Quarterly Report • Dec 5, 2018
Quarterly Report
Open in ViewerOpens in native device viewer
Net sales Q2
| 2018/19 Aug–Oct |
2017/18 Aug–Oct |
2018/19 May-Oct |
2017/18 May-Oct |
2017/18 May-Apr |
|
|---|---|---|---|---|---|
| 3 mths | 3 mths | 6 mths | 6 mths | 12 mths | |
| Net sales, SEK m. | 2,151.4 | 1,863.7 | 4,164.1 | 3,700.9 | 7,301.2 |
| Growth, % | 15.4 | 5.3 | 12.5 | 8.4 | 6.4 |
| Operating profit, SEK m. | 188.9 | 143.9 | 333.9 | 276.8 | 349.6 |
| Operating margin, % | 8.8 | 7.7 | 8.0 | 7.5 | 4.8 |
| Profit after tax, SEK m. | 126.3 | 101.4 | 198.3 | 177.0 | 230.1 |
| Earnings per share, SEK | 2.43 | 1.95 | 3.81 | 3.40 | 4.43 |
| Operating cash flow per share, SEK | 1.67 | 1.92 | 3.11 | 3.34 | 4.32 |
During the second quarter, growth was recorded at 15.4 percent, of which 9.1 percent was organic. All regions reported good growth, especially North America and Asia. Our gross margin showed a degree of improvement through price increases and good capacity utilisation. Operating profit improved to SEK 189 million, as against SEK 144 million in the same quarter last year.
Market developments were favourable in Systemair's major sales regions during the second quarter. In the Nordic market, growth was good in Sweden, Norway and Finland, while sales were more or less unchanged in Denmark. In Western Europe, several major markets developed strongly, including Spain, Italy, Portugal, the Netherlands and Germany, while sales declined in Austrian, Switzerland and France. Overall, in Eastern Europe, the market situation is good, only sales in Russia were practically unchanged during the quarter. The North American market continues to perform well and Systemair's acquisition of Greentek fits closely with our strategy of continued expansion in the region. In the Middle East and Asia, the growth was strong in India and Turkey during the second quarter.
In September, Systemair acquired Koolair, a Spanish maker of air distribution products. The company has sales of around EUR 30 million, half of which go to export markets. The acquisition considerably strengthens Systemair's market share in air distribution in Europe. The takeover was completed on 1 November.
In August, Systemair acquired the Canadian company Greentek, a major manufacturer of residential air handling units for the US and Canadian market. The company has sales of around CAD 10 million and the production has been relocated to Systemair's current production site.
During the period, Systemair continued to invest in machinery in a number of factories in order to maintain and raise productivity. However, the pace of investment is lower than last year, when substantial investments were made.
Activity and demand remain strong in several of our markets and so we are confident of further positive developments.
The ventilation market continues to move at an increasingly fast pace towards energy-efficient system solutions based on intelligent and smart products. Even the current public discussion of the importance of high quality indoor air contributes to a stronger interest from existing and new customers. Our ongoing projects and investments in IT, digitalization and system solutions will provide us with an excellent platform for further growth. Our customers will get improved access and understanding of our products and opportunities to connect different products to optimized systems.
Roland Kasper President and CEO
Group sales for the second quarter of the 2018/19 financial year totalled SEK 2,151.4 million (1,863.7), an increase of 15.4 percent from the same period in the preceding year.
Adjusted for foreign exchange effects, acquisitions and disposals, net sales grew 9.1 percent. Growth in acquired operations was 0.9 percent, while foreign exchange effects increased sales by 5.4 percent during the period.
During the second quarter, sales in the Nordic region were up 9 percent on the same period in the preceding year. The Swedish, Finnish and Norwegian markets reported good growth during the quarter. Adjusted for foreign exchange effects, acquisitions and disposals, sales rose 6 percent.
During the quarter, sales in the West European market were 16 percent higher than in the corresponding period last year. Adjusted for foreign exchange effects and acquisitions, sales rose by 5 percent. Several markets in the region performed well during the period, including Greece, Spain, Italy and Portugal, while sales declined in Austria, Switzerland and France.
Sales in Eastern Europe and the CIS rose by 12 percent during the quarter. Adjusted for foreign exchange effects and acquisitions, the increase was 7 percent. Sales in Russia were more or less unchanged from the same quarter last year. The Russian market accounts for 5 percent of Systemair's total sales, as against 6 percent in the previous year. Other major markets showing growth during the period include the Czech Republic, Slovenia and Slovakia.
Sales in the North and South America region during the quarter were 20 percent higher than in the same period last year. Both the Canadian and US markets performed well in the quarter. Adjusted for foreign exchange effects and acquisitions, sales increased by 4 percent in the region.
Sales in Other markets rose by 28 percent compared with the same period in the preceding year. Adjusted for foreign exchange effects and acquisitions, sales rose by 41 percent. Sales in Turkey, India and South Africa increased during the quarter but declined in parts of the Middle East.
| 2018/19 | 2017/18 | 2018/19 | 2017/18 | |||||
|---|---|---|---|---|---|---|---|---|
| Aug–Oct | Aug–Oct | Sales – | Of which, | May-Oct | May-Oct | Sales – | Of which, | |
| 3 mths | 3 mths | change | organic | 6 mths | 6 mths | change | organic | |
| Nordic region | 499.7 | 456.8 | 9% | 6% | 908.4 | 840.0 | 8% | 5% |
| Western Europe | 881.8 | 757.1 | 16% | 5% | 1,750.7 | 1,506.6 | 16% | 6% |
| Eastern Europe & the CIS |
333.7 | 298.4 | 12% | 7% | 657.6 | 589.6 | 12% | 7% |
| North and South America |
189.0 | 157.6 | 20% | 4% | 371.7 | 338.6 | 10% | 1% |
| Other markets | 247.2 | 193.8 | 28% | 41% | 475.7 | 426.1 | 12% | 20% |
| Total | 2,151.4 | 1,863.7 | 15% | 9% | 4,164.1 | 3,700.9 | 13% | 7% |
Net sales per quarter compared with same period previous years
Net sales
Systemair AB Interim report Q2 2018/19 3 (18)
The gross profit for the second quarter was SEK 731.6 million (631.4), an increase of 15.9 percent over the same period in the preceding year. The gross margin rose to 34.0 percent (33.9).
The operating profit for the second quarter totalled SEK 188.9 million (143.9), up 31.3 percent on the same period in the preceding year. The Company's operating margin was 8.8 percent (7.7). The operating profit includes restructuring costs of total SEK 9.2 million, mostly attributed to the German companies TTL and Menerga.
Selling and administration expenses for the quarter totalled SEK 540.7 million (475.0), a rise of SEK 65.7 million, or 13.8 percent. Acquisitions and disposals accounted for SEK 7.3 million of the quarter's costs. As a result, selling and administration expenses for comparable units rose by SEK 58.4 million, or 12.3 percent.
Selling expenses were charged with SEK 12.5 million (4.8) for anticipated and confirmed impairment losses on trade receivables, of which an individual customer in the Middle East accounted for SEK 4.1 million. During the quarter, costs related to acquisitions totalled SEK 0.8 million (0.9).
Net financial items ended the second quarter at SEK -11.1 million (-0.2). The impact of foreign exchange on long-term receivables, loans and bank balances totalled SEK -3.5 million (+4.2) net. The foreign exchange impact was caused mainly through weakening of the Turkish lira. Interest expenses for the quarter totalled SEK -8.1 million (-5.1).
Estimated tax for the quarter totalled SEK -51.5 million (-42.3), corresponding to an effective tax rate of 28.9 percent based on profit after net financial items.
Systemair has received a negative tax ruling on the 30th of November 2018 from the Swedish board for advance tax rulings. The ruling relates to losses carried forward and a deferred tax asset totalling SEK 25.9 million for the financial year 2017/18. Systemair intends to appeal to the Supreme administrative Court since Management believe that it is probable to reach success. The accounted deferred tax asset has therefore not been adjusted for in the closing per 31st of October.
In September, Systemair acquired the Spanish company Koolair. Koolair is a leading manufacturer of air distribution products. Export markets account for 50 percent of the company's sales. Production in Mostoles on the outskirts of Madrid is highly automated. Sales for the company total around EUR 30 million. The takeover was completed on 1 November 2018.
In August, Systemair acquired the Canadian company Greentek, formerly a division of the Imperial Manufacturing Group Inc. Greentek is based in Moncton, approximately 50 kilometres from Systemair's production facility at Bouctouche, in the Province of New Brunswick. The company develops, manufactures and sell high-quality air handling units with heat recovery for homes in the Canadian and US markets. Annual sales are valued at around CAD 10 million. The production has
Operating margin per quarter, relative to the same period in previous years
been relocated to the Bouctouche facility.
In July, Systemair acquired 49.9 percent of the shares in Burda WTG GmbH, Germany. Burda sells and develops radiant heaters for outdoor use. The company has a number of patents and smart technical solutions. Systemair has an option to acquire the remaining shares in the company within three years. Burda has sales of EUR 2.8 million.
In May 2018, Systemair signed an agreement to sell its Norwegian subsidiary Reftec A/S. The company has been acquired by its former management and will continue to operate as exclusive distributor of Systemair's air conditioning products in the Norwegian market. In 2017/18, Reftec posted net sales of NOK 28.9 million, with an operating profit of NOK -2.0 million. As a result of the sale, a goodwill impairment of SEK 11.2 million was incurred and recognised in the fourth quarter of 2017/18. No further impact on profit arose as a result of the disposal.
If the companies acquired during the period had been consolidated as of 1 May 2018, net sales for the period May through October 2018 would have totalled approximately SEK 4,189.7 million. The operating profit for that period would have totalled approximately SEK 336.5 million. For more information regarding acquisitions and disposals and their impact on the Group's cash and cash equivalents, see Note 3 in this interim report.
Investments for the quarter, excluding disposals, totalled SEK 105.3 million (121.1), including SEK 26.2 million (95.2) in new construction and machinery. The investments consisted in large part of investments in buildings and machinery in the factories in Turkey, Germany and the Czech Republic. Acquisitions and formerly withheld purchase considerations totalled SEK 64.5 million (21.8) for the quarter. Depreciation of noncurrent assets amounted to SEK 57.2 million (48.8).
The average number of employees in the Group was 5,321 (5,053). At the end of the period, Systemair had 5,578 employees (5,408), 170 more than one year previous. New employees were recruited chiefly at Systemair in Spain (42), Germany (27), Turkey (27), India (21), the Czech Republic (16), Slovenia (15), Slovakia (14), Sweden (13) and South Africa (12). Personnel cutbacks were made at Frivent Austria (-39) and Malaysia (-11). The acquisition of Syneco of Switzerland and Greentek of Canada brought 27 employees into the Group while the disposal of Reftec in Norway reduced the number of employees by 13.
Cash flow from operating activities during the quarter, before changes in working capital, totalled SEK 196.3 million (191.9). Changes in working capital, mainly consisting of higher trade accounts receivable, had an impact of SEK -109.5 million (-92.3) on cash flow. The cash flow from financing operations totalled SEK +212.5 million net (-50.0). At the end of the period, the Group's net indebtedness was SEK 1,954.2 million (1,585.9). The consolidated equity/assets ratio was 39.7 percent (43.2) at the end of the period.
No significant events have occurred since the end of the period.
Systemair is exposed to operational and financial risks in its business. Operational risks include the international nature of the operations, tough competition and the sensitivity of the construction industry to the business cycle. The financial risks that Systemair has identified in its business consist of foreign exchange risk, borrowing and interest rate risk, as well as credit risk and liquidity risk. The material risks and uncertainties affecting Systemair are described in more detail in the Company's 2017/18 Annual Report. No significant change occurred in the risk situation during the period.
Systemair's significant transactions with related parties concern ebmpapst AB and ebmpapst Mulfingen GmbH & Co. KG. Transactions with related parties are described in detail in Note 37 to the accounts in the Annual Report for the 2017/18 financial year. During the period, no change worthy of mention occurred in the scale of these transactions.
The Parent Company's net sales for the period under review totalled SEK 66.6 million (53.8). Operating profit totalled SEK -33.5 million (-41.2). The company had 51 employees (47). The core business of the Parent Company is that of intra-Group services.
Systemair is a leading ventilation company with operations in 50 countries in Europe, North America, South America, the Middle East, Asia and Africa. The
company had sales of approximately SEK 7.3 billion in the 2017/18 financial year and approximately 5,600 employees. Systemair has reported an operating profit every year since 1974, when the company was founded. During the past 10 years, the Company's growth rate has averaged about 9 percent.
Systemair has well-established operations in growth markets. The Group's products are marketed under the Systemair, Frico, Fantech and Menerga brands. Systemair shares have been quoted on the Mid Cap List of the Nasdaq OMX Nordic Exchange in Stockholm since October 2007. The Group comprises about 70 companies.
The Company established operations in 1974 with a product concept, the circular duct fan, a design that considerably simplified the process of installation. We adopted the motto "the direct route", which has been developed from a product concept into a business philosophy. Our product range has expanded strongly to extend over a broad range of fans, air handling units, products for air distribution, air conditioning, air curtains and heating products.
Operating from the core values of simplicity and reliability, our business concept is to develop, manufacture and market high-quality ventilation products. On the basis of our business concept and with our customers in focus, our aim is to be seen as a company to rely on, with the emphasis on delivery reliability, availability and quality.
Availability is an important parameter in terms of our competitiveness, and we ensure effective control of our flow of goods, with owned production units, centralised warehouse facilities and an efficient ERP system. With modern production plants and our own sales companies around the world, we reach out directly to our customers.
The business model supports stability and development, and today we are a leading producer and supplier of ventilation products with our own production and own sales companies.
The following strategies create major strengths and competitive advantages that help us to achieve our goals.
Innovative product development and a broad
product range focusing on energy-efficient air handling products.
The information in this Interim Report is information that Systemair is required to disclose in accordance with the Swedish Securities Markets Act (lagen om värdepappersmarknaden) and/or the Swedish Financial Instruments Trading Act (lagen om handel med finansiella instrument). This information will be submitted for publication at 8.00 a.m. on 5 December 2018.
The undersigned affirm that this six-month report provides a true and fair survey of the Parent Company's and the Group's operations, financial position and profits, as well as describing the material risks and uncertainty facing the Parent Company and the companies included in the Group.
Skinnskatteberg, 4 December 2018 Systemair AB (publ)
| Roland Kasper | Gerald Engström |
|---|---|
| Chief Executive Officer | Chairman of the Board |
| Carina Andersson | Svein Nilsen |
| Director | Director |
| Hans Peter Fuchs | Patrik Nolåker |
| Director | Director |
| Åke Henningsson | Ricky Sten |
| Employee Representative | Employee Representative |
Interim Report Q3 2018/19 8.00 a.m., 13 March 2019 Year-end report Q4 2018/19 8.00 a.m., 11 June 2019 Interim report Q1 2019/20 1.00 p.m., 29 August 2019 Contact President and CEO Roland Kasper Telephone: +46 (0)222-440 13, +46 (0)730-94 40 13 E-mail: [email protected]
CFO Anders Ulff Telephone: +46 (0)222-440 09, +46 (0)70-577 40 09 E-mail: [email protected]
Systemair AB (publ) Co. Reg. No. 556160-4108 SE-739 30 Skinnskatteberg, Sweden Telephone: +46 (0)222-440 00 [email protected] www.systemair.com.
We have reviewed the condensed interim financial information (interim report) for Systemair as per 31 October 2018 and the six-month reporting period ending on that date. The preparation and fair presentation of the interim report in accordance with IAS 34 and the Annual Accounts Act are the responsibility of the Board of Directors and the Chief Executive Officer. Our responsibility is to express our opinion of 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 Financial Information Performed by the Independent Auditors 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. The emphasis and scope of a review differ considerably from that of an audit in accordance with International Standards on Auditing (ISA) and other generally accepted auditing practices in Sweden.
The procedures performed in a review do not enable us to obtain a level of assurance to become aware of all significant matters that could have been identified in an audit. As our opinion is based on a review, the level of assurance is not as high as that of an opinion expressed based on an audit.
Based on our review, nothing has come to our attention that causes us to believe that the interim report was not, in all material respects, prepared for the Group in accordance with IAS 34 and the Swedish Annual Accounts Act, and, for the Parent Company, in accordance with the Swedish Annual Accounts Act.
Stockholm, 4 December 2018 Ernst & Young AB
Åsa Lundvall Authorised Public Accountant
| Group Parent |
||||||||
|---|---|---|---|---|---|---|---|---|
| Company | ||||||||
| 2018/19 | 2017/18 | 2018/19 | 2017/18 | 2017/18 | 2017/18 | 2018/19 | 2017/18 | |
| Aug–Oct | Aug–Oct | May-Oct | May-Oct | Nov-Oct | May-Apr | May-Oct | May-Oct | |
| SEK m. | 3 mths | 3 mths | 6 mths | 6 mths | trailing 12 |
12 mths | 6 mths | 6 mths |
| Net sales | 2,151.4 | 1,863.7 | 4,164.1 | 3,700.9 | 7,764.4 | 7,301.2 | 66.6 | 53.8 |
| Cost of goods sold | -1,419.8 | -1,232.3 | -2,781.6 | -2,462.5 | -5,206.3 | -4,887.2 | - | - |
| Gross profit | 731.6 | 631.4 | 1,382.5 | 1,238.4 | 2,558.1 | 2,414.0 | 66.6 | 53.8 |
| Other operating income | 56.9 | 23.0 | 97.4 | 51.8 | 162.5 | 116.9 | 5.0 | 0.8 |
| Selling expenses | -449.3 | -392.1 | -878.4 | -778.5 | -1,752.6 | -1,652.7 | -28.0 | -26.1 |
| Administration expenses | -91.4 | -82.9 | -178.6 | -165.6 | -373.7 | -360.7 | -44.2 | -40.9 |
| Other operating expenses | -58.9 | -35.5 | -89.0 | -69.3 | -187.6 | -167.9 | -32.9 | -28.8 |
| Operating profit/loss | 188.9 | 143.9 | 333.9 | 276.8 | 406.7 | 349.6 | -33.5 | -41.2 |
| Net financial items | -11.1 | -0.2 | -46.6 | -27.1 | -35.9 | -16.4 | 272.4 | 241.6 |
| Profit/loss after financial items | 177.8 | 143.7 | 287.3 | 249.7 | 370.8 | 333.2 | 238.9 | 200.4 |
| Appropriations | - | - | - | - | - | - | -0.1 | 0.5 |
| Tax on profit for the period | -51.5 | -42.3 | -89.0 | -72.7 | -119.4 | -103.1 | 4.1 | 6.2 |
| Profit for the period | 126.3 | 101.4 | 198.3 | 177.0 | 251.4 | 230.1 | 242.9 | 207.1 |
| Attributable to: | ||||||||
| Parent Company shareholders | 125.9 | 101.4 | 198.5 | 177.0 | 252.0 | 230.5 | - | - |
| Non-controlling interests | 0.4 | - | -0.2 | - | -0.6 | -0.4 | - | - |
| Earnings per share, SEK1 | 2.43 | 1.95 | 3.81 | 3.40 | 4.83 | 4.43 | - | - |
| Statement of comprehensive income | ||||||||
| Profit for the period | 126.3 | 101.4 | 198.3 | 177.0 | 251.4 | 230.1 | 242.9 | 207.1 |
| Other comprehensive income Items that have been, or may later be, transferred to profit for the year: |
||||||||
| Translation differences | 15.9 | 33.5 | -47.5 | -20.4 | 96.8 | 123.9 | - | - |
| Impact of tax | 0.3 | 0.1 | 0.5 | 0.3 | 0.0 | -0.2 | - | - |
| Items that cannot be transferred to | ||||||||
| profit for the year: Revaluation of defined-benefit |
||||||||
| pensions, net after tax | - | - | - | - | -11.7 | -11.7 | - | - |
| Other comprehensive income | 16.2 | 33.6 | -47.0 | -20.1 | 85.1 | 112.0 | - | - |
| Total comprehensive income for the period |
142.5 | 135.0 | 151.3 | 156.9 | 336.5 | 342.1 | 242.9 | 207.1 |
| Attributable to: | ||||||||
| Parent Company shareholders | 142.1 | 135.0 | 151.5 | 156.9 | 337.1 | 342.5 | - | - |
| Non-controlling interests | 0.4 | - | -0.2 | - | -0.6 | -0.4 | - | - |
1) Not affected by dilution.
| Group Parent Company |
|||||
|---|---|---|---|---|---|
| SEK m. | 31 Oct 2018 | 31 Oct 2017 | 30 Apr 2018 | 31 Oct 2018 | 31 Oct 2017 |
| ASSETS | |||||
| Goodwill | 753.9 | 728.0 | 759.1 | 0.0 | 0.2 |
| Other intangible assets | 208.1 | 200.3 | 216.9 | 22.2 | 19.2 |
| Property, plant and equipment | 1,732.6 | 1,538.4 | 1,722.2 | 40.5 | 29.3 |
| Financial and other assets | 257.2 | 201.9 | 240.4 | 2,807.2 | 2,419.4 |
| Total non-current assets | 2,951.8 | 2,668.6 | 2,938.6 | 2,869.9 | 2,468.1 |
| Inventory | 1,437.7 | 1,181.5 | 1,399.4 | - | - |
| Short-term receivables | 1,897.6 | 1,582.2 | 1,632.4 | 1,514.3 | 1,264.5 |
| Cash and cash equivalents | 431.9 | 208.3 | 212.8 | - | - |
| Total current assets | 3,767.2 | 2,972.0 | 3,244.6 | 1,514.3 | 1,264.5 |
| Available-for-sale assets | - | - | 11.8 | - | - |
| TOTAL ASSETS | 6,719.0 | 5,640.6 | 6,195.0 | 4,384.2 | 3,732.6 |
| EQUITY AND LIABILITIES | |||||
| Equity | 2,664.9 | 2,434.2 | 2,620.3 | 2,012.9 | 2,045.6 |
| Untaxed reserves | - | - | - | 5.2 | 5.1 |
| Non-current liabilities, non-interest-bearing | 268.9 | 232.7 | 275.5 | - | - |
| Non-current liabilities, interest-bearing | 847.1 | 368.2 | 690.7 | 996.4 | 418.0 |
| Total non-current liabilities | 1,116.0 | 600.9 | 966.2 | 996.4 | 418.0 |
| Current liabilities, interest-bearing | 1,468.7 | 1,391.3 | 1,283.2 | 1,307.5 | 1,220.1 |
| Current liabilities, non-interest-bearing | 1,469.4 | 1,214.2 | 1,316.1 | 62.2 | 43.8 |
| Total current liabilities | 2,938.1 | 2,605.5 | 2,599.3 | 1,369.7 | 1,263.9 |
| Liabilities attributable to available-for-sale assets | - | - | 9.2 | - | - |
| TOTAL EQUITY AND LIABILITIES | 6,719.0 | 5,640.6 | 6,195.0 | 4,384.2 | 3,732.6 |
| 2018/19 | 2017/18 | 2018/19 | 2017/18 | 2017/18 | |
|---|---|---|---|---|---|
| Aug–Oct | Aug–Oct | May-Oct | May-Oct | May-Apr | |
| SEK m. | 3 mths | 3 mths | 6 mths | 6 mths | 12 mths |
| Operating profit/loss | 188.9 | 143.9 | 333.9 | 276.8 | 349.6 |
| Adjustment for non-cash items | 50.7 | 62.7 | 68.5 | 78.8 | 220.4 |
| Financial items | -7.3 | -4.0 | -14.0 | -9.6 | -23.9 |
| Income tax paid | -36.0 | -10.7 | -71.9 | -42.5 | -147.4 |
| Cash flow from operating activities before changes in working capital |
196.3 | 191.9 | 316.5 | 303.5 | 398.7 |
| Changes in working capital | -109.5 | -92.3 | -154.6 | -130.0 | -174.4 |
| Cash flow from operating activities | 86.8 | 99.6 | 161.9 | 173.5 | 224.3 |
| Cash flow from investing activities | -104.4 | -118.0 | -206.0 | -279.4 | -481.9 |
| Cash flow from financing activities | 212.5 | -50.0 | 268.6 | 79.2 | 218.8 |
| Cash flow for the period | 194.9 | -68.4 | 224.5 | -26.7 | -38.8 |
| Cash and cash equivalents at start of period | 234.3 | 270.0 | 213.3 | 241.8 | 241.8 |
| Translation differences, cash and cash equivalents | 2.7 | 6.7 | -5.9 | -6.8 | 9.8 |
| Cash and cash equivalents at close of period | 431.9 | 208.3 | 431.9 | 208.3 | 212.8 |
| 2018/19 May-Oct |
2017/18 May-Oct |
2017/18 May-Apr |
|||||
|---|---|---|---|---|---|---|---|
| SEK m. | Equity attributable to Parent Company shareholders |
Total equity | Equity attributable to Parent Company shareholders |
Total equity | Equity attributable to Parent Company shareholders |
Total equity | |
| Amount at beginning of year | 2,620.3 | 2,620.3 | 2,381.3 | 2,381.3 | 2,381.3 | 2,381.3 | |
| Dividend | -104.0 | -104.0 | -104.0 | -104.0 | -104.0 | -104.0 | |
| Revaluation of acquisition option |
-2.7 | -2.7 | - | - | 0.9 | 0.9 | |
| Comprehensive income | 151.3 | 151.3 | 156.9 | 156.9 | 342.1 | 342.1 | |
| Amount at end of period | 2,664.9 | 2,664.9 | 2,434.2 | 2,434.2 | 2,620.3 | 2,620.3 |
| 2018/19 Aug–Oct |
2017/18 Aug–Oct |
2018/19 May-Oct |
2017/18 May-Oct |
2017/18 May-Apr |
||
|---|---|---|---|---|---|---|
| 3 mths | 3 mths | 6 mths | 6 mths | 12 mths | ||
| Net sales | SEK m. | 2,151.4 | 1,863.7 | 4,164.1 | 3,700.9 | 7,301.2 |
| Growth | % | 15.4 | 5.3 | 12.5 | 8.4 | 6.4 |
| Operating profit/loss | SEK m. | 188.9 | 143.9 | 333.9 | 276.8 | 349.6 |
| Operating margin | % | 8.8 | 7.7 | 8.0 | 7.5 | 4.8 |
| Profit after net fin. items | SEK m. | 177.8 | 143.7 | 287.3 | 249.7 | 333.2 |
| Profit margin | % | 8.3 | 7.7 | 6.9 | 6.7 | 4.6 |
| Return on capital employed | % | 8.8 | 10.4 | 8.8 | 10.4 | 9.1 |
| Return on equity | % | 9.7 | 10.8 | 9.7 | 10.8 | 9.3 |
| Equity/assets ratio | % | 39.7 | 43.2 | 39.7 | 43.2 | 42.5 |
| Investments | SEK m. | 104.4 | 118.0 | 206.0 | 279.4 | 481.9 |
| Depreciation/Amortisation | SEK m. | 57.2 | 48.8 | 112.8 | 97.6 | 204.6 |
| Per share ratios | ||||||
| Earnings per share | SEK | 2.43 | 1.95 | 3.81 | 3.40 | 4.43 |
| Equity per share | SEK | 51.25 | 46.81 | 51.25 | 46.81 | 50.39 |
| Operating cash flow per share | SEK | 1.67 | 1.92 | 3.11 | 3.34 | 4.32 |
| No. of shares at end of period | No. | 52,000,000 | 52,000,000 | 52,000,000 | 52,000,000 | 52,000,000 |
| 2018/19 2017/18 |
2016/17 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Aug–Oct | May–Jul | Feb–Apr | Nov–Jan | Aug–Oct | May–Jul | Feb–Apr | Nov–Jan | Aug–Oct | ||
| Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | ||
| Net sales | SEK m. | 2,151.4 | 2,012.7 | 1,827.1 | 1,773.3 | 1,863.7 | 1,837.2 | 1,733.2 | 1,715.4 | 1,769.2 |
| Growth | % | 15.4 | 9.6 | 5.4 | 3.4 | 5.3 | 11.6 | 14.9 | 21.1 | 8.9 |
| Gross margin | % | 34.0 | 32.3 | 32.3 | 33.0 | 33.9 | 33.0 | 33.8 | 33.7 | 35.2 |
| Operating profit/loss | SEK m. | 188.9 | 144.9 | 5.2 | 67.7 | 143.9 | 132.9 | 47.7 | 105.1 | 153.2 |
| Operating margin | % | 8.8 | 7.2 | 0.3 | 3.8 | 7.7 | 7.2 | 2.8 | 6.1 | 8.7 |
| Return on capital employed | % | 8.8 | 8.2 | 9.1 | 9.3 | 10.4 | 10.8 | 12.0 | 11.9 | 10.5 |
| Return on equity | % | 9.7 | 8.9 | 9.3 | 10.2 | 10.8 | 11.4 | 12.6 | 12.9 | 11.6 |
| Equity/assets ratio | % | 39.7 | 42.2 | 42.5 | 43.9 | 43.2 | 44.0 | 44.6 | 45.5 | 43.9 |
| Basic equity per share | SEK | 51.25 | 50.56 | 50.39 | 47.34 | 46.81 | 46.22 | 45.79 | 44.46 | 45.35 |
| Basic earnings per share | SEK | 2.43 | 1.38 | 0.22 | 0.80 | 1.95 | 1.45 | 0.55 | 0.98 | 2.22 |
| Cash flow from operating activities per share |
SEK | 1.67 | 1.44 | -0.29 | 1.28 | 1.92 | 1.42 | -0.49 | 4.01 | 3.22 |
Systemair applies International Financial Reporting Standards (IFRS). This interim report was prepared for the group in accordance with the Swedish Annual Accounts Act, the Swedish Financial Reporting Board's recommendation RFR 1 and IAS 34 Interim Financial Reporting, and for the Parent Company in accordance with the Swedish Annual Accounts Act and RFR 2.
IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial instruments have been applied at Systemair since 1 May 2018. Neither IFRS 15 nor IFRS 9 has had any material impact on Systemair and no adjustment has been applied to historical figures. The following is a presentation of accounting policies in accordance with IFRS 15 and IFRS 9, in terms of their application by Systemair.
IFRS 15 Revenue from Contracts with Customers establishes a new regime for how and when a company must recognise revenue. It replaces all previously issued standards on revenue recognition. The new standard is based on a five-step model to be applied to contracts with customers. Under IFRS 15, revenue is to be recognised when a goods item or a service is transferred to a customer, which may occur over time or at a point in time. The revenue shall consist of the amount that the company expects to receive as payment for transferred goods or services. IFRS 15 applies to financial years commencing on or after 1 January 2018. Systemair adopted and applied the standard on 1 May 2018.
During the 2017/18 financial year, the Group assessed the effects of IFRS 15 in order to determine the differences between earlier revenue recognition principles and the new requirements under IFRS 15, as well as to prepare for implementation of the new standard within the Group. The overall conclusion is that the new revenue recognition standard does not have any material impact on Systemair's historical financial position. Consequently, Systemair will not be presenting any restatements for earlier periods.
Systemair's revenue is generated in the main from the manufacture and sale of ventilation products, together with servicing of ventilation products. The major share of sales meet the requirements for recognising revenue at a specific point in time, that is, when control of equipment passes to the customer. Revenue is recognised according to that principle and IFRS 15 will therefore not lead to any change in revenue accounting in this case. In the case of customer contracts fulfilled over time, revenue is to be recognised over time as the criteria set out in IFRS 15 are met. Systemair's view is that the contracts that meet the criteria for revenue recognition over time are already recognised over time, and consequently this has no material impact on the Group's revenue recognition.
Systemair provides maintenance services to customers via separate service agreements. Revenue from service activities is today already recognised over time, as the customer receives and uses the benefits provided, and IFRS 15 thus does not represent any difference from current principles. On sale of products, Systemair provides warranties that for the most part cover original product defects. In some cases, extended warranty periods are offered, but in view of what the warranty covers, the warranties provided are not regarded as additional service warranties. On that basis, warranties provided are not considered as separate performance obligations, but instead will continue to be recognised in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets. If, in a particular case, an extended warranty is regarded as a separate performance obligation, the associated revenue will be recognised over time.
IFRS 9 Financial Instruments applies to recognition of financial assets and liabilities. It replaces IAS 39 Financial Instruments: Classification and Measurement. As with IAS 39, financial assets are classified in various categories, some of which are measured at amortised cost and others at fair value. IFRS 9 introduces categories other than those described in IAS 39. Classification under IFRS 9 is based partly on the contractual cash flows of the instruments, and partly on the company's business model. IFRS 9 also introduces a new model for impairment losses on financial assets. In the case of financial liabilities, IFRS 9 largely accords with IAS 39. However, in the case of liabilities recognised at fair value, the portion of the change in fair value that is attributable to own credit risk is recognised in other comprehensive income, rather than in profit or loss, unless to do so would lead to inconsistency in accounting. Changes in criteria for hedge accounting may have the effect that more financial hedging strategies meet the requirements for hedge accounting under IFRS 9 than under IAS 39. IFRS 9 came into effect on 1 January 2018, or could be applied later, and has been applied by the Group and Parent Company since 1 May 2018. The Group's view is that the standard has no material impact on its accounting.
New or amended standards that have not yet entered into force
IFRS 16 Leases will supersede IAS 17 Leases from 1 January 2019 and will therefore be adopted by Systemair from 1 May 2019. The new standard requires lessees to recognise their obligation to pay lease fees as a lease liability on the balance sheet. The right to use the underlying asset during the lease term is recognised as an asset. Depreciation on the asset is recognised in profit and loss and interest on the lease liability. Lease fees paid are recognised partly as payment of interest and partly as amortisation of the lease liability. The standard exempts leases for periods of less than 12 months (short-term leases) and leases on low-value assets. Both reported non-current assets and financial liabilities are expected to increase. The income statement and financing activities in the cash flow statement will also be affected. The project to determine the effects of IFRS 16 is ongoing. Some reliable calculation of the outcome has not yet been completed.
The Group's revenue is generated in the main from the manufacture and sale of ventilation products, together with servicing of ventilation products. Total revenue for the quarter amounted to SEK 2,151.4 million (1,863.7), of which servicing of ventilation products accounted for SEK 76.6 million (71.0).
| 2018/19 | 2018/19 | |
|---|---|---|
| aug-okt | maj-okt | |
| SEK m. | 3 mån | 6 mån |
| Europe | ||
| Sale of goods recognised at a specific point in time | 1,657.7 | 3,229.0 |
| Sale of goods recognized over time | 10.1 | 16.3 |
| Service recognized over time | 74.6 | 138.0 |
| 1,742.4 | 3,383.3 | |
| Asia, Africa, America and the Middle East Sale of goods recognised at a specific point in time Sale of goods recognized over time Service recognized over time |
364.4 42.6 2.0 409.0 |
703.9 72.9 4.0 780.8 |
| Total | ||
| Sale of goods recognised at a specific point in time | 2,022.1 | 3,932.9 |
| Sale of goods recognized over time | 52.7 | 89.2 |
| Service recognized over time | 76.6 | 142.0 |
| 2,151.4 | 4,164.1 |
The disposal of the shares in Reftec A/S, Norway, may provisionally be analysed as follows:
| Total transaction price | SEK 2.7 m. |
|---|---|
| Disposed assets and liabilities | Total |
| Goodwill | 3.0 |
| Machinery and equipment | 0.5 |
| Deferred tax assets | 1.0 |
| Inventory | 1.4 |
| Other current assets | 5.5 |
| Cash and cash equivalents | 0.5 |
| Non-interest-bearing liabilities | -0.7 |
| Interest-bearing liabilities | -4.5 |
| Other operating liabilities | -4.0 |
| 2.7 |
The total impact on cash flow is SEK +2.2 million. As a result of the sale of the company, a goodwill impairment of SEK 11.2 million was incurred and recognised in the fourth quarter of 2017/18.
The purchase consideration the asset acquisition in Greentek, Canada, may provisionally be calculated as follows:
| Total historical cost, less transaction costs | SEK 64.5 m. |
|---|---|
| Identifiable net assets | Total |
|---|---|
| Goodwill | 12.4 |
| Brands and customer relationships | 24.3 |
| Machinery and equipment | 8.7 |
| Inventory | 19.0 |
| 64.5 |
The valuation of identified brands and customer relationships is preliminarily estimated.
The total cash flow impact from acquisitions is SEK -64.5 million. No transaction costs associated with the acquisition have been identified.
Brands and customer relationships have been stated at the net present value of future payment flows. The useful life of these assets has been estimated at 5 years.
The goodwill upon acquisition is attributable to the strong market position of the companies acquired, synergy effects expected to arise after the acquisition and the company's estimated future earning capacity.
Figures that are sufficiently reliable to calculate the effects from the acquisition of Koolair, Spain, have not yet been obtained. The takeover was completed on 1 November 2018. The agreed purchase price amounts to EUR 20 million.
The acquired companies' net sales from acquisition date to the end of the interim period amounted to SEK 9.6 million. The operating profit for the corresponding period amounts to SEK 8.4 million. If the acquired companies had been consolidated
from 1 May 2018, net sales for the period May to October 2018 would have amounted to approximately SEK 4,189.7 million. The operating profit for the same period would have amounted to approximately SEK 336.5 million.
Systemair's financial instruments consist of derivatives, trade accounts receivable, cash and cash equivalents, availablefor-sale financial assets, trade accounts payable, accrued supplier costs and interest-bearing liabilities. Liabilities to credit institutions carry variable interest rates or, in certain cases, fixed rates for a short period. Derivatives are measured at fair value via the income statement on the basis of input data corresponding to level 2 as defined in IFRS 13. Available-forsale financial assets are measured at fair value on the basis of input data corresponding to level 1 as defined in IFRS 13. Other financial assets and liabilities are short-term. For that reason, the fair values of all financial instruments are considered to equate approximately to the carrying amounts. Systemair has not recognised any financial assets and liabilities net.
The Group's operations are classified on a geographical basis and Systemair aggregates into the geographical segments of Europe and Asia, Africa, America and the Middle East. The market segment Europe accounts for the major share of Systemair's business. The Europe segment consists of a large number of markets. The legal entities within Europe work with each other in manufacturing and sales. The Company also judges that in every material respect similar economic conditions exist in the region, and so the legal entities within the region have been aggregated. Systemair further considers that accounting for the merged segments of Europe and Asia, Africa, America and the Middle East presents a clearer picture. The Parent Company is accounted for via a separate segment, Group-wide. The subsidiaries are merged on the basis of their legal domicile and consolidation takes place according to the same principles as for the Group as a whole.
| 2018/19 Aug–Oct |
2017/18 Aug–Oct |
2018/19 May-Oct |
2017/18 May-Oct |
2017/18 May-Apr |
|
|---|---|---|---|---|---|
| SEK m. | 3 mths | 3 mths | 6 mths | 6 mths | 12 mths |
| Europe | |||||
| Net sales, external | 1,742.4 | 1,530.5 | 3,383.3 | 2,975.8 | 5,959.5 |
| Net sales, intra-Group | 34.7 | 35.0 | 64.3 | 75.2 | 153.2 |
| Operating profit/loss | 194.7 | 159.4 | 316.2 | 280.0 | 459.0 |
| Operating margin, % | 11.2 | 10.4 | 9.3 | 9.4 | 7.7 |
| Profit after net fin. items | 195.9 | 157.9 | 340.6 | 282.1 | 474.4 |
| Profit margin, % | 11.2 | 10.3 | 10.1 | 9.5 | 8.0 |
| Assets | 3,624.9 | 2,860.5 | 3,624.9 | 2,860.5 | 3,432.6 |
| Investments | 19.2 | 90.3 | 101.8 | 185.6 | 352.6 |
| Depreciation/Amortisation | 47.7 | 41.8 | 95.0 | 83.7 | 175.6 |
| Asia, Africa, America and the Middle East | |||||
| Net sales, external | 409.0 | 333.2 | 780.8 | 725.1 | 1,341.7 |
| Net sales, intra-Group | 3.7 | 1.8 | 5.4 | 5.1 | 11.6 |
| Operating profit/loss | 20.1 | 12.3 | 47.0 | 38.5 | 26.0 |
| Operating margin, % | 4.9 | 3.7 | 6.0 | 5.3 | 1.9 |
| Profit after net fin. items | 2.6 | 17.9 | 6.5 | 28.8 | -17.5 |
| Profit margin, % | 0.6 | 5.4 | 0.8 | 4.0 | -1.3 |
| Assets | 1,021.1 | 811.0 | 1,021.1 | 811.0 | 905.1 |
| Investments | 69.4 | 1.4 | 85.5 | 7.8 | 22.9 |
| Depreciation/Amortisation | 6.9 | 5.7 | 12.7 | 11.3 | 23.2 |
| Group-wide | |||||
|---|---|---|---|---|---|
| Net sales, intra-Group | 31.5 | 26.5 | 66.6 | 53.8 | 106.9 |
| Operating profit/loss | -25.9 | -27.8 | -29.3 | -41.7 | -135.4 |
| Profit after net fin. items | -20.7 | -32.1 | -59.8 | -61.2 | -123.7 |
| Assets | 4,385.4 | 3,735.4 | 4,385.4 | 3,735.4 | 3,953.2 |
| Investments | 15.8 | 26.3 | 18.7 | 86.0 | 106.4 |
| Depreciation/Amortisation | 2.6 | 1.3 | 5.1 | 2.6 | 5.8 |
| Eliminations | |||||
| Net sales, intra-Group | -69.9 | -63.3 | -136.3 | -134.1 | -271.7 |
| Assets | -2,312.4 | -1,766.3 | -2,312.4 | -1,766.3 | -2,095.9 |
| Total | |||||
| Net sales, external | 2,151.4 | 1,863.7 | 4,164.1 | 3,700.9 | 7,301.2 |
| Operating profit/loss | 188.9 | 143.9 | 333.9 | 276.8 | 349.6 |
| Operating margin, % | 8.8 | 7.7 | 8.0 | 7.5 | 4.8 |
| Profit after net fin. items | 177.8 | 143.7 | 287.3 | 249.7 | 333.2 |
| Profit margin, % | 8.3 | 7.7 | 6.9 | 6.7 | 4.6 |
| Assets | 6,719.0 | 5,640.6 | 6,719.0 | 5,640.6 | 6,195.0 |
| Investments | 104.4 | 118.0 | 206.0 | 279.4 | 481.9 |
| Depreciation/Amortisation | 57.2 | 48.8 | 112.8 | 97.6 | 204.6 |
In its interim report, Systemair presents performance measures that supplement the financial ratios defined in IFRS; these are known as alternative performance measures (APMs). The Company is of the view that these APMs provide valuable information to investors and the Company's management, in that they enable evaluation of the Company's performance, trends, capacity to pay down debt and invest in new business opportunities, and that they reflect the Group's acquisition-intensive business model.
Because not all companies calculate financial performance measures in the same way, these are not always comparable. As a result, they should not be regarded as substitutes for performance measures as defined in IFRS. A number of definitions appear below, the majority of which are alternative performance measures.
Operating profit (EBIT)
Earnings before financial items and tax.
Growth
Growth is defined as the change in net sales, relative to net sales for the preceding period.
Organic growth Change in sales by comparable units, adjusted for acquisitions and foreign currency effects.
Operating margin Operating profit divided by net sales.
Profit margin Profit after financial items divided by net sales.
Return on capital employed Profit after financial income, for the trailing 12 months (TTM), divided by average capital employed.
Capital employed Total assets less non-interest-bearing liabilities.
Interest-bearing liabilities + provisions for pensions reduced by cash and cash equivalents.
Profit after tax before non-controlling interest, for the trailing 12 months (TTM), divided by average equity excluding non-controlling interest.
The number of employees at the end of the accounting period. New employees, appointments terminated, part-time employees and paid overtime are converted into full-time equivalents.
Profit for the period attributable to Parent Company shareholders, divided by the average number of shares during the period.
Cash flow from operating activities for the period, divided by the average number of shares during the period.
Adjusted equity divided by total assets.
Equity divided by the number of shares at the end of the period.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.