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Dometic Group Earnings Release 2019
2905_10-k_2020-01-31_ed25bd82-5e27-4be2-aad2-a609becdec87.pdf
Earnings Release
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REPORT ON THE FOURTH QUARTER 2019
FOURTH QUARTER 2019
- Net sales for the quarter were SEK 3,919 m (4,070); a decrease of -4%, of which -9% was organic growth.
- Operating profit before depreciation and amortization (EBITDA) for the quarter was SEK 445 m (469), representing a margin of 11.4% (11.5%).
- Operating profit (EBIT) before items affecting comparability for the quarter was SEK 298 m (420), representing a margin of 7.6% (10.3%).
- Items affecting comparability for the quarter were SEK -60 m (-92), of which SEK -80 m related to restructuring costs for the quarter from the global restructuring program presented in the interim report for the third quarter 2019.
- Operating profit (EBIT) for the quarter was SEK 238 m (328), representing a margin of 6.1% (8.1%).
- Cash flow for the quarter was SEK 679 m (-906). Operating cash flow was SEK 918 m (859).
- Profit for the quarter was SEK 47 m (136).
- Earnings per share for the quarter were SEK 0.16 (0.46).
FULL YEAR 2019
- Net sales for the period were SEK 18,503 m (18,274); an increase of 1%, of which -7% was organic growth.
- Operating profit before depreciation and amortization (EBITDA) for the period was SEK 3,155 m (3,113), representing a margin of 17.1% (17.0%).
- Operating profit (EBIT) before items affecting comparability for the period was SEK 2,435 m (2,679), representing a margin of 13.2% (14.7%).
- Items affecting comparability for the period were SEK -97 m (-92), of which SEK -116 m related to restructuring costs for the period from the global restructuring program presented in the interim report for the third quarter 2019.
- Operating profit (EBIT) for the period was SEK 2,338 m (2,587), representing a margin of 12.6% (14.2%).
- Cash flow for the period was SEK 2,162 m (920). Operating cash flow was SEK 3,721 m (2,616).
- Profit for the period was SEK 1,325 m (1,576).
- Earnings per share for the period were SEK 4.48 (5.33).
- The Board of Directors propose a dividend of SEK 2.20 (2.15) per share for 2019.
FINANCIAL OVERVIEW
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2019 | 2018 | 2019 | 2018 |
| Net sales | 3,919 | 4,070 | 18,503 | 18,274 |
| EBITDA | 445 | 469 | 3,155 | 3,113 |
| % of net sales | 11.4% | 11.5% | 17.1% | 17.0% |
| 1 Operating profit (EBIT) before items affecting comparability⁽ ⁾ |
298 | 420 | 2,435 | 2,679 |
| % of net sales | 7.6% | 10.3% | 13.2% | 14.7% |
| Operating profit (EBIT) | 238 | 328 | 2,338 | 2,587 |
| % of net sales | 6.1% | 8.1% | 12.6% | 14.2% |
| Profit for the period | 47 | 136 | 1,325 | 1,576 |
| Earnings per share, SEK | 0.16 | 0.46 | 4.48 | 5.33 |
| Cash flow for the period | 679 | -906 | 2,162 | 920 |
| Operating cash flow⁽2⁾ | 918 | 859 | 3,721 | 2,616 |
| Core working capital | 3,238 | 3,986 | 3,238 | 3,986 |
| Investments in fixed assets | -114 | -117 | -361 | -422 |
| RoOC | 28.3% | 30.5% | 28.3% | 30.5% |
⁽1⁾ See Note 5 Items affecting comparability.
⁽2⁾Net cash flow from operations after investments in fixed assets and excluding income tax paid.
CEO COMMENTS
Short-term outlook:The near-term demand for Dometic's products is expected to remain challenging.
All references to EBIT and EBIT margin on this page refer to EBIT before items affecting comparability unless otherwise stated
.
2019 was an important year for Dometic. It was a year in which we clearly embarked on the journey of transforming as a company, started to execute on many strategic initiatives across the entire organization and raised our ambitions by establishing new financial targets.
Our strategy is the foundation for actions taken during the year. Despite a challenging trading environment in areas of our business and US trade tariffs, we have managed to deliver 1 percent net sales growth for the full year. We also demonstrated a strong ability to react immediately to changing market conditions by taking actions leading to continued high profitability and the best operating cash flow in the history of Dometic. At the same time, we have increased our investments in innovation, in building the commercial organization for the new growth areas and in IT to become even more competitive in the years to come. We achieved our ambitious targets relating to the innovation index and SKU reduction for the year.
We summarize a fourth quarter characterized by a similar trading environment seen all throughout the year. Total net sales growth was -4%, mainly impacted by a continued weak US market. We are pleased to see that we have started to execute on the restructuring program and we are satisfied how we have managed this so far.
Americas reported net sales growth of -8 percent in the quarter. The sales decline was driven by a negative development in Food & Beverage, while Other Applications showed a strong performance. The EBIT margin was 7.1 percent. The additional US tariffs and the continued volume decline in the US market could not be fully offset by all the actions taken in the Americas region. The gross impact from tariffs was SEK -81 m in the quarter and SEK -258 m for the full year.
EMEA reported net sales growth of 2 percent in the quarter. A good performance in Power & Control and Climate, boosted by the acquisition of Kampa, was offset by a weaker development in Food & Beverage. The EBIT margin was 4.1 percent, mainly negatively impacted by lower volumes and currency effects.
APAC reported net sales growth of -4 percent in the quarter. Climate and Power & Control displayed a positive sales trend. Food & Beverage was negatively impacted by a weak performance in Australia. The EBIT margin remained at a high level at 20.7 percent despite a negative development in the Pacific.
Since the announcement of the global restructuring program in connection with the report for the third quarter 2019, we have shifted two more production lines from China to the new manufacturing site in Mexico, consolidated one manufacturing site in Americas and initiated the closure of two manufacturing sites in EMEA. A total of 10 sites and around 200 employees have been affected during the quarter. In January, we took further action in the US affecting one manufacturing site and around 200 employees. We remain confident that we will deliver on the previously communicated target of estimated annualized effects on earnings of approximately SEK 400 m when fully implemented, with full impact in the middle of 2022. The execution of this program will allow us to reach our financial targets and take full advantage of the many opportunities ahead.
Operating cash flow was SEK 918 m, an increase of 7 percent compared with the same quarter last year. Leverage improved to 2.4x (2.8x) by the end of the quarter.
As we enter 2020, we will continue to drive improvements in all areas in line with our strategy. We will continue to invest in new growth opportunities and innovation, while persisting with our efforts to reduce complexity, execute on the global restructuring program and improve efficiency every day in 2020. The many actions across the entire organization will demand full attention in order to secure successful and timely execution.
We are confident about the long-term positive trends in the Mobile Living industry and the opportunities for acquisitive growth, and we will continue to deliver on our strategic direction to take Dometic to the next level.
Juan Vargues, President and CEO
FINANCIAL SUMMARY – FOURTH QUARTER 2019
Net sales were SEK 3,919 m (4,070), a decrease of -4% compared with the same quarter last year. This comprised -9% organic growth, 4% currency translation and 1% M&A.
Operating profit before depreciation and
amortization (EBITDA) was SEK 445 m (469). The EBITDA margin was 11.4% (11.5%).
Operating profit (EBIT) before items affecting comparability was SEK 298 m (420). The EBIT margin before items affecting comparability was 7.6% (10.3%).
Items affecting comparability totaled SEK -60 m (-92), of which SEK -80 m related to restructuring costs for the quarter from the global restructuring program presented in the interim report for the third quarter 2019
Operating profit (EBIT) was SEK 238 m (328). The EBIT margin was 6.1% (8.1%). IFRS 16 impacted EBIT positively by SEK 2 m.
Financial items totaled a net amount of SEK -160 m (-96), including SEK -103 m (-106) in interest on external bank loans and SEK -6 m (0) for interest on leases as an effect of IFRS 16. Other FX revaluations and other items amounted to SEK -57 m (6) and financial income amounted to SEK 5 m (5).
Taxes totaled SEK -30 m (-96), corresponding to 39% (41%) of profit before tax. Current tax amounted to SEK -180 m (-54) and deferred tax to SEK 151 m (-42). Deferred tax mainly related to timing differences. Paid tax of 138% (24%) is higher compared with the same quarter last year, mainly due to the Group's tax paying positions in Canada and the US, but also due to payments of withholding tax on intercompany dividends.
Profit for the quarter was SEK 47 m (136).
Earnings per share for the quarter were SEK 0.16 (0.46).
Operating cash flow for the quarter was SEK 918 m (859).
Cash flow for the quarter was SEK 679 m (-906).
Financial position. Leverage was 2.4x (2.8x) at the end of the fourth quarter 2019.
Global restructuring program. During the quarter, total costs relating to the global restructuring program amounted to SEK -80 m.
FINANCIAL SUMMARY – FULL YEAR 2019
Net sales were SEK 18,503 m (18,274), an increase of 1% compared with the same period last year. This comprised -7% organic growth, 5% currency translation and 3% M&A.
Operating profit before depreciation and
amortization (EBITDA) was SEK 3,155 m (3,113). The EBITDA margin was 17.1% (17.0%).
Operating profit (EBIT) before items affecting comparability was SEK 2,435 m (2,679). The EBIT margin before items affecting comparability was 13.2% (14.7%).
Items affecting comparability totaled SEK -97 m (-92), of which SEK -80 m related to restructuring costs for the period.
Operating profit (EBIT) was SEK 2,338 m (2,587). The EBIT margin was 12.6% (14.2%). IFRS 16 impacted EBIT positively by SEK 6 m.
Financial items totaled a net amount of SEK -508 m (-431), including SEK -434 m (-408) in interest on external bank loans and SEK -19 m (0) for interest on leases as an effect of IFRS 16. Other FX revaluations and other items amounted to SEK -68 m (-34) and financial income amounted to SEK 14 m (11).
Taxes totaled SEK -505 m (-580), corresponding to 28% (27%) of profit before tax. The total effective tax rate is higher compared with 2018 mainly due to the BEAT tax rate ("Base Erosion Anti-avoidance Tax) in the US. In 2019, the BEAT tax rate was increased from 5% to 10%. Current tax amounted to SEK -591 m (-296) and deferred tax to SEK 86 m (-284). Paid tax of 29% (15%) is higher compared with the same period last year, mainly due to the Group's tax paying positions in Canada and the US, but also due to payments of withholding tax on intercompany dividends as well as payment of capital gains tax on the sale of real estate in China in 2017, which had been postponed to this year.
Profit for the period was SEK 1,325 m (1,576).
Earnings per share for the period were SEK 4.48 (5.33).
Operating cash flow for the period was SEK 3,721 m (2,616).
Cash flow for the period was SEK 2,162 m (920).
Global restructuring program. During the period, total costs relating to the global restructuring program amounted to SEK -116 m.
Significant events after the period. There were no significant events after the period.
| Q4 | Q4 | Change (%) | FY | FY | Change (%) | |||
|---|---|---|---|---|---|---|---|---|
| SEK m | 2019 | 2018 | Rep. | Adj.⁽¹⁾ | 2019 | 2018 | Rep. | Adj.⁽¹⁾ |
| Americas | 2,010 | 2,177 | -8% | -12% | 9,325 | 9,758 | -4% | -11% |
| EMEA | 1,449 | 1,415 | 2% | 0% | 7,472 | 6,706 | 11% | 8% |
| APAC | 460 | 478 | -4% | -5% | 1,707 | 1,810 | -6% | -8% |
| Net sales | 3,919 | 4,070 | -4% | -7% | 18,503 | 18,274 | 1% | -4% |
| Americas | 143 | 234 | -39% | -42% | 1,096 | 1,470 | -25% | -31% |
| EMEA | 59 | 86 | -31% | -33% | 978 | 814 | 20% | 15% |
| APAC | 95 | 100 | -4% | -8% | 362 | 395 | -8% | -14% |
| Operating profit (EBIT) bef. i.a.c.⁽²⁾ | 298 | 420 | -29% | -32% | 2,435 | 2,679 | -9% | -15% |
| Americas | 7.1% | 10.8% | 11.8% | 15.1% | ||||
| EMEA | 4.1% | 6.1% | 13.1% | 12.1% | ||||
| APAC | 20.7% | 20.9% | 21.2% | 21.8% | ||||
| Operating profit % bef. i.a.c.⁽²⁾ | 7.6% | 10.3% | 13.2% | 14.7% |
⁽¹⁾Represents change in comparable currency. ⁽²⁾Before items affecting comparability.
Net sales (SEK m) 0 2 000 4 000 6 000 8 000 10 000 12 000 0 500 1 000 1 500 2 000 2 500 3 000 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 Q RT Quarterly net sales Rolling 12-month net sales
Q4
OPERATING PROFIT (EBIT)*
143 SEK MILLION (234)
7.1% (10.8%)
NET SALES AND OPERATING PROFIT (EBIT)
Fourth quarter 2019
Americas reported net sales of SEK 2,010 m (2,177), representing 51% of Group net sales. Total growth was -8%, of which -12% was organic growth, 4% currency translation and 0% M&A.
Operating profit (EBIT) before items affecting comparability was SEK 143 m (234); a decrease of -39% compared with the same quarter last year. The EBIT margin was 7.1% (10.8%).
Items affecting comparability totaled SEK -4 m (-34), of which SEK -23 m related to restructuring costs for the quarter from the global restructuring program presented in the interim report for the third quarter 2019.
Operating profit (EBIT) was SEK 139 m (200); a decrease of -30% compared with the same quarter last year. The EBIT margin was 6.9% (9.2%). The gross impact from tariffs was SEK -81 m in the quarter.
Full year 2019
Americas reported net sales of SEK 9,325 m (9,758). Total growth was -4%, of which -11% was organic growth, 7% currency translation and 0% M&A.
Operating profit (EBIT) before items affecting comparability was SEK 1,096 m (1,470); a decrease of -25% compared with the same period last year. The EBIT margin was 11.8% (15.1%).
Items affecting comparability totaled SEK -41 m (-34), of which SEK -60 m related to restructuring costs for the period from the global restructuring program presented in the interim report for the third quarter 2019.
Operating profit (EBIT) was SEK 1,055 m (1,437); a decrease of -27% compared with the same period last year. The EBIT margin was 11.3% (14.7%). The gross impact from tariffs was SEK -258 m for the period.
Business highlights, Q4
Total OEM sales growth was -12%, of which growth in constant currency was -16%.
Total Aftermarket sales growth was 3%, of which growth in constant currency was -2%.
Food & Beverage reported negative sales growth, mainly driven by weak demand for RV refrigeration products. Strong growth for mobile cooling.
Climate reported negative sales growth, mainly due to a weak performance for climate control and awnings products.
Power & Control reported negative sales growth, driven by a weaker development for steering systems.
Other Applications reported strong sales growth, supported by a strong performance for spare parts.
*EBIT before items affecting comparability.
EMEA
Net sales (SEK m)
Q4
OPERATING MARGIN (EBIT%)*
NET SALES AND OPERATING PROFIT (EBIT)
Fourth quarter 2019
EMEA reported net sales of SEK 1,449 m (1,415), representing 37% of Group net sales. Total growth was 2%, of which -4% was organic growth, 2% currency translation and 4% M&A.
Operating profit (EBIT) before items affecting comparability was SEK 59 m (86); a decrease of -31% compared with the same quarter last year. The EBIT margin was 4.1% (6.1%), mainly negatively impacted by lower volumes and currency effects.
Items affecting comparability totaled SEK -51 m (-57) and related to restructuring costs for the quarter from the global restructuring program presented in the interim report for the third quarter 2019.
Operating profit (EBIT) was SEK 8 m (29); a decrease of -72% compared with the same quarter last year. The EBIT margin was 0.6% (2.1%).
Full year 2019
EMEA reported net sales of SEK 7,472 m (6,706). Total growth was 11%, of which 1% was organic growth, 3% currency translation and 7% M&A.
Operating profit (EBIT) before items affecting comparability was SEK 978 m (814); an increase of 20% compared with the same period last year. The EBIT margin was 13.1% (12.1%).
Items affecting comparability totaled SEK -51 m (-57) and related to restructuring costs for the period from the global restructuring program presented in the interim report for the third quarter 2019.
Operating profit (EBIT) was SEK 926 m (756), an increase of 22% compared with the same period last year. The EBIT margin was 12.4% (11.3%).
Business highlights, Q4
Total OEM sales growth was -3%, of which growth in constant currency and excluding the acquisition of Kampa was -6%.
Total Aftermarket sales growth was 12%, of which growth in constant currency and excluding the acquisition of Kampa was -2%.
Food & Beverage reported negative sales growth. Good growth for hot & cooking products was more than offset by a weak performance for mobile cooling and refrigeration products.
Climate reported good sales growth, mainly driven by awnings and climate control products.
Power & Control reported strong sales growth, driven by generators and battery products.
Other Applications reported strong sales growth, mainly as a result of strong development for spare parts.
*EBIT before items affecting comparability
APAC
Net sales (SEK m)
Sales split AM/OEM
Q4
NET SALES
OPERATING PROFIT (EBIT)*
95 SEK MILLION (100)
OPERATING MARGIN (EBIT%)*
20.7% (20.9%)
*EBIT before items affecting comparability
NET SALES AND OPERATING PROFIT (EBIT)
Fourth quarter 2019
APAC reported net sales of SEK 460 m (478), representing 12% of Group net sales. Total growth was -4%, of which -5% was organic growth, 1% currency translation and 0% M&A.
Operating profit (EBIT) before items affecting comparability was SEK 95 m (100); a decrease of -5% compared with the same quarter last year. The EBIT margin was 20.7% (20.9%).
Items affecting comparability totaled SEK -5 m (-1) and related to restructuring costs for the quarter from the global restructuring program presented in the interim report for the third quarter 2019.
Operating profit (EBIT) was SEK 90 m (99); a decrease of -9% compared with the same quarter last year. The EBIT margin was 19.6% (20.7%).
Full year 2019
APAC reported net sales of SEK 1,707 m (1,810). Total growth was -6%, of which -8% was organic growth, 2% currency translation and 0% M&A.
Operating profit (EBIT) before items affecting comparability was SEK 362 m (395); a decrease of -8% compared with the same period last year. The EBIT margin was 21.2% (21.8%).
Items affecting comparability totaled SEK -5 m (-1) and related to restructuring costs for the period from the global restructuring program presented in the interim report for the third quarter 2019.
Operating profit (EBIT) was SEK 357 m (394); a decrease of -9% compared with the same period last year. The EBIT margin was 20.9% (21.8%).
Business highlights, Q4
Total OEM sales growth was -4%, of which growth in constant currency was -6%. Total Aftermarket sales growth was -3%, of which growth in constant currency was -5%.
Food & Beverage reported negative sales growth. A good development for refrigeration products was more than offset by weak sales for mobile cooling.
Climate reported good sales growth, mainly as a result of a strong performance for climate control products.
Power & Control reported sales growth, impacted by a positive development for generators and battery products.
Other Applications reported sales growth, mainly due to a strong performance for sanitation products and spare parts.
PARENT COMPANY DOMETIC GROUP AB (PUBL)
Fourth quarter 2019
The Parent Company Dometic Group AB (publ) comprises the functions of the Group's head office, such as Group-wide management and administration. The Parent Company invoices its costs to subsidiaries.
For the fourth quarter of 2019, the Parent Company had an operating profit (loss) of SEK -5 m (-1), including administrative expenses of SEK -40 m (-37) and other operating income of SEK 35 m (36), of which the full amount relates to income from subsidiaries.
Profit (loss) from financial items totaled SEK 187 m (480), including interest income from subsidiaries of SEK 60 m (72), interest expenses to subsidiaries of SEK 0 m (0), result from shares in subsidiaries of SEK – m (528) and other financial income and expenses of SEK 127 m (-119).
Profit (loss) for the quarter amounted to SEK -39 m (524).
Full year 2019
For the full year of 2019, the Parent Company had an operating profit (loss) of SEK 0 m (-5), including administrative expenses of SEK -185 m (-171) and other operating income of SEK 185 m (166), of which the full amount relates to income from subsidiaries.
Profit (loss) from financial items totaled SEK -453 m (10), including interest income from subsidiaries of SEK 279 m (259), interest expenses to subsidiaries of SEK 0 m (0), result from shares in subsidiaries of SEK – m (528) and other financial income and expenses of SEK -732 m (-777).
Profit (loss) for the period amounted to SEK -54 m (517).
For further information, please refer to the Parent Company's condensed financial statements on page 11.
ANNUAL GENERAL MEETING
Dometic Group AB's (publ) Annual General Meeting will be held on Tuesday, April 7, 2020, at 13:00 at At Six, Brunkebergstorg 6, Stockholm, Sweden.
NOMINATION COMMITTEE – ANNUAL GENERAL MEETING 2020
In accordance with the resolution taken by the 2019 Annual General Meeting (AGM), the Nomination Committee ahead of the 2020 AGM shall be composed of the Chairman of the Board of Directors together with one representative of each of the three largest shareholders, based on the ownership structure as of August 31, 2019. More details about the Nomination Committee are available on our website. www.dometic.com
PROPOSED DIVIDEND
For the 2019 full year, the Board of Directors propose a cash dividend of SEK 2.20 (2.15).
Solna, January 31, 2020
Board of Directors
REVIEW
This interim report has not been subject to review by the Dometic Group AB's (publ) external auditor.
CONSOLIDATED INCOME STATEMENT
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2019 | 2018 | 2019 | 2018 |
| Net sales | 3,919 | 4,070 | 18,503 | 18,274 |
| Cost of goods sold | -2,715 | -2,794 | -12,504 | -12,323 |
| Gross Profit | 1,204 | 1,276 | 5,999 | 5,951 |
| Sales expenses | -603 | -573 | -2,411 | -2,259 |
| Administrative expenses | -228 | -224 | -918 | -855 |
| Other operating income and expenses | 2 | -1 | 68 | 61 |
| Items affecting comparability | -60 | -92 | -97 | -92 |
| Amortization of acquisition related intangible assets | -77 | -58 | -303 | -219 |
| Operating profit | 238 | 328 | 2,338 | 2,587 |
| Financial income | 5 | 5 | 14 | 11 |
| Financial expenses | -165 | -101 | -522 | -442 |
| Loss from financial items | -160 | -96 | -508 | -431 |
| Profit (loss) before tax | 77 | 232 | 1,830 | 2,156 |
| Taxes | -30 | -96 | -505 | -580 |
| Profit (loss) for the period | 47 | 136 | 1,325 | 1,576 |
| Profit (loss) for the period attributable to owners of the Parent Company | 47 | 136 | 1,325 | 1,576 |
| Earnings per share before and after dilution, SEK - Owners of the Parent Company | 0.16 | 0.46 | 4.48 | 5.33 |
| Average number of shares, million | 295.8 | 295.8 | 295.8 | 295.8 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2019 | 2018 | 2019 | 2018 |
| Profit (loss) for the period | 47 | 136 | 1,325 | 1,576 |
| Other comprehensive income | ||||
| Items that will not be reclassified subsequently to profit or loss: | ||||
| Remeasurements of defined benefit pension plans, net of tax | 58 | -41 | -69 | -3 |
| 58 | -41 | -69 | -3 | |
| Items that may be reclassified subsequently to profit or loss: | ||||
| Cash flow hedges, net of tax | 0 | 10 | -30 | 8 |
| Gains/losses from hedges of net investments in foreign operations, net of tax | 75 | 14 | -41 | -14 |
| Exchange rate differences on translation of foreign operations | -611 | -155 | 784 | 554 |
| -536 | -130 | 713 | 548 | |
| Other comprehensive income for the period | -478 | -171 | 644 | 545 |
| Total comprehensive income for the period | -431 | -35 | 1,969 | 2,121 |
| Total comprehensive income for the period attributable to | ||||
| Owners of the Parent Company | -431 | -35 | 1,969 | 2,121 |
CONSOLIDATED BALANCE SHEET (IN SUMMARY)
| Dec 31, | Dec 31, | |
|---|---|---|
| SEK m | 2019 | 2018 |
| ASSETS | ||
| Non-current assets | ||
| Goodwill and trademarks | 18,875 | 18,203 |
| Other intangible assets | 4,560 | 4,507 |
| Tangible assets | 2,110 | 2,111 |
| Right-of-use assets | 623 | – |
| Deferred tax assets | 583 | 627 |
| Derivatives, long-term | 2 | 0 |
| Other non-current assets | 99 | 71 |
| Total non-current assets | 26,852 | 25,519 |
| Current assets | ||
| Inventories | 2,957 | 3,772 |
| Trade receivables | 1,695 | 1,705 |
| Current tax assets | 74 | 86 |
| Derivatives, short-term | 36 | 107 |
| Other current receivables | 641 | 681 |
| Prepaid expenses and accrued income | 136 | 128 |
| Cash and cash equivalents | 4,289 | 2,113 |
| Total current assets | 9,828 | 8,592 |
| TOTAL ASSETS | 36,681 | 34,111 |
| EQUITY AND LIABILITIES | ||
| EQUITY | 17,363 | 16,029 |
| LIABILITIES | ||
| Non-current liabilities | ||
| Liabilities to credit institutions, long-term | 12,288 | 11,217 |
| Deferred tax liabilities | 1,895 | 1,944 |
| Other non-current liabilities | 165 | 153 |
| Leasing liabilities, long-term | 475 | – |
| Provisions for pensions | 821 | 739 |
| Other provisions, long-term | 198 | 191 |
| Total non-current liabilities | 15,842 | 14,244 |
| Current liabilities | ||
| Liabilities to credit institutions, short-term | – | 393 |
| Trade payables | 1,414 | 1,491 |
| Current tax liabilities | 468 | 399 |
| Advance payments from customers | 20 | 38 |
| Leasing liabilities, short-term | 163 | – |
| Derivatives, short-term | 32 | 108 |
| Other provisions, short-term | 266 | 295 |
| Other current liabilities | 206 | 203 |
| Accrued expenses and prepaid income | 907 | 911 |
| Total current liabilities | 3,476 | 3,838 |
| TOTAL LIABILITIES | 19,318 | 18,082 |
| TOTAL EQUITY AND LIABILITIES | 36,681 | 34,111 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (IN SUMMARY)
| FY | FY | |
|---|---|---|
| SEK m | 2019 | 2018 |
| Opening balance for the period | 16,029 | 14,514 |
| Profit (loss) for the period | 1,325 | 1,576 |
| Other comprehensive income for the period | 644 | 545 |
| Total comprehensive income for the period | 1,969 | 2,121 |
| Transactions with owners | ||
| Dividend paid to shareholders of the Parent Company | -636 | -606 |
| Total transactions with owners | -636 | -606 |
| Closing balance for the period | 17,363 | 16,029 |
CONSOLIDATED STATEMENT OF CASH FLOW
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2019 | 2018 | 2019 | 2018 |
| Cash flow from operating activities | ||||
| Operating profit | 238 | 328 | 2,338 | 2,587 |
| Adjustment for other non-cash items | ||||
| Depreciation and amortization | 208 | 141 | 817 | 526 |
| Adjustments for other non-cash items | -30 | 22 | -29 | 122 |
| Changes in working capital | ||||
| Changes in inventories | 333 | 35 | 970 | -41 |
| Changes in trade receivables | 422 | 366 | 81 | -112 |
| Changes in trade payables | -39 | 90 | 53 | -80 |
| Changes in other working capital | -100 | -6 | -148 | 36 |
| Income tax paid | -106 | -56 | -529 | -313 |
| Net cash flow from operations | 926 | 920 | 3,553 | 2,725 |
| Cash flow from investments | ||||
| Acquisition of operations, net of cash acquired | – | -508 | – | -492 |
| Investments in fixed assets | -114 | -117 | -361 | -422 |
| Proceeds from sale of fixed assets | 0 | 2 | 15 | 70 |
| Deposit | – | – | – | -233 |
| Other investing activities | 0 | 4 | -2 | 1 |
| Net cash flow from investments | -114 | -619 | -348 | -1,076 |
| Cash flow from financing | ||||
| Borrowings from credit institutions | – | 0 | 9,762 | 3,183 |
| Repayment of loans to credit institutions | – | -1,124 | -9,546 | -2,849 |
| Payment of lease liabilities related to lease agreements | -46 | – | -166 | – |
| Paid interest | -60 | -89 | -369 | -376 |
| Received interest | 4 | 4 | 8 | 7 |
| Other financing activities | -31 | 2 | -96 | -88 |
| Dividend paid to shareholders of the Parent Company | – | – | -636 | -606 |
| Net cash flow from financing | -133 | -1,207 | -1,043 | -729 |
| Cash flow for the period | 679 | -906 | 2,162 | 920 |
| Cash and cash equivalents at beginning of period | 3,623 | 3,020 | 2,113 | 1,159 |
| Exchange differences on cash and cash equivalents | -13 | -1 | 14 | 34 |
| Cash and cash equivalents at end of period | 4,289 | 2,113 | 4,289 | 2,113 |
PARENT COMPANY INCOME STATEMENT
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2019 | 2018 | 2019 | 2018 |
| Administrative expenses | -40 | -37 | -185 | -171 |
| Other operating income | 35 | 36 | 185 | 166 |
| Operating profit | -5 | -1 | 0 | -5 |
| Interest income subsidiaries | 60 | 72 | 279 | 259 |
| Interest expenses subsidiaries | 0 | 0 | 0 | – |
| Result from shares in subsidiaries | – | 528 | – | 528 |
| Other financial income and expenses | 127 | -119 | -732 | -777 |
| Profit (loss) from financial items | 187 | 480 | -453 | 10 |
| Group contributions | -233 | 44 | 387 | 510 |
| Profit (loss) before tax | -51 | 523 | -66 | 516 |
| Taxes | 12 | 1 | 12 | 1 |
| Profit (loss) for the period | -39 | 524 | -54 | 517 |
PARENT COMPANY BALANCE SHEET (IN SUMMARY)
| Dec 31, | Dec 31, 2018 |
||
|---|---|---|---|
| SEK m | 2019 | ||
| ASSETS | |||
| Non-current assets | |||
| Shares in subsidiaries | 16,228 | 16,228 | |
| Other non-current assets | 5,844 | 5,573 | |
| Total non-current assets | 22,072 | 21,801 | |
| Current assets | |||
| Current assets | 532 | 1,825 | |
| Total current assets | 532 | 1,825 | |
| TOTAL ASSETS | 22,604 | 23,626 | |
| EQUITY | 10,066 | 10,755 | |
| PROVISIONS | |||
| Provisions | 53 | 42 | |
| Total provisions | 53 | 42 | |
| LIABILITIES | |||
| Non-current liabilities | |||
| Non-current liabilities | 12,288 | 11,217 | |
| Total non-current liabilities | 12,288 | 11,217 | |
| Current liabilities | |||
| Current liabilities | 197 | 1,611 | |
| Total current liabilities | 197 | 1,611 | |
| TOTAL LIABILITIES | 12,538 | 12,870 | |
| TOTAL EQUITY AND LIABILITIES | 22,604 | 23,626 |
CONDENSED NOTES
NOTE 1 | ACCOUNTING PRINCIPLES
Dometic Group AB (publ) and its subsidiaries (together "the Dometic Group", "Dometic" or "the Group") applies International Financial Reporting Standards (IFRS), as adopted by the EU. This consolidated Interim Financial Report has been prepared in accordance with IAS 34 'Interim Financial Reporting'. The accounting and valuation principles in this interim report correspond to principles applied by the Group in the 2018 Annual Report and should be read in conjunction with that Annual Report, available at www.dometic.com.
The Swedish Annual Accounts Act and RFR 2 Accounting for Legal Entities, issued by the Swedish Financial Reporting Board, have been applied for the Parent Company. The interim report comprises pages 1-18 and pages 1-11 are thus an integral part of this financial report (IAS 34.16A).
Totals quoted in tables and statements may not always be the exact sum of the individual items because of rounding differences. The aim is for each line item to correspond to its source, and rounding differences may therefore arise.
New and amended accounting principles for 2019 adopted by the Group
IFRS 16 Leases
IFRS 16 Leases came into effect as of January 1, 2019. The Group has adopted IFRS 16 Leases and it has been applied by the Group since January 1, 2019. This supersedes all lease requirements under IFRS.
For the IFRS 16 transition, Dometic decided to apply the simplified retrospective approach and has not restated comparative amounts for 2018, the year prior to first adoption. All right-of-use assets are measured at the amount of the lease liability on adoption, and are adjusted for any prepaid or accrued lease expense.
The Group uses the practical expedient for non-lease components, which means that each lease component and any associated non-lease component will not be treated separately but accounted for as one. Leases with similar characteristics can as a practical expedient be treated under the so-called portfolio approach. Dometic Group does not use this practical expedient but will account for leases on an individual basis. Dometic Group is using the recognition exemption for short-term leases and lowvalue leases and classifies all IT and office equipment as lowvalue assets and hence does not include them in the balance sheet.
The impact on the Group's consolidated financial statements was an opening balance increase, deriving from a lease liability and right-of-use asset of around SEK 500 m, each adjusted by the amount of prepaid or accrued lease payment. There was no effect in equity. The details below illustrate the link to recognized IFRS 16 opening lease liabilities from the previously classified operating lease commitments of IAS 17 Leases.
Future minimum lease charges for operating leases at nominal value on December 31, 2018 amounted to SEK 698 m. This amount is reduced by short-term lease agreements of SEK 164 m, low-value asset lease agreements of SEK 16 m, increased by lease term extensions of SEK 25 m, and reduced by the impact
of discounting of SEK 26 m. This results in an opening lease liability of SEK 517 m for January 1, 2019.
The detailed description of the accounting and valuation principles for leases applied by the Group in this interim report can be found in Note 2.1.1 Changes in accounting policies, New and amended accounting policies for 2019 and later, of the 2018 Annual Report.
IFRIC 23 Uncertainty over Income Tax Treatments IFRIC 23 – Interpretation 23 Uncertainty over Income Tax Treatments is effective as of January 1, 2019. The transition has no impact. The Group has applied IFRIC 23 as of January 1, 2019.
NOTE 2 | RISKS AND UNCERTAINTIES
Risks are part of any business and as a global Group with production and distribution all over the world Dometic faces risks that can impact its ability to achieve established strategic and other objectives, including financial targets. Effective risk management of strategic, execution, compliance & regulatory and reporting risks creates opportunities and effective risk mitigation. The key to effective risk management is identifying known risks and preparing for any unknown risks to which the Group is exposed. While mitigating risks usually comes at a cost, effective risk management adds value by establishing clear risk and process ownership combined with risk identification, assessment and prioritization of risk mitigating actions and effective monitoring.
In line with Dometic's established model for three lines of responsibility, risk management as part of the second line of responsibility constitutes an important role by providing and supporting management and the business with a risk framework including a risk management process used in identification, assessment and prioritization of risk mitigating actions and effective monitoring.
During the year, the risk framework was updated to increase the focus on strategic risks and improved alignment with the Group strategic objectives and strategy toolbox for execution. Each defined tool in the strategy toolbox represents both risks and opportunities that, correctly managed help the Group deliver on its strategy.
Risks in the risk framework and especially the strategic risks are connected to the objectives defined for each of the three pillars in the Group strategy being; Profitable expansion in mobile living, Product leadership through innovation and Continuous cost reductions.
The risk committee, which from 2019 comprises the members of Group management held four quarterly meetings in connection with Group management meetings, during which significant time was dedicated to risk identification, risk assessment and discussion of mitigating actions. Strategic risks are since 2019 primarily assessed via a top down approach through Group management, while execution, compliance & regulatory and reporting risks are primarily assessed via a bottom up approach through regional risk and process owners, with an additional topdown assessment from Group management as needed. The Risk
Committee discusses and makes decisions on risk mitigating activities and the members of Group management act as global risk and process owners as applicable.
The work of the Risk Committee is regularly reported to the Audit Committee and annually to the Board of Directors.
With strategic, execution, compliance & regulatory and reporting risks identified and assessed within the risk framework, the results in terms of agreed risks maps raise risk awareness and guide management and operations at different levels in the organization in prioritization of risk mitigation actions i.e. risk responses. Risk maps also serve as a foundation for the Group's control functions, such as Internal Control and Internal Audit, for their prioritization of focus areas.
Risk mitigating actions i.e. risk responses within the risk framework could include avoiding the risk, reducing the risk, sharing the risk or accepting the risk. Monitoring is executed in the daily operations and more formally at the quarterly risk committee meetings as well as at the Audit Committee and Board of Directors meetings respectively.
TABLE TO NOTE 3 – FINANCIAL INSTRUMENTS
Dometic's risk and risk management are described on pages 67- 71 and on pages 97-100 in the 2018 Annual Report, available at www.dometic.com.
NOTE 3 | FINANCIAL INSTRUMENTS
Dometic uses interest rate swaps to hedge senior facility term loans to move from a floating interest rate to a fixed interest rate. The Group also uses currency forward agreements to hedge part of its cash flow exposure.
The fair values of Dometic's derivative assets and liabilities were SEK 38 m (107) and SEK 32 m, (108). The value of derivatives is based on published prices in an active market. No transfers between levels of the fair value hierarchy have occurred during the period.
For financial assets and liabilities other than derivatives, fair value is assumed to be equal to the carrying amount.
| Dec 31, 2019 | Balance sheet carrying amount |
Financial instruments at amortized cost |
Financial instruments at fair value |
Derivatives used for hedging |
|---|---|---|---|---|
| Per category | ||||
| Derivatives | 38 | – | 6 | 32 |
| Financial assets | 6,724 | 6,724 | – | – |
| Total financial assets | 6,763 | 6,724 | 6 | 32 |
| Derivatives | 32 | – | 15 | 17 |
| Financial liabilities | 14,073 | 14,073 | – | – |
| Total financial liabilities | 14,105 | 14,073 | 15 | 17 |
NOTE 4 | SEGMENT INFORMATION
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2019 | 2018 | 2019 | 2018 |
| Net sales, external | ||||
| Americas | ||||
| OEM | 1,340 | 1,525 | 6,142 | 6,736 |
| Aftermarket | 670 | 652 | 3,183 | 3,022 |
| Americas net sales, external | 2,010 | 2,177 | 9,325 | 9,758 |
| RV | 1,017 | 1,133 | 4,938 | 5,595 |
| Marine | 896 | 937 | 3,994 | 3,757 |
| CPV | 39 | 58 | 184 | 229 |
| Other (Lodging and Retail) | 58 | 50 | 209 | 177 |
| Americas net sales, external | 2,010 | 2,177 | 9,325 | 9,758 |
| EMEA | ||||
| OEM | 853 | 883 | 3,624 | 3,532 |
| Aftermarket | 596 | 532 | 3,848 | 3,173 |
| EMEA net sales, external | 1,449 | 1,415 | 7,472 | 6,706 |
| RV | 802 | 737 | 3,795 | 3,180 |
| Marine | 186 | 199 | 845 | 805 |
| CPV | 333 | 356 | 1,807 | 1,769 |
| Other (Lodging and Retail) | 128 | 123 | 1,024 | 951 |
| EMEA net sales, external | 1,449 | 1,415 | 7,472 | 6,706 |
| APAC | ||||
| OEM | 193 | 202 | 792 | 857 |
| Aftermarket | 267 | 276 | 914 | 954 |
| APAC net sales, external | 460 | 478 | 1,707 | 1,810 |
| RV | 210 | 225 | 881 | 925 |
| Marine | 29 | 26 | 123 | 112 |
| CPV | 31 | 33 | 139 | 153 |
| Other (Lodging and Retail) | 190 | 194 | 564 | 620 |
| APAC net sales, external | 460 | 478 | 1,707 | 1,810 |
| Net sales, external | ||||
| Americas | 2,010 | 2,177 | 9,325 | 9,758 |
| EMEA | 1,449 | 1,415 | 7,472 | 6,706 |
| APAC | 460 | 478 | 1,707 | 1,810 |
| Total net sales, external | 3,919 | 4,070 | 18,503 | 18,274 |
| Operating profit (EBIT) before i.a.c. | ||||
| Americas | 143 | 234 | 1,096 | 1,470 |
| EMEA | 59 | 86 | 978 | 814 |
| APAC | 95 | 100 | 362 | 395 |
| Total operating profit before i.a.c. | 298 | 420 | 2,435 | 2,679 |
| Items affecting comparability | ||||
| Americas | -4 | -34 | -41 | -34 |
| EMEA | -51 | -57 | -51 | -57 |
| APAC | -5 | -1 | -5 | -1 |
| Total items affecting comparability | -60 | -92 | -97 | -92 |
| Operating profit (EBIT) Americas |
139 | 200 | 1,055 | 1,437 |
| EMEA | 8 | 29 | 926 | 756 |
| APAC | 90 | 99 | 357 | 394 |
| Total operating profit (EBIT) | 238 | 328 | 2,338 | 2,587 |
| Financial income | 5 | 5 | 14 | 11 |
| Financial expenses | -165 | -101 | -522 | -442 |
| Taxes | -30 | -96 | -505 | -580 |
| Profit (loss) for the period | 47 | 136 | 1,325 | 1,576 |
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2019 | 2018 | 2019 | 2018 |
| Net sales, external | ||||
| Americas | ||||
| Food & Beverage | 346 | 452 | 1,681 | 2,135 |
| Climate | 736 | 786 | 3,504 | 3,797 |
| Power & Control | 757 | 795 | 3,368 | 3,161 |
| Other applications | 171 | 145 | 772 | 664 |
| Americas net sales, external | 2,010 | 2,177 | 9,325 | 9,758 |
| EMEA | ||||
| Food & Beverage | 458 | 489 | 2,695 | 2,662 |
| Climate | 733 | 696 | 3,672 | 2,986 |
| Power & Control | 134 | 118 | 566 | 522 |
| Other applications | 124 | 111 | 538 | 536 |
| EMEA net sales, external | 1,449 | 1,415 | 7,472 | 6,706 |
| APAC | ||||
| Food & Beverage | 251 | 277 | 839 | 937 |
| Climate | 164 | 158 | 690 | 685 |
| Power & Control | 8 | 7 | 31 | 38 |
| Other applications | 38 | 36 | 147 | 150 |
| APAC net sales, external | 460 | 478 | 1,707 | 1,810 |
| Net sales, external | ||||
| Americas | 2,010 | 2,177 | 9,325 | 9,758 |
| EMEA | 1,449 | 1,415 | 7,472 | 6,706 |
| APAC | 460 | 478 | 1,707 | 1,810 |
| Total net sales, external | 3,919 | 4,070 | 18,503 | 18,274 |
Segment performance for each region is primarily assessed based on net sales and operating profit. Information for each region is based on where customers are located. Management follow-up is based on the integrated result in each segment. For further information, please refer to Note 5 of the 2018 Annual Report. As part of the strategic repositioning of Dometic presented on May 28, 2019, Dometic identified four application areas. Dometic will during a transition period from Q2 2019 to Q4 2019 report net sales by region, by application area, by business area and by sales channels. As of Q1 2020, regions will remain as segments and net sales will be reported by region, by application area and by sales channels. Inter-segment sales were as follows.
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2019 | 2018 | 2019 | 2018 |
| Americas | 60 | 80 | 363 | 389 |
| EMEA | 67 | 92 | 359 | 464 |
| APAC | 422 | 674 | 2,369 | 3,165 |
| Eliminations | 550 | 845 | 3,092 | 4,017 |
NOTE 5 | ITEMS AFFECTING COMPARABILITY
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2019 | 2018 | 2019 | 2018 |
| Relocation China | – | 9 | – | 9 |
| Restructuring charges | – | -101 | – | -101 |
| Global restructuring program | -80 | – | -116 | – |
| Other | 19 | – | 19 | – |
| Total | -60 | -92 | -97 | -92 |
The table below lists items affecting comparability by function.
| Relocation China | Restructuring charges | Global restructuring program | Total | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q4 | Q4 | FY | FY | Q4 | Q4 | FY | FY | Q4 | Q4 | FY | FY | Q4 | Q4 | FY | FY | |
| SEK m | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 |
| Costs of goods sold | – | 9 | – | 9 | – | -66 | – | -66 | -82 | – | -113 | – | -82 | -57 | -113 | -57 |
| Sales expenses | – | – | – | – | – | -6 | – | -6 | – | – | – | – | – | -6 | – | -6 |
| Administrative expenses | – | – | – | – | – | -29 | – | -29 | 3 | – | -3 | – | 3 | -29 | -3 | -29 |
| Other operating income and expenses | – | – | – | – | – | – | – | – | 19 | – | 19 | – | 19 | – | 19 | – |
| Total | –– | 9 | – | 9 | –– | -101 | – | -101 | -60 | – | -97 | – | -60 | -92– | -97 | -92 |
NOTE 6 | AMORTIZATION OF ACQUISITION-RELATED INTANGIBLE ASSETS BY FUNCTION
| SEK m | Amortization Trademarks |
Amortization of Customer Relationship Assets |
Amortization of Technology |
Amortization of intellectual property |
Total | |
|---|---|---|---|---|---|---|
| Cost of goods sold | ||||||
| Q4 | 2019 | – | – | -12 | -6 | -17 |
| Q4 | 2018 | – | – | -11 | -6 | -17 |
| FY | 2019 | – | – | -47 | -23 | -70 |
| FY | 2018 | – | – | -44 | -23 | -67 |
| Sales expenses | ||||||
| Q4 | 2019 | -12 | -47 | – | – | -60 |
| Q4 | 2018 | – | -41 | – | – | -41 |
| FY | 2019 | -49 | -185 | – | – | -234 |
| FY | 2018 | – | -152 | – | – | -152 |
| Total Amortization of acquisition related intangible assets | ||||||
| Q4 | 2019 | -12 | -47 | -12 | -6 | -77 |
| Q4 | 2018 | – | -41 | -11 | -6 | -58 |
| FY | 2019 | -49 | -185 | -47 | -23 | -303 |
| FY | 2018 | – | -152 | -44 | -23 | -219 |
NOTE 7 | RIGHT-OF-USE ASSETS
Right-of-use assets information is specified below:
Total depreciation and amortization of SEK 817 m (526) includes depreciation of right-of-use assets of SEK 180 m (-) for 2019.
| Depreciation and amortization | ||||||
|---|---|---|---|---|---|---|
| Q4 | Q4 | FY | FY | |||
| SEK m | 2019 | 2018 | 2019 | 2018 | ||
| Depreciation and amortization | -208 | -141 | -817 | -526 | ||
| Add back depreciation related to right-of use assets |
49 | – | 180 | – | ||
| Total | -159 | -141 | -637 | -526 |
Right-of-use assets
| Dec 31, | Dec 31, | |
|---|---|---|
| SEK m | 2019 | 2018 |
| Buildings | 573 | – |
| Machinery, equipment and other technical installations |
50 | – |
| Total | 623 | – |
NOTE 8 | TRANSACTIONS WITH RELATED PARTIES
No transactions between Dometic and related parties that have significantly affected the company's position and earnings took place during 2019.
NOTE 9 | ACQUISITIONS AND DIVESTMENTS 2019
Dometic has not made any acquisitions or divestments during 2019.
The purchase price allocation of Kampa is considered as final. No changes have been made.
2018
Acquisition of Kampa
On December 3, 2018, Dometic acquired Kampa, an innovative provider of Retail and Aftermarket products based in the UK. Kampa significantly broadens Dometic's Retail and Aftermarket offering in EMEA, with good potential for further expansion and profitable growth.
The cash purchase price was GBP 50 m on a debt and cash free basis excluding potential earnout elements. The total cash purchase price amounted to GBP 57.9 m including earnout elements of GBP 8.5 m. GBP 8.5 m has been accounted for as a non-interest-bearing liability to the sellers.
If the acquisition had been consolidated as of January 1, 2018, the effect on proforma net sales would have been GBP 40 m and EBITDA of 7 m. Aftermarket sales account for 100% of revenue. The business operates with a small fixed asset base, which requires limited Capex each year.
The summary of value adjustments recognized as a result of the preliminary purchase price allocation of Kampa totals SEK 512 m, including goodwill of SEK 309 m, trademarks and tradenames of SEK 16 m, customer relationships of SEK 208 m, other intangible assets of SEK 1 m, operating assets of SEK 222 m, cash of SEK 31 m, other non-current liabilities of SEK 47 m and operating liabilities of SEK 229 m.
Goodwill is justified by new potential customer relationships and market position. Acquisition-related costs in the consolidated income statement for Q4 2018 amount to SEK 10 m. Sales and cost synergies are expected to be limited. The acquisition has affected consolidated net sales in the amount of SEK 12 m and operating profit by SEK -3.5 m, including step-up inventory of SEK -2.6 m.
NOTE 10 | SIGNIFICANT EVENTS AFTER THE PERIOD.
There were no significant events after the period.
RECONCILIATION OF NON-IFRS MEASURES TO IFRS (ALTERNATIVE PERFORMANCE MEASURES)
Dometic presents some financial measures in this interim report, which are not defined by IFRS. The company believes that these measures provide valuable additional information to investors and management for evaluating the company's financial performance, financial position and trends in the company's operations. It should be noted that these measures, as defined, may not be comparable to similarly titled measures used by other companies. These non-IFRS measures should not be considered as substitutes for financial reporting measures prepared in accordance with IFRS. See Dometic's website www. dometic.com for the detailed reconciliation.
Core working capital
Consists of inventories and trade receivables less trade payables.
EBITDA
Operating profit (EBIT) before Depreciation and Amortization. Depreciation also includes depreciation of right-of-use assets as of January 1, 2019, when IFRS 16 Leases came into effect.
EBITDA margin
EBITDA divided by net sales.
Leverage
Net debt excluding pensions and accrued interest in relation to EBITDA before items affecting comparability and including acquisitions proforma. Any cash deposits with tax authorities are treated as cash in leverage calculation.
Net debt
Total borrowings including pensions and accrued interest less cash and cash equivalents.
Operating cash flow
Cash flow from operations after investments in fixed assets excluding income tax paid.
Organic growth
Sales growth excluding acquisitions/divestments and currency translation effects. Quarters are calculated at comparable currency, applying latest period average rate.
RoOC – Return on Operating Capital
Operating profit (EBIT) divided by operating capital. Based on the operating profit (EBIT) for the four previous quarters, divided by the average operating capital for the previous four quarters, excluding goodwill and trademarks for the previous quarter.
DEFINITIONS AND KEY RATIOS
AM
Aftermarket.
Capital expenditure
Expenses related to the purchase of tangible and intangible assets.
CPV
Commercial and Passenger Vehicles.
EPS – Earnings per share
Net profit for the period divided by average number of shares.
FY 2019
Financial Year ended December 31, 2019.
FY 2018
Financial Year ended December 31, 2018.
i.a.c. – items affecting comparability
Items affecting comparability are events or transactions with significant financial effects, which are relevant for understanding the financial performance when comparing profit for the current period with previous periods. Items included are for example restructuring programs, expenses related to major revaluations, gains and losses from acquisitions or disposals of subsidiaries.
Interest-bearing debt
Liabilities to credit institutions plus liabilities to related parties plus provisions for pensions.
LTM
Last twelve months.
Net profit
Profit (loss) for the period.
OCI
Other Comprehensive Income.
OEM
Original Equipment Manufacturers.
Operating capital excluding goodwill and trademarks
Interest-bearing debt plus equity less cash and cash equivalents, excluding goodwill and trademarks.
Operating profit (EBIT)
Operating profit (EBIT) before financial items and taxes.
Operating profit (EBIT) margin
Operating profit (EBIT) divided by net sales.
RV
Recreational Vehicles.
Q4 2019
October to December 2019 for Income Statement.
Q4 2018
October to December 2018 for Income Statement.
Working capital
Core working capital plus other current assets less other current liabilities and provisions relating to operations.
YTD 2019
Year to date. January to December 2019 for Income statement.
YTD 2018
Year to date. January to December 2018 for Income statement.
PRESENTATION OF THE INTERIM REPORT
Analysts and media are invited to participate in a telephone conference at 10.00 (CET), January 31, 2020, during which President and CEO, Juan Vargues and CFO, Stefan Fristedt, will present the report and answer questions. To participate in the webcast/telephone conference, please dial in five minutes prior to the start of the conference call:
Sweden: +46 8 505 583 52 UK: +44 333 300 92 65 US: +1 646 722 49 57
The webcast URL and presentation are available at www.dometic.com
FOR FURTHER INFORMATION, PLEASE CONTACT
Johan Lundin Head of Investor Relations and Communications Phone: +46 8 501 025 46 E-mail: [email protected]
CONTACT DETAILS
Dometic Group AB (publ)
Hemvärnsgatan 15 SE-171 54 Solna, Sweden Phone: +46 8 501 025 00 www.dometic.com Corporate registration number 556829-4390
This information is information that Dometic Group 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 person set out above, at 08:00 CET on January 31, 2020.
This document is a translation of the Swedish version of the interim report. In the event of any discrepancy, the Swedish wording shall prevail.
FINANCIAL CALENDAR
MARCH 16, 2020: Annual Report 2019 published APRIL 7, 2020: Annual General Meeting APRIL 24, 2020: Interim report for the first quarter 2020 JULY 16, 2020: Interim report for the second quarter 2020 OCTOBER 23, 2020: Interim report for the third quarter 2020
ABOUT DOMETIC
Dometic is a global market leader in branded solutions for mobile living in the areas of Food & Beverage, Climate, Power & Control and Other Applications. Dometic operates in the Americas, EMEA and APAC, providing products for use in recreational vehicles, pleasure and workboats, trucks and premium cars, and for a variety of other uses. Our motivation is to create smart and reliable products with outstanding design. We have a global distribution and dealer network in place to serve the aftermarket. Dometic employs approximately 7,200 people worldwide, had net sales of SEK 18.5 billion in 2019 and is headquartered in Stockholm, Sweden.
DISCLAIMER
Some statements herein are forward-looking and the actual outcome could be materially different. In addition to the factors explicitly commented upon, the actual outcome could be materially affected by other factors, (a) changes in economic, market and competitive conditions, (b) success of business and operating initiatives, (c) changes in the regulatory environment and other government actions, (d) fluctuations in exchange rates and (e) business risk management.