Quarterly Report • Oct 22, 2021
Quarterly Report
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Q3 2021
Solna, October 22, 2021
| Q3 | Q3 | YTD | YTD | LTM | FY | |
|---|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 |
| Net sales | 5,545 | 4,466 | 15,974 | 11,993 | 20,187 | 16,207 |
| EBITDA | 987 | 867 | 3,004 | 1,968 | 3,705 | 2,669 |
| % of net sales | 17.8% | 19.4% | 18.8% | 16.4% | 18.4% | 16.5% |
| Operating profit (EBIT) before items affecting comparability⁽¹⁾ | 785 | 690 | 2,471 | 1,473 | 2,937 | 1,939 |
| % of net sales | 14.2% | 15.5% | 15.5% | 12.3% | 14.5% | 12.0% |
| Operating profit (EBIT) | 762 | 676 | 2,385 | 1,366 | 2,899 | 1,880 |
| % of net sales | 13.7% | 15.1% | 14.9% | 11.4% | 14.4% | 11.6% |
| Profit (loss) for the period | 480 | 281 | 1,530 | 611 | 1,370 | 451 |
| Earnings per share, SEK | 1.50 | 0.95 | 4.99 | 2.07 | 4.51 | 1.52 |
| Cash flow for the period | 2,550 | 730 | 2,014 | 2,649 | 3,030 | 3,666 |
| Operating cash flow⁽²⁾ | 346 | 1,043 | 1,203 | 1,534 | 1,927 | 2,258 |
| Core working capital | 5,388 | 3,524 | 5,388 | 3,524 | 5,388 | 2,952 |
| Net debt leverage | 1.5 | 2.8 | 1.5 | 2.8 | 1.5 | 2.0 |
| RoOC | 42.3% | 21.5% | 42.3% | 21.5% | 42.3% | 26.9% |
⁽¹⁾See Note 5 Items affecting comparability.
⁽²⁾Net cash flow from operations after investments in fixed assets and excluding income tax paid. Paid interest/received interest is a part of the net cash flow of financing.
Net sales in the quarter totaled SEK 5,545 m (4,466), corresponding to growth of 24 percent despite the significant supply chain disturbances impacting many industries around the world. Organic net sales growth reached 11 percent in the quarter. Based on the last twelve months we achieved a new milestone, exceeding sales of SEK 20 b.
EBIT before items affecting comparability improved to SEK 785 m (690) despite negative currency effects, corresponding to a solid margin of 14.2 (15.5) percent. Supply chain disturbances, rising raw material prices and freight costs all had an adverse impact on the margin. We are continually adjusting our pricing to compensate for higher costs and safeguard profitability. Compared to a year ago we have increased investments in sales and marketing to drive growth in new strategic areas, including B2C. In addition we had a low cost base last year, still influenced by the pandemic related lock-downs.
We are continuing to make acquisitions, and in September we announced two further acquisitions targeting the outdoor market; Cadac International, a provider of premium barbecues and accessories to the vehicle-based outdoor market, and Igloo, an iconic brand and manufacturer of cooling boxes and drinkware. Igloo has a clear number one position on the cooling box market in the US and adds strong market positions and consumer experience, assets that will be very useful in the next stage of our transformation.
Strategy execution aimed at transforming Dometic into a more consumer-oriented company with lower sales cyclicality and higher margins continues at a high pace. The sales channel mix is strengthening and the share of Distribution and Service & Aftermarket was 48 percent over the last twelve months, compared to 39 percent for the same period in 2017. Our eight acquisitions year to date, all focusing on Distribution and Service & Aftermarket customers, will help to further accelerate the pace of this transformation.
The innovation index improved to 26 percent (21), reaching our target of 25 percent for the first time in the company's history. Products launched in the quarter included a broad range of new products for the marine business. Implementation of the cost reduction program continues with high activity, however still impacted by COVID-19 related effects. Number of SKUs, which are driving complexity, has been reduced by 59 percent since 2018 which is well above the initial target level.
It is also encouraging to see our progress on Sustainability. CO2 ton/net sales has decreased by 17 percent compared to 2020, which is already outperforming the full-year 2021 target. One additional site switched to a renewable electricity supply in the quarter. During the quarter we also introduced a new material, "REDUX", a lightweight polyester made from 100% recycled plastic bottles that will be used in a wide range of new products
Operating cash flow for the quarter was SEK 346 m (1,043) impacted by the component shortages and longer than normal supply lead-times. Net debt leverage ratio was 1.5x (2.8x).
We are continuously optimistic about the demand outlook for forthcoming quarters. Our order backlog is record high for the period and retail inventory levels are low across all vertical end markets. Supply remains the main uncertainty and it is difficult to predict when the situation will stabilize. In these challenging circumstances, I am proud of our employees' ability and efforts to implement mitigating actions to secure customer deliveries.
We are optimistic about the long-term trends in the Mobile Living industry and will continue to drive our strategic agenda to deliver on our financial targets.
Juan Vargues, President and CEO
Operating cash flow, SEK m
Net sales were SEK 5,545 m (4,466), an increase of 24% compared with the same quarter last year. This comprised 11% organic growth, -2% currency translation and 15% M&A.
Gross profit was SEK 1,647 m (1,378) corresponding to 29.7% (30.9%) of net sales.
Sales and administrative expenses totaled SEK -696 m (-509).
Research and development expenses were SEK -100 m (-80). In addition, Research & development expenses of SEK -3 m (-5) were capitalized in the quarter. In total, this corresponds to 1.9% (1.9%) of net sales.
Other operating income and expenses were SEK 28 m (-26). The difference is mainly due to currency hedge effects.
Operating profit before depreciation and amortization (EBITDA) was SEK 987 m (867). The EBITDA margin was 17.8% (19.4%).
Operating profit (EBIT) before items affecting comparability was SEK 785 m (690). The EBIT margin before items affecting comparability was 14.2% (15.5%). The gross impact from tariffs was SEK -51 m (-55).
Items affecting comparability totaled SEK -23 m (-14) of which restructuring costs for the global restructuring program amounted to SEK -17 m (-14).
Operating profit (EBIT) was SEK 762 m (676). The EBIT margin was 13.7% (15.1%).
Financial items totaled a net amount of SEK -103 m (-153), including SEK -90 m (-101) in interest on external bank loans. Other FX revaluations and other items amounted to SEK -14 m (-52) and financial income amounted to SEK 1 m (0).
Taxes totaled SEK -179 m (-242), corresponding to 27% (46%) of profit before tax. Current tax amounted to SEK -134 m (-114) and deferred tax to SEK -45 m (-128). Paid tax was 15% (22%).
Profit for the quarter was SEK 480 m (281).
Earnings per share for the quarter were SEK 1.50 (0.95).
Operating cash flow for the quarter was SEK 346 m (1,043). Changes in working capital was negative mainly due to increased inventories driven by longer than normal supply lead-times and strong market demand.
Cash flow for the quarter was SEK 2,550 m (730). Net cash flow from investments was SEK -626 m, mainly due to acquisitions completed in the quarter. Net cash flow from financing was SEK 2,830 m positively impacted by EUR 300 m issued on the European bond market with a 7-year maturity.
Return on Operating Capital (RoOC) was 42.3% (21.5%).
Global restructuring program. During the quarter, total costs related to the program amounted to SEK -17 m (-14) while no new sites or employees were affected.
Acquisitions. The acquisitions of Büttner Elektronik and Front Runner Vehicle Outfitters were completed in the quarter. The acquisitions of Cadac International and Igloo were announced in September 2021 and are expected to be completed in the fourth quarter. See note 10 for more details.
Significant events after the quarter. Peter Kjellberg, Chief Marketing Officer, has decided to leave Dometic for another external assignment. There have been no other significant events that have impacted the financial reporting after the balance sheet date.
Net sales were SEK 15,974 m (11,993), an increase of 33% compared with the same period last year. This comprised 30% organic growth, -5% currency translation and 8% M&A.
Operating profit before depreciation and amortization (EBITDA) was SEK 3,004 m (1,968). The EBITDA margin was 18.8% (16.4%).
Operating profit (EBIT) before items affecting comparability was SEK 2,471 m (1,473). The EBIT margin before items affecting comparability was 15.5% (12.3%). The gross impact from tariffs was SEK -150 m (-162).
Items affecting comparability totaled SEK -86 m (-107) of which restructuring costs for the global restructuring program amounted to SEK -51 m (-98).
Operating profit (EBIT) was SEK 2,385 m (1,366). The EBIT margin was 14.9% (11.4%).
Financial items totaled a net amount of SEK -311 m (-383), including SEK -270 m (-305) in interest on external bank loans. Other FX revaluations and other items amounted to SEK -53 m (-84) and financial income amounted to SEK 12 m (6).
Taxes totaled SEK -544 m (-372), corresponding to 26% (38%) of profit before tax. Current tax amounted to SEK -439 m (-306) and deferred tax to SEK -105 m (-66). Paid tax was 42% (33%) and was negatively impacted by a settlement of a foreign tax dispute related to previous years, which was provided for in 2020.
Profit for the period was SEK 1,530 m (611).
Earnings per share for the period were SEK 4.99 (2.07).
Operating cash flow for the period was SEK 1,203 m (1,534).
Cash flow for the period was SEK 2,014 m (2,649). Net cash flow from investments was SEK -2,745 m mainly due to acquisitions completed in the period. Net cash flow from financing was SEK 4,174 m positively impacted by a directed share issue of approximately SEK 3.35 billion before transaction costs and EUR 300 m issued on the European bond market with a 7-year maturity. This was partly offset by a dividend payout of SEK -681 m and by a repayment of an EMTN bond due of SEK -1,000 m. A tax payment for the settlement of a foreign tax dispute related to previous years impacted cash flow for the period negatively.
Net debt leverage was 1.5x (2.8x) at the end of the period.
Return on Operating Capital (RoOC) was 42.3% (21.5%).
Global restructuring program. During the first nine months, total costs related to the program amounted to SEK -51 m (-98). One additional site and 26 additional employees have been affected during the period. Since program start, 22 sites and 804 employees have been affected with a total cost of SEK -283 m.
Employees. Number of employees in terms of headcount was 7,981 (6,204) at the end of the period.
| Q3 | Q3 | YTD | YTD | LTM | FY | ||
|---|---|---|---|---|---|---|---|
| Change (%) SEK m 2021 2020 Rep. Org. ⁽¹⁾ 2021 2020 2021 1,724 1,258 37% 9% 4,454 3,212 5,688 1,733 1,514 14% 10% 5,461 4,350 6,740 516 280 84% 54% 1,415 880 1,849 1,573 1,413 11% 6% 4,644 3,550 5,910 5,545 4,466 24% 11% 15,974 11,993 20,187 61 79 256 17 280 243 218 824 571 899 126 45 366 158 479 354 347 1,024 728 1,278 785 690 2,471 1,473 2,937 3.5% 6.3% 5.7% 0.5% 4.9% 14.0% 14.4% 15.1% 13.1% 13.3% 24.5% 16.2% 25.9% 18.0% 25.9% 22.5% 24.5% 22.0% 20.5% 21.6% |
2020 | ||||||
| Americas | 4,447 | ||||||
| EMEA | 5,629 | ||||||
| APAC | 1,315 | ||||||
| Global | 4,816 | ||||||
| Net sales | 16,207 | ||||||
| Americas | 41 | ||||||
| EMEA | 646 | ||||||
| APAC | 271 | ||||||
| Global | 981 | ||||||
| Operating profit (EBIT) before i.a.c. | 1,939 | ||||||
| Americas | 0.9% | ||||||
| EMEA | 11.5% | ||||||
| APAC | 20.6% | ||||||
| Global | 20.4% | ||||||
| Operating profit (EBIT) % before i.a.c. | 14.2% | 15.5% | 15.5% | 12.3% | 14.5% | 12.0% |
⁽¹⁾Net sales growth excluding acquisitions/divestments and currency translation effects.
Previous periods have been restated according to the new segment structure, see note 4 for further details on the financial performance by segment.
For details on acquisitions included in each segment, see note 10.
Segment Americas reported net sales of SEK 1,724 m (1,258), representing 31% (28%) of Group net sales. Total growth was 37%, of which 9% was organic growth, -4% currency translation and 31% M&A. Growth was driven by application areas Power & Control and Other applications.
Operating profit (EBIT) before items affecting comparability was SEK 61 m (79), representing a margin of 3.5% (6.3%). Items affecting comparability totaled SEK -7 m (-8). Operating profit (EBIT) was SEK 54 m (71), corresponding to a margin of 3.1% (5.7%). Rising raw material prices and freight costs, as well as currency effects, had a negative impact on operating margin. This was partly offset by net sales growth, cost reductions and pricing. The gross impact from tariffs was SEK -51 m (-55).
Segment EMEA reported net sales of SEK 1,733 m (1,514), representing 31% (34%) of Group net sales. Total growth was 14%, of which 10% was organic growth, -2% currency translation and 6% M&A. Growth was driven by application areas Climate and Power & Control.
Operating profit (EBIT) before items affecting comparability was SEK 243 m (218), representing a margin of 14.0% (14.4%). Items affecting comparability totaled SEK -9 m (-4). Operating profit (EBIT) was SEK 234 m (214), corresponding to a margin of 13.5% (14.2%). Rising raw material prices and freight costs, as well as currency effects and M&A transaction costs, had a negative impact on operating margin. This was partly offset by net sales growth, cost reductions and pricing.
Segment APAC reported net sales of SEK 516 m (280), representing 9% (6%) of Group net sales. Total growth was 84%, of which 54% was organic growth, -1% currency translation and 31% M&A. All application areas showed net sales growth compared with the third quarter 2020, which was negatively impacted by COVID-19 pandemic related lock-downs in Australia.
Operating profit (EBIT) before items affecting comparability was SEK 126 m (45), representing a margin of 24.5% (16.2%). Items affecting comparability totaled SEK - m (-2). Operating profit (EBIT) was SEK 126 m (43), corresponding to a margin of 24.5% (15.5%). Rising raw material prices and freight costs, as well as currency effects, had a negative impact on operating margin. This was more than offset by net sales growth, regional sales mix, cost reductions and pricing.
Segment Global reported net sales of SEK 1,573 m (1,413), representing 29% (32%) of Group net sales. Total growth was 11%, of which 6% was organic growth, -2% currency translation and 8% M&A. Growth was driven by application areas Food & Beverage and Power & Control.
Operating profit (EBIT) before items affecting comparability was SEK 354 m (347), representing a margin of 22.5% (24.5%). Items affecting comparability totaled SEK -7 m (-). Operating profit (EBIT) was SEK 347 m (347), corresponding to a margin of 22.1% (24.5%). Rising raw material prices and freight costs, as well as a net sales mix with a lower share of Service & Aftermarket sales, had a negative impact on operating margin. This was partly offset by net sales growth, cost reductions and pricing.
| Same period | ||||||
|---|---|---|---|---|---|---|
| Focus area | KPI | Actual | Prev. year | Target 2021 | ||
| People | LTIFR (Injury rate per million working hours) | 2.4 | 4.0 | 2.0 | ||
| People | % Female managers | 23% | 23% | 26% | ||
| Ethics | % Audited spend in LCC | 81% | 78% | 90% | ||
| Environment | Reduction in CO₂ ton / net sales SEK m⁽¹⁾ | -17% | - | -5% |
⁽¹⁾Adjusted for acquisitions and currency translation effects.
For definitions of KPIs, and what the actual period refers to for each KPI, see Definitions and Key ratios on page 20.
See the Dometic Annual and Sustainability report 2020 and the Q1 2021 interim report for details on targets and baselines of KPIs.
As a pioneer in the Mobile Living arena, Dometic is committed to driving sustainability in its industry. This means providing smart, reliable, and safe products designed with a life-cycle perspective to reduce the environmental footprint throughout a product's life cycle. Dometic also provides a safe, healthy, diverse, and inclusive workplace and ensures business practices meet the highest ethical standards. Four focus areas have been defined – Ethics, People, Products and Environment – with strong ownership in Group management and clear KPIs, targets and activities implemented in day-to-day operations. Progress on all defined KPIs is reported externally as part of the Annual and Sustainability Reports, but in addition Dometic has chosen to report its progress on a quarterly basis on four of the defined KPIs. Starting from 2021, Dometic has implemented sustainability targets as part of the Long-Term Incentive (LTI) program. The targets are on CO2 emission reduction, injury rate and percentage of female managers.
Dometic has defined a long-term climate target to reduce CO2 emissions from operations1) in relation to net sales by 50% by 2030. To achieve this reduction, Dometic will continue to implement the manufacturing footprint project and increase energy efficiency in operations. Much of the reduction will come from transitioning to a renewable electricity supply. In the third quarter, the share of renewable indirect energy (scope 2) for the last 12 months increased to 15.6% (5.5%), and one additional site in the US switched to a renewable electricity supply.
Dometic designs products for sustainability, and during the third quarter new training was launched for the Product Management and Product Development organization to further support the implementation of the Dometic Design for Sustainability Guidelines. One objective of the guidelines is to increase the use of recycled materials. At the Caravan Salon in Düsseldorf in September a new material was introduced – the Dometic REDUX - which is made from 100% recycled plastic bottles. This material will be used in awnings, tents and other products to reduce their environmental footprint.
LTIFR (Lost Time Injury Frequency Rate) is significantly reduced compared to the same period last year, with improvements in all segments. The implementation of the Dometic Health & Safety Guidelines is continuing, with a focus on ergonomics, safety culture and awareness. The injury severity rate has decreased by 13% compared to the same period last year.
% female managers remains at the same level as the same period last year. In 2020, all segments started to work on their own Diversity & Inclusion targets with three-year action plans to support diversity and inclusion, including gender diversity at managerial levels. During the first two quarters of 2021, a Diversity and Inclusion campaign was rolled out globally to further raise awareness throughout the organization.
% audited spend in LCC has improved compared to last year but decreased somewhat since the second quarter 2021, partly due to challenges caused by COVID-19 related travel restrictions.
CO2 ton/net sales SEK m decreased by 17% compared to the baseline year (2020), already outperforming the full-year 2021 target. The implementation of a roadmap for switching to renewable electricity in operations will support further reductions. The absolute CO2 emissions increased by 4% compared to the same period last year due to significantly higher business activity. The share of renewable indirect energy (scope 2) for the last 12 months increased to 15.6% (5.5%) and in the third quarter of 2021, one additional site in the US switched to renewable electricity supply.
1) Scope 1 and 2 emissions represented by fuel combustion, electricity and district heating used on operation sites.
The Parent Company Dometic Group AB (publ) comprises the functions of the Group's head office, such as Group management and administration. The Parent Company invoices its costs to subsidiaries.
For the quarter, the Parent Company had an operating profit (loss) of SEK -1 m (-10), including administrative expenses of SEK -59 m (-45) and other operating income of SEK 58 m (35), of which the full amount relates to income from subsidiaries.
Profit (loss) from financial items totaled SEK -11 m (-107), including interest income from subsidiaries of SEK 49 m (48), interest expenses to subsidiaries of SEK - m (-) and other financial expenses of SEK -61 m (-155).
Profit (loss) for the quarter amounted to SEK -12 m (-157).
For the period, the Parent Company had an operating profit (loss) of SEK -1 m (-5), including administrative expenses of SEK -216 m (-143) and other operating income of SEK 215 m (139), of which the full amount relates to income from subsidiaries.
Profit (loss) from financial items totaled SEK -101 m (-259), including interest income from subsidiaries of SEK 129 m (150), interest expenses to subsidiaries of SEK -1 m (-) and other financial expenses of SEK -229 m (-409).
Profit (loss) for the period amounted to SEK -107 m (-163).
For further information, please refer to the Parent Company's condensed financial statements on page 12.
Juan Vargues President and CEO
Solna, October 22, 2021
Dometic Group AB (publ) reg. no. 556829-4390
We have reviewed the condensed interim financial information (interim report) of Dometic Group AB (publ) as of 30 September 2021 and the nine-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.
Stockholm, October 22, 2021
PricewaterhouseCoopers AB
Anna Rosendal Authorized Public Accountant
Dometic Group's Annual General Meeting will be held on April 13, 2022, in Stockholm.
In accordance with the resolution adopted by the 2021 Annual General Meeting (AGM), the Nomination Committee ahead of the 2022 AGM shall be composed of the Chairman of the Board of Directors together with one representative from each of the three largest shareholders, based on the ownership structure at August 31, 2021. Further details about the Nomination Committee are available on our website. www.dometicgroup.com
| Q3 | Q3 | YTD | YTD | FY | |
|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | 2021 | 2020 | 2020 |
| Net sales | 5,545 | 4,466 | 15,974 | 11,993 | 16,207 |
| Cost of goods sold | -3,899 | -3,088 | -11,056 | -8,562 | -11,571 |
| Gross Profit | 1,647 | 1,378 | 4,918 | 3,431 | 4,636 |
| Sales expenses | -414 | -296 | -1,148 | -905 | -1,214 |
| Administrative expenses | -282 | -213 | -772 | -681 | -915 |
| Research and development expenses | -100 | -80 | -302 | -239 | -336 |
| Other operating income and expenses | 28 | -26 | 20 | 93 | 64 |
| Items affecting comparability | -23 | -14 | -86 | -107 | -59 |
| Amortization of acquisition-related intangible assets | -94 | -73 | -245 | -226 | -296 |
| Operating profit | 762 | 676 | 2,385 | 1,366 | 1,880 |
| Financial income | 1 | 0 | 12 | 6 | 7 |
| Financial expenses | -104 | -153 | -323 | -389 | -538 |
| Net financial expenses | -103 | -153 | -311 | -383 | -532 |
| Profit (loss) before tax | 659 | 523 | 2,074 | 983 | 1,348 |
| Taxes | -179 | -242 | -544 | -372 | -897 |
| Profit (loss) for the period | 480 | 281 | 1,530 | 611 | 451 |
| Profit (loss) for the period attributable to owners of the Parent Company | 480 | 281 | 1,530 | 611 | 451 |
| Earnings per share before and after dilution, SEK - Owners of the Parent Company | 1.50 | 0.95 | 4.99 | 2.07 | 1.52 |
| Average number of shares, million | 319.5 | 295.8 | 306.3 | 295.8 | 295.8 |
Previous periods have been restated in line with Company communication March 15, 2021. Logistic costs have moved from Sales expenses to Cost of goods sold and Product development have moved from Cost of goods sold to Research & Development expenses.
| Q3 | Q3 | YTD | YTD | FY | |
|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | 2021 | 2020 | 2020 |
| Profit (loss) for the period | 480 | 281 | 1,530 | 611 | 451 |
| Other comprehensive income | |||||
| Items that will not be reclassified subsequently to profit or loss: | |||||
| Remeasurements of defined benefit pension plans, net of tax 38 40 98 38 40 98 Cash flow hedges, net of tax 14 11 75 Gains/losses from hedges of net investments in foreign operations, net of tax 23 -41 12 |
-90 | -14 | |||
| -90 | -14 | ||||
| Items that may be reclassified subsequently to profit or loss: | |||||
| -70 | -62 | ||||
| -68 | 130 | ||||
| Exchange rate differences on translation of foreign operations | 235 | -333 | 816 | -518 | -1,667 |
| 272 | -363 | 903 | -656 | -1,599 | |
| Other comprehensive income for the period | 310 | -322 | 1,001 | -746 | -1,613 |
| Total comprehensive income for the period | 790 | -41 | 2,531 | -135 | -1,162 |
| Total comprehensive income for the period attributable to | |||||
| Owners of the Parent Company | 790 | -41 | 2,531 | -135 | -1,162 |
| SEK m | Sep 30, 2021 | Sep 30, 2020 | Dec 31, 2020 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Goodwill and trademarks | 20,461 | 18,364 | 17,204 |
| Other intangible assets | 4,742 | 4,182 | 3,853 |
| Tangible assets | 1,675 | 1,966 | 1,474 |
| Right-of-use assets | 765 | 520 | 630 |
| Deferred tax assets | 479 | 509 | 597 |
| Derivatives, long-term | - | - | - |
| Other non-current assets | 108 | 107 | 95 |
| Total non-current assets | 28,228 | 25,647 | 23,853 |
| Current assets | |||
| Inventories | 5,084 | 2,957 | 3,133 |
| Trade receivables | 2,637 | 2,204 | 1,839 |
| Current tax assets | 36 | 83 | 48 |
| Derivatives, short-term | 87 | 43 | 88 |
| Other current receivables | 469 | 615 | 618 |
| Prepaid expenses and accrued income | 116 | 91 | 123 |
| Cash and cash equivalents | 9,959 | 6,921 | 7,913 |
| Total current assets | 18,389 | 12,912 | 13,762 |
| TOTAL ASSETS | 46,617 | 38,559 | 37,615 |
| EQUITY AND LIABILITIES | |||
| EQUITY | 21,383 | 17,228 | 16,201 |
| LIABILITIES | |||
| Non-current liabilities | |||
| Liabilities to credit institutions, long-term | 15,887 | 13,146 | 12,455 |
| Deferred tax liabilities | 1,831 | 1,785 | 1,666 |
| Derivatives, long-term | - | 11 | 2 |
| Other non-current liabilities | 1,214 | 58 | 0 |
| Leasing liabilities, long-term | 646 | 398 | 601 |
| Provisions for pensions | 723 | 908 | 797 |
| Other provisions, long-term | 235 | 218 | 213 |
| Total non-current liabilities | 20,535 | 16,524 | 15,734 |
| Current liabilities | |||
| Liabilities to credit institutions, short-term | - | 996 | 1,000 |
| Trade payables | 2,333 | 1,637 | 2,019 |
| Current tax liabilities | 333 | 443 | 944 |
| Advance payments from customers | 46 | 47 | 59 |
| Leasing liabilities, short-term | 229 | 148 | 139 |
| Derivatives, short-term | 40 | 99 | 140 |
| Other provisions, short-term | 276 | 267 | 264 |
| Other current liabilities | 215 | 246 | 209 |
| Accrued expenses and prepaid income | 1,228 | 924 | 906 |
| Total current liabilities | 4,699 | 4,807 | 5,680 |
| TOTAL LIABILITIES | 25,234 | 21,331 | 21,414 |
| TOTAL EQUITY AND LIABILITIES | 46,617 | 38,559 | 37,615 |
| YTD | YTD | FY | |
|---|---|---|---|
| SEK m | 2021 | 2020 | 2020 |
| Opening balance for the period | 16,201 | 17,363 | 17,363 |
| Profit (loss) for the period | 1,530 | 611 | 451 |
| Other comprehensive income for the period | 1,001 | -746 | -1,613 |
| Total comprehensive income for the period | 2,531 | -135 | -1,162 |
| Transactions with owners | |||
| New share issue | 3,332 | - | - |
| Dividend paid to shareholders of the Parent Company | -680 | - | - |
| Total transactions with owners | 2,651 | - | - |
| Closing balance for the period | 21,383 | 17,228 | 16,201 |
| Q3 | Q3 | YTD | YTD | FY | |
|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | 2021 | 2020 | 2020 |
| Cash flow from operating activities | |||||
| Operating profit | 762 | 676 | 2,385 | 1,366 | 1,880 |
| Adjustment for other non-cash items | |||||
| Depreciation and amortization | 226 | 191 | 619 | 601 | 789 |
| Adjustments for other non-cash items | -71 | 41 | -98 | -166 | -305 |
| Changes in working capital | |||||
| Changes in inventories | -492 | 252 | -1,263 | -81 | -485 |
| Changes in trade receivables | 266 | -88 | -482 | -572 | -309 |
| Changes in trade payables | -276 | -20 | 82 | 263 | 778 |
| Changes in other working capital | 28 | 46 | 219 | 293 | 156 |
| Income tax paid | -97 | -112 | -877 | -325 | -444 |
| Net cash flow from operations | 347 | 984 | 584 | 1,379 | 2,060 |
| Cash flow from investments | |||||
| Acquisition of operations, net of cash acquired | -549 | - | -2,672 | - | - |
| Investments in fixed assets | -98 | -53 | -258 | -170 | -246 |
| Proceeds from sale of fixed assets | 12 | 1 | 34 | 1 | 537 |
| Deposit | -1 | - | 147 | - | - |
| Other investing activities | 9 | -2 | 4 | -2 | -1 |
| Net cash flow from investments | -626 | -54 | -2,745 | -171 | 289 |
| Cash flow from financing | |||||
| New share issue | -22 | - | 3,326 | - | - |
| Borrowings from credit institutions | 3,062 | - | 3,062 | 2,000 | 2,000 |
| Repayment of loans to credit institutions | - | - | -1,000 | - | - |
| Payment of lease liabilities related to lease agreements | -56 | -38 | -155 | -123 | -171 |
| Paid interest | -126 | -147 | -324 | -374 | -415 |
| Received interest | 1 | - | 3 | 1 | 2 |
| Other financing activities | -29 | -15 | -59 | -62 | -99 |
| Dividend paid to shareholders of the Parent Company | - | - | -680 | - | - |
| Net cash flow from financing | 2,830 | -200 | 4,174 | 1,442 | 1,318 |
| Cash flow for the period | 2,550 | 730 | 2,014 | 2,649 | 3,666 |
| Cash and cash equivalents at beginning of period | 7,392 | 6,190 | 7,913 | 4,289 | 4,289 |
| Exchange differences on cash and cash equivalents | 16 | 1 | 32 | -18 | -43 |
| Cash and cash equivalents at end of period | 9,959 | 6,921 | 9,959 | 6,921 | 7,913 |
| Q3 | Q3 | YTD | YTD | FY 2020 |
|
|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | 2021 | 2020 | |
| Administrative expenses | -59 | -45 | -216 | -143 | -199 |
| Other operating income | 58 | 35 | 215 | 139 | 190 |
| Operating profit (loss) | -1 | -10 | -1 | -5 | -9 |
| Interest income subsidiaries | 49 | 48 | 129 | 150 | 194 |
| Interest expenses subsidiaries | - | - | -1 | - | - |
| Other financial expenses | -61 | -155 | -229 | -409 | -293 |
| Profit (loss) from financial items | -11 | -107 | -101 | -259 | -99 |
| Group contributions | - | -40 | - | 101 | - |
| Profit (loss) before tax | -12 | -157 | -102 | -163 | -108 |
| Taxes | -0 | - | -5 | 0 | -34 |
| Profit (loss) for the period | -12 | -157 | -107 | -163 | -142 |
| SEK m | Sep 30, 2021 | Sep 30, 2020 | Dec 31, 2020 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Shares in subsidiaries | 16,228 | 16,228 | 16,228 |
| Other non-current assets | 7,613 | 5,638 | 5,169 |
| Total non-current assets | 23,841 | 21,866 | 21,397 |
| Current assets | |||
| Current assets | 4,809 | 2,379 | 2,299 |
| Total current assets | 4,809 | 2,379 | 2,299 |
| TOTAL ASSETS | 28,650 | 24,245 | 23,696 |
| EQUITY | 12,468 | 9,903 | 9,924 |
| PROVISIONS | |||
| Provisions | 89 | 68 | 75 |
| Total provisions | 89 | 68 | 75 |
| LIABILITIES | |||
| Non-current liabilities | |||
| Non-current liabilities | 15,887 | 13,146 | 12,455 |
| Total non-current liabilities | 15,887 | 13,146 | 12,455 |
| Current liabilities | |||
| Current liabilities | 206 | 1,127 | 1,242 |
| Total current liabilities | 206 | 1,127 | 1,242 |
| TOTAL LIABILITIES | 16,182 | 14,343 | 13,772 |
| TOTAL EQUITY AND LIABILITIES | 28,650 | 24,245 | 23,696 |
Dometic Group AB (publ) and its subsidiaries (together "the Dometic Group", "Dometic" or "the Group") applies International Financial Reporting Standards (IFRS), as endorsed by the European Union. This consolidated Interim Financial Report has been prepared in accordance with IAS 34 'Interim Financial Reporting'.
The accounting and valuation principles in this interim report correspond to principles applied by the Group in the 2020 Annual and Sustainability Report and should be read in conjunction with that Annual and Sustainability Report, available at www.dometicgroup.com.
The Swedish Annual Accounts Act and RFR 2 Accounting for Legal Entities, issued by the Swedish Financial Reporting Board, have been applied for the Parent Company. The interim report comprises pages 1–21 and pages 1–12 are thus an integral part of this financial report (IAS 34.16A).
Totals quoted in tables and statements may not always be the exact sum of the individual items because of rounding differences. The aim is for each line item to correspond to its source, and rounding differences may therefore arise.
A detailed description of the accounting and valuation principles for new or amended accounting policies for 2021 applied by the Group in this interim report can be found in Note 2.1.1 Changes in accounting policies, New or amended accounting policies for 2021, of the 2020 Annual and Sustainability Report available at www.dometicgroup.com.
Risks are part of any business and as a global Group with production and distribution all over the world Dometic faces risks that can impact its ability to achieve established strategic and other objectives, including financial targets. Effective risk management of strategic, execution, compliance & regulatory and reporting risks creates opportunities and effective risk mitigation.
The key to effective risk management is identifying known risks and preparing for any unknown risks to which the Group is exposed. While mitigating risks usually comes at a cost, effective risk management adds value by establishing clear risk and process ownership combined with risk identification, assessment, prioritization and risk response i.e. risk mitigating actions as well as effective monitoring.
In line with Dometic's Three Lines Model, Risk Management as part of the second line of responsibility constitutes an important role by providing and supporting management and the business operations with a risk framework, including a risk management process and a risk universe for identification, assessment, and prioritization of risks, and for providing risk response i.e. risk mitigating actions as well as effective monitoring.
In 2019 the risk framework was updated to increase the focus on strategic risks and to improve alignment with the Group strategic objectives and strategy toolbox for execution. Each defined tool in the strategy toolbox represents both risks and opportunities that, correctly managed, help the Group deliver on its strategy. Risks in the risk framework, and especially strategic risks are connected to the objectives defined for each of the three pillars in the Group strategy.
During 2020, extensive risk assessments were performed on Group and segment level to assess risks and related mitigating actions. Group risk assessments mainly focused on the strategic risks, and the segment risk assessments mainly focused on the execution risks, since the segments execute on the strategy and decisions made by Group Management and the Board of Directors.
The Risk Committee held meetings in connection with Group Management meetings, during which significant time was
dedicated to plan for and present results from risk assessments, as well as review of risk mitigating actions. Strategic risks are assessed top-down by Group Management, while execution, compliance & regulatory and reporting risks are assessed bottomup by Segment Management and process and risk owners, as well as top-down by Group Management and global process and risk owners, as applicable. The Risk Committee discusses and makes decisions on risk mitigating actions and the members of Group Management act as global process and risk owners as applicable. The work of the Risk Committee is regularly reported to the Audit Committee and annually to the Board of Directors.
With strategic, execution, compliance & regulatory and reporting risks identified and assessed annually, the results thereof in terms of risk registers and risk maps help raise risk awareness and support management and the business operations at different levels of the organization in prioritization of risk mitigating actions. The annual risk assessment, including risk registers and risk maps, also serves as foundation for the Group's control functions, such as Internal Control and Internal Audit, for their prioritization of focus areas.
The risk framework includes a universe of risks that could impact Dometic's ability to achieve established strategic and other objectives including financial targets. The risks to which Dometic is exposed are classified into four main categories: strategic risks, execution risks, compliance & regulatory risks and reporting risks. Each main category has subcategories with defined underlying risks. Sustainability risks are integrated in the main categories and subcategories. Risks are mapped to strategic and other objectives including financial targets. Risk ownership is identified for each risk in the risk universe.
Strategic risks can impact Dometic's ability to achieve strategic objectives including financial targets. Strategic risks are divided into the following subcategories; market and sales risks, product risks, manufacturing, distribution and sourcing risks, organizational risks and externa risk factors. External risk factors could be political such as tariffs, climate change, weather related, hazards such as disease outbreaks and risks related to competition and external crime.
Execution risks are operational, commercial and financial risks associated with business operations.
Compliance & Regulatory risks are both internal compliance with governing documents, as well as external compliance with laws, rules and regulations.
Reporting risks are risks associated with Dometic's reporting, information and communication, both financial and non-financial.
The COVID-19 pandemic had a negative impact on Dometic's business and operations, primarily during the first half of 2020. Future development of the pandemic create uncertainty and external as well as internal measures to contain COVID-19 cases may negatively impact the business and operations. While an increase in end-user appetite for staycation and outdoor activities is driving demand for the company's products across the portfolio, Dometic continues to take proactive actions to protect its employees, other stakeholders and the financial position. Dometic is actively working to balance capacity and resources with demand across the organization.
Supply chain disturbances including rising raw material prices and freight costs, as well as availability of critical components and transport capacity, have impacted profitability and cash flow since the end of 2020. Component supply and transport capacity remain main uncertainties and it is difficult to predict when the situation will stabilize. Mitigating actions from Dometic to safeguard Company profitability and cash flow includes price increases as well as close collaboration with suppliers and freight partners to mitigate the negative effects from the current disturbances in the global value chain.
Dometic's risks and risk management are described on pages 59- 61 and on pages 86-89 in the 2020 Annual and Sustainability Report, available at www.dometicgroup.com.
Dometic uses interest rate swaps to hedge senior facility term loans to move from a floating interest rate to a fixed interest rate. The Group also uses currency forward agreements to hedge part of its cash flow exposure.
The fair values of Dometic's derivative assets and liabilities were SEK 87 m (43) and SEK 40 m (111). The value of derivatives is
based on published prices in an active market. No transfers between levels of the fair value hierarchy have occurred during the period.
For financial assets and liabilities other than derivatives, fair value is assumed to be equal to the carrying amount.
| Financial | Financial | |||
|---|---|---|---|---|
| Balance sheet | instruments at | instruments at | Derivatives used | |
| Sep 30, 2021 | carrying amount | amortized cost | fair value | for hedging |
| Per category | ||||
| Derivatives | 87 | - | 16 | 71 |
| Financial assets | 13,173 | 13,173 | - | - |
| Total financial assets | 13,259 | 13,173 | 16 | 71 |
| Derivatives | 40 | - | - | 40 |
| Financial liabilities | 19,649 | 19,649 | - | - |
| Total financial liabilities | 19,688 | 19,649 | - | 40 |
As of 2021 Dometic has a new organizational structure with four segments: Segments Americas, EMEA, APAC and Global. Segment performance is primarily assessed based on net sales and operating profit. Information for each segment is based on type of customer and where customers are located. Management follow-up is based on the integrated result in each segment. For further information, please refer to Note 5 of the 2020 Annual and Sustainability Report available at www.dometicgroup.com
| Q3 | Q3 | YTD | YTD | FY | |
|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | 2021 | 2020 | 2020 |
| Net sales, external | |||||
| Segment Americas | 1,724 | 1,258 | 4,454 | 3,212 | 4,447 |
| Segment EMEA | 1,733 | 1,514 | 5,461 | 4,350 | 5,629 |
| Segment APAC | 516 | 280 | 1,415 | 880 | 1,315 |
| Segment Global | 1,573 | 1,413 | 4,644 | 3,550 | 4,816 |
| Total net sales, external | 5,545 | 4,466 | 15,974 | 11,993 | 16,207 |
| Operating profit (EBIT) bef i.a.c | |||||
| Segment Americas | 61 | 79 | 256 | 17 | 41 |
| Segment EMEA | 243 | 218 | 824 | 571 | 646 |
| Segment APAC | 126 | 45 | 366 | 158 | 271 |
| Segment Global | 354 | 347 | 1,024 | 728 | 981 |
| Total operating profit (EBIT) before i.a.c. | 785 | 690 | 2,471 | 1,473 | 1,939 |
| Operating profit (EBIT) bef i.a.c. % | |||||
| Segment Americas | 3.5% | 6.3% | 5.7% | 0.5% | 0.9% |
| Segment EMEA | 14.0% | 14.4% | 15.1% | 13.1% | 11.5% |
| Segment APAC | 24.5% | 16.2% | 25.9% | 18.0% | 20.6% |
| Segment Global | 22.5% | 24.5% | 22.0% | 20.5% | 20.4% |
| Total operating profit (EBIT) before i.a.c. % | 14.2% | 15.5% | 15.5% | 12.3% | 12.0% |
| Items affecting comparability | |||||
| Segment Americas | -7 | -8 | -25 | -56 | -68 |
| Segment EMEA | -9 | -4 | -22 | -23 | 32 |
| Segment APAC | - | -2 | - | -25 | -20 |
| Segment Global | -7 | - | -39 | -3 | -3 |
| Total items affecting comparability | -23 | -14 | -86 | -107 | -59 |
| Operating profit (EBIT) | |||||
| Segment Americas | 54 | 71 | 231 | -39 | -27 |
| Segment EMEA | 234 | 214 | 803 | 548 | 678 |
| Segment APAC | 126 | 43 | 366 | 133 | 251 |
| Segment Global | 347 | 347 | 985 | 725 | 978 |
| Total operating profit (EBIT) | 762 | 676 | 2,385 | 1,366 | 1,880 |
| Operating profit (EBIT) % | |||||
| Segment Americas | 3.1% | 5.7% | 5.2% | -1.2% | -0.6% |
| Segment EMEA | 13.5% | 14.2% | 14.7% | 12.6% | 12.1% |
| Segment APAC | 24.5% | 15.5% | 25.9% | 15.2% | 19.1% |
| Segment Global | 22.1% | 24.5% | 21.2% | 20.4% | 20.3% |
| Total operating profit (EBIT) % | |||||
| 13.7% | 15.1% | 14.9% | 11.4% | 11.6% | |
| Financial income | 1 | 0 | 12 | 6 | 7 |
| Financial expenses | -104 | -153 | -323 | -389 | -538 |
| Taxes | -179 | -242 | -544 | -372 | -897 |
| Profit (loss) for the period | 480 | 281 | 1,530 | 611 | 451 |
Previous periods have been restated according to the new segment structure.
| Q3 | Q3 | YTD | YTD | FY | |
|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | 2021 | 2020 | 2020 |
| Segment Americas | |||||
| Food & Beverage | 399 | 411 | 1,217 | 1,021 | 1,404 |
| Climate | 736 | 673 | 2,093 | 1,766 | 2,453 |
| Power & Control | 237 | 3 | 334 | 7 | 10 |
| Other applications | 352 | 171 | 809 | 419 | 580 |
| Segment Americas net sales, external | 1,724 | 1,258 | 4,454 | 3,212 | 4,447 |
| Segment EMEA | |||||
| Food & Beverage | 576 | 540 | 1,997 | 1,629 | 2,088 |
| Climate | 857 | 714 | 2,656 | 1,981 | 2,572 |
| Power & Control | 188 | 130 | 481 | 386 | 520 |
| Other applications | 112 | 130 | 328 | 354 | 449 |
| Segment EMEA net sales, external | 1,733 | 1,514 | 5,461 | 4,350 | 5,629 |
| Segment APAC | |||||
| Food & Beverage | 216 | 139 | 658 | 436 | 672 |
| Climate | 183 | 116 | 550 | 369 | 543 |
| Power & Control | 90 | 4 | 130 | 15 | 23 |
| Other applications | 27 | 21 | 77 | 61 | 76 |
| Segment APAC net sales, external | 516 | 280 | 1,415 | 880 | 1,315 |
| Segment Global | |||||
| Food & Beverage | 236 | 135 | 649 | 344 | 441 |
| Climate | 251 | 229 | 797 | 689 | 930 |
| Power & Control | 762 | 664 | 2,279 | 1,647 | 2,301 |
| Other applications | 323 | 385 | 919 | 870 | 1,143 |
| Segment Global net sales, external | 1,573 | 1,413 | 4,644 | 3,550 | 4,816 |
| Net sales, external | |||||
| Food & Beverage | 1,428 | 1,226 | 4,521 | 3,429 | 4,605 |
| Climate | 2,026 | 1,732 | 6,096 | 4,805 | 6,498 |
| Power & Control | 1,277 | 800 | 3,223 | 2,054 | 2,856 |
| Other applications | 814 | 707 | 2,134 | 1,702 | 2,248 |
| Total net sales, external | 5,545 | 4,466 | 15,974 | 11,993 | 16,207 |
Inter-segment sales were as follows.
| Q3 | Q3 | YTD | YTD | FY | |
|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | 2021 | 2020 | 2020 |
| Segment Americas | 42 | 35 | 118 | 137 | 169 |
| Segment EMEA | 91 | 83 | 286 | 233 | 309 |
| Segment APAC | 810 | 614 | 2,678 | 1,669 | 2,544 |
| Segment Global | 11 | 1 | 23 | 3 | 4 |
| Eliminations | 955 | 733 | 3,104 | 2,041 | 3,026 |
| Q3 | Q3 | Change (%) | YTD | YTD | FY | ||
|---|---|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | Rep. | Org.⁽¹⁾ | 2021 | 2020 | 2020 |
| Net sales, external | |||||||
| OEM | 2,748 | 2,231 | 23% | 17% | 8,090 | 6,225 | 8,712 |
| Distribution | 678 | 451 | 50% | 7% | 1,997 | 1,377 | 1,734 |
| Service and Aftermarket | 2,119 | 1,783 | 19% | 5% | 5,887 | 4,393 | 5,762 |
| Total net sales, external | 5,545 | 4,466 | 24% | 11% | 15,974 | 11,993 | 16,207 |
⁽¹⁾Net sales growth excluding acquisitions/divestments and currency translation effects.
| Q3 | Q3 | YTD | YTD | FY | |
|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | 2021 | 2020 | 2020 |
| Global restructuring program | -17 | -14 | -51 | -98 | -116 |
| Other | -6 | 0 | -35 | -9 | 57 |
| Total | -23 | -14 | -86 | -107 | -59 |
"Other" FY 2020 includes a gain of SEK 66 m related to sale of fixed assets. "Other" YTD 2021 includes major transaction costs related to acquisitions.
The table below specifies items affecting comparability by function and other operating income and expenses. Previous periods have been restated in line with Company communication on March 15, 2021. Logistic costs have moved from Sales expenses to Cost of goods sold and Product development have moved from Cost of goods sold to Research & development expenses.
| Global restructuring program | Q3 | Q3 | YTD | YTD | FY |
|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | 2021 | 2020 | 2020 |
| Cost of goods sold | -19 | -13 | -50 | -72 | -80 |
| Sales expenses | 1 | -1 | -1 | -2 | -3 |
| Administrative expenses | 1 | -2 | 0 | -4 | -9 |
| Research and development expenses | 0 | 1 | 0 | - | -4 |
| Other operating income and expenses | 1 | 1 | - | -19 | -21 |
| Total | -17 | -14 | -51 | -98 | -116 |
| Other | Q3 | Q3 | YTD | YTD | FY | |
|---|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | 2021 | 2020 | 2020 | |
| Cost of goods sold | - | - | - | - | - | |
| Sales expenses | - | - | - | - | - | |
| Administrative expenses | - | - | - | - | - | |
| Research and development expenses | - | - | - | - | - | |
| Other operating income and expenses | -6 | - | -35 | -9 | 57 | |
| Total | -6 | - | -35 | -9 | 57 | |
| Total | Q3 | Q3 | YTD | YTD | FY | |
| SEK m | 2021 | 2020 | 2021 | 2020 | 2020 | |
| Cost of goods sold | -19 | -13 | -50 | -72 | -80 | |
| Sales expenses | 1 | -1 | -1 | -2 | -3 | |
| Administrative expenses | 1 | -2 | 0 | -4 | -9 | |
| Research and development expenses | 0 | 1 | 0 | - | -4 | |
| Other operating income and expenses | -5 | 1 | -35 | -28 | 36 | |
| Total | -23 | -14 | -86 | -107 | -59 |
The table below specifies amortization of acquisition-related intangible assets by function and other operating income and expenses.
| Amortization | ||||||
|---|---|---|---|---|---|---|
| of Customer | Amortization | |||||
| Amortization | Relationship | Amortization of | of intellectual | |||
| SEK m | Trademarks Assets Technology property |
Total | ||||
| Cost of goods sold | ||||||
| Q3 | 2021 | - | - | -12 | -6 | -18 |
| Q3 | 2020 | - | - | -11 | -6 | -17 |
| YTD | 2021 | - | - | -34 | -18 | -52 |
| YTD | 2020 | - | - | -34 | -17 | -51 |
| FY | 2020 | - | - | -45 | -23 | -68 |
| Sales expenses | ||||||
| Q3 | 2021 | -20 | -57 | - | - | -76 |
| Q3 | 2020 | -12 | -44 | - | - | -56 |
| YTD | 2021 | -43 | -150 | - | - | -193 |
| YTD | 2020 | -37 | -138 | - | - | -174 |
| FY | 2020 | -48 | -181 | - | - | -228 |
| Total Amortization of acquisition-related intangible assets | ||||||
| Q3 | 2021 | -20 | -57 | -12 | -6 | -94 |
| Q3 | 2020 | -12 | -44 | -11 | -6 | -73 |
| YTD | 2021 | -43 | -150 | -34 | -18 | -245 |
| YTD | 2020 | -37 | -138 | -34 | -17 | -226 |
| FY | 2020 | -48 | -181 | -45 | -23 | -296 |
Right-of-use assets information is specified below:
Total depreciation and amortization of SEK 226 m (191) includes depreciation of right-of-use assets of SEK -56 m (-41) in the third quarter of 2021.
| amortization | Q3 | Q3 | YTD | YTD | FY |
|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | 2021 | 2020 | 2020 |
| Depreciation and amortization | -226 | -191 | -619 | -601 | -789 |
| Add back depreciation related | |||||
| to right-of-use assets | 56 | 41 | 152 | 133 | 179 |
| Total | -170 | -150 | -467 | -469 | -610 |
| Right-of-use assets | Sep 30, | Sep 30, | Dec 31, |
|---|---|---|---|
| SEK m | 2021 | 2020 | 2020 |
| Buildings | 720 | 480 | 591 |
| Machinery, equipment and | |||
| other technical installations | 44 | 40 | 39 |
| Total | 765 | 520 | 630 |
| Date of | Included and | Previous year net | Number of | ||
|---|---|---|---|---|---|
| Acquisition | announcement | controlled from | Segment | sales⁽¹⁾ | employees⁽¹⁾ |
| Twin Eagles | Feb 2 | Feb 18 | Global | 34 MUSD | 130 |
| Valterra | April 22 | May 25 | Americas 94 MUSD | 550 | |
| Enerdrive | May 18 | June 1 | APAC | 28 MAUD | 45 |
| Front Runner | May 20 | Aug 3 | EMEA | 35 MUSD | 320 |
| Zamp Solar | May 26 | May 26 | Americas 14 MUSD | 65 | |
| Büttner Elektronik | July 2 | July 2 | EMEA | 13 MEUR | 17 |
| Cadac International Sept 16 | TBC⁽²⁾ | EMEA | 17 MEUR | 40 | |
| Igloo | Sept 17 | TBC⁽²⁾ | Global | 401 MUSD | 1,100 |
Dometic has acquired Twin Eagles, a leading US manufacturer of freestanding and built-in-grills and outdoor kitchen solutions for the Residential Outdoor market. The acquisition strengthens Dometic's offering in the fast-growing Residential Outdoor area in North America.
Dometic has acquired Valterra Products, a leading North American provider of service and aftermarket products to the RV and CPV industries, including solar power solutions. The acquisition of Valterra broadens Dometic's position in Service and Aftermarket through new products, a broader distribution network and strengthened market presence.
| Depreciation & | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| amortization | Q3 | Q3 | YTD | YTD | FY | Enerdrive | |||||
| SEK m | 2021 | 2020 | 2021 | 2020 | 2020 | Dometic has acquired Enerdrive, an Australian-based provider of | |||||
| Depreciation and amortization Add back depreciation related |
-226 | -191 | -619 | -601 | -789 | mobile power products for the outdoor market. The acquisition of Enerdrive strengthens Dometic's offering of mobile power |
|||||
| to right-of-use assets | 56 | 41 | 152 | 133 | 179 | products, including solar power solutions, in the Pacific region. | |||||
| Total | -170 | -150 | -467 | -469 | -610 | ||||||
| Zamp Solar Dometic has acquired Zamp Solar, a leading North American manufacturer of innovative and high-quality mobile solar power solutions for the outdoor market. The acquisition of Zamp Solar |
|||||||||||
| Right-of-use assets | Sep 30, | Sep 30, | Dec 31, | broadens Dometic's position in the fast-growing market for mobile | |||||||
| SEK m | 2021 | 2020 | 2020 | solar power solutions. | |||||||
| Buildings | 720 | 480 | 591 | Büttner Elektronik GmbH | |||||||
| Machinery, equipment and | Dometic has acquired Büttner Elektronik, a Germany based provider of mobile power solutions for the outdoor market. The |
||||||||||
| other technical installations | 44 | 40 | 39 | acquisition strengthens Dometic's offering of mobile power | |||||||
| Total | products, including solar power solutions, for the European | ||||||||||
| 765 | 520 | 630 | outdoor market. | ||||||||
| PARTIES No transactions between Dometic and related parties that have significantly affected the company's position and earnings took place during the first nine months 2021. NOTE 10 ACQUISITIONS AND DIVESTMENTS Announced acquisitions Jan-Sep 2021 |
Dometic has acquired Front Runner Vehicle Outfitters, a global provider of high-quality products for the outdoor market headquartered in South Africa. The acquisition strengthens Dometic's product offering and distribution network for the vehicle based outdoor market. Effect on group cash flow Effect on group cash flow amounts to SEK -2,672 m. |
||||||||||
| Date of | Included and | Previous year net | Number of | Purchase price allocation, | |||||||
| Acquisition | announcement | controlled from | Segment | sales⁽¹⁾ | employees⁽¹⁾ | preliminary | SEK m | ||||
| Twin Eagles Valterra |
Feb 2 April 22 |
Feb 18 May 25 |
Global | 34 MUSD Americas 94 MUSD |
130 550 |
Trademarks and tradenames | 100 | ||||
| Enerdrive | May 18 | June 1 | APAC | 28 MAUD | 45 | Other intangible assets | 809 | ||||
| Front Runner | May 20 | Aug 3 | EMEA | 35 MUSD | 320 | Tangible assets | 86 | ||||
| Zamp Solar Büttner Elektronik |
May 26 July 2 |
May 26 July 2 |
EMEA | Americas 14 MUSD 13 MEUR |
65 17 |
Right-of-use assets | 59 | ||||
| Cadac International Sept 16 | TBC⁽²⁾ | EMEA | 17 MEUR | 40 | Other non-current assets | 3 | |||||
| Igloo | Sept 17 | TBC⁽²⁾ | Global | 401 MUSD | 1,100 | Operating assets | 754 | ||||
| ⁽¹⁾Annual net sales and number of employees as disclosed in the press release when announced. | Cash and cash equivalents | 112 | |||||||||
| ⁽²⁾Not completed, expected closing during the fourth quarter 2021. | Provisions and other non-current liabilities | -70 | |||||||||
| Acquisitions | Leasing liabilities, long- and short-term | -59 | |||||||||
| 2021 | Operating liabilities | -223 | |||||||||
| The purchase price paid amounts to SEK 2,784 m on a debt and cash free basis excluding potential earn-out elements. The total |
Fair value of net assets | 1,571 | |||||||||
| purchase price amounts to SEK 3,967 m. | Goodwill | 2,396 | |||||||||
| In the purchase price allocation below, calculation of intangible | Purchase price | 3,967 | |||||||||
| assets and goodwill are only preliminary. The purchase price allocation for acquisitions are finalized no later that one year after |
Consideration transferred | ||||||||||
| the acquisition is made. | -2,784 | ||||||||||
| Cash and cash equivalents in acquired | |||||||||||
| Goodwill is justified by customer relationships, market position | companies | 112 | |||||||||
| and new future technologies. Acquisition-related costs in the consolidated income statement for the first nine months amount |
Cash flow effect on Group's cash and cash | ||||||||||
| to SEK 29 m. | equivalents at the acquisition | -2,672 | |||||||||
| The proportion of equity in all acquired companies are 100%. | |||||||||||
| YTD 2021 the combined acquisitions have affected consolidated | 2020 | ||||||||||
| net sales from the date of the acquisitions by SEK 995 m and | Dometic did not make any acquisitions or divestments in 2020. | ||||||||||
| operating profit before i.a.c. by SEK 160 m. | NOTE 11 SIGNIFICANT EVENTS AFTER THE | ||||||||||
| PERIOD | |||||||||||
| Twin Eagles Dometic has acquired Twin Eagles, a leading US manufacturer of |
Peter Kjellberg, Chief Marketing Officer, has decided to leave | ||||||||||
| freestanding and built-in-grills and outdoor kitchen solutions for | Dometic for another external assignment. | ||||||||||
| the Residential Outdoor market. The acquisition strengthens Dometic's offering in the fast-growing Residential Outdoor area in |
There have been no other significant events that have impacted the financial reporting after the balance sheet date. |
Dometic presents some financial measures in this interim report, which are not defined by IFRS. The company believes that these measures provide valuable additional information to investors and management for evaluating the company's financial performance, financial position and trends in the company's operations. It should be noted that these measures, as defined, may not be comparable to similarly titled measures used by other companies. These non-IFRS measures should not be considered as substitutes for financial reporting measures prepared in accordance with IFRS. See Dometic's website www. dometicgroup.com for the detailed reconciliation.
| Core working capital | Consists of inventories and trade receivables less trade payables. |
|---|---|
| EBITDA | Operating profit (EBIT) before Depreciation and Amortization. Depreciation also includes depreciation of right-of use assets in accordance with IFRS 16 Leases. |
| EBITDA margin | EBITDA divided by net sales. |
| Leverage | Net debt excluding pensions, leasing and accrued interest in relation to EBITDA before items affecting comparability and including acquisitions proforma. Any cash deposits with tax authorities are treated as cash in leverage calculation. |
| Net debt | Total borrowings including pensions and accrued interest less cash and cash equivalents. |
| Operating cash flow | Cash flow from operations after investments in fixed assets excluding income tax paid. Paid interest/received interest is a part of the net cashflow of financing. |
| Organic growth | Sales growth excluding acquisitions/divestments and currency translation effects. Quarters are calculated at comparable currency, applying the latest period average rate. |
| RoOC – Return on Operating Capital |
Operating profit (EBIT) divided by operating capital. Based on the operating profit (EBIT) for the four previous quarters, divided by the average operating capital for the previous four quarters, excluding goodwill and trademarks for the previous quarters. |
| % audited spend in LCC | Percentage of spend of direct material suppliers in low-cost countries, that has been audited during the last two years. |
|---|---|
| % female managers | Percentage of female managers in the company at the end of each period, with one quarter delay in reporting. |
| Capital expenditure | Expenses related to the purchase of tangible and intangible assets. |
| CO2 ton / net sales SEK m | CO2 emissions from own operations (scope 1 and 2) divided by currency adjusted net sales. Rolling 12 months with one month delay in reporting. Scope 1 = energy from fuel combustion used at operation sites (factories, warehouses, distribution centers), Scope 2 = electricity and district heating used at operation sites. (excl M&A) |
| EPS – Earnings per share | Net profit for the period divided by average number of shares. |
| FY 2020 | Financial Year ended December 31, 2020. |
| i.a.c. – items affecting comparability |
Items affecting comparability are events or transactions with significant financial effects, which are relevant for understanding the financial performance when comparing profit (loss) for the current period with previous periods. Items included are for example restructuring programs, expenses related to major revaluations, gains and losses from acquisitions or disposals of subsidiaries, or major transaction costs related to mergers and acquisitions, |
| Interest-bearing debt | Liabilities to credit institutions plus liabilities to related parties plus provisions for pensions. |
| LTIFR | Lost Time Injury Frequency Rate. Work related accidents with lost time >=1 day per million working hours. Rolling 12 months with one-month delay in reporting. |
| LTM | Last twelve months. |
| Net profit | Profit (loss) for the period. |
| OCI | Other Comprehensive Income. |
| OEM | Original Equipment Manufacturers. |
| Operating capital excluding goodwill and trademarks |
Interest-bearing debt plus equity less cash and cash equivalents, excluding goodwill and trademarks. |
| Operating profit (EBIT) | Operating profit (EBIT) before financial items and taxes. |
| Operating profit (EBIT) margin |
Operating profit (EBIT) divided by net sales. |
| Product development costs Research and development costs including capitalized spend. | |
| Q3 2021 | July to September 2021 for Income Statement. |
| Q3 2020 | July to September 2020 for Income Statement. |
| RoOC | Return on Operating Capital, excluding goodwill and trademarks. |
| Working capital | Core working capital plus other current assets less other current liabilities and provisions relating to operations. |
| YTD 2021 | Year to date. January to September 2021 for Income statement. |
| YTD 2020 | Year to date. January to September 2020 for Income statement. |
Analysts and media are invited to participate in a telephone conference at 10.00 (CEST),October 22, 2021, during which President and CEO, Juan Vargues and CFO, Stefan Fristedt, will present the report and answer questions. To participate in the webcast/telephone conference, please dial in five minutes prior to the start of the conference call. The webcast URL and presentation are available at www.dometicgroup.com.
Sweden: +46 8 505 583 50 UK: +44 333 300 9263 US: +1 646 722 4902
Rikard Tunedal Head of Investor Relations Phone: +46 730 56 97 35 E-mail: [email protected]
Hemvärnsgatan 15 SE-171 54 Solna, Sweden Phone: +46 8 501 025 00 www.dometic.com Corporate registration number 556829-4390
This information is information that Dometic Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 CEST on October 22, 2021.
This document is a translation of the Swedish version of the interim report. In the event of any discrepancy, the Swedish wording shall prevail.
Dometic is a global market leader in the mobile living industry. Millions of people around the world use Dometic products in outdoor, residential, and professional applications. Our motivation is to create smart, sustainable, and reliable products with aspirational design for an outdoor and mobile lifestyle in the areas of Food & Beverage, Climate, Power & Control, and Other Applications. Dometic employs approximately 7,700 people worldwide, had net sales of SEK 16.2 billion in 2020 and is headquartered in Stockholm, Sweden.
Some statements herein are forward-looking and the actual outcome could be materially different. In addition to the factors explicitly commented upon, the actual outcome could be materially affected by other factors, (a) changes in economic, market and competitive conditions, (b) success of business and operating initiatives, (c) changes in the regulatory environment and other government actions, (d) fluctuations in exchange rates and (e) business risk management.
November 30, 2021 January 27, 2022 April 13, 2022: April 28, 2022: July 15, 2022: October 26, 2022:
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