Quarterly Report • Jul 16, 2020
Quarterly Report
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• Revenue amounted to MSEK 2,288 (1,576), with the change compared with the preceding year primarily attributable to the acquisition of Swedol. Compared with revenue for the corresponding quarter in the preceding year
including Swedol (MSEK 2,499), revenue declined by 8 percent.*
• EBITA (excluding items affecting comparability of MSEK –4) amounted to MSEK 155 (75), corresponding to an EBITA margin of 6.8 percent (4.8). The change compared with the preceding year is primarily attributable to the acquisition of Swedol.
Compared with EBITA for the corresponding quarter in the preceding year including Swedol (MSEK 168), EBITA declined by 8 percent while the EBITA margin increased to 6.8 percent (6.7).*
Momentum Group AB (publ)
Mail address: PO Box 5900, SE-102 40 Stockholm, Sweden │ Visit: Östermalmsgatan 87 D, Stockholm │ Tel: +46 10 454 54 70 Org No: 559072-1352 Reg office: Stockholm │ www.momentum.group
The ongoing pandemic continues to affect the global economy and thus is inevitably impacting Momentum Group, our employees and our customers. The general demand situation over the past quarter continued to be characterised by restraint and caution in all of our main markets in the Nordic region, although with certain variations between customer segments and countries, with the most significant impact experienced in Norway. However, the overall effect on the Group's earnings performance so far during the financial year to date has been relatively limited given the challenging circumstances, with each business implementing decentralised measures based on their specific level of activity and market conditions. The Group's ability to deliver on our customer commitments has remained strong, as all units continued to operate with a high delivery capacity. Our focus on the safety of our employees and business partners has been one of our top priorities during the period, and we can note that our operations have experienced relatively few disruptions due to illness. At the start of the quarter, some businesses were impacted by disruptions to product deliveries and temporary shutdowns at customer production facilities. The customer segments in the automotive and oil & gas sectors were hit hardest by declining demand. However, the effect of these disruptions with respect to the product range and demand gradually decreased during the quarter.
In total, the Group's revenue and EBITA decreased by approximately 8 percent during the quarter compared with the preceding year (including Swedol). Previously implemented measures intended to improve efficiency combined with the various government grants for part-time working thus resulted in a relatively stable earnings performance for several of the Group's businesses during the quarter.
The cumulative effect of the pandemic on our earnings during the remainder of the financial year is currently difficult to predict and depends entirely on the extent and duration of the decline in demand and the effects of the cost-cutting measures that may continue to be taken, with or without the supportive measures implemented in each country.
The coordination of TOOLS and Swedol was initiated during the quarter and is proceeding well, despite the challenges involved in meeting in person. We were also able to confirm that our initial goal of an EBITA margin of 10 percent for the merged business area remain, compared with the initial margin of just over 6 percent and given the current business volume. This margin improvement is to come from measures to improve the contribution ratio (with improved purchasing terms and increased sales of products under proprietary brands) and from increased efficiency and reduced costs (through store coordination, more efficient logistics and a joint organisation). Linked to our financial goal to achieve annual earnings growth of 15 percent, our ambition is to reach our goals for the acquisition within a three-year period, subject to the impact that COVID-19 may continue to have on our operations.
Momentum Group's decentralised business model entails that business decisions are to be made close to the customer and the operations. In addition, increased focus also generates results, and in conjunction with the acquisition of Swedol, the conditions have now been created to form a "new" Momentum Group with two strong business areas. Each business area will therefore comprise a separate sub-group with its own dedicated senior management group – with the business area Tools, Consumables, Workwear & Protective Equipment under Business Area Manager Clein Johansson Ullenvik and the business area Components & Services under my own management. This will give the business area Components & Services an opportunity to focus on acquisition-driven growth while maintaining profitability in its areas, and allow the business area Tools, Consumables, Workwear & Protective Equipment to fully focus on the ongoing integration of TOOLS and Swedol in order to generate synergies and create an even stronger and more efficient operations for its customers. These changes are further supported by the Group's intention to form a separate subsidiary Board of Directors for this business area during autumn 2020, which will manage and prepare any integration issues. The Board of Directors and Group management are convinced that having two business areas with operational independence, decentralised business responsibility, increased focus and their own management groups will create favourable conditions for continued value growth for Momentum Group and its shareholders.
Stockholm, July 2020
Ulf Lilius President & CEO
| QUARTER | FULL-YEAR | |||||
|---|---|---|---|---|---|---|
| APR-JUN | APR-JUN | ROLLING | ||||
| 2020 | 2019 | Δ | 12 MON | 2019/20 | Δ | |
| Revenue, MSEK | 2,288 | 1,576 | 45% | 6,847 | 6,135 | 12% |
| Revenue including Swedol 2019/20 1 | 2,288 | 2,499 | –8% | 9,569 | 9,780 | –2% |
| Operating profit, MSEK | 134 | 70 | 91% | 367 | 303 | 21% |
| of which: Items affecting comparability | –4 | – | –18 | –14 | ||
| of which: Amortisation of intangible assets incurred | ||||||
| in connection with corporate acquisitions | –17 | –5 | –33 | –21 | ||
| EBITA, MSEK | 155 | 75 | 107% | 418 | 338 | 24% |
| EBITA including Swedol 2019/20 1 | 155 | 168 | –8% | 668 | 681 | –2% |
| Profit after financial items, MSEK | 120 | 66 | 82% | 337 | 283 | 19% |
| Net profit (after taxes), MSEK | 94 | 51 | 84% | 260 | 217 | 20% |
| Earnings per share, SEK | 1.85 | 1.80 | 3% | 7.75 | 7.70 | 1% |
| Operating margin | 5.9% | 4.4% | 5.4% | 4.9% | ||
| EBITA margin | 6.8% | 4.8% | 6.1% | 5.5% | ||
| EBITA margin including Swedol 2019/20 1 | 6.8% | 6.7% | 7.0% | 7.0% | ||
| Profit margin | 5.2% | 4.2% | 4.9% | 4.6% | ||
| Return on equity | 15% | 16% | ||||
| Return on working capital (EBITA/WC ) |
29% | 28% | ||||
| EBITA/WC including Swedol 2019/20 1 | 29% | 30% | ||||
| Equity per share, SEK | 58.20 | 56.95 | 2% | |||
| Equity/assets ratio | 38% | 48% | ||||
| Number of employees at the end of the period2 | 2,370 | 1,651 | 44% |
1) Calculated as though the acquisition of Swedol had closed on 1 April 2019.
2) Adjusted for employees furloughed due to the COVID-19 pandemic as of 30 June 2020.
Revenue for the first quarter of the financial year amounted to MSEK 2,288 (1,576), with the change compared with the preceding year primarily attributable to the acquisition of Swedol. Compared with revenue for the corresponding quarter in the preceding year including Swedol (MSEK 2,499), revenue declined by 8 percent. Revenue for comparable units (including Swedol), measured in local currency and adjusted for the number of trading days, decreased by approximately 8 percent compared with the corresponding quarter in the preceding year, while exchange-rate translation effects had an impact of MSEK –66 on comparable units (including Swedol). The quarter contained one trading day more than the corresponding quarter in the preceding financial year. Other acquisitions (excluding Swedol) contributed approximately 0.5 percent to total change in revenue.
Operating profit for the quarter amounted to MSEK 134 (70), with the change compared with the preceding year primarily attributable to the acquisition of Swedol. Operating profit for the quarter includes items affecting comparability totalling MSEK –4 pertaining to costs for advisors and other costs arising from the acquisition and integration of Swedol. EBITA (excluding the items affecting comparability and amortisation of intangible assets incurred in connection with corporate acquisitions) amounted to MSEK 155 (75). Compared with EBITA for the corresponding quarter in the preceding year including Swedol (MSEK 168), EBITA thus declined by 8 percent and the EBITA margin amounted to 6.8 percent (6.7). Operating profit was charged with depreciation of MSEK –14 (–4) on tangible non-current assets and amortisation of MSEK –27 (–9) on intangible non-current assets. Exchange-rate translation effects had a net impact of MSEK 0 (0) on operating profit.
Profit after financial items totalled MSEK 120 (66) and net profit amounted to MSEK 94 (51), which corresponds to earnings per share of SEK 1.85 (1.80) for the quarter.
From 1 April 2020, the Momentum Group comprises two business areas: business area Tools, Consumables, Workwear & Protective Equipment and business area Components & Services. Group-wide includes the Group's management, finance function and support functions (including internal communications, investor relations and legal affairs).
The beginning of the 2020/21 financial year was characterised by a significantly restrained and cautious attitude in Momentum Group's main markets, primarily due to the uncertainty concerning the COVID-19 pandemic. Since the stringent measures from both society at large and individual companies started taking effect toward the end of March, all operations in the Group have experienced a negative effect on overall demand. However, sales of certain product groups, mainly personal protective equipment, and to various customer segments, such as construction & civil engineering and the public sector, have been more positive, while demand in the automotive and oil & gas sectors has been weaker. Performances have also varied between countries. The overall impact on demand in Sweden has been relatively limited, although with major variations between customer segments. At the same time, the Norwegian and Finnish markets have generally performed more negatively, probably due to the stricter lockdowns in these countries and to weaker demand in the oil & gas sector.
In total, the COVID-19 pandemic is deemed to be the main reason for the Momentum Group's (including Swedol) negative sales performance of approximately 8 percent for the quarter. At the same time, various government grants for part-time working and the implementation of other cost-saving measures are deemed to have reduced the Group's cost base by approximately MSEK 100 during the quarter for comparable units (including Swedol), of which personnel costs have decreased by approximately MSEK 75. Approximately half of these are deemed to be temporary effects based on various types of government grants and other support measures.
While demand gradually stabilised in certain areas of the Group during the quarter, future sales, particularly to the Group's major, export-oriented customers, will largely be impacted by developments in the global markets. Accordingly, it is not possible to predict with any certainty how the pandemic will affect Momentum Group in the coming quarters today, since this depends on the extent and duration of the decline in demand and the effects of the cost-cutting measures taken. The measures taken by the Group during the past quarter, for example with increased vigilance for changes in the customer structure and increased focus on liquidity, will continue for the time being. However, the current situation has not induced any changes in material bases of judgement compared with the ones applied in the Annual Report for 2019/20.
| QUARTER | |
|---|---|
| APR-JUN 20201 | |
| Change in revenue for: | |
| Comparable units in local currency | –7.8% |
| Currency effects | –2.6% |
| Number of trading days | 1.5% |
| Other units2 | 0.5% |
| Total change | –8.4% |
1) Swedol is included in "Comparable units" as though the acquisition had closed on 1 April 2019.
2) Other acquisitions in 2019/20 (excluding Swedol, which is included in "Comparable units").
As of 1 April 2020, this business area comprises Swedol and TOOLS with Univern and Grolls, and Gigant, Mercus Yrkeskläder, TriffiQ Företagsprofilering, Reklamproffsen and Company Line, which offer products and services related to tools, consumables, workwear, personal protective equipment, workplace equipment as well as promotional products for the industrial, construction and public sectors and private market in the Nordic region, among others.
Note: The business area is presented below as of 1 April 2020, with comparative figures as though the acquisition of Swedol and other changes in the business area's structure had taken place as of 1 April 2019. EBITA is presented excluding any items affecting comparability. For information about the outcome for each business area (operating segment) for the preceding year excluding Swedol, refer to the table in Note 2.
| QUARTER | FULL-YEAR | |||
|---|---|---|---|---|
| APR-JUN 2020 | APR-JUN 2019 | ROLLING 12 MON | 2019/20 | |
| REVENUE, MSEK | ||||
| Sweden | 1,262 | 1,247 | 4,837 | 4,822 |
| Norway | 482 | 621 | 2,363 | 2,502 |
| Finland | 315 | 344 | 1,284 | 1,313 |
| Other countries | 19 | 20 | 76 | 77 |
| Eliminations | –56 | –19 | –133 | –96 |
| Total BA | 2,022 | 2,213 | 8,427 | 8,618 |
| EBITA, MSEK | ||||
| Sweden | 95 | 104 | 373 | 382 |
| Norway | 5 | 16 | 75 | 86 |
| Finland | 23 | 17 | 72 | 66 |
| Other countries | 0 | 1 | –1 | 0 |
| Total BA | 123 | 138 | 519 | 534 |
| EBITA MARGIN, % | ||||
| Sweden | 7.5% | 8.3% | 7.7% | 7.9% |
| Norway | 1.0% | 2.6% | 3.2% | 3.4% |
| Finland | 7.3% | 4.9% | 5.6% | 5.0% |
| Other countries | 0.0% | 5.0% | –1.3% | 0.0% |
| Total BA | 6.1% | 6.2% | 6.2% | 6.2% |
| OTHER INFORMATION | ||||
| Return on working capital (EBITA/WC ), % |
26% | 26% |
All operations in the business area Tools, Consumables, Workwear & Protective Equipment were impacted negatively by the COVID-19 pandemic during the first quarter of the financial year, with weaker demand and periodic production shutdowns by a number of customers in various customer segments in the Nordic region. To a certain extent, this was offset by increased sales of certain product groups, primarily in the area of personal protective equipment. In total, revenue for comparable units in the business area decreased by approximately 9 percent1 during the quarter, although with major variations between countries. Combined with previously implemented cost-saving measures, employee furloughs carried out due to the pandemic along with price increases resulted in an overall stable earnings performance for the business area during the quarter, despite a decline in revenue, higher purchase prices and negative exchange-rate effects.
Revenue for the operations in Sweden decreased a total of approximately 1 percent1 during the quarter compared with the preceding year. It was primarily sales to major industrial companies that were negatively impacted by the prevailing cautious approach, while sales to small and medium-sized customers were stable during the quarter, partly due to extra sales initiatives. At the same time, sales of products under proprietary brands remained positive. A number of new agreements concerning personal protective equipment, including agreements signed by the companies specialising in workwear and promotional products, had a positive impact on sales.
Revenue for the operations in Norway decreased by approximately 13 percent1 during the quarter. The stringent measures implemented by the Norwegian authorities, with much of society shut down to reduce the spread of COVID-19, had a negative impact on overall demand, not least in the oil & gas sector. This had a negative impact on sales to both retail and processing customers during the quarter, which was also reflected in earnings for the Norwegian operations. Earnings were also negatively impacted by the exchange rate for the Norwegian krona. Price increases have been implemented and cost-saving measures remain in place, including measures taken within the logistics functions.
1 Comparable units (including Swedol), measured in local currency and adjusted for the number of trading days this year compared with the preceding year.
Revenue for the operations in Finland declined by approximately 9 percent2 during the quarter. Demand was negatively impacted by the country's extensive lockdown, which had a major effect on the relatively export-dependent Finnish industry, including the pulp and paper industry and shipbuilding industry.
The coordination of TOOLS and Swedol began in full force during the quarter, which creates favourable conditions for increased efficiency and economies of scale. The goal is for the business area's EBITA margin to increase to approximately 10 percent over time, compared with the initial combined margin of just over 6 percent. Approximately 50 percent of this increase is expected to come from measures to improve the contribution ratio, mainly in the form of improved purchasing terms and increased sales of products under proprietary brands, and the remaining 50 percent from increased efficiency and reduced costs, primarily through a joint organisation, store coordination and more efficient logistics functions.
During the spring, the business area mainly initiated work to achieve improved purchase terms, increased sales of proprietary brands and planning for store coordination in each country. Among other measures, a decision was made to coordinate TOOLS' and Swedol's stores in a total of 20 locations across Sweden, with the coordination of stores in six locations so far scheduled for autumn 2020 and early 2021. In Norway, Swedol stores will be coordinated with TOOLS in some ten locations. The business area also aims for its sales of proprietary brands to account for approximately 25 percent of sales, compared with the current figure of 20 percent. In parallel, a new organisation was established and the appointment of managers and other employees has begun, with the intention of having the business area's new, joint organisation up and running as of 1 October 2020.
This business area comprises Momentum Industrial with the subsidiaries Rörick Elektriska Verkstad, ETAB Industriautomation and Carl A Nilssons Elektriska Reparationsverkstad, which offer spare parts, services and repairs to customers in the industrial sector in the Nordic region.
| QUARTER | FULL-YEAR | |||
|---|---|---|---|---|
| APR-JUN 2020 | APR-JUN 2019 | ROLLING 12 MON | 2019/20 | |
| REVENUE, MSEK | ||||
| Total BA | 274 | 298 | 1,183 | 1,207 |
| EBITA, MSEK | ||||
| Total BA | 34 | 33 | 155 | 154 |
| EBITA MARGIN, % | ||||
| Total BA | 12.4% | 11.1% | 13.1% | 12.8% |
| OTHER INFORMATION | ||||
| Return on working capital (EBITA/WC ), % |
64% | 63% |
Sales in the business area Components & Services were impacted negatively by the COVID-19 pandemic during the first quarter of the financial year, which was reflected by a general sense of restraint and major industrial customers implementing a number of cost-cutting measures in their operations. Revenue for comparable units in the business area decreased by approximately 13 percent2 during the quarter, while acquired units contributed by approximately 3 percent to the change in revenue.
Sales for Momentum Industrial declined during the quarter, particularly in the automotive industry and wholesale trade, while demand in the mining sector remained stable. Many industrial customers also continued to carry out maintenance work during the quarter despite production shutdowns, particularly in the automotive sector. The combination of previously implemented measures to increase cost-efficiency and the employee furloughs carried out due to the pandemic contributed to a stable earnings performance during the quarter.
Momentum Industrial's subsidiaries Rörick Elektriska Verkstad, which specialises in service and repairs, and ETAB Industriautomation, which specialises in pneumatics and hydraulics, displayed a stable performance during the quarter.
EBITA for "Group-wide and eliminations" amounted to MSEK –2 (–3) for the reporting period and items affecting comparability to MSEK –2 (–). Items affecting comparability pertain to costs for advisors and other costs arising from the acquisition of Swedol. Accordingly, an operating loss of MSEK –4 (–3) was reported.
The Parent Company's revenue for the period amounted to MSEK 7 (7) and the loss after financial items totalled MSEK –5 (1). The results for the period include no Group contributions.
2 Comparable units (including Swedol), measured in local currency and adjusted for the number of trading days this year compared with the preceding year.
3 The comparative year for "Group-wide" has been restated to reflect the transfer of the Group's logistics function in Sweden to the business area Tools, Consumables, Workwear & Protective Equipment for accounting purposes.
At the end of the reporting period, the number of employees in the Group amounted to 2,370, compared with 1,651 at the beginning of the year. In conjunction with the acquisition of Swedol on 1 April 2020, 1,046 employees joined the Group. The number of employees at the end of the period has been adjusted for employees furloughed due to the COVID-19 pandemic as of 30 June 2020.
To date, Momentum Group has conducted one corporate acquisition with closing during the 2020/21 financial year.
On 11 November 2019, Momentum Group announced a recommended public offer to the shareholders of Swedol AB (publ). On 23 March 2020, the Board of Directors of Momentum Group resolved to complete the offer following scrutiny for compatibility with competition law by the national competition authorities in Sweden, Norway and Finland and the offer being accepted by shareholders representing approximately 98 percent of the shares in Swedol. Closing on the shares in Swedol took place on 1 April 2020. After an extended acceptance period for shares outstanding to 17 April 2020, Momentum Group held approximately 98.8 percent of the shares and approximately 99.0 percent of the votes in Swedol. The last day for trading in Swedol's Class B shares on Nasdaq Stockholm was 20 April 2020 and Momentum Group has called for a compulsory redemption of the remaining shares outstanding in Swedol. The arbitration board in the dispute resolution proceeding granted preferential rights to the outstanding shares in early July 2020, after which Momentum Group now holds 100 percent of the shares and votes in Swedol.
The combination of TOOLS and Swedol creates an attractive business partner for Nordic customers – including both smaller and larger companies in the industrial and construction sectors as well as other sectors, such as the public sector – in the areas of tools, workwear, personal protective equipment and consumables. The acquisition creates the prerequisites for increased efficiency and economies of scale, which will also be of benefit to the customers of both companies and lead to increased competition within the sector. Together, both businesses will benefit from common product ranges, procurement channels, more efficient logistics and Swedol's proprietary product brands as well as the development of an even better service offering and new digital solutions. This will lead to a solid platform for continued expansion. Hence, the coordination between Swedol's and TOOLS' operations will create value for customers, suppliers, employees and owners.
Refer to Note 4 for a preliminary acquisition analysis regarding the acquisition of Swedol and a summary of acquisitions completed since the 2015/16 financial year.
The Group's profitability, measured as the return on equity, amounted to 15 percent (18) and the return on working capital (EBITA/WC) to 29 percent (26) for the most recent 12-month period. The return on capital employed for the corresponding period was 13 percent (17).
Cash flow from operating activities before changes in working capital for the reporting period totalled MSEK 248 (126). During the period, inventories decreased by MSEK 98 and operating receivables by MSEK 149. Operating liabilities decreased by MSEK 118. Accordingly, cash flow from operating activities for the period amounted to MSEK 377 (74).
Cash flow for the reporting period was also impacted in a net amount of MSEK –55 (–6) pertaining to investments in and divestments of non-current assets, and a net amount of MSEK –1,693 (–58) pertaining to acquisitions of subsidiaries and other business units and sale of financial non-current assets. Investments in non-current assets during the reporting period mainly pertained to the expansion and efficiency enhancements carried out at the Group's warehouse and logistics facility in Örebro, which was part of the acquisition of Swedol.
The Group's financial net loan liability at the end of the reporting period amounted to MSEK 2,747, compared with MSEK 708 at the beginning of the financial year. The increase is primarily pertaining to the acquisition of Swedol with the cash consideration paid, refinancing of interest-bearing financial liabilities and financial lease liabilities added. At the end of the period, the Group's operational net loan liability amounted to MSEK 1,658 (314). Cash and cash equivalents, including unutilised granted credit facilities, totalled MSEK 1,075. The equity/assets ratio at the end of the period was 38 percent.
Equity per share, both before and after dilution, totalled SEK 58.20 at the end of the reporting period, compared with SEK 56.95 at the beginning of the financial year.
At the end of the reporting period, the share capital totalled MSEK 102. In April 2020, in connection with the acquisition of Swedol, the Board of Momentum Group decided to carry out a directed issue of 6,897 Class B shares to the shareholders of Swedol who had accepted the public offer during the extended
acceptance period until 17 April 2020. The acquisition of Swedol closed on 1 April 2020. The distribution by class of share on 30 June 2020 was as follows:
| CLASS OF SHARE | AS OF 30 JUNE 2020 |
|---|---|
| Class A shares | 1,062,436 |
| Class B shares | 49,843,753 |
| Total number of shares before repurchasing | 50,906,189 |
| Less : Repurchased Class B shares | –500,000 |
| Total number of shares after repurchasing | 50,406,189 |
As of 31 March 2020, Momentum Group's holding of Class B treasury shares totalled 500,000. There were no changes to the holding of treasury shares during the reporting period. Accordingly, the number of Class B shares held in treasury as of 30 June 2020 amounted to 500,000, corresponding to 1.0 percent of the total number of shares and 0.8 percent of the total number of votes.
The shares held in treasury cover the Company's obligations in the call option programmes issued to senior management in December 2017 and September 2018, respectively. The redemption price for the 250,000 call options issued in connection with the 2017 share-based incentive programme is SEK 121.60 per share. Each call option in this programme entitles the holder to acquire one repurchased Class B share during the redemption periods of 12-25 February and 12-25 May 2021, respectively. The redemption price for the 250,000 call options issued in connection with the 2018 share-based incentive programme is SEK 137.30 per share. Each call option in this programme entitles the holder to acquire one repurchased Class B share during the redemption periods of 14-28 February and 16-30 May 2022, respectively.
The share price on 30 June 2020 was SEK 119.40 and the issued call options thus did not result in any dilution effect during the reporting period.
There have been no changes in the holding of treasury shares after the end of the reporting period.
The Board has decided to propose that the Annual General Meeting on 31 August 2020 resolve to renew the authorisation to repurchase own shares in accordance with the information below.
No transactions having a material impact on the Group's position or earnings occurred between Momentum Group and its related parties during the reporting period.
Momentum Group's earnings, financial position and strategic position are impacted by a number of internal factors that are within the control of Momentum Group as well as a number of external factors where the Group's ability to influence the course of events is limited. The most important external risk factors for Momentum Group are the economic and market situation as well as the development in the number of employees in the industrial and construction sectors combined with structural changes and the competitive situation. The risks and uncertainties impacting the Group are the same as in earlier periods, although uncertainty over future developments in the market and demand is deemed to have increased on account of the ongoing COVID-19 pandemic. For more information about the Group's risks and uncertainties, refer to page 42 of Momentum Group's Annual Report for 2019/20. The Parent Company is impacted indirectly by the above risks and uncertainties through its function in the Group.
Momentum Group AB's Annual General Meeting will be held on Monday, 31 August 2020, at 4:00 p.m. CEST at IVA's Conference Centre, Grev Turegatan 16, Stockholm, Sweden. The notice for the Annual General Meeting will be published on 27 July 2020.
Due to current uncertainty in the operating environment caused by the COVID-19 pandemic, the Board of Directors of Momentum Group AB proposes that no dividend be paid for 2019/20 (previous year: SEK 3.20 per share).
The Board has also decided to propose that the Annual General Meeting resolve to renew the authorisation to repurchase own shares. In brief, this motion 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 would at no time exceed 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 Stockholm in order to finance acquisitions and to fulfil the Company's obligations in connection with its share-based incentive programmes for senior management in the Momentum Group.
The Board has also decided to propose that the Annual General Meeting resolve on an authorisation for a new share issue of up to 10 percent of the number of shares as a means of payment for acquisitions. In brief, this motion entails that the Annual General Meeting would authorise the Board, on one or more occasions during the period until the next Annual General Meeting, to decide to increase the Company's share capital through a new issue of shares up to a maximum of 10 percent of the number of shares. The new issue of shares may be performed with or without deviation from the shareholders' preferential rights and with or without provisions regarding non-cash issues or right of offset. The purpose of the authorisation and the grounds for the deviation from the shareholders' preferential rights are to improve the Company's opportunities to conduct or finance corporate acquisitions.
In view of the fact that Nordstjernan AB is Momentum Group's Parent Company as of 1 April 2020 and has the calendar year as its financial year, the Board of Directors proposes that the Annual General Meeting also resolves to change the Company's financial year to encompass the calendar year.
The arbitration board in the dispute resolution proceeding concerning the shares outstanding in Swedol granted Momentum Group preferential rights to the outstanding shares in early July 2020, after which Momentum Group now holds 100 percent of the shares and votes in Swedol.
No other significant events affecting the Group have occurred since the end of the reporting period.
Stockholm, 16 July 2020
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 54 70 Mats Karlqvist, Head of Investor Relations, Tel: +46 70 660 31 32
The Annual Report for the 2019/20 financial year was published on 2 July 2020 and is available on the Company's website.
Momentum Group AB's 2020 Annual General Meeting will be held on 31 August 2020, at 4:00 p.m. CEST at IVA's Conference Centre, Grev Turegatan 16, Stockholm, Sweden.
Interim Report (6 months) – 1 April-30 September 2020 will be published on 23 October 2020. Interim Report (9 months) – 1 April-31 December 2020 will be published on 11 February 2021. Financial Report 2020/21 – 1 April 2020-31 March 2021 will be published on 12 May 2021.
* Due to the Board's motion to change Momentum Group's financial year to the calendar year in conjunction with the Company's Annual General Meeting on 31 August 2020, the above reporting dates may be adapted should such a resolution be passed.
Visit www.momentum.group to subscribe for reports and press releases.
The information in this report is such that Momentum Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. This information was submitted for publication, through the agency of the contact persons set out above, at 8:00 a.m. CEST on 16 July 2020.
This document is in all respects a translation of the Swedish original Interim Report. In the event of any differences between this translation and the Swedish original, the latter shall prevail.
Momentum Group AB (publ) Mail address: PO Box 5900, SE-102 40 Stockholm, Sweden Visit: Östermalmsgatan 87 D, Stockholm Tel: +46 10 454 54 70 Org No: 559072-1352 Reg office: Stockholm, Sweden www.momentum.group
| QUARTER | FULL-YEAR | ||
|---|---|---|---|
| MSEK | APR-JUN 2020 | APR-JUN 2019 | 2019/20 |
| Revenue | 2,288 | 1,576 | 6,135 |
| Other operating income | 4 | 1 | 4 |
| Total operating income | 2,292 | 1,577 | 6,139 |
| Cost of goods sold | –1,382 | –995 | –3,864 |
| Personnel costs | –426 | –313 | –1,189 |
| Depreciation, amortisation, impairment losses and reversal of impairment losses Other operating expenses |
–138 –212 |
–68 –131 |
–264 –519 |
| Total operating expenses | –2,158 | –1,507 | –5,836 |
| Operating profit | 134 | 70 | 303 |
| Financial income | 2 | 0 | 1 |
| Financial expenses | –16 | –4 | –21 |
| Net financial items | –14 | –4 | –20 |
| Profit after financial items | 120 | 66 | 283 |
| Taxes | –26 | –15 | –66 |
| Net profit | 94 | 51 | 217 |
| Of which, attributable to: Parent Company shareholders Non-controlling interest |
92 2 |
50 1 |
214 3 |
| Earnings per share, SEK – before dilution – after dilution |
1.85 1.85 |
1.80 1.80 |
7.70 7.70 |
| QUARTER | FULL-YEAR | ||
|---|---|---|---|
| MSEK | APR-JUN 2020 | APR-JUN 2019 | 2019/20 |
| Net profit | 94 | 51 | 217 |
| OTHER COMPREHENSIVE INCOME FOR THE PERIOD | |||
| Components that will not be reclassified to net profit | |||
| Remeasurement of defined-benefit | |||
| pension plans | –1 | –1 | –3 |
| Tax attributable to components that will | |||
| not be reclassified | 0 | 0 | 1 |
| –1 | –1 | –2 | |
| Components that will be reclassified to net profit | |||
| Translation differences | –15 | 9 | –27 |
| Fair value changes for the year in | |||
| cash-flow hedges | –15 | 0 | 2 |
| Tax attributable to components that will | |||
| be reclassified | 3 | 0 | 0 |
| –27 | 9 | –25 | |
| Other comprehensive income for the period | –28 | 8 | –27 |
| Total comprehensive income for the period | 66 | 59 | 190 |
| Of which, attributable to: Parent Company shareholders |
64 | 58 | 187 |
| Non-controlling interest | 2 | 1 | 3 |
| MSEK | 30 JUN 2020 | 30 JUN 2019 | 31 MAR 2020 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible non-current assets | 2,779 | 684 | 660 |
| Tangible non-current assets | 509 | 66 | 61 |
| Right-of-use assets | 1,048 | 558 | 491 |
| Financial investments | 1 | 2 | 2 |
| Deferred tax assets | 30 | 23 | 18 |
| Total non-current assets | 4,367 | 1,333 | 1,232 |
| Current assets | |||
| Inventories | 1,898 | 1,020 | 985 |
| Accounts receivable | 1,160 | 1,046 | 964 |
| Current receivables - non-cash issue | – | – | 1,487 |
| Other current receivables | 183 | 111 | 115 |
| Cash and cash equivalents | 29 | 16 | 1,157 |
| Total current assets | 3,270 | 2,193 | 4,708 |
| TOTAL ASSETS | 7,637 | 3,526 | 5,940 |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Equity attributable to Parent Company shareholders | 2,934 | 1,337 | 2,869 |
| Non-controlling interest | 16 | 22 | 19 |
| Total equity | 2,950 | 1,359 | 2,888 |
| Non-current liabilities | |||
| Non-current interest-bearing liabilities | 1,567 | 139 | 1,125 |
| Non-current lease liabilities | 682 | 371 | 305 |
| Provisions for pensions | 34 | 30 | 31 |
| Other non-current liabilities and provisions | 362 | 78 | 61 |
| Total non-current liabilities | 2,645 | 618 | 1,522 |
| Current liabilities | |||
| Current interest-bearing liabilities | 120 | 191 | 198 |
| Current lease liabilities | 373 | 207 | 206 |
| Accounts payable | 878 | 797 | 764 |
| Other current liabilities | 671 | 354 | 362 |
| Total current liabilities | 2,042 | 1,549 | 1,530 |
| TOTAL LIABILITIES | 4,687 | 2,167 | 3,052 |
| TOTAL EQUITY AND LIABILITIES | 7,637 | 3,526 | 5,940 |
| Financial net loan liability | 2,747 | 922 | 708 |
| Operational net loan liability | 1,658 | 314 | 166 |
| Equity attributable to Parent Company shareholders | ||||||
|---|---|---|---|---|---|---|
| MSEK | Share capital |
Reserves | Retained earnings, including net profit |
Total | Non-controlling interest |
Total equity |
| Closing equity, 31 March 2019 | 57 | 10 | 1,236 | 1,303 | 14 | 1,317 |
| Change in accounting policy1 | –8 | –8 | –8 | |||
| Net profit | 50 | 50 | 1 | 51 | ||
| Other comprehensive income | 9 | –1 | 8 | 8 | ||
| Acquisitions of partly owned subsidiaries | – | 8 | 8 | |||
| Dividends paid in partly owned subsidiaries | – | –1 | –1 | |||
| Option liability, acquisitions2 | –16 | –16 | –16 | |||
| Closing equity, 30 June 2019 | 57 | 19 | 1,261 | 1,337 | 22 | 1,359 |
| Net profit | 164 | 164 | 2 | 166 | ||
| Other comprehensive income | –34 | –1 | –35 | –35 | ||
| Dividend | –89 | –89 | –89 | |||
| Non-cash issue3 | 45 | 1,442 | 1,487 | 1,487 | ||
| Acquisitions of partly owned subsidiaries | – | 1 | 1 | |||
| Changes in share of partly owned subsidiaries | 5 | 5 | –5 | 0 | ||
| Dividends paid in partly owned subsidiaries | – | –1 | –1 | |||
| Option liability, acquisitions2 | –1 | –1 | –1 | |||
| Change in value of option liability4 | 1 | 1 | 1 | |||
| Closing equity, 31 March 2020 | 102 | –15 | 2,782 | 2,869 | 19 | 2,888 |
| Net profit | 92 | 92 | 2 | 94 | ||
| Other comprehensive income | –27 | –1 | –28 | –28 | ||
| Non-cash issue5 | 0 | 0 | 0 | 0 | ||
| Changes in share of partly owned subsidiaries | 2 | 2 | –5 | –3 | ||
| Change in value of option liability4 | –1 | –1 | –1 | |||
| Closing equity, 30 June 2020 | 102 | –42 | 2,874 | 2,934 | 16 | 2,950 |
1) Transition to IFRS 16. Refer to accounting policies in Momentum Group's Annual Report for 2019/20.
2) Refers to the value of call/put options in relation to non-controlling interests in the acquired subsidiaries ETAB Industriautomation AB and Company Line Förvaltning AB, which entail that: a) Momentum Group is entitled to purchase the remaining shares from the shareholders (call option), and b) the shareholders are entitled to sell their shares to Momentum Group (put option). The call options expire during the 2021/22 financial year and can thereafter be extended for a period of one year at a time. The put options can be exercised until the 2020/21 financial year. The price of the options is dependent on certain results being achieved in the respective company.
3) A new issue of a total of 22,633,876 Class B shares pertaining to the public offer to shareholders in Swedol AB (publ). Capital contributed in kind consisting of the shares in Swedol was conveyed to the Group on 1 April 2020 and recognised on 31 March 2020 as a current receivable pertaining to the non-cash issue.
4) Pertains to a change in the value of the call/put options in relation to non-controlling interests carried out in conjunction with the acquisitions of partly owned subsidiaries.
5) A new issue of a total of 6,897 Class B shares pertaining to the public offer to shareholders in Swedol AB (publ).
| QUARTER | FULL-YEAR | ||
|---|---|---|---|
| MSEK | APR-JUN 2020 | APR-JUN 2019 | 2019/20 |
| Operating activities | |||
| Operating activities before changes in | |||
| working capital | 248 | 126 | 487 |
| Changes in working capital | 129 | –52 | 18 |
| Cash flow from operating activities | 377 | 74 | 505 |
| Investing activities | |||
| Acquisition of intangible & tangible non current assets |
–55 | –6 | –18 |
| Sale of intangible & tangible non current assets |
0 | 0 | 0 |
| Acquisition of subsidiaries & other business units |
–1,694 | –58 | –66 |
| Sale of financial non-current assets | |||
| 1 | – | – | |
| Cash flow from investing activities | –1,748 | –64 | –84 |
| Cash flow before financing | –1,371 | 10 | 421 |
| Financing activities | |||
| Financing activities | 245 | –2 | 729 |
| Cash flow for the period | –1,126 | 8 | 1,150 |
| Cash and cash equivalents at the beginning | |||
| of the period | 1,157 | 8 | 8 |
| Exchange-rate differences in cash and cash equivalents |
–2 | 0 | –1 |
| Cash and cash equivalents at the end | |||
| of the period | 29 | 16 | 1,157 |
| QUARTER | |||
|---|---|---|---|
| SEK | APR-JUN 2020 | APR-JUN 2019 | 2019/20 |
| Earnings before dilution | 1.85 | 1.80 | 7.70 |
| Earnings after dilution | 1.85 | 1.80 | 7.70 |
| Equity, at the end of the period | 58.20 | 48.00 | 56.95 |
| Equity after dilution, at the end of the period | 58.20 | 48.00 | 56.95 |
| NUMBER OF SHARES OUTSTANDING IN THOUSANDS | |||
| Number of shares outstanding before dilution | 50,406 | 27,765 | 50,399 |
| Weighted number of shares outstanding before dilution Weighted number of shares outstanding |
50,406 | 27,765 | 27,765 |
| after dilution | 50,406 | 27,765 | 27,765 |
Average number of shares outstanding before or after dilution. Shares held by Momentum Group at any given time are not included in the number of shares outstanding. Dilution effects arise due to any call options issued by the Company that can be settled using shares in share-based incentive programmes. In such cases, 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. Momentum Group held 500,000 Class B shares as of 30 June 2020 and has issued 500,000 call options for repurchased shares. Since the average share price is lower than the redemption prices of SEK 121.60 per call option ("2017 share-based incentive programme") and SEK 137.30 per call option ("2018 share-based incentive programme"), respectively, no dilution effect existed as of 30 June 2020. Refer also to page 7.
| QUARTER | FULL-YEAR | ||
|---|---|---|---|
| MSEK | APR-JUN 2020 | APR-JUN 2019 | 2019/20 |
| Revenue | 7 | 7 | 29 |
| Other operating income | 2 | 2 | 2 |
| Total operating income | 9 | 9 | 31 |
| Operating expenses | –12 | –13 | –41 |
| Operating profit/loss | –3 | –4 | –10 |
| Financial income and expenses | –2 | 5 | 16 |
| Profit/loss after financial items | –5 | 1 | 6 |
| Appropriations | – | – | –3 |
| Profit before taxes | –5 | 1 | 3 |
| Taxes | 1 | 0 | –1 |
| Net profit | –4 | 1 | 2 |
| SEK Earnings before dilution Earnings after dilution |
FULL-YEAR | |||||
|---|---|---|---|---|---|---|
| APR-JUN 2020 | APR-JUN 2019 | 2019/20 | ||||
| 1.85 | 1.80 | 7.70 | ||||
| 1.85 | 1.80 | 7.70 | ||||
| Equity, at the end of the period | 58.20 | 48.00 | 56.95 | |||
| Equity after dilution, at the end of the period | 58.20 | 48.00 | 56.95 | |||
| NUMBER OF SHARES OUTSTANDING IN THOUSANDS | ||||||
| Number of shares outstanding before dilution | 50,406 | 27,765 | 50,399 | |||
| Weighted number of shares outstanding before | ||||||
| dilution Weighted number of shares outstanding |
50,406 | 27,765 | 27,765 | |||
| after dilution | 50,406 | 27,765 | 27,765 | |||
| outstanding. Dilution effects arise due to any call options issued by the Company that can be settled using shares in share-based incentive programmes. In such cases, 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. Momentum Group held 500,000 Class B shares as of 30 June 2020 and has issued 500,000 call options for repurchased shares. Since the average share price is lower than the redemption prices of SEK 121.60 per call option ("2017 share-based incentive programme") and SEK 137.30 per call option ("2018 share-based incentive programme"), respectively, no dilution effect existed as of 30 June 2020. Refer also to page 7. PARENT COMPANY IN SUMMARY |
||||||
| INCOME STATEMENT | QUARTER | FULL-YEAR | ||||
| MSEK | APR-JUN 2020 | APR-JUN 2019 | 2019/20 | |||
| Revenue | 7 | 7 | 29 | |||
| Other operating income | 2 | 2 | 2 | |||
| Total operating income | 9 | 9 | 31 | |||
| Operating expenses | –12 | –13 | –41 | |||
| Operating profit/loss | –3 | –4 | –10 | |||
| Financial income and expenses | –2 | 5 | 16 | |||
| Profit/loss after financial items | –5 | 1 | 6 | |||
| Appropriations | – | – | –3 | |||
| Profit before taxes | –5 | 1 | 3 | |||
| 1 | 0 | –1 | ||||
| Taxes Net profit |
–4 | 1 | 2 | |||
| There are no items in the Parent Company recognised as other comprehensive income. Accordingly, total comprehensive income corresponds to net profit for the period. BALANCE SHEET MSEK |
30 JUN 2020 | 30 JUN 2019 | 31 MAR 2020 | |||
| ASSETS | ||||||
| Intangible non-current assets | 0 | 0 | ||||
| Tangible non-current assets | 0 | 0 | ||||
| Financial non-current assets | 4,023 | 846 | ||||
| Current receivables | 230 | 351 | ||||
| Cash and cash equivalents Total assets |
2 4,255 |
0 1,197 |
0 0 829 1,644 1,153 3,626 |
|||
| EQUITY, PROVISIONS AND LIABILITIES Equity |
2,063 | 668 | ||||
| Untaxed reserves | – | 63 | ||||
| Provisions | – | – | ||||
| Non-current liabilities | 1,567 | 138 | ||||
| Current liabilities | 625 | 328 | 2,067 – – 1,125 434 |
The change in financial non-current assets during the reporting period primarily pertains to the acquisition of Swedol by MSEK 2,738 and an increase in long-term receivables from Group companies by MSEK 456 mainly related to the refinancing of interest-bearing liabilities in Swedol, which were replaced by new credit facilities in Momentum Group AB.
The change in current receivables and cash and cash equivalents is primarily attributable to the recognition of the non-cash
The Interim 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. In addition to the financial statements and associated notes, disclosures in accordance with IAS 34.16A are also presented in other sections of the report. The Interim 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 Momentum Group's Annual Report for 2019/20 have been applied.
During the reporting period, the Group received government grants for part-time working. The grants received are deemed to meet the definition of government grants under IAS 20. The grants are recognised in the income statement as a reduction of personnel costs. The grants are systematically recognised in the
The Group's operating segments comprise the business areas Tools, Consumables, Workwear & Protective Equipment and Components & Services. The operating segments are consolidations of the operational organisation, as used by Group management and the Board of Directors to monitor operations. Group management, comprising the CEO and CFO, are the Group's chief operating decision makers.
As of 1 April 2020, Tools, Consumables, Workwear & Protective Equipment comprises Swedol and TOOLS with Univern and Grolls, and Gigant, Mercus Yrkeskläder, TriffiQ Företagsprofilering, Reklamproffsen Skandinavien and Company Line, which offer products and services related to tools, consumables, workwear, personal protective equipment, workplace equipment as well as promotional products for the industrial, construction and public sectors and private market in the Nordic region, among others.
income statement over the same periods of time as the costs that the grants are intended to compensate for and when the Group is deemed to meet the conditions and fulfil the obligations pertaining to the grants.
As of 1 April 2020, the Group has a new business area structure (operating segments). The change primarily impacted the Group's logistics function in Sweden, which was consolidated as part of the business area Tools, Consumables, Workwear & Protective Equipment as of 1 April 2020, after previously being part of Group-wide. The comparative year was restated accordingly.
IASB has issued additions to standards that will take effect for the Group on or after 1 April 2020. These additions are deemed not to be material for the consolidated financial statement.
Components & Services comprises Momentum Industrial and its subsidiaries, which offer spare parts, service and repairs for customers in the industrial sector in the Nordic region.
Group-wide includes the Group's management, finance function and support functions. The support functions include internal communications, investor relations and legal affairs.
Financial items and taxes are not distributed by operating segment but recognised in their entirety in Group-wide.
Intra-Group pricing between the operating segments occurs on market terms. The accounting policies are the same as those applied in the consolidated financial statements. The revenue presented below for the geographic markets is based on the domicile of the customers (compared with the information presented by geographic market for Tools, Consumables, Workwear & Protective Equipment on page 5, which is based on the geographic domicile of each legal entity).
| APR-JUN 2020 (3 MON) | ||||||||
|---|---|---|---|---|---|---|---|---|
| MSEK | Tools, Consumables, Workwear & Protective Equipment |
Components & Services |
Group-wide | Eliminations | Group total | |||
| Revenue | ||||||||
| From external customers by geographic area | ||||||||
| Sweden | 1,176 | 264 | – | – | 1,440 | |||
| Norway | 478 | 5 | – | – | 483 | |||
| Finland | 305 | 0 | – | – | 305 | |||
| Other countries | 58 | 2 | – | – | 60 | |||
| From other segments | 5 | 3 | 8 | –16 | – | |||
| Total | 2,022 | 274 | 8 | –16 | 2,288 | |||
| Operating profit | ||||||||
| EBITA | 123 | 34 | –2 | 0 | 155 | |||
| Items affecting comparability | –2 | – | –2 | – | –4 | |||
| Amortisation of intangible assets incurred in | ||||||||
| connection with corporate acquisitions | –16 | –1 | – | – | –17 | |||
| Total | 105 | 33 | –4 | 0 | 134 |
| APR-JUN 2019 (3 MON) | |||||||
|---|---|---|---|---|---|---|---|
| MSEK | Tools, Consumables, Workwear & Protective Equipment |
Components & Services |
Group-wide | Eliminations | Group total | ||
| Revenue | |||||||
| From external customers by geographic area | |||||||
| Sweden | 508 | 276 | – | – | 784 | ||
| Norway | 472 | 12 | – | – | 484 | ||
| Finland | 265 | 1 | – | – | 266 | ||
| Other countries | 40 | 2 | – | – | 42 | ||
| From other segments | 5 | 7 | 7 | –19 | – | ||
| Total | 1,290 | 298 | 7 | –19 | 1,576 | ||
| Operating profit | |||||||
| EBITA | 45 | 33 | –3 | 0 | 75 | ||
| Items affecting comparability | – | – | – | – | – | ||
| Amortisation of intangible assets incurred in | |||||||
| connection with corporate acquisitions | –4 | –1 | – | – | –5 | ||
| Total | 41 | 32 | –3 | 0 | 70 |
| 2020/21 | 2019/20 | |||||||
|---|---|---|---|---|---|---|---|---|
| MSEK | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| Tools, Consumables, Workwear & Protective Equipment |
2,022 | 1,235 | 1,287 | 1,161 | 1,290 | |||
| Components & Services | 274 | 313 | 312 | 284 | 298 | |||
| Group-wide | 8 | 7 | 8 | 7 | 7 | |||
| Eliminations | –16 | –16 | –19 | –20 | –19 | |||
| Momentum Group | 2,288 | 1,539 | 1,588 | 1,432 | 1,576 |
| 2020/21 | 2019/20 | |||||||
|---|---|---|---|---|---|---|---|---|
| MSEK | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| Tools, Consumables, Workwear & Protective Equipment |
123 | 49 | 51 | 46 | 45 | |||
| Components & Services | 34 | 44 | 40 | 37 | 33 | |||
| Group-wide | –2 | –2 | –1 | –3 | –3 | |||
| Eliminations | 0 | 0 | 2 | 0 | 0 | |||
| Momentum Group | 155 | 91 | 92 | 80 | 75 |
Momentum Group measures financial instruments at fair value or amortised 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. The fair value of all of the Group's financial assets is estimated to correspond with their carrying amount. Liabilities measured at fair value comprise options issued in connection with the acquisition of equity instruments in partly owned subsidiaries, which are measured using discounted cash flow and are thus included in level 3 according to IFRS 13.
| MSEK | 30 JUN 2020 | 30 JUN 2019 | 31 MAR 2020 |
|---|---|---|---|
| Financial assets measured at fair value | |||
| Financial investments | 0 | 1 | 1 |
| Derivative hedging instruments | 2 | 0 | 4 |
| Financial assets measured at amortised cost | |||
| Long-term receivables | 1 | 1 | 1 |
| Accounts receivable | 1,160 | 1,046 | 964 |
| Cash and cash equivalents | 29 | 16 | 1,157 |
| Total financial assets | 1,192 | 1,064 | 2,127 |
| Financial liabilities measured at fair value | |||
| Option liability | 25 | 47 | 35 |
| Derivative hedging instruments | 3 | 0 | 0 |
| Liability for purchase consideration (compulsory redemption) | 46 | – | – |
| Financial liabilities measured at amortised cost | |||
| Interest-bearing liabilities | 2,742 | 908 | 1,834 |
| Accounts payable | 878 | 797 | 764 |
| Total financial liabilities | 3,694 | 1,752 | 2,633 |
On 11 November 2019, Momentum Group announced a recommended public offer to the shareholders of Swedol AB (publ). On 23 March 2020, the Board of Directors of Momentum Group resolved to complete the offer following scrutiny for compatibility with competition law by the national competition authorities in Sweden, Norway and Finland and the offer being accepted by shareholders representing approximately 98 percent of the shares in Swedol. Closing on the shares in Swedol took place on 1 April 2020. The last day for trading in Swedol's Class B shares on Nasdaq Stockholm was 20 April 2020 and Momentum Group has called for a compulsory redemption of the remaining shares outstanding in Swedol. The arbitration board in the dispute resolution proceeding granted preferential rights to the outstanding shares in early July 2020, after which Momentum Group now holds 100 percent of the shares and votes in Swedol.
The total purchase consideration for the acquisition amounted to MSEK 2,724 (excluding acquisition costs), of which the non-cash issue's share was MSEK 1,487 and the remaining share was a cash settlement. The fair value of the 22,640,773 Class B shares in Momentum Group issued as part of the purchase consideration is based on the listed share price for Momentum Group's Class B shares on 1 April 2020 of SEK 65.70 per share. Acquisition costs totalling MSEK 14 were recognised as other operating expenses for the 2019/20 financial year and MSEK 2 for the reporting period 1 April-30 June 2020.
In accordance with the preliminary acquisition analysis presented below, MSEK 1,119 of the purchase consideration was allocated to goodwill, MSEK 550 to brands and MSEK 430 to customer relations. The allocation to brands and customer relations was based on the discounted value of future cash flows attributable to each class of assets, where an assessment was conducted that included margin, tied-up capital and turnover rate of the customer base. The value of goodwill was based on the expectation that the Momentum Group's position in the markets in question will strengthen and the other synergies in areas such as purchasing, store coordination and logistics that the Group expects to realise through the acquisition.
If the acquisition had been completed on 1 April 2019, a preliminary consolidated income statement at 31 March 2020 for the Momentum Group, including Swedol, would have shown total revenue of MSEK 9,780 and net profit after tax of MSEK 425 for the 2019/20 financial year. These amounts have been calculated based on the Swedol Group's earnings, adjusted for additional depreciation and amortisation that would have arisen if the adjustment to fair value for tangible and intangible non-current assets had been applied from 1 April 2019, together with attributable tax effects. There are no material differences in accounting policies between Momentum Group and the acquired business since Swedol applied IFRS in its historical financial statements.
During the reporting period 1 April-30 June 2020, the acquisition of Swedol contributed MSEK 926 to the Group's revenue and MSEK 87 to the Group's EBITA.
According to the preliminary acquisition analysis, the assets and liabilities included in the acquisition of Swedol AB amounted to the following:
| FAIR VALUE RECOGNISED IN THE GROUP |
|
|---|---|
| MSEK | |
| ACQUIRED ASSETS | |
| Brands | 550 |
| Customer relations | 430 |
| Other intangible non-current assets | 52 |
| Buildings and land | 220 |
| Other tangible non-current assets | 191 |
| Right-of-use assets | 622 |
| Deferred tax assets | 10 |
| Inventories | 1,018 |
| Other receivables | 433 |
| Cash and cash equivalents | 25 |
| Total assets | 3,551 |
| ACQUIRED PROVISIONS AND LIABILITIES | |
| Interest-bearing liabilities - credit institutions | 527 |
| Interest-bearing liabilities - leases | 621 |
| Deferred tax liability | 317 |
| Other current liabilities | 481 |
| Total provisions and liabilities | 1,946 |
| NET OF IDENTIFIED ASSETS AND LIABILITIES | 1,605 |
| Goodwill | 1,119 |
| Non-controlling interests | 0 |
| PURCHASE CONSIDERATION | 2,724 |
| Less: New share issue | –1,487 |
| Less: Purchase consideration related to compulsory redemption | –46 |
| Additional: Net debt in Swedol | 503 |
| EFFECT ON THE GROUP'S CASH AND CASH EQUIVALENTS | 1,694 |
Corporate acquisitions carried out since the 2015/16 financial year:
| TIME | NO. OF | |||
|---|---|---|---|---|
| ACQUISITION | (possession taken) | REVENUE1 | EMPLOYEES1 | BUSINESS AREA |
| AB Carl A. Nilssons El. Rep.verkstad, SE | September 2015 | MSEK 20 | 13 | Components & Services |
| Tønsberg Maskinforretning AS, NO | April 2016 | MNOK 20 | 10 | Tools & Consumables |
| Astrup Industrivarer AS, NO | November 2016 | MNOK 240 | 50 | Tools & Consumables |
| Arboga Machine Tool AB, SE | March 2017 | MSEK 10 | 5 | Components & Services |
| TriffiQ Företagsprofilering AB2 , SE |
September 2017 | MSEK 70 | 18 | Tools & Consumables |
| AB Knut Sehlins Industrivaruhus, SE | October 2017 | MSEK 40 | 14 | Tools & Consumables |
| Elka Produkter AB2 , SE |
October 2017 | 3 – |
10 | Tools & Consumables |
| Reklamproffsen Skandinavien AB2 , SE |
March 2018 | MSEK 35 | 12 | Tools & Consumables |
| Profilmakarna i Södertälje AB, SE | April 2018 | MSEK 25 | 8 | Tools & Consumables |
| MRO business from Brammer4 , SE |
May 2018 | MSEK 140 | 33 | Components & Services |
| MFG Components Oy4 , FI |
October 2018 | MEUR 1 | 3 | Tools & Consumables |
| TOOLS Løvold AS, NO | January 2019 | MNOK 95 | 28 | Tools & Consumables |
| PPE business from Lindström Group4 , FI |
April 2019 | MEUR 6 | 5 | Tools & Consumables |
| ETAB Industriautomation AB2 , SE |
June 2019 | MSEK 45 | 9 | Components & Services |
| Company Line Förvaltning AB2 , SE |
June 2019 | MSEK 75 | 25 | Tools & Consumables |
| AMJ Papper AB, SE | March 2020 | MSEK 15 | 6 | Tools & Consumables |
| Swedol AB5 , SE / NO / FI |
April 2020 | MSEK 3,650 | 1,046 | Tools & Consumables |
1) Refers to information for the full year on the date of acquisition.
2) Momentum Group initially acquired 70 percent of the shares in each company. Momentum Group currently owns 89 percent of the shares in TriffiQ Företagsprofilering AB and 100 percent of the shares in Reklamproffsen Skandinavien AB.
3) The current operations of Elka Produkter AB were established in autumn 2017. Accordingly, there is no full-year information available regarding comparable revenue.
4) The acquisition was carried out as a conveyance of assets and liabilities.
5) After the completion of the public offer to the shareholders in Swedol AB, Momentum Group's holding amounted to approximately 99 percent of the shares. Compulsory redemption of the remaining shares in Swedol has been called for, and preferential rights to the shares was granted by the arbitration board in the dispute resolution proceeding in early July 2020. Momentum Group subsequently holds 100 percent of the shares and votes in Swedol.
Momentum Group uses certain financial performance measures in its analysis of the operations and their performance that are not defined in accordance with IFRS. Momentum Group believes that these alternative performance measures provide valuable information for the company's Board of Directors, owners and investors, since they enable a more accurate assessment of current trends and the company's performance when combined with other performance measures calculated in accordance with IFRS. Since not all listed companies calculate these financial performance measures in the same way, there is no guarantee that the information is comparable with other companies' performance measures of the same name. Hence, these financial performance measures must not be viewed as a replacement for those measures calculated in accordance with IFRS. Insofar as the performance measures are used and commented on by business area (operating segment), the derivation of the performance measures is also presented at this level.
| 12 MONTHS ENDING | ||||||
|---|---|---|---|---|---|---|
| 30 JUN 20201 | 31 MAR 2020 | 31 MAR 2019 | 31 MAR 2018 | |||
| IFRS PERFORMANCE MEASURES | ||||||
| Net profit, MSEK | 260 | 217 | 231 | 182 | ||
| Earnings per share, SEK | 7.75 | 7.70 | 8.20 | 6.45 | ||
| ALTERNATIVE PERFORMANCE MEASURES | ||||||
| Performance measures related to the income statement | ||||||
| Revenue, MSEK | 6,847 | 6,135 | 6,024 | 5,616 | ||
| Operating profit, MSEK | 367 | 303 | 302 | 240 | ||
| of which: Items affecting comparability | –18 | –14 | – | –12 | ||
| of which: Amortisation of intangible assets incurred in connection with corporate acquisitions |
–33 | –21 | –16 | –10 | ||
| EBITA, MSEK | 418 | 338 | 318 | 262 | ||
| of which: Depreciation and amortisaton of tangible | ||||||
| and other intangible non-current assets 2 | –47 | –31 | –31 | –27 | ||
| Profit after financial items, MSEK | 337 | 283 | 296 | 235 | ||
| Operating margin, % | 5.4% | 4.9% | 5.0% | 4.3% | ||
| EBITA margin, % | 6.1% | 5.5% | 5.3% | 4.7% | ||
| Profit margin, % | 4.9% | 4.6% | 4.9% | 4.2% | ||
| Performance measures related to profitability | ||||||
| Return on working capital (EBITA/WC ), % |
29% | 28% | 27% | 25% | ||
| Return on capital employed, % | 13% | 14% | 19% | 17% | ||
| Return on equity, % | 15% | 16% | 19% | 17% | ||
| Performance measures related to financial position | ||||||
| Financial net loan liability (closing balance), MSEK | 2,747 | 708 | 293 | 322 | ||
| Operational net loan liability (closing balance), MSEK | 1,658 | 166 | 266 | 295 | ||
| Equity (closing balance)3 , MSEK |
2,934 | 2,869 | 1,303 | 1,155 | ||
| Equity/assets ratio, % | 38% | 48% | 45% | 42% | ||
| Other performance measures | ||||||
| Number of employees at the end of the period4 | 2,370 | 1,651 | 1,684 | 1,647 | ||
| Share price at the end of the period, SEK | 119.40 | 67.50 | 93.40 | 100.00 |
1) These performance measures include the acquisition of Swedol as of 1 April 2020.
2) Total depreciation/amortisation of tangible and intangible non-current assets, excluding amortisation of intangible assets arising in connection with corporate acquisitions and IFRS 16 effects.
3) Refers to equity attributable to Parent Company shareholders.
4) Adjusted for employees furloughed due to the COVID-19 pandemic as of 30 June 2020.
Own invoicing, commission-based revenue from commission sales and side revenue.
Profit before financial items and tax.
Items affecting comparability include revenue and expenses that do not arise regularly in the operating activities.
Operating profit adjusted for items affecting comparability and before any impairment of goodwill and amortisation and impairment of other intangible assets arising in connection with corporate acquisitions and equivalent transactions.
Operating profit relative to revenue.
EBITA as a percentage of revenue.
Profit after financial items as a percentage of revenue.
EBITA for the most recent 12-month period divided by average working capital measured as total working capital (accounts receivable and inventories less accounts payable) at the end of each month for the most recent 12-month period and the opening balance at the start of the period divided by 13.
Operating profit plus financial income for the most recent 12-month period divided by average capital employed measured as the balance-sheet total less non-interest-bearing liabilities and provisions at the end of the most recent four quarters and the opening balance at the start of the period divided by five.
Net profit for the most recent 12-month period divided by average equity measured as total equity attributable to Parent Company shareholders at the end of the most recent four quarters and the opening balance at the start of the period divided by five.
Financial net loan liability measured as non-current interest-bearing liabilities and current interest-bearing liabilities, less cash and cash equivalents at the end of the period.
Operational net loan liability measured as non-current interest-bearing liabilities and current interest-bearing liabilities, excluding finance lease liabilities and net provisions for pensions, less cash and cash equivalents at the end of the period.
Equity attributable to Parent Company shareholders as a percentage of the balance-sheet total at the end of the period.
Net profit attributable to the Parent Company shareholders divided by the weighted number of shares. IFRS performance measure.
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 in the number of trading days compared with the comparative period. Other units refer to the acquisition or divestment of units during the corresponding period. Note: Any instances where comparable units include Swedol for periods prior to the closing date of 1 April 2020 are specifically noted.
| 12 MONTHS ENDING | |||||
|---|---|---|---|---|---|
| MSEK | 30 JUN 2020 | 31 MAR 2020 | 31 MAR 2019 | 31 MAR 2018 | |
| EBITA | |||||
| Operating profit | 367 | 303 | 302 | 240 | |
| Items affecting comparability | |||||
| Acquisition related expenses | 16 | 14 | – | – | |
| Integration expenses for the acquisition of Swedol | 2 | – | – | – | |
| Split and listing expenses | – | – | – | 12 | |
| Amortisation of intangible assets incurred in connection with corporate acquisitions | 33 | 21 | 16 | 10 | |
| EBITA | 418 | 338 | 318 | 262 |
| 12 MONTHS ENDING | |||||
|---|---|---|---|---|---|
| MSEK | 30 JUN 2020 | 31 MAR 2020 | 31 MAR 2019 | 31 MAR 2018 | |
| WORKING CAPITAL | |||||
| Average operating assets | |||||
| Average inventories | 1,236 | 1,021 | 975 | 884 | |
| Average accounts receivable | 1,003 | 966 | 956 | 895 | |
| Total average operating assets | 2,239 | 1,987 | 1,931 | 1,779 | |
| Average operating liabilities | |||||
| Average accounts payable | –788 | –759 | –736 | –732 | |
| Total average operating liabilities | –788 | –759 | –736 | –732 | |
| Average working capital | 1,451 | 1,228 | 1,195 | 1,047 | |
| EBITA | 418 | 338 | 318 | 262 | |
| Return on working capital (EBITA/WC), % | 29% | 28% | 27% | 25% |
| 12 MONTHS ENDING | ||||||
|---|---|---|---|---|---|---|
| MSEK | 30 JUN 2020 | 31 MAR 2020 | 31 MAR 2019 | 31 MAR 2018 | ||
| CAPITAL EMPLOYED | ||||||
| Average balance-sheet total | 4,263 | 3,318 | 2,813 | 2,619 | ||
| Average non-interest-bearing liabilities and provisions | ||||||
| Average non-interest-bearing non-current liabilities | –129 | –72 | –74 | –57 | ||
| Average non-interest-bearing current liabilities | –1,213 | –1,147 | –1,150 | –1,149 | ||
| Total average non-interest-bearing liabilities and provisions | –1,342 | –1,219 | –1,224 | –1,206 | ||
| Average capital employed | 2,921 | 2,099 | 1,589 | 1,413 | ||
| Operating profit | 367 | 303 | 302 | 240 | ||
| Financial income | 3 | 1 | 1 | 2 | ||
| Total operating profit + financial income | 370 | 304 | 303 | 242 | ||
| Return on capital employed, % | 13% | 14% | 19% | 17% | ||
| 12 MONTHS ENDING | ||||||
| MSEK | 30 JUN 2020 | 31 MAR 2020 | 31 MAR 2019 | 31 MAR 2018 | ||
| RETURN ON EQUITY | ||||||
| Average equity* | 1,660 | 1,333 | 1,220 | 1,070 | ||
| Net profit* | 256 | 214 | 229 | 181 | ||
| Return on equity, % | 15% | 16% | 19% | 17% | ||
| * Refers to equity and earnings attributable to Parent Company shareholders. | ||||||
| 12 MONTHS ENDING | ||||||
|---|---|---|---|---|---|---|
| MSEK | 30 JUN 2020 | 31 MAR 2020 | 31 MAR 2019 | 31 MAR 2018 | ||
| FINANCIAL NET LOAN LIABILITY (CLOSING BALANCE) | ||||||
| Non-current interest-bearing liabilities | 2,283 | 1,461 | 164 | 130 | ||
| Current interest-bearing liabilities | 493 | 404 | 137 | 202 | ||
| Cash and cash equivalents | –29 | –1,157 | –8 | –10 | ||
| Financial net loan liability (closing balance) | 2,747 | 708 | 293 | 322 | ||
| 12 MONTHS ENDING | ||||||
| MSEK | 30 JUN 2020 | 31 MAR 2020 | 31 MAR 2019 | 31 MAR 2018 | ||
| OPERATIONAL NET LOAN LIABILITY (CLOSING BALANCE) | ||||||
| Financial net loan liability | 2,747 | 708 | 293 | 322 | ||
| Financial lease liabilities | –1,055 | –511 | – | – | ||
| Net provisions for pensions | –34 | –31 | –27 | –27 | ||
| Operational net loan liability (closing balance) | 1,658 | 166 | 266 | 295 | ||
| 12 MONTHS ENDING | ||||||
| MSEK | 30 JUN 2020 | 31 MAR 2020 | 31 MAR 2019 | 31 MAR 2018 | ||
| EQUITY/ASSETS RATIO | ||||||
| Balance-sheet total (closing balance) | 7,637 | 5,940 | 2,914 | 2,734 | ||
| Equity (closing balance)* | 2,934 | 2,869 | 1,303 | 1,155 | ||
| Equity/assets ratio, % | 38% | 48% | 45% | 42% |
* Refers to equity attributable to Parent Company shareholders.
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