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Elanders

Quarterly Report Oct 21, 2019

3038_10-q_2019-10-21_8b987e78-216e-4849-ab8c-28b9213ffd24.pdf

Quarterly Report

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Press release from Elanders AB (publ) 2019-10-21

January - September

  • Net sales increased by six percent to MSEK 8,350 (7,852), of which two percentage points were organic growth.
  • EBITA increased to MSEK 424 (353), which corresponded to an EBITA margin of 5.1 (4.5) percent. Excluding the effects of implementing IFRS 16, EBITA increased to MSEK 398 (353) which corresponds to an EBITA margin of 4.8 (4.5) percent.
  • The result before tax increased to MSEK 275 (234). Excluding the effects of IFRS 16, the result before tax increased to MSEK 298 (234), which was an improvement of 27 percent.
  • The net result increased to MSEK 197 (150) or SEK 5.45 (4.17) per share. Excluding the effects of IFRS 16, the net result increased to MSEK 214 (150) which corresponds to SEK 5.95 (4.17) per share.
  • Operating cash flow increased to MSEK 1,080 (144). Excluding the effects of IFRS 16, operating cash flow increased to MSEK 556 (144).

Third quarter

  • Net sales increased by MSEK 8 to MSEK 2,825 (2,817), but the organic growth decreased by three percent.
  • EBITA increased to MSEK 169 (154), which corresponded to an EBITA margin of 6.0 (5.5) percent. Excluding the effects of IFRS 16, EBITA increased to 161 (154) which corresponds to an EBITA margin of 5.7 (5.5) percent.
  • The result before tax increased to MSEK 118 (114). Excluding the effects of IFRS 16, the result before tax increased to MSEK 127 (114), which was an improvement of 11 percent.
  • The net result increased to MSEK 88 (75) or SEK 2.43 (2.07) per share. Excluding the effects of IFRS 16, the net result increased to MSEK 94 (75) which corresponds to SEK 2.61 (2.07) per share.
  • Operating cash flow increased to MSEK 439 (52). Excluding the effects of IFRS 16, operating cash flow amounted to MSEK 260 (52).
Financial overview January - September Third quarter
2019 2019
excl.
IFRS 161)
2018 2019 2019
excl.
IFRS 161)
2018
Net sales, MSEK 8,350 8,350 7,852 2,825 2,825 2,817
EBITDA, MSEK 1,070 545 508 387 208 206
EBITA, MSEK 2) 424 398 353 169 161 154
EBITA-margin, % 5.1 4.8 4.5 6.0 5.7 5.5
Operating cash flow, MSEK 1,080 556 144 439 260 52
Net debt at the end of the period, MSEK 4,272 2,296 2,890 4,272 2,296 2,890
Net debt/EBITDA ratio 3) 3.0 3.2 4.3 2.8 2.8 3.5
Return on capital employed, % 3) 7.1 9.1 7.6 8.5 11.2 10.1

1) Excluding the effect from the transition to IFRS 16, which means that the same accounting principles as 2018 have been used. IFRS 16 is effective from 1 January 2019 and has affected the accounting of the Group's lease agreements. For more details, see page 13.

2) EBITA refers to Earnings before interest, taxes and amortization; operating result plus amortization of assets identified in conjunction with acquisitions.

3) Return ratios have been annualized (the result has been recalculated to correspond to the result for a 12-month period).

COMMENTS FROM THE CEO

Despite a somewhat waning demand in the third quarter from some of our customers I am pleased that once again we can present both an improved result and better margins. Due to this improvement and a strong cash flow in the third quarter we will soon achieve one of our financial goals - a net debt / EBITDA ratio under 3.0, both with and without the effects of the implementation of IFRS 16. The organic reduction in net sales in the third quarter was due in part to lower demand from customers in Automotive and Electronics and in part because we have consciously prioritized more profitable business. Demand in Fashion & Lifestyle, however, continued to be good during the quarter.

Net sales contracted in the business area Supply Chain Solutions during the quarter while profitability improved. This is the business area where we see the greatest potential to increase profitability by optimizing our processes, focusing on the most profitable segments and services as well as taking over more of our customers' value chains. In the third quarter we also reorganized our largest subsidiary LGI and reduced the number of divisions in order to better clarify result and customer ownership.

The positive trend in business area Print & Packaging Solutions continued during the third quarter with an improved result and organic growth even without our business with subscription boxes in the US that also showed strong organic growth. We increased our share of the contracting German print market and renewed our contract with one of our largest customers in Great Britain. However, certain operations in the US have run into some challenges of both lower net sales and results due to the trade war between the US and China. Fortunately this result reduction has been compensated by improvement in Europe.

During the year we have further invested in our Global Sales organization which primarily works with business on Group level that comprise broad sections of our business areas and at finding new customers for our operations both locally and globally. We are currently holding several interesting discussions with potential customers that we hope will lead to new business in the future.

Our forward-looking focus is on reducing debt while we continue to work on improving profitability. This will provide us with a more stable platform in the face of a possible downturn in the economy.

Magnus Nilsson President and Chief Executive Officer

GROUP

Our business

Elanders is a global supplier with a broad range of services of integrated solutions in supply chain management. The business is run through two business areas, Supply Chain Solutions and Print & Packaging Solutions. The Group has almost 7,000 employees and operates in some 20 countries on four continents. Our most important markets are China, Singapore, the United Kingdom, Sweden, Germany and the USA. Our major customers are active in the areas Automotive, Electronics, Fashion & Lifestyle, Industrial and Health Care & Life Science.

Net sales and result

January - September

Net sales increased by six percent to MSEK 8,350 (7,852) compared to the same period last year. Cleared of exchange rate fluctuations and effects of acquisitions and divestures of operations, net sales grew organically by two percent and was generated by both business areas. EBITA, i.e. the operating result adjusted for amortization on assets identified in conjunction with acquisitions, increased to MSEK 424 (353), which corresponded to an EBITA margin of 5.1 (4.5) percent. The improved result compared to last year is in part due to the fact that previously problematic customer projects in Supply Chain Solutions are now in balance, and in part the effects of implementing IFRS 16, where around MSEK 26 that refers to the interest component of rental and leasing costs is now recognized in net financial items instead of, as previously, in the operating result. The problematic customer projects had a substantial negative effect on the result in the third and fourth quarters of 2017 as well as the first quarter 2018. When results in foreign subsidiaries were converted into Swedish krona changes in exchange rates affected EBITA positively by MSEK 22. Excluding the effects of implementing IFRS 16, EBITA increased to MSEK 398 (353) and the EBITA margin to 4.8 (4.5) percent.

The result before tax increased to MSEK 275 (234). Excluding the effects of implementing IFRS 16, the result before tax increased to MSEK 298 (234), which was a 27 percent improvement in the result. The improvement primarily came from operations but lower financial costs also contributed to the higher result.

Third quarter

Net sales increased by MSEK 8 to MSEK 2,825 (2,817) compared to the same period last year. Cleared of exchange rate fluctuations and effects of acquisitions and divestures of operations, organic sales contracted by three percent. The decrease was mainly in Electronics, Industrial and Automotive while there was an increase in Fashion & Lifestyle. EBITA, i.e. the operating result adjusted for amortization on assets identified in conjunction with acquisitions, increased to MSEK 169 (154), which corresponded to an EBITA margin of 6.0 (5.5) percent. When results in foreign subsidiaries were converted into Swedish krona changes in exchange rates affected EBITA positively by MSEK 7. Excluding the effects of implementing IFRS 16, EBITA increased to MSEK 161 (154) and the EBITA margin to 5.7 (5.5) percent.

The result before tax increased to MSEK 118 (114) but was affected negatively by around MSEK 8 due to the implementation of IFRS 16. Excluding the effects of implementing IFRS 16, the result before tax increased to MSEK 127 (114), which was an 11 percent improvement in the result. The improvement came from both operations and lower financial costs but it was also boosted by positive effects in exchange rates.

Supply Chain Solutions

Elanders is one of the leading companies in the world in Global Supply Chain Management. Our services include taking responsibility for and optimizing customers' material and information flows, everything from sourcing and procurement combined with warehousing to after sales service.

January - September Third quarter Full year
Supply Chain Solutions 2019 2018 1) 2019 2018 1) 2018 1)
Net sales, MSEK 6,576 6,256 2,214 2,274 8,525
EBITDA, MSEK 882 392 322 166 540
EBITA, MSEK 346 285 141 130 401
EBITA-margin, % 5.3 4.6 6.4 5.7 4.7
Operating result, MSEK 311 244 130 116 347
Operating margin, % 4.7 3.9 5.8 5.1 4.1
Average number of employees 5,498 5,784 5,512 5,901 5,815

1) The figures for the comparison period have been adjusted to reflect the new structure of business areas. The figures for 2018 have not been adjusted for IFRS 16 since the transition to IFRS 16 have been based on the Modified retrospective approach.

2) EBITA refers to Earnings before interest, taxes and amortization; operating result plus amortization of assets identified in conjunction with acquisitions.

While demand in business area Supply Chain Solutions slowed somewhat during the quarter in Automotive, Electronics and Industrial it increased in Fashion & Lifestyle. All in all organic net sales contracted by six percent during the quarter through a combination of lower demand and conscious prioritization of more profitable business. Focus is now on increasing profitability in general and particularly in Industrial.

Excluding the effects of IFRS 16, EBITA increased by MSEK 40 to MSEK 325 (285) and the EBITA margin to 4.9 (4.6) percent during the period January – September 2019. EBITA increased by MSEK 4 to MSEK 134 (130) and the EBITA margin to 6.1 (5.7) percent during the quarter.

Print & Packaging Solutions

Through its innovative force and global presence the business area Print & Packaging offers cost-effective solutions that can handle customers' local and global needs for printed material and packaging, often in combination with advanced order platforms on the Internet, value-added services and just-in-time deliveries.

January - September Third quarter Full year
Print & Packaging Solutions 2019 2018 1) 2019 2018 1) 2018 1)
Net sales, MSEK 1,827 1,617 623 551 2,243
EBITDA, MSEK 212 129 74 42 205
EBITA, MSEK 103 81 37 27 142
EBITA-margin, % 5.6 5.0 5.9 4.8 6.3
Operating result, MSEK 97 74 35 24 133
Operating margin, % 5.3 4.6 5.6 4.4 5.9
Average number of employees 1,199 1,363 1,192 1,359 1,327

1) The figures for the comparison period have been adjusted to reflect the new structure of business areas. The figures for 2018 have not been adjusted for IFRS 16 since the transition to IFRS 16 have been based on the Modified retrospective approach.

2) EBITA refers to Earnings before interest, taxes and amortization; operating result plus amortization of assets identified in conjunction with acquisitions.

In business area Print & Packaging Solutions there was strong growth in operations in Germany and the subscription box business which meant that the business area on the whole grew organically by 11 percent during the nine month period. Even without subscription box operations the business area had organic growth of nearly five percent, which was a result of some new business and an increase in market shares, primarily on the highly competitive German market.

Excluding the effects of IFRS 16, EBITA increased by MSEK 17 to MSEK 98 (81) and the EBITA margin to 5.4 (5.0) percent during the period January – September 2019. EBITA increased by MSEK 8 to MSEK 35 (27) and the EBITA margin was 5.6 (4.8) percent during the quarter.

Important events during the period

Factoring

Since the fourth quarter 2018 Elanders has used factoring, i.e. sales of our accounts receivable, as part of our long-term financing. Working together with one of the Group's principle banks factoring is applied without recourse and comprises some of our business in Germany. The entire facility amounts to MEUR 50, of which at least 70 percent, i.e. MEUR 35, will probably be utilized. The financial terms for factoring are better than the rest of our financing. During the third quarter an additional MEUR 6 was utilized of the facility and a total of MEUR 20 has now been utilized compared to MEUR 8 at the beginning of the year.

Three business areas become two

As of 1 January 2019, Elanders has two business areas, Supply Chain Solutions and Print & Packaging Solutions since e-Commerce Solutions was integrated into Print & Packaging Solutions.

Investments and depreciation

January - September

Net investments for the period amounted to MSEK 108 (120) and was mainly related to production equipment. Depreciation, amortization and write-downs amounted to MSEK 687 (202). Excluding the effects from IFRS 16, depreciation, amortization and write-downs amounted MSEK 188 (202).

Third quarter

For the quarter net investments amounted to MSEK 27 (41). Depreciation, amortization and writedowns amounted to MSEK 232 (68). Excluding the effects from IFRS 16, depreciation, amortization and write-downs amounted MSEK 61 (68).

Financial position, cash flow and financing

January - September

The operating cash flow increased to MSEK 1,080 (144) of which the effects of IFRS 16 were MSEK 524. The effect of IFRS 16 on operating cash flow refers primarily to the amortized portion of leasing fees that were previously included in the operating cash flow. This amortization is now included in the financing activities in cash flow. Excluding IFRS 16 effects, operating cash flow increased to MSEK 556 (144). The improvement was foremost related to decreased working capital.

Net debt increased to MSEK 4,272 compared to MSEK 2,539 at the beginning of the year. The change in net debt includes an increase of MSEK 2,043 attributable to the implementation of IFRS 16 and refers to adjustment of the opening balance. In addition to this, debt has increased by MSEK 199 due to changes in exchange rates since a large part of loans and leasing liabilities are in euros and a lesser amount in US dollars, which have both strengthened against the Swedish krona.

Excluding the effects of IFRS 16, net debt contracted to MSEK 2,296 compared to MSEK 2,539 at the beginning of the year. The change in net debt includes an increase of MSEK 101 attributable to changed exchange rates. Leverage, i.e. net debt / EBITDA for a rolling 12-month period, excluding IFRS 16 effects, is now down to 3.0 (4.4). Including effects from IFRS 16 and with an extrapolation of the effects over a twelve-month period this net debt / EBITDA is also around 3.0.

Third quarter

The operating cash flow increased to MSEK 439 (52), of which the effects of IFRS 16 were MSEK 179. The effect of IFRS 16 on operating cash flow refers primarily to the amortized portion of leasing fees that were previously included in the operating cash flow. This amortization is now included in the financing activities in cash flow. Excluding IFRS 16 effects, operating cash flow increased to MSEK 260 (52). The improvement was foremost related to decreased working capital.

Personnel

January - September

The average number of employees during the period was 6,708 (7,158), whereof 153 (190) in Sweden. The decrease in the number of employees is mainly attributable to employees in the operations divested in 2018. At the end of the period the Group had 6,704 (7,246) employees, whereof 153 (160) in Sweden.

Third quarter

The average number of employees during the quarter was 6,716 (7,271), whereof 154 (175) in Sweden.

PARENT COMPANY

The parent company has provided intragroup services. The average number of employees during the period was 11 (11) and at the end of the period 11 (11).

OTHER INFORMATION

Elanders' offer

Elanders offers integrated and customized solutions for handling all or part of our customers' supply chain. The Group can take complete responsibility for complex and global deliveries that may include purchasing, storage, configuration, production and distribution. We also offer managing ordering solutions, payment flows and aftermarket services for our customers.

The services are provided by business-minded employees who, with their expertise and aided by intelligent IT solutions, contribute to developing our customers' offers which are often totally dependent on efficient product, component and service flows as well as traceability and information. In addition to our offer to the B2B market the Group sells photo products directly to consumers via our own brands, fotokasten and myphotobook.

Goal and strategy

Elanders' overall goal is to be a leader in global solutions in supply chain management with a world class integrated offer. Our strategy is to work in niches in each business area where the company can attain a leading position in the market. We will achieve this goal by being best at meeting customers' demands for efficiency and delivery. Acquisitions play an important role in our company's development and provide competence, broader product and service offers and enlarge our customer base.

Risks and uncertainties

Elanders divides risks into circumstantial risk (the future of our products/services and business cycle sensitivity), financial risk (currency, interest, financing and credit risks) as well as business risk (customer concentration, operational risks, risks in operating expenses as well as contracts and disputes). These risks, together with a sensitivity analysis, are described in detail in the Annual Report 2018. Circumstances in the world around us since the Annual Report was published are not believed to have caused any significant risks or influenced the way in which the Group works with these compared to the description in the Annual Report 2018.

Seasonal variations

The Group's net sales, and thereby income, are affected by seasonal variations. Historically the fourth quarter has been somewhat stronger than the other quarters.

Transaction with related parties

The following significant transactions with related parties have occurred during the period:

  • One of the members of the Board, Erik Gabrielson, is a partner in the law firm Vinge, which provides the company with legal services.
  • Related parties to Peter Sommer, a member of Group Management and Managing Director of Elanders GmbH, own shares in a property where Elanders GmbH runs most of its operations.

Remuneration is considered on par with the market for all of these transactions.

Events after the balance sheet date

No significant events have occurred after the balance sheet date until the day this report was signed.

Forecast

No forecast is given for 2019.

Accounting principles

The quarterly report for the Group has been prepared in accordance with the Annual Accounts Act and IAS 34 Interim Financial Reporting and for the parent company in accordance with the Annual Accounts Act. The same accounting principles and calculation methods as those in the last Annual Report have been used, except for the standards with mandatory effective date 1 January 2019, where the significant differences for the Group are presented below.

Leases

International Accounting Standards Boards (IASB) has issued a new standard, IFRS 16 "Leases", which is effective from 1 January 2019. The standard concerns the accounting of operating lease agreements where the Group has large commitments in terms of rental contracts for premises and leasing of machinery and equipment as well as vehicles. The transition to IFRS 16 has been based on the Modified retrospective approach, which means that the comparison periods have not been adjusted for IFRS 16. The standard has had a significant effect on the Group's total assets and liabilities and the effects on opening balances as of 1 January 2019 are presented on page 13 in this report. Furthermore, the above application means that the figures for the current year will not be fully comparable with previous years.

The new accounting principles in short; The leases are recognized as a right-of-use asset with a corresponding lease liability. Short-term leases and leases for which the underlying asset is of low value are exempted. Each lease payment is divided into amortization and financial cost. The financial cost is allocated over the lease term, so that each reporting period is charged with an amount corresponding to a fixed interest rate for the liability recognized under each period. The Group's lease liabilities are recognized at the present value of the future lease payments. Discounting of the future lease payments are made with the interest rate implicit in the lease, if this rate can easily be determined. Otherwise, the Group's incremental borrowing rate is applied.

The Group's right-of-use assets are recognized at cost, and initially comprise the present value of the lease liability, adjusted for lease payments made at or before the commencement date. Restoration costs are included in the asset if a corresponding provision for restoration costs exist. The right-of-use asset is depreciated on a straight-line basis over the asset's useful life or the lease term, whichever is the shortest.

Nomination committee for the Annual General Meeting 2020

The nomination committee for the Annual General Meeting on 28 April 2020 is as follows:

Carl Bennet, Chair Carl Bennet AB
Hans Hedström Carnegie Funds
Carl Gustafsson Didner & Gerge Funds
Fredrik Carlsson Svolder
Sophie Nachemson-Ekwall Representative from the smaller shareholders

Shareholders who would like to submit proposals to Elanders' 2020 Nomination Committee, can contact the Nomination Committee by e-mail at [email protected] or by mail: Elanders AB, Att: Nomination Committee, Flöjelbergsgatan 1C, SE-431 35 Mölndal, Sweden.

Annual General Meeting 2020

Elanders AB's Annual General Meeting will be held on April 28, 2020, Gothia Towers, Mässans gata 24, Gothenburg, Sweden. Shareholders wishing to have a matter addressed at the Annual General Meeting can submit their proposal to Elanders' Board Chairman by e-mail: [email protected], or by mail: Elanders AB, Flöjelbergsgatan 1C, SE-431 35 Mölndal, Sweden. To ensure inclusion in the notice and thus in the Annual General Meeting's agenda, proposals must be received by the company not later than February 28, 2020.

Financial calendar

Q4 2019 28 January 2020
Annual Report 2019 20 March 2020
Q1 2020 28 April 2020
Annual General Meeting 2020 28 April 2020
Q2 2020 15 July 2020
Q3 2020 22 October 2020

Conference call

In connection to the issuing of the Quarterly Report for the third quarter 2019 Elanders will hold a Press and Analysts conference call on October 21 at 15:00 CET, hosted by President and CEO Magnus Nilsson and CFO Andréas Wikner.

To join this event, please use the below Click to Join link 5-10 minutes prior to start time, where you will be asked to enter your phone number and registration details. Our Event Conferencing system will call you on the phone number you provide and place you into the event. Please note that the Click To Join link will be active 15 minutes prior to the event.

CLICK TO JOIN

Use the Click to Join option above for the easiest way to join your conference or use one of the access numbers below:

Sweden: +46 (0)8 5033 6546 Germany: +49 (0)69 2222 10763 UK: +44 (0)330 336 9401 USA: +1 929-477-0338

Participant Passcode: 707987

Agenda

  • 14:50 Conference number is opened
  • 15:00 Presentation of quarterly results
  • 15:20 Q&A
  • 16:00 End of the conference

During the conference call a presentation will be held. To access the presentation, please use this link:

https://www.elanders.com/presentations

AUDITOR'S REPORT

Elanders AB (publ) corp. reg. no. 556008-1621

Introduction

We have reviewed the condensed interim financial information (interim report) of Elanders AB as of 30 September 2019 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.

Scope of 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.

Conclusion

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.

Gothenburg, 21 October 2019

PricewaterhouseCoopers AB

Magnus Willfors Tomas Hilmarsson Authorized Public Accountant Authorized Public Accountant Auditor in Charge

Contact information

Further information can be found on Elanders' website www.elanders.com or requested via e-mail [email protected].

Questions concerning this report can be put to:

Magnus Nilsson Andréas Wikner Elanders AB (publ) Phone +46 31 750 07 50 Phone +46 31 750 07 50 Flöjelbergsgatan 1 C

President and CEO Chief Financial Officer (Company ID 556008-1621) 431 35 Mölndal, Sweden Phone +46 31 750 00 00

This document is a translation of the Swedish original. In the event of any discrepancies between this translation and the Swedish original, the latter shall prevail.

GROUP

Group - Income Statements

January - September Third quarter Full year
MSEK 2019 2018 2019 2018 2018
Net sales 8,350 7,852 2,825 2,817 10,742
Cost of products and services sold -7,163 -6,831 -2,397 -2,435 -9,330
Gross profit 1,187 1,021 429 382 1,412
Sales and administrative expenses -834 -762 -288 -259 -1,034
Other operating income 41 70 17 23 111
Other operating expenses -11 -24 -2 -8 -30
Operating result 383 305 156 138 459
Net financial items -109 -71 -37 -24 -93
Result after financial items 275 234 118 114 366
Income tax -78 -84 -30 -39 -108
Result for the period 197 150 88 75 259
Result for the period attributable to:
- parent company shareholders 193 147 86 73 254
- non-controlling interests 4 3 2 2 5
Earnings per share, SEK 1) 2) 5.45 4.17 2.43 2.07 7.18
Average number of shares, in thousands 35,358 35,358 35,358 35,358 35,358
Outstanding shares at the end of the year, in thousands 35,358 35,358 35,358 35,358 35,358

1) Earnings per share before and after dilution.

2) Earnings per share calculated by dividing the result for the period attributable to parent company shareholders by the average number of outstanding shares during the period.

Group - Statements of Comprehensive Income

January - September Third quarter Full year
MSEK 2019 2018 2019 2018 2018
Result for the period 197 150 88 75 259
Items that will not be reclassified to
the income statement
Remeasurements after tax -0 -0 -0 -0 1
Items that will be reclassified to the income
statement
Translation differences after tax 149 114 77 -37 121
Hedging of net investment abroad after tax -18 -29 -10 3 -33
Other comprehensive income 131 85 67 -34 88
Total comprehensive income for the period 328 235 155 41 347
Total comprehensive income attributable to:
- parent company shareholders 324 232 153 40 342
- non-controlling interests 4 3 2 1 5

Group - Statements of Cash Flow

Full year
2019 2018 2019 2018 2018
275 234 118 114 366
687 156 245 92 213
-79 -101 -15 -36 -127
117 -197 65 -137 3
1,000 92 414 33 455
-161
24
-1
-137
-115
-44
-66
-104 -93 - - -93
-782 -179 -250 -60 -318
111 -208 136 -68 0
722 679 721 596 679
55 37 30 -19 43
888 509 888 509 722
2,665
-
199 124 76 -21 121
- - - - 41
-509 101 -391 -4 -288
4,272 2,890 4,272 2,890 2,539
538
-102
-5
-2
-108
-68
-505
-104
2,539
2,043
1,080
January - September
-120
-
-
-120
-86
-34
34
2,665
-
144
-26
-
-2
-27
-23
-173
-54
4,587
-
439
Third quarter
-41
-
-
-41
-29
-12
-19
2,915
-
52

Group – Statements of Financial Position

30 Sep. 31 Dec.
MSEK 2019 2018 2018
Assets
Intangible assets 3,320 3,230 3,218
Tangible assets 2,692 815 789
Other fixed assets 278 253 267
Total fixed assets 6,290 4,298 4,274
Inventories 457 413 468
Accounts receivable 1,735 2,040 1,762
Other current assets 560 636 511
Cash and cash equivalents 888 509 722
Total current assets 3,641 3,598 3,463
Total assets 9,931 7,896 7,737
Equity and liabilities
Equity 2,931 2,596 2,707
Liabilities
Non-interest-bearing long-term liabilities 201 207 199
Interest-bearing long-term liabilities 3,845 186 2,442
Total long-term liabilities 4,046 393 2,642
Non-interest-bearing short-term liabilities 1,639 1,694 1,569
Interest-bearing short-term liabilities 1,315 3,213 819
Total short-term liabilities 2,954 4,907 2,388
Total equity and liabilities 9,931 7,896 7,737

Group – Statements of Changes in Equity

January - September Full year
MSEK 2019 2018 2018
Opening balance 2,707 2,453 2,453
Dividend to parent company shareholders -103 -92 -92
Dividend to non-controlling interests -1 -1 -1
Total comprehensive income for the period 328 235 347
Closing balance 2,931 2,596 2,707
Attributable to:
- parent company shareholders 2,918 2,587 2,697
- non-controlling interests 13 8 10

Quarterly report January – September 2019

Effect of applying IFRS 16

IFRS 16 "Leases" is effective from 1 January 2019 and affect the accounting of the Group's lease agreements where there are large commitments in terms of rental contracts for premises and leasing of machinery and equipment. The transition to IFRS 16 is based on the Modified retrospective approach. The standard has a significant effect on the Group's total assets and liabilities and the effects on opening balances 1 January 2019, income statement first quarter 2019 and a reconciliation of reported operating lease obligations are presented below. The effect of applying IFRS 16 deviate from the preliminary effects presented in the annual report related to some minor adjustments in the assumptions.

Closing
balance
Opening
balance
31 December Effect 1 January
MSEK 2018 IFRS 16 2019
Fixed assets 4,274 2,043 6,317
Current assets 3,463 - 3,463
Fixed assets 7,737 2,043 9,780
Equity 2,707 - 2,707
Long-term liabilities 2,642 1,444 4,085
Short-term liabilities 2,388 599 2,987
Total equity and liabilities 7,737 2,043 9,780
MSEK Jan - Sep
2019
Effect
IFRS 16
Jan – Sep
2019
excl effect
IFRS 16
Jan - Sep
2018
Net sales 8,350 - 8,350 7,852
EBITDA 1,070 -525 545 508
Operating result 383 -26 357 305
Result after financial items 275 24 298 234
Result for the period 197 17 214 150
MSEK Third
quarter
2019
Effect
IFRS 16
Third
quarter
2019
excl effect
IFRS 16
Third
quarter
2018
Net sales 2,825 - 2,825 2,817
EBITDA 387 -179 208 206
Operating result 156 -9 147 138
Result after financial items 118 8 127 114
Result for the period 88 6 94 75
MSEK Reconciliation leases
from IAS 17 to IFRS 16
Operating lease obligations as of 31 December 2018 2,046
Discounting effect to net present value -190
Short term and assets of low value exceptions -81
Effect from extension options 268
Effect on the lease liability as of 1 January 2019 2,043
Finance leases per 31 December 2018 147
Lease liability according to IFRS 16 as of 1 January 2019 2,190

The Group's average discount rate used for transition is 3.1 percent. The discount rate for the various agreements is in the range of 2.5 to 7.35 percent and is dependent on the currency, jurisdiction and the contract length.

Segment reporting

The two business areas are reported as reportable segments, since this is how the Group is governed and the President has been identified as the highest executive decision-maker. The operations within each reportable segment have similar economic characteristics and resemble each other regarding the nature of their products and services, production processes and customer types. Sales between segments are made on market terms.

Until 31 December 2018 Elanders had three business areas, Supply Chain Solutions, Print & Packaging Solutions and e-Commerce Solutions. As of 1 January 2019, e-Commerce Solutions was integrated into Print & Packaging Solutions and the Swedish operations that was earlier included in Print & Packaging Solutions is now included in Supply Chain Solutions. In 2018, the Swedish operations had net sales of MSEK 398.

The comparison periods have been adjusted to reflect the current segments.

Net sales per segment

January - September Third quarter Full year
MSEK 2019 2018 2019 2018 12 months 2018
Supply Chain Solutions 6,576 6,256 2,214 2,274 8,844 8,525
Print & Packaging Solutions 1,827 1,617 623 551 2,453 2,243
Group functions 28 35 9 12 40 46
Eliminations -81 -57 -21 -19 -97 -73
Group net sales 8,350 7,852 2,825 2,817 11,240 10,742

Operating result per segment

January - September Third quarter Last Full year
MSEK 2019 2018 2019 2018 12 months 2018
Supply Chain Solutions 311 244 130 116 414 346
Print & Packaging Solutions 97 74 35 24 156 133
Group functions -25 -13 -9 -2 -32 -21
Group operating result 383 305 156 138 537 459

Recalculated quarters 2018 – Net sales per segment

MSEK First
quarter
Second
quarter
Third
quarter
Fourth
quarter
Full year
Supply Chain Solutions 1,906 2,077 2,274 2,269 8,525
Print & Packaging Solutions 523 544 551 626 2,243
Group functions 11 12 12 12 46
Eliminations -18 -20 -20 -17 -73
Group net sales 2,422 2,613 2,817 2,890 10,742

Recalculated quarters 2018 – Operating result per segment

MSEK First
quarter
Second
quarter
Third
quarter
Fourth
quarter
Full year
Supply Chain Solutions 46 82 116 102 346
Print & Packaging Solutions 24 25 24 59 133
Group functions -3 -7 -2 -8 -21
Group operating result 68 100 138 153 459

Disaggregation of revenue

Revenue has been divided into geographic markets, main revenue streams and customer segments since these are the categories the Group uses to present and analyze revenue in other contexts. Income for each category is presented per reportable segment. The Group's customer contracts are easy to identify and products and services in a contract are largely connected and dependent on each other, and therefore part of an integrated offer.

Main revenue streams are presented based on the internal names used in the Group. Sourcing & Procurement services refer to the purchase and procurement of products for customers as well as handling the flows connected to these products. Freight and transportation services refer to revenue from freight and transportation with our own trucks as well as pure freight forwarding. Other supply chain services such as fulfilment, kitting, warehousing, assembly and after sales services are presented under Other contract logistics services. Other work/services refer to pure print services and other services that do not fit into any of the first three categories.

Intra-group invoicing regarding group functions is reported net in net sales to group companies.

For comparability between the quarters, adjustments have been made regarding historical figures for net sales per customer segment due to that some customers were moved between the customer segments.

January - September

Supply Chain
Solutions
Print & Packaging
Solutions
Total
MSEK 2019 2018 2019 2018 2019 2018
Total net sales 6,576 6,256 1,827 1,617 8,403 7,873
Less: net sales to group companies -14 -13 -38 -9 -52 -22
Net sales 6,561 6,243 1,789 1,608 8,350 7,852
Supply Chain Print & Packaging
Solutions Solutions Total
MSEK 2019 2018 2019 2018 2019 2018
Customer segments
Automotive 1,641 1,588 297 259 1,938 1,847
Electronics 2,704 2,454 33 24 2,737 2,478
Fashion & Lifestyle 959 934 543 386 1,502 1,320
Health Care & Life Science 177 167 37 37 214 204
Industrial 751 749 493 517 1,244 1,266
Other 329 351 386 385 714 736
Net sales 6,561 6,243 1,789 1,608 8,350 7,852
Main revenue streams
Sourcing and procurement services 1,954 1,744 - - 1,954 1,744
Freight and transportation services 1,873 1,993 306 206 2,178 2,199
Other contract logistics services 2,530 1,970 282 252 2,812 2,222
Other work/services 205 537 1,201 1,151 1,407 1,687
Net sales 6,561 6,243 1,789 1,608 8,350 7,852
Geographic markets
Europe 4,140 4,048 1,153 1,058 5,293 5,106
Asia 2,082 1,880 9 57 2,091 1,937
North and South America 333 274 621 464 955 738
Other 6 42 5 29 11 71
Net sales 6,561 6,243 1,789 1,608 8,350 7,852

Third quarter

Supply Chain
Solutions
Print & Packaging
Solutions
Total
MSEK 2019 2018 2019 2018 2019 2018
Total net sales 2,214 2,274 623 551 2,837 2,825
Less: net sales to group companies -5 -4 -6 -4 -11 -8
Net sales 2,209 2,270 616 547 2,825 2,817
Supply Chain Print & Packaging
Solutions Solutions Total
MSEK 2019 2018 2019 2018 2019 2018
Customer segments
Automotive 546 566 91 90 637 655
Electronics 910 961 12 6 922 967
Fashion & Lifestyle 327 351 194 136 521 488
Health Care & Life Science 65 56 12 12 77 68
Industrial 259 244 169 164 428 408
Other 102 92 138 139 240 231
Net sales 2,209 2,270 616 547 2,825 2,817
Main revenue streams
Sourcing and procurement services 708 681 - - 708 681
Freight and transportation services 623 701 106 73 729 774
Other contract logistics services 821 700 105 82 925 783
Other work/services 57 188 406 392 463 579
Net sales 2,209 2,270 616 547 2,825 2,817
Geographic markets
Europe 1,382 1,416 393 358 1,775 1,775
Asia 698 739 2 18 700 757
North and South America 127 103 219 160 346 263
Other 2 11 2 11 4 22
Net sales 2,209 2,270 616 547 2,825 2,817

Last 12 months and full year 2018

Supply Chain
Solutions
Print & Packaging
Solutions
Total
Last Full year Last Full year Last Full year
MSEK 12 months 2018 12 months 2018 12 months 2018
Total net sales 8,844 8,525 2,453 2,243 11,297 10,768
Less: net sales to group companies -19 -17 -39 -9 -58 -26
Net sales 8,826 8,508 2,414 2,234 11,240 10,742
Supply Chain Print & Packaging
Solutions Solutions Total
Last Full year Last Full year Last Full year
MSEK 12 months 2018 12 months 2018 12 months 2018
Customer segments
Automotive 2,169 2,115 371 333 2,540 2,449
Electronics 3,704 3,455 75 65 3,779 3,520
Fashion & Lifestyle 1,297 1,271 712 555 2,008 1,826
Health Care & Life Science 223 212 52 53 275 265
Industrial 1,012 1,010 628 652 1,640 1,662
Other 422 445 576 576 998 1,020
Net sales 8,826 8,508 2,414 2,234 11,240 10,742
Main revenue streams
Sourcing and procurement services 2,601 2,391 20 20 2,621 2,411
Freight and transportation services 2,549 2,670 394 294 2,943 2,964
Other contract logistics services 3,339 2,778 362 333 3,701 3,111
Other work/services 337 668 1,638 1,587 1,975 2,256
Net sales 8,826 8,508 2,414 2,234 11,240 10,742
Geographic markets
Europe 5,559 5,467 1,584 1,490 7,143 6,957
Asia 2,816 2,614 12 60 2,828 2,674
North and South America 434 374 805 648 1,239 1,022
Other 17 53 13 37 30 89
Net sales 8,826 8,508 2,414 2,234 11,240 10,742

Net sales per quarter

2019 2018
Third Second First Fourth Third Second
MSEK quarter quarter quarter quarter quarter quarter
Customer segments
Automotive 637 648 652 602 655 613
Electronics 922 857 958 1,042 967 813
Fashion,&,Lifestyle 521 512 469 506 488 431
Health Care & Life Science 77 65 73 61 68 73
Industrial 428 404 413 396 408 447
Other 240 234 241 284 231 235
Net,sales, 2,825 2,719 2,806 2,890 2,817 2,613

Quarterly report January – September 2019

Financial assets and liabilities measured at fair value

The financial instruments recognized at fair value in the Group's report on financial position are derivatives identified as hedging instruments. The derivatives consist of forward contracts and are used for hedging purposes. Valuation at fair value of forward contracts is based on published forward rates on an active market. All derivates are therefore included in level 2 in the fair value hierarchy. Since all the financial instruments recognized at fair value are included in level 2 there have been no transfers between valuation levels.

Derivative instruments in hedge accounting relationships recognized at fair value is presented under other current assets and non-interest bearing short-term liabilities. These items gross are below MSEK 1 both per 30 September 2019 and the comparison periods.

The fair value of other financial assets and liabilities valued at their amortized purchase price is estimated to be equivalent to their book value.

Divestiture of operations in 2018

In October 2018 Elanders signed a contract with the Edelmann Group to transfer its Beijing, China operations in Print & Packaging Solutions to Edelmann. This unit had nearly 170 employees and annual net sales of around MSEK 80. The deal was concluded in the fourth quarter and had a positive effect on cash flow of about MSEK 23 and a minor negative effect on the operating result.

In November 2018 Elanders' subsidiary LGI signed a contract with Adecco for the divestiture of 51 percent of the shares in Logworks, Elanders' staffing services in Germany that employs around 500 people. The sales had a positive effect on cash flow of MSEK 1 and a minor positive effect on the result, and the deal was concluded in the fourth quarter.

Assets and liabilities in divestments

MSEK Book value in the Group
Tangible assets -17
Inventory -6
Accounts receivable -33
Other current assets -6
Cash and cash equivalents -41
Accounts payable 15
Other non-interest-bearing liabilities -24
Total -64
Cash and cash equivalents received 65
Effect on cash and cash equivalents for the group 24

PARENT COMPANY

Parent Company – Income Statements

January - September Third quarter
MSEK 2019 2018 2019 2018 2018
Net sales 28 35 9 12 41
Operating expenses -54 -51 -18 -14 -60
Operating result -26 -16 -9 -2 -19
Net financial items 57 29 15 20 18
Result after financial items 31 13 6 18 -1
Income tax -1 -6 1 -3 -6
Result for the period 30 7 7 15 -7

Parent Company - Statements of Comprehensive Income

January - September Third quarter Full year
MSEK 2019 2018 2019 2018 2018
Result for the period 30 7 7 15 -7
Other comprehensive income - - - - -
Total comprehensive income for the period 30 7 7 15 -7

Parent Company - Balance Sheets

30 Sep. 31 Dec.
MSEK 2019 2018 2018
Assets
Fixed assets 4,645 4,520 4,423
Current assets 202 364 508
Total assets 4,847 4,884 4,930
Equity, provisions and liabilities
Equity 1,576 1,662 1,649
Provisions 3 3 3
Long-term liabilities 2,362 66 2,187
Short-term liabilities 906 3,153 1,092
Total equity, provisions and liabilities 4,847 4,884 4,930

Parent Company - Statements of Changes in Equity

January - September
MSEK 2019 2018 2018
Opening balance 1,649 1,747 1,747
Dividend -103 -92 -92
Total comprehensive income for the period 30 7 -7
Closing balance 1,576 1,662 1,649

QUARTERLY DATA

2019
Q3
2019
Q2
2019
Q1
2018
Q4
2018
Q3
2018
Q2
2018
Q1
2017
Q4
2017
Q3
Net sales, MSEK 2,825 2,719 2,806 2,890 2,817 2,613 2,422 2,584 2,355
EBITDA, MSEK 387 349 334 217 206 168 134 151 104
EBITA, MSEK 169 132 123 169 154 116 83 103 55
EBITA-margin, % 6.0 4.8 4.4 5.9 5.5 4.4 3.4 4.0 2.3
Operating result, MSEK 156 118 110 153 138 100 68 86 40
Operating margin, % 5.5 4.3 3.9 5.3 4.9 3.8 2.8 3.3 1.7
Result after financial items, MSEK 118 84 73 132 114 74 46 68 20
Result after tax, MSEK 88 59 50 108 75 42 34 45 14
Earnings per share, SEK 1) 2.43 1.62 1.40 3.01 2.07 1.15 0.95 1.24 0.39
Operating cash flow, MSEK 439 251 390 393 52 127 -34 5 -6
Cash flow per share, SEK2) 11.70 6.54 10.05 10.27 0.94 2.85 -1.17 2.14 0.23
Depreciation and write-downs, MSEK 232 231 224 64 68 68 67 65 64
Net investments, MSEK 27 53 28 17 41 41 38 104 54
Goodwill, MSEK 2,539 2,497 2,476 2,439 2,440 2,466 2,429 2,337 2,261
Total assets, MSEK 9,931 9,823 9,749 7,737 7,896 7,850 7,684 7,409 7,085
Equity, MSEK 2,931 2,776 2,818 2,707 2,596 2,554 2,559 2,453 2,365
Equity per share, SEK 82.52 78.20 79.38 76.28 73.16 72.02 72.17 69.21 66.88
Net debt at end of the period, MSEK 4,272 4,587 4,358 2,539 2,890 2,915 2,834 2,665 2,597
Capital employed, MSEK 7,203 7,363 7,176 5,246 5,486 5,469 5,392 5,118 4,961
Return on total assets, % 3) 7.3 5.3 5.3 8.0 7.0 6.3 5.1 4.8 2.3
Return on equity, % 3) 12.1 8.2 7.2 16.1 11.4 6.4 5.4 7.3 2.3
Return on capital employed, % 3) 8.5 6.5 6.1 11.4 10.1 7.3 5.2 6.8 3.2
Debt/equity ratio 1.5 1.7 1.6 0.9 1.1 1.1 1.1 1.1 1.1
Equity ratio, % 29.5 28.3 28.9 35.0 32.9 32.5 33.3 33.1 33.4
Interest coverage ratio 4) 4.3 4.6 4.9 5.3 4.7 3.7 3.8 4.1 4.5
Number of employees at the end of 6,704 6,764 6,788 6,652 7,246 7,170 7,085 6,997 6,708
the period

1) There is no dilution.

2) Cash flow per share refers to cash flow from operating activities.

3) Return ratios have been annualized (the result has been recalculated to correspond to the result for a 12-month period).

4) Interest coverage ratio calculation is based on a moving 12-month period.

FIVE YEAR OVERVIEW – JANUARY - SEPTEMBER

2019 2018 2017 2016 2015
Net sales, MSEK 8,350 7,852 6,758 3,956 3,113
EBITA, MSEK 424 353 269 245 197
Result after tax, MSEK 197 150 120 138 101
Earnings per share, SEK 1) 2) 5.45 4.17 3.41 4.89 3.58
Cash flow from operating activities per share, SEK 2) 28.29 2.59 -3.95 8.35 1.18
Equity per share, SEK 2) 82.52 73.16 66.88 56.93 51.19
Return on equity, % 3) 9.2 11.6 6.7 12.0 9.7
Return on capital employed, % 3) 7.1 7.6 6.1 10.4 10.4
EBITA-margin, % 5.1 4.5 4.0 6.2 6.3
Operating margin, % 4.6 3.9 3.3 5.6 5.8
Average number of shares, in thousands 2) 35,358 35,358 35,358 28,224 28,224

1) There is no dilution

2) Historic number of shares and historic key ratios have been adjusted for the bonus issue element in the new share issue in 2016.

3) Return ratios have been annualized (results are recalculated to correspond to a 12-month period).

FIVE YEAR OVERVIEW – THIRD QUARTER

2019 2018 2017 2016 2015
Net sales, MSEK 2,825 2,817 2,355 1,878 1,041
EBITA, MSEK 169 154 55 112 69
Result after tax, MSEK 88 75 14 58 36
Earnings per share, SEK 1) 2) 2.43 2.07 0.39 2.04 1.27
Cash flow from operating activities per share, SEK 2) 11.70 0.94 0.23 6.30 -1.87
Equity per share, SEK 2) 82.52 73.16 66.88 56.93 51.19
Return on equity, % 3) 12.1 11.4 2.3 14.8 10.0
Return on capital employed, % 3) 8.5 10.1 3.2 11.7 10.9
EBITA-margin, % 6.0 5.5 2.3 6.0 6.7
Operating margin, % 5.5 4.9 1.7 5.3 6.2
Average number of shares, in thousands 2) 35,358 35,358 35,358 28,224 28,224

1) There is no dilution.

2) Historic number of shares and historic key ratios have been adjusted for the bonus issue element in the new share issue in 2016.

3) Return ratios have been annualized (results are recalculated to correspond to a 12-month period).

FIVE YEAR OVERVIEW – FULL YEAR

2018 2017 2016 2015 2014
Net sales, MSEK 10,742 9,342 6,285 4,236 3,730
EBITDA, MSEK 725 563 516 428 292
EBITA, MSEK 523 371 384 313 194
Result after financial items, MSEK 366 230 300 259 140
Result after tax, MSEK 259 165 217 175 88
Earnings per share, SEK 1) 2) 7.18 4.65 7.35 6.18 3.27
Cash flow from operating activities per share, SEK 2) 12.88 -1.81 11.19 9.52 6.03
Equity per share, SEK 2) 76.28 69.21 68.19 52.72 47.75
Dividends per share, SEK 2) 2.90 2.60 2.60 2.07 1.03
EBITA-margin, % 4.9 4.0 6.1 7.4 5.2
Return on total assets, % 6.6 4.3 6.7 8.2 5.9
Return on equity, % 9.8 6.8 12.4 12.1 7.4
Return on capital employed, % 8.5 6.2 10.0 12.6 8.7
Net debt/EBITDA ratio, times 3.5 4.7 4.3 1.7 3.1
Debt/equity ratio, times 0.9 1.1 0.9 0.5 0.7
Equity ratio, % 35.0 33.1 35.6 42.0 37.8
Average number of shares, in thousands 2) 35,358 35,358 29,555 28,224 26,825

1) There is no dilution.

2) Historic number of shares and historic key ratios have been adjusted for the bonus issue element in the new share issues in 2014 and 2016.

RECONCILIATION ALTERNATIVE PERFORMANCE MEASURES – QUARTERLY DATA

MSEK 2019
Q3
2019
Q2
2019
Q1
2018
Q4
2018
Q3
2018
Q2
2018
Q1
2017
Q4
2017
Q3
Operating result 156 118 110 153 138 100 68 86 40
Depreciation, amortization and write 232 231 224 64 68 68 67 65 64
downs
EBITDA 387 349 334 217 206 168 134 151 104
Operating result 156 118 110 153 138 100 68 86 40
Amortization of assets identified in
conjunction with acquisitions 14 14 13 16 16 16 16 17 15
EBITA 169 132 123 169 154 116 83 103 55
Cash flow from operating activities 414 231 355 363 33 101 -41 76 8
Net financial items 37 34 37 21 24 26 22 19 20
Paid tax 15 39 26 26 36 42 23 14 21
Net investments -27 -53 -28 -17 -41 -41 -38 -104 -54
Operating cash flow 439 251 390 393 52 127 -34 5 -6
Average total assets 9,877 9,786 9,764 7,817 7,873 7,767 7,547 7,247 7,072
Average cash and cash equivalents -805 -726 -726 -616 -552 -574 -616 -620 -581
Average non-interest-bearing liabilities -1,789 -1,790 -1,805 -1,835 -1,844 -1,763 -1,676 -1,587 -1,529
Average capital employed 7,283 7,270 7,233 5,366 5,477 5,430 5,255 5,040 4,962
Annualized operating result 623 472 438 614 552 399 271 344 159
Return on capital employed, % 8.5 6.5 6.1 11.4 10.1 7.3 5.2 6.8 3.2
Interest-bearing long-term liabilities 3,845 3,931 3,833 2,442 186 2,575 2,559 2,504 2,477
Interest-bearing short-term liabilities 1,315 1,377 1,256 819 3,213 935 826 840 681
Cash and cash equivalents -888 -721 -731 -722 -509 -596 -552 -679 -561
Net debt at the end of the period 4,272 4,587 4,358 2,539 2,890 2,915 2,834 2,665 2,597

RECONCILIATION ALTERNATIVE PERFORMANCE MEASURES – JANUARY - SEPTEMBER

MSEK 2019 2018 2017 2016 2015
Operating result 383 305 222 222 181
Amortization of assets identified in conjunction
with acquisitions 41 48 47 24 16
EBITA 424 353 269 245 197
Average total assets 9,834 7,710 6,997 4,327 3,558
Average cash and cash equivalents -780 -584 -632 -542 -414
Average non-interest-bearing liabilities -1,807 -1,760 -1,504 -959 -825
Average capital employed 7,248 5,366 4,862 2,826 2,319
Annualized operating result 511 407 296 295 241
Return on capital employed, % 7.1 7.6 6.1 10.4 10.4

RECONCILIATION ALTERNATIVE PERFORMANCE MEASURES – THIRD QUARTER

MSEK 2019 2018 2017 2016 2015
Operating result 156 138 40 100 64
Amortization of assets identified in conjunction
with acquisitions 14 16 15 12 5
EBITA 169 154 55 112 69
Average total assets 9,877 7,873 7,072 5,112 3,526
Average cash and cash equivalents -805 -552 -581 -558 -389
Average non-interest-bearing liabilities -1,789 -1,844 -1,529 -1,141 -794
Average capital employed 7,283 5,477 4,962 3,412 2,344
Annualized operating result 623 552 159 398 256
Return on capital employed, % 8.5 10.1 3.2 11.7 10.9

RECONCILIATION ALTERNATIVE PERFORMANCE MEASURES – FULL YEAR

MSEK 2018 2017 2016 2015 2014
Operating result 459 308 344 292 175
Depreciation, amortization and write-downs 266 255 172 136 117
EBITDA 725 563 516 428 292
Operating result 459 308 344 292 175
Amortization of assets identified in conjunction
with acquisitions 64 63 40 21 19
EBITA 523 371 384 313 194
Average total assets 7,792 7,154 5,132 3,559 3,017
Average cash and cash equivalents -595 -639 -573 -418 -336
Average non-interest-bearing liabilities -1,799 -1,532 -1,131 -816 -671
Average capital employed 5,398 4,983 3,428 2,325 2,010
Annualized operating result 459 308 344 292 175
Return on capital employed, % 8.5 6.2 10.0 12.6 8.7

DEFINITIONS

Average number of employees The number of employees at the end of each month divided
by number of months.
Average number of shares Weighted average number of shares outstanding during the
period.
Capital employed Total assets less liquid funds and non-interest bearing
liabilities.
Debt/equity ratio Net debt in relation to reported equity, including non
controlling interests.
Earnings per share Result for the period attributable to parent company
shareholders divided by the average number of shares.
EBIT Earnings before interest and taxes; operating result.
EBITA Earnings before interest, taxes and amortization; operating
result plus amortization of assets identified in conjunction
with acquisitions.
EBITDA Earnings before interest, taxes, depreciation and
amortization; operating result plus depreciation, amortization
and write-downs of intangible assets and tangible fixed
assets.
Equity ratio Equity, including non-controlling interests, in relation to total
assets.
Interest coverage ratio Operating result plus interest income divided by interest
costs.
Net debt Interest bearing liabilities less liquid funds.
Operating cash flow Cash flow from operating activities and investing activities,
adjusted for paid taxes and financial items.
Operating margin Operating result in relation to net sales.
Return on capital employed (ROCE) Operating result in relation to average capital employed.
Return on equity Result for the year in relation to average equity.
Return on total assets Operating result plus financial income in relation to average
total assets.

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