Annual / Quarterly Financial Statement • May 9, 2017
Annual / Quarterly Financial Statement
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B&B TOOLS provides the industrial and construction sectors in northern Europe with industrial consumables, industrial components and related services. The Group has annual revenue of approximately SEK 8 billion and approximately 2,600 employees.
Acquisition of Arbesko – the leading Nordic brand for safety and work footwear. On 3 April 2017, the Bergman & Beving operating segment acquired all shares in Arbesko Gruppen AB. Arbesko is the leading Nordic brand for safety and work footwear.
| QUARTER – 3 MOS ENDING 31 MAR | FULL-YEAR – 12 MOS ENDING 31 MAR | |||||
|---|---|---|---|---|---|---|
| 2017 | 2016 | Change | 2017 | 2016 | Change | |
| Revenue, MSEK | 2,126 | 1,935 | +10% | 8,272 | 7,821 | +6% |
| Operating profit/loss, MSEK | –35 | 111 | –132% | 323 | 486 | –34% |
| of which, items affecting comparability | –128 | – | –148 | 15 | ||
| Adjusted operating profit, MSEK | 93 | 111 | –16% | 471 | 471 | 0% |
| Profit/loss after financial items, MSEK | –37 | 107 | –135% | 308 | 468 | –34% |
| Net profit/loss (after taxes), MSEK | –28 | 87 | –132% | 237 | 362 | –35% |
| Earnings per share, SEK | –1.00 | 3.10 | –132% | 8.40 | 12.90 | –35% |
| Operating margin | –1.6% | 5.7% | 3.9% | 6.2% | ||
| Profit margin | –1.7% | 5.5% | 3.7% | 6.0% | ||
| Return on equity | 9% | 15% | ||||
| Equity per share, SEK | 96.80 | 92.20 | +5% | |||
| Equity/assets ratio | 49% | 51% | ||||
| Number of employees at the end of the period | 2,638 | 2,623 | +1% |
As we summarise the 2016/2017 financial year, we look back at another year of improvements in the Group that create good conditions for the continued development. It is particularly gratifying to highlight Momentum Industrial, Teng Tools and ESSVE, all of which achieved operating margins of more than 10 percent. As we reported in earlier interim reports during the year, TOOLS has implemented and will continue to implement robust measures to improve profitability and growth – including a well customised store network, strengthened digital sales channels, improved product range coordination and the establishment of its own central warehouse. Thanks to the restructuring reserve of MSEK 94 recognised in the profit for the 2016/2017 financial year, we can now accelerate these structural measures. The measures will contribute to an increased margin in the current and upcoming operating years.
As part of the focus on our future development, we have taken steps during the year to create the conditions to split the Group into two separate listed companies. The past year included numerous measures in our operations focused on separating the Group's joint functions, mainly into logistics, IT and finance, which were divided between the B&B TOOLS Group's two operating segments. The purpose of the split and separate listing of the Momentum Group operating segment is to increase the Group's earnings growth through an even clearer focus on the development of leading brands and attractive market channels in profitable niches.
In recent years, we have substantially improved our basic prerequisites for growth and development. With our strong balance sheet and low debt, we were able to carry out a number of interesting corporate acquisitions during the year, including Astrup Industrivarer, IQ Supplies and AAK Safety. After the end of the financial year in April, the Bergman & Beving segment also acquired Arbesko, the leading Nordic brand of safety and work footwear. These acquisitions have strengthened our focus and the planned split of the Group could create new business and acquisition opportunities.
In conclusion, I would like to take this opportunity to extend my sincere thanks to all of our dedicated employees for your many outstanding efforts during the year. I would also like to thank our customers and business partners for continuing to believe in us. I look forward to an exciting new financial year in 2017/2018 for both Bergman & Beving and Momentum Group.
Stockholm, May 2017
Ulf Lilius President & CEO
Revenue for the fourth quarter rose by 10 percent to MSEK 2,126 (1,935). Exchange-rate translation effects had an impact of MSEK +47 (–50) on revenue. Revenue for comparable units, measured in local currency and adjusted for the number of trading days, decreased by 1 percent during the quarter.
The operating profit/loss for the fourth quarter amounted to MSEK –35 (111). Adjusted for items affecting comparability, operating profit totalled MSEK 93 (111). Items affecting comparability amounted to approximately MSEK –128 for the quarter and pertained to the restructuring reserve of MSEK –94 recognised in the profit for 2016/17, mainly intended for the previously announced structural measures in TOOLS and will enable these measures to be accelerated, as well as costs of approximately MSEK –34 associated with the establishment of two independent operating segments ahead of a potential spinoff and separate listing of the Momentum Group segment. Exchange-rate translation effects had an impact of MSEK +2 (–1) on operating profit, net. The operating margin was –1.6 percent (5.7). Excluding items affecting comparability, the adjusted operating margin was 4.4 percent (5.7). The Group reported an operating profit/loss after financial items of MSEK –37 (107) and a net profit/loss of MSEK –28 (87) for the quarter, corresponding to earnings per share of SEK –1.00 (3.10).
Revenue for the full financial year increased by 6 percent to MSEK 8,272 (7,821). Exchange-rate translation effects had an impact of MSEK +54 (–117) on revenue. Revenue for comparable units, measured in local currency and adjusted for the number of trading days, was essentially unchanged during the financial year.
Operating profit for the financial year amounted to MSEK 323 (486). Adjusted operating profit (excluding items affecting comparability) totalled MSEK 471 (471). Items affecting comparability amounted to approximately MSEK –148 for the year and pertained to the restructuring reserve of MSEK –94 recognised in the profit for 2016/2017, which is described above, as well as costs of approximately MSEK –54 associated with the establishment of two independent operating segments ahead of a potential spin-off and separate listing of the Momentum Group segment. Operating profit was charged with depreciation and impairment losses of MSEK –27 (–24) on tangible non-current assets and amortisation and impairment losses of MSEK –12 (–4) on intangible non-current assets. Exchange-rate translation effects had a net impact of MSEK 3 (2) on operating profit. The operating margin was 3.9 percent (6.2). Excluding items affecting comparability, the adjusted operating margin was 5.7 percent (6.0).
Profit after financial items amounted to MSEK 308 (468) and net financial items to MSEK –15 (–18). The profit margin was 3.7 percent (6.0). Net profit totalled MSEK 237 (362), corresponding to earnings per share of SEK 8.40 (12.90).
The B&B TOOLS Group comprises two operating segments – Bergman & Beving and Momentum Group – as well as shared administrative, logistics and IT functions.
| QUARTER | FULL-YEAR | |||
|---|---|---|---|---|
| MSEK | 2017 | 3 MONTHS ENDING 31 MAR 2016 |
2016/ 2017 |
2015/ 2016 |
| Revenue | 2,126 | 1,935 | 8,272 | 7,821 |
| Operating profit/loss | –35 | 111 | 323 | 486 |
| of which, items affecting comparability | –128 | – | –148 | +15 |
| Adjusted operating profit | 93 | 111 | 471 | 471 |
| Operating margin | –1.6% | 5.7% | 3.9% | 6.2% |
| Adjusted operating margin | 4.4% | 5.7% | 5.7% | 6.0% |
Premium brands that offer innovation and quality to professional users in construction and industry.
| BERGMAN & BEVING | ||||
|---|---|---|---|---|
| QUARTER | FULL-YEAR | |||
| 3 MONTHS ENDING 31 MAR | 2016/ | 2015/ | ||
| MSEK | 2017 | 2016 | 2017 | 2016 |
| Revenue | 969 | 897 | 3,833 | 3,647 |
| Operating profit | 66 | 71 | 291 | 274 |
| of which, items affecting comparability | – | – | – | – |
| Adjusted operating profit | 66 | 71 | 291 | 274 |
| Operating margin | 6.8% | 7.9% | 7.6% | 7.5% |
| Adjusted operating margin | 6.8% | 7.9% | 7.6% | 7.5% |
Revenue for comparable units in the Bergman & Beving operating segment decreased by approximately 2 percent1 during the fourth quarter, mainly due to TOOLS' direct purchases from other suppliers. Sales to other customers continued to grow favourably and were boosted by higher market shares for several of the operations in the segment. Price adjustments and increased sales of proprietary product brands during the quarter had an overall positive impact. The businesses in Bergman & Beving are making continuous investments in long-term product and brand development.
Revenue for ESSVE rose by 7 percent1 during the quarter, with continued favourable growth in sales to chain customers in the area of construction materials in all geographic markets. Operating profit continued to increase and the operating margin was more than 10 percent. Skydda's revenue and operating profit decreased by approximately 6 percent1 during the quarter, with a continued increase in demand from customers in the area of construction materials, while sales were impacted negatively by TOOLS' direct purchases from other suppliers. At the same time, the market position for Skydda's proprietary product brands was strengthened. The acquisition of AAK Safety earlier in the year had a positive impact on the performance of Cresto, which also captured market shares. Excluding AAK Safety, Cresto's revenue rose by 6 percent1 during the quarter.
Luna's revenue decreased by 1 percent1during the quarter and its operating margin improved, with a continued increase in demand from the area of construction materials, while sales were negatively impacted by TOOLS' direct purchases from other suppliers. Revenue for Grunda decreased by nearly 10 percent1 during the quarter, mainly due to a decline in sales to TOOLS and other industrial resellers. On 1 April 2017, Luna and Grunda were coordinated into a single product and sales organisation. Teng Tools continued to display a strong operating margin, despite weaker sales during the fourth quarter.
In preparation for the potential split of the B&B TOOLS Group into two independent companies, Appendix 1 presents a summary of the financial position of the Bergman & Beving operating segment as if it had been an independent company as of the end of the accounting period on 31 March 2017. Refer to pages 16-17.
1 Comparable units, measured in local currency and adjusted for the number of trading days this year compared with the preceding year.
Leading market channels for industrial consumables, industrial components, service and maintenance for professional end users.
| QUARTER | FULL-YEAR | |||
|---|---|---|---|---|
| 3 MONTHS ENDING 31 MAR | 2016/ | |||
| MSEK | 2017 | 2016 | 2017 | 2015/ 2016 |
| Revenue | 1,400 | 1,251 | 5,411 | 5,176 |
| Operating profit/loss | –23 | 45 | 123 | 193 |
| of which, items affecting comparability | –73 | – | –73 | – |
| Adjusted operating profit | 50 | 45 | 196 | 193 |
| Operating margin | –1.6% | 3.6% | 2.3% | 3.7% |
| Adjusted operating margin | 3.6% | 3.6% | 3.6% | 3.7% |
Revenue for comparable units in Momentum Group were largely unchanged2 during the fourth quarter. The establishment of internal functions for purchasing, warehousing and logistics within TOOLS and Gigant had a positive impact on the performance of the operating area during the quarter. At the same time, costs associated with measures to improve long-term profitability, primarily in TOOLS Sweden, and the implementation of a new business system in TOOLS Norway had a negative impact on earnings. A restructuring reserve of MSEK –73, mainly pertaining to the previously announced structural measures in TOOLS, was recognised in the annual accounts for 2016/2017 and will allow these measures to be accelerated.
Revenue for TOOLS Sweden rose by approximately 2 percent2 during the quarter. Combined with continued investments in digital sales channels and a stronger market position as a leading occupational health and safety (OHS) supplier, the implementation of measures with an increased focus on selected product areas, cost control and a reduction in the number of local units had a positive impact on underlying earnings during the quarter. Thanks to the aforementioned reserve, the Group will be able to accelerate this work and achieve earnings effects earlier than previously anticipated. Revenue for TOOLS Norway decreased by 3 percent2 during the quarter and the business continued to adapt its cost levels to its declining volumes. The acquisition of Astrup Industrivarer earlier in the year had a positive impact on the business's performance. TOOLS Finland increased its revenue by approximately 9 percent2 during the quarter and continued to deliver a favourable sales trend in terms of large customers. TOOLS Norway and TOOLS Finland will also be able to accelerate their improvement efforts as a result of the aforementioned reserve. Revenue for Mercus Yrkeskläder increased by 2 percent2 , with continued favourable demand from customers in the construction sector at all stores.
While Momentum Industrial's revenue decreased by 4 percent2 during the quarter, its earnings trend remained favourable. A number of new customer agreements were signed or extended during the period. Gigant's total revenue increased by 4 percent2 during the quarter. Measures to improve long-term profitability continued – with a focus on and increased demand in the area of direct sales to the industrial and construction sectors during the quarter.
In preparation for the potential split of the B&B TOOLS Group into two independent companies, Appendix 1 presents a summary of the financial position of the Momentum Group operating segment as if it had been an independent company as of the end of the accounting period on 31 March 2017. Refer to pages 16-17.
An operating loss of MSEK –91 (–3) was reported for "Group-wide" for the financial year, of which items affecting comparability accounted for MSEK –75 MSEK (+15). Of the items affecting comparability in "Group-wide," approximately MSEK –53 pertains to costs for the relocation of logistics and division of IT systems in conjunction with the establishment of two independent operating segments ahead of a potential spin-off and separate listing of the Momentum Group segment and approximately MSEK –22 is included in the total restructuring reserve of MSEK –94, which was recognised in the annual accounts for 2016/17, mainly intended for the previously announced structural measures in TOOLS.
The Parent Company's revenue amounted to MSEK 40 (36) and profit after financial items to MSEK 95 (318). These results include Group contributions, intra-Group dividends and similar items totalling MSEK 96 (472).
Eliminations for intra-Group inventory gains had an impact of MSEK 1 (22) on earnings during the year.
At the end of the financial year, the number of employees in the Group amounted to 2,638, compared with 2,623 at the beginning of the year.
2 Comparable units, measured in local currency and adjusted for the number of trading days this year compared with the preceding year.
In mid-September, the subsidiary Teng Tools UK entered into an agreement to acquire the operations of the sales company IQ Supplies. IQ Supplies is an exclusive distributor of Teng Tools' proprietary products in the areas of hand tools and smart storage solutions for professional users. Since the 1980s, the company has achieved major success through its well-established distribution network of industrial and automotive parts resellers in the UK and Ireland. IQ Supplies generates annual revenue of just over MSEK 100 and has approximately 40 employees. The acquisition was carried out as a conveyance of assets and liabilities and closing took place in October 2016.
In mid-October, TOOLS Norway entered into an agreement to acquire all shares in Astrup Industrivarer AS, one of Norway's leading industrial resellers, with five branches in Bergen, Mongstad, Odda, Sotra and Ulsteinvik. The company, which was already a part of the TOOLS chain, offers industrial components, industrial consumables and related services for companies operating primarily in the maritime industry and energy area (such as oil and gas, hydro and wind power, and other forms of renewable energy). The acquisition is part of the Group's efforts to strengthen TOOLS' position as a leading supplier to Norwegian industry. Astrup Industrivarer generates annual revenue of approximately MNOK 240 and has some 50 employees. Closing took place in November 2016.
In December, the subsidiary Cresto AB entered into an agreement to acquire all of the shares in AAK Safety AS. AAK Safety is the leading fall protection specialist in Norway, with annual revenue of approximately MSEK 70 and some 30 employees. AAK Safety is a niche company specialising in fall protection, with sales of personal protective equipment, fixed fall protection systems and related services to customers in such areas as the energy, telecom, offshore and rescue equipment industries in Norway. Together, Cresto and AAK Safety together form the leading fall protection specialist in the Nordic region, with combined annual revenue of just over MSEK 150 and approximately 70 employees. Closing took place in early February 2017.
In early March, the subsidiary Rörick Elektriska Verkstad acquired all shares in Arboga Machine Tool AB. With a workshop in Arboga, Sweden, Arboga Machine Tool is a service company offering sales and repairs of ball screws and machine guarding systems as well as spindle repairs. Arboga Machine Tool generates annual revenue of approximately MSEK 10 and has five employees. Closing took place in early March 2017.
After the end of the financial year, in early April 2017, the Bergman & Beving operating segment acquired all shares in Arbesko Gruppen AB. Arbesko is the leading Nordic brand for safety and work footwear. Also refer to Events after the end of the financial year on page 7.
The Group's profitability, measured as the return on working capital (P/WC), amounted to 17 percent (26) for the financial year. The return on capital employed was 9 percent (14) and the return on equity was 9 percent (15).
Cash flow from operating activities before changes in working capital for the financial year amounted to MSEK 354 (416). Funds tied up in working capital decreased by MSEK 52. During the year, the Group's inventories increased by MSEK 23 and operating receivables by MSEK 111. Operating liabilities rose by MSEK 186. Accordingly, cash flow from operating activities for the year amounted to MSEK 406 (493).
Cash flow for the year was also impacted in a net amount of MSEK –84 (–55) pertaining to investments in and divestments of non-current assets, and a net amount of MSEK –213 (+19) pertaining to the acquisition and divestment of subsidiaries and other business units.
The Group's operational net loan liability at the end of the financial year amounted to MSEK 260 (217). Interest-bearing liabilities totalled MSEK 323 (282), excluding expensed pension obligations of MSEK 582 (536). Liabilities to credit institutions amounted to MSEK 260 (220), net. Cash and cash equivalents, including unutilised granted credit facilities, totalled MSEK 841 (880).
The equity/assets ratio at the end of the financial year was 49 percent, compared with 51 percent at the beginning of the year.
Equity per share totalled SEK 96.80 at the end of the financial year, compared with SEK 92.20 at the beginning of the year. Equity per share after dilution totalled SEK 96.80 at the end of the financial year, compared with SEK 92.25 at the beginning of the year.
The Swedish tax rate, which also applies to the Parent Company, was 22 percent during the financial year. The Group's normalised tax rate, with its current geographic mix, is approximately 23 percent.
At the end of the financial year, share capital totalled MSEK 56.9. The distribution by class of share is as follows:
| SHARE STRUCTURE | ||
|---|---|---|
| CLASS OF SHARE | AS OF 31 MARCH 2017 | |
| Class A shares | 1,063,780 | |
| Class B shares | 27,372,636 | |
| Total number of shares before repurchasing | 28,436,416 | |
| Less: Repurchased Class B shares | -184,300 | |
| Total number of shares after repurchasing | 28,252,116 |
As of 31 March 2016, the number of Class B shares held in treasury totalled 340,000. During the financial year, a total of 155,700 treasury shares were conveyed in connection with the exercise of the call options. Accordingly, the number of Class B shares held in treasury as of 31 March 2017 amounted to 184,300, corresponding to 0.6 percent of the total number of shares and 0.5 percent of the total number of votes. The quotient value of this holding at 31 March 2017 amounted to SEK 368,600. Of the total number of shares held in treasury, 182,300 are reserved to cover the Company's obligations in the two call option programmes issued to senior management in the Group in September 2013 and September 2014, respectively.
The redemption price for call options issued in connection with the share-based incentive programme for 2013 was SEK 101.90 and the redemption period was from 12 September 2016 until 9 June 2017, inclusive. The redemption price for call options issued in connection with the share-based incentive programme for 2014 is SEK 176.50 and the redemption period is from 11 September 2017 until 8 June 2018, inclusive. At 31 March 2017, the share price was SEK 192.00. For more information about the dilution effect of call options issued, refer to page 12.
After the end of the financial year in April 2017, 13,300 additional shares held in treasury were conveyed in connection with the exercise of the remaining 13,300 call options issued to senior management in the Group in September 2013. This call option programme has thus been concluded. There have been no other changes in the holding of treasury shares after the end of the financial year.
No transactions having a material impact on the Group's position or earnings occurred between B&B TOOLS and its related parties during the financial year.
During the financial year, no significant changes occurred with respect to risks and uncertainties, for either the Group or the Parent Company. For information about the Group's risks and uncertainties, refer to page 25 of B&B TOOLS' Annual Report for 2015/2016.
The Financial Report for the Group was prepared in accordance with IFRS and by applying IAS 34, Interim Financial Reporting, the Swedish Annual Accounts Act and the Swedish Securities Market Act. The Financial Report for the Parent Company was prepared in accordance with the Swedish Annual Accounts Act and the Swedish Securities Market Act, which conforms to the provisions detailed in RFR 2, Accounting for Legal Entities.
The same accounting policies and bases of judgement as in the Annual Report for 2015/2016 have been applied.
For information on the calculation of certain key financial ratios and definitions, refer to pages 14-15.
B&B TOOLS' Annual General Meeting will be held on Thursday, 24 August 2017, at 4:30 p.m. at IVA's Conference Centre, Grev Turegatan 16, Stockholm, Sweden.
The Board of B&B TOOLS AB proposes a dividend of SEK 5.00 (5.00) per share. Taking into account the repurchased Class B shares held in treasury, the proposed dividend corresponds to a total of approximately MSEK 141 (140).
The Board also intends to propose that the Annual General Meeting resolve to authorise a repurchase of own shares. In brief, this proposal entails that the Annual General Meeting would authorise the Board, during the period until the next Annual General Meeting, to repurchase a maximum number of own shares through Nasdaq Stockholm so that the Company's holding of treasury shares at no time exceeds 10 percent of the total number of shares in the Company. This authorisation would enable the Board to use repurchased shares to pay for acquisitions or to sell the shares in a manner other than through Nasdaq
1 APRIL 2016-31 MARCH 2017
Stockholm in order to finance acquisitions and to fulfil the Company's obligations in connection with its share-based incentive programme for senior management.
Acquisition of Arbesko
The Bergman & Beving operating segment acquired all shares in Arbesko Gruppen AB in early April. With its own product development and production operations in Sweden, Arbesko is one of the strongest brands of safety and work footwear in the Nordic region. Arbesko generates annual revenue of approximately MSEK 200 and has approximately 120 employees. Closing took place on 3 April 2017. The acquisition is expected to have a marginally positive effect on B&B TOOLS' earnings per share during the 2017/18 financial year.
No other significant events affecting the Group have occurred since the end of the financial year.
Stockholm, 9 May 2017
Ulf Lilius President & CEO
This report has not been subject to special review by the Company's auditors.
Ulf Lilius, President & CEO, Tel: +46 10 454 77 00 Mats Karlqvist, Head of Investor Relations, Tel: +46 70 660 31 32
Complete contact information for B&B TOOLS is provided below and forthcoming information dates are presented on page 15.
B&B TOOLS AB (publ)
| QUARTER (3 MOS) | FULL-YEAR (12 MOS) | ||||
|---|---|---|---|---|---|
| JAN-MAR | 2016/ | 2015/ | |||
| MSEK | 2017 | 2016 | 2017 | 2016 | |
| Bergman & Beving | 969 | 897 | 3,833 | 3,647 | |
| Momentum Group | 1,400 | 1,251 | 5,411 | 5,176 | |
| Group-wide | 181 | 131 | 612 | 544 | |
| Eliminations | –424 | –344 | –1,584 | -1,546 | |
| The B&B TOOLS Group | 2,126 | 1,935 | 8,272 | 7,821 |
| REVENUE BY QUARTER | 2016/2017 | 2015/2016 | ||||||
|---|---|---|---|---|---|---|---|---|
| MSEK | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| Bergman & Beving | 969 | 969 | 883 | 1,012 | 897 | 912 | 883 | 955 |
| Momentum Group | 1,400 | 1,419 | 1,210 | 1,382 | 1,251 | 1,349 | 1,209 | 1,367 |
| Group-wide | 181 | 148 | 137 | 146 | 131 | 139 | 135 | 139 |
| Eliminations | –424 | –404 | –351 | –405 | –344 | –407 | –388 | –407 |
| The B&B TOOLS Group | 2,126 | 2,132 | 1,879 | 2,135 | 1,935 | 1,993 | 1,839 | 2,054 |
| QUARTER (3 MOS) | FULL-YEAR (12 MOS) | |||
|---|---|---|---|---|
| JAN-MAR | 2016/ | 2015/ | ||
| MSEK | 2017 | 2016 | 2017 | 2016 |
| Bergman & Beving | 66 | 71 | 291 | 274 |
| Momentum Group | –23 | 45 | 123 | 193 |
| Group-wide | –75 | –15 | –91 | -3 |
| Eliminations | –3 | 10 | 0 | 22 |
| The B&B TOOLS Group | –35 | 111 | 323 | 486 |
| OPERATING PROFIT BY QUARTER | 2016/2017 | 2015/2016 | ||||||
|---|---|---|---|---|---|---|---|---|
| MSEK | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| Bergman & Beving | 66 | 66 | 76 | 83 | 71 | 57 | 70 | 76 |
| Momentum Group | –23 | 44 | 49 | 53 | 45 | 51 | 57 | 40 |
| Group-wide | –75 | –18 | 5 | –3 | –15 | 0 | 3 | 9 |
| Eliminations | –3 | 2 | 1 | 0 | 10 | 7 | 1 | 4 |
| The B&B TOOLS Group | –35 | 94 | 131 | 133 | 111 | 115 | 131 | 129 |
| QUARTER (3 MOS) | FULL-YEAR (12 MOS) | ||||
|---|---|---|---|---|---|
| JAN-MAR | 2015/ | ||||
| MSEK | 2017 | 2016 | 2017 | 2016 | |
| Revenue | 2,126 | 1,935 | 8,272 | 7,821 | |
| Shares of profit in associated companies | –2 | 0 | –2 | 0 | |
| Other operating income | 0 | 2 | 8 | 34 | |
| Total operating income | 2,124 | 1,937 | 8,278 | 7,855 | |
| Cost of goods sold | –1,264 | –1,131 | –4,875 | –4,598 | |
| Personnel costs | –492 | –434 | –1,797 | –1,682 | |
| Depreciation, amortisation, impairment losses and | |||||
| reversal of impairment losses | –13 | –7 | –39 | –28 | |
| Other operating expenses | –390 | –254 | –1,244 | –1,061 | |
| Total operating expenses | –2,159 | –1,826 | –7,955 | –7,369 | |
| Operating profit/loss | –35 | 111 | 323 | 486 | |
| Financial income and expenses | -2 | –4 | –15 | –18 | |
| Profit/loss after financial items | –37 | 107 | 308 | 468 | |
| Taxes | 9 | –20 | –71 | –106 | |
| Net profit/loss | –28 | 87 | 237 | 362 | |
| Of which, attributable to: | |||||
| Parent Company shareholders | –28 | 87 | 237 | 362 | |
| Earnings per share, SEK | |||||
| – Before dilution | –1.00 | 3.10 | 8.40 | 12.90 | |
| – After dilution | –1.00 | 3.10 | 8.40 | 12.85 |
| QUARTER (3 MOS) | FULL-YEAR (12 MOS) | ||||
|---|---|---|---|---|---|
| MSEK | JAN-MAR 2017 |
2016 | 2016/ 2017 |
2015/ 2016 |
|
| Net profit/loss | –28 | 87 | 237 | 362 | |
| OTHER COMPREHENSIVE INCOME | |||||
| Components that will not be reclassified to net profit | |||||
| Remeasurement of defined-benefit pension plans | 16 | –73 | –36 | 94 | |
| Tax attributable to components that will not be reclassified | –3 | 16 | 8 | –21 | |
| 13 | –57 | –28 | 73 | ||
| Components that will be reclassified to net profit | |||||
| Translation differences | –4 | 8 | 43 | –51 | |
| Fair value changes for the year in cash-flow hedges | 2 | –11 | 6 | –8 | |
| Tax attributable to components that will be reclassified | 0 | 3 | –1 | 1 | |
| –2 | 0 | 48 | –58 | ||
| Other comprehensive income | 11 | –57 | 20 | 15 | |
| Total comprehensive income | –17 | 30 | 257 | 377 | |
| Of which, attributable to: | |||||
| Parent Company shareholders | –17 | 30 | 257 | 377 |
1 APRIL 2016-31 MARCH 2017
| MSEK | 31 MAR 2017 | 31 MAR 2016 |
|---|---|---|
| ASSETS | ||
| Intangible non-current assets | 2,023 | 1,821 |
| Tangible non-current assets | 112 | 100 |
| Financial non-current assets | 8 | 5 |
| Shares in associated companies | 9 | 11 |
| Deferred tax assets | 104 | 88 |
| Inventories | 1,595 | 1,505 |
| Accounts receivable | 1,451 | 1,232 |
| Other current receivables | 205 | 216 |
| Cash and cash equivalents | 63 | 62 |
| Total assets | 5,570 | 5,040 |
| EQUITY AND LIABILITIES | ||
| Equity | 2,724 | 2,591 |
| Non-current interest-bearing liabilities | 200 | 150 |
| Provisions for pensions | 582 | 536 |
| Other non-current liabilities and provisions | 129 | 88 |
| Current interest-bearing liabilities | 123 | 132 |
| Accounts payable | 1,046 | 896 |
| Other current liabilities | 766 | 647 |
| Total equity and liabilities | 5,570 | 5,040 |
| Operational net loan liability | 260 | 220 |
| MSEK | 31 MAR 2017 | 31 MAR 2016 |
|---|---|---|
| Opening equity | 2,591 | 2,326 |
| Dividend, Parent Company shareholders | –140 | –112 |
| Sale of treasury shares in connection with redemption of share options | 16 | – |
| Total comprehensive income attributable to: Parent Company shareholders |
257 | 377 |
| Closing equity | 2,724 | 2,591 |
| QUARTER (3 MOS) | FULL-YEAR (12 MOS) | |||
|---|---|---|---|---|
| MSEK | JAN-MAR 2017 |
2016 | 2016/ 2017 |
2015/ 2016 |
| Operating activities before changes in working capital | 41 | 87 | 354 | 416 |
| Changes in working capital | –52 | –22 | 52 | 77 |
| Cash flow from operating activities | –11 | 65 | 406 | 493 |
| Investments in intangible and tangible non-current assets | –19 | –16 | –84 | –57 |
| Proceeds from sale of intangible and tangible non-current assets | 0 | 0 | 0 | 2 |
| Acquisition of subsidiaries and other business units | –53 | 0 | –213 | –11 |
| Proceeds from sale of subsidiaries and other business units | – | 1 | – | 30 |
| Cash flow before financing | –83 | 50 | 109 | 457 |
| Financing activities | 75 | –36 | –109 | –445 |
| Cash flow for the period | –8 | 14 | 0 | 12 |
| Cash and cash equivalents at the beginning of the period | 73 | 48 | 62 | 57 |
| Exchange-rate differences in cash and cash equivalents | –2 | 0 | 1 | –7 |
| Cash and cash equivalents at the end of the period | 63 | 62 | 63 | 62 |
B&B TOOLS measures financial instruments at fair value or cost in the balance sheet depending on their classification. In addition to items in the financial net debt, financial instruments also include accounts receivable and accounts payable. According to IFRS 7, financial instruments measured at fair value in the balance sheet are included in level 2 of the fair value hierarchy. The carrying amounts for financial assets and liabilities correspond to fair value in all material respects.
| MSEK | EXTERNAL REVENUE 2016/ 2017 |
2015/ 2016 |
REVENUE FROM INTERNAL CUSTOMERS 2016/ 2017 |
2015/ 2016 |
REVENUE 2016/ 2017 |
2015/ 2016 |
PROFIT 2016/ 2017 |
OPERATING 2015/ 2016 |
|---|---|---|---|---|---|---|---|---|
| Bergman & Beving | 2,865 | 2,643 | 968 | 1,004 | 3,833 | 3,647 | 291 | 274 |
| Momentum Group | 5,401 | 5,169 | 10 | 7 | 5,411 | 5,176 | 123 | 193 |
| Total operating segments | 8,266 | 7,812 | 978 | 1,011 | 9,244 | 8,823 | 414 | 467 |
| Group-wide | 6 | 9 | 606 | 535 | 612 | 544 | –91 | –3 |
| Eliminations | – | – | –1,584 | –1,546 | –1,584 | –1,546 | 0 | 22 |
| The B&B TOOLS Group | 8,272 | 7,821 | 0 | 0 | 8,272 | 7,821 | 323 | 486 |
The Group's operating segments are Bergman & Beving and Momentum Group. The operating segments are consolidations of the operational organisation, as used by Group management and the Board of Directors to monitor operations.
Bergman & Beving comprises product-owning businesses that develop premium brands that offer innovation and quality for professional users in construction and industry. Momentum Group comprises reseller businesses in TOOLS, Momentum Industrial, Gigant Arbetsplats and Mercus Yrkeskläder, which together form the Group's market channels for industrial consumables and industrial components for industry, construction and public administration in the Nordic region. Group-wide includes the Group's management, accounting, support functions, infrastructure operations and property management. The support functions include HR, internal communications, IR and legal affairs. The infrastructure operations comprise IT and supply chain.
Intra-Group pricing between the operating segments occurs on market terms. As a result of the current operating segments (which were introduced on 1 April 2016), no material changes occurred with respect to assets in the operating segments compared with the most recent Annual Report. The accounting policies are the same as those applied in the consolidated financial statements.
| QUARTER (3 MOS) | FULL-YEAR (12 MOS) | |||
|---|---|---|---|---|
| SEK | JAN-MAR 2017 |
2016 | 2016/ 2017 |
2015/ 2016 |
| Earnings before dilution | -1.00 | 3.10 | 8.40 | 12.90 |
| Earnings after dilution | -1.00 | 3.10 | 8.40 | 12.85 |
| Equity, at the end of the period | 96.80 | 92.20 | ||
| Equity after dilution, at the end of the period | 96.80 | 92.25 | ||
| NUMBER OF SHARES OUTSTANDING IN THOUSANDS | ||||
| Number of shares outstanding before dilution | 28,252 | 28,096 | 28,252 | 28,096 |
| Weighted number of shares outstanding before dilution | 28,203 | 28,096 | 28,143 | 28,096 |
| Weighted number of shares outstanding after dilution | 28,259 | 28,131 | 28,208 | 28,127 |
3 Dilution effect based on issued and outstanding call options on repurchased Class B shares as of 31 March 2017.
| 3 months 0.2% 2016/17 0.2% 2015/2016 0.1% |
|---|
| ---------------------------------------------------------- |
| QUARTER (3 MOS) | FULL-YEAR (12 MOS) | ||||
|---|---|---|---|---|---|
| JAN-MAR | 2016/ | 2015/ | |||
| MSEK | 2017 | 2016 | 2017 | 2016 | |
| Revenue | 12 | 5 | 40 | 36 | |
| Other operating income | – | 0 | – | 0 | |
| Total operating income | 12 | 5 | 40 | 36 | |
| Operating expenses | –15 | –13 | –52 | –34 | |
| Operating profit/loss | –3 | –8 | –12 | 2 | |
| Financial income and expenses | 19 | 15 | 107 | 316 | |
| Profit after financial items | 16 | 7 | 95 | 318 | |
| Appropriations | 62 | 157 | 62 | 157 | |
| Profit before taxes | 78 | 164 | 157 | 475 | |
| Taxes | –18 | –36 | –27 | –50 | |
| Net profit | 60 | 128 | 130 | 425 |
| QUARTER (3 MONTHS) | FULL-YEAR (12 MONTHS) | |||
|---|---|---|---|---|
| JAN-MAR | 2016/ | 2015/ | ||
| MSEK | 2017 | 2016 | 2017 | 2016 |
| Net profit | 60 | 128 | 130 | 425 |
| OTHER COMPREHENSIVE INCOME | ||||
| Components that will not be reclassified to net profit | – | – | – | – |
| Components that will be reclassified to net profit | ||||
| Fair value changes for the year in cash-flow hedges | 2 | –11 | 6 | –8 |
| Taxes attributable to other comprehensive income | 0 | 3 | -1 | 1 |
| Other comprehensive income | 2 | –8 | 5 | –7 |
| Total comprehensive income | 62 | 120 | 135 | 418 |
| MSEK | 31 MAR 2017 | 31 MAR 2016 |
|---|---|---|
| ASSETS | ||
| Intangible non-current assets | 0 | 0 |
| Tangible non-current assets | 0 | 0 |
| Financial non-current assets | 2,989 | 3,408 |
| Current receivables | 646 | 510 |
| Cash and cash equivalents | 1 | 0 |
| Total assets | 3,636 | 3,918 |
| EQUITY, PROVISIONS AND LIABILITIES | ||
| Equity | 2,223 | 2,212 |
| Untaxed reserves | 264 | 268 |
| Provisions | 45 | 45 |
| Non-current liabilities | 260 | 210 |
| Current liabilities | 844 | 1,183 |
| Total equity, provisions and liabilities | 3,636 | 3,918 |
| 12 MONTHS ENDING | ||||||
|---|---|---|---|---|---|---|
| 31 MAR 2017 | 31 MAR 2016 | 31 MAR 2015 | 31 MAR 2014 | |||
| Revenue, MSEK | 8,272 | 7,821 | 7,903 | 7,648 | ||
| Operating profit, MSEK | 323 | 486 | 450 | 340 | ||
| Adjusted operating profit, MSEK | 471 | 471 | 450 | 340 | ||
| EBITA, MSEK | 327 | 486 | 450 | 340 | ||
| Profit after financial items, MSEK | 308 | 468 | 408 | 286 | ||
| Net profit, MSEK | 237 | 362 | 306 | 214 | ||
| Operating margin | 3.9% | 6.2% | 5.7% | 4.4% | ||
| Profit margin | 3.7% | 6.0% | 5.2% | 3.7% | ||
| Return on working capital (P/WC) | 17% | 26% | 24% | 19% | ||
| Return on capital employed | 9% | 14% | 13% | 10% | ||
| Return on equity | 9% | 15% | 14% | 10% | ||
| Operational net loan liability (closing balance), MSEK | 260 | 220 | 533 | 822 | ||
| Equity (closing balance), MSEK | 2,724 | 2,591 | 2,326 | 2,203 | ||
| Equity/assets ratio | 49% | 51% | 45% | 43% | ||
| Number of employees at the end of the period | 2,638 | 2,623 | 2,682 | 2,655 | ||
| KEY PER-SHARE DATA | ||||||
| Earnings, SEK | 8.40 | 12.90 | 10.90 | 7.60 | ||
| Earnings after dilution, SEK | 8.40 | 12.85 | 10.85 | 7.60 | ||
| Cash flow from operating activities, SEK | 14.45 | 17.55 | 11.75 | 7.45 | ||
| Equity, SEK | 96.80 | 92.20 | 82.80 | 78.40 | ||
| Share price, SEK | 192.00 | 149.50 | 141.00 | 119.00 |
B&B TOOLS AB uses certain key financial ratios in its analysis of the operations and their performance that are not calculated in accordance with IFRS. The Company believes that these key financial ratios provide valuable information for investors, since they enable a more accurate assessment of current trends when combined with other key financial ratios calculated in accordance with IFRS. Since listed companies do not always calculate these key financial ratios in the same way, there is no guarantee that the information is comparable with other companies' key financial ratios of the same name.
Comparable units refer to sales in local currency from units that were part of the Group during the current period and the entire corresponding period in the preceding year. Trading days refer to sales in local currency depending on the difference the number of trading days compared with the comparative period. Other units refer to the acquisition or divestment of units during the corresponding period.
| QUARTER (3 MOS) – JAN-MAR | FULL-YEAR (12 MOS) | ||||
|---|---|---|---|---|---|
| CHANGE IN REVENUE FOR: | 2017 | 2016 | 2016/2017 | 2015/2016 | |
| Comparable units in local currency | –1.0% | 1.5% | 0.5% | 0.1% | |
| Currency effects | 2.3% | –2.5% | 0.7% | –1.4% | |
| Number of trading days | 5.6% | –2.1% | 2.6% | 0.2% | |
| Other units | 3.0% | 0.2% | 2.0% | 0.1% | |
| TOTAL – CHANGE | 9.9% | –2.9% | 5.8% | –1.0% |
Operating profit for the period adjusted for items affecting comparability. Items affecting comparability include revenue and expenses that do not arise regularly in the operating activities. Items affecting comparability for the period include a reserve for structural measures and costs for establishing two independent operating segments; and items affecting comparability for the comparative period include revenue from the sale of properties and conveyance of a pension obligation.
| MSEK | QUARTER (3 MOS) – JAN-MAR | FULL-YEAR (12 MOS) | ||||
|---|---|---|---|---|---|---|
| 2017 | 2016 | 2016/2017 | 2015/2016 | |||
| ADJUSTED OPERATING PROFIT | 93 | 111 | 471 | 471 | ||
| Restructuring programme | –94 | – | –94 | – | ||
| Establishment of two independent operating segments | –34 | – | –54 | – | ||
| Other items affecting comparability | – | – | – | 15 | ||
| OPERATING PROFIT/LOSS | –35 | 111 | 323 | 486 |
1 APRIL 2016-31 MARCH 2017
B&B TOOLS' profitability target is for each unit in the Group to achieve profitability of at least 45 percent, measured as rolling 12-month EBITA (P) as a percentage of average 12-month working capital (WC), defined as inventories plus accounts receivable less accounts payable.
| ROLLING 12 MONTHS ENDING | ||
|---|---|---|
| 31 MAR 2017 | 31 MAR 2016 | |
| EBITA (P), MSEK | 327 | 486 |
| Average working capital (WC) | ||
| Inventories, MSEK | 1,550 | 1,514 |
| Accounts receivable, MSEK | 1,304 | 1,200 |
| Accounts payable, MSEK | -956 | -841 |
| TOTAL – AVERAGE WC | 1,898 | 1,873 |
| P/WC | 17% | 26% |
Operating profit for the period excluding items affecting comparability as a percentage of revenue.
Cash flow for the rolling 12-month period from operating activities divided by the weighted number of shares.
Net profit for the period attributable to the Parent Company shareholders divided by the weighted number of shares.
Operating profit for the period before impairment of goodwill and amortisation and impairment of other intangible assets in connection with corporate acquisitions and equivalent transactions.
Equity attributable to Parent Company shareholders divided by the number of shares at the end of the period.
Equity as a percentage of the balance-sheet total.
Operating profit for the period as a percentage of revenue.
Interest-bearing liabilities excluding provisions for pensions less cash and cash equivalents.
Profit after financial items as a percentage of revenue.
Profit after financial items plus financial expenses for the rolling 12-month period divided by the average balance-sheet total less non-interest-bearing liabilities.
Net profit for the rolling 12-month period divided by average equity.
Average number of shares outstanding before or after dilution. Shares held by B&B TOOLS are not included in the number of shares outstanding. Dilution effects arise due to call options that can be settled using shares in share-based incentive programmes. The call options have a dilution effect when the average share price during the period is higher than the redemption price of the call options.
The Annual Report for the 2016/2017 financial year will be published in mid-May 2017 and will be available at the Company's office and website as of the same date and be distributed to shareholders who have so requested in mid-July 2017.
Interim Report (3 months) – 1 April-30 June 2017 will be presented on 20 July 2017.
B&B TOOLS AB's 2017 Annual General Meeting will be held in Stockholm on 24 August 2017.
Visit www.bbtools.com to order reports and press releases.
The information in this report is such that B&B TOOLS AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 12:45 p.m. CET on 9 May 2017.
This document is in all respects a translation of the Swedish original Financial Report. In the event of any differences between this translation and the Swedish original, the latter shall prevail.
The following tables present selected financial information for the 2014/2015, 2015/2016 and 2016/2017 financial years for Momentum Group and B&B TOOLS excluding Momentum Group ("Bergman & Beving"). The information in the tables presented below does not constitute financial statements in accordance with the International Financial Reporting Standards ("IFRS") as adopted by the EU and is thus not necessarily comparable with similar calculations in other companies and has certain limitations as an analytical tool. The information should only be viewed as providing an indication of the financial positions of Momentum Group and Bergman & Beving if they had been independent companies as of the end of the accounting period on 31 March 2017 and may therefore deviate from the segment reporting presented in other sections of B&B TOOLS' Financial Report. Comments on relevant deviations are included below. The financial statements for Bergman & Beving comprise the difference between the financial information for B&B TOOLS and Momentum Group adjusted for internal transactions and business.
For definitions, refer to other sections of B&B TOOLS' Financial Report.
| MSEK | 2016/2017 | 2015/2016 | 2014/2015 |
|---|---|---|---|
| Revenue | 5,411 | 5,176 | 5,351 |
| Other operating income | 6 | 6 | 6 |
| Total operating expenses | –5,352 | –4,989 | –5,159 |
| Operating profit | 65 | 193 | 198 |
| Adjusted operating profit | 193 | 193 | 198 |
| Restructuring programme [item affecting comparability] | –94 | – | – |
| Establishment of two independent operating segments – Momentum Groups share | |||
| [item affecting comparability] | –34 | – | – |
| Operating profit | 65 | 193 | 198 |
| MSEK | 31 MAR 2017 |
|---|---|
| ASSETS | |
| Working capital assets (inventories and accounts receivable) | 1,735 |
| Cash and cash equivalents | 69 |
| Other assets | 747 |
| Total assets | 2,551 |
| EQUITY AND LIABILITIES | |
| Equity | 1,007 |
| Interest-bearing liabilities | 332 |
| Provisions for pensions | 24 |
| Accounts payable | 782 |
| Other liabilities | 406 |
| Total equity and liabilities | 2,551 |
| Operational net loan liability | 263 |
| 2016/2017 | 2015/2016 | 2014/2015 | |
|---|---|---|---|
| Operating margin, % | 1.2% | 3.7% | 3.7% |
| Adjusted operating margin, % | 3.6% | 3.7% | 3.7% |
| Number of employees at the end of the period | 1,620 | 1,573 | 1,618 |
| MSEK | 2016/2017 | 2015/2016 | 2014/2015 |
|---|---|---|---|
| Revenue | 3,833 | 3,647 | 3,620 |
| Other operating income | 0 | 0 | 0 |
| Total operating expenses | –3,542 | –3,373 | –3,339 |
| Operating profit – Bergman & Beving | 291 | 274 | 281 |
| Group-wide | –33 | –3 | –26 |
| Eliminations | 0 | 22 | –3 |
| Operating profit – B&B TOOLS excluding Momentum Group | 258 | 293 | 252 |
| Adjusted operating profit – B&B TOOLS excluding Momentum Group | 278 | 278 | 251 |
| Establishment of two independent operating segment | –20 | – | – |
| Other items affecting comparability | – | 15 | 1 |
| Operating profit – B&B TOOLS excluding Momentum Group | 258 | 293 | 252 |
| MSEK | 31 MAR 2017 |
|---|---|
| ASSETS | |
| Working capital assets | 1,629 |
| Cash and cash equivalents | 97 |
| Other assets | 1,829 |
| Total assets | 3,555 |
| EQUITY AND LIABILITIES | |
| Equity | 1,817 |
| Interest-bearing liabilities | 93 |
| Provisions for pensions | 548 |
| Accounts payable | 507 |
| Other liabilities | 590 |
| Total equity and liabilities | 3,555 |
| Operational net loan liability | –3 |
| 2016/2017 | 2015/2016 | 2014/2015 | |
|---|---|---|---|
| Operating margin – Bergman & Beving, % | 7.6% | 7.5% | 7.8% |
| Operating margin – B&B TOOLS excluding Momentum Group, % | 6.7% | 8.0% | 7.0% |
| Adjusted operating margin – B&B TOOLS excluding Momentum Group, % | 7.3% | 7.6% | 6.9% |
| Number of employees at the end of the period – Bergman & Beving | 1,018 | 1,050 | 1,064 |
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