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Systemair

Quarterly Report Aug 29, 2013

2980_10-q_2013-08-29_634cbd0d-cbb4-4250-9b07-df9930c9daf0.pdf

Quarterly Report

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Systemair ab INTERIM REPORT Q1 1 May – 31 July 2013

First quarter, May –July 2013

  • Net sales increased by 21 percent to SEK 1,325 million (1,091).
  • Operating profit (EBIT) totalled SEK 102 million (99).
  • The operating margin was 7.7 percent (9.0).
  • Profit after tax fell to SEK 59 million (73).
  • Earnings per share totalled SEK 1.14 (1.40).
  • Cash flow from operating activities totalled SEK 69 million (60).

Net sales Q1

EBIT Q1

SEK 102 m.

Significant events during the first quarter

  • Menerga GmbH, Germany, was acquired in May. Menerga is a market-leading producer of air handling units for swimming baths. It also makes comfort and process ventilation equipment of extra high efficiency.
  • Norwegian company Reftec AS was acquired in May. Reftec supplies commercial chillers and heat pumps to the Norwegian market.
  • In July, an agreement to acquire Menerga GmbH, Austria, was signed. The company sells and services Menerga's products.
2013
May–Jul
3 mths
2012
May–Jul
3 mths
2012/13
May-Apr
12 mths
Net sales, SEK million 1,324.7 1,091.0 4,551.0
Growth, % 21.4 20.6 13.9
Operating profit, SEK million 102.0 98.5 365.2
Operating margin, % 7.7 9.0 8.0
Profit after tax, SEK million 59.3 73.0 241.0
Earnings per share, SEK 1.14 1.40 4.63
Operating cash flow per share, SEK 1.33 1.16 6.61

Continued organic gro owth

During our first quarter, we recor increase of 21 percent. The incre attributable to the acquisitions co Menerga in Germany, Holland He in Turkey. Gratifyingly, we can al continued organic growth of 6 pe the quarter, we focused hard on and restructuring the companies rded a sales ease is largely ompleted, eating and HSK lso report ercent. During integrating acquired.

The market

May and June were relatively weak perio was considerably stronger. As before, un especially in southern Europe but also to in North America and parts of Eastern Eu Nevertheless, we can see an upward tre example, Germany, Sweden, Turkey and ods, while July ncertainty prevails o a certain degree urope. end in, for d India.

Companies acquired

The year began with acquisitions of Men Germany, and Reftec, Norway. At the sa focused hard on integrating Holland Hea Turkey and continued the process of inte AC, Italy. Over the past year, we have ac expansion of the Systemair product rang a stronger player in the project market a offer all-inclusive product deliveries of v equipment for construction projects. Our also considerably boosted service and af nerga GmbH, ame time, we ating, HSK of egrating Systemair chieved a sharp ge. This makes us and enables us to ventilation r acquisitions have fter-market sales.

Investments

During the quarter, we expanded our pro Slovenia. We also acquired land in Slova Denmark in order to enlarge our product warehousing areas alongside existing pr In Ontario, Canada, we acquired a wareh building in which to relocate Change Air' to build up a logistics centre. In Malaysia agreement to acquire a new industrial p these investments will enable us to cont existing production facilities. Our facilitie well equipped. In September, we official air handling unit factory in Turkey, wher relocated to a new building and carried o investments in machinery. oduction facility in kia and in tion and roduction facilities. house and office 's operations and a, we signed an roperty. All-in-all, tinue expanding at es are modern and ly open our new e we have out major

Outlook

One of Systemair's strengths is have our own operations in 44 supply our products to more tha economic uncertainty in many m organic growth for the fourteen a reasonable level of profitabilit weaker economy to our advant acquisitions. We have acquired reasonable terms, although the restructuring in certain cases. W acquisitions and investments in product development and mark a record of performing well in t assume will continue to deliver our global presence. We countries and regularly an 100 countries. Despite markets, we can report nth successive quarter with ty. We have used the tage in making company good companies on re is a need for We are continuing to make production equipment, keting. A strategy that has he past and that we good results in the future.

Gerald Engström CEO

Sales and markets

Group sales for the first quarter of 2013 1,324.7 million (1,091.0), up 21.4 perce period in the preceding year. /14 totalled SEK nt from the same

Adjusted for both foreign exchange e acquisitions, net sales grew 5.7 percent. successive quarter of organic growth de market. effects and This is the 14th spite a weak

Net sales per quarter compared with same period previous years h

Geographic breakdown of Nordic region f Q1 sales

During the first quarter, sales in increased by 12 percent from th preceding year. Sales in Sweden and in Norway by 10 percent. T and Menerga, which delivers to in the increase. Adjusted for acq exchange effects, growth was 9 the Nordic region he same period the n increased by 24 percent The acquisitions of Reftec o the region, were factors quisitions and foreign 9 percent for the region.

Western Europe

Sales in the West European mar during the quarter, compared w period in the preceding year. Ad foreign exchange and acquisitio percent. Markets that performe include Germany and Switzerlan rket grew 36 percent with the corresponding djusted for the effects of ons, sales increased 3 ed strongly in the region nd.

Eastern Europe and CIS

Sales in Eastern Europe and the during the quarter. Adjusted for exchange effects, sales increase continues to show growth. e CIS increased 2 percent r acquisitions and foreign ed 1 percent. Russia

North America

Sales in the North American ma during the quarter compared to preceding year. Adjusted for the exchange and acquisitions, sale arket decreased 5 percent the same period in the e effects of foreign s decreased 3 percent.

2013
May–Jul
3 mths
2012
May–Jul
3 mths
Change in
sales
O
Of which
organic
Nordic region 268.9 239.6 12% 9%
Western Europe 492.7 361.6 36% 3%
Eastern Europe & CIS 308.4 302.0 2% 1%
North America 100.0 105.1 -5% -3%
Other markets 154.7 82.7 87% 38%
Total 1,324.7 1,091.0 21% 6%

Other markets

Sales in Other markets were 87 percent same period in the preceding year, partl HSK's and Holland Heating's deliveries to Adjusted for foreign exchange effects an sales increased 38 percent. higher than in the y as a result of o the region. nd acquisitions,

Sales by market Q1 2013 (Q1 2012 )

Results for the first quarter

The gross profit for the first quarter amo 439.2 million (390.2), an increase of 12. the same period in the preceding year. T fell to 33.2 percent (35.8) as a result ma acquisitions of companies with lower ma ounted to SEK .5 percent over The gross margin ainly of argins.

Operating profit for the first quarter a 102.0 million (98.5), an increase of 3.5 p same period in the preceding year. Our o was 7.7 percent (9.0). The lower operat consequence of a lower gross margin. amounted to SEK percent over the operating margin ing margin is a

Selling and administration expenses totalled SEK 332.8 million (286.8), an inc million. Selling and administration expen companies accounted for SEK 43.7 millio for the quarter. for the quarter crease of SEK 46.0 nses for acquired on of the increase

Selling expenses were charged with (4.7) for anticipated bad debts and impa trade receivables. During the quarter, co acquisitions totalled SEK 0.1 million (0.8) SEK 5.9 million airment losses on osts related to ).

Net financial items for the first quart -17.7 million (0.3). The effects of foreign long-term receivables, loans and bank b SEK -7.7 million net (5.8). Interest expen amounted to SEK -10.4 million (-5.9), as increased borrowing. er totalled SEK n exchange on alances totalled nse for the quarter s a result of

Operating profit per quarter, rel same period in previous years ative to the

Operating margin per quarte the same period in previous er, relative to years

Tax expense

Estimated tax for the quarter to (-25.8), corresponding to an eff percent (26.1) based on profit a otalled SEK -25.0 million fective tax rate of 29.6 after net financial items.

Acquisitions and new ope erations

In May, Systemair completed th GmbH, Germany, a leading Euro handling units for swimming ba makes extra high-efficiency com equipment. Established in 1981 headquarters and production fa Ruhr, just outside Düsseldorf. Sa 56.7 million, 53 percent in Germ currently employs approximatel he acquisition of Menerga opean producer of air ths. The company also mfort and ventilation , Menerga has its cilities in Mülheim an der ales in 2012 totalled EUR many. The company ly 400 people.

In May, Systemair entered an agreemen Reftec AS, a supplier of commercial chill pumps to the Norwegian market. Reftec 2007, has its headquarters in Trondheim in Oslo. It has 11 employees. The compa of NOK 34 million in 2012 and sales grow 30 percent. The company was formerly Systemair products in the Norwegian ma nt to acquire ers and heat c, founded in m and a sales office any recorded sales wth of more than a reseller of arket.

In July, Systemair entered into an agreem Menerga GmbH, the reseller of Menerga Austria. The company, with headquarter 10 employees, had sales of SEK 20 millio company both sells and services Menerg ment to acquire a's products in rs in Salzburg and on in 2012. The ga's products.

Menerga Germany and Reftec have bee of 1 May 2013, inclusive. It is anticipated acquisition of Menerga, Austria, will be c September, after which the company wi n consolidated as d that the completed in ill be consolidated.

Note 1 in this report contains an acquisit an account of the effects of the acquisiti Group's cash and cash equivalents. tion analysis and ions on the

Investments, depreciation and a mortisation

Investments for the quarter, excluding d totalled SEK 205.3 million (79.4), includin million (19.4) invested in new constructi machinery. The investments consisted fo land and buildings at the production faci Denmark, Germany and Slovakia. Acquis additional considerations paid for subsid 116.3 million (60.0) for the quarter. Dep current assets amounted to SEK 37.2 mi ivestments, ng SEK 87.9 ion and or the most part of lities in Canada, sitions and iaries totalled SEK preciation of nonllion (28.3).

Personnel

The average number of employees in th 3,841 (2,948). At the end of the period, 4,075 employees (3,279), 796 more tha New employees were recruited above a Slovakia (13), Germany (12) and Lithuan acquisitions, 712 employees joined the G 400 at Menerga, Germany, 160 at HSK, Holland Heating and 11 at Reftec, Norwa he Group was Systemair had an a year earlier. all in Malaysia (13), nia (12). Through Group, including Turkey, 141 at ay.

Cash flow and financial position

Cash flow from operating activities befo working capital totalled SEK 111.1 millio quarter. Changes in working capital, mai lower trade accounts payable and highe receivable, had an impact of SEK -42.0 m cash flow. Net cash flow from financing re changes in n (112.1) for the nly consisting of r trade accounts million (-51.7) on activities totalled SEK 172.1 million (20.4), as a re end of the period, the Group's n 1,455.7 million (818.0). The con ratio was 38.6 percent (45.2) a esult of new loans. At the net indebtedness was SEK nsolidated equity/assets t the end of the period.

Material risks and uncerta ainty

Systemair is exposed to operati its business. Operational risk is i international nature of the oper and the sensitivity of the constr business cycle. The financial risk identified in its business consist borrowing and interest rate risk risk and share price risk in longsecurities. The material risks an Systemair are described in more 2012/13 Annual Report. No sig the risk situation during the per ional and financial risks in inherent in the rations, tough competition ruction industry to the ks that Systemair has t of foreign exchange risk, k, credit risk and liquidity -term holdings of d uncertainty affecting e detail in the Company's nificant change occurred in iod.

Related party transaction ns

Systemair's significant transacti concern ebmpapst AB and ebm Co. KG. Transactions with relate detail in Note 37 to the account the 2012/13 financial year. Dur worthy of mention occurred in t transactions. ons with related parties papst Mulfingen GmbH & ed parties are described in ts in the Annual Report for ring the period, no change the scale of these

Parent Company

Parent Company sales for the q million (231.4), while operating (8.1). uarter totalled SEK 246.6 profit was SEK 9.9 million

The average number of employ was 428 (404). yees in the Parent Company

Financial calendar

The Interim Report for the seco be published at 8.00 a.m. on 28 The interim report for the third be published at 8.00 a.m. on 6 M The report for the fourth quarte will be published at 8.00 a.m. o nd quarter of 2013/14 will 8 November 2013. quarter of 2012/2013 will March 2014. er and full year 2013/14 n 11 June 2014.

About Systemair

The Company established operations in product concept, the circular duct fan, a considerably simplified the process of in adopted the motto "the straight way", a developed from a product concept into a philosophy. Our product range has expan span a broad range of fans, air handling air distribution, air curtains, heating prod refrigeration equipment. 1974 with a design that stallation. We nd this has been a business nded strongly to units, products for ducts and

Mission statement

Operating from the core values of simpli our business concept is to develop, man market high-quality ventilation products our business concept and with our custo aim is to be seen as a company to rely o emphasis on delivery reliability, availabil icity and reliability, ufacture and . On the basis of omers in focus, our on, with the lity and quality.

Business model

Availability is an important parameter in competitiveness, and we ensure effectiv flow of goods, with owned production u warehouse facilities and an efficient ERP modern production plants and our own s around the world, we reach out directly The business model supports stability an and today we are a leading producer an ventilation products with our own produ sales companies. terms of our ve control of our nits, centralised P system. With sales companies to our customers. nd development, d supplier of uction and own

Strategies

The following strategies create major str competitive advantages that help us to a rengths and achieve our goals.

  • Innovative product developmen product range focusing on ener handling products. nt and a broad rgy-efficient air
  • High product availability and fa efficient production, logistics an st delivery via an nd IT organisation.
  • Development and expansion of sales organisation. f Systemair's own
  • Good relationships with ventila distributors and consultants. tion contractors,
  • A highly diversified customer b vulnerability to fluctuations in t ase reduces our he economy.
  • Early presence in growth marke ets.
  • Strategy of acquisition and esta expand market shares. ablishment to

Miscellaneous

The information in this Interim R Systemair is required to disclose Swedish Securities Markets Act värdepappersmarknaden) and/o Instruments Trading Act (lagen instrument). This information is publication at 1.00 p.m. on 29 A Report is information that e in accordance with the (lagen om or the Swedish Financial om handel med finansiella to be submitted for August 2013.

This interim report has not b Company's auditor. been reviewed by the

Skinnskatteberg, 29 August 201 Systemair AB (publ) 13

Board of Directors

For further information, please c Gerald Engström, CEO, tel. +46- +46-70-519-0001, gerald.engs Lars Hansson, Chairman, tel. +4 [email protected] Glen Nilsson, CFO, tel. +46-222 +46-70-654-4003, glen.nilsson contact: -222-44001 or [email protected] 46-70-895-9002, -44003, [email protected]

Systemair AB (publ)

Co. Reg. No. 556160-4108 SE-739 30 Skinnskatteberg, Sw Tel. +46-222-44000 Fax +46-222-44099 [email protected] www.systemair.com. weden

Systemair in Brief

Systemair is a leading ventilation co countries in Europe, North America, East, Asia and South Africa. The Com approximately SEK 4.55 billion in th approximately 4,100 employees. Sy operating profit every year since 19 founded. During the past 15 years, has averaged about 13 percent. ompany with operations in 44 South America, the Middle mpany had sales of e 2012/13 financial year and ystemair has reported an 974, when the Company was the Company's growth rate

Systemair has well-established o The Group's products are marketed VEAB, Fantech, Menerga and Hollan shares have been quoted on the Mi Exchange in Stockholm since Octob about 60 companies. operations in growth markets. d under the Systemair, Frico, nd Heating brands. Systemair id Cap List of the OMX Nordic er 2007. The Group comprises

Consolidated Income S Statement

2013
M
May–Jul
2012
May–Jul
2012/13
Aug–Jul
2012/13
May-Apr
SEK m. 3 mths 3 mths trailing 12 12 mths
Net sales 1
1,324.7
1,091.0 4,784.7 4,551.0
Cost of goods sold -885.5 -700.8 -3,108.4 -2,923.6
Gross profit 439.2 390.2 1,676.3 1,627.4
Other operating income 19.6 13.7 67.3 61.5
Selling expenses -267.6 -233.6 -1,075.4 -1,041.4
Administration expenses -65.2 -53.2 -238.0 -226.1
Other operating expenses -24.0 -18.6 -61.6 -56.2
Operating profit 102.0 98.5 368.6 365.2
Net financial items -17.7 0.3 -52.5 -34.6
Profit after financial items 84.3 98.8 316.1 330.6
Tax on profit for the period -25.0 -25.8 -88.7 -89.6
Profit for the period 59.3 73.0 227.4 241.0
Attributable to:
Parent Company shareholders 59.3 73.0 227.4 241.0
Non-controlling interests 0.0 0.0 0.0 0.0
Earnings per share, SEK 1 1.14 1.40 4.37 4.63
Average number of shares 1 52,0
000,000
52,000,000 52,000,000 52,000,000

1 At present, Systemair does not have any op ption programme in operation and so no dilution effect is to b be taken into account.

Consolidated Stateme ent of Comprehensive Income

2013
M
May–Jul
3 mths
2012
May–Jul
3 mths
2012/13
Aug–Jul
trailing 12
2012/13
May-Apr
12 mths
Profit for the period 59.3 73.0 227.4 241.0
Other comprehensive income,
net of tax
Items that may later be
transferred to profit for the
period:
Translation differences, foreign
operations
-15.9 -69.8 -2.3 -56.1
Hedging of net assets in foreign
operations, net of tax
- 0.0 -0.6 -0.6
Change in fair value, financial
assets available for sale
74.6 - 132.3 57.7
Other comprehensive income,
net after tax
58.7 -69.8 129.4 1.0
Total comprehensive income for
the period
118.0 3.2 356.8 242.0
Attributable to:
Parent Company shareholders 118.0 3.2 356.8 242.0
Non-controlling interests 0.0 0.0 0.0 0.0

Consolidated Balance Sheet

SEK m. 31/07/2013 31/07/20
012
30/04/2013
ASSETS
Goodwill 518.5 36
69.2
457.7
Other intangible assets 272.9 13
34.1
171.7
Property, plant and equipment 907.9 76
63.1
813.4
Financial and other assets 629.6 10
05.6
550.9
Total non-current assets 2,328.9 1,37
72.0
1,993.7
Inventory 829.7 77
70.2
790.0
Current receivables 1,081.3 87
77.5
992.6
Cash and cash equivalents 133.4 8
86.1
98.4
Total current assets 2,044.4 1,73
33.8
1,881.0
TOTAL ASSETS 4,373.3 3,10
05.8
3,874.7
EQUITY AND LIABILITIES
Equity 1,688.4 1,40
02.3
1,576.0
Non-current liabilities, provisions 183.1 13
30.5
154.5
Non-current liabilities, interest-bearing 710.5 21
14.0
586.3
Total non-current liabilities 893.6 34
44.5
740.8
Current liabilities, interest-bearing 847.8 66
65.2
724.0
Current liabilities, non-interest-bearing 943.5 69
93.8
833.9
Total current liabilities 1,791.3 1,35
59.0
1,557.9
TOTAL EQUITY AND LIABILITIES 4,373.3 3,10
05.8
3,874.7

Consolidated Cash Flow w Statement

2013
May–Jul
2012
May–Jul
2012/13
May-Apr
SEK m. 3 mths 3 mths 12 mths
Operating profit 102.0 98.5 365.2
Adjustment for non-cash items 36.8 34.0 147.3
Financial items -7.5 -4.7 -27.4
Income tax paid -20.2 -15.7 -76.9
Cash flow from operating activities bef
fore
111.1 112.1 408.2
changes in working capital
Changes in working capital -42.0 -51.7 -64.3
Cash flow from operating activities 69.1 60.4 343.9
Cash flow from investing activities -203.5 -78.3 -692.5
Cash flow from financing activities 172.1 20.4 364.5
Cash flow for the period 37.7 2.5 15.9
Cash and cash equivalents at start of pe
eriod
98.4 91.6 91.6
Translation differences, cash and cash e
equivalents
-2.7 -8.0 -9.1
Cash and cash equivalents at close of p
period
133.4 86.1 98.4

Statement of Changes s in Equity – Group

2013 2012
May–Jul May–Jul
Equity
attrib
butable to
Parent
Equity
attributable to
Parent
SEK m. Company
sha
reholders
Non-controlling
interests
Total
equity
Company
shareholders
Non-controlling
interests
Total
equity
Amount at beginning of year
Effect from change in
accounting principles IAS 19R
1,576.0 0.0 1,576.0 1,399.0 0.1 1,399.1
(net)
Adjusted amount at beginning
-5.6 - -5.6 - - -
of year 1,570.4 0.0 1,570.4 1,399.0 0.1 1,399.1
Comprehensive income 118.0 - 118.0 3.2 0.0 3.2
Amount at end of period 1,688.4 0.0 1,688.4 1,402.2 0.1 1,402.3

Key Ratios for the Gro oup

2013
May–Jul
3 mths
2012
May–Jul
3 mths
2012/13
May-Apr
12 mths
Net sales SEK m. 1,324.7 1,091.0 4,551.0
Growth % 21.4 20.6 13.9
Operating profit SEK m. 102.0 98.5 365.2
Operating margin % 7.7 9.0 8.0
Profit after net fin. items SEK m. 84.3 98.8 330.6
Profit margin % 6.4 9.1 7.3
Return on capital employed % 12.7 14.3 13.8
Return on equity % 14.5 16.8 16.1
Equity/assets ratio % 38.6 45.2 40.7
Investments SEK m. 203.5 78.3 692.5
Depreciation/Amortisation SEK m. 37.2 28.3 116.6
Per share ratios
Basic earnings per share SEK 1.14 1.40 4.63
Diluted earnings per share SEK 1.14 1.40 4.63
Basic equity per share SEK 32.47 26.97 30.31
Diluted equity per share SEK 32.47 26.97 30.31
Basic operating cash flow per share SEK 1.33 1.16 6.61
Diluted operating cash flow per share SEK 1.33 1.16 6.61
No. of shares at end of period No. 52,000,000 52,000,000 52,000,000

Quarterly Key Ratios – Group

2013
3/14
2012/13
2011/12
May
y–Jul
Feb–Apr Nov–Jan Aug–Oct May–Jul Feb
–Apr
Nov–Jan Aug–Oct May–Jul
Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Net sales SEK m. 1,3
24.7
1,123.7 1,120.6 1,215.7 1,091.0 1,0
34.9
1,030.6 1,026.6 904.8
Growth % 21.4 8.6 8.7 18.4 20.6 25.0 15.4 10.5 10.7
Gross margin % 33.2 33.7 37.0 36.5 35.8 35.9 37.5 39.1 36.6
Operating profit SEK m. 1
02.0
36.0 89.8 140.9 98.5 5.6 97.3 130.2 86.8
Operating margin % 7.7 3.2 8.0 11.6 9.0 0.5 9.4 12.7 9.6
Return on capital employed % 12.7 13.8 13.1 13.9 14.3 14.7 18.7 19.3 19.1
Return on equity % 14.5 16.1 14.6 15.9 16.8 15.7 18.9 21.5 20.9
Equity/assets ratio % 38.6 40.7 41.4 39.1 45.2 45.1 45.3 45.4 45.4
Basic equity per share SEK 3
2.47
30.31 28.86 28.92 26.97 2
6.90
27.02 25.59 26.05
Basic earnings per share SEK 1.14 0.46 1.06 1.71 1.40 -
0.09
1.35 1.83 1.06

Parent Company Incom me Statement

2013 2012 2012/13
SEK m. May–Jul
3 mths
May–Jul
3 mths
May-Apr
12 mths
Net sales 246.6 231.4 946.8
Cost of goods sold -184.3 -178.2 -716.9
Gross profit 62.3 53.2 229.9
Other operating income 10.6 9.7 47.7
Selling expenses -38.8 -34.6 -165.3
Administration expenses -14.2 -13.8 -62.3
Other operating expenses -10.0 -6.4 -15.5
Operating profit 9.9 8.1 34.5
Net financial items 259.5 133.3 148.2
Profit after financial items 269.4 141.4 182.7
Appropriations 1 7.4 8.7 -20.7
Pre-tax profit 276.8 150.1 162.0
Tax on profit for the period -2.9 -5.1 -0.1
Profit for the period 273.9 145.0 161.9

1 Accelerated depreciation, tax allocation reserve a nd Group contributions.

Parent Company Balan nce Sheet

SEK m. 30/07/2013 30/07/20
012
30/04/2013
ASSETS
Other intangible assets 5.0 5.0 4.8
Property, plant and equipment 128.7 10
05.9
129.9
Financial and other assets 2,278.6 1,37
74.3
2,004.7
Total non-current assets 2,412.3 1,48
85.2
2,139.4
Inventory 158.9 9
99.7
127.8
Current receivables 689.4 63
35.4
560.9
Cash and cash equivalents - - -
Total current assets 848.3 73
35.1
688.7
TOTAL ASSETS 3,260.6 2,22
20.3
2,828.1
EQUITY AND LIABILITIES
Equity 1,239.1 88
86.9
892.4
Untaxed reserves 55.9 8
84.0
63.3
Non-current liabilities, provisions 2.6 2.0 2.8
Non-current liabilities, interest-bearing 747.5 51
16.0
743.3
Total non-current liabilities 750.1 51
18.0
746.1
Current liabilities, interest-bearing 795.2 61
17.6
664.5
Current liabilities, non-interest-bearing 420.3 11
13.8
461.8
Total current liabilities 1,215.5 73
31.4
1,126.3
TOTAL EQUITY AND LIABILITIES 3,260.6 2,22
20.3
2,828.1

General accounting policies and principles

Systemair applies International Financial accordance with the Swedish Annual Ac IAS 34 Interim Financial Reporting, and f RFR 2. The accounting policies and meth used in preparing the most recent Annua amendments, and IAS 1 Presentation of financial reporting. Reporting Standards (IFRS). This interim report was pr counts Act, the Swedish Financial Reporting Board's re for the Parent Company in accordance with the Swedis hods of calculation applied for the Group and Parent Co al Report, with the exception of application of IAS 19 E Financial Statements. These have not had any major im epared for the Group in ecommendation RFR 1 and h Annual Accounts Act and mpany accord with those Employee benefits mpact on the Group's

Note 1 - Acquisition analysis

The price paid to acquire 100 percent of follows: f the shares outstanding in Menerga and Reftec was pr rovisionally made up as

Total historical cost, less transaction cost ts SEK 133.3 million

Identifiable net assets Total
Goodwill 71.9
Brands and customer relationships 111.9
Buildings and land 29.9
Machinery and equipment 10.4
Financial and other assets 0.4
Inventory 47.2
Other current assets 66.7
Cash and cash equivalents 13.6
Non-interest-bearing liabilities (incl. deferred
d tax liability)
-26.8
Interest-bearing liabilities -38.5
Other operating liabilities -153.4
133.3

Transaction costs in the acquisition of su earnings in 2012/13. ubsidiaries totalled SEK 5.1 million, the major share of w which was charged to Q4

The total effect on cash flow from the ac consideration for prior years' acquisition cquisitions, including payment of a formerly withheld a s, amounted to SEK -116.3 million. additional purchase

Brands and customer relationships have these assets has been estimated at 5-10 been measured at the net present value of future cas 0 years. h flows. The useful life of

The goodwill upon acquisition is attributa expected to emerge after the acquisition able to the strong market position of the companies ac ns and the company's estimated future earning capacit cquired, synergy effects ty.

Note 2 – Financial instruments

Systemair's financial instruments consist for-sale financial assets, trade accounts institutions carry variable interest rates o fair value via the income statement, bas assets are recognised at fair value based liabilities are short term. For that reason, approximately to the carrying amounts. t of derivatives, trade accounts receivable, cash and ca payable, accrued supplier costs and interest-bearing lia or, in certain cases, fixed rates for a short period. Deriv sed on input data corresponding to level 2 in IFRS 7. Av d on input data corresponding to level 1 in IFRS 7. Othe , the fair values of all financial instruments are conside Systemair has not recognised any financial assets and ash equivalents, availableabilities. Liabilities to credit vatives are recognised at vailable-for-sale financial er financial assets and ered to equate liabilities net.

Definitions of key rati ios

Operating profit (EBIT)

Earnings before financial items and tax.

Growth

Growth is defined as the change in net s sales, relative to net sales for the preceding period.

Operating margin

Operating profit divided by net sales.

Profit margin

Profit after financial items divided by ne t sales.

Return on capital employed

Profit after financial income, for the trail ing 12 months (TTM), divided by average capital emplo oyed.

Capital employed

Total assets less non-interest-bearing lia abilities.

Return on equity

Profit after tax before non-controlling in non-controlling interest. terest, for the trailing 12 months (TTM), divided by ave erage equity excluding

Number of employees

The number of employees at the end of employees and paid overtime are conve the accounting period. New employees, appointments erted into full-time equivalents. s terminated, part-time

Earnings per share

Profit for the period attributable to Paren period. nt Company shareholders, divided by the average num mber of shares during the

Operating cash flow per share

Cash flow from operating activities for th he period, divided by the average number of shares du uring the period.

Equity/assets ratio

Adjusted equity divided by total assets.

Equity per share

Equity divided by the number of shares at the end of the period.

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