half-year interim report gives a true and fair view of the Company's and Group's operations, position and result of operations, and describes material risks and uncertainties facing the Company and companies included in the Group.

Stockholm 19 July 2022 Indutrade AB (publ)

Katarina Martinson Chairman

Bengt Kjell Vice Chairman Susanna Campbell Director

Anders Jernhall Director

Ulf Lundahl Director

Krister Mellvé Director

Lars Petterson Director

Kerstin Lindell Director

Bo Annvik Director, President and CEO

This report has not been reviewed by the company's auditors.

Note

The information in this report is such that Indutrade AB is obligated to make public in accordance with the EU Market Abuse Act and the Swedish Securities Market Act. The information was submitted for publication by the agency of the following contact persons on 19 July 2022 at 9.30 CEST.

Further information

For further information, please contact: Bo Annvik, President and CEO, tel.: +46 8 703 03 00, Patrik Johnson, CFO, tel.: +46 70 397 50 30

This report will be commented upon as follows:

A webcast of the report will be presented on 19 July at 11.00 CEST via the following link:

https://tv.streamfabriken.com/indutrade-q2-2022

To participate in the conference call and to ask questions, please call: SE: +46 8 505 163 86 UK: +44 20 319 84884 US: +1 412 317 6300

Pin code: 5655851#

Q2 Indutrade consolidated income statement – condensed

	2022	2021	2022	2021	2021/22	2021
SEK million	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Moving 12 mos	Jan-Dec
Net sales	6,683	5,552	13,081	10,699	24,097	21,715
Cost of goods sold	-4,350	-3,618	-8,536	-7,000	-15,642	-14,106
Gross profit	2,333	1,934	4,545	3,699	8,455	7,609
Development costs	-83	-64	-159	-124	-293	-258
Selling costs	-994	-813	-1,931	-1,584	-3,626	-3,279
Administrative expenses	-380	-304	-757	-607	-1,381	-1,231
Other operating income and expenses	32	-2	59	-10	53	-16
Operating profit	908	751	1,757	1,374	3,208	2,825
Net financial items	-37	-29	-72	-58	-114	-100
Profit before taxes	871	722	1,685	1,316	3,094	2,725
Income Tax	-196	-160	-372	-293	-707	-628
Net profit for the period	675	562	1,313	1,023	2,387	2,097
Net profit, attributable to:
Equity holders of the parent company	675	562	1,312	1,023	2,384	2,095
Non-controlling interests	0	0	1	0	3	2
	675	562	1,313	1,023	2,387	2,097
EBITA	1,023	843	1,982	1,556	3,628	3,202
Operating profit includes:
Amortisation of intangible assets 1)	-126	-102	-247	-202	-464	-419
of which attributable to acquisitions	-115	-92	-225	-182	-420	-377
Depreciation of property, plant and equipment	-176	-166	-350	-319	-670	-639

Earnings per share before dilution, SEK	1.85	1.54	3.60	2.81	6.55	5.76
Earnings per share after dilution, SEK	1.85	1.54	3.60	2.81	6.54	5.75
1) Excluding impairment losses

Indutrade consolidated statement of comprehensive income

	2022	2021	2022	2021	2021/22	2021
SEK million	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Moving 12 mos	Jan-Dec
Net profit for the period	675	562	1,313	1,023	2,387	2,097
Other comprehensive income
Items that can be reversed into income statement
Fair value adjustment of hedge instruments	9	6	9	1	9	1
Tax attributable to fair value adjustments	-2	-1	-2	0	-2	0
Exchange rate differences	147	-78	238	106	335	203
Items that cannot be reversed into income statement
Actuarial gains/losses	-	-	-	-	54	54
Tax on actuarial gains/losses	-	-	-	-	-11	-11
Other comprehensive income for the period, net of tax	154	-73	245	107	385	247
Total comprehensive income for the period	829	489	1,558	1,130	2,772	2,344
Total comprehensive income, attributable to:
Equity holders of the parent company	829	489	1,557	1,130	2,769	2,342
Non-controlling interests	0	0	1	0	3	2

Indutrade consolidated balance sheet – condensed

	2022	2021	2021
SEK million	30-Jun	30-Jun	31-Dec
Goodwill	6,018	4,708	5,439
Other intangible assets	3,613	2,872	3,331
Property, plant and equipment	3,620	3,280	3,385
Financial assets	215	218	204
Inventories	4,835	3,507	4,010
Trade receivables	4,274	3,501	3,458
Other receivables	1,028	788	713
Cash and cash equivalents	1,265	1,433	1,460
Total assets	24,868	20,307	22,000

Equity	11,005	9,072	10,303
Non-current interest-bearing liabilities and pension liabilities	6,286	4,672	5,536
Other non-current liabilities and provisions	1,035	812	976
Current interest-bearing liabilities	1,977	2,150	1,413
Trade payables	1,954	1,510	1,597
Other current liabilities	2,611	2,091	2,175
Total equity and liabilities	24,868	20,307	22,000

Indutrade consolidated statement of changes in equity – condensed

Attributable to equity holders of the parent company	2022	2021	2021
SEK million	30-Jun	30-Jun	31-Dec
Opening equity	10,292	8,624	8,624
Total comprehensive income for the period	1,557	1,130	2,342
New issues	11	40	48
Dividend 1)	-837	-655	-655
Hedging of incentive programme	-44	-77	-80
Share-based payments	14	1	13
Closing equity	10,993	9,063	10,292
1) Dividend per share for 2021 (2020) was SEK 2.30 (1.80)
Equity, attributable to:
Equity holders of the parent company	10,993	9,063	10,292
Non-controlling interests	12	9	11
	11,005	9,072	10,303

Q2 Indutrade consolidated cash flow statement – condensed

	2022	2021	2022	2021	2021/22	2021
SEK million	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Moving 12 mos	Jan-Dec
Operating profit	908	751	1,757	1,374	3,208	2,825
Non-cash items	316	270	606	521	1,165	1,080
Interests and other financial items, net	-23	-21	-50	-42	-80	-72
Paid tax	-168	-111	-410	-311	-737	-638
Change in working capital	-411	-97	-1,005	-261	-1,086	-342
Cash flow from operating activities	622	792	898	1,281	2,470	2,853
Net capital expenditures in non-current assets	-104	-70	-234	-149	-442	-357
Company acquisitions and divestments	-557	-131	-715	-580	-1,795	-1,660
Change in other financial assets	0	9	6	19	4	17
Cash flow from investing activities	-661	-192	-943	-710	-2,233	-2,000
Debt/repayment of debt, net	911	585	631	695	343	407
Dividend paid out	-837	-655	-837	-655	-837	-655
New issues	11	40	11	40	19	48
Cash flow from financing activities	85	-30	-195	80	-475	-200
Cash flow for the period	46	570	-240	651	-238	653
Cash and cash equivalents at start of period	1,189	872	1,460	758	1,433	758
Exchange rate differences	30	-9	45	24	70	49
Cash and cash equivalents at end of period	1,265	1,433	1,265	1,433	1,265	1,460

Key data

	2022	2021	2021	2020	2019
Moving 12 mos	30-Jun	31-Dec	30-Jun	31-Dec	31-Dec
Net sales, SEK million	24,097	21,715	20,326	19,217	18,411
Sales growth, %	19	13	7	4	9
EBITA, SEK million	3,628	3,202	2,953	2,615	2,330
EBITA margin, %	15.1	14.7	14.5	13.6	12.7
Capital employed at end of period, SEK million	18,003	15,792	14,461	13,512	13,300
Capital employed, average, SEK million	15,878	14,516	13,792	13,541	12,416
Return on capital employed, % 1)	23	22	21	19	19
Equity, average, SEK million	10,172	9,297	8,566	7,899	6,715
Return on equity, % 1)	23	23	23	21	22
Interest-bearing net debt at end of period, SEK million	6,998	5,489	5,389	4,878	6,130
Net debt/equity ratio, %	64	53	59	56	85
Net debt/EBITDA, times	1.6	1.4	1.5	1.5	2.1
Equity ratio, %	44	47	45	48	41
Average number of employees	8,109	7,715	7,393	7,349	7,167
Number of employees at end of period	8,397	8,185	7,694	7,270	7,357
Attributable to equity holders of the parent company Key ratios per share
Earnings per share before dilution, SEK	6.55	5.76	5.32	4.60	4.09
Earnings per share after dilution, SEK	6.54	5.75	5.32	4.59	4.09
Equity per share, SEK	30.17	28.26	24.89	23.72	19.74
Cash flow from operating activities per share, SEK	6.78	7.84	7.80	7.66	5.30
Average number of shares before dilution, '000	364,166	363,921	363,274	362,721	362,565
Average number of shares after dilution, '000	364,270	364,180	363,836	363,320	362,754
Number of shares at the end of the period, '000	364,323	364,188	364,102	363,615	362,565

1) Calculated on average capital and equity.

Q2 Business area performance

	2022	2021	2022	2021	2021/22	2021
Net sales, SEK million	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Moving 12 mos	Jan-Dec
Benelux	970	864	1,919	1,665	3,585	3,331
DACH	521	409	1,025	780	1,906	1,661
Finland	545	453	1,050	839	2,037	1,826
Flow Technology	1,385	1,144	2,650	2,147	4,804	4,301
Fluids & Mechanical Solutions	753	603	1,475	1,128	2,714	2,367
Industrial Components	1,342	1,113	2,612	2,266	4,819	4,473
Measurement & Sensor Technology	692	610	1,379	1,180	2,571	2,372
UK	504	375	1,024	730	1,761	1,467
Parent company and Group items	-29	-19	-53	-36	-100	-83
Total	6,683	5,552	13,081	10,699	24,097	21,715

	2022	2021	2022	2021	2021/22	2021
EBITA, SEK million	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Moving 12 mos	Jan-Dec
Benelux	155	122	293	237	520	464
DACH	78	59	148	104	280	236
Finland	96	76	169	121	331	283
Flow Technology	236	185	436	325	779	668
Fluids & Mechanical Solutions	116	96	229	169	442	382
Industrial Components	218	196	436	382	787	733
Measurement & Sensor Technology	128	113	259	212	475	428
UK	59	45	127	83	202	158
Parent company and Group items	-63	-49	-115	-77	-188	-150
Total	1,023	843	1,982	1,556	3,628	3,202

	2022	2021	2022	2021	2021/22	2021
EBITA margin, %	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Moving 12 mos	Jan-Dec
Benelux	16.0	14.1	15.3	14.2	14.5	13.9
DACH	15.0	14.4	14.4	13.3	14.7	14.2
Finland	17.6	16.8	16.1	14.4	16.2	15.5
Flow Technology	17.0	16.2	16.5	15.1	16.2	15.5
Fluids & Mechanical Solutions	15.4	15.9	15.5	15.0	16.3	16.1
Industrial Components	16.2	17.6	16.7	16.9	16.3	16.4
Measurement & Sensor Technology	18.5	18.5	18.8	18.0	18.5	18.0
UK	11.7	12.0	12.4	11.4	11.5	10.8
	15.3	15.2	15.2	14.5	15.1	14.7

Business area performance per quarter

	2022		2021
Net sales, SEK million	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar
Benelux	970	949	843	823	864	801
DACH	521	504	457	424	409	371
Finland	545	505	525	462	453	386
Flow Technology	1,385	1,265	1,109	1,045	1,144	1,003
Fluids & Mechanical Solutions	753	722	643	596	603	525
Industrial Components	1,342	1,270	1,192	1,015	1,113	1,153
Measurement & Sensor Technology	692	687	622	570	610	570
UK	504	520	360	377	375	355
Parent company and Group items	-29	-24	-25	-22	-19	-17
Total	6,683	6,398	5,726	5,290	5,552	5,147

2022			2021

	2022		2021
EBITA, SEK million	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar
Benelux	155	138	127	100	122	115
DACH	78	70	69	63	59	45
Finland	96	73	81	81	76	45
Flow Technology	236	200	168	175	185	140
Fluids & Mechanical Solutions	116	113	108	105	96	73
Industrial Components	218	218	184	167	196	186
Measurement & Sensor Technology	128	131	112	104	113	99
UK	59	68	32	43	45	38
Parent company and Group items	-63	-52	-45	-28	-49	-28
Total	1,023	959	836	810	843	713

2022			2021

	2022
EBITA margin, %	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar
Benelux	16.0	14.5	15.1	12.2	14.1	14.4
DACH	15.0	13.9	15.1	14.9	14.4	12.1
Finland	17.6	14.5	15.4	17.5	16.8	11.7
Flow Technology	17.0	15.8	15.1	16.7	16.2	14.0
Fluids & Mechanical Solutions	15.4	15.7	16.8	17.6	15.9	13.9
Industrial Components	16.2	17.2	15.4	16.5	17.6	16.1
Measurement & Sensor Technology	18.5	19.1	18.0	18.2	18.5	17.4
UK	11.7	13.1	8.9	11.4	12.0	10.7
	15.3	15.0	14.6	15.3	15.2	13.9

2022			2021









15.3	15.0	14.6	15.3	15.2	13.9

Q2 Disaggregation of revenue

Net sales per geographic market

2022
Apr-Jun, SEK million	Benelux	DACH	Finland	FT	FM	IC	MST	UK	Elim.1)	Total
Nordic countries	34	4	491	759	567	1,191	148	27	-13	3,208
Other Europe	805	499	39	480	153	130	217	415	-8	2,730
Americas	49	14	5	6	23	15	199	30	-4	337
Asia	71	4	8	130	8	4	114	28	-4	363
Other	11	0	2	10	2	2	14	4	0	45
	970	521	545	1,385	753	1,342	692	504	-29	6,683

Timing of revenue recognition	Benelux	DACH	Finland	FT	FM	IC	MST	UK	Elim.1)	Total
Over time	11	62	0	0	54	1	63	0	-2	189
Point in time	959	459	545	1,385	699	1,341	629	504	-27	6,494
	970	521	545	1,385	753	1,342	692	504	-29	6,683


2021
Apr-Jun, SEK million	Benelux	DACH	Finland	FT	FM	IC	MST	UK	Elim.1)	Total
Nordic countries	30	3	411	641	430	970	138	30	-10	2,643
Other Europe	732	388	33	422	139	125	177	305	-8	2,313
Americas	42	10	5	8	25	7	210	13	-1	319
Asia	55	7	4	67	8	8	73	23	0	245
Other	5	1	0	6	1	3	12	4	0	32
	864	409	453	1,144	603	1,113	610	375	-19	5,552

Timing of revenue recognition	Benelux	DACH	Finland	FT	FM	IC	MST	UK	Elim.1)	Total
Over time	10	66	0	0	12	4	37	0	0	129
Point in time	854	343	453	1,144	591	1,109	573	375	-19	5,423

1) Parent company & Group items

FT - Flow Technology FM - Fluids & Mechanical Solutions

IC - Industrial Components MST - Measurement & Sensor Technology

Disaggregation of revenue – continued

Net sales per geographic market

2022
Jan-Jun, SEK million	Benelux	DACH	Finland	FT	FM	IC	MST	UK	Elim.1)	Total
Nordic countries	50	9	903	1,433	1,112	2,301	281	59	-23	6,125
Other Europe	1,619	977	80	919	296	272	466	844	-17	5,456
Americas	104	26	12	11	47	29	404	56	-7	682
Asia	117	12	20	268	16	8	192	55	-5	683
Other	29	1	35	19	4	2	36	10	-1	135
	1,919	1,025	1,050	2,650	1,475	2,612	1,379	1,024	-53	13,081

Timing of revenue recognition	Benelux	DACH	Finland	FT	FM	IC	MST	UK	Elim.1)	Total
Over time	23	138	0	0	102	4	123	0	-2	388
Point in time	1,896	887	1,050	2,650	1,373	2,608	1,256	1,024	-51	12,693
	1,919	1,025	1,050	2,650	1,475	2,612	1,379	1,024	-53	13,081

2021
Jan-Jun, SEK million	Benelux	DACH	Finland	FT	FM	IC	MST	UK	Elim.1)	Total
Nordic countries
	43	5	761	1,182	803	1,862	282	64	-17	4,985
Other Europe	1,388	735	65	820	262	369	365	589	-15	4,578
Americas	102	20	6	15	44	16	367	30	-3	597
Asia	115	18	6	109	16	14	140	39	-1	456
Other	17	2	1	21	3	5	26	8	0	83
	1,665	780	839	2,147	1,128	2,266	1,180	730	-36	10,699

Timing of revenue recognition	Benelux	DACH	Finland	FT	FM	IC	MST	UK	Elim.1)	Total
Over time	13	132	0	0	12	12	81	0	-1	249
Point in time	1,652	648	839	2,147	1,116	2,254	1,099	730	-35	10,450

1) Parent company & Group items

FT - Flow Technology FM - Fluids & Mechanical Solutions

IC - Industrial Components MST - Measurement & Sensor Technology

Q2 Acquisitions

Acquisitions during the interim period

All of the shares were acquired in Autoroll UK Ltd (UK), NTi Audio AG (Liechtenstein), Stabalux GmbH (Germany), PMH International AB (Sweden), acti-Chem A/S (Denmark), Pro Diagnostics Scandinavia AB (Sweden) and Oscar Medtec AB (Sweden).