Addtech AB — Interim / Quarterly Report 2023

Jul 14, 2023

ADDTECH

INTERIM REPORT 1 APRIL - 30 JUNE 2023

FIRST QUARTER (1 APRIL - 30 JUNE 2023)

• Net sales increased by 16 percent and amounted to SEK 5,089 million (4,376).
• Operating profit before amortisation of intangible non-current assets (EBITA) increased by 22 percent and amounted to SEK 696 million (570) corresponding to an EBITA margin of 13.7 percent (13.0).
• Operating profit increased by 23 percent and amounted to SEK 595 million (482) corresponding to an operating margin of 11.7 percent (11.0).
• Profit after tax increased by 14 percent and amounted to SEK 392 million (344) and earnings per share before/after dilution amounted to SEK 1.40 (1.20). For the latest twelve month period earnings per share before dilution amounted to SEK 5.75 (4.30) and after dilution to SEK 5.75 (4.25).
• Return on working capital (P/WC) amounted to 66 percent (68).
• Return on equity amounted to 30 percent (30) and the equity ratio amounted to 38 percent (34).
• Cash flow from operating activities amounted to SEK 547 million (281). For the latest twelve month period, cash flow per share from operating activities amounted to SEK 8.10 (4.45).
• Since the start of the financial year six acquisitions have been completed, with total annual sales of about SEK 465 million.

| Group Summary
SEKm | 3 months | | | Rolling 12 months | |
| --- | --- | --- | --- | --- | --- |
| | 30 Jun 2023 | 30 Jun 2022 | Δ | 30 Jun 2023 | 31 Mar 2023 |
| Net sales | 5,089 | 4,376 | 16% | 19,427 | 18,714 |
| EBITA | 696 | 570 | 22% | 2,666 | 2,540 |
| EBITA-margin % | 13.7 | 13.0 | | 13.7 | 13.6 |
| Profit after financial items | 509 | 438 | 16% | 2,076 | 2,005 |
| Profit for the period | 392 | 344 | 14% | 1,602 | 1,554 |
| Earnings per share before dilution, SEK | 1.40 | 1.20 | | 5.75 | 5.55 |
| Earnings per share after dilution, SEK | 1.40 | 1.20 | | 5.75 | 5.55 |
| Cash flow from operating activities per share, SEK | - | - | | 8.10 | 7.10 |
| Return on equity, % | 30 | 30 | | 30 | 32 |
| Equity ratio, % | 38 | 34 | | 38 | 36 |

Comparisons in parentheses refer to the corresponding period of the previous year, unless stated otherwise.

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023

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CEO'S COMMENTS

FIRST QUARTER - CONTINUED GROWTH AND GOOD PROFITABILITY

We are starting the business year according to plan with continued growth and good profitability in all business areas. A high level of customer activity in the companies generated organic growth of 7 percent and EBITA-growth of 22 percent with high margins despite tough comparisons. Our international expansion continues and, during the period, we strengthened our operations with six additional acquisitions, of which four were outside the Nordic region. Our well-positioned and entrepreneur-driven companies with their strong relationships with customers and suppliers continue to demonstrate their strength and to generate value growth.

MARKET TREND

The general market situation was favourable in most of our key customer segments and geographies. The sales trend was very good regarding input components and solutions to manufacturing companies within the defence and process industries. The market situation in infrastructure products for national and regional grids as well as special vehicles remained strong, while the willingness to invest in major projects in the sawmill industry remained low. The business situation in the electronics, medical and mechanical industry segments was stable, while demand for electricity-related products for building and installation customers was favourable. From a geographical perspective, the business situation was favourable throughout the Nordic region, with development being strongest in Norway. For our companies operating outside the Nordic region, the overall business situation was strong.

ACQUISITIONS

We continue to take a positive view of the acquisition market and are working actively to fill and process our attractive pipeline with companies that are successful in strategically selected segments. During the quarter, we supplemented and strengthened the operations with an additional six acquisitions, adding combined annual sales of about SEK 465 million. Entirely in line with our strategy, the proportion of acquisitions outside the Nordic region is continuing to increase. The Canadian company Darby Manufacturing, a leading supplier of driver's seats for special vehicles and our first acquisition in North America, proves clearly that we do not see geography as a limitation given that the company is a high performer with a good strategic and cultural fit. Our relationship-based acquisition process, combined with a strong balance sheet and favourable cash flow, means that we perceive good opportunities to maintain a high rate of acquisition even in the future.

OUTLOOK

We entered the first quarter with favourable conditions but also with very tough comparisons. We currently see no signs of a general slowdown and have a well-filled, good quality order backlog, which was strengthened further during the quarter. Although the market situation varies between different segments, I am firmly convinced that our ability to quickly adapt to market changes means that our companies will continue to generate the prerequisites for long-term profitable growth. In conclusion, I would like to thank all our committed and skilled employees and to take the opportunity to wish everyone a pleasant summer.

Niklas Stenberg
President and CEO

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL – 30 JUNE 2023

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GROUP DEVELOPMENT

Sales development

Net sales in the Addtech Group during the period increased by 16 percent to SEK 5,089 million (4,376).

The organic growth amounted to 7 percent and acquired growth amounted to 5 percent. Exchange rate changes affect net sales positively with 4 percent, corresponding to SEK 172 million.

Profit development

EBITA for the period amounted to SEK 696 million (570), representing an increase of 22 percent. Operating profit increased during the period by 23 percent to SEK 595 million (482) and the operating margin amounted to 11.7 percent (11.0). Net financial items were SEK -86 million (-44) and profit after financial items increased by 16 percent to SEK 509 million (438).

Profit after tax for the period increased by 14 percent to SEK 392 million (344) and the effective tax rate amounted to 23 percent (22). Earnings per share before/after dilution for the period amounted to SEK 1.40 (1.20). For the latest twelve month period, earnings per share before dilution amounted to SEK 5.75 (4.30) and after dilution to SEK 5.75 (4.25).

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL – 30 JUNE 2023

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DEVELOPMENT IN THE BUSINESS AREAS

AUTOMATION

Net sales in Automation increased by 18 percent to SEK 897 million (761) and EBITA increased by 20 percent to SEK 109 million (91).

Market

The Automation business area enjoyed a good business situation in first quarter with a good sales trend. The trend was particularly strong for companies exposed to the defence industry. In medical technology, demand decreased against very tough comparisons, while it was stable in the process and mechanical industries. The revaluation of contingent purchase considerations affected profit for the quarter negatively by about SEK 4 million.

ELECTRIFICATION

Net sales in Electrification increased by 10 percent to SEK 1,024 million (929) and EBITA increased by 15 percent to SEK 130 million (114).

Market

The business situation for the Electrification business area was favourable in the first quarter with particularly favourable development for the companies in defence, special vehicles and solutions for electronics production. The market situation was stable in data and telecom, medical technology and for battery solutions, while demand decreased in wind power and building and installation.

ENERGY

Net sales in Energy increased by 14 percent to SEK 1,428 million (1,251) and EBITA increased by 27 percent to SEK 198 million (156).

Market

The Energy business area had a positive business situation and stable demand at a high level. The companies operating within infrastructure products for national and regional grids experienced favourable demand, while the number of project completions decreased slightly against tough comparisons. Sales developed positively for the units active in niche products for electric power distribution, the manufacturing industry, as well as for building and installation, while the market situation in wind power and the expansion of fiber optic networks was weaker. The revaluation of contingent purchase considerations affected profit for the quarter positively by about SEK 5 million.

INDUSTRIAL SOLUTIONS

Net sales in Industrial Solutions increased by 17 percent to SEK 923 million (788) and EBITA increased by 19 percent to SEK 157 million (132).

Market

On the whole, the business situation for the Industrial Solutions business area was favourable during the first quarter. For companies exposed to the forestry and sawmill industries, sales were good, while demand for new projects remained weak. The market situation was highly favourable for the companies active in special vehicles, while it was stable in waste and recycling and the mechanical industry. An unrealised exchange rate loss, as well as non-recurring costs totalling approximately SEK 9 million affected profit for the quarter negatively.

PROCESS TECHNOLOGY

Net sales in Process Technology increased by 26 percent to SEK 824 million (654) and EBITA increased by 28 percent to SEK 112 million (87).

Market

For the Process Technology business area, the market situation was highly favourable in the first quarter of the year. Demand was strong in the process industry, especially in oil and gas, as well as for the companies active in energy, the marine segment and for solutions for the aftermarket and service. The business situation in the mechanical and forestry industries was stable at a high level and it was strengthened in medical technology. Non-recurring costs of about SEK 8 million affected profit for the quarter negatively.

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL – 30 JUNE 2023

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OTHER FINANCIAL INFORMATION

Profitability, financial position and cash flow

The return on equity at the end of the period was 30 percent (30), and return on capital employed was 22 percent (21). Return on working capital P/WC (EBITA in relation to working capital) amounted to 66 percent (68).

At the end of the period the equity ratio amounted to 38 percent (34). Equity per share, excluding non-controlling interest, totalled SEK 21.95 (16.50). The Group's net debt at the end of the period amounted to SEK 4,310 million (4,305), excluding pension liabilities of SEK 219 million (248). The net debt/equity ratio, calculated on the basis of net debt excluding provisions for pensions amounted to 0.7 (0.9).

Cash and cash equivalents consisting of cash and bank equivalents and approved but non-utilised credit facilities amounted to SEK 2,030 million (1,902) at 30 June 2023.

Cash flow from operating activities amounted to SEK 547 million (281) during the period. Company acquisitions and disposals including settlement of contingent consideration regarding acquisitions implemented in previous years amounted to SEK 534 million (778). Investments in non-current assets totalled SEK 33 million (36) and disposal of non-current assets amounted to SEK 2 million (1). Repurchase of call options amounted to SEK 1 million (3) and exercised call options totalled SEK 0 million (11).

Employees

At the end of the period, the number of employees was 4,108 compared to 3,911 at the beginning of the financial year. During the period, completed acquisitions resulted in an increase of the number of employees by 149. The average number of employees in the latest twelve month period was 3,882.

Ownership structure

At the end of the period the share capital amounted to SEK 51.1 million.

Class of shares	Number of shares	Number of votes	Percentage of capital	Percentage of votes
Class A shares, 10 votes per share	12,885,744	128,857,440	4.7%	33.1%
Class B shares, 1 vote per share	259,908,240	259,908,240	95.3%	66.9%
Total number of shares before repurchases	272,793,984	388,765,680	100.0%	100.0%
Repurchased class B shares	-3,227,772		1.2%	0.8%
Total number of shares after repurchases	269,566,212

Addtech has three outstanding call option programmes for a total of 2,593,980 shares. Call options issued on repurchased shares entail a dilution effect of about 0.1 percent during the latest twelve month period. Addtech's own shareholdings fully meet the needs of the outstanding call option programmes.

Outstanding programme	Number of options	Corresponding number of shares	Proportion of total shares	Exercise price per option	Exercise price per share	Expiration period
2022/2026	825,910	825,910	0.3%	180.10	180.10	8 Sep 2025 - 10 Jun 2026
2021/2025	768,070	768,070	0.3%	214.40	214.40	9 Sep 2024 - 11 Jun 2025
2020/2024	250,000	1,000,000	0.4%	538.10	134.53	4 Sep 2023 - 5 Jun 2024
Total	1,843,980	2,593,980

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023

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Acquisitions and disposals

On 4 April, 90 percent of the shares in INDAG Maschinenbau GmbH, Germany, was acquired to become part of the Process Technology business area. INDAG produces and sells dynamic inline mixers to the process industry with a main focus on the food and chemical segments. The company has 40 employees and sales of around EUR 5 million.

On 26 April, Clyde Holding Ltd., Great Britain, was acquired to become part of the Process Technology business area. Clyde is a leading supplier of products and systems for pneumatic conveying primarily to the process and energy industries. The company operates globally and has extensive experience of complex projects where they also offer aftermarket services. The company has 49 employees and sales of around GBP 12 million.

On 5 May, 90 percent of the shares in Feritech Global Ltd., Great Britain, was acquired to become part of the Industrial Solutions business area. Feritech is a leader in the design and manufacture of bespoke technical solutions for the geotechnical subsea sector. The company has a broad offering and operates globally mainly towards the expansion of offshore wind power. The company has 21 employees and sales of around GBP 4.5 million.

On 1 June, Electrum Automation AB, Sweden, was acquired to become part of the Electrification business area. Electrum develop, produce and sell mobile electronics and complete solutions to leading manufacturers of machines and vehicles. The company has 22 employees and sales of around SEK 80 million.

On 1 June, Darby Manufacturing Ltd., Canada, was acquired to become part of the Industrial Solutions business area. Darby is a leading supplier of driver's seats for special vehicles in the North American market. The company offers both standard and specially adapted driver's seats from leading manufacturers in Europe and the US. The company has 14 employees and sales of around CAD 6.5 million.

On 26 June, S. Tygesen Energi A/S, Denmark, was acquired to become part of the Energy business area. Tygesen sells equipment and electricity transmission materials for electrical distribution networks, transmission networks, railways and stations in Denmark. The company also operates in Greenland, Iceland and the Faroe Islands. The company has 3 employees and sales of around DKK 50 million.

The purchase price allocation calculations for the acquisitions completed during the period 1 April - 30 June 2022 have now been finalised. No significant adjustments have been made to the calculations. Acquisitions completed as of the 2022/2023 financial year are distributed among the Group's business areas as follows:

Acquisitions 2022/2023	Closing	Acquired share, %	Net sales, SEKm*	Number of employees*	Business Area
Intertrafo Oy, Finland	April, 2022	100	30	15	Energy
Electric Control Systems Automation AS, Norway	April, 2022	100	75	31	Process Technology
Impulseradar Sweden AB, Sweden	April, 2022	88	80	27	Industrial Solutions
C.K. Environment A/S, Denmark	May, 2022	100	40	14	Process Technology
Arruti Group, Spain	June, 2022	100	280	90	Energy
Gotapack International AB, Sweden	July, 2022	100	25	5	Process Technology
Allied Insulators Ltd., Great Britain	August, 2022	100	75	15	Energy
Advanced Valve Solutions B.V., Netherlands	December, 2022	100	140	27	Process Technology
MCS Europe Group B.V., Netherlands	January, 2023	100	75	19	Automation
Drivhuset AB, Sweden	January, 2023	100	35	7	Industrial Solutions
Acquisitions 2023/2024	Closing	Acquired share, %	Net sales, SEKm*	Number of employees*	Business Area
INDAG Maschinenbau GmbH, Germany	April, 2023	90	55	40	Process Technology
Clyde Holding Ltd., Great Britain	April, 2023	100	150	49	Process Technology
Feritech Global Ltd., Great Britain	May, 2023	90	55	21	Industrial Solutions
Electrum Automation AB, Sweden	June, 2023	100	80	22	Electrification
Darby Manufacturing Ltd., Canada	June, 2023	100	50	14	Industrial Solutions
S. Tygesen Energi A/S, Denmark	June, 2023	100	75	3	Energy

• Refers to assessed condition at the time of acquisition on a full-year basis.

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023

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If all acquisitions which have taken effect during the period had been completed on 1 April 2023, their impact would have been an estimated SEK 115 million on Group net sales, about SEK 19 million on operating profit and about SEK 14 million on profit after tax for the period.

Addtech normally employs an acquisition structure comprising basic purchase consideration and contingent consideration. The outcome of contingent purchase considerations is determined by the future earnings reached by the companies and is subject to a fixed maximum level. Of considerations not yet paid for acquisitions during the financial year, the discounted value amounts to SEK 154 million. The contingent purchase considerations fall due for payment within four years and the outcome is subject to a maximum of SEK 195 million.

Transaction costs for acquisitions that resulted in an ownership transfer during the period, amounted to SEK 16 million (3) and are reported under Selling expenses.

Revaluation of contingent consideration had a marginally positive net effect of SEK 0 million (4) during the period. The impact on profits are reported under Other operating income and Other operating expenses, respectively.

According to the preliminary acquisitions analyses, the assets and liabilities included in the acquisitions were as follows, during the period:

| Fair value
SEKm | 30 Jun 2023 | 30 Jun 2022 |
| --- | --- | --- |
| Intangible non-current assets | 307 | 368 |
| Other non-current assets | 84 | 32 |
| Inventories | 85 | 121 |
| Other current assets | 238 | 241 |
| Deferred tax liability/tax asset | -80 | -88 |
| Other liabilities | -129 | -110 |
| Acquired net assets | 505 | 564 |
| Goodwill 1) | 308 | 366 |
| Non-controlling interests 2) | -36 | -28 |
| Consideration 3) | 777 | 902 |
| Less: cash and cash equivalents in acquired businesses | -106 | -71 |
| Less: consideration not yet paid | -181 | -175 |
| Effect on the Group’s cash and cash equivalents | 490 | 656 |

1) Goodwill is justified by expected future sales trend and profitability as well as the personnel included in the acquired companies.
2) Non-controlling interests have been measured at fair value, which entails that goodwill is also reported for non-controlling interests.
3) The consideration is stated excluding transaction costs for the acquisitions.

Parent Company

Parent Company net sales during the period amounted to SEK 24 million (20) and profit after financial items was SEK -38 million (-38). Net investments in non-current assets were SEK 0 million (0). The Parent Company's financial net assets was SEK 460 million (-2) at the end of the period.

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023

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OTHER DISCLOSURES

Accounting policies

The interim report has been prepared in accordance with IFRS as adopted by the EU, with IAS 34 Interim Financial Reporting being applied. Apart from in the financial statements and their accompanying notes, disclosures in accordance with IAS 34.16A also appear in other parts of the interim report. The interim report for the Parent Company has been prepared in accordance with the Annual Accounts Act and the Securities Market Act, which is in accordance with the provisions of RFR 2 Accounting for Legal Entities.

In the interim report, the same accounting principles and bases of calculation have been applied as in the most recent annual report. There are no new IFRS or IFRIC pronouncements endorsed by the EU that are applicable for Addtech or that have a significant impact on the Group's result of operations and position in 2023/2024.

Alternative performance measures

The Company presents certain financial measures in the interim report that are not defined according to IFRS. The Company believes that these measures provide valuable supplemental information to investors and the Company's management as they allow for evaluation of trends and the Company's performance. Since all companies do not calculate financial measures in the same way, they are not always comparable to measures used by other companies. These financial measures should therefore not be considered to be a replacement for measurements as defined under IFRS. For definitions and reconciliation tables of the performance measures that Addtech uses, please see page 17-20.

Risks and factors of uncertainty

Addtech's profit and financial position, as well as its strategic position, are affected by a number of internal factors under Addtech's control and by a number of external factors over which Addtech has limited influence. The risk factors of greatest significance to Addtech are the economic situation, or other events affecting the economy, such as the worldwide COVID-19 pandemic, as well as geopolitical conflicts, such as Russia's invasion of Ukraine, in combination with structural changes and the competitive situation.

Please see section Risks and uncertainties (page 59-61) in the annual report for 2022/2023 for further details.

The Parent Company is indirectly affected by the above risks and uncertainty factors due to its role in the organisation.

Transactions with related parties

No transactions between Addtech and related parties that have significantly affected the Group's or the parent company's position and its earnings have taken place during the period.

Seasonal effects

Addtech's sales of high-tech products and solutions in the manufacturing industry and infrastructure are not subject to major seasonal variations. The number of production days and customers' demand and willingness to invest can vary over the quarters.

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023

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Events after the end of the period

No events requiring reporting have occurred after the end of the period.

Stockholm July 14, 2023

Niklas Stenberg
President and CEO

This report has not been subject to review by the company's auditor.

FURTHER INFORMATION

Publication

This information is information that Addtech 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 below, at 8.15 a.m CET on 14 July 2023.

Future information

2023-08-23 Annual General Meeting 2023 will be held at IVA, Grev Turegatan 16, Stockholm at 2.00 p.m
2023-10-26 Interim report 1 April - 30 September 2023
2024-02-07 Interim report 1 April - 31 December 2023
2024-05-16 Year-end report 1 April 2023 - 31 March 2024

For further information, please contact:

Niklas Stenberg, President and CEO, +46 8 470 49 00
Malin Enarson, CFO, +46 705 979 473

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023

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BUSINESS AREA

Net sales by business area	2023/2024		2022/2023
Quarterly data, SEKm	Q1	Q4	Q3	Q2	Q1
Automation	897	962	877	810	761
Electrification	1,024	1,149	1,001	958	929
Energy	1,428	1,355	1,267	1,256	1,251
Industrial Solutions	923	937	802	709	788
Process Technology	824	875	713	690	654
Group items	-7	-11	-7	-5	-7
Addtech Group	5,089	5,267	4,653	4,418	4,376
EBITA by business area	2023/2024		2022/2023
---	---	---	---	---	---
Quarterly data, SEKm	Q1	Q4	Q3	Q2	Q1
Automation	109	126	105	105	91
Electrification	130	143	118	126	114
Energy	198	176	169	159	156
Industrial Solutions	157	190	148	115	132
Process Technology	112	125	94	91	87
Group items	-10	-2	-4	-14	-10
EBITA	696	758	630	582	570
Depr. of intangible non-current assets	-101	-98	-94	-93	-88
- of which acquisitions	-96	-91	-88	-87	-84
Operating profit	595	660	536	489	482
Net sales	3 months		Rolling 12 months
---	---	---	---	---
SEKm	30 Jun 2023	30 Jun 2022	30 Jun 2023	31 Mar 2023
Automation	897	761	3,546	3,410
Electrification	1,024	929	4,132	4,037
Energy	1,428	1,251	5,306	5,129
Industrial Solutions	923	788	3,371	3,236
Process Technology	824	654	3,102	2,932
Group items	-7	-7	-30	-30
Addtech Group	5,089	4,376	19,427	18,714
EBITA and EBITA-margin	3 months				Rolling 12 months
---	---	---	---	---	---
	30 Jun 2023		30 Jun 2022		30 Jun 2023
	SEKm	%	SEKm	%	SEKm
Automation	109	12.2	91	12.0	445
Electrification	130	12.7	114	12.2	517
Energy	198	13.9	156	12.5	702
Industrial Solutions	157	17.1	132	16.8	610
Process Technology	112	13.6	87	13.3	422
Group items	-10		-10		-30
EBITA	696	13.7	570	13.0	2,666
Depr. of intangible non-current assets	-101		-88		-386
- of which acquisitions	-96		-84		-362
Operating profit	595	11.7	482	11.0	2,280

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023

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DISAGGREGATION OF REVENUE

Net sales by the customers		3 months
geographical location		30 Jun 2023
			Industrial	Process	Group	Addtech
SEKm	Automation	Electrification	Energy	Solutions	Technology	items	Group
Sweden	216	283	352	311	181	-	1,343
Denmark	172	96	260	7	134	0	669
Finland	156	105	112	187	108	-	668
Norway	55	91	289	43	124	-	602
Other Europe	255	397	334	213	203	-	1,402
Other countries	42	51	80	161	71	-	405
Group items	1	1	1	1	3	-7	-
Total	897	1,024	1,428	923	824	-7	5,089
Net sales by the customers		3 months
geographical location		30 Jun 2022
			Industrial	Process	Group	Addtech
SEKm	Automation	Electrification	Energy	Solutions	Technology	items	Group
Sweden	191	309	310	286	150	0	1,246
Denmark	150	106	312	9	98	0	675
Finland	128	124	80	134	115	0	581
Norway	54	100	240	32	92	-	518
Other Europe	207	228	231	200	144	0	1,010
Other countries	30	60	77	127	52	0	346
Group items	1	2	1	0	3	-7	-
Total	761	929	1,251	788	654	-7	4,376
Net sales per customers segment		3 months
			30 Jun 2023
SEKm	Automation	Electrification	Energy	Industrial	Process	Group	Addtech
Building & Installation	38	83	294	25	17	-	457
Data & Telecommunications	29	54	110	0	1	-	194
Electronics	63	250	60	3	6	0	382
Energy	59	141	654	8	117	-	979
Vehicles	55	136	16	346	53	-	606
Medical technology	151	129	10	4	54	-	348
Mechanical industry	246	101	86	86	123	-	642
Forestry & Process	97	14	34	290	295	-	730
Transport	43	12	106	67	120	-	348
Other	115	103	57	93	35	0	403
Group items	1	1	1	1	3	-7	-
Total	897	1,024	1,428	923	824	-7	5,089
Net sales per customers segment		3 months
			30 Jun 2022
SEKm	Automation	Electrification	Energy	Industrial	Process	Group	Addtech
Building & Installation	28	68	287	21	34	-	438
Data & Telecommunications	26	65	118	0	0	-	209
Electronics	57	200	61	3	6	0	327
Energy	50	139	494	7	99	-	789
Vehicles	51	142	21	268	36	-	518
Medical technology	131	85	14	4	40	-	274
Mechanical industry	209	100	87	77	110	-	583
Forestry & Process	89	9	37	279	191	-	605
Transport	29	16	83	58	104	-	290
Other	90	103	48	71	31	0	343
Group items	1	2	1	0	3	-7	-
Total	761	929	1,251	788	654	-7	4,376

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023

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CONSOLIDATED INCOME STATEMENT, CONDENSED

SEKm	3 months		Rolling 12 months
	30 Jun 2023	30 Jun 2022	30 Jun 2023	31 Mar 2023
Net sales	5,089	4,376	19,427	18,714
Cost of sales	-3,518	-3,076	-13,533	-13,091
Gross profit	1,571	1,300	5,894	5,623
Selling expenses	-713	-613	-2,693	-2,593
Administrative expenses	-249	-215	-956	-922
Other operating income and expenses	-14	10	35	59
Operating profit	595	482	2,280	2,167
- as % of net sales	11.7	11.0	11.7	11.6
Financial income and expenses	-86	-44	-204	-162
Profit after financial items	509	438	2,076	2,005
- as % of net sales	10.0	10.0	10.7	10.7
Income tax expense	-117	-94	-474	-451
Profit for the period	392	344	1,602	1,554
Profit for the period attributable to:
Equity holders of the Parent Company	378	329	1,544	1,495
Non-controlling interests	14	15	58	59
Earnings per share before dilution, SEK	1.40	1.20	5.75	5.55
Earnings per share after dilution, SEK	1.40	1.20	5.75	5.55
Average number of shares after repurchases, '000s	269,565	269,551	269,560	269,557
Number of shares at end of the period, '000s	269,566	269,626	269,566	269,565

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, CONDENSED

SEKm	3 months		Rolling 12 months
	30 Jun 2023	30 Jun 2022	30 Jun 2023	31 Mar 2023
Profit for the period	392	344	1,602	1,554
Components that will be reclassified to profit for the year
Cash flow hedges	4	1	4	1
Foreign currency translation differences for the period	363	146	529	312
Components that will not be reclassified to profit for the year
Actuarial effects of the net pension obligation	-	55	27	82
Other comprehensive income	367	202	560	395
Total comprehensive income	759	546	2,162	1,949
Total comprehensive income attributable to:
Equity holders of the Parent Company	734	528	2,088	1,882
Non-controlling interests	25	18	74	67

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023

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CONSOLIDATED BALANCE SHEET, CONDENSED

SEKm	30 Jun 2023	30 Jun 2022	31 Mar 2023
Goodwill	4,365	3,719	3,935
Other intangible non-current assets	2,672	2,386	2,377
Property, plant and equipment	1,280	1,112	1,179
Other non-current assets	80	69	80
Total non-current assets	8,397	7,286	7,571
Inventories	3,457	3,039	3,326
Current receivables	3,830	3,369	3,768
Cash and cash equivalents	879	540	606
Total current assets	8,166	6,948	7,700
Total assets	16,563	14,234	15,271
Total equity	6,364	4,826	5,573
Interest-bearing provisions	219	248	218
Non-interest-bearing provisions	706	587	633
Non-current interest-bearing liabilities	3,488	3,165	3,617
Non-current non-interest-bearing liabilities	23	9	18
Total non-current liabilities	4,436	4,009	4,486
Non-interest-bearing provisions	110	73	87
Current interest-bearing liabilities	1,701	1,680	1,096
Current non-interest-bearing liabilities	3,952	3,646	4,029
Total current liabilities	5,763	5,399	5,212
Total equity and liabilities	16,563	14,234	15,271

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY, CONDENSED

SEKm	30 Jun 2023	30 Jun 2022	31 Mar 2023
Opening balance	5,573	4,259	4,259
Exercised, issued and repurchased options	-1	8	-17
Repurchase of treasury shares	-	-	-31
Dividend, ordinary	-	-	-485
Dividend, non-controlling interests	-3	-2	-34
Change, non-controlling interests	36	28	28
Option debt, acquisition	-	-13	-96
Total comprehensive income	759	546	1,949
Closing balance	6,364	4,826	5,573

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023

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CONSOLIDATED CASH FLOW STATEMENT, CONDENSED

SEKm	3 months		Rolling 12 months
	30 Jun 2023	30 Jun 2022	30 Jun 2023	31 Mar 2023
Profit after financial items	509	438	2,076	2,005
Adjustment for items not included in cash flow	273	184	796	707
Income tax paid	-56	-105	-425	-474
Changes in working capital	-179	-236	-270	-327
Cash flow from operating activities	547	281	2,177	1,911
Net investments in non-current assets	-31	-35	-179	-183
Acquisitions and disposals	-534	-778	-960	-1,204
Cash flow from investing activities	-565	-813	-1,139	-1,387
Dividend paid to shareholders	-	-	-485	-485
Repurchase of own shares/change of options	-1	8	-57	-48
Other financing activities	256	611	-193	162
Cash flow from financing activities	255	619	-735	-371
Cash flow for the period	237	87	303	153
Cash and cash equivalents at beginning of period	606	437	540	437
Exchange differences on cash and cash equivalents	36	16	36	16
Cash and cash equivalents at end of period	879	540	879	606

FAIR VALUES ON FINANCIAL INSTRUMENTS

SEKm	30 Jun 2023			31 Mar 2023
	Carrying amount	Level 2	Level 3	Carrying amount	Level 2	Level 3
Derivatives - fair value, hedge instruments	15	15	-	9	9	-
Derivatives - fair value through profit	12	12	-	9	9	-
Total financial assets at fair value per level	27	27	-	18	18	-
Derivatives - fair value, hedge instruments	2	2	-	3	3	-
Derivatives - fair value through profit	75	75	-	38	38	-
Contingent considerations - fair value through profit	411	-	411	295	-	295
Total financial liabilities at fair value per level	488	77	411	336	41	295

The fair value and carrying amount are recognised in the balance sheet as shown in the table above.

For quoted securities, the fair value is determined on the basis of the asset's quoted price in an active market, level 1.

As at the reporting date the Group had no items in this category.

For currency contracts and embedded derivatives, the fair value is determined on the basis of observable market data, level 2.

For contingent considerations, a cash-flow-based valuation is performed, which is not based on observable market data, level 3.

For the Group's other financial assets and liabilities, fair value is estimated to be the same as the carrying amount.

Contingent considerations	30 Jun 2023	31 Mar 2023
Opening balance	295	349
Acquisitions during the year	145	150
Reversed through profit or loss	0	-40
Consideration paid	-51	-192
Interest expenses	2	11
Exchange differences	20	17
Closing balance	411	295

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023

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KEY FINANCIAL INDICATORS

	12 months ending
	30 Jun 2023	31 Mar 2023	30 Jun 2022	31 Mar 2022	31 Mar 2021
Net sales, SEKm	19,427	18,714	15,135	14,038	11,336
EBITDA, SEKm	3,012	2,872	2,257	2,077	1,501
EBITA, SEKm	2,666	2,540	1,971	1,803	1,251
EBITA-margin, %	13.7	13.6	13.0	12.8	11.0
Operating profit, SEKm	2,280	2,167	1,651	1,501	989
Operating margin, %	11.7	11.6	10.9	10.7	8.7
Profit after financial items, SEKm	2,076	2,005	1,553	1,433	937
Profit for the period, SEKm	1,602	1,554	1,211	1,117	729
Working capital	4,055	3,855	2,888	2,618	2,416
Return on working capital (P/WC), %	66	66	68	69	52
Return on equity, %	30	32	30	30	23
Return on capital employed, %	22	22	21	20	15
Equity ratio, %	38	36	34	34	35
Financial debt, SEKm	4,529	4,325	4,553	4,061	3,134
Debt / equity ratio, multiple	0.7	0.8	0.9	1.0	0.9
Financial debt / EBITDA, multiple	1.5	1.5	2.0	2.0	2.1
Net debt excl. pensions, SEKm	4,310	4,107	4,305	3,747	2,798
Net debt, excl pensions / equity ratio, multiple	0.7	0.7	0.9	0.9	0.8
Interest coverage ratio, multiple	11.9	13.7	20.2	22.4	15.8
Average number of employees	3,882	3,781	3,434	3,317	3,068
Number of employees at end of the period	4,108	3,911	3,753	3,556	3,133

KEY FINANCIAL INDICATORS PER SHARE

SEK	12 months ending
	30 Jun 2023	31 Mar 2023	30 Jun 2022	31 Mar 2022	31 Mar 2021
Earnings per share before dilution	5.75	5.55	4.30	4.00	2.60
Earnings per share after dilution	5.75	5.55	4.25	3.95	2.60
Cash flow from operating activities per share	8.10	7.10	4.45	4.15	5.60
Shareholders' equity per share	21.95	19.25	16.50	14.60	11.95
Share price at the end of the period	234.80	192.30	133.40	182.00	130.00
Average number of shares after repurchases, '000s	269,560	269,557	269,465	269,400	269,051
Average number of shares adjusted for repurchases and dilution, '000s	269,780	269,723	270,341	270,346	269,969
Number of shares outstanding at end of the period, '000s	269,566	269,565	269,626	269,528	269,275

For definitions of key financial indicators, see page 17-19.

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023

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PARENT COMPANY INCOME STATEMENT, CONDENSED

SEKm	3 months		Rolling 12 months
	30 Jun 2023	30 Jun 2022	30 Jun 2023	31 Mar 2023
Net sales	24	20	87	83
Administrative expenses	-36	-28	-124	-116
Operating profit/loss	-12	-8	-37	-33
Interest income and expenses and similar items	-26	-30	713	709
Profit after financial items	-38	-38	676	676
Appropriations	-	-	338	338
Profit before taxes	-38	-38	1,014	1,014
Income tax expense	7	8	-56	-55
Profit for the period	-31	-30	958	959
Total comprehensive income	-31	-30	958	959

PARENT COMPANY BALANCE SHEET, CONDENSED

SEKm	30 Jun 2023	30 Jun 2022	31 Mar 2023
Intangible non-current assets	1	1	1
Property, plant and equipment	0	0	0
Non-current financial assets	6,201	5,362	5,503
Total non-current assets	6,202	5,363	5,504
Current receivables	1,363	1,027	1,698
Cash and bank balances	0	-	-
Total current assets	1,363	1,027	1,698
Total assets	7,565	6,390	7,202
Restricted equity	69	69	69
Unrestricted equity	1,069	653	1,100
Total equity	1,138	722	1,169
Untaxed reserves	391	302	391
Provisions	14	13	14
Non-current liabilities	3,226	2,718	3,410
Current liabilities	2,796	2,635	2,218
Total equity and liabilities	7,565	6,390	7,202

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023

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DEFINITIONS

Return on equity¹²

Earnings after tax divided by equity. The components are calculated as the average of the last 12 months.

Return on equity measures the return generated on owners' invested capital.

Return on working capital (P/WC)¹

EBITA divided by working capital.

P/WC is used to analyse profitability and is a measure that encourages high EBITA and low working capital requirements, see the reconciliation table on page 20.

Return on capital employed¹

Profit after financial items plus financial expenses as a percentage of capital employed. The components are calculated as the average of the last 12 months.

Return on capital employed shows the Group's profitability in relation to externally financed capital and equity, see the reconciliation table on page 20.

EBITA¹

Operating profit before amortisation of intangible assets.

EBITA is used to analyse the profitability generated by operating activities, see reconciliation table on page 20.

EBITA-margin¹

EBITA as a percentage of net sales.

EBITA-margin is used to show the degree of profitability in operating activities.

EBITDA¹

Operating profit before depreciation and amortisation.

EBITDA is used to analyse the profitability generated by operating activities, see reconciliation table on page 20.

Equity per share¹

Equity divided by number of shares outstanding at the reporting period's end.

This measures how much equity is attributable to each share and is published to make it easier for investors to conduct analyses and make decisions.

Financial net debt¹

The net of interest-bearing debt and provisions minus cash and cash equivalents.

Net debt is used to monitor changes in debt, analyse the Group indebtedness and its ability to repay its debts using liquid funds generated from the Group's operating activities if all debt fell due for repayment today and any necessary refinancing.

Financial net debt/EBITDA¹

Net financial debt divided by EBITDA.

Net financial debt compared with EBITDA provides a performance measure for net debt in relation to cash-generating earnings in the business, i.e. it gives an indication of the business' ability to repay its debts. This measure is generally used by financial institutions to measure creditworthiness.

Financial items¹

Financial income minus financial costs.

Used to describe changes in the Group's financial activities.

Acquired growth¹

Changes in net sales attributable to business acquisitions compared with the same period last year.

Acquired growth is used as a component to describe the change in consolidated net sales in which acquired growth is distinguished from organic growth, divestments and exchange rate effects, see reconciliation table on page 20.

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL – 30 JUNE 2023

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ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL – 30 JUNE 2023

Cash flow from operating activities per share¹

Cash flow from operating activities, divided by the average number of outstanding shares after repurchase.

This measure is used so investors can easily analyse the size of the surplus generated per share from operating activities.

Net investments in non-current assets¹

Investments in non-current assets minus sales of non-current assets.

This measure is used to analyse the Group's investments in renewing and developing property, plant and equipment.

Net debt excluding pensions¹

The net of interest-bearing debt and provisions excluding pensions minus cash and cash equivalents.

A measure used to analyse financial risk, see reconciliation table on page 20.

Net debt excluding pensions/ equity ratio¹²

Net debt excluding pensions divided by shareholders' equity.

A measure used to analyse financial risk, see reconciliation table on page 20.

Organic growth¹

Changes in net sales excluding currency effects, acquisitions and divestments compared with the same period last year.

Organic growth is used to analyse underlying sales growth driven by change in volumes, product range and price for similar products between different periods, see reconciliation table on page 20.

Profit after financial items¹

Profit/loss for the period before tax.

Used to analyse the business' profitability including financial activities.

Earnings per share (EPS)

Shareholders' share of profit for the period after tax, divided by the weighted average number of shares during the period.

Earnings per share (EPS), diluted

Shareholders' share of profit for the period after tax, divided by the weighted average number of shares during the period, adjusted for the additional number of shares in the event of outstanding options being used.

Interest coverage ratio¹

Earnings after net financial items plus interest expenses and bank charges divided by interest expenses and bank charges.

This performance indicator measures the Group's capacity through its business operations and financial income to generate a sufficiently large surplus to cover its financial costs, see reconciliation table on page 20.

Working capital¹

Working capital (WC) is measured through an annual average defined as inventories plus accounts receivable less accounts payable.

Working capital is used to analyse how much working capital is tied up in the business, see reconciliation table on page 20.

Operating margin¹

Operating profit as a percentage of net sales.

This measure is used to specify the percentage of sales that is left to cover interest and tax, and to provide a profit, after the company's costs have been paid.

Operating profit¹

Operating income minus operating expenses.

Used to describe the Group's earnings before interest and tax.

18

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Debt/equity ratio¹²

Financial net liabilities divided by equity.

A measure used to analyse financial risk.

Equity ratio¹²

Equity as a percentage of total assets.

The equity/assets ratio is used to analyse financial risk and show the percentage of assets that are funded with equity.

Capital employed¹

Total assets minus non-interest-bearing liabilities and provisions.

Capital employed shows the size of the company's assets that have been lent out by the company's owners or that have been lent out by lenders, see reconciliation table on page 20.

Outstanding shares

Total number of shares less treasury shares repurchased by the Company.

¹The performance measure is an alternative performance measure according to ESMA's guidelines.

²Minority interest is included in equity when the performance measures are calculated.

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL – 30 JUNE 2023

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RECONCILIATION TABLES ALTERNATIVE PERFORMANCE MEASURES

EBITA and EBITDA		12 months ending
Addtech Group, SEKm	30 Jun 2023	31 Mar 2023	30 Jun 2022	31 Mar 2022	31 Mar 2021
Operating profit according to Interim report	2,280	2,167	1,651	1,501	989
Amortization, intangible assets (+)	386	373	320	302	262
EBITA	2,666	2,540	1,971	1,803	1,251
Depreciation, tangible assets (+)	346	332	286	274	250
EBITDA	3,012	2,872	2,257	2,077	1,501
Working capital and return on working capital (P/WC)
---	---	---	---	---	---
	12 months ending
Addtech Group, SEKm	30 Jun 2023	31 Mar 2023	30 Jun 2022	31 Mar 2022	31 Mar 2021
EBITA (12 months rolling)	2,666	2,540	1,971	1,803	1,251
Inventory, yearly average (+)	3,319	3,154	2,314	2,058	1,722
Accounts receivables, yearly average (+)	3,000	2,876	2,283	2,078	1,756
Accounts payables, yearly average (-)	-2,264	-2,175	-1,709	-1,518	-1,062
Working capital (average)	4,055	3,855	2,888	2,618	2,416
Return on working capital (P/WC) (%)	66%	66%	68%	69%	52%
Acquired- and organic growth	3 months				12 months
---	---	---	---	---	---	---
	30 Jun 2023		30 Jun 2022		30 Jun 2023
Addtech Group	239	(5%)	436	(13%)	1,458	(9%)
Organic growth (SEKm,%)	302	(7%)	562	(17%)	2,226	(15%)
Divestments (SEKm,%)	-	(-)	-	(-)	-	(-)
Exchange rate effect (SEKm,%)	172	(4%)	99	(3%)	608	(4%)
Total growth (SEKm,%)	713	(16%)	1,097	(33%)	4,292	(28%)
Interest coverage ratio	12 months ending
---	---	---	---	---	---
	30 Jun 2023	31 Mar 2023	30 Jun 2022	31 Mar 2022	31 Mar 2021
Addtech Group	2,076	2,005	1,553	1,433	937
Interest expenses and bank charges, SEKm (+)	191	158	81	67	63
Total	2,267	2,163	1,634	1,500	1,000
Interest coverage ratio, multiple	11.9	13.7	20.2	22.4	15.8
Net debt excl. pensions and net debt excl pensions/equity ratio
---	---	---	---	---	---
	12 months ending
Addtech Group	30 Jun 2023	31 Mar 2023	30 Jun 2022	31 Mar 2022	31 Mar 2021
Financial net debt, SEKm	4,529	4,325	4,553	4,061	3,134
Pensions, SEKm (-)	-219	-218	-248	-314	-336
Net debt excluding pensions, SEKm	4,310	4,107	4,305	3,747	2,798
Equity, SEKm	6,364	5,573	4,826	4,259	3,450
Net debt to Equity ratio (excluding pensions), multiple	0.7	0.7	0.9	0.9	0.8
Capital employed and return on capital employed
---	---	---	---	---	---
	12 months ending
Addtech Group, SEKm	30 Jun 2023	31 Mar 2023	30 Jun 2022	31 Mar 2022	31 Mar 2021
Profit after financial items	2,076	2,005	1,553	1,433	937
Financial expenses (+)	275	210	187	152	93
Profit after financial items plus financial expenses	2,351	2,215	1,740	1,585	1,030
Total assets, yearly average (+)	15,107	14,280	11,887	11,001	9,309
Non-interest-bearing liabilities, yearly average (-)	-3,756	-3,581	-2,965	-2,705	-2,153
Non-interest-bearing provisions, yearly average (-)	-704	-655	-528	-485	-413
Capital employed	10,647	10,044	8,394	7,811	6,743
Return on capital employed, %	22%	22%	21%	20%	15%

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023

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This is Addtech

Addtech is a Swedish, listed technical solutions group that combines the flexibility and speed of a small company with the resources of a large company. We acquire, own and develop independent subsidiaries that sell various high-tech products and solutions to customers, primarily within industry and infrastructure. With in-depth expertise in a number of different niches, our subsidiaries generate added technical, financial and sustainable value for customers and suppliers alike, thus helping increase the efficiency and competitiveness of all involved. We currently own more than 150 companies in about 20 countries, and have a long history of sustainable, profitable growth.

Our vision

We are to be the leader in value-creating technical solutions for a sustainable tomorrow, perceived as the most skilled and long-term partner of our customers, suppliers and employees.

Business concept in brief

Addtech offers high-tech products and solutions for companies in the manufacturing and infrastructure sectors. Addtech contributes with added technical and financial value by being a skilled and professional partner for customers and manufacturers.

We build shareholder value through:

• our 150 subsidiaries and their capacity to generate earnings growth
• corporate governance that ensures the companies achieve even better results and development
• acquisitions that bring in new employees, customers and suppliers

ADDTECH AB (PUBL.) Org.nr: 556302-9726, Box 5112, 102 43 Stockholm, Visiting address: Birger Jarlsgatan 43 Tel: +46 8 470 49 00, info@addtech.com

ADDTECH

ADDTECH AB (PUBL.) INTERIM REPORT 1 APRIL - 30 JUNE 2023