Annual Report • Mar 22, 2021
Annual Report
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| Indutrade in brief | 2 | |
|---|---|---|
| CEO's message | 4 | |
| ● | Indutrade's business model | 6 |
| ● | Goals and strategies | 8 |
| ● | Active ownership | 12 |
| ● Acquisitions in 2020 | 14 | |
| ● | Driving forces and business environment | 16 |
| ● | Sustainable business | 17 |
| ● Operations | 22 | |
| Four reasons to invest in Indutrade | 27 | |
| Share data | 28 | |
| ● | ● Risks and risk management | 30 |
| ● Other information | 32 | |
| ● Corporate Governance Report | 34 | |
| ● Board of Directors and auditors | 38 | |
| ● Group Management | 40 | |
| Remuneration report | 42 | |
| ● Proposed distribution of earnings and the Board's assurance |
43 | |
| Financial statements | 44 | |
| ● Consolidated financial statements | 45 | |
| ● Parent Company financial statements | 50 | |
| Notes | 54 | |
| Auditor's report | 86 | |
| Multi-year overview and definitions | 90 | |
| Quarterly overview | 94 | |
| Annual General Meeting and reporting dates | 95 | |
The statutory sustainability report in accordance with the Swedish Annual Accounts Act is included in the Annual Report on the following pages: social conditions and personnel issues, see pages 6-7,9 and 16-21. Environment, see pages 9, 17, 19-21 and 32. Human rights and counteracting corruption, see pages 13, 17 and 31. Goals and strategies and Active ownership, see pages 8-13. Managing significant risks in the area of sustainability is a part of the Group's overall risks and how they are managed is described in the Directors' report on pages 30-31.
The Board of Directors and CEO of Indutrade AB (publ), CIN: 556017- 9367, hereby submit the Annual Report for the 2020 financial year for the Parent Company and the Group, which consists of a Directors' Report on pages 14-15, 22-26, 29-41, 43, 46-47 and 49-50, along with the financial statements and notes on pages 45-85. The consolidated income statement and balance sheet, along with the Parent Company's income statement and balance sheet will be presented for adoption at the AGM. The Corporate Governance Report, which was reviewed by the auditors, is on pages 34-41. See the Auditor's Report on pages 86-90.
This is an unofficial translation of the original Swedish text. In the event of any discrepancy between the English translation and the Swedish original, the Swedish version shall govern.
To provide sustainable profitable growth by developing and acquiring successful companies managed by passionate entrepreneurs in a decentralised way.
TRUSTED BY ENTREPRENEURS
Indutrade's brand promise is rooted in our conviction that passionate entrepreneurs are an important part of our continued growth and that we have been winning the confidence of this target group since inception in 1978.
Now, more than 40 years later and having made more than 200 acquisitions, we have established a unique position with vast knowledge of both acquisitions and company development.
We develop and acquire companies that are characterised by high-tech know-how and an ability to build enduring, close relationships with customers and suppliers.
We offer sustainable solutions that enhance our own, and our customers', competitiveness. Our companies manufacture, develop and sell components, systems and services with a high-tech content.
Customers can be found in a wide range of industries, e.g. infrastructure & buildings, medical technology and pharmaceuticals, engineering, energy, water & wastewater and food.
Indutrade comprises more than 200 companies offering services in more than 30 countries on six continents.
| 19,217 SEK m, net sales |
13.6 % EBITA-margin |
2,780 SEK m, cash flow from operating activities |
|---|---|---|
| 10 completed acquisitions |
1.80 SEK, proposed dividend per share |
7,349 average number of employees |
| KEY DATA SEK million |
2020 | 2019 | NET SALES AND EARNINGS | |||
|---|---|---|---|---|---|---|
| Net sales | 19,217 | 18,411 | ||||
| Operating profit | 2,266 | 2,016 | 20,000 | |||
| EBITA | 2,615 | 2,330 | ||||
| EBITA margin, % | 13.6 | 12.7 | 15,000 | |||
| Profit before taxes | 2,140 | 1,892 | ||||
| Net profit for the year | 1,669 | 1,483 | ||||
| Earnings per share before dilution, SEK | 4.60 | 4.09 | 10,000 | |||
| Dividend per share, SEK ( proposed 2020) | 1.80 | – | ||||
| Return on capital employed, % | 19 | 19 | ||||
| Cash flow from operating activities | 2,780 | 1,922 | 5,000 | |||
| Net debt/equity ratio, % | 56 | 85 | ||||
| Average number of employees | 7,349 | 7,167 |
Despite the COVID-19 pandemic, we look back at 2020 with a sense of pride, as yet another successful year for Indutrade. In challenging times like these, our decentralised business model with entrepreneurial MDs who act quickly and adapt their businesses to the prevailing challenges and opportunities, is a strength that creates stability. I would like to sincerely thank each and every employee for your deep commitment and professionalism in a highly unusual year characterised by both uncertainty and change.
2020 was a year of uncertainty, not only because of the COVID-19 pandemic but also Brexit and the US election affected the business climate. There was much variation in the market situation faced by the Group's companies, since they work in many different sectors, segments and geographic markets. Sales amounted to just over SEK 19.2 billion, with growth during the year of 4 percent and a record-high EBITA margin of 13.6 percent. Indutrade's share price increased by 57 percent during the year, while the Stockholm Stock Exchange gained 13 percent and the OMX Industrials PI sector index rose 13 percent.
Our highest priority during this turbulent period has been the health and safety of our employees, customers and suppliers. We maintained a very close dialogue with our subsidiaries to support them in the best way possible and I am impressed by their perseverance and resilience in dealing with this challenging situation. Companies with declining order intake have worked with different types of cost reduction programmes and to avoid major permanent staff reductions, some have received the redundancy support that has been available in certain countries.
For companies with customers in the medical technology and pharmaceutical sectors, growth during the year was strong, driven in part by higher demand associated with COVID-19. There was also favourable development for infrastructure, water & wastewater, wind power and the process industry. Lower demand in the engineering industry, particularly the automotive industry, had a negative impact on many of our companies but the situation improved somewhat towards the end of the year.
As a consequence of nationwide shutdowns and closures of production facilities at several major customers during the year, many of our companies were negatively affected by markedly reduced demand. The business situation for the construction sector in the UK was challenging, so too for some of the companies in the Measurement & Sensor Technology business area, with weaker demand from, among others, customers in the automotive industry and marine sector.
The Group's financial position strengthened during the year, attributable to such things as having extended a short-term loan of SEK 800 million by more than three years and expanding long-term credit commitments by an additional SEK 750 million. Favourable development of working capital contributed to an improved cash flow.
Our diversified structure, with more than 200 companies in various sectors and geographic markets, provides us with a very good spread of risk, which creates the prerequisites for stability, despite the challenging market conditions. This type of breadth lowers dependency on any single segment or market. It also makes it easier to persevere in difficult times. Although the general business climate can be challenging in many respects, there are always individual segments and markets with growth. Major global trends, such as climate change, digitalisation, sustainable development and the need for more efficient production offer major opportunities in a variety of industries. In many cases, the products and solutions that we offer help customers run their operations in a more environmentallyfriendly, efficient and safe way, thereby strengthening their competitiveness.
We delegate responsibility for each individual subsidiary to its MD and believe that the majority of decision-making should be done by those closest to the customer. It means that our companies have a great deal of flexibility and ability to always adapt their businesses to the current situation and local market. This is something that has helped us deal with the challenges and uncertainty caused by the pandemic. Our way of organising the
business allows us to retain the flexibility, commitment and responsibility characteristic of a small company, yet with the stability and financial strength characteristic of a large Group.
Our overall goal is to create sustainable, profitable growth and we continued working with our strategic initiatives during the year. They include leadership and competence development, facilitating and promoting knowledge-sharing between companies in the Group and offering subsidiaries a toolbox of practical, concrete tools in several strategic areas, such as capital ties and sustainability, that can ultimately contribute to improved profit and growth.
The pandemic has speeded up the pace of sustainable development and digitalisation, which are two areas that we feel both strengthen competitiveness and lead to new business opportunities. The UN Global Compact serves as the point of departure for Indutrade's sustainability work and it is based on our shared commitment that the companies within the Group continuously develop and improve in ways that are economically, environmentally and socially responsible. By establishing long-term objectives and measurable key ratios for our three focus areas – people, the environment and profitable growth – we increased the ambition for our sustainability work in 2020. We are convinced that systematic sustainability work, where sustainability aspects are integrated in the business strategy, is a prerequisite for longterm value creation.
During the past year, we welcomed ten new companies to the Indutrade Group. The acquired companies are located in Germany, the Netherlands, Finland, Norway, Sweden, the UK and the Czech Republic. They operate in a number of different industries and specific niches within their respective segments. During the initial months of 2021, we made an additional five acquisitions. The annual sales for these 15 acquisitions amount to just over SEK 1.3 billion.
Since Germany is a strategic priority area for us, we are happy to welcome the German companies, Stein Automation, X-RAY WorX and Tecno Plast to the Indutrade family. Marked by quality, innovation and technical expertise, we regard their offerings and leading market positions as highly interesting.
We have a well-founded opportunistic acquisition strategy that is continuously developed and adapted to changes in the world around us. Besides requiring that the companies we acquire are well-managed and technically oriented, it is also important that they are focused on customers in industries that we believe have long-term growth potential. During 2020, due to the unstable market situation, we chose to extend the acquisition processes to ensure that the right conditions for profitable growth exists within the potential acquisition companies. There is a good inflow of interesting companies and we assess our future acquisition opportunities as good.
2020 was a turbulent year, yet, we are happy to report that it was another successful year for Indutrade. We have a company culture characterised by entrepreneurship, where dedicated leaders are able to grow simultaneous to continuously developing and improving the companies. Together, we are a strong, stable Group that delivers results.
Our goal of creating sustainable, profitable growth, both organically and through acquisitions, remains and I am convinced that with our dedicated employees, diversified structure and strong balance sheet, we have all the prerequisites for continued competitive value-creation.
Stockholm, March 2021
Bo Annvik President and CEO
Indutrade has a long-term commitment to ensuring that people and companies can grow. We contribute to our own development and that of society at large by giving more people and companies the chance to become part of a business world fuelled by entrepreneurial spirit. company acquisitions during the year
Indutrade has a long-term commitment to ensuring that people and companies can grow. We contribute to our own development and that of society at large by giving more people and companies the chance to become part of a business world fuelled by entrepreneurial spirit.
For us, people are most important of all – our employees are the key to the Group's future success. We strive to derive the greatest value and benefits from our talented employees by sharing and spreading best practice between companies.
We have a strong entrepreneurial spirit and are passionate about the business. We are also determinedly committed to continuously driving, developing and improving the business. People make the difference
We are a decentralised organisation with a strong local presence. We believe that the best decisions are made locally, by those who are closest to the customer.
We focus on profitability and our definition of success is achieving sustainable profitability and growth that benefits individuals, companies and society at large.
Indutrade's brand promise is rooted in our conviction that passionate entrepreneurs are an important part of our continued growth. We have been winning the confidence of this target group since inception in 1978. Now, more than 40 years later and having made more than 200 acquisitions, we have established a unique position with vast knowledge of both acquisitions and company development.
TRUSTED BY ENTREPRENEURS
Fördelning ekonomiskt värde Indutrade is in the business of developing and acquiring well-managed, profitable technology and industrial companies with a focus on decentralisation. Our tested, decentralised business model offers passionate entrepreneurs independency and customer-focused decision opportunities.
Leverantörer och aärspartners 65% Medarbetare (inklusive sociala avgifter) 23% Aktieägare och andra finansiärer 4% Samhälle (bolagsskatt) 3% Our business risk is limited by acquiring successful companies with established customer relationships and good profitability. Therefore, we carefully assess each potential company acquisition and have clear expectations on sustainable and profitable growth. We thereafter support our companies during their continued growth journeys.
Kvar i bolaget 5% In addition to meeting requirements for financial performance, the acquired companies must also have a highly motivated management team, be characterised by a genuine entrepreneurial spirit and possess deep technical expertise. Nevertheless, the most important factor in a successful acquisition is the consistent culture and values – i.e. ensuring that everyone shares the same values and ethical principles.
The Indutrade Group strives for continuous growth in selected geographic markets, product areas and niches while maintaining limited business risk. Growth is to be achieved organically as well as through acquisitions.
THE GROUP'S OVERALL GOAL IS TO GENERATE SUSTAINABLE PROFITABLE GROWTH.
Sales growth
EBITA-margin
Average sales growth shall amount to a minimum of 10% per year over a business cycle. Growth is to be achieved organically as well as through acquisitions.
The EBITA margin shall amount to a minimum of 12% per year over a business cycle.
During the last five-year period, average annual sales growth was 10%. Net sales rose 4% in 2020. The increase for comparable units was unchanged, the acquired growth amounted to 6% and divestments amounted to –1%. Currency movements amounted to –1%. 10% Mål minst
The return on capital employed shall be a minimum of 20% per year on average over a business cycle.
The net debt/equity ratio should normally not exceed 100%. 100 During the last five years, the net debt/equity ratio at the end of each year ranged from 56% to 100%
85%. The net debt/equity ratio at year-end 2020
During the last five years the average return on operating capital was 20%. In 2020 the return
20%
was 19%.
was 56%.
Dividend payout ratio
The dividend payout ratio shall range from 30% to 50% of net profit.
During the last five years, the dividend payout ratio has been an average of 41%, including the proposed dividend 2020 and excluding 2019 when no dividend was paid. For 2020, a dividend of SEK 1.80 has been proposed, corresponding to 39%. 30– 50% Mål mellan
The sustainability strategy is based on Indutrade's three focus areas: people, environment and profitable growth – with 2030 objectives set within each of these areas. To achieve the objectives, measurable enablers will be used that annually are evaluated and followed up on.
People
Engaged and talented people are key in building long-term sustainable businesses. By focusing on continuous leadership and competence development, building inclusive and productive teams and workplaces where people enjoy working and by ensuring safe and healthy working conditions, we enable longterm growth for our business.
Stabilising and reducing carbon dioxide emissions is an important factor in contributing to environmental sustainability. The transition to a low-carbon society involves improving energy efficiency, reducing emissions and increasing the share of renewable energy. In 2020, Indutrade started measuring the carbon footprint at Group level, thereby establishing a base line. The objective is to reduce direct emissions and compensating the carbon emissions that we cannot avoid, by investing in projects that counterbalance these emissions.
We sustain our companies' strong market and product positions by efficient use of resources and continuous product and process innovation. We carefully select stable and profitable businesses to acquire, limiting the business risk by focusing on long-term growth drivers and a positive contribution to society. Growth is to be achieved organically as well as through acquisitions and Indutrade strives to create sustainable value over time for all of our stakeholders.
• Customer satisfaction
100%
engaged people
• Efficient business travel CO2 neutral
scope 1 and 2 (GHG)
100%
of Indutrade's companies contributing to sustainable development
To achieve its overall goals, Indutrade pursues the following strategies:
| STRATEGY | EFFECT | PROGRESS 2020 | ||
|---|---|---|---|---|
| Growth with limited risk Growth will be achieved organically and through acquisitions: ■ In existing and new technology areas ■ Through a broadened customer offering based on relevant knowledge, such as extended support, training and other aftermarket services ■ Via innovation and development of both products and offerings ■ Geographical growth in selected markets. |
→ | Business development and growth are strategic tools for reducing the Group's risk. |
→ | Many companies managed to achieve organic growth thanks to strong offerings and good market positions, despite the COVID-19 pandemic. Geographic spread of the year's acquisitions has been good, occurring primarily in both existing and new areas of technology. Because of the pandemic, Indutrade chose to extend the acquisition processes in 2020 to ensure that the right conditions for profitable growth existed with the potential acquisition companies. |
| Acquisitions Indutrade acquires well-managed, successful and typically owner-led industrial companies whose man agement teams are eager to continue running and growing the business. The companies manufacture or sell products in distinct markets. We can also make smaller, add-on acquisitions through our existing com panies to strengthen market positions. A central feature of the acquisition process is to ensure that there is a shared foundation of values and ethical principles. All subsidiaries are expected to follow our Code of Conduct. |
→ | Indutrade acquires compa nies with the aim of develop ing them over the long term. We do not change the com panies' names and neither do we merge companies. This assures the seller that the company will be able to, even over the long term, continue as a player in the market. |
→ | All companies acquired during the year shared certain characteristics, namely, a genuine entrepreneurial spirit, in-depth technical expertise and a skilled leadership team. To strengthen our market position in attractive segments, a number of successful add-on acquisitions were made in 2020. |
| Strong market positions Indutrade focuses on sales of products in niches in which it can attain a leading position. |
→ | Strong market positions are often a prerequisite for good profitability and being able to attract the best suppliers, all of which further solidifies Indutrade's position. |
→ | Several of Indutrade's subsidiaries have lead ing positions within their niches. During 2020, these positions were maintained and in sev eral cases even strengthened thanks to the local presence, which has proven to be an asset during the pandemic, when transports of goods have been more difficult. |
Indutrade gives priority to suppliers who, through own product development, provide market-leading and highquality products with a high-tech content. A partnership with an Indutrade company should be the most profitable way for suppliers to sell their products.
Indutrade has many companies with proprietary products and brands. The products should have a high-tech content, while the companies should have a strong market position and good growth potential.
The Group's companies give priority to customers with a recurring need that are active in industries where the prospects are favourable for maintaining competitive production in their home markets. Many of these industries are characterised by a high degree of automation, high distribution costs and/or large start-up investments.
Indutrade's product and service offering, which is aimed at both end users and OEM customers (i.e. customers that integrate Indutrade's products in their own products), should have a high-tech content and incorporate a high level of service and qualified technical consulting. Indutrade's sales representatives must have a high level of technical expertise in their respective niches and a depth of knowledge about the customers' production processes.
Indutrade's governance model is characterised by decentralisation, as the best business decisions are made close to customers by people who have the best understanding of the customers' needs and processes. → A range of market-leading products from the best suppliers, coupled with Indutrade's technical and market knowhow, makes Indutrade an attractive business partner for existing and potential customers.
→ Companies with proprietary products and brands provide balance to the Group's technology sales companies. Since 2004 the share of companies with proprietary products has grown by 31 percentage points, and in 2020 they accounted for 40% of consoli-
dated net sales.
→
→ Long-term relationships with existing suppliers of high-quality products were also prioritised in 2020. Simultaneously, we established collaboration with several new suppliers during the year.
→ In line with the long-term goal of increasing the percentage of companies with own products, a large portion of the companies acquired in 2020 have their own brands and production. One example is the German company X-RAY WorX GmbH, a leading niche manufacturer of X-ray tubes for industrial applications in non-destructive testing.
During the year, we continued acquiring companies with repetitive sales and one example is the Dutch company Holland Fasteners, which is a supplier of customised, high-quality items such as bolts, screws, nuts and rivets.
This contributes to business stability and predictability of revenue flows. →
→ This makes Indutrade an attractive business partner that creates added-value for customers and suppliers alike. → The companies have strengthened their offerings by establishing deeper customer relations and continuous competence development within their particular area of technology. Network meetings to exchange experience and knowledge were held on digital platforms during the year due to the COVID-19 pan-
demic.
→ We raise customer value via subsidiaries that have the autonomy to run their own operations with a high level of flexibility and entrepreneurial employees who work close to the customer.
→ Our decentralised business model with entrepreneurial MDs who make independent and quick business decisions that are adapted to the current challenges and opportunities in each market has proven to be a strength.
Indutrade is a long-term and stable owner that is involved in and takes responsibility for it subsidiaries' development. Decentralised leadership based on clear values promotes entrepreneurial spirit in the companies, which are able to maintain its original identity and keep their own name, culture and management team. Leaders with strong business acumen are developed and given the opportunity to continuously drive their companies forward.
We exercise active ownership by participating on the Boards of Directors of our subsidiaries with the aim of developing them to generate long-term value and make a positive contribution to society. As an active owner, we contribute by, for example, developing our leaders and providing both the knowledge and capital that enables companies to invest in such things as product development and improved customer offerings. It is of utmost importance that our companies continuously strive to improve their social, environmental and economic impact. We are convinced that responsible, sustainable ownership creates long-term value and greater competitiveness.
Indutrade's values guide us in how we act both externally and internally. Over the years, these values have emerged and become synonymous with our employees, based on our belief that it is people who make the difference. Value-based leadership, where individuals have a great deal of freedom and decision autonomy is our point of departure and it applies to the acquisition phase as well as how we later run, build and develop the businesses in a responsible way. This way of thinking provides the foundation for our vision: an entrepreneurial world where people make a difference.
Our Code of Conduct is an important tool to describe our common principles and promoting our shared values. Our decentralised governance model puts demands on acquired companies to have well-functioning operations and management. During the acquisition process we therefore put strong emphasis on getting to know the company and its management, employees and owners in order to gain an understanding of whether they share our values and views of sustainable business.
Our highly decentralised organisation enables companies to make own decisions, thereby giving them freedom and flexibility. The best business decisions are made when there is close contact with customers based on their specific needs and processes. Many of our subsidiaries work in smaller cities or towns, where our employees become important ambassadors who, through their work, contribute to our companies being perceived as reliable and responsible, such as by ensuring that the local environment is not negatively impacted by the company operations. Our companies contribute to local growth and development through their local investments and by creating jobs.
Our decentralised organisation enables companies to make their own decisions, thereby giving them freedom and flexibility. The best business decisions are made when there is close contact with customers based on their specific needs and processes.
We appoint an active, engaged Board of Directors that supports the executive management team and serves as a sounding board. Through our combined competence, experience and structure, conditions are created for continued development of the companies.
Indutrade supports its subsidiaries by providing industrial and technical expertise, business development, financing and management by objectives. We also offer support in many areas, including competence development, digitalisation and sustainability.
Financial strength
longevity of our subsidiaries.
We share experiences, knowledge and best practice through network meetings, trainings and Indutrade Portal (our internal communications platform). The challenges and solutions relevant to one company are often also relevant to another. Knowledge sharing and informal networking thus encourages exchange of ideas and experiences between companies.
The Group's financial strength creates stability and facilitates expansion of the subsidiaries. As a stable owner, we take responsibility for the
We hold network meetings and have a digital communications portal called Indutrade Portal, both of which facilitate knowledge-sharing and informal networking to exchange ideas and experiences between companies.
When a company joins the Indutrade Group, it is able to maintain its original identity, while gaining access to the cumulative experience and knowledge that exists within the Group. Companies within the Group enrich each other and valuable knowledge-sharing occurs through network meetings and internal benchmarking. All companies in the Indutrade Group have clear authorities and responsibilities over their own business. Indutrade supports them with industrial know-how, financing, business development and management by objective.
We put high requirements on the companies we acquire. They are successful and well-managed, with a defined market and distinct customer offering. They are run by entrepreneurs who are passionate about their business concept, who want to further develop their company and who share our values on sustainable entrepreneurship. We acquire companies where the owners want to continue leading and developing the company without being its owner. Reasons for wanting to sell can vary. For example, a company may need a new owner because it is in an expansion or investment phase. Or, perhaps new ownership is needed to ensure the company's longevity. Indutrade has no exit strategy, and by selling to Indutrade, the company's future is secured.
Acquisition is a natural component of Indutrade's operations and it is fundamental to our strategy for growth. With an opportunistic acquisition strategy, we acquire successful, well managed companies with a well defined market and a clearly distinct offering. We maintain a high rate of acquisition, typically acquiring several companies each year.
We put high requirements on the companies we acquire. They are run by entrepreneurs who are passionate about their business concept, who want to further develop their company and who share our values on sustainable entrepreneurship. They also have technical niche expertise. They have well-working and motivated management teams that are characterised by entrepreneurship and which are eager to continue their involvement also after the acquisition.
The pre-acquisition process might last for several years, during which time we meet managers and employees frequently to ensure that they are an "Indutrade company". We strive to, as early as possible during the acquisition process, discuss our decentralised governance model and our fundamental values.
All of the companies that were acquire are reviewed to ensure that they have a long-term sustainable business strategy that generates long-term values. Running businesses in a responsible way is of utmost importance and the key to long-term sustainable growth, development and profitability. In 2020, Indutrade acquired 10 new companies. All of them were subject to a sustainability review.
Indutrade strives to, already at an early stage, engage with owners of potential acquisition candidates. Prior to a potential sale, owners are already acquainted with Indutrade and find it natural to involve us in discussions about an acquisition. Indutrade continuously engages in discussions with interesting acquisition candidates, both directly and via company advisers.
Several parameters are used to evaluate a potential acquisition including market position, customers, competitors, main supplier's strategic and technical focus, environmental impact, ISO certifications, financial position, historical data and future involvement of key employees. Running the business in a responsible way is critical to creating longterm sustainable growth, development and profitability, and is therefore central in the evaluation process.
Thorough and tailored due diligence minimises the operational and financial risks associated with acquisitions. Keys to success are careful preparations and that both parties getting to know each other. This is why the acquisition process is allowed to take time. If a potential acquisition does not comply with relevant standards, does not pass the review process regarding such items as human rights or corruption risks, or is not deemed to be amenable to necessary improvements, Indutrade rejects the acquisition.
The negotiation stage is primarily about ensuring the following:
A structured review of the acquired company is done when carrying out an acquisition. The main areas that we focus on are the acquired company's:
New financial targets are established that are specific to the company and its conditions.
There is continuous dialogue between Indutrade's Group management team/business area managers and the acquired company's management team. Ongoing governance is goal-oriented with a focus on growth, margins and tied-up assets. During the year, we also ensure that the competence development, succession planning and the sustainability agendas of subsidiaries are being monitored and evaluated, which is an important aspect of Indutrade's role as an active owner.
It is of utmost importance that our companies continuously strive to improve their social, environmental and economic impact.
Growth via acquisition of successful, market-leading niche companies is a key component of Indutrade's business model. Due to the unstable market situation in 2020 caused by the COVID-19 pandemic, Indutrade chose to extend the acquisition processes to ensure that the right conditions for profitable growth existed with the potential acquisition companies. In 2020, Indutrade made 10 acquisitions and the total annual sales of these newly acquired companies amounted to SEK 825 million.
| Possession | Acquisition | Business area | Sales SEK million1) |
No. of employees1) |
|---|---|---|---|---|
| January | STEIN Automation GmbH & Co. KG | DACH | 110 | 45 |
| January | VarioDrive B.V. | Benelux | 60 | 6 |
| January | AVA Monitoring AB | Measurement & Sensor Technology | 45 | 10 |
| February | Sverre Hellum & Sønn AS | Industrial Components | 60 | 13 |
| February | Jouka Oy | Finland | 70 | 31 |
| March | Nortronic AS | Industrial Components | 60 | 16 |
| July | Holland Fasteners B.V. (HoFa) | Benelux | 50 | 9 |
| September | UK Gas Technologies Ltd | Flow Technology | 130 | 32 |
| October | Cheirón A.S. | Industrial Components | 120 | 61 |
| December | X-RAY WorX GmbH | Measurement & Sensor Technology | 120 | 23 |
| Total | 825 | 246 |
1) Estimated annual sales and number of employees at the time of acquisition.
Stein Automation is a supplier of pallet transfer systems for assemblylines. The systems are Industry 4.0-ready and built up by standardized modules, providing flexible configuration and re-modelling features, to optimize the customers' production processes. The customers are companies primarily based in Germany, often with international production facilities, within the automotive, consumer goods and medical industries. Application areas are found in various assembly-line pallet transfer systems for e.g. white goods, electronics and automotive products. Stein Automation, established in 1969, has 45 employees and is based in Villingen-Schwenningen, Germany.
VarioDrive is a niche technical trading company offering motion control solutions from leading suppliers to OEM customers in the Netherlands. With focus on drive and control technology, the offering includes customised solutions with integrated mechanical and electrical features, including pre-assembly of components and software programming. The motion control market is very diverse and application areas are found in general industries including intracompany
logistics, packaging, aerospace and MedTech. Customers are for example system integrators and machine builders.
AVA Monitoring develops, manufactures and sells vibration measurement and monitoring equipment used in connection to infrastructure engineering projects and construction projects. Through fully automated measurement systems with unattended and remotely controlled field instruments, ground vibrations and noise can be measured, controlled and monitored remotely via an online web application.
The company works through technological innovation to reduce the environmental impact on people, buildings, land, air and waterways in connection to, for example, infrastructure engineering projects. The customers are often specialized in providing measurement services in connection to construction projects and infrastructure
engineering projects, mainly on the Nordic market. Additionally, AVA Monitoring's products and solutions are being sold via distributors in the UK, Australia and Canada.
Sverre Hellum & Sønn is a supplier of diamond tools and associated equipment to the Norwegian market. Diamond tools are used in a wide range of industries such as infrastructure, on- and off-shore construction and geological prospecting (e.g. mining). The offering also includes machine equipment to industries in which diamond tools are used, with a focus on the construction industry. Additionally, the company is active on the micro trenching market – a technology used to install fiber optic for broadband networks. Sverre Hellum & Sønn has 13 employees and is based in Oslo and Tønsberg, Norway.
Jouka designs and manufacturers ball valves and integrated ball valve solutions with a high degree of customisation. The company offers bespoke products with customer specific R&D. Customer segments include machine building, marine, process and pulp & paper industries primarily in the Finnish market. With high manufacturing flexibility, Jouka offers competitive delivery times to customers having special needs, such as precise materials specifications, designs or "sizing to the place" requirements. Jouka was established in 1957 and is based in Ylöjärvi, Finland, with 31 employees.
Nortronic is a technical trading company within the lighting market, representing European market leading brands within the area of LED lighting solutions, lighting controls and drivers. Customers include for example electrical wholesalers, lighting companies and retail businesses. Nortronic's offering includes energy-efficient and innovative lighting solutions for both indoor and outdoor environments, with focus on the design element. Nortronic has 16 employees and is based in Kolbotn, Norway.
HoFa is a supplier offering high-quality items such as bolts, screws, nuts, rivets, and with a significant part of the products customized and special made according to drawings and specifications. Main market is in the Netherlands, but HoFa also distributes its products in other European markets. Customers are manufacturers of agricultural machines and household appliances, furniture manufacturers, woodworking and metalworking industry and end users in electrical installations. HoFa also have significant customers among industrial distributors. Based in Bleiswijk, the Netherlands,
the company has 9 employees.
UK Gas Technologies is a manufacturing group offering custommade solutions for high purity medical and laboratory gases, purified water and steam systems, as well as other process installations and specialist systems. Their worldwide customers can be found within segments such as healthcare and hospitals, pharmaceutical manufacturing, research laboratories, and solar cell and semiconductor manufacturers.
Founded in 1983, the group today consists of the three companies Medical Gases Ltd, Microgas Systems Ltd, and Puretec Process Systems Ltd. UK Gas has 32 employees and is based in Gatwick Surrey, United Kingdom.
Cheirón is a technical trading company of medical technology products, specialising primarily in equipment used for healthcare applications in surgery rooms, intensive care wards, emergency wards, and cardio units. Providing value added solutions and service to their hospital customers' specific needs, the product offering includes monitoring equipment, respirators, defibrillators, anaesthesiology equipment, as well as a wide range of single-use items. The offering is complemented by service and training and customers are mainly Czech hospitals. Cheirón also produces its own product line of suction devices which they sell through a broad
network of international distributors.
X-RAY WorX is a leading niche manufacturer of X-ray tubes for industrial applications in non-destructive testing. The product range consists of open high resolution microfocus X-ray tubes, with the highest capabilities, meeting diverse application and industrial requirements. The offering is complemented by maintenance, service, and training. Customers are primarily OEMs of industrial X-ray inspection systems, serving a diverse set of industrial end markets including high growth applications areas such as additive manufacturing and battery production. To serve its internationally diversified customer base, X-RAY WorX uses a broad network of distributors and sales partners. The company is located in Garbsen, Germany, and has 23 employees.
Conducting active business intelligence in which the long-term trends are identified, monitored and analysed is crucial for Indutrade in its ability to make well-grounded decisions and create long-term sustainable business. While certain trends may pose challenges, they also represent major business opportunities.
| Trend | Examples of how Indutrade meets trends |
|---|---|
| Greater needs within healthcare | Within the Indutrade Group, there are several companies active in the medical technology segment. Examples are Rubin Medical, which offers diabetes therapy in Sweden, Denmark and Norway. Biameditek and Cheiron are specialised in equipment used for healthcare applications in surgery rooms, intensive care wards, emergency wards, and cardio units in Poland and the Czech Republic. Ultra Pure International manufactures single-use systems used within the pharmaceutical industry. |
| Indutrade is positive about acquiring additional companies operating in the medical technology segment. |
|
| Greater needs to expand infra structure and water & wastewater systems |
A majority of the companies within the Group conduct trading in industrial components for water & wastewater systems. Examples are Belos, Oy Lining and GPA Flowsystem. Another is Torell Pump, which markets and sells valves, pumps, compressors and equipment for cleaning wastewater. Ventim, another Indutrade subsidiary, supplies control valves and various other measuring instru ments. AVA Monitoring offers automated measurement systems used in connection with infra structure projects to measure ground vibrations and noise aimed at lowering the risks in the area. Indutrade is positive about acquiring additional companies operating in the infrastructure and water & wastewater segments. |
| Higher requirements for more efficient use of resources and recycling of material, and conservation of energy in industry. |
Several Indutrade companies manufacture, develop and sell components, systems and services that help industries to comply with environmental standards. For example, Svenska Geotech offers sustainable environmental products used in, for example, building site preparation and civil engineering projects, while Flow Tec focuses on industrial valves, systems and components for the pulp and paper industry. Colly Filtreringsteknik offers efficient industrial filters that reduce the customer's environmental impact and contribute to increased productivity and reduced costs. Lyma delivers valves, pumps and instruments to waste incineration stations. Within the Group, systematic sustainability efforts are being pursued, which include measurement and monitoring of resource and energy efficiency. |
| Higher requirements on sustainable development due to climate change concerns. Because of this, the use of renewable energy sources is increasing and there is pressure to create a sustaina ble transport sector, with improved fuel efficiency and lower carbon emissions. As environmental awareness among con sumers rises, so too does their demand for locally produced goods. Awareness about climate change and the environment is also influencing where industrial produc tion is established around the world. |
Färber & Schmid is a company that specialises in environmental-friendly chemicals for industrial wastewater treatment and the surface treatment market. HP Valves and BVT Sweden are compa nies that manufacture valves used in, among others, solar energy plants and which improve effi ciency of energy production. The majority of Indutrade companies work in smaller cities or towns and through them, Indutrade contributes to local growth and development by creating jobs and promoting entrepreneurship and local investments. Within the Group, systematic sustainability efforts are being pursued, which includes increasing the percentage of renewable energy, reducing CO2 emissions and increasing sales from sustain able products and/or solutions. |
| Digitalisation is creating many opportunities and contributing to more efficient use of resources. |
Making customers' energy and resource use more efficient by connecting machines, systems and processes is something that many of the companies in the Group are working with. For example, Sepab offers its IoT platform, ExyPro, that is used by companies to monitor, streamline and ana lyse such things as environmental impact and the electronic driving records of their vehicle fleets. Another example is Dasa, which is specialised in intelligent systems for control, information man agement and communication for heavy vehicles used in forestry, contracting and transport. Datum Hawk is a solution that helps customers monitor and analyse engine performance in ships to reduce wear and fuel consumption. The solutions are connected and customers can monitor and analyse data in real time to save money. Some business areas have shared resources working with information and training on digitalisation. |
Indutrade works long-term and sustainability is a natural part of our decentralised business model. We regard business opportunities linked to sustainability as a driving force for developing our companies and continuing to generate sustainable profitable growth.
Indutrade works systematically with sustainability based on the materiality analysis where we have identified the most important areas for us to focus on. In 2020, long-term objectives were established for 2030 to enhance business opportunities, drive sustainable profitable growth, and support the UN Sustainable Development Goals (SDGs). Indutrade's sustainability strategy represents a shared commitment that the businesses within the Group continuously develops and improves in ways that are economically, environmentally and socially responsible. Consistent with Indutrade's decentralised business and entrepreneurial culture, the strategy is in line with the SDGs and based on Indutrade's three focus areas: people, environment and profitable growth. In order to follow up on the goals for 2030, we have identified a number of enablers within each key area. The objectives and measurements will be evaluated annually to ensure continuously effective ways to identify, measure and calculate the factors that affect Indutrade's long term objectives going forward. In 2020, a sustainability reporting platform was also launched for collecting sustainability data. It is used by all subsidiaries for reporting a number of key ratios.
Maintaining focus on the long term and sustainability, even in challenging situations, is critical. Since the outbreak of the pandemic, Indutrade has been carefully monitoring the effects of COVID-19, with the highest priority being the health and safety of our employees, customers and suppliers. There has been close dialogue with subsidiaries during the year aimed at implementing measures in the best possible way and lending support for local decisions. The transformation in digitalisation and sustainable development have accelerated due to the pandemic. These are two important areas that both strengthen competitiveness and generate new business opportunities.
Indutrade's most important stakeholders are employees, owners, investors and other key players in the capital market. Through ongoing dialogue with stakeholders, business intelligence and analyses of industrial sectors, we identified our most important sustainability issues as the following: anti-corruption & business ethics, acquisitions, employees, sustainability governance, environmental & climate impact and sustainable products and services.
In 2020, Indutrade engaged in several qualitative interviews with important stakeholders. The main conclusions from stakeholder engagement in 2020 were:
The updated materiality analysis resulted in some minor changes and updates to our material issues.
Indutrade is a signatory to the UN Global Compact and supports the ILO conventions, the UN Universal Declaration of Human Rights and the OECD Guidelines for Multinational Enterprises. With operations in more than 30 countries around the world, business ethics is of utmost importance to Indutrade. In order to grow and develop, we must ensure that we have good business ethics and that there is full compliance at all levels of the organisation with our requirements on anticorruption.
Indutrade's Code of Conduct is our policy for sustainable entrepreneurship and it is an important component of sustainability efforts. It provides guidance for who we aspire to be and how we would like to be perceived, and applies for all employees in the Indutrade Group, in all countries. The Code of Conduct lays out guidelines in a number of important areas, including care for the environment, health and safety, business ethics including anti-corruption, employee relations, human rights and community impacts.
The Code of Conduct has been adopted by Indutrade's Board of Directors and it is available to all of our employees via Indutrade Portal (our communications portal that also offers e-learning to support implementation). A follow-up showed that 96 percent of Indutrade's companies have, during 2020, implemented the Code of Conduct in their organisation.
The Code of Conduct has been translated from Swedish into eight other languages and is available on our website. The MD of each subsidiary is responsible for making sure that the Code of Conduct is implemented.
Employees who notice any deviations from the Code of Conduct or suspect improprieties can report such via an external whistleblower function (anonymously, if they so prefer). The whistleblower function is also open to subsidiaries' suppliers, partners and subcontractors.
72%
applied the Code of Conduct to third parties
In 2020, Indutrade received four reports via the whistleblower function on suspected deviations from the Code. These were related to events that occurred in our subsidiaries. All of the cases were investigated and the matters were dealt with. have entirely or partially
72 percent of Indutrade's companies have entirely or partially included suppliers and partners to be covered by the Code of Conduct. A large portion of Indutrade's subsidiaries do not have any own production. The products that they sell are manufactured in countries where the working conditions, environmental regulations and business ethics (including anti-corruption) may vary. It is therefore crucial that we work with our suppliers and partners to ensure that there is a sustainable value chain, thereby contributing to sustainable development.
Subsidiaries continuously monitor social and environmental aspects of customers and suppliers and thanks to their close ties and long-term collaborations, they have good insight and knowledge of the value chain. Suppliers and partners comply with the Code of Conduct, which lowers the risk of any negative impact on people in the value chain. A negative impact on people in the value chain could involve compliance and brand risks for the Indutrade Group. Besides the Code of
Conduct, Indutrade has several Group-wide internal guidelines which include such things as our trade compliance, tax, insurance, information and investment policies.
All of the 10 companies acquired during the year have been evaluated from a sustainability perspective. Due to the unstable market situation caused by the pandemic, Indutrade chose to extend the acquisition processes in 2020 to ensure that the right conditions for profitable growth existed with the potential acquisition companies.
Ensuring that employees are thriving and developing in the organisation is a priority area for Indutrade and critical to the Group's success. We help create the conditions for long-term growth of our business by focusing on continuously developing leadership skills and competencies, having inclusive teams and workplaces where people thrive and by ensuring that there are safe and healthy working conditions.
One of the most important prerequisites for maintaining a long-term approach in our operations is to ensure we have the right expertise within the Group. In our subsidiaries this is largely a matter of making use of the expertise that already exists internally. We do this both through continuing education for
key individuals and by sharing knowledge and experiences within the Group. Through Indutrade Academy, we offer an in-house leadership programme that provides training in areas such as leadership and sales.
We share experiences, knowledge and best practice through networks, trainings and Indutrade Portal (internal communications platform). Many companies face similar challenges, making the solutions for one relevant to others. By sharing this information, companies belonging to the Group gain additional resources and insights.
In 2020, several Group-wide activities were held to promote competence development and knowledge sharing. Most were held via a digital platform, since physical meetings were not possible due to the pandemic. For example, a sustainability network for knowledge sharing was established and several digital courses and trainings were offered, aimed at fortifying the long-term development of employees and companies.
We believe in giving people freedom and trust. It creates job satisfaction, pride and commitment. Being able to attract, develop and retain the right employees is a prerequisite for Indutrade's long-term profitability. Employees are recruited and promoted exclusively based on their work qualifications and without consideration of their gender, transgender identity or expression, ethnic origin, religion or other faith, functional variation, sexual preference, age or other categories protected by law.
Due to the COVID-19 pandemic, sickness absence was unusually high in 2020 amounting to 6.1 days per full-time employee. That number also included absence for employees needing to remain isolated in their homes due to COVID-19, for safety reasons. The employee turnover rate was 10 percent, which is also higher than normal and it includes the approximately 320 employees who permanently left their positions, primarily due to changed market conditions due to the pandemic.
Health and safety in the workplace is fundamental for Indutrade. Investing in improved work and production environments is something that we prioritise, support and encourage. It creates the best conditions for a safe workplace with fewer risk factors at the same time that it boosts productivity and creates conditions for high performance and growth in the subsidiaries. We have a zero vision for occupational injuries.
In total, 220 workplace injuries were reported in 2020, including minor injuries that did not result in any lost time or absence from the workplace, resulting in an injury frequency rate of 3.2. Continuously improving the injury frequency rate is a priority focus area.
Indutrade's sustainability governance efforts have been adapted to our decentralised organisation and they primarily occur via the Boards of Directors of our subsidiaries.
Sustainability is a standing item on the Board meeting agendas of subsidiaries. The MD and senior executives of each subsidiary have operational responsibility for their own sustainability work and each Board of Directors is ultimately responsible for ensuring that the company follows its own and Indutrade's guidelines and policies. Sustainability governance occurs primarily via:
At the Group level, the Board is involved in climate issues by approving strategies, policies, acquisitions and potential divestments. At the Group level, we also conduct a comprehensive strategic risk analysis each year.
Indutrade comprises more than 200 companies in a wide variety of industries and markets. Accordingly, each of them faces different types of challenges and opportunities. After having identified each company's most important sustainability issues, each subsidiary then identified relevant goals and key ratios, thereby enabling efficient and strategic improvement work within each company. From a long-term ownership perspective, our overall ambitions for sustainability are the same for all our subsidiaries, namely, continuously improving work through systematic improvement efforts.
Indutrade's environmental impact and environmental work primarily takes place in our subsidiaries. In 2020, we embarked on an initiative to calculate the Group's total greenhouse gas emissions. Both direct emissions (scope 1) and emissions from energy consumption (scope 2) are calculated in accordance with the Greenhouse Gas Protocol. Our subsidiaries include both manufacturing and non-manufacturing companies. As such, there are variations as to where the majority of emissions occur in their value chains. A significant portion of the Group's impact occurs in scope 3 (e.g. in the supply chains, business trips, shipping). At present, however, this data is not available at Group level. The objective is to include scope 3 before 2025 in order to provide a full understanding of the Group's emissions.
Most companies report that they are continuously reducing their environmental impact and actively helping their customers do the same. At the end of 2020, 69% of the manufacturing companies were working with environmental management systems and more than 50% of all the companies in the Group had various types of ISO certification, such as ISO14001, ISO9001, ISO13485, ISO17025 and OHSAS18001. Being ISO-certified is often a prerequisite for customers and suppliers prior to initiating collaboration. Seven of our Swedish subsidiaries conduct operations that require permits or reporting in accordance with the Swedish Environmental Code. Five foreign subsidiaries conduct operations subject to an equivalent permit or reporting obligation.
During 2020, Indutrade started analysing and mapping the impact of implementation of the EU Taxonomy Regulation, which is a classification system for designating investments as environmentally sustainable. The purpose of the EU Taxonomy Regulation is to ensure that the finance sector obtains a set of common guidelines for which investments may be called "green" investments. Indutrade monitors the updates that are continuously being published on the EU Taxonomy Regulation and will continue with analysis and documentation effort during 2021.
Many of our companies offer solutions that improve energy efficiency for their customers, reduce their negative environmental impact or contribute to improving the customer's health. By having good knowledge about customers' systems and processes, combined with a high level of technical expertise, we improve the efficiency of our customers' operations and offer solutions that reduce environmental impacts and enhance efficiency. Stimulating the development and sale of sustainable products is a focus area for the Group.
A natural starting point for the parent company's sustainability efforts is focusing on the processes where we can have the greatest impact, i.e. our investment decisions and exercising active ownership via the Boards of Directors for our subsidiaries. Proactive sustainability efforts should also be an integrated part of the daily operations run by our 19 employees at the head office in Stockholm. Indutrade's direct environmental impact is limited. However, we must still actively strive to lower it. Air travel, which accounted for Indutrade's largest environmental impact, decreased significantly in 2020 due to travel restrictions associated with the COVID-19 pandemic. Digital platforms were used to conduct meetings instead. Efforts focused on the work environment and IT, which got underway in 2019, continued in 2020.
In order to reach the goals for 2030, Indutrade has defined a number of key ratios for each area. The goals and ratios will be evaluated each year to ensure that we are working effectively and to identify, measure and calculate the factors that affect Indutrade's long-term goals and our progress in achieving them.
| MATERIAL ISSUES | ■ Anti-corruption and business ethics ■ Employees ■ Environment and carbon footprint |
■ Acquisitions | ■ Sustainable products and solutions ■ Sustainability governance |
|---|---|---|---|
| FOCUS AREAS | PEOPLE | ENVIRONMENT | PROFITABLE GROWTH |
| KEY PERFORMANCE INDICATORS AND RESULTS | Engaged people KPI: percentage of companies measuring employee satisfaction/ engagement Starting point 2020: 58% Target 2025: 90% Leadership and competence development KPI: percentage of internal Managing Director appointments Starting point 2020: 50% Target 2025: 60% Employee engagement KPI: percentage of the Group's overall employee retention rate Starting point 2020: 90% Target 2025: 85-90 % Diversity and inclusion KPI: percentage of subsidiary boards with women represented Starting point 2020: 30% Target 2025: 60% Employee well-being KPI: Group overall Sickness Absence rate (short-term and long-term sick leave) Starting point 2020: 6.1 days/full-time employee Target 2025: 4.3 days/full-time employee Employee safety KPI: Group overall Injury frequency rate1) Starting point 2020: 3.2 Target 2025: 1.6 1) Injury frequency rate is the number of injuries per 200,000 employee-hours worked. |
Improved energy efficiency KPI: improve the energy intensity per turn over Starting point 2020:4.79 Mwh/SEK m net sales Target 2025: 3.35 Mwh/SEK m net sales Share of renewable energy KPI: increase the share of renewable energy Starting point 2020: 24% Target 2025: 50% Reduce CO2 emissions KPI: reduce the CO2 emissions for scope 1 and 2 Starting point 2020: 19,924 tCO2e Emission intensity 1.04 tCO2e/SEK m net sales Target 2025: 15,939 tCO2e, corresponding to 20% reduction in absolute emission figures while still growing our business via acquisition of new companies Efficient business travel KPI: increase awareness around indirect emissions from business travel Starting point 2020: Increase knowledge of indirect CO2 emissions in general and in relation to business travel, along with facilitating acceleration of digitalisation Target 2025: Include emissions from scope 3 in Indutrade's total CO2 measurement |
Customer satisfaction KPI: percentage of companies measuring customer satisfaction Starting point 2020: 66% Target 2025: 80% Resource efficiency Resource efficiency means using resources such as water, energy, and waste more efficiently. KPI: increase the number of companies with individual KPIs in the environmental area Starting point 2020: 45% Target 2025: 55% Solutions improving customers' operations and reducing environmental impacts KPI: increase the share of sales derived from environmentally sustainable economic activities, based on the EU taxonomy Starting point 2020/21: Begin mapping Indutrade companies according to EU's taxonomy Target 2025: Increase taxonomy aligned turn over from companies with sustainable prod ucts and/or solutions New product offerings should use less energy and/or decrease carbon footprint KPI: percentage of net sales deriving from product offerings launched during the last three years Starting point 2020: Start collecting data Target 2025: Increase the percentage of net sales derived from new products and stimu late the ability to innovate within the Group Assessment of acquired companies KPI: percentage of acquired companies assessed for sustainable contribution and sustainability related risks Starting point 2020: 100% of the acquisition proccesses have included environmental and sustaibility assessments Target 2025:100% of the acquired companies assessed by the EU Taxonomy standard, for economic, environmental, and social impacts, ensuring their contribution to sustainable development1) 1) Sustainable development in accordance with the SDGs |
In 2015, the UN introduced its 2030 Agenda for Sustainable Development supported by 17 Sustainable Development Goals (SDGs). The SDGs, which should be met by 2030, are aimed at achieving sustainable social, economic and environmental growth.
SDG 4 – Quality education Our employees benefit from competence and career development along with a stable workplace.
Solutions and products that contribute to a safer work environment and better health are one of the areas that Group companies work within. Many of our companies do business in smaller cities and communities, which contributes to local growth and creates jobs.
Indutrade contributes both directly and indirectly to a large number of areas. Our largest contribution comes from the services and products that companies deliver and produce. The SDGs that are most relevant for Indutrade are SDG 4, SDG 8, SDG 9 and SDG 13.
Through efficient use of resources and continuous improvements, we strive to minimise the emissions and waste generated by our companies. Infrastructure is one of our largest segments, and we deliver many products and services in this area.
SDG 13 – Climate action Many of Indutrade's companies deliver solutions and products that help customers save energy, water, materials and reduce CO2 emissions.
Furthermore, many Indutrade companies deliver solutions and products that help customers save energy, water, materials and CO2. That contributes to fulfilment of SDG 6 (Clean water and sanitation), SDG 7 (Affordable and clean energy), SDG 12 (Responsible consumption and production) and SDG 13 (Climate action) and indirectly to SDG 14 (Life below water) and SDG 15 (Life on land).
Some companies deliver solutions and products that contribute to a safer work environment and better health, which affects for example SDG 3 (Good health and well-being). Many of our companies do business in smaller cities and communities, where
they actively contribute to SDG 11 (Sustainable cities and communities) and SDG 10 (Reduced inequalities) in their regions and communities.
We work systematically to ensure that our operations are run in a fair and ethical way in order to minimise the risk of corruption in the supply chain. This contributes to SDG 16 (Peace, justice and strong institutions). We strive to ensure non-discrimination and equal opportunity in the workplace, which contributes to SDG 5 (Gender equality).
Companies that belong to the Indutrade Group are able to maintain their original identity, while gaining access to the collective knowledge and experience of all of the Group's employees. They are also able to maintain their local ties and growth potential. Furthermore, being responsible for their own responsibility fuels entrepreneurial spirit within the Group.
The Indutrade Group is structured into eight business areas. The eight business areas are as follows: Benelux, DACH, Finland, Flow Technology, Fluids & Mechanical Solutions, Industrial Components, Measurement & Sensor Technology and UK. Companies within a business area are grouped together either through similar products or geographical area.
Indutrade's business model continues to show strength and stability and the Group can sum up 2020 as a successful year. Despite it being a turbulent year, with the ongoing COVID-19 pandemic and much uncertainty in the market, both sales and earnings nevertheless increased. For the full year 2020, sales amounted to SEK 19.2 billion and the EBITA margin was a record high 13.6%. Thanks to the amazing efforts of our employees, companies have been able to quickly and efficiently adapt to the prevailing circumstances and act on business opportunities.
There has been more engagement with subsidiaries since the outbreak of COVID-19, aimed at ensuring correct and quick dissemination of information and providing support for making good decisions. Demand increased sharply for some companies in the medical technology segment. Furthermore, inventory build-up at some industrial customers initially had a positive impact on the companies in these segments. However, as a consequence of the nationwide shutdowns that began at the end of March and closures of production facilities at several major customers, for example in the automotive and engineering industries, many of our companies were negatively affected with markedly reduced demand. During the first quarter,
some disruptions were also noted in the supply chains, as well as in own production. Later in the year, however, there were fewer disruptions from shutdowns and also fewer delivery problems.
All our companies with declining order intake have worked with different types of cost reduction programmes and many have also temporarily laid off staff. A number of subsidiaries, primarily in Sweden and the UK, have received redundancy support.
Our decentralised business model with entrepreneurial CEOs who make independent and quick business decisions is a strength in demanding times like these. During the fourth quarter, most of the programs involving various types of temporary lay-offs and short-term work, which had been set up at the start of the pandemic, were terminated.
Since the end of March 2020, the workforce has been permanently reduced by approximately 320 individuals, corresponding to 4%. For the full year 2020, personnelrelated government assistance amounted to 0.5% of net sales
Growth, both organic and via acquisitions, is a key concept for Indutrade. In total, ten acquisitions were made in 2020. An additional five acquisitions have been made thus far in 2021.
Indutrade has established a new sustainability vision and long-term sustainability objectives for 2030 to enhance business opportunities, drive sustainable profitable growth, and support the UN Sustainable Development Goals (SDGs).
The sustainability vision is based on Indutrade's shared commitment that the businesses within the Group continuously develop and improve in ways that are economically, environmentally and socially responsible. The objectives are based on three main areas: employees, the environment and profitable growth. To achieve the objectives by 2030, Indutrade will be using measurable key ratios that are evaluated and follow up on each year.
Indutrade's financing, nearly all of which is managed by the Parent Company, consists of loans from financial institutions, corporate bonds and certificate programmes.
Financing was strengthened during the year in conjunction with having extended a short-term loan of SEK 800 million by more than three years. In addition, long-term credit commitments were increased by SEK 750 million and prior existing credit commitments were extended by an additional year.
| Benelux | DACH | Finland | Flow Technology | Solutions | Fluids & Mechanical |
Components | Industrial | Measurement & Sensor Technology |
UK | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |
| Net sales, SEK million |
2,773 | 2,288 | 1,529 | 1,403 | 1,679 | 1,689 | 4,071 | 3,798 | 1,979 | 2,041 | 3,803 | 3,513 | 2,120 | 2,259 | 1,322 | 1,469 |
| EBITA, SEK million | 360 | 315 | 169 | 134 | 247 | 223 | 607 | 491 | 268 | 279 | 569 | 432 | 334 | 366 | 159 | 208 |
| EBITA margin, % | 13.0 | 13.8 | 11.1 | 9.6 | 14.7 | 13.2 | 14.9 | 12.9 | 13.5 | 13.7 | 15.0 | 12.3 | 15,8 | 16.2 | 12.0 | 14.2 |
| Return on capital employed, % |
16 | 16 | 13 | 12 | 31 | 33 | 30 | 26 | 15 | 17 | 25 | 21 | 13 | 15 | 11 | 15 |
| Average number of employees |
744 | 635 | 583 | 532 | 467 | 453 | 1,072 | 1,058 | 681 | 693 | 881 | 829 | 2,029 | 2,062 | 872 | 888 |
The companies in this business area offer custom-manufactured niche products, design solutions, aftermarket service and assembly, and customisation. The business area includes companies with a considerable amount of own manufacturing and proprietary products. Customers are in the energy, construction & infrastructure, and healthcare segments. Product areas include valves, hydraulic and indus-
trial equipment, and measurement technology. The business area has strong market positions in the Benelux area (Belgium, the Netherlands and Luxembourg).
During the year, net sales increased by 21%, of which comparable units increased by 7%, acquisitions contributed 15% and currency movements amounted to –1%. The higher net sales for comparable units came from a higher level of invoicing for valves for power generation. The lower EBITA margin is primarily explained by a positive one-off item last year associated with pensions. There was only a marginal impact on EBITA from personnel related government assistance.
VarioDrive B.V. and Hofa B.V. (Holland Fasteners, the Netherlands), was acquired during the year.
| 2020 | 2019 | Change, % | |
|---|---|---|---|
| Net sales, SEK million | 2,773 | 2,288 | 21 |
| EBITA, SEK million | 360 | 315 | 14 |
| EBITA margin, % | 13.0 | 13.8 | |
| Return on capital employed, % | 16 | 16 | |
| Average number of employees | 744 | 635 |
| Benelux | 64% |
|---|---|
| Asia | 10% |
| North America | 10% |
| Germany | 3% |
| Switzerland | 2% |
| Other | 11% |
| Process industry | 26% |
|---|---|
| Infrastructure/construction | 22% |
| Medical technology and pharmaceutical | 12% |
| Energy | 10% |
| Engineering | 9% |
| Other | 21% |
| Valves | 30% |
|---|---|
| Industrial equipment | 11% |
| Measurement technology | 11% |
| Construction material | 10% |
| Filters & Process technology | 6% |
| Other | 32% |
This business area includes companies that offer custom manufactured niche products, design solutions, aftermarket service and assembly, and customisation. The business area includes companies with a considerable amount of own manufacturing and proprietary products. Customers are in the construction & infrastructure, engineering, healthcare and chemical industries. Product areas include con-ROBERT TIMMER MARKUS RÜEDIN
struction material, hydraulic and industrial equipment and valves. Each of the individual companies has a strong market position in the DACH area (Germany, Austria and Switzerland), and most companies are market leaders in their fields.
| Share of sales | 8% | Share of EBITA |
6% |
|---|---|---|---|
During the year, net sales increased by 9%, of which the impact from comparable units was –2%. Acquisitions contributed 11%, divestments amounted to –1% and there was a positive impact from currency movements of 1%. The negative performance for comparable units primarily came from a somewhat lower level of activity in the German engineering industry.
The higher EBITA margin is primarily explained by cost reductions. Government assistance for temporary lay-offs corresponded to 0.7% of net sales.
Stein Automation GmbH Co. KG (Germany) was acquired during the year.
| 2020 | 2019 | Change, % | |
|---|---|---|---|
| Net sales, SEK million | 1,529 | 1,403 | 9 |
| EBITA, SEK million | 169 | 134 | 26 |
| EBITA margin, % | 11.1 | 9.6 | |
| Return on capital employed, % | 13 | 12 | |
| Average number of employees | 583 | 532 |
| Switzerland | 59% |
|---|---|
| Germany | 25% |
| North America | 2% |
| Eastern Europe | 2% |
| Asia | 2% |
| Other | 10% |
| Infrastructure/construction | 28% |
|---|---|
| Engineering | 25% |
| Medical technology and pharmaceutical | 22% |
| Process industry | 16% |
| Food | 3% |
| Other | 6% |
| Construction material | 28% |
|---|---|
| Valves | 22% |
| Industrial equipment | 17% |
| Chemical technology | 16% |
| Measurement technology | 11% |
| Other | 6% |
The Finland business area includes companies that offer sales of components as well as customisation, combinations and installations of products from various suppliers. Customers are in the construction & infrastructure, engineering, water/ wastewater, energy and chemical industries.
Products range from hydraulics and industrial equipment to measurement technology, valves, service,
filters and process technology. The business area has a strong market position in Finland.
During the year, net sales decreased by 1%, of which comparable units had an effect of –3%, acquisitions contributed 3% and currency movements had an effect of –1%. The negative performance for comparable units was primarily due to a lower demand from industrial customers. The improved EBITA margin is primarily attributable to cost reductions and acquisitions. Government assistance for temporary lay-offs was marginal during the year.
Jouka Oy (Finland) was acquired during the year.
| 2020 | 2019 | Change, % | |
|---|---|---|---|
| Net sales, SEK million | 1,679 | 1,689 | –1 |
| EBITA, SEK million | 247 | 223 | 11 |
| EBITA margin, % | 14.7 | 13.2 | |
| Return on capital employed, % | 31 | 33 | |
| Average number of employees | 467 | 453 |
| Finland | 90% |
|---|---|
| Benelux | 2% |
| Germany | 1% |
| Denmark | 1% |
| Eastern Europe | 1% |
| Other | 5% |
| Water/Wastewater | 22% |
|---|---|
| Engineering | 18% |
| Infrastructure/construction | 18% |
| Energy | 8% |
| Paper & pulp | 8% |
| Other | 26% |
| Measurement technology | 21% |
|---|---|
| Valves | 20% |
| Industrial equipment | 16% |
| Service | 11% |
| Fasteners/Electronics/Industrial Springs | 8% |
| Other | 24% |
Companies in this business area offer components and systems for controlling, measuring, monitoring and regulating flows. The business area includes companies that specialise in various areas of industrial flow technology. Customers are in the process industry, food and pharmaceutical industries, water/ wastewater, energy and marine industries. Product areas include valves, pipes and pipe systems, JUHA KUJALA MORGAN O´BRIEN
measurement technology, pumps, hydraulics and industrial equipment. The business area has a strong market position especially in Sweden, but also in the Northern Europe.
| Share of sales | 21% | Share of EBITA |
23% |
|---|---|---|---|
During the year, net sales increased by 7%, of which comparable units increased by 7%, acquisitions contributed 3%, the effect of divestments was –2% and the impact from currency movements was –2%. The increase in sales for comparable units and improved EBITA margin is primarily explained by a favourable performance from companies with customers in the medical technology and pharmaceutical segment, and the improved margin is attributable to good cost control. Government assistance for temporary lay-offs amounted to 0.3% of net sales for the year.
UK Gas Technologies Ltd (UK) was acquired during the year and Meson FT Rus LLC (Russia) was divested.
| 2020 | 2019 | Change, % | |
|---|---|---|---|
| Net sales, SEK million | 4,071 | 3,798 | 7 |
| EBITA, SEK million | 607 | 491 | 24 |
| EBITA margin, % | 14.9 | 12.9 | |
| Return on capital employed, % | 30 | 26 | |
| Average number of employees | 1,072 | 1,058 |
| Sweden | 30% |
|---|---|
| UK/Ireland | 24% |
| Norway | 10% |
| Denmark | 9% |
| Finland | 8% |
| Other | 19% |
| Medical technology and pharmaceutical | 21% |
|---|---|
| Energy | 16% |
| Water/Wastewater | 14% |
| Process industry | 11% |
| Marin | 9% |
| Other | 29% |
| Valves | 40% |
|---|---|
| Pipes & pipe systems | 20% |
| Pumps | 10% |
| Measurement technology | 9% |
| Industrial equipment | 5% |
| Other | 16% |
Companies in the business area offer technical components, both hydraulic and mechanical, as well as solutions with high technological content, to the industry in primarily Scandinavia and Europe, but also the USA and Asia. The companies have a considerable amount of own manufacturing and proprietary products, as well as technical trading companies. Important product
areas include filters, hydraulics, auto repair, tools & transmission, industrial springs, water & wastewater and lighting. The business area has a strong market position in the Nordic region.
| 10% Share of sales |
Share of EBITA |
10% |
|---|---|---|
| ----------------------- | ------------------- | ----- |
During the year, net sales decreased by 3%, of which comparable units had an effect of –3%, acquisitions contributed 1% and currency movements had an effect of –1%. The slowdown for comparable units pertained to several of the business area's segments, but was largest for the industrial segment. The vehicle aftermarket segment and water & wastewater segment, however, counteracted positively. The EBITA margin fell slightly during the year due to lower net sales, but improved towards the end of the year thanks to good cost control and favourable performance in some of the segments. Government assistance for temporary lay-offs amounted to 1.0% of net sales for the year.
| 2020 | 2019 | Change, % | |
|---|---|---|---|
| Net sales, SEK million | 1,979 | 2,041 | –3 |
| EBITA, SEK million | 268 | 279 | –4 |
| EBITA margin, % | 13.5 | 13.7 | |
| Return on capital employed, % | 15 | 17 | |
| Average number of employees | 681 | 693 |
| Infrastructure/construction | 29% |
|---|---|
| Vehicle aftermarket | 24% |
| Engineering | 14% |
| Water/Wastewater | 9% |
| Commercial vehicles | 5% |
| Other | 19% |
| Construction material | 20% |
|---|---|
| Filters & process technology | 14% |
| Hydraulics | 8% |
| Valves | 7% |
| Glass/Plastic/Ceramic | 7% |
| Other | 44% |
Companies in this business area are primarily technical trading companies that offer a wide range of technically advanced components and systems for industrial production and maintenance, as well as medical technology equipment. The products consist mainly of consumables. Its customers exist in the following segments: engineering, healthcare, construction and infra-GÖTE MATTSSON JOAKIM SKANTZE
structure. The product areas include hydraulics and industrial equipment, chemical technology and fasteners. The business area has a strong market position in the Nordic region.
| Share of sales | 20% | Share of EBITA |
21% |
|---|---|---|---|
During the year, net sales increased by 8%, of which comparable units increased by 4%, acquisitions contributed 6%, the effect of divestments was marginal and the impact from currency movements was –2%. The performance of companies in the medical technology segment was very strong during the year, which is partly attributable to the COVID-19 pandemic.
The high EBITA margin is attributable to positive earnings development for many of the companies, with improvements in several of the business area's segments, particularly towards the end of the year. The strongest performance, however, was in the medical technology segment. Government assistance for temporary lay-offs amounted to 0.7% of net sales for the year.
Sverre Hellum and Sønn AS, Nortronic AS (Norway) and Cheirón A.S., (Czech Republic) were acquired during the year.
| 2020 | 2019 | Change, % | |
|---|---|---|---|
| Net sales, SEK million | 3,803 | 3,513 | 8 |
| EBITA, SEK million | 569 | 432 | 32 |
| EBITA margin, % | 15.0 | 12.3 | |
| Return on capital employed, % | 25 | 21 | |
| Average number of employees | 881 | 829 |
| Sweden | 56% |
|---|---|
| Norway | 19% |
| Denmark | 8% |
| Eastern Europe | 8% |
| Finland | 2% |
| Other | 7% |
| Medical technology and pharmaceutical | 27% |
|---|---|
| Infrastructure/construction | 25% |
| Engineering | 21% |
| Commercial vehicles | 8% |
| Energy | 4% |
| Other | 15% |
| Medical technology | 26% |
|---|---|
| Industrial equipment | 17% |
| Chemical technology | 15% |
| Measurement technology | 8% |
| Fasteners/Electronics/Industrial Springs | 8% |
| Other | 26% |
Companies in this business area sell measurement instruments, measurement systems, sensors, control and regulating technology, and monitoring equipment for various industries. All of the business area's companies have proprietary products based on advanced technological solutions and own development, design and manufacturing. Its customers exist in a variety of areas,
such as various types of manufacturing industries like electronics, vehicles and energy. Companies in this business area work globally and have the entire world as the market for their products, with established production and sales companies on six continents.
During the year, net sales decreased by 6%, of which comparable units had an effect of –9%, acquisitions contributed 4% and currency movements had an effect of –1%. During the year, there was a lower level of activity in several segments, primarily among customers in the vehicle and marine segments. EBITA margin was somewhat lower than last year for the full year, due to, among others, weaker demand. However, the margin improved towards the end of the year primarily due to cost savings. Government assistance for temporary lay-offs amounted to 0.7% of net sales for the year.
AVA Monitoring AB (Sweden) and X-RAY WorX GmbH (Germany) were acquired during the year.
| 2020 | 2019 | Change, % | |
|---|---|---|---|
| Net sales, SEK million | 2,120 | 2,259 | –6 |
| EBITA, SEK million | 334 | 366 | –9 |
| EBITA margin, % | 15.8 | 16.2 | |
| Return on capital employed, % | 13 | 15 | |
| Average number of employees | 2,029 | 2,062 |
| North America | 27% |
|---|---|
| Sweden | 17% |
| Asia | 9% |
| Benelux | 6% |
| Germany | 6% |
| Other | 35% |
| Engineering | 36% |
|---|---|
| Energy | 11% |
| Commercial vehicles | 8% |
| Water/Wastewater | 7% |
| Infrastructure/construction | 6% |
| Other | 32% |
| Measurement technology | 60% |
|---|---|
| Industrial equipment | 17% |
| Fasteners/Electronics/Industrial Springs | 15% |
| Automation | 2% |
| Service | 2% |
| Other | 4% |
The companies in this business area offer custom-manufactured niche products, design solutions, aftermarket service and assembly, and customisation. They have a considerable amount of own manufacturing and proprietary products. Customer segments include construction and infrastructure, engineering and commercial vehicles. Examples of product areas are springs, piston rings, press work, PATRIK STOLPE PETER ROWLANDS
valve channels, pipes and pipe systems. The individual companies all have strong market positions in the UK, and most are market leaders in their respective niches.
During the year, net sales decreased by 10%, of which comparable units had an effect of –11%, acquisitions contributed 3% and currency movements had an effect of –2%. The negative sales trend for comparable units is primarily attributable to the pandemic, along with uncertainty about Brexit.
The weaker EBITA margin primarily results from lower net sales and unfavourable product mix. To some extent, however, it was offset by cost savings. Government assistance for temporary lay-offs amounted to 1.7% of net sales for the year.
| 2020 | 2019 | Change, % | |
|---|---|---|---|
| Net sales, SEK million | 1,322 | 1,469 | –10 |
| EBITA, SEK million | 159 | 208 | –24 |
| EBITA margin, % | 12.0 | 14.2 | |
| Return on capital employed, % | 11 | 15 | |
| Average number of employees | 872 | 888 |
| UK/Ireland | 72% |
|---|---|
| North America | 6% |
| Asia | 5% |
| Denmark | 4% |
| Benelux | 3% |
| Other | 10% |
| Infrastructure/construction | 40% |
|---|---|
| Marin | 12% |
| Engineering | 12% |
| Medical technology and pharmaceutical | 10% |
| Commercial vehicles | 7% |
| Other | 19% |
| Fasteners/Electronics/Industrial Springs | 39% |
|---|---|
| Industrial equipment | 12% |
| Glass/Plastic/Ceramic | 11% |
| Medical technology | 10% |
| Construction material | 8% |
| Other | 20% |
Attractive market position and risk profile
3
■ Leading position in selected, niche segments ■ Focus on high quality and technically advanced products for customers with recurring need ■ Diversified and stable customer & supplier base ■ Stable long-term relationships with leading
Source: Monitor by Modular Finance AB
1
5
50
suppliers
Indutrade's shares are listed on Nasdaq Stockholm and included on the Large Cap list. Indutrade's market capitalisation on 31 December 2020 was SEK 64,069 million (40,511).
Total return 2020 57.7%
Indutrade's share price increased by 58% during the year, from SEK 111.73 to SEK 176.20. During the same period of time the Stockholm Stock Exchange gained 13%, while the OMX Industrials PI sector index rose 13%. Including reinvested dividends, the total return for Indutrade shares was 57.7%, compared with 14.6% for the OMXSGI Index.
The highest price paid in 2020 was SEK 179.90, on 17 December, and the lowest price paid was SEK 73.73, on 23 March. The share prices have been restated after the bonus issue in December 2020. During the last ten-year period Indutrade's shares have delivered a total return of 737% including reinvested dividends. The OMXSGI Index showed a total return of 192% for the same period.
Total trading volume in Indutrade shares on all marketplaces during the year was 116.6 million (106.0 ) shares for a combined value of SEK 43.0 billion (29.3). This corresponds to a turnover rate of 97% (88%). Average daily trading volume was 462,777 shares (423,840), with 3,716 transactions (2,322). Trading volume on the Stockholm Stock Exchange was 55.2 million (51.0) shares, corresponding to a turnover rate of 46% (42%). Kr Antal aktier, 1 000-tal 25 000 175 200
Since the adoption of the EU's Markets in Financial Instruments Directive (MiFID) in 2007, the structure for share trading in Europe has changed. Trading has become more fragmented and is now conducted to an increasing extent on other trading platforms outside the regulated marketplaces. One consequence of this is that a growing share of trading in shares of Swedish companies is being conducted outside the Stockholm Stock Exchange. During 2020 Indutrade's shares were traded in several different marketplaces, and the Stockholm Stock Exchange accounted for 47% (42%) of total trading volume. 5 000 15 000 JAN FEB MAR APR MAJ JUN JUL AUG SEP OKT NOV DEC 50 75 100 125 150
Indutrade's share capital amounted to SEK 727 (242) million on 31 December 2020, divided among 363,615,000 (120,855,000) shares with a share quota value of SEK 2 (2). All shares have equal voting power. A 2:1 bonus issue was executed in December 2020. After the bonus issue the number of shares have tripled.
Indutrade had 12,880 (10,287) shareholders on 31 December 2020. At year-end the ten largest owners controlled 64% of the capital and votes (64%). Swedish legal entities, including institutions such as insurance companies and mutual funds, owned 62% (63%) of the capital and votes at year-end. Foreign ownership of the Company was 32% (31%), with the largest holdings held by shareholders in USA, UK, Luxembourg and Norway.
50 000 60 000 70 000 Kr Antal aktier, 1 000-tal 150 200 The Board's goal is to provide the shareholders an attractive dividend yield and high dividend growth. The goal is that the dividend shall, over time, amount to between 30% and 50% of net profit. During the last five-year period, dividends of SEK 2,036 million has been distributed to the shareholders, corresponding to a dividend payout ratio of 31% of Indutrade's aggregate profit after tax, totalling SEK 6,486 million. Including the proposed dividend for the year and excluding 2019 when no dividend was paid, the dividend payout ratio is 41%.
OMX Stockholm_PI
Trading volume, number of shares '000s per month
Indutrade SX20 OMX Stockholm Industrials_PI
OMX Stockholm_PI Trading volume, number of shares '000s per month
Source: Monitor by Modular Finance AB Source: Monitor by Modular Finance AB
Ownership by country, % Owners by category, %
| Number of shares | Share of capital and votes, % |
|
|---|---|---|
| L E Lundbergföretagen | 96,840,000 | 26.6 |
| State Street Bank and Trust Co, W9 | 24,823,687 | 6.8 |
| AMF – insurance and funds | 21,186,242 | 5.8 |
| JP Morgan Chase Bank NA | 16,201,202 | 4.5 |
| Alecta Pensionsförsäkring | 15,819,906 | 4.4 |
| SEB Investment Management | 13,730,236 | 3.8 |
| Handelsbanken funds | 12,295,563 | 3.4 |
| Brown Brothers Harriman & Co., W9 | 11,388,932 | 3.1 |
| Didner & Gerge funds | 11,119,510 | 3.1 |
| The Northern Trust Company | 9,099,009 | 2.5 |
| Others | 131,110,713 | 36.0 |
| 2020 | 2019 | |
|---|---|---|
| Share price at 31 December, SEK | 176.20 | 111.73 |
| Market cap at 31 December, SEK million | 64,069 | 40,511 |
| Dividend, SEK | 1.802) | – |
| Earnings before dilution, SEK | 4.60 | 4.09 |
| Earnings after dilution, SEK | 4.59 | 4.09 |
| Number of shares outstanding, 000s | 363,615 | 362,565 |
| Average number of shares before dilution, '000 | 362,721 | 362,565 |
| Average number of shares after dilution, '000 | 363,320 | 362,754 |
| Number of shareholders at 31 December | 12,880 | 10,287 |
| Highest price paid during the financial year, SEK | 179.90 | 112.60 |
| Lowest price paid during the financial year, SEK | 73.73 | 70.20 |
| Direct yield3), % | 1.0 | – |
| Equity, SEK | 23.72 | 19.74 |
| Cash flow from operating activities, SEK | 7.66 | 5.30 |
1) A 2:1 bonus issue was executed during December 2020. Comparison figures have been restated for the new number of shares.
2) Proposed by the Board of Directors.
3) Dividend divided by the share price on 31 December.
In April 2017 the Annual General Meeting of Indutrade AB resolved to introduce a long-term incentive programme (LTI 2017) comprising a combined maximum of 704,000 warrants in two series for senior executives and other key persons in the Indutrade Group. Shares can be subscribed during specially stipulated subscription periods through Friday, 20 May 2022. For more information about LTI 2017, see Note 8.
| Outstanding programme | Number of options |
Corresponding number of shares |
Proportion of total shares |
Price per warrant, SEK |
Original subscription price, SEK |
Recalculated subscription price, SEK |
Number of exercised warrants |
Corresponding number of shares |
Expiration period |
|---|---|---|---|---|---|---|---|---|---|
| 2017/2022, Series I | 526,000 | 1,578,000 | 0.4% | 15.0 | 244.9 | 81.6 | 317,000 | 951,000 | 27 April 2020 – 20 May 2022 |
| 2017/2022, Series II | 60,000 | 180,000 | 0.0% | 13.4 | 276.8 | 92.3 | 33,000 | 99,000 | 27 April 2020 – 20 May 2022 |
| Dilutive effects | ||
|---|---|---|
| 2020 | 2019 | |
| Average number of shares before dilution, '000 | 362,721 | 362,565 |
| Number of shares that incur a dilutive effect due to incentive programme, '000 |
599 | 189 |
| Average number of shares after dilution, '000 | 363,320 | 362,754 |
| Dilutive effect, % | 0.17 | 0.05 |
| Number of shares at end of the period, '000 | 363,615 | 362,565 |
Indutrade is exposed to numerous risks that could impact the Group to a greater or lesser extent. Risks are defined mainly as factors that affect Indutrade's ability to achieve set goals.
Indutrade works continuously with assessment and evaluation of the risks that the Group is exposed to and could be exposed to. Many of the risks described here could affect the Company both positively and negatively. This means that in the event of a favourable risk development or if the Company is successful in mitigating the risk through its risk management activities, its goal achievement may be better than anticipated. In such way, risks also entail opportunities for Indutrade.
Examples of this are the business climate, customer behaviours and variations in market prices.
At year-end 2020 Indutrade conducted business through more than 200 companies in 30 countries on six continents. This diversification of risk along with a large number of customers in a wide range of industries and a large number of suppliers in various technology areas limits the business risks.
| RISK | RISK MANAGEMENT | |||
|---|---|---|---|---|
| CHANGES IN THE ECONOMY | ||||
| Indutrade's business is dependent on customer purchases and investments, and is affected by cyclical changes in many different markets and conditions in the global market. |
The effect of economic fluctuations in specific sectors and geographic markets is mitigated by the Group's involvement in many different sectors, segments and geographic markets. Thanks to its decentralised business model, the companies belonging to the Group are easily able to adapt by making quick decisions at the local level. By continuously acquiring companies in new customer segments and in new markets, the Group is able to reduce market risks and counteract cyclical fluctuations better. |
|||
| CHANGES AT THE SUPPLIER LEVEL | ||||
| There is always a risk of suppliers leaving a partnership with one of Indutrade's technology trading companies to set up their own sales operations or collaborate with a different distributor. |
Subsidiaries choose suppliers who view a collaboration with them as the best selling method. Stable supplier relationships are one of the parameters that are assessed prior to Indutrade's acquisition of a company. Because of the large overall number of suppliers within the Indutrade Group, no individual supplier accounts for a predominant economic risk from a Group perspective. |
|||
| DIGITALISATION | ||||
| Digitalisation – with more access to easily available information and quick connections – creates many opportunities, such as producers more easily being able to reach their end customers. That, in turn, could result in more competition and downward pressure on prices for Indutrade's technology sales companies. More efficient production, shorter lead times and higher quality are other consequences of digitalisation. |
Indutrade's companies possess a high level of technical expertise and good knowledge of customer systems and processes, thereby adding much value in the supplier chain. The aim is also to continue developing this expertise and offerings so that it is possible to retain competitive advantages. To facilitate knowledge-sharing and contribute to skills development in digitalisation, subsidiaries are offered access to the knowledge bank on digitalisation that has been built up. It is available via Indutrade Portal, which is Indutrade's digital communications platform. |
|||
| FUNDING RISK | ||||
| Funding risk is the risk that funding of the Group's capital requirement will be impeded, rendered impossible or become much more costly. |
To mitigate funding risk, the Group strives to maintain a balanced maturity structure, a good liquidity reserve, and diversified borrowing. This creates a preparedness to take necessary alternative actions to raise capital, should this be necessary. Indutrade manages the Group's funding needs centrally. Essentially all external funding is conducted by the Parent Company, which then funds the Group's subsidiaries in local currency. |
|||
| INTEREST RATE RISK | ||||
| Interest rate risk is the risk that unfavourable changes in interest rates will have a significant impact on the Group's net financial items and earnings. |
Indutrade continuously and frequently monitors the interest rate situation and assesses the need to increase the percentage of loans at a fixed interest rate or secure the interest rate with interest rate swaps. |
|||
| CHANGES IN GLOBAL TRADE REGULATIONS | ||||
| Group companies do business in many different countries and in many different markets. Changes in domestic or international import/export regulations on various types of products could result in higher costs or other difficulties for Indutrade's companies. |
Indutrade's companies are active in a wide variety of market segments and geographic locations. As such, the Group's exposure to any one particular area is relatively low. The companies with operations at more high-risk geographic locations work proactively with many activities to minimise the impact of regulation changes. |
Indutrade's companies are domiciled in many different countries. New laws, taxation or rules in various markets could lead to limitations in running operations or stipulate new, higher requirements. Intentional or unintentional violations of trade regulations or international sanctions could result in Group companies incurring fines or becoming subject to various types of sanctions. Indutrade's reputation and competitiveness could be damaged in such situations.
Currency risk is the risk of unfavourable movements in exchange rates affecting consolidated profit and equity measured in SEK:
Long-term sustainability is becoming increasingly important to Indutrade's business in order to: conduct business over the long term with good financial profitability; be able to attract the best talent in the labour market; attract customers and suppliers; and comply with laws and government decisions. If companies belonging to the Group do not identify significant sustainability risks or deficiencies in the management of identified risks, Indutrade may be subject to various forms of sanctions and risk damage to its reputation. This, in turn, could have a negative impact on the Group's earnings and financial position.
Indutrade acquires companies on an ongoing basis, typically, several each year. In 2020, ten companies were acquired. It is important that the acquisition process, and in particular the legal and financial due diligence processes, are both thorough and effective. If the situation (regarding such things as earnings capacity or sustainability issues) for a particular company worsens, Indutrade's reputation or financial performance could be damaged.
An IT incident is the risk of critical data, or one or more of the IT systems in place, being breached such that they become unusable, locked, impaired or destroyed. Indutrade's business is dependent on IT systems functioning as intended. In the event of a drawn out or widespread disruption, or other IT incidents, there is a risk of not being able to run certain operations for a period of time, or, in the worst case, having all areas of operations down, or only being up and running with much difficulty or at much higher costs.
Climate and environmental changes involve risks, but when handled properly, these external factors can be turned into opportunities for Indutrade. Climate change in the form of global warming can lead to economic risks, such as sharply increased energy costs. Extreme weather changes and natural disasters are other examples of risks that can affect the entire Group.
Changed environmental legislation can affect companies' sales of products and solutions, as well as the transport of goods.
With operations in more than 30 countries around the world, business ethics is of utmost importance to Indutrade. Through good business ethics, Indutrade can contribute to a positive development in the entire value chain and minimise the risk of corruption. Unethical behaviour or unmanaged business ethics risks can damage Indutrade's brand and reputation among both entrepreneurs and other stakeholders in the market. Indutrade could also be subject to fines and other legal sanctions.
Pandemics, such as the COVID-19 outbreak, can significantly affect the Group's companies with a risk to employees', customers' and suppliers' health and disruptions in operations; for example, if many people become ill at the same time or are quarantined or if, as a result of actual or feared spread of infection, import or export regulations are introduced that lead to delays, increases in costs or obstacles. It could affect the Group's sales and costs, and thus also its earnings.
Trainings are held for the relevant target groups in order to increase awareness and knowledge of external regulations and internal policies. Risk analyses are also carried out regularly to identify business flows associated with risk. The company does business in regions where there are risks. It has therefore implemented special routines to ensure compliance with regulations.
The Indutrade Group's transaction exposure arises, for example, when subsidiaries import products for sale in the domestic market. Exchange rate effects are eliminated as far as possible through currency clauses in customer contracts and by buying and selling in the same currency. In certain cases, forward contracts are used.
The Group is exposed to a translation risk associated with translation of the accounts of foreign subsidiaries to the Group currency, SEK. This type of currency risk is not hedged at present.
A shared framework is available to all companies as a tool for increasing their skills and ability to work with sustainability in a structured way. A sustainability platform has been implemented that Group companies use to report their sustainability data. Trainings, workshops and network meetings on sustainability are continuously offered. The companies' sustainability work and risks are monitored and discussed each year by their boards of directors.
Acquisitions are carried out by employees who have a great deal of experience. Specialists are also brought in when certain legal and financial expertise is required. Thorough due diligence is always a central component of the acquisition process, thereby minimising the risk associated with acquisitions. Potential acquisitions are evaluated on many aspects, both quantitative and qualitative.
Indutrade's decentralised business model with independent subsidiaries means that only a few companies share their IT platform and infrastructure. Accordingly, the risk of a significant financial impact in the event of a major IT incident for the Group is relatively limited. To lower the risk even further, IT studies have been carried out and documented of the companies' operational risks.
Indutrade has a negative impact on the climate through CO2 emissions from the Group's companies. In 2020, Indutrade started calculating the Group's total carbon dioxide emissions. We are striving to lower our environmental impact by continuously monitoring sustainability data and environmental risks. The level of awareness and demands of customers, suppliers and employees as regards sustainability and the environment are rising and Indutrade's subsidiaries are actively striving to satisfy the growing requirements and expectations on responsible and sustainable solutions. Stimulating and supporting the development and sale of sustainable products is a focus area for the Group.
The risks are minimised through preventive work in the form of general risk analyses and risk analyses in connection with acquisitions.
A Code of Conduct was established in 2015 to ensure that Indutrade's organisation lives up to the Group's values and does not participate in, or can be linked to, unethical business practices. Through good business ethics and corporate governance, the Group can contribute to a positive development in the entire value chain and minimise the risk of corruption. Indutrade's Code of Conduct for Suppliers and Partners stipulates requirements on such things as work with anti-corruption and respect for human rights throughout the supply chain, including subcontractors. An external whistleblower system has been set up and any suspected violations are dealt with by various functions within Group management.
The Group's structure, with its diversified, wide-ranging operations, limits the aggregated business and financial risks in the event of a pandemic.
Furthermore, with its decentralised governance model comprised of more than 200 independent companies, it is possible to quickly make decisions adapted to the local conditions, which is important as regards being able to limit the effects of a pandemic outbreak. In the event of a major crisis, Indutrade engages in more dialogue with its subsidiaries to ensure that there is a correct and rapid dissemination of information and the proper support for making good decisions.
The number of employees was 7,270 at the end of the year, compared with 7,357 at the start of the year. A total of 246 employees have been added during the year through acquisitions. Furthermore, 30 employees left the Group in conjunction with divestments.
During the fourth quarter, most of the programmes involving various types of temporary lay-offs and short-term work, which had been set up at the start of the COVID-19 pandemic, were terminated. Since the end of March 2020, the workforce has been permanently reduced by approximately 320 individuals, corresponding to 4%.
Development of proprietary products is conducted primarily by manufacturing companies, which are mainly in the Benelux, DACH, Fluids & Mechanical Solutions, Measurement & Sensor Technology and UK business areas.
Indutrade's environmental impact is primarily indirect and it occurs via our subsidiaries. Accordingly, most of our environmental initiatives occur in subsidiaries. Indutrade strives to continually reduce its environmental impact via systematic improvement efforts. Most of our subsidiaries are engaged in environmental work, such as more efficient use of energy and natural resources, implementing systems for reuse and recycling of materials and energy, along with preventing/limiting pollution.
In accordance with what is stipulated in Chapter 6 of the Swedish Annual Accounts Act, the Sustainability Report has bee prepared separately. See page 2 for further reference.
Due to the ongoing pandemic, with new virus mutations, the business situation remains uncertain. Demand within the medical technology and pharmaceutical segments is expected to remain high, yet with a somewhat lower rate of growth. With time, as society gradually opens up again and demand improves, companies' market activities and costs will also gradually increase.
During the period up until 19 March, five companies were acquired. More information is available in Note 32.
The guidelines for compensation of senior executives that applied in 2020 are outlined in Note 8. The Company's auditors have performed a review to ensure adherence to the guidelines set by the Annual General Meeting. For the 2021 AGM, the Board intends to propose guidelines for compensation of senior executives in accordance with the following:
A prerequisite for the successful implementation of the company's business strategy and safeguarding of the company's long-term interests, including its sustainability, is that Indutrade is able to recruit and retain management with high qualifications. To this end, the company must offer competitive compensation and other terms of employment, which these guidelines enable. The forms of compensation should motivate members of the executive management to perform their utmost in order to safeguard the interests of the shareholders. For more information about the company's business strategy, please see the company's website: https://www.indutrade.com/about-indutrade/objectives--strategy/.
These guidelines encompass senior executives, i.e. the CEO and other members of the group management (the executive management). For employments governed by rules other than Swedish, customary adjustments may be made for compliance with mandatory rules or established local practice, taking into account, to the extent possible, the overall purpose of these guidelines.
Variable cash compensation covered by these guidelines shall aim to promote the company's business strategy and long-term interests, including its sustainability.
The total compensation shall be on market terms, straightforward, long-term and quantifiable, and may consist of the following components: fixed cash salary, variable cash compensation, pension benefits, as well as other benefits.
The general meeting may also, irrespective of these guidelines, resolve on, among other things, share-related or share price-related compensation (for information about ongoing incentive programmes, please see the company's website:https://www.indutrade.com/ about-indutrade/corporate-governance/renumeration/).
The performance period with respect to criteria for awarding variable salary shall be measured over a period of one or several years. The variable cash compensation may amount to a maximum of 50 percent of the fixed annual salary.
The pension terms for the executive management shall be in line with the going rate in the market in respect of what applies for peer executives in the market in which the executive works, a maximum of 40 percent of the fixed annual salary, and should be based on defined contribution pension solutions or correspond to a public pension plan (in Sweden the ITP plan). Variably salary to members of the executive management not covered by the ITP plan shall not qualify for pension benefits.
Other benefits may include, for example, life insurance, health insurance and company car. Premiums and other costs related to such benefits may amount to not more than 15 percent of the fixed annual salary. Awarding of non-monetary benefits shall facilitate the individuals in the execution of their duties and correspond to what can be considered reasonable in respect of practice in the market in which the respective executive is active.
The notice period for a member of the executive management may not exceed 12 months if the termination is initiated by the company, and 6 months if it is initiated by the individual. Severance pay to a member of the executive management shall in aggregate not exceed 24 months' salary in the event the company serves notice, and 6 months' salary in the event the member of the executive management gives notice.
The variable compensation shall be designed so as to reward the achievement of clear objectives, in straight-forward and transparent structures, and be linked to one or several predetermined and measurable financial criteria, such as sales growth, EBITA-margin or return on operating capital/capital employed. Any non-financial criteria shall be related to sustainability. Financial criteria shall constitute at least 75 percent of all criteria.
Once the period for measuring the satisfaction of criteria for awarding variable cash compensation expires, the outcome will be determined. The Remuneration Committee is responsible for determining the CEO's outcome, while the CEO is responsible for determining the outcome for other members of the executive management. For financial objectives, the assessment shall be based on the latest financial information made public by the company, with any adjustments deemed necessary or reasonable by the Board of Directors.
The terms for variable compensation shall be designed so that the Board of Directors, under exceptional financial conditions, may limit, refuse or redeem payment of variable compensation if such measure is deemed reasonable.
In specific cases, arrangements may be made on one-time variable compensation, provided that such compensation does not exceed an amount corresponding to 10 percent of the fixed annual salary, and is not paid more than once each year per individual. Such compensation shall not qualify for pension benefits unless required by mandatory collective agreement provisions. Resolutions on such compensation shall be made by the Board of Directors based on a proposal from the Remuneration Committee, so far as it concerns the CEO, and by the Remuneration Committee based on a proposal from the CEO, so far as it concerns other senior executives.
No other variable cash compensation shall be paid.
In the preparation of the Board of Directors' proposal for these compensation guidelines, salary and other employment terms for employees of the company have been taken into account by including information on the employees' total compensation, the components of the compensation and increase and growth rate over time, in the Remuneration Committee's and the Board of Directors' basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable.
The Board of Directors has appointed a Remuneration Committee with the task of preparing the Board of Directors' decisions regarding proposal for guidelines for compensation to senior executives. The Board of Directors shall prepare a proposal for new guidelines at least every fourth year, and submit it to the Annual General Meeting.
The Remuneration Committee shall also monitor and evaluate programmes for variable compensation to members of the executive management, as well as the application of the guidelines in terms of compensation levels and structures. Members of the executive management do not participate in the Board of Directors' processing of, and resolutions regarding, compensation-related matters in so far as they are affected by such matters.
The Board of Directors may temporarily resolve to derogate from the guidelines adopted by the general meeting, in whole or in part, if in a specific case there is special cause for the derogation and a derogation is necessary to serve the company's long-term interest, including its sustainability, or to ensure the company's financial viability. As set out above, the Remuneration Committee's tasks include preparing the Board of Directors' resolutions in compensation-related matters, including any resolutions to derogate from the guidelines.
Indutrade applies the Swedish Corporate Governance Code (the Code) since 1 July 2006. The Code is a component of self-regulation in Swedish industry and is based on the "comply or explain" principle. This means that companies that adhere to the Code may depart from individual rules, provided that they give an explanation for each departure. Indutrade has no departures to report for the 2020 financial year. The Corporate Governance Report has been reviewed by the Company's auditors.
Responsibility for management and control of the Group is delegated among the shareholders (via general meetings), the Board, its designated committees and the President in accordance with the Swedish Companies Act, other laws and regulations, applicable rules for listed companies, the Company's Articles of Association and the Board's internal governance documents.
The share capital amounts to SEK 727 million, divided among 363,615,000 shares with a share quota value of SEK 2. All shares have equal voting power. Indutrade, which was previously a wholly owned subsidiary of AB Industrivärden, was introduced on the Stockholm Stock Exchange on 5 October 2005. At year-end 2020 Indutrade had 12,880 shareholders (10,287). The ten largest shareholders controlled 64% of the share capital at year-end. Swedish legal entities, including institutions such as insurance companies and mutual funds, held 62% of the share capital and votes at year-end. Foreign ownership accounted for 32% of the share capital and votes.
One shareholder, L E Lundbergföretagen AB, with 26.6% of the share capital and votes, controlled 10% or more of the share capital and votes at year-end.
Indutrade's shares are listed on Nasdaq Stockholm and are included on the Large Cap list.
According to Ch. 6 § 2 a of the Swedish Annual Accounts Act, listed companies are to provide disclosures about certain conditions that could affect opportunities to take over the company through a public offer to acquire the shares in the company. No such conditions exist in Indutrade AB.
Indutrade is a public company whose business is to "on its own or through subsidiaries, pursue trade in connection with the import and export of machines, raw materials and finished and semi-manufactured products as well as industrial necessities, including production, preferably within the plastics, mechanical and chemical industries, and activities compatible therewith."
The Board shall consist of a minimum of three and a maximum of eight directors, who are elected each year at the Annual General Meeting. Notices of general meetings of shareholders shall be made through advertisement in the Official Swedish Gazette (Post- och Inrikes Tidningar) and on the Company's website within the time frame prescribed by the Swedish Companies Act. An advertisement shall be posted in the Swedish daily newspaper Dagens Nyheter announcing that notice of the Annual General Meeting has been issued. In votes at general meetings of shareholders, there is no limitation to the number of votes for represented shares.
General meetings of shareholders are Indutrade's highest governing body. At the Annual General Meeting (AGM), which is held within six months after the end of each financial year, the income statement and balance sheet are adopted, the dividend is set, the Board and auditors are elected (where applicable), their fees are determined, other items of legally ordained business are conducted, and decisions are made on proposals submitted by the Board and shareholders.
All shareholders who are registered in the shareholder register on a specified record date and who have notified the Company in due time of their intention to participate at the general meeting are entitled to attend the meeting and vote for the total number of shares they have. Shareholders may be represented by proxy. More information about the 2021 AGM is provided on page 95 of this Annual Report and on the company's website.
The notice of the AGM scheduled for 13 April 2021 was published on 5 March 2021 on Indutrade's website, and on 10 March 2021 in the Official Swedish Gazette. The notice includes a proposed agenda including proposals for the dividend, election of directors, directors' fees (broken down by the Chairman and other directors), election of the auditor, the auditor's fee, and proposed guidelines on compensation of the Company's senior executives and a proposal for the establishment of a long-term incentive programme.
External rules and regulations
Examples of external rules and regulations that affect governance of Indutrade
2020 AGM
At the AGM on 2 June 2020, shareholders representing 63.8% of the shares and votes were in attendance. Katarina Martinson was appointed to serve as AGM chairman. The annual report and audit report were presented to the AGM. Chairman of the Board Katarina Martinson provided information on the work of the Board and reported on the guidelines for compensation of the Group Management and on the work of the Audit and Remuneration Committees. In addition, CEO Bo Annvik gave an address reviewing Indutrade's operations in 2019 and the start of 2020.
The auditors reported on their audit of the Group and presented relevant parts of their audit report for 2019.
■ to adopt the financial statements for 2019,
On 4 February 2020, Indutrade held an Extraordinary General Meeting. At that meeting, it was resolved to divest the subsidiary, Meson FT Rus LLC.
On 3 December 2020, Indutrade held an Extraordinary General Meeting. At that meeting, it was resolved that a change would be made to the Articles of Association along with a bonus issue, aimed at increasing the liquidity in the share and further strengthening its financial position.
After the bonus issue the number of shares have tripled and the price per share has been reduced to approximately one third. The record date of the bonus issue was 18 December 2020. The bonus issue did not involve any change in the relationship between shareholders.
Indutrade's Board of Directors, which is elected by the AGM, consists of eight members including the CEO. Indutrade has not set any specific age limit for the board members, nor any term limit for how long a director may sit on the Board. Röster, %
A presentation of the current assignments of the members of the Board can be found on pages 38-39 of this Annual Report. Mattias Karlsson, Mannheimer Swartling are the Board's secretary. Other executives participate at board meetings in a reporting role. 60 70
All of the directors, except for Bo Annvik, are independent in relation to Indutrade. Bo Annvik, Bengt Kjell, Krister Mellvé, Ulf Lundahl and Susanna Campbell are independent in relation to Indutrade's major shareholders. The Board thereby meets the requirement that at least two of the directors who are independent in relation to the Company shall also be independent in relation to the major shareholders. Only one director, Bo Annvik, has an operational role in the Company. 0 10 20 30 40 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Each year the Board adopts a written work plan that governs the Board's work and its internal delegation of duties including the committees, decision-making procedures within the Board, meeting procedure and duties of the Chairman. The Board has also issued instructions for the CEO and instructions on financial reporting to the Board.
In addition, the Board has adopted numerous policies, including, Code of Conduct, a finance policy and an investment policy.
The Board is responsible for the Company's organisation and for the administration of its affairs. This entails ensuring that the organisation is suited for its purpose and designed in such a way so as to ensure satisfactory control of its bookkeeping, treasury management and financial conditions in general. In addition, the Board is responsible for ensuring that the Company has satisfactory internal control and continuously evaluates the extent to which the Company's system for internal control works. The Board is also responsible for developing and monitoring the Company's strategies by drawing up plans and setting objectives. The Board oversees and evaluates the CEO's and operative management's work on a continuous basis. This particular matter is addressed yearly without any members of the Group Management team present.
In accordance with the adopted work plan, the Board holds at least five regular meetings each year, including the statutory meeting after the AGM, and on any other occasions when warranted by the situation.
In 2020, the Board held a total of 16 meetings including the statutory meeting. The Board conducted its work during the year in accordance with the Board's work plan. Matters requiring special attention by the Board during the year pertained to strategy, finance, acquisitions and sustainability.
As a significant part of the Board's work during the year, a number of subsidiary managing directors and business area directors gave in-depth presentations of their businesses.
All decisions made by the Board during the year were unanimous.
The Chairman organises and leads the work of the Board to ensure that it is carried out in compliance with the Swedish Companies Act, other laws and regulations, applicable rules for listed companies (including the Code), and the Board's internal governance documents. The Chairman monitors business activities through regular contact with the CEO and ensures that the other directors are provided with adequate information and decision-making documentation.
To ensure and improve the quality of the Board's work, an evaluation of the work it has done, along with the Board's composition, is carried out each year under the direction of the Chairman of the Board. In 2020, evaluation was carried out via a survey and via qualitative interviews. The results of the evaluation were reported in writing to the board members, who thereafter discussed it together at the board meeting in December. The Chairman of the Board also reported on the results of the evaluation at a meeting of the Nomination Committee.
The Chairman represents the Company on ownership matters.
The Remuneration Committee draws up recommendations for decisions regarding the terms of employment for the CEO. It also addresses and conducts drafting work for issues related to compensation of the members of the Group Management team, which culminates with the submission of a recommendation for decision by the AGM.
The President consults with the Remuneration Committee regarding the terms of employment for other members of the Group Management.
During the year, one of the items discussed by the Remuneration Committee was a proposal for a new long-term incentive programme (LTI) for senior executives.
The committee held four meetings in 2020.
The Audit Committee has an oversight role with respect to the Company's risk management, governance and control, and financial reporting. The committee maintains regular contact with the Company's auditor to ensure that the Company's internal and external reporting satisfies the requirements made on market-listed companies and to discuss the scope and focus of auditing work. The Audit Committee evaluates completed audit activities and informs the Company's nomination committee about
the results of its evaluation and assists the Nomination Committee on drawing up recommendations for auditors and fees for their auditing work. In addition, the Audit Committee evaluates the efficiency of the internal control system and the Group's risk management activities. It also monitors the financial structure.
The committee held five meetings during the year. The auditors participated in several meetings in conjunction with planning and reporting the results of this year's audit.
Fees are payable to the Chairman of the Board and directors in accordance with an AGM resolution. The Chairman receives a fee of SEK 600,000, the Vice Chairman receives a fee of SEK 450,000, and the other directors receive a fee of SEK 300,000 each. However, no fee is payable to directors who are employed by a company within the Indutrade Group. The chairman of the Audit Committee receives a fee of SEK 80,000 per year and each of the committee members receives a fee of SEK 40,000. The chairman and members of the Remuneration Committee each receive a fee of SEK 30,000 per year. The total amount of Board fees and fees to committee members thus amounts to SEK 2,800,000.
At the AGM on 6 May 2013, the decision was made in favour of a standing instruction for Indutrade's nomination committee, which shall apply until further notice. According to this instruction, the Nomination Committee ahead of a forthcoming AGM shall consist of representatives of four of the largest shareholders in terms of votes, plus the Chairman of the Board, who shall also convene the first meeting of the Nomination Committee. The member representing the largest shareholder shall serve as committee chair. The composition of the Nomination Committee ahead of the AGM is to be based on ownership data as per 31 August each year and is to be publicly announced not later than six months prior to the AGM. The composition of the Nomination Committee ahead of the 2021 AGM was announced on 16 September 2020, based on ownership information as per 31 August 2020.
| Representative | Shareholder | Share of votes as per 31 Aug 2020 |
|---|---|---|
| Claes Boustedt | L E Lundbergföretagen, Committee Chair |
26.7% |
| DEC Dick Bergqvist NOV |
JAN AMF insurance and funds FEB |
5.0% |
| Camilla Wirth | Alecta Pensionsförsäkring | 4.4% |
| OKT Henrik Didner |
MA Didner & Gerge funds R |
3.7% |
| Katarina Martinson SEP |
Chairman of the Board APR |
|
| AUG L UJ |
The Nomination Committee held two meetings for which the minutes MAJ were taken in preparation for the 2021 AGM. During those meetings, they discussed, among other things, the evaluation of work done by the NUJ |
The Nomination Committee held two meetings for which the minutes were taken in preparation for the 2021 AGM. During those meetings, they discussed, among other things, the evaluation of work done by the Board during the year past and the composition of the Board of Directors. The Nomination Committee is tasked with drawing up recommendations to be presented to the AGM for resolutions regarding a person to MAJ NUJ
JANUARY Summons to Extraordinary General Meeting, divestment of subsidiary. Acquisition issues.
FEBRUARY Year-end report. Discussion about dividend goals, report from the auditors, the Audit Committee and the Remuneration Committee. Acquisition issues.
MARCH Decisions about Annual Report. Questions prior to the AGM. Business matters, including the COVID-19 pandemic. Financing issues.
APRIL Interim report January – March 2020. Financing and acquisition issues. Report from the Audit Committee.
serve as AGM chairman, the Chairman of the Board and other directors, directors' fees, the auditor's fee and election of the auditor, and the principles for the appointment of a new Nomination Committee.
For its diversity policy, the Nomination Committee has applied item 4.1 of the Swedish Code of Corporate Governance, namely, that the board is to have a composition appropriate to the company's operations, phase of development and other relevant circumstances. The board members elected by the shareholders' meeting are collectively to exhibit diversity and breadth of qualifications, experience and background. The company is to strive for gender balance on the board. The 2020 AGM resolved in accordance with the Nomination Committee's proposal.
Based on the results of the Board's evaluation and the current directors' availability for re-election – among other things – the Nomination Committee makes an assessment of whether the sitting board meets the requirements that will be made for the Board in view of the Company's situation and future orientation, or if the composition of expertise and experience needs to be changed.
The Nomination Committee proposes that Katarina Martinson be elected as Chairman of the Board at the 2021 Annual General Meeting. The Committee also proposes the re-election of directors Susanna Campbell, Bengt Kjell, Ulf Lundahl, Krister Mellvé, Lars Pettersson, Anders Jernhall and Bo Annvik.
The Nomination Committee's proposal entails that the number of directors during the coming mandate period will be unchanged at eight.
A more detailed presentation of the members of the Board is provided on pages 38-39 of this Annual Report.
The CEO is responsible for the administration of Indutrade's day-to-day affairs, which are managed by the Company's Group Management Team. The CEO's decision-making authority regarding investments and financing matters is governed by rules set by the Board.
Bo Annvik has served as CEO of Indutrade AB since April 2017. He was born in 1965 and holds a B.Sc. Econ. He served as President and CEO of Haldex from 2012 to 2017 and served in executive positions for Volvo Cars during the years 1994–2002, for SKF during the years 2002–2007, and for Outokumpu during the years 2007–2011.
ule.
issues.
JUNE AGM. Statutory meeting. Decisions on company signatories, adoption of instructions and policies, appointment of Vice Chairman, Remuneration Committee, Audit Committee, meeting sched-
JUNE Evaluation of acquisitions,
JULY Interim report January – June 2020. Acquisition and investment
SEPTEMBER The Group's strategy, including acquisition and sustainability issues. Investment issues. Company presentations.
competitor analysis.
At the 2020 AGM, the chartered accounting firm PricewaterhouseCoopers AB ("PwC") was elected as auditor for a term extending through the 2021 Annual General Meeting. The auditors maintain regular contact with the Audit Committee and the Group Management.
The chief auditor since 2020 is Anna Rosendal, Authorised Public Accountant. The auditor's fee is reported in Note 11 of this Annual Report.
Indutrade's nine-month interim report for the 2020 financial year was reviewed by the Company's auditors.
NOVEMBER Acquisition issues.
DECEMBER Budget and targets for 2021. Evaluation of the work done by the Board. Evaluation of the CEO and senior executives. Reports from the Remuneration Committee and Audit Committee, including review of internal controls. HR issues.
As prescribed by the Swedish Companies Act, the Board is responsible for internal control. This report has been prepared in accordance with the Annual Accounts Act and describes how the internal control over financial reporting is organised.
Effective board work is the foundation for good internal control. The Board's work plan and the instructions for the CEO and the Board's committees ensure a clear delegation of roles and responsibilities to the benefit of effective management of risks in the Company's operations.
In addition, the Board has adopted a number of fundamental guidelines and policies designed to create the conditions for a good control environment. These include, among other things, Indutrade's Code of Conduct, a policy for economic and financial reporting, a finance policy and an investment policy. These policies are followed up and revised as needed. The Group Management continuously draws up instructions for the Group's financial reporting which, together with the policies adopted by the Board, are included in the Group's manual of instructions and policies. RISKBEDÖMNING ÅTGÄRD INFORMATION OCH KOMMUNIKATION
The Group has a joint reporting system that serves as the base for the Group's monthly reporting, consolidation work and monitoring of earnings performance. UPPFÖLJNING KONTROLLAKTIVITET
The Company has implemented a structured process for assessing risks that could affect financial reporting. This is an annually recurring process and is evaluated by the Audit Committee and the Board.
Through this risk assessment it has been ascertained that the Group's structure, consisting of a large number of standalone companies of varying size that are independent from each other in various sectors and geographic markets, entails a considerable diversification of risk. The risk assessment also covered the Group's income statement and balance sheet items to identify areas in which the aggregate risk for error and the effects of these would be greatest. The areas identified consisted primarily of revenue recognition, trade receivables and inventories.
In addition, continuous risk assessment is conducted in connection with strategic planning, budgeting, forecasts and acquisition activities, aimed at – among other things – identifying events in the market or operations that could give rise to changes in e.g., revenue streams and valuations of assets or liabilities.
The Indutrade Group was organised in eight business areas in 2020. In addition to a business area director, the respective business area management teams include a controller. The controller plays a central role in analysing and monitoring the business area's financial reporting and in ensuring compliance by the companies in the business area with Group policies. The Parent Company has additional functions for continuous analysis and monitoring of financial reporting by the Group, the business areas and subsidiaries. The Parent Company's finance department also initiates work on the annual self assessment routine regarding internal control over financial reporting. The routine was reviewed during the year.
At the start of 2020, all companies owned by Indutrade were required to respond to a questionnaire designed to evaluate internal control based on the risk analysis. The responses were compiled and evaluated. As a complement to this work, the auditors validated parts of the respective companies' completed questionnaires. In addition to this, the controllers of the business areas and Parent Company monitor internal control through visits to a number of companies each year. Both the evaluation performed by the Company and the result of the auditors' validation were reported and discussed with the Audit Committee. Feedback is provided to the companies in the Group where a need for improved routines has been identified. The audit committee also presented the results to the Board. The evaluation of internal control over the Group's financial reporting will serve as documentation for the subsequent years' self assessment and work on further strengthening internal control.
The Company's governing documents, consisting of policies, guidelines and manuals – to the extent that these pertain to financial reporting – are updated on a regular basis and communicated to the companies within the Group. Systems and routines have been established to provide management with reports on the results of operations and financial position in relation to set targets, among other things.
The Board conducts a monthly evaluation of business development, earnings, position and cash flow using a report pack containing comments on outcomes and certain key ratios.
The Audit Committee has an oversight role regarding the Company's financial reporting, risk management, and governance and control. In addition, the Audit Committee maintains regular contact with the Company's auditors to ensure that the Company's internal and external reporting satisfies requirements made on market-listed companies and to monitor any observations that emerge from the audit.
The Group has a simple operative structure consisting primarily of small and medium-sized standalone businesses that are independent of each other, with varying conditions for internal control. Compliance with governance and internal control systems that have been drawn up by the Group is checked by the controllers on a regular basis at the business area and Parent Company levels. In addition, the controllers perform continuing analyses of the companies' reporting and financial outcomes to verify their performance. Added to this is the routine for annual self assessment of internal control over financial reporting. In view of the above, the Board has opted to not have a dedicated internal audit function.
| Katarina Martinson | Bengt Kjell | Susanna Campbell | Anders Jernhall | |
|---|---|---|---|---|
| Position | Chairman since 2018 Director since 2015 Chairman of the Remuneration Committee, member of the Audit Committee |
Vice Chairman since 2013 Director since 2002 Member of the Remuneration Committee |
Director since 2017 | Director since 2018 Member of the Audit Committee |
| Works with asset management for Lundberg family, among others. |
Own investment business | Own investment business | Executive Vice President and CFO of Holmen AB. |
|
| Born | 1981 | 1954 | 1973 | 1970 |
| Citizenship | Swedish | Swedish | Swedish | Swedish |
| Education | M. Sc. Economics, Stockholm School of Economics |
MBA Stockholm School of Economics |
M. Sc. Economics, Stockholm School of Economics |
M. Sc. Economics, Stockholm School of Economics |
| Professional experience | Analyst at Handelsbanken Capital Markets, Vice President of Strategas Research Partners LLC, New York, Analysis of investment strategies investment research at ISA, International Strategy & Investment Group, New York. |
Acting President and CEO of Industrivärden, President and CEO of Handel och Industri AB, Executive Vice President and Head of Investment Operations at Industrivärden, Head of Corporate Finance at Securum, Senior Partner and founder of Navet, Authorised Public Accountant. |
President and CEO of Ratos. Various positions with McKinsey and Company, and Alfred Berg Fondkommission. |
Various positions at Holmen and Citibank. |
| Other directorships | Director of L E Lundbergföretagen, Fastighets AB L E Lundberg, Fidelio Capital, Husqvarna, Förvaltnings AB Lunden and L E Lundberg Kapitalförvaltning. |
Chairman of SSAB and Amasten Fastighets AB. Vice Chairman of Pandox. Director of Industrivärden and others. |
Chairman of Babyshop Group, Röhnisch Sportswear, Estrid Sweden AB and Network of Design (NOD). Director of Nalka Invest, Kinnevik and Northvolt. |
Director of L E Lundberg Kapitalförvaltning. |
| Attendance at Board meetings |
16/16 | 16/16 | 16/16 | 16/16 |
| Attendance at Audit Committee meetings |
5/5 | 5/5 | ||
| Attendance at Remuneration Committee meetings |
4/4 | 4/4 | ||
| Independent of Indutrade and its management |
Yes | Yes | Yes | Yes |
| Independent in relation to major shareholders |
No | Yes | Yes | No |
| Shareholding in Indutrade 1) |
96,840,000 (via L E Lundbergföretagen) |
150,000 | 6,000 | 3,000 |
1) Holdings of shares in Indutrade AB are stated as of 31 December 2020 and they include the holdings of related parties (both individuals and legal entities).
Chairman of the Audit Committee
Position Director since 2006
Katarina Martinson Bengt Kjell Susanna Campbell Anders Jernhall Ulf Lundahl Krister Mellvé Lars Pettersson Bo Annvik
Director since 2012 Director since 2013 Member of the Remuneration Committee
Director since 2017 President and CEO
Auditors PricewaterhouseCoopers AB Anna Rosendal Authorized Public Accountant Born 1975
Chief Auditor of Indutrade since 2020
Other auditing assignments for listed companies: Dometic Group and Addnode Group
Born 1965
Citizenship Swedish Employed since 2017
Education M. Sc. Economics
Professional experience President and CEO of Haldex, executive positions with Volvo Cars, SKF and Outokumpu.
Number of shares 42,000
Number of warrants 100,000
PATRIK JOHNSON
Born 1970 Citizenship Swedish
Employed since 2018
Education M. Sc. Economics
Professional experience CFO Sandvik Machining Solutions and Seco Tools. Various management positions as controller and in accounting/finance at ABB Sweden.
Number of shares 0 Number of warrants 12,000
FRIDA ADRIAN
PETER ERIKSSON
Vice President Communications, Sustainability and IR Born 1977
Citizenship Swedish Employed since 2017
Education M. Sc. Economics Professional experience Head of IR at Mr Green & Co, various
positions in IR, communications and finance at Investor, LF Bank and Svensk Exportkredit.
Number of shares 1,500 Number of warrants 0
Born 1953
Senior Vice President Finland Born 1967
Citizenship Finnish
Employed since 2006 Education MBA, Technical college engineer
Professional experience CEO of Kontram Oy, CEO of Maansähkö Oy, COO and Sales Manager Kontram Oy, Export Manager Kalmar Industries Oy
Number of shares 30,060
Number of warrants 7,000
Senior Vice President Fluids & Mechanical Solutions Born 1955 Citizenship Swedish Employed since 1999 Education B. Sc. Economics, Management studies Professional experience President and Partner Industri Belos, President J Sörling, Group Controller
Transventor, Vice President Parator Number of shares 48,600
Number of warrants 24,000
Head of Group Finance Born 1963 Citizenship Swedish
Employed since 2012
Education M. Sc. Economics Professional experience Group Controller Addtech, Management Consultant KPMG, Financial Manager position at Telia, Financial Manager and Controller positions at SKF
Number of shares 22,014 Number of warrants 4,000
Head of Acquisitions and Business
Citizenship Swedish Employed since 2018
Education B. Sc. Economics, Technical college engineer
Professional experience Director Mergers & Acquisitions SKF Group, CEO Provexa AB, CEO Svenska Skumsläcknings AB
Number of shares 0 Number of warrants 6,000 SUSANN NYBERG
MORGAN O'BRIEN
Senior Vice President Flow Technology Born 1961
Citizenship Irish Employed since 1992 Education Dip. Applied Science / Instrument Physics
Professional experience Managing Director ESI Technologies Ltd
Number of shares 123 Number of warrants 0
PATRIK STOLPE
Citizenship Swedish Employed since 2014
Education B. Sc. Electronics, Industrial Marketing
Professional experience Global Segment Manager Xylem, President and CEO Lorentzen & Wettre.
Number of shares 22,863 Number of warrants 5,000
Senior Vice President UK Born 1968
Citizenship British
Employed since 2009
Education M. Eng. in Materials Science and Technology, MBA
Professional experience Managing Director Precision Products Ltd, Managing Director TelesisEagle Ltd, Group Operations Manager Edward Pryor & Son Ltd
Number of shares 0 Number of warrants 1,000
Senior Vice President DACH Born 1965
Citizenship Swiss
Employed since 2011 Education M.A. HSG Economics
Professional experience Divisional Controller Clariant, member of management Clariant
Number of shares 3,000 Number of warrants 0
Senior Vice President Industrial Components
Citizenship Swedish Employed since 2016
and management studies Professional experience Venture Manager Traction, President Gnosjö Plast, Business Area Manager and Partner Schneidler Grafiska, Senior Consultant
Number of shares 18,000 Number of warrants 6,000
Education M. Sc. Electronics, economics
Born 1967
Accenture.
ÅSA WIRSENIUS
Senior Vice President Benelux Born 1969
Citizenship Dutch
Employed since 1994
Education B. Sc. Mechanical Engineering, studies in business and management
Professional experience Sales Manager Hitma B.V., Managing Director Aluglas B.V., Managing Director Hitma Group B.V.
Number of shares 0
Number of warrants 6,000
Vice President Group Human Resources Born 1977
Citizenship Swedish
Employed since 2018
Education MSc in Human Resources and Organisations Professional experience People
Director Belron UK, HR Director Carglass Nordics, HR positions at ICA, Wasa Barilla and others.
Number of shares 0 Number of warrants 0
JOAKIM SKANTZE
This report describes how the guidelines for executive remuneration of Indutrade AB, adopted by the annual general meeting 2020, were implemented in 2020 (the "Remuneration Guidelines"). The report also provides information on remuneration to the CEO and a summary of the company's outstanding share-related and share price-related incentive plans. The report has been prepared in accordance with the Swedish Companies Act and the Remuneration Rules issued by the Swedish Corporate Governance Board.
Further information on executive remuneration is available in note 8 (Wages, salaries and other remuneration, and social security costs) in the annual report 2020. Information on the work of the remuneration committee in 2020 is set out in the corporate governance report available in the annual report 2020.
Remuneration of the Board of Directors is not covered by this report. Such remuneration is resolved annually by the annual general meeting and disclosed in note 8 in the annual report 2020.
The CEO summarizes the company's overall performance in his statement in the annual report 2020.
A prerequisite for the successful implementation of the company's business strategy and safeguarding of the company's long-term interests, including its sustainability, is that Indutrade is able to recruit and retain management with high qualifications. To this end, the company must offer competitive remuneration and other terms of employment, which the Remuneration Guidelines enable. The forms of remuneration should motivate members of the executive management to perform their utmost in order to safeguard the interests of the shareholders. The total remuneration shall be on market terms, straightforward, long-term and quantifiable, and may consist of the following components: fixed cash salary, variable cash remuneration, pension benefits and other benefits. Variable cash remuneration covered by the Remuneration Guidelines shall aim to promote the company's business strategy and long-term interests, including its sustainability.
The Remuneration Guidelines are included in their entirety in the annual report 2020. During 2020, the company has complied with the applicable Remuneration Guidelines, adopted by the annual general meeting. No deviations from the Remuneration Guidelines have been decided and no derogations from the procedure for implementation of the Remuneration Guidelines have been made. The auditor's report regarding the company's compliance with the Remuneration Guidelines is available on the company's website https://www.indutrade.com/aboutindutrade/corporate-governance/renumeration/. No remuneration has been reclaimed. In addition to remuneration covered by the Remuneration Guidelines, the annual general meeting of the company has previously resolved to implement long-term share-related incentive plans. The plans are clearly linked to the business strategy and the company's long-term value creation by being linked to the development of the share price.
Variable cash remuneration is linked to predetermined and measurable criteria with a clear connection to the company's financial targets. The outcome is entirely related to the fulfilment of the set objective regarding the Group's profit before tax. The Board is responsible for the outcome assessment as regards the CEO. The outcome for the financial year 2020 amounts to 100% of maximum outcome.
In 2020, Indutrade has had one outstanding warrant programme compromising two series for senior executives and other key persons in the Indutrade Group (LTI 2017). The purpose of LTI 2017 is to, in a simple way, reward and retain important employees as well as to promote and create a long-term commitment to the Indutrade Group by the employees' own investments and subsequently attain an increased alignment of interests between the employees and Indutrade's shareholders.
LTI 2017 is a warrant programme comprising approximately 100 senior executives (including the CEO) and other key persons in the Indutrade Group. The participants acquired the warrants in 2017 at a calculated market price. During the term of the programme, Indutrade has paid out a cash subsidy for the number of warrants that the individual is guaranteed, corresponding to a total of 120 percent of the price that the participants paid. Any warrants acquired in excess of the number of warrants that is guaranteed have not been subsidized. The subsidy has been paid out to the participants on two occasions and in equal portions, provided that the participant, at the time of payment, had not disposed of any warrants and that the participant was still employed by the Group and had not resigned or been dismissed. Half of the subsidy was paid out in 2019, and half was paid out in 2020. Shares can be subscribed for during certain specified subscription periods from 27 April, 2020 up to and including Friday, 20 May, 2022 at a subscription price of SEK 81.60 for series I and SEK 92.30 for series II, recalculated after the bonus issue 2:1 in December 2020.
The CEO acquired 40,000 warrants of series I in 2017 within the incentive programme, of which 20,000 was acquired without any cash subsidy. In 2020, all of the warrants were exercised to subscribe for shares.
In addition to this programme, the CEO acquired 100,000 warrants in 2017 via L E Lundbergföretagen, at a calculated marked price, which after the bonus issue 2:1 in December 2020 entitle to subscription of 300,000 shares.
The CEO was not awarded any remuneration in the form of shares during 2020.
| 2020 vs. 2019 |
2019 vs. 2018 |
2018 vs. 2017 |
2017 vs. 2016 |
2016 vs. 2015 |
|
|---|---|---|---|---|---|
| CEO remuneration 1) | |||||
| Annual change in total remuneration (%) |
6% | 0% | 1% | 16%2) | 4% |
| The company's profit development | |||||
| Annual change in profit after tax for the year (%), the Group |
13% | 8% | 33% | 10% | 5% |
| Remuneration to employees 3) | |||||
| Annual change in total remuneration (%), Sweden |
3% | 1% | 3% | 3% | 5% |
| 1) The remuneration refers to the total amount of all remuneration components as reported in the table below. |
2) Bo Annvik is CEO since April 2017. He succeeded Johnny Alvarsson who retired.
3) Calculated based on the average number of employees in full-time equivalents in the Group's companies in Sweden. The number of employees in the parent company, excluding group management, is considered too small to constitute a relevant benchmark.
| Total remuneration to the CEO in 2020 | Base salary | One year variable remuneration |
Multi-year variable remuneration1) |
Benefits2) | Occupational pension3) |
Total remuneration |
|
|---|---|---|---|---|---|---|---|
| Bo Annvik | SEK thousand / Proportion of total remuneration 8,509 / 52% | 4,380 / 27% | 25 / 0% | 436 / 2% | 3,066 / 19% | 16,416 |
1) The subsidy cost for the year, related to the incentive programme described above. In 2020, TSEK 180 was disbursed.
2) Refers mainly to double housing (housing, garage and home travels), as well as car and fuel.
3) Only base salary qualifies for pension benefits.
The chart refers to costs accounted for regarding remuneration to the CEO. Base salary refers to monthly salary, holiday pay and other taxable expense allowances. One year variable cash remuneration refers to a short-term incentive program for year 2020, which is paid in the beginning of the following year. Multi-year variable remuneration refers to cost accounted for regarding the long-term incentive program described above.
| (SEK million) | |
|---|---|
| Share premium reserve | 199 |
| Reserve for fair value | –4 |
| Retained earnings | 5,023 |
| Net profit for the year | 1,138 |
| Total | 6,356 |
| Dividend of SEK 1.80 per share | 655 |
|---|---|
| To be carried forward | 5,701 |
| Total | 6,356 |
The dividend proposed by the Board of Directors corresponds to 9% of the Parent Company's equity and 8% of the Group's equity. Indutrade's dividend policy is that the dividend shall, over time, amount to between 30% and 50% of net profit.
In light of the expected economic development, the Board is of the opinion that the proposed dividend is well balanced with respect to the goals, scope and risks of the operations and with respect to the ability to meet the Company's future obligations.
If the dividend had been paid out at year-end, the Group's equity ratio would have been 44%. After payment of the proposed dividend, it is judged that Indutrade will continue to have a favourable financial position.
The Board of Directors and President certify that the consolidated financial statements and annual report have been prepared in accordance with International Financial Reporting Standards (IFRS) and generally accepted accounting principles and give a true and fair presentation of the Group's and Parent Company's position and result of operations. The Directors' Report for the Group and Parent Company gives a true and fair overview of the Group's and Parent Company's operations, position and result of operations and describes material risks and uncertainties facing the Parent Company and companies included in the Group.
The Group's and Parent Company's result of operations and position in general are shown in the following income statements, balance sheets, cash flow statements and notes.
Stockholm March 19, 2021
Katarina Martinson Chairman of the Board
Bengt Kjell Vice Chairman of the Board Susanna Campbell Director
Anders Jernhall Director
Ulf Lundahl Director
Krister Mellvé Director
Lars Pettersson Director
Bo Annvik President and CEO, Director
Our audit report was submitted on March 19, 2021
PricewaterhouseCoopers AB
Anna Rosendal Authorized Public Accountant Lead Partner
| Financial statements | Page | |
|---|---|---|
| Consolidated financial statements | 45-49 | |
| Parent Company financial statements | 50-53 | |
| Notes | Page | |
| 1 Accounting and valuation principles | 54 | |
| 2 Risks and risk management | 55 | |
| 3 Segment reporting | 59 | |
| 4 Revenue from Contracts with Customers | 61 | |
| 5 Income statements classified by type of cost | 62 | |
| 6 Other operating income/expenses | 62 | |
| 7 Average number of employees | 62 | |
| 8 | Wages, salaries and other remuneration, and social security costs |
63 |
| 9 Depreciation/amortisation | 65 | |
| 10 Government assistance | 66 | |
| 11 Auditors' fees | 66 | |
| 12 Financial income | 66 | |
| 13 Financial expenses | 66 | |
| 14 Profit from participation in Group companies | 67 | |
| 15 Income Tax | 67 | |
| 16 Intangible assets | 69 |
| Page | |
|---|---|
| 17 Property, plant and equipment | 71 |
| 18 Leases | 73 |
| 19 Shares and participations | 75 |
| 20 Non-current receivables | 76 |
| 21 Inventories | 76 |
| 22 Trade receivables | 76 |
| 23 Prepaid expenses | 77 |
| 24 Non-current and current interest-bearing liabilities | 77 |
| 25 Pension obligations | 78 |
| 26 Other provisions | 81 |
| 27 Accrued expenses | 81 |
| 28 Pledged assets | 81 |
| 29 Contingent liabilities | 81 |
| 30 Cash and cash equivalents | 81 |
| 31 Cash flow | 82 |
| 32 Acquisitions and divestments of subsidiaries | 83 |
| 33 Related party transactions | 85 |
| 34 Events after the balance sheet date | 85 |
| 35 Disclosures about Parent Company | 85 |
| 36 Tax allocation reserves | 85 |
| SEK million Note |
2020 | 2019 |
|---|---|---|
| Net sales 3, 4 |
19,217 | 18,411 |
| Cost of goods sold | –12,681 | –12,126 |
| Gross profit | 6,536 | 6,285 |
| Development costs | –227 | –217 |
| Selling costs | –3,009 | –2,990 |
| Administrative expenses | –1,123 | –1,103 |
| Other operating income 6 |
345 | 153 |
| Other operating expenses 6 |
–256 | –112 |
| Operating profit 5, 8, 9, 10, 11 |
2,266 | 2,016 |
| Financial income 12 |
18 | 145 |
| Financial expenses 13 |
–144 | –269 |
| Profit after financial items | 2,140 | 1,892 |
| Tax 15 |
–471 | –409 |
| Net profit for the year | 1,669 | 1,483 |
| Profit attributable to | ||
| Equity holders of the parent company | 1,669 | 1,482 |
| Non-controlling interests | 0 | 1 |
| Earnings per share attributable to equity holders of the parent, SEK 1) | 4.60 | 12.26 |
| Earnings per share after dilution, attributable to equity holders of the parent, SEK 1) | 4.59 | 12.26 |
| Average number of shares before dilution, '000 | 362,721 | 362,565 |
| Average number of shares after dilution, '000 | 363,320 | 362,754 |
| Proposed dividend per share, SEK | 1.80 | – |
1) A 2:1 bonus issue was executed during December 2020. All comparison figures have been restated for the new number of shares.
For information about dilution, see Directors' report page 29.
| SEK million | Note | 2020 | 2019 |
|---|---|---|---|
| Net profit for the year | 1,669 | 1,483 | |
| Other comprehensive income | |||
| Items that can be reversed into income statement | |||
| Fair value adjustment of hedge instruments | 2 | 4 | –2 |
| Tax attributable to fair value adjustments | 15 | –1 | 0 |
| Exchange rate differences | –279 | 109 | |
| Items that cannot be reversed into income statement | |||
| Actuarial gains/losses | 25 | –16 | –79 |
| Tax on actuarial gains/losses | 15 | 3 | 16 |
| Other comprehensive income, net of tax | –289 | 44 | |
| Total comprehensive income for the period | 1,380 | 1,527 | |
| Comprehensive income attributable to | |||
| Equity holders of the parent company | 1,380 | 1,526 | |
| Non-controlling interests | 0 | 1 |
Order intake amounted to SEK 19,595 million (18,653) for the financial year, which is an increase of 5%. Comparable units increased by 2%, acquisitions contributed 6%, divestments had an effect of –1%, and the effect of currency movements was –2%.
During the year, net sales increased by 4% to SEK 19,217 (18,411) million. Comparable units were unchanged, acquisitions contributed 6%, divestments had an effect of –1% and currency movements –1%.
For the full year, operating profit before amortisation of intangible assets attributable to acquisitions (EBITA) amounted to SEK 2,615 million (2,330), an increase of 12%. Comparable units increased by 7%, acquisitions contributed 7% and currency movements with –2%. Divestments had a marginal effect. The EBITA margin increased and amounted to 13.6% (12.7%). The gross margin amounted to 34.0% (34.1%).
Net financial items for the full year amounted to SEK –126 million (–124). Tax on profit for the year was SEK –471 million (–409), corresponding to a tax charge of 22% (22%). Profit for the period grew 13% and amounted to SEK 1,669 million (1,483). Earnings per share before dilution increased by 12% and amounted to SEK 4.60 (4.09).
| SEK million | 3 958 Jan–Mar mkr |
820 Apr–Jun mkr |
Jul–Sep | Oct–Dec |
|---|---|---|---|---|
| Net sales | 4,976 | 4,614 | 4,599 | 5,028 |
| EBITA | 616 | 602 | 685 | 712 |
| EBITA margin, % | 12.4 | 13.0 | 14.9 | 14.2 |
| Förvärv Profit after tax 10 953 |
388 | 370 | 458 | 453 |
| mkr Earnings per share, SEK |
1.07 | 1.02 | 1.27 | 1.24 |
| SEK million | Note | 31 Dec 2020 |
31 Dec 2019 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | |||
| Goodwill | 4,306 | 4,031 | |
| Agencies, customer relationships, etc. | 2,212 | 2,189 | |
| Trademarks | 311 | 303 | |
| Software, licences, etc. | 66 | 72 | |
| Other intangible assets | 104 | 108 | |
| Total intangible assets | 16 | 6,999 | 6,703 |
| Property, plant and equipment | |||
| Land and buildings | 17 | 1,155 | 1,091 |
| Machinery | 17 | 559 | 609 |
| Equipment | 17 | 280 | 266 |
| Construction-in-progress and advances for property, plant and equipment |
17 | 73 | 54 |
| Right-of-use assets | 18 | 1,039 | 982 |
| Total property, plant and equipment | 3,106 | 3,002 | |
| Financial assets | |||
| Holdings of shares and participation in unlisted companies |
19 | 12 | 14 |
| Non-current receivables | 20 | 64 | 34 |
| Deferred tax assets | 15 | 152 | 134 |
| Total financial assets | 228 | 182 | |
| Total non-current assets | 10,333 | 9,887 | |
| Current assets | |||
| Inventories | 21 | 3,307 | 3,400 |
| Trade receivables | 22 | 2,925 | 3,025 |
| Contract assets | 4 | 135 | 110 |
| Mkr Current tax assets 2 500 |
25 | % 30 25 |
|
| Other current receivables | 304 | 183 | |
| 2 000 Prepaid expenses |
23 | 175 | 20 190 |
| Cash and cash equivalents 1 500 |
30, 31 | 758 | 719 15 |
| Total current assets 1 000 |
7,629 | 7,657 10 |
|
| TOTAL ASSETS | 17,962 | 17,544 |
| EBITA and return on capital employed | |
|---|---|
| SEK million | Note | 31 Dec 2020 |
31 Dec 2019 |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Share capital | 727 | 242 | |
| Reserves | 121 | 397 | |
| Retained earnings incl. net profit for the year |
7,776 | 6,518 | |
| Total equity attributable to owners of the parent |
8,624 | 7,157 | |
| Non-controlling interests | 10 | 13 | |
| Total equity | 8,634 | 7,170 | |
| Non-current liabilities | |||
| Non-current interest-bearing liabilities | 18, 24, 31 |
4,050 | 4,330 |
| Other non-current liabilities | 1 | 2 | |
| Pension obligations | 25 | 400 | 377 |
| Deferred tax liabilities | 15 | 749 | 706 |
| Other provisions | 26 | 20 | 12 |
| Total non-current liabilities | 5,220 | 5,427 | |
| Current liabilities | |||
| Current interest-bearing liabilities | 18, 24, 31 |
1,186 | 2,142 |
| Trade payables | 1,136 | 1,237 | |
| Contract liabilities | 4 | 109 | 150 |
| Current tax liabilities | 202 | 159 | |
| Other current liabilities | 516 | 400 | |
| Accrued expenses | 27 | 959 | 859 |
| Total current liabilities | 4,108 | 4,947 | |
| TOTAL EQUITY AND LIABILITIES | 17,962 | 17,544 |
Information on pledged assets and contingent liabilities is provided in Notes 28 and 29.
The return on capital employed was 19% (19%), and the return on equity was 21% (22%).
Shareholders' equity amounted to SEK 8,634 million (7,170) and the equity ratio was 48% (41%). Cash and cash equivalents amounted to SEK 758 million (719). In addition to this, the Group had unutilised credit commitments of SEK 4,895 million (3,258). Interest-bearing net debt at the end of the period was SEK 4,878 million (6,130). The decline compared to last year was primarily attributable to the strong cash flow, a somewhat lower rate of acquisition and not having paid dividends for 2020. The net debt/equity ratio was 56% (85%) at year end.
| Attributable to equity holders of the parent company |
||||||
|---|---|---|---|---|---|---|
| SEK million | Share capital |
Reserves | Retained earnings |
Total | Non-controlling interests |
Total equity |
| OPENING BALANCE, 1 JANUARY 2019 | 242 | 290 | 5,673 | 6,205 | 13 | 6,218 |
| ADJUSTED OPENING BALANCE DUE TO CHANGED ACCOUNTING POLICY IFRS 16 |
–28 | –28 | –28 | |||
| ADJUSTED OPENING BALANCE | 242 | 290 | 5,645 | 6,177 | 13 | 6,190 |
| Comprehensive income | ||||||
| Net profit for the year | – | – | 1,482 | 1,482 | 1 | 1,483 |
| Other comprehensive income | ||||||
| Fair value adjustment of hedge instruments | – | –2 | – | –2 | – | –2 |
| Tax attributable to fair value adjustments | – | 0 | – | 0 | – | 0 |
| Actuarial gains/losses | – | – | –79 | –79 | – | –79 |
| Tax on actuarial gains/losses | – | – | 16 | 16 | – | 16 |
| Exchange rate differences | – | 109 | – | 109 | 0 | 109 |
| Total comprehensive income | – | 107 | 1,419 | 1,526 | 1 | 1,527 |
| Transactions with shareholders | ||||||
| Acquisitions of non-controlling interests | – | – | –2 | –2 | 0 | –2 |
| Sale of shares with non-controlling interests | – | – | – | – | 0 | 0 |
| Dividend paid for 2018 | – | – | –5441) | –544 | –1 | –545 |
| Total transactions with shareholders | – | – | –546 | –546 | –1 | –547 |
| OPENING BALANCE, 1 JANUARY 2020 | 242 | 397 | 6,518 | 7,157 | 13 | 7,170 |
| Comprehensive income | ||||||
| Net profit for the year | – | – | 1,669 | 1,669 | 0 | 1,669 |
| Other comprehensive income | ||||||
| Fair value adjustment of hedge instruments | – | 4 | – | 4 | – | 4 |
| Tax attributable to fair value adjustments | – | –1 | – | –1 | – | –1 |
| Actuarial gains/losses | – | – | –16 | –16 | – | –16 |
| Tax on actuarial gains/losses | – | – | 3 | 3 | – | 3 |
| Exchange rate differences | – | –279 | – | –279 | 0 | –279 |
| Total comprehensive income | – | –276 | 1,656 | 1,380 | 0 | 1,380 |
| Transactions with shareholders | ||||||
| Acquisitions of non-controlling interests | – | – | – | – | – | – |
| Sale of shares with non-controlling interests | – | – | – | – | –3 | –3 |
| Dividend paid for 2019 | – | – | – 2) | – | – | – |
| New issues | 0 | – | 87 | 87 | – | 87 |
| Bonus issue | 485 | – | –485 | – | – | – |
| Total transactions with shareholders | 485 | – | –398 | 87 | –3 | 84 |
| CLOSING BALANCE, 31 DECEMBER 2020 | 727 | 121 | 7,776 | 8,624 | 10 | 8,634 |
1) The dividend per share for 2018 amounted to SEK 1.50 restated for the 2:1 bonus issue in December 2020.
2) The dividend per share for 2019 amounted to SEK 0. The proposed dividend per share for 2020 amounts to SEK 1.80.
| SEK million | Note | 2020 | 2019 |
|---|---|---|---|
| Operating activities | |||
| Operating profit | 2,266 | 2,016 | |
| Adjustment for | |||
| Depreciation/amortisation | 9, 16, 17 | 996 | 899 |
| Adjustment of contingent consideration | 32 | –208 | –30 |
| Net profit from sale of operations, property, plant and equipment, intangible assets and shares | –69 | 7 | |
| Other non-cash items | 208 | 19 | |
| Paid tax | –508 | –512 | |
| Change in working capital | |||
| Inventories | 66 | –291 | |
| Trade receivables | 35 | 123 | |
| Trade payables | –58 | –43 | |
| Other operating assets and liabilities, net | 155 | –138 | |
| Interest received | 18 | 13 | |
| Interest paid | –92 | –97 | |
| Other financial items | –29 | –44 | |
| Cash flow from operating activities | 2,780 | 1,922 | |
| Investing activities | |||
| Acquisitions of subsidiaries and operations | 32 | –1,024 | –1,513 |
| Sales of subsidiaries and operations | 32 | 46 | 29 |
| Acquisitions of property, plant and equipment | 17 | –390 | –386 |
| Sales of property, plant and equipment | 17 | 28 | 20 |
| Acquisitions of intangible non-current assets | 16 | –37 | –37 |
| Decrease in financial assets | 12 | 4 | |
| Increase in financial assets | –1 | –1 | |
| Cash flow from investing activities | –1,366 | –1,884 | |
| Financing activities | |||
| Borrowings | 31 | 2,936 | 5,082 |
| Repayment of debt | 31 | –3,976 | –4,201 |
| Amortisation leasing | 18, 31 | –367 | –340 |
| Mkr Dividend paid out |
– | –544 | |
| 3 000 New issues |
87 | – | |
| Payment for issued warrants 2 500 |
– | – | |
| Cash flow from financing activities 2 000 |
–1,320 | –3 | |
| Cash flow for the year 1 500 |
94 | 35 | |
| Cash and cash equivalents at start of year 1 000 |
719 | 708 | |
| Exchange rate differences in cash and cash equivalents | –55 | –24 | |
| 500 Cash and cash equivalents at end of year |
30, 31 | 758 | 719 |
Cash flow from operating activities amounted to SEK 2,780 million (1,922) for the full year. Cash flow after net capital expenditures in intangible non-current assets and in property, plant and equipment (excluding company acquisitions) was SEK 2,381 million (1,519).
The Group's net capital expenditures, excluding company acquisitions, totalled SEK 399 million (403). Depreciation of property, plant and equipment totalled SEK 600 million (550).
Investments in company acquisitions amounted to SEK 908 million (1,415). In addition, earn-out payments for previous years' acquisitions totalled SEK 116 million (97). Divestments amounted to SEK 46 million (28).
The main functions of Indutrade AB are to take responsibility for business development, acquisitions, financing, business control, analysis and communication. The Parent Company's net sales, which consist entirely of internal invoicing of services, amounted to SEK 8 million (7) for the year. The Parent Company's financial assets consist mainly of shares in subsidiaries. During the year,
the Parent Company acquired shares in four new companies. The Parent Company has not made any major investments in intangible assets or in property, plant and equipment. The number of employees on 31 December was 19 (19). Receivables and payables to Group companies primarily consist of loans granted and received to and from subsidiaries.
| SEK million | Note | 2020 | 2019 |
|---|---|---|---|
| Net sales | 8 | 7 | |
| Gross profit | 8 | 7 | |
| Administrative expenses | 5 | –117 | –120 |
| Other operating income and expenses | 6 | – | – |
| Operating profit | 8, 9, 10, 11 | –109 | –113 |
| Financial income | 12 | 130 | 214 |
| Financial expenses | 13 | –109 | –231 |
| Profit from participations in Group companies | 14 | 894 | 981 |
| Profit after financial items | 806 | 851 | |
| Group contributions received | 498 | 741 | |
| Group contributions rendered | –93 | –87 | |
| Change in tax allocation reserve | –2 | –26 | |
| Excess depreciation of equipment | 0 | 0 | |
| Profit before taxes | 1,209 | 1,479 | |
| Tax | 15 | –71 | –108 |
| Net profit for the year | 1,138 | 1,371 |
| SEK million | Note | 2020 | 2019 |
|---|---|---|---|
| Net profit for the year | 1,138 | 1,371 | |
| Other comprehensive income | |||
| Items that can be reversed into income statement | |||
| Fair value adjustment of hedge instruments | 2 | –1 | 0 |
| Tax attributable to fair value adjustments | 15 | 0 | 0 |
| Other comprehensive income, net of tax | –1 | 0 | |
| Total comprehensive income for the period | 1,137 | 1,371 |
| SEK million | Note | 31 Dec 2020 |
31 Dec 2019 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | |||
| Software and licences | 16 | 0 | 0 |
| Property, plant and equipment | |||
| Equipment | 17 | 1 | 1 |
| Financial assets | |||
| Participations in Group companies | 19 | 6,210 | 5,919 |
| Non-current receivables | 20 | 38 | 13 |
| Deferred tax assets | 15 | 5 | 4 |
| Total financial assets | 6,253 | 5,936 | |
| Total non-current assets | 6,254 | 5,937 | |
| Current assets | |||
| Current receivables | |||
| Receivables from Group companies | 6,683 | 6,804 | |
| Other receivables | 157 | 35 | |
| Prepaid expenses | 23 | 21 | 22 |
| Total current receivables | 6,861 | 6,861 | |
| Cash and cash equivalents | 30 | 0 | 0 |
| Total current assets | 6,861 | 6,861 | |
| TOTAL ASSETS | 13,115 | 12,798 |
| SEK million | Note | 31 Dec 2020 |
31 Dec 2019 |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Restricted equity | |||
| Share capital | 35 | 727 | 242 |
| Statutory reserve | 5 | 5 | |
| 732 | 247 | ||
| Unrestricted equity | |||
| Share premium reserve | 199 | 112 | |
| Reserve for fair value | –4 | –3 | |
| Retained earnings | 5,023 | 4,137 | |
| Net profit for the year | 1,138 | 1,371 | |
| 6,356 | 5,617 | ||
| Total equity | 7,088 | 5,864 | |
| Untaxed reserves | |||
| Tax allocation reserve | 36 | 675 | 673 |
| Excess depreciation of equipment | 0 | 0 | |
| Total untaxed reserves | 675 | 673 | |
| Non-current liabilities | |||
| Non-current interest-bearing liabilities | 24 | 2,893 | 3,257 |
| Pension obligations | 25 | 20 | 17 |
| Deferred tax liabilities | 15 | 0 | 5 |
| Total non-current liabilities | 2,913 | 3,279 | |
| Current liabilities | |||
| Current interest-bearing liabilities | 24 | 757 | 1,629 |
| Trade payables | 4 | 5 | |
| Liabilities to Group companies | 1,626 | 1,301 | |
| Other current liabilities | 15 | 12 | |
| Current tax liabilities | 0 | 0 | |
| Accrued expenses | 27 | 37 | 35 |
| Total current liabilities | 2,439 | 2,982 | |
| TOTAL EQUITY AND LIABILITIES | 13,115 | 12,798 |
Information on pledged assets and contingent liabilities is provided in Notes 28 and 29.
| SEK million | Share capital | Reserves | Share premium reserve |
Reserve for fair value |
Retained earnings |
Total |
|---|---|---|---|---|---|---|
| OPENING BALANCE, 1 JANUARY 2019 | 242 | 5 | 112 | –3 | 4,681 | 5,037 |
| Comprehensive income | ||||||
| Net profit for the year | – | – | – | – | 1,371 | 1,371 |
| Other comprehensive income | ||||||
| Fair value adjustment of hedge instruments | – | – | – | 0 | – | 0 |
| Tax attributable to fair value adjustments | – | – | – | 0 | – | 0 |
| Total comprehensive income | – | – | – | 0 | 1,371 | 1,371 |
| Transactions with shareholders | ||||||
| Dividend paid for 2018 | – | – | – | – | –5441) | –544 |
| Total transactions with shareholders | – | – | – | – | –544 | –544 |
| OPENING BALANCE, 1 JANUARY 2020 | 242 | 5 | 112 | –3 | 5,508 | 5,864 |
| Comprehensive income | ||||||
| Net profit for the year | – | – | – | – | 1,138 | 1,138 |
| Other comprehensive income | ||||||
| Fair value adjustment of hedge instruments | – | – | – | –1 | – | –1 |
| Tax attributable to fair value adjustments | – | – | – | 0 | – | 0 |
| Total comprehensive income | – | – | – | –1 | 1,138 | 1,137 |
| Transactions with shareholders | ||||||
| Dividend paid for 2019 | – | – | – 2) | – | – | – |
| New issues | 0 | – | 87 | – | – | 87 |
| Bonus issue | 485 | – | – | – | –485 | – |
| Total transactions with shareholders | 485 | – | 87 | – | –485 | 87 |
| CLOSING BALANCE, 31 DECEMBER 2020 | 727 | 5 | 199 | –4 | 6,161 | 7,088 |
1) The dividend per share for 2018 amounted to SEK 1.50 restated for the 2:1 bonus issue in December 2020.
2) The dividend per share for 2019 amounted to SEK 0. The proposed dividend per share for 2020 amounts to SEK 1.80.
| SEK million | Note | 2020 | 2019 | |
|---|---|---|---|---|
| Operating activities | ||||
| Operating profit | –109 | –113 | ||
| Adjustment for | ||||
| Depreciation, amortisation and impairment losses | 9, 16, 17 | 1 | 0 | |
| Net profit for sale of operations | – | 0 | ||
| Other non-cash items | 7 | 4 | ||
| Paid tax | –119 | –169 | ||
| Change in working capital | ||||
| Trade receivables | 0 | 0 | ||
| Trade payables | –2 | 2 | ||
| Other operating assets and liabilities, net | 176 | –1,477 | ||
| Interest received | 130 | 90 | ||
| Interest paid | –68 | –74 | ||
| Group contributions received and dividend income | 1,548 | 1,644 | ||
| Other financial items | –40 | –33 | ||
| Cash flow from operating activities | 1,524 | –126 | ||
| Investing activities | ||||
| Acquisitions of subsidiaries | 19 | –268 | –418 | |
| Divestment of subsidiaries | – | 0 | ||
| Acquisitions of non-current intangible assets and property, plant and equipment | 16,17 30 |
|||
| Cash flow from investing activities | –269 | –418 | ||
| Financing activities | ||||
| Borrowings | 2,947 | 5,073 | ||
| Repayment of debt | –4,289 | –4,185 | ||
| Dividend paid out | – | –544 | ||
| New issues | 87 | – | ||
| Cash flow from financing activities | –1,255 | 344 | ||
| Cash flow for the year | 0 | –200 | ||
| Cash and cash equivalents at start of year | 0 | 200 | ||
| Cash and cash equivalents at end of year | 0 | 0 |
Unless otherwise stated, all amounts in the notes are in SEK million. Rounding-off differences may occur.
The symbols IS and BS indicate amounts in the notes that can be found in the income statement or balance sheet, respectively.
The Indutrade Group markets and sells components, systems and services with a high-tech content to industrial companies in selected niches. Business is conducted via more than 200 subsidiaries in 30 countries. Indutrade's shares have been listed on Nasdaq Stockholm since 2005.
The Group is structured into eight business areas.
The Parent Company is a limited liability company with registered office in Stockholm.
This annual report was approved by the Board of Directors for publication on 19 March 2021. The consolidated and parent company income statements and balance sheets will be presented for adoption by the Annual General Meeting on 13 April 2021.
Overarching accounting principles and new standards are reported below. Other important accounting principles are reported in connection with the respective notes.
The consolidated accounts of the Indutrade Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed by the European Union as well as with RFR 1 and the Swedish Annual Accounts Act. Assets and liabilities have been accounted for at historical cost, except for with respect to revaluations of financial assets and liabilities (including derivative instruments), which are measured at fair value.
Preparation of financial statements in accordance with IFRS requires the use of a number of important accounting estimations. Further, application of the Company's accounting principles requires that management makes certain assessments. Areas that involve a high degree of assessment, or areas in which assumptions and estimations are of material significance for the consolidated financial statements, are described below in the section "Important estimations and assumptions for accounting purposes".
There are no new IFRSs or IFRIC pronouncements endorsed that have had a significant impact on the Group's result of operations and position in 2020.
No newly issued IFRSs or interpretations have been applied prospectively.
There are no new IFRSs or IFRIC pronouncements endorsed that will have a significant impact on the Group's result of operations and position in 2021.
No newly issued IFRSs or interpretations have been applied prospectively.
The consolidated accounts include subsidiaries in which the Group directly or indirectly has control. Subsidiaries are included in the consolidated accounts from the date control is transferred to the Group. They are excluded from the consolidated accounts from the date control ceases.
The purchase method is used for reporting of the Group's business acquisitions. The consideration for acquisition of a subsidiary is comprised of the fair value of what has been paid in cash and the fair value of liabilities arising from contingent earn-out payments, i.e. the fair value of acquired assets and liabilities, along with goodwill arising from the acquisition. Transaction costs in connection with acquisitions are recognised directly in profit for the year as other operating expenses. In cases where contingent earn-out payment is remeasured at fair value, this is recognised in operating profit. Identifiable, acquired assets and liabilities taken over in a business acquisition are initially measured at fair value as per the acquisition date.
For each acquisition, the Group determines if non-controlling interests in the acquired company are to be stated at the holding's proportional share of the fair value of identifiable net assets, excluding goodwill (partial goodwill), or at fair value, which entails that goodwill is also reported for non-controlling interests (full goodwill). Subsequent acquisitions up to 100% are reported as equity transactions.
Goodwill is initially carried at the amount in which the total purchase price and non-controlling interests exceed the fair value of identifiable, acquired assets and liabilities taken over.
Intra-Group transactions and balance sheet items as well as unrealised gains and losses on transactions between Group companies are eliminated.
The Group treats transactions with non-controlling interests as transactions with the Group's shareholders. Transactions with noncontrolling interests are reported in equity.
Non-current assets and non-current liabilities consist essentially of amounts that are expected to be recovered or paid more than 12 months from the balance sheet date. Current assets and current liabilities consist essentially of amounts that are expected to be recovered or paid within 12 months from the balance sheet date.
Items that are included in the financial statements for the Group's various units have been valued in the currency that is used in the economic environment in which the respective company mainly operates (the functional currency). In the consolidated accounts, Swedish kronor (SEK) is used, which is the Parent Company's functional and reporting currency. The earnings and financial position of all Group companies that have a different functional currency than their reporting currency are translated to the Group's reporting currency in accordance with the following:
Goodwill and fair value adjustments that arise in connection with the acquisition of a foreign business are treated as assets and liabilities in the acquired business and are translated at the exchange rate in effect on the balance sheet date.
Transactions in foreign currencies are translated to the functional currency at the exchange rate in effect on the transaction date. Exchange
rate gains and losses that arise upon payment in such transactions and when translating monetary assets and liabilities in foreign currencies at the exchange rate on the balance sheet date are recognised in profit or loss. An exception to this rule is applied for transactions that constitute hedges that meet the conditions for hedge accounting of cash flows or of net investments, for which gains/losses are recognised in other comprehensive income.
Exchange rate differences that arise upon translation or recognition of operating assets/liabilities are reported as other income/expenses, while exchange rate differences that arise upon payment of financial assets/liabilities are reported as financial income/expenses.
The Group makes estimations and assumptions about the future. By definition, the estimations for accounting purposes that are a consequence of these rarely match the actual outcome. This primarily applies to assessments of: testing for impairment of goodwill, defined benefit pension obligations, discount rate for leasing and the duration of the lease. Assumptions and estimations are evaluated continuously and are based on historical experience and anticipations of future events that are considered to be reasonable under prevailing conditions.
The Parent Company accounts have been prepared in accordance with the Swedish Annual Accounts Act and RFR 2, Reporting for Legal Entities. According to RFR 2, in the annual report for a legal entity, the Parent Company shall apply all IFRSs and statements endorsed by the EU as far as possible within the confines of the Annual Accounts Act and taking into account the connection between reporting and taxation. The recommendation indicates which exceptions and amendments are to be applied with respect to IFRS.
Participations in Group companies are reported in the Parent Company using the cost method. In the Parent Company, a change in the liability for contingent earn-out payments affects the value of participations in subsidiaries. Contingent earn-out payments are reported in the Parent Company when it is certain or probable that the obligation will arise.
Untaxed reserves are reported in the Parent Company including deferred tax liabilities and not as in the Group (broken down into deferred tax liabilities and equity).
Group contributions are reported gross as appropriations in accordance with the alternative rule in RFR 2.
The Group mainly has the following financial instruments: trade receivables, cash and cash equivalents, trade payables, borrowings, contingent earn-out payments and derivative instruments.
Indutrade's trade payable typically fall due within 6 months, which is why they are classified as current liabilities. Initially, trade payables are measured at fair value and thereafter at amortised cost.
Derivative instruments are reported at fair value in the balance sheet as per the contract date, both initially and for subsequent revaluations. The method for reporting the profit of loss that arises with revaluation depends on how the derivative was identified. The Group identifies certain derivatives as a hedge on a highly probable forecast transaction (cash flow hedge). More information is provided below under Cash Flow Hedging.
For other derivatives, realised and unrealised gains and losses arising from changes in fair value are included in the income statement during the period in which they arise. The costs and earnings impact of forward contracts used to hedge loans are reported as part of financial income and expenses.
The effective portion of changes in the fair value of a derivative instrument that is identified as a cash flow hedge and that meets the conditions for hedge accounting is reported in other comprehensive income. Changes in the value of derivatives, such as forward contracts, are recognised in the income statement on the same line and at the same point in time as the hedged item, typically as part of other operating income/expense.
Indutrade uses interest rate swaps to some extent to hedge borrowings at variable interest rates. The gain or loss that is attributable to the effective portion is recognised in other comprehensive income, while the ineffective portion is recognised immediately in the income statement in the item "Interest expense". Accumulated amounts in equity are restated in the income statement in the periods in which the hedged item affects earnings (e.g., when the prognosticated, hedged interest payment is made). The gain or loss that is attributable to the effective portion of interest rate swaps is reported as interest expense in the income statement.
When a prognosticated transaction is no longer expected to take place, the accumulated gain or loss that was previously reported in the hedging reserve through other comprehensive income is immediately transferred to the income statement.
This category includes financial assets that are not derivatives and that have been designated to this category at the time of acquisition or have not been classified in any other category. These are included in non-current assets unless the Group has the intention of selling the asset within 12 months after the balance sheet date. The Group has only negligible holdings of such assets. The difference between the carrying amount and fair value is considered to be insignificant.
In the course of its business, the Indutrade Group is exposed to various types of financial risk:
Indutrade's board of directors sets the Company's finance policy on a yearly basis. This policy establishes the Company's financial strategy and internal delegation of responsibilities. The policy also governs such matters as how financing, liquidity management and currency risk management are to be handled within the Group as well as any restrictions that should be considered with respect to counterparties.
Funding risk is the risk that funding of the Group's capital requirement will be impeded or become more costly. To mitigate funding risk, the Group strives to maintain a balanced maturity structure, a good liquidity reserve, and diversified borrowing. This creates a preparedness to take necessary alternative actions to raise capital, should this be necessary.
Indutrade manages the Group's funding needs centrally. Nearly all of the external funding is conducted by the Parent Company, which then funds the Group's subsidiaries, both in and outside Sweden, in local currency. Cash pools are established in Sweden, Finland, Norway, Denmark, Germany, the Netherlands and the UK.
In order to secure its long-term financing, Indutrade signed an agreement during the year for a new revolving credit facility. It amounts to SEK 750 million and the agreement spans 3 years. In total, there are revolving credit facilities for SEK 4,250 million, of which SEK 3,500 million span over 5 years. At year-end SEK 4,250 million of the facility were unutilised.
Indutrade's agreement with the bank contains covenants, i.e. thresholds on certain KPIs. All of the covenants were met with a good margin during the year.
Indutrade has had a commercial paper programme in place since 2014. As of the end of the financial year, the framework of the programme was SEK 3,000 million.
Indutrade also has a Medium Term Note programme (MTN) with a framework amount of SEK 3,000 million.
The Group's interest-bearing net debt was SEK 4,878 million (6,130) at year-end.
At year-end, the Group had SEK 758 million (719) in cash and cash equivalents and SEK 4,895 million (3,258) in unutilised overdraft facilities. Of the Group's interest-bearing loans, 78% of the total principal falls due for payment after 31 December 2021. For a more detailed maturity analysis, see the description of the Group's borrowings in Note 24.
The Group strives to maintain a reasonable balance between equity, debt financing and liquidity, to enable the Group to secure funding at a reasonable capital cost. The Group's goal is that the net debt/equity ratio, defined as interest-bearing liabilities less cash and cash equivalents in relation to equity, normally should not exceed 100%. At yearend the debt/equity ratio was 56% (85%).
Interest rate risk is the risk that unfavourable changes in interest rates will have a significant impact on the Group's net financial items and earnings. At year-end, as in the preceding year, most of the Group's loans had variable interest rates.
The Parent Company has entered into two contracts to hedge SEK 250 million of its borrowing at variable interest against fixed interest for five years. The contract expires in 2023. The difference between the fixed and variable interest is expensed in the income statement. The valuation of interest rate swaps for the year amounted to SEK –1 million (0) before tax, which is recognised in other comprehensive income. The Parent Company had a corresponding result of SEK –1 million (0).
Based on the loan structure at year-end, a 1% rise in the interest rate on an annualised basis would result in a higher interest expense of approximately SEK –34 million (–43), taking into account the loans' fixed interest periods. Taking into account the existing interest rate swaps, the effect would be approximately SEK –31 million (–41). Profit after tax would be affected by SEK –25 million (–32).
The table below shows the remaining contractual terms of loans and contingent earn-out payments until maturity, including interest. Trade payables normally have a term of less than six months.
For information on the utilisation of bank overdraft facilities, granted credit limits and contingent earn-out payments, see Note 24. For leasing liabilities, see Note 18.
| Group | Parent company | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Maturity in 2020 | – | 1,846 | – | 1,677 |
| Maturity in 2021 | 882 | 883 | 774 | 585 |
| Maturity in 2022 | 797 | 576 | 643 | 557 |
| Maturity in 2023 | 1,406 | 1,083 | 1,337 | 1,023 |
| Maturity in 2024 | 1,159 | 1,200 | 1,015 | 1,200 |
| Maturity in 2025 or later | 47 | 55 | – | – |
| Total borrowings incl. interest, SEK million |
4,291 | 5,643 | 3,769 | 5,042 |
Currency risk is the risk of unfavourable movements in exchange rates affecting consolidated profit and equity measured in SEK:
The Indutrade Group's transaction exposure arises when subsidiaries import products for sale in the domestic market and/or sell products in foreign currency. Exchange rate effects are eliminated to the extent possible by using currency clauses in customer contracts and by buying and selling in the same currency. In certain cases, forward contracts are used. Indutrade therefore considers its transaction exposure to be limited.
The consolidated income statement includes SEK –11 million (3), net, in exchange rate differences in operating profit and SEK –13 million (–5), net, in financial items.
With respect to operational transaction exposure, at 31 December 2020 Indutrade had net exposure of SEK 97 million (179) in foreign currency. See the breakdown of currencies in the following table.
| 2020 | 2019 | ||||
|---|---|---|---|---|---|
| Group SEK million |
local currency |
local currency |
SEK | ||
| EUR | 5.7 | 58 | 12.0 | 125 | |
| USD | 5.6 | 46 | 7.7 | 72 | |
| DKK | –0.1 | 0 | 9.8 | 14 | |
| CHF | –0.2 | –2 | –1.4 | –13 | |
| GBP | –2.5 | –27 | –1.6 | –19 | |
| Other currencies | 22 | 0 | |||
| Total | 97 | 179 |
At year-end, the Group had outstanding forward contracts to reduce the currency risk associated with future cash flows. All of the contracts mature within 17 months. Market valuation of outstanding forward contracts as per 31 December 2020 resulted in an unrealised gain of SEK 5 million (–2) before tax, which is recognised in other comprehensive income.
| Group SEK million |
2020 | 2019 |
|---|---|---|
| USD | 190 | 125 |
| EUR | 90 | 9 |
| SGD | 23 | 28 |
| SEK | 9 | 30 |
| AUD | 5 | 6 |
| GBP | – | 13 |
| Total | 317 | 211 |
In addition, the Parent Company has hedged outstanding receivables from and liabilities to subsidiaries, along with contingent earn-out payments. Receivables from subsidiaries increased during the year.
| Parent Company SEK million |
2020 | 2019 |
|---|---|---|
| EUR | 2,002 | 1,364 |
| GBP | 1,854 | 1,902 |
| CHF | 249 | 395 |
| USD | 156 | 179 |
| NOK | 128 | 53 |
| DKK | 101 | 216 |
| PLN | 24 | 24 |
| SGD | – | 3 |
| Total | 4,514 | 4,136 |
All contracts mature within 23 months.
The Group is exposed to a translation risk associated with translation of the accounts of foreign subsidiaries to the Group currency, SEK. This type of currency risk is not hedged. Net investments in foreign subsidiaries at year-end are shown in the table below. Indutrade also had net investments in other currencies in both 2020 and 2019, but the amounts were insignificant.
| 2020 | 2019 | ||||
|---|---|---|---|---|---|
| Group Net exposure in millions |
local currency |
SEK | local currency |
SEK | |
| EUR | 343 | 3,440 | 261 | 2,727 | |
| GBP | 143 | 1,589 | 144 | 1,758 | |
| NOK | 727 | 694 | 591 | 625 | |
| DKK | 475 | 641 | 522 | 729 | |
| CHF | 37 | 341 | 40 | 380 | |
| Total | 6,705 | 6,219 |
Indutrade estimates that the Company's translation exposure entails that a 1% change in the value of SEK vs. other currencies would result in a yearly positive/negative effect (in the event of a weakening/strengthening of SEK) corresponding to approximately SEK 141 million (133) on net sales and approximately SEK 13 million (11) on net profit. The effect on equity of a 1% change would be SEK 70 million (65).
In the treasury management activities, credit risks arise in connection with investments of cash and cash equivalents, and counterparty risks arise in connection with the use of forward contracts. These risks are limited by working with counterparties that have been approved in accordance with the guidelines stipulated in the finance policy. These have primarily been major Nordic banks.
The risk of the Group's customers failing to meet their obligations, i.e., of payment not being received from customers, constitutes a customer credit risk. Assessment of Indutrade's credit risk in commercial transactions is handled by the respective subsidiaries. The Indutrade Group does business in many countries, which entails a spread of credit risk exposure over several geographic areas. No single customer represents more than 3 percent of sales. For information on sales per geographic area, see Note 4.
For information on age analysis, doubtful debts and bad debts, see Note 22.
Financial instruments are measured at fair value, based on the classification of the fair value hierarchy:
Other observable data, besides listed prices, for assets or liabilities (Level 2), Non-observable market data (Level 3).
No reclassifications between Level 2 and Level 3 were made during the year. Contingent earn-out payments have been discounted to present value using an interest rate that is judged to be in line with the market rate at the time of acquisition. Adjustments are not made on a regular basis for changes in the market interest rate, since the effects of these are judged to be negligible. For further information about contingent earn-out payments and loans, see Note 24.
| Contingent earn-out payments | ||
|---|---|---|
| 2020 | 2019 | |
| Opening book value | 565 | 215 |
| Acquisitions during the year | 319 | 465 |
| Consideration paid | –104 | –93 |
| Reclassified via income statement |
–213 | –32 |
| Interest expenses | 5 | 7 |
| Exchange rate differences | –23 | 3 |
| Closing book value | 549 | 565 |
| Interest rate swaps and currency forward contracts in hedge accounting |
Amortised cost | Holdings of shares and participation in unlisted companies |
Contingent earn out payments |
Financial liabilities measured at amortised cost |
Total carrying amount |
Fair value | |
|---|---|---|---|---|---|---|---|
| Valuation classification | Level 2 | Level 3 | Level 3 | ||||
| Other shares and participations | – | – | 12 | – | – | 12 | 12 |
| Trade receivables | – | 2,925 | – | – | – | 2,925 | 2,925 |
| Other receivables | 7 | 49 | – | – | – | 56 | 56 |
| Cash and cash equivalents | – | 758 | – | – | – | 758 | 758 |
| Total | 7 | 3,732 | 12 | – | – | 3,751 | 3,751 |
| Non-current interest-bearing liabilities |
– | – | – | 462 | 3,588 | 4,050 | 4,057 |
| Current interest-bearing liabilities | – | – | – | 87 | 1,099 | 1,186 | 1,186 |
| Trade payables | – | – | – | – | 1,136 | 1,136 | 1,136 |
| Other liabilities | 10 | – | – | – | – | 10 | 10 |
| Total | 10 | – | – | 549 | 5,823 | 6,382 | 6,389 |
| Interest rate swaps and currency forward contracts in hedge accounting |
Amortised cost | Holdings of shares and participation in unlisted companies |
Contingent earn out payments |
Financial liabilities measured at amortised cost |
Total carrying amount |
Fair value | |
|---|---|---|---|---|---|---|---|
| Valuation classification | Level 2 | Level 3 | Level 3 | ||||
| Other shares and participations | – | – | 14 | – | – | 14 | 14 |
| Trade receivables | – | 3,025 | – | – | – | 3,025 | 3,025 |
| Other receivables | 3 | 5 | – | – | – | 8 | 8 |
| Cash and cash equivalents | – | 719 | – | – | – | 719 | 719 |
| Total | 3 | 3,749 | 14 | – | – | 3,766 | 3,766 |
| Non-current interest-bearing liabilities |
– | – | – | 411 | 3,919 | 4,330 | 4,339 |
| Current interest-bearing liabilities | – | – | – | 154 | 1,988 | 2,142 | 2,143 |
| Trade payables | – | – | – | – | 1,237 | 1,237 | 1,237 |
| Other liabilities | 8 | – | – | – | – | 8 | 8 |
| Total | 8 | – | – | 565 | 7,144 | 7,717 | 7,727 |
03
Segment reporting is based on internal reporting to the chief operating decision maker. For Indutrade, this means the Group CEO and the key ratios that are presented for the business areas. Detailed information on segment revenue is provide in Note 4 Revenue from Contracts with Customers. Rör & rörsystem Kemiteknik Medicinteknik Byggmaterial
The Group is organised in these eight business areas: Benelux, DACH, Finland, Flow Technology, Fluids & Mechanical Solutions, Industrial Components, Measurement & Sensor Technology and UK. They constitute the Group's operating segments. Övrigt Service Glas/Plast/Keramik Automation 2
The Group's business areas conduct business primarily in the Nordic countries and in central and northern Europe. See the Directors' Report for a description of each business area. Byggmaterial Fästelement/Elektronik/Ind.fjädrar Industriell utrustning 9
According to IFRS, "Other" is the part of operations that does not constitute its own operating segment. At Indutrade, only the Parent Company is included in the segment called "Other". Indutrade AB lacks a major revenue source, which is why the Parent Company does not constitute its own operating segment. Filter & Processteknik Rör & rörsystem Medicinteknik Kemiteknik
The operating segments are monitored through "Net sales", which include both external and internal sales. However, the scope of internal sales between the subsidiaries is very limited, which is shown in the eliminations column in the table below. Glas/Plast/Keramik Automation Pumpar Hydraulik 4
The earnings measure that is monitored in Indutrade is EBITA. The business areas are followed up using the same accounting principles as the Group. Service
| 2020 | Benelux | DACH | Finland | FT | FMS | IC | MST | UK | PC | Elim.1) | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales | 2,773 | 1,529 | 1,679 | 4,071 | 1,979 | 3,803 | 2,120 | 1,322 | 8 | –67 | 19,217 |
| Operating profit | 299 | 128 | 235 | 575 | 237 | 504 | 266 | 120 | –109 | 11 | 2,266 |
| Net financial items | –126 | ||||||||||
| Income Tax | –471 | ||||||||||
| Net profit | 1,669 | ||||||||||
| EBITA 2) | 360 | 169 | 247 | 607 | 268 | 569 | 334 | 159 | –109 | 11 | 2,615 |
| EBITA margin, % | 13 | 11.1 | 14.7 | 14.9 | 13.5 | 15.0 | 15,8 | 12.0 | 13.6 | ||
| Amortisation of intangible assets | –65 | –43 | –23 | –35 | –34 | –73 | –84 | –39 | – | – | –396 |
| of which attributable to acquisitions | –61 | –41 | –12 | –32 | –31 | –65 | –68 | –39 | – | – | –349 |
| Depreciation of property, plant and equipment |
–90 | –77 | –70 | –83 | –78 | –84 | –63 | –54 | –1 | – | –600 |
| Investments in non-current assets | 74 | 20 | 32 | 33 | 56 | 77 | 64 | 52 | 0 | – | 408 |
| 2019 | Benelux | DACH | Finland | FT | FMS | IC | MST | UK | PC | Elim.1) | Total |
| Net sales | 2,288 | 1,403 | 1,689 | 3,798 | 2,041 | 3,513 | 2,259 | 1,469 | 7 | –56 | 18,411 |
| Operating profit | 267 | 104 | 217 | 460 | 240 | 371 | 304 | 171 | –113 | –5 | 2,016 |
| Net financial items | 2 596 | –124 5 855 |
|||||||||
| Sverige Income Tax |
2 623 | Sverige | 5 786 –409 |
||||||||
| Storbritannien och Irland Net profit |
1 940 2 087 |
Storbritannien och Irland | 2 856 1,483 2 800 |
||||||||
| EBITA 2) Benelux |
315 | 134 | 1 508 223 1 460 |
491 | 279 | 432 Danmark och Norge |
366 | 208 | –113 | –5 | 2 613 2,330 2 568 |
| EBITA margin, % Danmark och Norge |
13.8 | 9.6 | 13.2 1 489 |
12.9 | 13.7 | 12.3 Benelux |
16.2 | 14.2 | 12.7 2 705 |
||
| Amortisation of intangible assets | –50 | –31 | 1 431 –15 544 |
–34 | –42 | –68 | –72 | –37 | 0 | – | 2 327 –349 2 031 |
| Finland of which attributable to acquisitions |
–48 | –30 | 461 –6 401 |
–31 | –39 | Finland –61 |
–62 | –37 | – | – | 2 001 –314 879 |
| Schweiz | Schweiz |
equipment –77 –69 –69 –78 –70 –77 –58 –51 –1 – –550 Investments in non-current assets 42 90 23 46 66 43 52 58 0 – 420
1 627
1 198
1) Primarily pertains to the elimination of intra-Group sales and intra-Group profit on inventory. 0 500 1 000 1 500 2 000 2 500
Depreciation of property, plant and
Övriga världen
2) EBITA less depreciation/amortization attributable to acquisitions is equal to Operating profit 2020 2019
FT – Flow Technology FMS – Fluids & Mechanical Solutions IC – Industrial Components MST – Measurement & Sensor Technology PC – Parent Company & Group Item
Övrigt
0 1000 2000 3000 4000 5000 6000
2 278
2 129
Based on where the Group's legal companies have their registered offices, excluding financial assets.
Based on where the Group's legal companies have their registered offices. The information on page 2 is based on where the customers are located.
04
Most of Indutrade's revenues consist of sales of products that are recognised as revenue at a set point in time. The sale is recognised as revenue when control of the products has been transferred, which typically takes place when the products are delivered to the customer. Delivery takes place when the products have been transported to a specific location, the risk for obsolete or misplaced products has been transferred to the customer, and the customer has either accepted the products in accordance with the contract, the time allowed for objections to the contract has expired, or the Group has objective evidence that all criteria for acceptance have been met.
Certain contracts include services, such as for installation of a product. Revenue for installation is typically recognized at a specific point in time, since it does not meet the criteria for recognition over time. If installation can be performed by another vendor, the service is reported as a distinct performance obligation. In such case, the transaction price is allocated to the respective separate performance obligations by reference to their stand-alone selling prices. In cases where a stand-alone selling price is not directly observable, the price is estimated based on the expected expenses associated with the product or service plus a profit margin.
In a few cases, revenue is generated from service/maintenance agreements. This revenue is recognised on a linear basis over the term of the contract.
Volume discounts are frequently offered to customers and reduce the level of revenue. Historical data is used to estimate the expected value of the discounts, and the revenue is recognised only to the extent that it is very probable that a significant reversal will not arise.
A few companies work with larger projects where performance does not result in creation of an asset with alternative use and where it is also entitled to payment for services rendered to date, such as manufacturing of a customized product. This revenue is recognised over time. Increases or decreases in estimated revenue or expenses that are attributable to changed estimations are recognised in the income statement in the period in which the circumstances that gave rise to the change became known.
For fixed-price contracts, the customer pays the agreed-upon price on contracted payment dates. If the products or services that have been delivered exceed the payment, a contractual asset is reported. If the payments exceed the delivered services, a contractual liability is reported.
Warranties are offered and consist mostly of "assurance-type warranties", i.e., the warranty does not represent a separate performance obligation and thus does not affect revenue recognition, but is instead reported as an expense and provision respectively. The right for customers to return products exists only to a very limited scope within the Group.
The Group does not expect to have any significant contracts where the time between transfer of the products or services to the customer and payment from the customer exceed one year. As a result, the Group does not adjust the transaction price for the effects of a significant financing component.
The Group does not have any material assets that have arisen from the costs associated with fulfilling a contract, such as costs associated with obtaining a contract with customers, costs prior to entering into a contract or start-up costs.
The Indutrade Group does not receive revenue from any single customer that amounts to 10% of total, which is why no data is reported on this.
| 2020 | Benelux | DACH | Finland | FT | FMS | IC | MST | UK | Elim.1) | Total |
|---|---|---|---|---|---|---|---|---|---|---|
| Nordic countries | 69 | 12 | 1,550 | 2,357 | 1,401 | 3,229 | 528 | 96 | –27 | 9,215 |
| Other Europe | 2,088 | 1,447 | 99 | 1,445 | 461 | 517 | 727 | 1,061 | –22 | 7,823 |
| Americas | 299 | 38 | 18 | 33 | 83 | 38 | 611 | 82 | –6 | 1,196 |
| Asia | 289 | 26 | 9 | 122 | 26 | 11 | 199 | 68 | –2 | 748 |
| Other | 28 | 6 | 3 | 114 | 8 | 8 | 55 | 15 | –2 | 235 |
| IS | 2,773 | 1,529 | 1,679 | 4,071 | 1,979 | 3,803 | 2,120 | 1,322 | –59 | 19,217 |
| When revenue is recognised | ||||||||||
| – Over time | 0 | 296 | 0 | 0 | 0 | 28 | 213 | 0 | –1 | 536 |
| – At a specific time | 2,773 | 1,233 | 1,679 | 4,071 | 1,979 | 3,775 | 1,907 | 1,322 | –58 | 18,681 |
| IS | 2,773 | 1,529 | 1,679 | 4,071 | 1,979 | 3,803 | 2,120 | 1,322 | –59 | 19,217 |
| 2019 | Benelux | DACH | Finland | FT | FMS | IC | MST | UK | Elim.1) | Total |
|---|---|---|---|---|---|---|---|---|---|---|
| Nordic countries | 27 | 10 | 1,560 | 2,271 | 1,430 | 3,104 | 495 | 102 | –19 | 8,980 |
| Other Europe | 1,856 | 1,330 | 110 | 1,276 | 494 | 353 | 837 | 1,202 | –16 | 7,442 |
| Americas | 190 | 41 | 10 | 34 | 81 | 32 | 652 | 90 | –6 | 1,124 |
| Asia | 197 | 15 | 7 | 179 | 29 | 21 | 216 | 60 | –5 | 719 |
| Other | 18 | 7 | 2 | 38 | 7 | 3 | 59 | 15 | –3 | 146 |
| IS | 2,288 | 1,403 | 1,689 | 3,798 | 2,041 | 3,513 | 2,259 | 1,469 | –49 | 18,411 |
| When revenue is recognised | ||||||||||
| – Over time | 48 | 264 | 0 | 185 | 0 | 151 | 191 | 7 | –4 | 842 |
| – At a specific time | 2,240 | 1,139 | 1,689 | 3,613 | 2,041 | 3,362 | 2,068 | 1,462 | –45 | 17,569 |
| IS | 2,288 | 1,403 | 1,689 | 3,798 | 2,041 | 3,513 | 2,259 | 1,469 | –49 | 18,411 |
FT – Flow Technology FMS – Fluids & Mechanical Solutions IC – Industrial Components MST – Measurement & Sensor Technology PC – Parent Company & Group Items
| Group | ||||
|---|---|---|---|---|
| Contract assets | 2020 | 2019 | ||
| Opening book value | 110 | 99 | ||
| New contracts and increase in existing contracts |
279 | 81 | ||
| Reclassification of contract asset to accounts receivable |
–246 | –75 | ||
| Exchange rate differences | –8 | 5 | ||
| BS Closing book value |
135 | 110 | ||
| Contract liabilities | 2020 | 2019 | ||
| Opening book value | 151 | 148 | ||
| Company acquisition and divestment | –19 | –5 | ||
| Increase in contract liabilities during the year | 69 | 74 | ||
| Contracts for which revenue has been recognised that were included in contract |
||||
| liabilities at the beginning of the period | –83 | –68 | ||
| Impairment losses | – | –3 | ||
| Exchange rate differences | –9 | 5 | ||
| BS Closing book value |
109 | 151 |
During 2020, revenue from performance obligations that were fulfilled during prior periods amounted to SEK 4 (1) million. This type of revenue could consist of customer bonuses that did not need to be paid and changes in the estimated revenue or costs of major products based on changed assumptions.
Remaining long-term customer contracts not yet fulfilled or partially fulfilled as of 31 December 2020 amount to SEK 258 million. Of that amount, SEK 211 million is expected to be recognised as revenue during the 2021 financial year and the remainder, SEK 47 million in 2022.
Other contracts with customers have an original expected duration of 1 year, at most. In accordance with IFRS 15, disclosures of the transaction price have not been provided for these unfulfilled obligations.
| Group | Parent company | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Goods for resale, raw materials and consumables |
–10,045 | –9,526 | – | – |
| Costs for employee benefits | –4,426 | –4,286 | –71 | –69 |
| Depreciation/amortisation, Notes 9,16,17 |
–996 | –899 | –1 | –1 |
| Transport costs | –342 | –364 | –1 | –1 |
| Marketing costs | –128 | –161 | –1 | –1 |
| Property-related costs | –571 | –517 | –12 | –11 |
| Other costs | –532 | –683 | –31 | –37 |
| IS Total |
–17,040 –16,436 | –117 | –120 |
| Group | Parent company | ||||
|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | ||
| Other operating income | |||||
| Exchange rate gains | 86 | 86 | – | – | |
| Revaluation of liabilities pertaining to contingent earn out payments, Note 2 |
212 | 31 | – | – | |
| Gain on sale of subsidiaries/ operations |
33 | 6 | – | – | |
| Insurance benefits and similar benefits |
12 | 29 | – | – | |
| Other | 2 | 1 | – | – | |
| IS Total |
345 | 153 | – | – | |
| Other operating expenses | |||||
| Exchange rate losses | –97 | –83 | – | – | |
| Revaluation of liabilities pertaining to contingent earn out payments, Note 2 |
–4 | –1 | – | – | |
| Transaction costs associated with acquisitions, Note 31 |
–11 | –14 | – | – | |
| Loss on sale of subsidiaries/ operations |
–3 | –14 | – | – | |
| Impairment losses on intangible assets, Note 16 |
–141 | – | – | – | |
| IS Total |
–256 | –112 | – | – | |
| Other operating income/ expenses, net |
89 | 41 | – | – |
| 2020 | 2019 | ||||
|---|---|---|---|---|---|
| Number of employees |
Of whom, women |
Number of employees |
Of whom, women |
||
| Parent company | 20 | 12 | 17 | 10 | |
| Subsidiaries in Sweden | 1,637 | 370 | 1,589 | 341 | |
| Total Sweden | 1,657 | 382 | 1,606 | 351 | |
| Subsidiaries outside Sweden | 5,692 | 1,381 | 5,561 | 1,728 | |
| Total | 7,349 | 1,763 | 7,167 | 2,079 |
The Parent Company's board is composed of 2 women and 6 men (same as in preceding year). The subsidiaries' boards and senior executives include 21 (20) women. The Group Management consisted of 3 (3) women and 12 (12) men through 31 December 2020.
08
Termination benefits are payable when employment is terminated before the normal retirement date or when an employee accepts voluntary departure in exchange for such benefits. The Group reports severance pay when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without the possibility of withdrawal, or to providing termination benefits as a result of an offer made to encourage voluntary departures.
The Parent Company and most of the subsidiaries have bonus or profit-sharing systems based on the earnings performance of each unit. The Group reports a liability and an expense for these programmes when it has a formal or constructive obligation to make such payments in exchange for services performed by employees and the amount of such obligations can be calculated in a reliable manner. Reporting is done in the period the cost pertains to.
| 2020 | 2019 | |||||
|---|---|---|---|---|---|---|
| Wages, salaries and other remuneration |
Social security costs |
Of which, pension costs |
Wages, salaries and other remuneration |
Social security costs |
Of which, pension costs |
|
| Parent company | 43 | 26 | 12 | 43 | 23 | 8 |
| Subsidiaries in Sweden | 898 | 385 | 114 | 879 | 394 | 98 |
| Total Sweden | 941 | 411 | 126 | 922 | 417 | 106 |
| Subsidiaries outside Sweden | 2,616 | 437 | 192 | 2,435 | 407 | 187 |
| Total | 3,557 | 848 | 318 | 3,357 | 824 | 293 |
Of the Parent Company's pension costs, SEK 3 million (3) pertains to the Board of Directors and the CEO. The corresponding amount for the Group is SEK 54 million (47).
Wages, salaries and other remuneration broken down by country (Sweden and other countries) and by category of employee (senior executives and other employees)
| 2020 | 2019 | ||||||
|---|---|---|---|---|---|---|---|
| Company Of which, bonuses management1) and similar Other employees |
Company Of which, bonuses management1) and similar |
Other employees | |||||
| Parent company | 16 | 4 | 27 | 15 | 3 | 28 | |
| Subsidiaries in Sweden | 114 | 13 | 784 | 111 | 15 | 768 | |
| Total Sweden | 130 | 17 | 811 | 126 | 18 | 796 | |
| Subsidiaries outside Sweden | 234 | 33 | 2,382 | 215 | 29 | 2,220 | |
| Total | 364 | 50 | 3,193 | 341 | 47 | 3,016 |
1) Pertains to Board of Directors and Presidents.
The Chairman and members of the Board of Directors are paid a fee in accordance with a resolution by the Annual General Meeting. At the AGM in June 2020, it was resolved that the fees should be unchanged, i.e. that a fee of SEK 600,000 should be paid to the Chairman of the Board and SEK 450,000 to the Vice Chairman. Other Board members, who are not employees of the company, are paid a fee of SEK 300,000 each. The Audit Committee chair is paid an additional fee of SEK 80,000, and the other members receive SEK 40,000 each. A fee of SEK 30,000 is paid to the chair and each of other members of the Remuneration Committee.
These guidelines shall be applicable to agreed compensation, and amendments to compensation already agreed, after adoption of the guidelines by the 2020 Annual General Meeting.
A prerequisite for the successful implementation of the company's business strategy and safeguarding of the company's long-term interests, including its sustainability, is that Indutrade is able to recruit and
retain management with high qualifications. To this end, the company must offer competitive compensation and other terms of employment, which these guidelines enable. The forms of compensation should motivate members of the executive management to perform their utmost in order to safeguard the interests of the shareholders. For more information about the company's business strategy, please see the company's website: https://www.indutrade.com/about-indutrade/ objectives--strategy/.
These guidelines encompass senior executives, i.e. the CEO and other members of the group management (the executive management). For employments governed by rules other than Swedish, customary adjustments may be made for compliance with mandatory rules or established local practice, taking into account, to the extent possible, the overall purpose of these guidelines.
Variable cash compensation covered by these guidelines shall aim to promote the company's business strategy and long-term interests, including its sustainability.
The total compensation shall be on market terms, straightforward, long-term and quantifiable, and may consist of the following components: fixed cash salary, variable cash compensation, pension benefits, as well as other benefits.
The general meeting may also, irrespective of these guidelines, resolve on, among other things, share-related or share price-related compensation (for information about ongoing incentive programmes, please see the company's website: https://www.indutrade.com/about-indutrade/ corporate-governance/remuneration/).
The performance period with respect to criteria for awarding variable salary shall be measured over a period of one or several years. The variable cash compensation may amount to a maximum of 50 percent of the fixed annual salary.
Additionally, senior executives may be awarded cash compensation linked to their investments in shares or share-related instruments under such incentive programmes, as well as pension and other benefits. Such cash compensation must not exceed 15 percent of the fixed annual salary.
The pension terms for the executive management shall be in line with the going rate in the market in respect of what applies for peer executives in the market in which the executive works, a maximum of 40 percent of the fixed annual salary, and should be based on defined contribution pension solutions or correspond to a public pension plan (in Sweden the ITP plan). Variably salary to members of the executive management not covered by the ITP plan shall not qualify for pension benefits.
Other benefits may include, for example, life insurance, health insurance and company car. Premiums and other costs related to such benefits may amount to not more than 15 percent of the fixed annual salary. Awarding of non-monetary benefits shall facilitate the individuals in the execution of their duties and correspond to what can be considered reasonable in respect of practice in the market in which the respective executive is active.
The notice period for a member of the executive management may not exceed 12 months if the termination is initiated by the company, and 6 months if it is initiated by the individual. Severance pay to a member of the executive management shall in aggregate not exceed 24 months' salary in the event the company serves notice, and 6 months' salary in the event the member of the executive management gives notice.
The variable compensation shall be designed so as to reward the achievement of clear objectives, in straight-forward and transparent structures, and be linked to one or several predetermined and measurable financial criteria, such as sales growth, EBITA-margin or return on operating capital/ capital employed. Any non-financial criteria shall be related to sustainability. Financial criteria shall constitute at least 75 percent of all criteria.
Once the period for measuring the satisfaction of criteria for awarding variable cash compensation expires, the outcome will be determined. The Remuneration Committee is responsible for determining the CEO's outcome, while the CEO is responsible for determining the outcome for other members of the executive management. For financial objectives, the assessment shall be based on the latest financial information made public by the company, with any adjustments deemed necessary or reasonable by the Board of Directors.
The terms for variable compensation shall be designed so that the Board of Directors, under exceptional financial conditions, may limit, refuse or redeem payment of variable compensation if such measure is deemed reasonable.
In specific cases, arrangements may be made on one-time variable compensation, provided that such compensation does not exceed an amount corresponding to 10 percent of the fixed annual salary, and is not paid more than once each year per individual. Such compensation shall not qualify for pension benefits unless required by mandatory collective agreement provisions. Resolutions on such compensation shall be made by the Board of Directors based on a proposal from the Remuneration Committee, so far as it concerns the CEO, and by the Remuneration Committee based on a proposal from the CEO, so far as it concerns other senior executives.
No other variable cash compensation shall be paid.
In the preparation of the Board of Directors' proposal for these compensation guidelines, salary and other employment terms for employees of the company have been taken into account by including information on the employees' total compensation, the components of the compensation and increase and growth rate over time, in the Remuneration Committee's and the Board of Directors' basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable.
The Board of Directors has appointed a Remuneration Committee with the task of preparing the Board of Directors' decisions regarding proposal for guidelines for compensation to senior executives. The Board of Directors shall prepare a proposal for new guidelines at least every fourth year, and submit it to the Annual General Meeting.
The Remuneration Committee shall also monitor and evaluate programmes for variable compensation to members of the executive management, as well as the application of the guidelines in terms of compensation levels and structures. Members of the executive management do not participate in the Board of Directors' processing of, and resolutions regarding, compensation-related matters in so far as they are affected by such matters.
The Board of Directors may temporarily resolve to derogate from the guidelines adopted by the general meeting, in whole or in part, if in a specific case there is special cause for the derogation and a derogation is necessary to serve the company's long-term interest, including its sustainability, or to ensure the company's financial viability. As set out above, the Remuneration Committee's tasks include preparing the Board of Directors' resolutions in compensation-related matters, including any resolutions to derogate from the guidelines.
In April 2017 the Annual General Meeting of Indutrade AB resolved to introduce a long-term incentive programme (LTI 2017) comprising a combined maximum of 704,000 warrants in two series for senior executives and other key persons in the Indutrade Group. Shares can be subscribed during specially stipulated subscription periods through Friday, 20 May 2022. The warrants were acquired at an estimated market price.
A cash subsidy corresponding to a total of 120 percent of the price that the participants paid for the warrants will be paid out on two occasions and in equal portions under the condition that the participants do not sell any warrants and continue to be employed by the Group on the payment dates. Half of the subsidy was paid out in 2019 and half in 2020. The subsidy was paid for the number of warrants the individual was granted and not for any over-subscription. The subsidy was expensed over the vesting period. The total cost is SEK 10 million, of which SEK 1 million in 2020.
The CEO acquired 40,000 warrants, of which 20,000 without cash subsidy. Others members of the Group management team acquired 145,000 warrants, of which 30,000 without cash subsidy. In 2020, the CEO utilised all warrants to subscribe for shares and other members of the Group management team utilised 12,600 warrants to subscribe for shares, also, 61,400 warrants were divested. In addition to this programme, the CEO acquired 100,000 warrants in 2017 at an estimated market price via L E Lundbergföretagen. Following the 2:1 bonus issue in December 2020, they entitle holders to subscribe for 300,000 shares.
| Outstanding programme |
Number of options |
Corresponding number of shares |
Proportion of total shares |
Price per warrant, SEK |
Original subscription price, SEK |
Recalculated subscription price, SEK |
Number of exercised warrants |
Corresponding number of shares |
Expiration period |
|---|---|---|---|---|---|---|---|---|---|
| 2017/2022, Series I | 526,000 | 1,578,000 | 0.4% | 15.0 | 244.9 | 81.6 | 317,000 | 951,000 | 27 April 2020 – 20 May 2022 |
| 2017/2022, Series II | 60,000 | 180,000 | 0.0% | 13.4 | 276.8 | 92.3 | 33,000 | 99,000 | 27 April 2020 – 20 May 2022 |
| SEK thousand | Base salary/ Directors' fees |
Variable compensation1) |
Other benefits |
Pension cost |
Total |
|---|---|---|---|---|---|
| Katarina Martinson, Chairman of the Board, Chairman of the Remuneration Committee, Member of the Audit Committee |
670 | 670 | |||
| Bengt Kjell, Vice Chairman of the Board, Member of the Remuneration Committee |
480 | 480 | |||
| Susanna Campbell, Director | 300 | 300 | |||
| Anders Jernhall, Director, Member of the Audit Committee | 340 | 340 | |||
| Ulf Lundahl, Director, Chairman of the Audit Committee | 380 | 380 | |||
| Krister Mellvé, Director | 300 | 300 | |||
| Lars Pettersson, Director, Member of the Remuneration Committee | 330 | 330 | |||
| Bo Annvik, CEO 2) | 8,509 | 4,405 | 436 | 3,066 | 16,416 |
| Other senior executives (14 persons) 2) | 34,162 | 11,591 | 2,149 | 8,095 | 55,997 |
| Total | 45,471 | 15,996 | 2,585 | 11,161 | 75,213 |
1) Including compensation (the year's subsidy cost) for the senior executives who participate in the incentive programmes described above.
For the CEO, the cost is SEK 25 thousand for other senior executives it is SEK 140 thousand.
2) In 2020, members of the Group management team reduced the base salary by 10 percent for 6 months due to uncertainty about the COVID-19 pandemic.
| SEK thousand | Base salary/ Directors' fees |
Variable compensation1) |
Other benefits |
Pension cost |
Total |
|---|---|---|---|---|---|
| Katarina Martinson, Chairman of the Board, Chairman of the Remuneration Committee, Member of the Audit Committee |
624 | 624 | |||
| Bengt Kjell, Vice Chairman of the Board, Member of the Remuneration Committee |
461 | 461 | |||
| Susanna Campbell, Director | 289 | 289 | |||
| Anders Jernhall, Director, Member of the Audit Committee | 309 | 309 | |||
| Ulf Lundahl, Director, Chairman of the Audit Committee | 360 | 360 | |||
| Krister Mellvé, Director | 289 | 289 | |||
| Lars Pettersson, Director, Member of the Remuneration Committee | 318 | 318 | |||
| Bo Annvik, CEO | 8,517 | 3,432 | 607 | 2,898 | 15,454 |
| Other senior executives (14 persons) | 34,213 | 11,670 | 2,409 | 8,471 | 56,763 |
| Total | 45,380 | 15,102 | 3,016 | 11,369 | 74,867 |
1) Including compensation (the year's subsidy cost) for the senior executives who participate in the incentive programmes described above. For the CEO, the cost is SEK 98 thousand for other senior executives it is SEK 546 thousand.
Depreciation of property, plant and equipment and amortisation of intangible assets are included in the following functions in the following amounts:
| Group | Parent company | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Cost of goods sold | 603 | 549 | – | – |
| Development costs | 24 | 14 | – | – |
| Selling costs | 219 | 197 | – | – |
| Administrative expenses | 150 | 139 | 1 | 1 |
| Total | 996 | 899 | 1 | 1 |
Indutrade does not normally receive government assistance. However, due to the extraordinary circumstances associated with the COVID-19 pandemic, companies belonging to the Group have obtained this type of support and it has primarily been employeerelated. Such support is reported in the financial statements as a cost reduction for the items the support relates to. Recognition occurs when it is reasonably certain that the support will be received and any stated terms and conditions have been met.
| Group | Parent company | ||||
|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | ||
| Temporary lay-offs | 67 | – | – | – | |
| Reduced employer contributions | 31 | – | – | – | |
| Other assistance | 6 | – | 0 | – | |
| Total assistance | 104 | – | 0 | – |
Assistance received amounts to 0.5% of net sales. In conjunction with assistance already received, there are no remaining unmet conditions or other contingent liabilities.
| Group | Parent company | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| PricewaterhouseCoopers | ||||
| Audit assignment | 18 | 16 | 2 | 1 |
| Auditing activities in addition to audit assignment |
0 | 1 | – | – |
| Tax consulting | 1 | 1 | – | – |
| Other services | 1 | 0 | 0 | 0 |
| Total fees, PricewaterhouseCoopers |
20 | 18 | 2 | 1 |
| Other auditing firms | ||||
| Auditing fees | 6 | 6 | – | – |
Other auditing firms refers to several auditing firms where none account for a significant amount in 2020 or the preceding year.
Audit assignment pertains to fees for the statutory audit, i.e., such work that was necessary to issue the audit report as well as audit consulting in connection with the audit assignment.
Fees paid to PWC Sweden for their auditing assignment amounted to SEK 7 million during the year. Fees for auditing services in addition to the audit assignment amounted to SEK 0 million, and fees for tax consulting and other services totalled SEK 1 million.
Financial income consists of interest income on invested funds, dividends, and gains on hedge instruments recognised in profit for the year.
Interest income is reported in accordance with the effective interest method and includes accrued interest as per the balance sheet date. Dividend income is recognised when the right to payment has been determined.
| Group | Parent company | ||||
|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | ||
| Interest | 18 | 15 | 130 | 90 | |
| Exchange rate differences1) | – | 130 | – | 124 | |
| Other | 0 | 0 | – | – | |
| IS Total financial income | 18 | 145 | 130 | 214 | |
| Of which, pertaining to Group companies: |
|||||
| Interest | – | – | 115 | 81 |
1) as of 2020 exchange rate difference are reported at the net amount. The comparative financial information has not been restated.
Financial expenses consist of interest expense on loans and pension liabilities, effects of the dissolution of discounted contingent earn-out payments, interest expense on leases, losses on hedge instruments recognised in profit for the year, and bank charges. Interest expenses are reported in accordance with the effective interest method.
| Group | Parent company | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Interest expenses, bank loans | –74 | –80 | –66 | –72 |
| Interest expenses, pension liability |
–3 | –5 | – | – |
| Interest expenses, leases | –27 | –26 | 0 | 0 |
| Interest expenses, contingent earn-out payments |
–5 | –7 | –1 | –1 |
| Total interest expenses | –109 | –118 | –67 | –73 |
| Exchange rate differences1) | –13 | –135 | –21 | –144 |
| Other | –22 | –16 | –21 | –14 |
| IS Total financial expenses | –144 | –269 | –109 | –231 |
| Of which, pertaining to Group companies: |
||||
| Interest | – | – | –3 | –2 |
1) as of 2020 exchange rate difference are reported at the net amount. The comparative financial information has not been restated.
| Parent company | 2020 | 2019 |
|---|---|---|
| Dividends from subsidiaries | 894 | 991 |
| Liquidation loss | – | –10 |
| IS Total |
894 | 981 |
15
14
Taxes
Income tax consists of current tax and deferred tax. Income taxes are reported in the income statement, except in cases where the tax is attributable to items that are reported in other comprehensive income.
Current tax is tax that is to be paid or received in the current year using the tax rates that apply at the balance sheet date. This also includes adjustments of current tax attributable to earlier periods. Tax is calculated according to the current tax rate in the respective countries.
Deferred taxes attributable to temporary differences between the book value and the taxable value of assets and liabilities are reported in full in the consolidated accounts, while the Parent Company still reports the difference pertaining to machinery and equipment as an untaxed reserve. However, deferred tax liability is not reported if it arises as a result of initial recognition of goodwill. Valuation of deferred tax is based on how the underlying asset or liability is expected to be realised or settled. Deferred tax is calculated using the tax rates that apply at the balance sheet date or announced as per the balance sheet date and which are expected to apply when the deferred tax asset in question is realised or the tax liability is settled. Deferred tax assets attributable to deductible, temporary differences and unutilised tax-loss carryforwards are reported to the extent that it is probable that they will be utilised in the foreseeable future.
| Group | Parent company | ||||
|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | ||
| Tax expense | |||||
| Current tax | –545 | –467 | –78 | –108 | |
| Deferred tax | 74 | 60 | 7 | 0 | |
| Other tax | 0 | –2 | 0 | 0 | |
| Total | –471 | –409 | –71 | –108 |
The Group's tax expense amounts to 22% (21.6%) of consolidated profit before tax. The difference between the reported tax expense and anticipated tax expense (weighted average tax based on national tax rates) is explained below.
| Group | Parent company | ||||
|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | ||
| Profit before taxes | 2,140 | 1,892 | 1,209 | 1,479 | |
| Weighted average tax based on national tax rates (Group 21.1% and 21.1%, respectively, and Parent Company 21.4% and 21.4%, respectively) |
–452 | –400 | –259 | –316 | |
| Tax effect of: | |||||
| Non-deductible interest expenses on discounted contingent earn-out payments |
–1 | –1 | 0 | 0 | |
| Non-deductible transaction costs for acquisitions |
–2 | –3 | – | – | |
| Tax-exempt contingent earn-out payment recognised as income |
45 | 7 | – | – | |
| Non-deductible impairment of goodwill |
–28 | – | – | – | |
| Other non-deductible other expenses / tax-exempt income |
–15 | –8 | 1891) | 2081) | |
| Losses, for which loss carryforward is not recognised |
–3 | –14 | – | – | |
| Utilisation of loss-carryforward where tax was not previously reported |
1 | 2 | – | – | |
| Adjustment pertaining to previous years' current tax |
2 | –3 | –1 | 0 | |
| Change in tax rate | –18 | 13 | 0 | 0 | |
| Other items | 0 | –2 | 0 | 0 | |
| IS Total |
–471 | –409 | –71 | –108 | |
| 22% | 21.6% | 5.9% | 7.3% |
1) Pertains primarily to dividends from subsidiaries.
| Group, 1 Jan– 31 Dec 2020 | Intangible assets |
Property, plant and equipment |
Untaxed reserves |
Pension obligations |
Other items | Total tax |
|---|---|---|---|---|---|---|
| Deferred tax, net | ||||||
| Opening book value | –465 | –83 | –155 | 60 | 71 | –572 |
| Deferred tax as per income statement | 70 | 5 | 4 | 2 | 11 | 92 |
| Change in tax rate affecting income statement | –19 | –1 | 0 | 2 | 0 | –18 |
| Deferred tax recognised in other comprehensive income | – | – | – | 3 | –1 | 2 |
| Deferred tax attributable to acquisitions | –116 | –3 | –1 | – | –1 | –121 |
| Exchange rate differences | 20 | 4 | 0 | –1 | –3 | 20 |
| Closing book value | –510 | –78 | –152 | 66 | 77 | –597 |
| As per 31 Dec 2020 | ||||||
| BS Deferred tax asset |
3 | 3 | 0 | 64 | 82 | 152 |
| BS Deferred tax liability |
–513 | –81 | –152 | 2 | –5 | –749 |
| Deferred tax, net | –510 | –78 | –152 | 66 | 77 | –597 |
| Group, 1 Jan – 31 Dec 2019 | Intangible assets |
Property, plant and equipment |
Untaxed reserves |
Pension obligations |
Other items | Total tax |
| Deferred tax, net | ||||||
| Opening book value | –388 | –69 | –143 | 46 | 67 | –487 |
| Change in accounting method | – | – | – | – | 7 | 7 |
| Deferred tax as per income statement | 65 | –1 | –7 | –1 | –9 | 47 |
| Change in tax rate affecting income statement | 14 | 1 | 0 | –2 | 0 | 13 |
| Deferred tax recognised in other comprehensive income | – | – | – | 16 | 0 | 16 |
| Deferred tax attributable to acquisitions | –147 | –12 | –5 | 0 | 4 | –160 |
| Exchange rate differences | –9 | –2 | 0 | 1 | 2 | –8 |
| Closing book value | –465 | –83 | –155 | 60 | 71 | –572 |
| As per 31 Dec 2019 | ||||||
| BS Deferred tax asset |
0 | 4 | 0 | 60 | 70 | 134 |
| BS Deferred tax liability |
–465 | –87 | –155 | 0 | 1 | –706 |
| Deferred tax, net | –465 | –83 | –155 | 60 | 71 | –572 |
The loss-carryforward, in which deferred tax has been capitalised, amounts to SEK 173 million (165), corresponding to a tax asset of SEK 52 million (54). The tax that has been capitalised on loss-carryforwards pertains mainly to German companies. The loss-carryforward is not limited in time. Uncapitalised loss-carryforwards amount to SEK 80 million (119), corresponding to a tax asset of SEK 22 million (29). The amount is primarily attributable to companies in Germany, USA, China, Singapore
| Parent Company, 1 Jan– 31 Dec 2020 | Pension obligations |
Other | items Total tax |
|---|---|---|---|
| Deferred tax, net | |||
| Opening book value | 4 | –5 | –1 |
| Deferred tax as per income statement | 0 | 6 | 6 |
| Change in tax rate affecting income statement |
0 | 0 | 0 |
| Deferred tax recognised in other comprehensive income |
– | 0 | 0 |
| Closing book value | 4 | 1 | 5 |
| As per 31 Dec 2020 | |||
| BS Deferred tax asset |
4 | 1 | 5 |
| BS Deferred tax liability |
– | 0 | 0 |
| Deferred tax, net | 4 | 1 | 5 |
and Brazil. The remainder is made up of other items, which are not significant each on their own, and pertains to several countries.
Substantial dividends may be recognised without withholding tax. Of the deferred tax liabilities, SEK 71 million is estimated to be dissolved in 2021. The calculation is based on estimated depreciation of acquisition calculations in the coming years.
| Parent Company, 1 Jan– 31 Dec 2019 | Pension obligations |
Other | items Total tax |
|---|---|---|---|
| Deferred tax, net | |||
| Opening book value | 3 | –4 | –1 |
| Deferred tax as per income statement | 1 | –1 | 0 |
| Change in tax rate affecting income statement |
0 | 0 | 0 |
| Deferred tax recognised in other comprehensive income |
– | 0 | 0 |
| Closing book value | 4 | –5 | –1 |
| As per 31 Dec 2019 | |||
| BS Deferred tax asset |
4 | 0 | 4 |
| BS Deferred tax liability |
– | –5 | –5 |
| Deferred tax, net | 4 | –5 | –1 |
Goodwill consists of the amount by which the total purchase price and non-controlling interests exceed the fair value of identifiable, acquired assets and liabilities taken over. Goodwill is tested at least annually for impairment and is carried at cost less accumulated impairment losses. Gains or losses on the disposal of an entity include the remaining carrying amount of goodwill relating to the entity sold. For impairment testing during the year, see "Impairment testing of non-financial assets" below.
The Group's starting point with respect to acquisitions is that agencies, customer relations, etc., and the item software, licences, etc. have a limited useful life and are carried at cost less accumulated amortisation. Trademarks are possible to identify in connection with major company acquisitions. Most of the trademarks that have been capitalised to date have been judged to have an indefinite useful life, and no amortisation is calculated. Instead, an impairment test is conducted at least annually, in the same way as goodwill.
In connection with nearly all company acquisitions completed by Indutrade, a value is identified for purchased agencies and the customer relations that are included as part of the acquisition. Since most of Indutrade's acquisitions are small, it is not possible to itemise the intangible assets. According to IFRS, supplementary disclosures are to be made for each significant intangible asset. Since the Indutrade Group's intangible assets consist for the most part of many small sub-items, where none constitutes an item with material impact on the Group's result or position, no supplementary disclosures are made for these smaller intangible noncurrent assets.
Amortisation is calculated on a straight-line basis to allocate the cost of these assets over their estimated useful lives. The following amortisation schedules are used:
| Agencies, customer relations, etc. | 5–20 years |
|---|---|
| Trademarks | – |
| Software, licences, etc. | 5–10 years |
| Other intangible assets | 5–20 years |
The Group conducts certain product-specific development activities. Outlays for development are reported as development costs in the income statement as they arise. If the requirements in IAS 38 for internally prepared intangible assets are fulfilled, then the development that has been conducted is capitalised and is included in the item "Other intangible assets". The requirements of this standard are that the development costs pertain to identifiable, unique assets that are controlled by the Group. Capitalisation is done if it is technically possible to complete preparation of the asset and the intention is to use or sell the asset, that it can be shown that future economic benefit is probable, and that the costs can be calculated in a reliable manner.
Goodwill and most of the trademarks have been assessed as having an indefinite useful life and are not amortised, but are instead tested at least annually for impairment. Impairment is judged on the basis of a decline in value whenever events or changes in conditions indicate that the carrying amount may not be recoverable. Impairment is recognised in the amount in which the asset's carrying amount exceeds its recoverable value. The recoverable value is the higher of the asset's fair value less selling costs and its value in use. In calculations of value in use, future cash flows are discounted using a discount factor that takes into account risk-free interest and the risk associated with the specific asset. When determining any need to recognise impairment, assets are grouped at the lowest levels in which there are separate, identifiable cash flows (cash-generating units). For Indutrade this entails that such determination is done at the segment level, which corresponds to Indutrade's business areas, except for newly acquired companies where there are remaining contingent earn-outs, which are tested separately. For assets other than financial assets and goodwill for which an impairment loss has previously been recognised, a test is performed as per each balance sheet date to determine if any reversals should be made.
The effects of implementation of IFRS 16 have been taken into consideration in the test of impairment and have not had a significant impact.
| Group, 1 Jan– 31 Dec 2020 | Goodwill | Agencies, customer relationships, etc. |
Trademarks | Software, licences, etc. |
Other intangible assets |
Total intangible assets |
|---|---|---|---|---|---|---|
| Opening book value | 4,031 | 2,189 | 303 | 73 | 108 | 6,704 |
| Exchange rate differences | –189 | –106 | –7 | –4 | –2 | –308 |
| Investments during the year | – | – | 0 | 24 | 12 | 36 |
| Company acquisitions | 634 | 459 | 17 | 3 | 8 | 1,121 |
| Reclassification | –19 | 19 | – | – | – | – |
| Sales and disposals | – | 0 | – | –1 | – | –1 |
| Adjustment of preliminary purchase price allocation |
5 | – | – | – | – | 5 |
| Depreciation/amortisation | – | –344 | –2 | –29 | –21 | –396 |
| Impairment losses | –141 | – | – | – | –1 | –142 |
| Company divestment | –15 | –5 | – | – | – | –20 |
| BS Closing book value |
4,306 | 2,212 | 311 | 66 | 104 | 6,999 |
| As per 31 Dec 2020 | ||||||
| Cost | 4,566 | 4,502 | 374 | 252 | 218 | 9,912 |
| Accumulated depreciation/amortisation and impairment |
–260 | –2,290 | –63 | –186 | –114 | –2,913 |
| BS Book value |
4,306 | 2,212 | 311 | 66 | 104 | 6,999 |
| Group, 1 Jan – 31 Dec 2019 | Goodwill | Agencies, customer relationships, etc. |
Trademarks | Software, licences, etc. |
Other intangible assets |
Total intangible assets |
|---|---|---|---|---|---|---|
| Opening book value | 3,170 | 1,723 | 270 | 71 | 105 | 5,339 |
| Exchange rate differences | 72 | 42 | 4 | 1 | 0 | 120 |
| Investments during the year | – | – | 0 | 26 | 11 | 37 |
| Company acquisitions | 810 | 733 | 31 | 2 | 5 | 1,581 |
| Reclassification | – | 0 | – | 0 | –1 | –1 |
| Sales and disposals | – | 0 | – | 0 | – | 0 |
| Adjustment of preliminary purchase price allocation |
0 | 0 | 0 | 0 | 0 | 0 |
| Depreciation/amortisation | – | –309 | –2 | –26 | –12 | –349 |
| Impairment losses | –21 | – | – | –2 | – | –23 |
| BS Closing book value |
4,031 | 2,189 | 303 | 72 | 108 | 6,704 |
| As per 31 Dec 2019 | ||||||
| Cost | 4,158 | 4,238 | 365 | 232 | 201 | 9,195 |
| Accumulated depreciation/amortisation and impairment |
–127 | –2,049 | –62 | –160 | –93 | –2,491 |
| BS Book value |
4,031 | 2,189 | 303 | 73 | 108 | 6,704 |
Goodwill is not amortised continuously; instead, the value is tested yearly for impairment in accordance with IAS 36. Testing was conducted most recently in December 2020.
Goodwill is apportioned over cash-generating units, which for Indutrade are equated with operating segments. The operating segments correspond to Indutrade's business areas. The companies are organised in business areas to utilise the Group's aggregate position and strength in various customer and product segments. If it is logical from a business sense, coordination of certain support functions, such as warehousing, may be done within the business areas. Impairment testing is therefore done at the smallest, joint unit, which is the business area, except for newly acquired companies where there are remaining contingent earn-outs, which are tested separately. During the period leading up to when contingent earn-outs are to be paid, typically 1-3 years, no major changes are made to the operations of the company acquired, since the contingent earn-out payments are based on the company's earnings from existing operations. Integration with the rest of the Group is thus limited, initially. The point of departure for impairment testing is the contingent earn-out payments. In cases where it has been assessed that part, or all of the contingent earn-out will not be paid, a detailed impairment test for the company must be carried out.
The recoverable value has been calculated according to value in use and is based on the current estimation of cash flows for the next five years. Assumptions have been made on the gross margin, level of overheads, need for working capital and investment need. The parameters have been set to correspond to budgeted earnings for the 2021 financial year. During the rest of the five-year period, an annual growth rate of 2% (2%) has been assumed. Where greater changes are expected, the assumptions have been adapted to better correspond to these expectations. For cash flows beyond the five-year period, the rate of
growth has been assumed to correspond to the growth rate during the fifth year, ordinarily 2%.
Cash flows for cash-generating units, which correspond to operating segments (business areas) have been discounted using a weighted cost of capital equal to approximately 8% (9%) before tax. The weighted cost of capital has been adapted to the prevailing level of interest rates.
Operating segments have operations in more than one country. Operational risk in cash flows is considered to be similar among the segments, and thus the same discount rate (WACC) has been used for all segments. With respect to financial risk, the segments are active in related sectors, and the segments' financing structures are therefore considered to be similar.
The calculation shows that value in use exceeds the carrying amount at the segmental level. A sensitivity analysis shows that the remaining goodwill value would continue to be upheld if the discount rate were to be raised by 1 percentage point or long-term growth were to be decreased by 1 percentage point.
For newly acquired companies tested separately, an individually adapted WACC has been used that reflects the company's specific situation and risk. Impairment testing carried out in 2020 resulted in recognition of goodwill impairment equal to SEK 141 million.
Every year impairment testing is conducted for trademarks at the segmental level in accordance with the same principles and at the same point in time as for goodwill.
No events or changed conditions that would motivate impairment testing of other intangible assets that are amortised have been identified.
| 2020 | 2019 | |
|---|---|---|
| Benelux | 575 | 547 |
| DACH | 406 | 359 |
| Finland | 199 | 140 |
| Flow Technology | 535 | 515 |
| Fluids & Mechanical Solutions | 525 | 550 |
| Industrial Components | 720 | 689 |
| Measurement & Sensor Technology | 987 | 816 |
| UK | 359 | 415 |
| Total | 4,306 | 4,031 |
| 2020 | 2019 | |
|---|---|---|
| Benelux | 14 | 15 |
| DACH | 76 | 78 |
| Finland | 0 | 0 |
| Flow Technology | 10 | 11 |
| Fluids & Mechanical Solutions | 18 | 19 |
| Industrial Components | 5 | 6 |
| Measurement & Sensor Technology | 188 | 174 |
| UK | 0 | 0 |
| Total | 311 | 303 |
| Parent company | 2020 | 2019 |
|---|---|---|
| Opening cost | 2 | 2 |
| Investments during the year | 0 | 0 |
| Closing accumulated cost | 2 | 2 |
| Opening amortisation | –2 | –2 |
| Amortisation for the year | 0 | 0 |
| Closing accumulated amortisation | –2 | –2 |
| BS Planned residual value |
0 | 0 |
17
Property, plant and equipment are stated at cost less accumulated depreciation according to plan. Cost includes charges that are directly attributable to acquisition of the asset. Additional charges are added to the asset's carrying amount or are reported as a separate asset, depending on which is suitable, only when it is probable that the future economic benefit associated with the asset will accrue to the Group and the asset's cost can be measured in a reliable manner. All other forms of repairs and maintenance are reported as costs in the income statement in the period in which they were incurred.
Property, plant and equipment are depreciated over the asset's estimated useful life. The following depreciation schedules are used:
| Buildings | 25–40 years |
|---|---|
| Machinery | 5–10 years |
| Equipment | 3–10 years |
The assets' residual value and useful lives are tested for impairment at the end of every reporting period and are adjusted as necessary. Gains and losses on disposals of non-current assets are reported in the function in which depreciation was reported prior to their disposal or, alternatively, in other operating income and expenses.
Land is judged to have indefinite useful life and is not depreciated, but is instead tested at least annually for impairment. Impairment is judged on the basis of a decline in value whenever events or changes in conditions indicate that the carrying amount may not be recoverable. Impairment is recognised in the amount in which the asset's carrying amount exceeds its recoverable value. The recoverable value is the higher of the asset's fair value less selling costs and its value in use. In calculations of value in use, future cash flows are discounted using a discount factor that takes into account risk-free interest and the risk associated with the specific asset. When determining any need to recognise impairment, assets are grouped at the lowest levels in which there are separate, identifiable cash flows (cash-generating units). For Indutrade this normally entails that such determination is normally done at the segment level, which corresponds to Indutrade's business areas. For assets other than financial assets and goodwill for which an impairment loss has previously been recognised, a test is performed as per each balance sheet date to determine if any reversals should be made.
| Group, 1 Jan– 31 Dec 2020 | Land and buildings |
Machinery | Equipment | Construction-in progress |
Total property, plant and equipment |
|---|---|---|---|---|---|
| Opening book value | 1,091 | 609 | 266 | 54 | 2020 |
| Exchange rate differences | –56 | –28 | –9 | –2 | –95 |
| Investments during the year | 84 | 77 | 106 | 104 | 371 |
| Company acquisitions | 35 | 10 | 16 | – | 61 |
| Sales and disposals | –3 | –4 | –13 | – | –20 |
| Reclassification | 42 | 36 | 5 | –83 | – |
| Depreciation/amortisation | –38 | –129 | –90 | – | –257 |
| Company divestment | – | –12 | –1 | – | –13 |
| BS Closing book value |
1,155 | 559 | 280 | 73 | 2,067 |
| As per 31 Dec 2020 | |||||
| Cost | 1,646 | 1,945 | 1,125 | 73 | 4,789 |
| Accumulated depreciation/amortisation and impairment | –491 | –1,386 | –845 | – | –2,722 |
| BS Book value |
1,155 | 559 | 280 | 73 | 2,067 |
| Group, 1 Jan – 31 Dec 2019 | Land and buildings |
Machinery | Equipment | Construction-in progress |
Total property, plant and equipment |
| Opening book value | 885 | 477 | 342 | 32 | 1,736 |
| Existing leases as per the prior leasing standard, IAS 17, moved to note 18 |
– | – | –97 | – | –97 |
| Exchange rate differences | 13 | 16 | 6 | 1 | 36 |
| Investments during the year | 26 | 199 | 98 | 60 | 383 |
| Company acquisitions | 190 | 30 | 26 | 1 | 247 |
| Sales and disposals | –1 | –3 | –12 | –4 | –20 |
| Reclassification | 26 | 7 | –13 | –36 | –16 |
| Adjustment of preliminary purchase price allocation | 0 | 0 | 0 | 0 | 0 |
| Depreciation/amortisation | –35 | –116 | –82 | – | –233 |
| Company divestment | –13 | –1 | –2 | – | –16 |
| BS Closing book value |
266 | 54 | 2,020 | ||
| 1,091 | 609 | ||||
| As per 31 Dec 2019 | |||||
| Cost | 1,554 | 1,932 | 1,056 | 54 | 4,596 |
1) Of net investments in property, plant and equipment, SEK 362 million had an effect on cash flow, while SEK 0 million pertain to investments financed via finance leases.
BS Book value 1,091 609 266 54 2,020
| Parent company | 2020 | 2019 |
|---|---|---|
| Opening cost | 3 | 4 |
| Investments during the year | 1 | 0 |
| Sales and disposals | –1 | –1 |
| Closing accumulated cost | 3 | 3 |
| Opening depreciation/amortisation | –2 | –2 |
| Depreciation for the year | –1 | –1 |
| Sales and disposals | 1 | 1 |
| Closing accumulated depreciation | –2 | –2 |
| BS Planned residual value |
1 | 1 |
18
Indutrade's leases are primarily for rented premises. There are however, also leases on machinery and cars. Typically, leases are amortised over a fixed duration of between 1 and 15 years, with the option to extend. The Group has both small and mediumsized subsidiaries at many locations and in several countries. Because of that, there are also many lease agreements in place, with a variety of terms and conditions. Individually, most of the leases are immaterial. The leased assets may not be used as collateral on loans.
Leases are reported as rights-of-use with a corresponding liability as of the date when the leased asset is available for use by the Group. Each lease payment is allocated between amortisation of the liability and the financial expense. The financial expense is allocated over the lease period such that an amount corresponding to a fixed interest for the reported liability is recognised in each reporting period. Right-of-use assets are depreciated on a straight-line basis over the asset's useful life or lease period, whichever is shorter.
Assets and liabilities arising from leases are initially measured at present value.
Lease liabilities include the present value of the following lease payments:
The lease payments are discounted using the implicit rate of interest if that can be determined. Otherwise, the Group's established interest rate is used.
Right-of-use assets are measured at cost and include the following:
– the amount at which the lease liability was originally valued – initial direct expenses
Short-term leases and contracts where the right-of-use asset has a low value are expensed on an ongoing basis over the duration of the lease. Only identifiable assets are included as right-of-use assets with the associated lease liability, which means that the
lease payments associated with such things as service contracts with non-identifiable assets are reported directly in the income statement.
The Group is exposed to potential future increases in variable lease payments based on an index or interest rate that is not included in the lease liability prior to them entering into force. When adjustments of lease payments based on an index or an interest rate enter into force, the lease liability is revalued and adjusted against the right-of-use asset.
In instances where interest has not been specified in the lease agreement, Indutrade has (for each currency that applies) used a risk-free interest rate with a duration corresponding to the average term for leases as the basis. A premium has then been added to cover the Group's and subsidiaries' assessed credit risk. An adjustment has also been made based on the type of asset.
The Group initially estimates the amounts of guaranteed residual values that are expected to be paid and reports them as part of the lease liability. The amounts are evaluated and adjusted (if necessary) at the end of each reporting period. At the end of this financial year, guaranteed residual values associated with lease liabilities amounted to SEK 0.3 million (0.5).
When the duration of a lease has been established, management considers all available information providing an economic incentive to utilise an option to extend, or not utilise an option to cancel an agreement. Opportunities to extend an agreement are only included in the duration of the lease if it is reasonable to assume that the lease will be extended.
The assessment is re-evaluated if any important events arise, or, if a change in circumstances occurs that impacts this assessment and the change is within the lessee's control.
| Group, 1 Jan – 31 Dec 2020 | Buildings | Cars | Production equipment | Other | Total Right-of-use assets |
|---|---|---|---|---|---|
| Opening book value | 791 | 144 | 36 | 11 | 982 |
| Exchange rate differences | –26 | –2 | –2 | 0 | –30 |
| Additional rights-of-use | 250 | 96 | 3 | 9 | 358 |
| Company acquisitions | 83 | 3 | – | 0 | 86 |
| Leases ended | –4 | –8 | – | 0 | –12 |
| Amortisation 1) | –231 | –91 | –15 | –6 | –343 |
| Company divestment | –2 | – | – | – | –2 |
| BS Closing book value |
861 | 142 | 22 | 14 | 1,039 |
| As per 31 Dec 2020 | |||||
| Cost | 1,252 | 273 | 54 | 24 | 1,603 |
| Accumulated depreciation | –391 | –131 | –32 | –10 | –564 |
| BS Book value | 861 | 142 | 22 | 14 | 1,039 |
1) In the income statement, amortisation associated with leases is reported for each function
| Group, 1 Jan – 31 Dec 2019 | Buildings | Cars | Production equipment | Other | Total Right-of-use assets |
|---|---|---|---|---|---|
| Existing leases as per the prior leasing standard, IAS 17 |
– | 100 | 12 | 2 | 114 |
| Change in accounting principles | 725 | 39 | 37 | 6 | 807 |
| Exchange rate differences | 13 | 2 | 1 | 0 | 16 |
| Additional rights-of-use | 190 | 98 | 2 | 6 | 296 |
| Company acquisitions | 76 | 3 | 2 | 3 | 84 |
| Leases ended | –6 | –10 | –1 | – | –17 |
| Amortisation | –207 | –87 | –17 | –6 | –317 |
| Company divestment | – | –1 | – | 0 | –1 |
| BS Closing book value |
791 | 144 | 36 | 11 | 982 |
| Cost | 992 | 222 | 64 | 21 | 1,299 |
|---|---|---|---|---|---|
| Accumulated depreciation | –201 | –78 | –28 | –10 | –317 |
| BS Book value | 791 | 144 | 36 | 11 | 982 |
| 2020 | 2019 | |
|---|---|---|
| Amortisation of leases | –343 | –317 |
| Interest expense on lease liabilities (included in financial expenses) |
–27 | –26 |
| Lease expense on short-term contracts | –5 | –6 |
| Lease expense on assets with a low value | –16 | –18 |
| Costs associated with variable lease payments | –1 | –1 |
| Revenue from subleasing of rights-of-use | 0 | 0 |
| Total amount recognised in the income statement | –392 | –368 |
| 2020 | 2019 | |
|---|---|---|
| Maturity in 2020 | – | 325 |
| Maturity in 2021 | 323 | 224 |
| Maturity in 2022 | 247 | 171 |
| Maturity in 2023 | 185 | 126 |
| Maturity in 2024 | 122 | 82 |
| Maturity in 2025 or later | 276 | 140 |
| Total contractual cash flows | 1,153 | 1,068 |
| Carrying amount of lease liability | 1,068 | 1,011 |
| 2020 | 2019 | |
|---|---|---|
| Payments for short-term contracts and contracts of lesser value |
–21 | –24 |
| Costs associated with variable lease payments | –1 | –1 |
| Interest paid | –27 | –26 |
| Total cash flow from operating activities | –49 | –51 |
Amortisation of lease liabilities attributable to leases –367 –340
The Group's holdings of shares and participations in other companies
| Domicile | Share of capital % |
Share of votes % |
No. shares |
Book value |
|
|---|---|---|---|---|---|
| Kytäjän Golf Oy | Finland | – | – | 6 | 1 |
| EGA Matic ApS | Denmark | 27 | 27 | 125 | 1 |
| Veng Norge AS | Norway | 30 | 30 | 330 | 8 |
| Other | – | – | – | 2 | |
| Holdings of shares and participation in unlisted companies |
12 |
For the Group's holdings of shares and participations in other companies, fair value is considered to be equal to cost. See also Note 2.
Shares and participations
| Group | Parent company | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Opening cost | 14 | 13 | 6,590 | 6,156 |
| External acquisitions | – | 1 | 312 | 348 |
| External divestiture/liquidations | –2 | 0 | – | –10 |
| Shareholder contribution | – | 0 | 23 | 85 |
| Internal restructuring | – | – | – | 25 |
| Adjustment of estimated contingent earn-out payments |
– | – | –44 | –14 |
| Increase through company acquisition |
2 | 0 | – | – |
| Decrease through company divestiture |
–2 | – | – | – |
| Exchange rate differences | 0 | 0 | – | – |
| Closing accumulated cost | 12 | 14 | 6,881 | 6,590 |
| Opening revaluations | – | – | 8 | 8 |
| Closing acc. revaluations | – | – | 8 | 8 |
| Opening impairment | 0 | – | –679 | –679 |
| Impairment for the year | – | 0 | – | – |
| Closing acc. impairment | 0 | 0 | –679 | –679 |
| BS Book value |
12 | 14 | 6,210 | 5,919 |
| Effect on cash flow | ||||
| Purchase price, external acquisitions |
–312 | –344 | ||
| Purchase price not paid out | 69 | 90 | ||
| Reversal of contingent earn-out payments |
– | – | ||
| Internal restructuring | – | –25 | ||
| Purchase price paid for previous years' acquisitions |
–5 | –59 | ||
| Shareholder contribution paid out |
–20 | –80 | ||
| Total | –268 | –418 |
A complete, statutory specification has been appended to the annual report sent in to the Swedish Companies Registration Office. This specification is available upon request from Indutrade AB.
| Group | Parent company | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Opening balance | 34 | 26 | 13 | 13 |
| Additional receivables | 41 | 9 | 22 | – |
| Repaid deposits/amortisation | –12 | –2 | – | – |
| Company acquisitions | – | 1 | – | – |
| Change in value of pensions | 0 | 1 | 0 | 1 |
| Reported net against pension obligations |
2 | –1 | 3 | –1 |
| Exchange rate differences | –1 | 0 | 0 | – |
| BS Total |
64 | 34 | 38 | 13 |
The Group's non-current receivables pertain mainly to endowment insurance policies. The book value is judged to correspond to fair value. The maturity dates for the endowment insurance policies is dependent on the date of retirement for the persons insured.
The Parent Company's non-current receivables pertain mainly to an endowment insurance policy.
Inventories
Inventories are stated at the lower of their cost and net realisable value. Cost is calculated using the first-in first-out (FIFO) method. The cost of finished goods and work in progress consists of raw materials, direct wages, other direct costs and related indirect manufacturing costs (based on normal manufacturing capacity).
Net realisable value is the estimated selling price in the normal course of business, less relevant variable selling costs.
Inventories are broken down into the following items:
| Group | 2020 | 2019 |
|---|---|---|
| Raw materials and consumables | 675 | 704 |
| Products-in-process | 317 | 308 |
| Finished products and goods for resale | 2,315 | 2,388 |
| BS Total |
3,307 | 3,400 |
The cost of goods sold for the Group includes impairment of inventory, totalling SEK 52 million (25).
No significant reversals of previous impairment charges were made in 2020 or 2019.
Trade receivables
Trade receivables pertain to goods sold as part of operating activities. Trade receivable are initially recognised at the transaction price and subsequently at amortised cost, since the Group holds trade receivables with the intention of receiving contractual cash flows. Bad debt losses are recorded based on an assessment of expected losses during the lifespan of receivables. It is based on historic data and various risk scenarios. The historical loss level is adjusted according to the most likely scenario. The loss is recognised in the income statement as part of selling costs. Recoveries of previous impairment losses are credited to selling costs in the income statement.
Since the Group consists of more than 200 operating companies, the item "trade receivables" is an accumulation of many smaller individual entries. That fact lowers the overall risk, since subsidiaries can act quickly if a customer does not pay in accordance with the terms and conditions. Because Indutrade's trade receivables typically fall due within 6 months, they are classified as current assets.
Age breakdown of trade receivables and provisions for impaired trade receivables
| Group | 2020 | 2019 |
|---|---|---|
| Trade receivables | ||
| Trade receivables not yet due | 2,240 | 2,187 |
| Trade receivables 0-3 months past due | 594 | 740 |
| Trade receivables 3-6 months past due | 58 | 57 |
| Trade receivables more than 6 months past due | 90 | 105 |
| Provision for doubtful debts | –57 | –64 |
| BS Total |
2,925 | 3,025 |
| Provision for doubtful debts | ||
| Provision for doubtful debts, 0–3 months past due | –7 | –6 |
| Provision for doubtful debts, 3-6 months past due | –4 | –6 |
| Provision for doubtful debts, older than 6 months | –46 | –52 |
| Total | –57 | –64 |
| Change in provision for doubtful debts during the year |
||
| Opening provision | –64 | –65 |
| Receivables written off as bad debt losses | 10 | 6 |
| Reversed, unutilised provisions | 8 | 10 |
| Provision for doubtful debts for the year | –11 | –12 |
| Company acquisitions | –2 | –1 |
| Exchange rate differences | 2 | –2 |
| Closing provision | –57 | –64 |
For a description of risks associated with the Company's trade receivables, see Note 2.
| Group | Parent company | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Prepaid material costs | 40 | 57 | – | – |
| Prepaid rents | 31 | 26 | – | – |
| Prepaid IT/telecom costs | 22 | 21 | 1 | 1 |
| Prepaid insurance premiums | 15 | 15 | 0 | 0 |
| Prepaid property costs | 11 | 12 | – | – |
| Other prepaid expenses | 56 | 59 | 20 | 21 |
| BS Total |
175 | 190 | 21 | 22 |
Loans are stated initially at fair value, net after deducting transaction costs. They are thereafter stated at amortised cost, and any difference between the amount received (net after transaction costs) and the repayment amount is recognised in the income statement allocated over the duration of the loans using the effective interest method.
Borrowings are classified as non-current liabilities unless the Group has an unconditional right to defer repayment by at least 12 months after the balance sheet date.
Indutrade typically uses an acquisition structure entailing a base level of consideration plus a contingent earn-out payment. Contingent earn-out payment is typically based on the projected earnings of the acquired company over the next few years. As per the date of the transaction, the contingent earn-out payment is measured at fair value by estimating the present value of the likely outcome. The interest expense is thereafter allocated over the period up until the date of payment. Contingent earn-out payments are remeasured at every reporting date. Excess or deficit amounts are booked as an expense or revenue in the income statement under "Other operating income/expenses". Contingent earn-out payments are reported as a current liability if it is payable within 12 months from the balance sheet date.
For a description of the accounting principles for lease liabilities, please see Note 18 Leases.
| Group | Parent company | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Non-current liabilities | ||||
| Lease liability | 758 | 694 | 0 | 0 |
| SEK-denominated loans with terms longer than 1 year |
802 | 1,183 | 800 | 1,178 |
| MTN loans | 2,000 | 2,000 | 2,000 | 2,000 |
| EUR-denominated loans with terms longer than 1 year |
17 | 16 | – | – |
| Loans in other currencies with terms longer than 1 year |
12 | 26 | – | – |
| Contingent earn-out payments in SEK with payment due later than 1 year |
93 | 115 | 56 | 79 |
| Contingent earn-out payments in EUR with payment due later than 1 year |
188 | 78 | – | – |
| Contingent earn-out payments in other currencies with payment due later than 1 year |
180 | 218 | 37 | – |
| BS Total |
4,050 | 4,330 | 2,893 | 3,257 |
| Current liabilities | ||||
| Utilised bank overdraft facilities | 48 | 255 | 35 | 232 |
| Lease liability | 310 | 317 | 0 | 0 |
| SEK-denominated loans with terms shorter than 1 year |
– | 299 | – | 297 |
| Commercial paper | 699 | 1,082 | 699 | 1,082 |
| EUR-denominated loans with terms shorter than 1 year |
– | 3 | – | – |
| Loans in other currencies with terms shorter than 1 year |
41 | 32 | – | – |
| Contingent earn-out payments in SEK with payment due less than 1 year |
13 | 12 | 12 | 12 |
| Contingent earn-out payments in EUR with payment due less than 1 year |
56 | 29 | – | – |
| Contingent earn-out payments in other currencies with payment due less than 1 year |
19 | 113 | 11 | 6 |
| BS Total |
1,186 | 2,142 | 757 | 1,629 |
Externally granted bank overdraft facilities amount to SEK 716 million (740) for the Group and SEK 680 million (680) for the Parent Company.
| Maturity dates | Group | |
|---|---|---|
| leases, non-current portion | 2020 | 2019 |
| Maturity in 2021 | – | 215 |
| Maturity in 2022 | 235 | 161 |
| Maturity in 2023 | 173 | 117 |
| Maturity in 2024 | 112 | 76 |
| Maturity in 2025 or later | 238 | 125 |
| Total | 758 | 694 |
| 2020 | Parent company |
|||||
|---|---|---|---|---|---|---|
| Maturity dates for long-term loans, SEK million | SEK | EUR | DKK | GBP | KRW | SEK |
| Maturity in 2022 | 500 | 7 | 5 | 1 | 1 | 500 |
| Maturity in 2023 | 1,300 | 1 | – | 1 | 3 | 1,300 |
| Maturity in 2024 | 1,000 | 1 | – | 1 | – | 1,000 |
| Maturity in 2025 or later | 2 | 8 | – | – | – | – |
| Total | 2,802 | 17 | 5 | 3 | 4 | 2,800 |
| Variable (V)/Fixed (F) interest | V&F | V&F | V | V&F | V | V&F |
| 2019 | Group | Parent company |
|||||
|---|---|---|---|---|---|---|---|
| Maturity dates for long-term loans, SEK million | SEK | EUR | CNY | GBP | KRW | USD | SEK |
| Maturity in 2021 | 501 | 6 | 10 | 3 | 4 | 0 | 500 |
| Maturity in 2022 | 501 | 2 | – | 2 | 2 | 0 | 500 |
| Maturity in 2023 | 1,000 | 0 | – | 1 | – | 0 | 1,000 |
| Maturity in 2024 or later | 1,181 | 8 | – | 3 | – | 1 | 1,178 |
| Total | 3,183 | 16 | 10 | 9 | 6 | 1 | 3,178 |
| Variable (V)/Fixed (F) interest | V&F | V&F | V | V&F | V | V&F | V&F |
| 2020 | Group | Parent company | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Maturity dates for long-term contingent earn-out payments, SEK million |
SEK | EUR | GBP | NOK | CHF | CZK | SEK | NOK | CZK |
| Maturity in 2022 | 56 | 40 | 95 | 26 | – | 11 | 56 | 26 | 11 |
| Maturity in 2023 | – | 16 | – | – | 45 | – | – | – | – |
| Maturity in 2024 | – | 132 | – | – | – | – | – | – | – |
| Maturity in 2025 or later | 37 | – | – | – | – | – | – | – | – |
| Total | 93 | 188 | 95 | 26 | 45 | 11 | 56 | 26 | 11 |
| Present value discounting rate, % | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 |
| 2019 | Parent company |
|||||
|---|---|---|---|---|---|---|
| Maturity dates for long-term contingent earn-out payments, SEK million |
SEK | EUR | GBP | NOK | CHF | SEK |
| Maturity in 2021 | 51 | 63 | 167 | 6 | – | 51 |
| Maturity in 2022 | 28 | 9 | – | – | – | 28 |
| Maturity in 2023 | – | 6 | – | – | 45 | – |
| Maturity in 2024 or later | 36 | – | – | – | – | – |
| Total | 115 | 78 | 167 | 6 | 45 | 79 |
| Present value discounting rate, % | 2 | 2 | 2 | 2 | 2 | 2 |
25
The Group has both defined benefit and defined contribution pension plans. A defined benefit pension plan is a pension plan that specifies a level of post-retirement benefits. The Group's defined benefit plans are both funded and unfunded. For funded plans, the assets have been detached (plan assets). A defined contribution pension plan is a pension plan to which the Group makes set contributions to a separate legal entity.
The liability carried on the balance sheet pertaining to defined benefit pension plans consists of the present value of the defined benefit obligations on the balance sheet date, less the fair value of the plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligations is calculated by discounting the anticipated future cash flows using the rate of interest for high quality corporate bonds (AA-rated), corresponding to the duration of the liability, in countries in which such a market exists (the Netherlands, the UK and Switzerland).
For calculations of defined benefit pension obligations in Sweden, the discount rate has been set in reference to the interest rate for mortgage bonds with a duration that corresponds to the average duration of the obligations. Indutrade has determined
that a deep market for high quality corporate bonds exists in Sweden. Indutrade is of the opinion that Swedish mortgage bonds issued by Swedish corporations in the financial sector are covered by the concept of corporate bonds. Based on the outstanding volume, turnover and number of issues in the mortgage bond market, it has been determined that a deep market exists for these bonds. Consequently, mortgage bonds have been used as a basis for the interest rate.
Actuarial gains and losses arising from experience-based adjustments and changes in actuarial assumptions are recognised directly in other comprehensive income after taking into account payroll tax and deferred tax.
Pension costs relating to service in current and past periods are recognised directly in profit or loss.
For defined contribution pension plans, the Group pays contributions to publicly or privately administered pension plans on a statutory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. Earnings are charged in pace with employees' earnings of the benefits.
Some of the Group's defined benefit pension obligations have been financed through payment of premiums to the insurance company Alecta. Since relevant information about these cannot be obtained from Alecta, these obligations are reported as a defined contribution plan.
In calculations of the liability on the balance sheet pertaining to defined benefit pension plans, various assumptions have been made, as shown in the table.
The Parent Company's pension obligation consists of an endowment insurance policy.
In accordance with IAS 19 Employee Benefits, actuaries commissioned by Indutrade have computed the Group's pension liability and the provisions to be made on a regular basis for pensions for the Group's employees.
The pension plans include retirement pensions, disability pensions and family pensions. Calculations are done individually and are based on the employee's salary, previously earned pension benefits and the anticipated remaining service period. Apart from the PRI plan in Sweden, the Group has defined benefit plans primarily in the Netherlands, Switzerland and the UK. Switzerland has a risk-sharing system for defined benefit plans in which the risk is split between the company and the employees. The plan in the UK has been closed for new contributions, as well as the main portion of the plan in the Netherlands.
| 2020 | 2019 | |
|---|---|---|
| PRI plan | 175 | 155 |
| Defined benefit plans, Netherlands, Switzerland and the UK |
190 | 192 |
| Total defined benefit plans | 365 | 347 |
| Other pension obligations | 35 | 30 |
| BS Total |
400 | 377 |
The Group's plan assets, totalling SEK 943 million (978), consist for Switzerland and the Netherlands of investments with insurance companies, mainly in government bonds, corporate bonds and interest rate derivatives. Plan assets in the UK consist of equities and equity funds, government and corporate bonds, and liquid assets. The pension liability is irrevocable.
The pension plans include retirement pensions, disability pensions and family pensions. Premiums are paid on a regular basis during the year to independent legal entities. The size of the pension premiums is based on the individual employee's salary, and the cost of the premium is recognised on a continuing basis through profit or loss.
According to a pronouncement from the Swedish Financial Reporting Board, retirement pension and family pension obligations secured through insurance with Alecta for salaried employees in Sweden are classified as multi-employer defined benefit plans. For 2020 Indutrade does not have access to such information that would make it possible to report this plan as a defined benefit plan, which is why the plan is reported as a defined contribution plan. Premiums paid during the year for pension plans with Alecta amounted to SEK 29 million (28). Premiums for 2021 are expected to be in line with 2020. Alecta's collective funding ratio was 148% (148%) in December 2020.
| The Group, 2020 | Sweden | Nether lands |
Switzer land |
Great Britain |
|---|---|---|---|---|
| Assumptions in calculating pension obligations |
||||
| Discount rate, % | 0.90 | 0.90 | 0.20 | 1.10 |
| Future salary increases, % | 3.25 | 1.80 | 0.50 | – |
| Anticipated inflation, % | 1.50 | 1.80 | 0.50 | 3.30 |
| Future pension increases, % | 1.50 | 0.50 | 0.00 | 2.30 |
| Employee turnover, % | 2.00 | 1) | 1) | – |
1) Age-related.
| Sweden | Nether lands |
Switzer land |
Great Britain |
|---|---|---|---|
| 1.55 | 1.01 | 0.35 | 1.90 |
| 3.80 | 1.80 | 1.00 | – |
| 1.80 | 1.80 | 1.00 | 3.30 |
| 1.80 | 0.50 | 0.00 | 2.30 |
| 2.00 | 1) | 1) | – |
1) Age-related.
| Duration, years | 2020 | 2019 |
|---|---|---|
| Sweden | 20 | 20 |
| Netherlands | 20 | 20 |
| Switzerland | 17 | 17 |
| Great Britain | 13 | 13 |
| Impact on defined benefit obligation, SEK million |
Sweden | Nether lands |
Switzer land |
Great Britain |
|---|---|---|---|---|
| Discount rate, increase by 1.00% | –14 | –49 | –40 | –4 |
| Discount rate, decrease by 1.00% | 16 | 56 | 46 | 5 |
| Salary increase, increase by 1.00% | 10 | 0 | 4 | – |
Amounts reported in the balance sheet
| 2020 | 2019 | |
|---|---|---|
| Present value of funded obligations | 1,133 | 1,170 |
| Fair value of plan assets | –943 | –978 |
| 190 | 192 | |
| Present value of unfunded obligations | 175 | 155 |
| 175 | 155 | |
| Net liability, defined benefit plans, in the balance sheet |
365 | 347 |
| 2020 | 2019 | |
|---|---|---|
| Experience-based adjustments of defined benefit obligations |
5 | 5 |
| Return on plan assets, excl. interest income | –12 | –102 |
| Demographic adjustments of defined benefit obligations |
–13 | 0 |
| Financial adjustments of defined benefit obligations | 36 | 176 |
| Total | 16 | 79 |
| 2020 | 2019 | |
|---|---|---|
| Present value of pension obligations at start of year | 1,325 | 1,077 |
| Pension costs | 31 | 35 |
| Change of pension terms | – | –12 |
| Interest expenses | 11 | 19 |
| Employee contributions | 11 | 10 |
| Pension payments | –50 | –18 |
| Actuarial gains (–)/losses (+) | 28 | 181 |
| Exchange rate differences | –48 | 33 |
| Present value of pension obligations at year-end | 1,308 | 1,325 |
| Plan assets at start of year | 978 | 810 |
| Interest income | 7 | 14 |
| Employee contributions | 12 | 12 |
| Company contributions | 20 | 26 |
| Pension payments | –46 | –14 |
| Return on plan assets, excl. interest income | 12 | 102 |
| Exchange rate differences | –40 | 28 |
| Plan assets at year-end | 943 | 978 |
| Net liability at start of year | 347 | 267 |
| Net cost reported in the income statement | 35 | 28 |
| Pension payments | –5 | –6 |
| Company contributions | –20 | –26 |
| Actuarial gains (–)/losses (+) | 16 | 79 |
| Exchange rate differences in foreign plans | –8 | 5 |
| Net liability at year-end | 365 | 347 |
| 2020 | 2019 | ||||||
|---|---|---|---|---|---|---|---|
| Amounts reported in income statement | Defined benefit plans |
Defined contribution plans |
Total | Defined benefit plans |
Defined contribution plans |
Total | |
| Costs relating to service in current and past periods | 31 | 284 | 315 | 23 | 265 | 288 | |
| Interest on obligation | 11 | – | 11 | 19 | – | 19 | |
| Return on plan assets | –7 | – | –7 | –14 | – | –14 | |
| Net cost in income statement | 35 | 284 | 319 | 28 | 265 | 293 | |
| of which, included in selling costs | 31 | 207 | 238 | 23 | 194 | 217 | |
| of which, included in administrative expenses | 0 | 77 | 77 | 0 | 71 | 71 | |
| of which, included in financial items | 4 | – | 4 | 5 | – | 5 |
Anticipated company contributions to defined benefit pension plans in 2021 amount to SEK 17 million.
26
A provision is reported on the balance sheet when the Group has a formal or constructive obligation as a result of an event that has occurred and it is probable that an outflow of resources will be required to settle the obligation, and the amount has been calculated in a reliable manner.
Future obligations for guarantee commitments are based on outlays for similar costs during the financial year or calculated costs for the respective obligations.
| Group | Parent company | ||||
|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | ||
| Guarantee commitments | 20 | 12 | – | – | |
| Total long-term provisions | 20 | 12 | – | – |
| Guarantee commitments |
|
|---|---|
| Opening balance, 1 January 2020 | 12 |
| Guarantee commitments in acquired companies | 0 |
| Change in guarantee commitments for the year | 8 |
| BS Closing balance, 31 December 2020 |
20 |
| Group | Parent company | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Accrued vacation pay | 251 | 235 | 5 | 6 |
| Other payroll costs | 312 | 268 | 12 | 11 |
| Accrued social security costs | 97 | 96 | 8 | 6 |
| Accrued expenses for purchase of materials |
102 | 99 | – | – |
| Customer bonuses and discounts | 74 | 61 | – | – |
| Accrued audit and consulting fees |
37 | 31 | 2 | 2 |
| Accrued financial expenses | 9 | 9 | 8 | 9 |
| Other | 77 | 60 | 2 | 1 |
| BS Total |
959 | 859 | 37 | 35 |
| Group | Parent company | ||||
|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | ||
| For own liabilities: | |||||
| Real estate mortgages | 73 | 103 | – | – | |
| Chattel mortgages | 14 | 38 | – | – | |
| Assets subject to liens1) | 178 | 191 | – | – | |
| Blocked funds | 5 | 1 | – | – | |
| Total | 270 | 333 | – | – |
1) Primarily leases on cars.
A contingent liability is recognised when a possible obligation arises from past events and whose existence will be confirmed only by the occurrence of one or more uncertain future events, or when an obligation currently exists that is not reported as a liability or provision because it is not probable that an outflow or resources will be required to settle the obligation.
| Group | Parent company | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Guarantees pledged for subsidiaries' PRI liabilities |
– | – | 80 | 79 |
| Guarantees pledged for the benefit of subsidiaries |
– | – | 28 | 38 |
| Contingent liabilities for own PRI liabilities |
2 | 2 | – | – |
| Other contingent liabilities | 0 | 1 | – | – |
| Total | 2 | 3 | 108 | 117 |
Cash and cash equivalents include short-term investments with maturities of less than three months, and cash and bank balances. Drawn bank overdraft facilities are stated on the balance sheet under the item "Current interest-bearing liabilities".
Cash and cash equivalents on the balance sheet and in the statement of cash flows consist of:
| Group | Parent company | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Cash and bank balances | 755 | 716 | 0 | 0 |
| Short-term investments | 3 | 3 | 0 | 0 |
| BS Total |
758 | 719 | 0 | 0 |
| Non-cash changes | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 Jan 2020 |
Items affecting | cash flow Acquisition | Divest | ments Interest | Transfer from non current to current |
Translation difference |
Adjustment in income statement |
New loans raised |
Fair value |
31 Dec 2020 |
|
| Current interest-bearing liabilities | 1,671 | –1,406 | 6 | – | – | 504 | 13 | – | – | – | 788 |
| Non-current interest-bearing liabilities |
3,225 | 366 | 9 | 34 | – | –504 | –299 | – | – | – | 2,831 |
| Lease liability | 1,011 | –367 | 86 | –14 | 27 | – | –32 | – | 357 | – | 1,068 |
| Total, excl. contingent earn-out payments |
5,907 | –1,407 | 101 | 20 | 27 | – | –318 | – | – | 4,687 | |
| Contingent earn-out payments1) | 565 | –104 | – | – | 5 | – | –23 | –213 | 319 | 0 | 549 |
| Total interest-bearing liabilities | 6,472 | –1,511 | 101 | 20 | 32 | – | –341 | –213 | 676 | 0 | 5,236 |
| 1) Items affecting cash flow are reported in investing activities. | |||||||||||
| Financial assets used for hedging purposes2) |
14 | – | – | – | – | – | – | – | 16 | – | 30 |
| Short-term investments | 3 | 0 | – | – | – | – | 0 | – | – | – | 3 |
| Cash and bank balances | 716 | 94 | – | – | – | – | –55 | – | – | – | 755 |
| Total cash and bank balances | 719 | 94 | – | – | – | – | –55 | – | – | – | 758 |
2) For liabilities reported in financing activities.
| Non-cash changes | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 Jan 2019 |
Items affect ing cash flow Acquisition |
Divest | ments Interest | Transfer from non current to current |
Translation difference |
Adjust ment in income statement |
New loans raised |
New account ing prin ciple, IFRS 16 |
Fair value |
31 Dec 2019 |
||
| Current interest-bearing liabilities | 1,642 | –289 | 7 | – | – | 310 | 1 | – | – | – | – | 1,671 |
| Non-current interest-bearing liabilities |
2,356 | 1,170 | 27 | – | – | –310 | –18 | – | – | – | – | 3,225 |
| Lease liability | 108 | –340 | 83 | –18 | 25 | – | 17 | – | 294 | 842 | – | 1,011 |
| Total, excl. contingent earn-out payments |
4,106 | 541 | 117 | –18 | 25 | – | 0 | – | 294 | 842 | – | 5,907 |
| Contingent earn-out payments1) | 215 | –93 | – | – | 7 | – | 3 | –32 | 465 | – | 0 | 565 |
| Total interest-bearing liabilities | 4,321 | 448 | 117 | –18 | 32 | – | 3 | –32 | 759 | 842 | 0 | 6,472 |
| 1) Items affecting cash flow are reported in investing activities. | ||||||||||||
| Financial assets used for hedging purposes2) |
6 | – | – | – | – | – | – | – | 8 | – | 0 | 14 |
| Short-term investments | 3 | 0 | – | – | – | – | 0 | – | – | – | – | 3 |
| Cash and bank balances | 705 | 35 | – | – | – | – | –24 | – | – | – | – | 716 |
| Total cash and bank balances | 708 | 35 | – | – | – | – | –24 | – | – | – | – | 719 |
2) For liabilities reported in financing activities.
All of the shares were acquired in the following companies: Stein Automation GmbH (Germany), VarioDrive B.V. (Netherlands), AVA Monitoring AB (Sweden), Sverre Hellum & Sønn AS (Norway), Jouka OY (Finland), Nortronic AS (Norway), Holland Fasteners B.V. (the Netherlands), UK Gas Technologies Ltd. (UK), Cheirón A.S. (Czech Republic) and X-RAY WorX GmbH (Germany).
On 27 January, VarioDrive B.V. (the Netherlands) was acquired, with annual sales of SEK 60 million. The company offers motion control solutions to OEM customers.
On 20 July, Holland Fasteners B.V. (the Netherlands) was acquired, with annual sales of SEK 50 million. The company offers customised, high-quality items such as bolts, screws, nuts and rivets. Its customers are primarily located in the Netherlands.
On 10 January, STEIN Automation GmbH & Co. KG, (Germany) was acquired with annual sales of SEK 110 million. The company is a supplier of pallet transfer systems for assembly lines. Its customers are companies primarily based in Germany within the automotive, medical and consumer goods industries.
On 17 September, UK Gas Technologies Ltd. (UK) was acquired, with annual sales of SEK 130 million. It manufactures solutions for high purity medical and laboratory gases, purified water and steam systems, as well as other process installations and specialist systems. The company serves customers worldwide.
On 6 February, Jouka Oy (Finland) was acquired, with annual sales of SEK 70 million. The company designs and manufactures ball valves and integrated ball valve solutions for customers primarily in the Finnish market.
On 4 February, Sverre Hellum & Sønn AS (Norway) was acquired, with annual sales of SEK 60 million. The company is a supplier of diamond tools in the Norwegian market.
On 3 March, Nortronic AS (Norway) was acquired, with annual sales of approximately SEK 60 million. The company is a technology sales company in the lighting market, which represents manufacturers of various LED solutions, system solutions for control and drives.
On 1 October, Cheirón A.S. (Czech Republic) was acquired, with annual sales of SEK 120 million. The company offers medical technology products, used in surgery rooms, intensive care wards, emergency wards, and cardio units.
On 31 January, AVA Monitoring AB (Sweden) was acquired, with annual sales of SEK 45 million. The company develops, manufactures and sells equipment for measuring ground vibration and noise in connection with infrastructure and construction projects.
On 22 December, X-RAY WorX GmbH (Germany) was acquired, with annual sales of SEK 120 million. The company manufactures X-ray tubes for industrial applications in non-destructive testing.
On 24 March, Meson FT Rus LLC was divested, with annual sales of approximately SEK 80 million. The capital gain amounted to SEK 0 million.
2020 2019 SEK million Net sales EBITA Net sales EBITA Business area Benelux 345 40 272 28 DACH 158 23 95 17 Finland 57 15 – – Flow Technology 137 22 116 18 Fluids & Mechanical Solutions 28 2 92 17 Industrial Components 215 38 87 17 Measurement & Sensor Technology 99 16 297 43 UK 51 2 183 26 Effect on Group 1,090 158 1,142 166 Acquisitions carried out in 2018 333 50 Acquisitions carried out in 2019 619 76 809 116 Acquisitions carried out in 2020 471 82 – – Effect on Group 1,090 158 1,142 166
The table above shows the net sales and EBITA that the acquired companies have had since the acquisition date and which are included in the Group's earnings for each period. If all acquired units had been consolidated as from 1 January 2020, net sales for the year would have amounted to SEK 19,517 million, and EBITA would have totalled SEK 2,669 million.
| SEK million | 2020 | 2019 |
|---|---|---|
| Purchase price, incl. contingent earn-out payments | 1,359 | 2,091 |
| of which contingent earn-out payments | 324 | 465 |
| 2020 | 2019 | |||||||
|---|---|---|---|---|---|---|---|---|
| Acquired assets | Book value |
Fair value adjustment |
Fair value | Book value |
Fair value adjustment |
Fair value | ||
| Goodwill | – | 634 | 634 | – | 810 | 810 | ||
| Agencies, trademarks, customer relationships, licenses etc. | 11 | 476 | 487 | 9 | 763 | 772 | ||
| Property, plant and equipment | 61 | – | 61 | 247 | – | 247 | ||
| Financial assets | 0 | – | 0 | 1 | – | 1 | ||
| Inventories | 180 | – | 180 | 241 | – | 241 | ||
| Other current assets1) | 242 | – | 242 | 271 | – | 271 | ||
| Cash and cash equivalents | 124 | – | 124 | 202 | – | 202 | ||
| Deferred tax liability | –3 | –118 | –121 | –10 | –152 | –162 | ||
| Provisions including pension liabilities | – | – | – | 0 | – | 0 | ||
| Other operating liabilities | –248 | – | –248 | –291 | – | –291 | ||
| Non-controlling interests | – | – | – | 0 | – | 0 | ||
| 367 | 992 | 1,359 | 670 | 1,421 | 2,091 |
1) Primarily trade receivables.
Since disclosures about the individual acquisitions are insignificant, they are provided here in aggregate form. The cost amount of the value of customer relationships and agencies is reported on the balance sheet as agencies, trademarks, customer relationships, licences, etc. They will be amortised over a period of 5–20 years, with the exception of trademarks, most of which are assumed to have indefinite useful life. Trademarks are included at a value of SEK 17 million (31). Goodwill is justified by the good profitability and personnel included in the acquired companies.
Indutrade typically uses an acquisition structure entailing a base level of consideration plus a contingent earn-out payment. Initially, the contingent earn-out payment is valued at the present value of the likely outcome, which for the acquisitions made during the year amount to SEK 324 million (465). The contingent earn-out payments fall due for payment within three years and can amount to a maximum of SEK 364 million (487). If the conditions are not met, the outcome can be in the range of SEK 0-364 million (0-487).
Transaction costs for the acquisitions carried out during the year totalled SEK 11 million (14) and are included in "Other operating expenses" in the income statement. Contingent earn-out payments were restated in the amount of SEK 214 million (30). The effect is reported under Other operating income and expenses in the amount of SEK 208 million (30) and under Net financial items in the amount of SEK 6 million (0).
The purchase price allocation calculations for the companies acquired through December 2019 have now been finalised. No significant adjustments have been made to the calculations. For other acquisitions, the purchase price allocation calculations are preliminary. Indutrade regards the calculations as preliminary during the time that uncertainty exists with respect to, for example, the outcome of guarantees in the acquisition agreements concerning inventories and trade receivables.
| SEK million | 2020 | 2019 |
|---|---|---|
| Purchase price, incl. contingent earn-out payments | 1,359 | 2,091 |
| Purchase price not paid out | –327 | –474 |
| Cash and cash equivalents in acquired companies | –124 | –202 |
| Payments pertaining to previous years´acquisitions | 116 | 97 |
| Total cash flow impact | 1,024 | 1,512 |
On 4 January, Pistesarjat Oy, Finland, was acquired, with annual sales of SEK 90 million. The company offers cable systems from global leading suppliers to customers in Finland.
On 20 January, and agreement was signed to acquire Tecno Plast Industrietechnik GmbH (Germany), with annual sales of SEK 240 million. The company offers single-use tubing sets, PTFE and silicone hoses to customers in Germany, Austria, and Switzerland. The acquisition was made on 12 February subsequent to approval by the German Competition Authority.
On 29 January, Fire Proof B.V. (the Netherlands) was acquired, with annual sales of SEK 70 million. The company is a distributor specialised in passive fire protection for buildings.
On 15 February Typhoon Group (the Netherlands) was acquired, with annual sales of SEK 40 million. It is specialised in stirring and mixing systems.
On 4 March, Efcon Water B.V. (the Netherlands) was acquired, with annual sales of SEK 20 million. It is a highly focused supplier of products and measurement instrumentation for wastewater sampling systems.
Intra-Group purchases and sales were only limited in extent. Investments with and borrowings from Group companies have been made on an arm's length basis.
The Indutrade Group's related parties consist mainly of senior executives. Disclosures of transactions with these related parties are provided in Note 8, Wages, salaries and other remuneration, and social security costs.
During January-March 2021, five company acquisitions were made. For further information, see Note 32.
In other respects, no significant events for the Group have occurred after the end of the reporting period.
Indutrade AB, reg. no. 556017-9367, is the Parent Company of the Group. The Company is a Swedish limited liability company with registered office in Stockholm, Sweden. Address:
Indutrade AB Box 6044 SE-164 06 Kista Sweden Tel: +46 (0)8 703 03 00 Website: www.indutrade.se
The share capital of Indutrade AB as per 31 December 2020 consisted of 363,615,000 shares with a share quota value of SEK 2, for a total of SEK 727 million. A bonus issue was executed in December 2020. As a result of that, the number of shares tripled. The bonus issue did not involve any change in the relationship between shareholders.
At the Annual General Meeting on 13 April 2021, a dividend of SEK 1.80 per share will be proposed for the 2020 financial year, for a total of SEK 655 million. The proposed dividend has not been reported as a liability in these financial statements.
| Parent company | ||
|---|---|---|
| 2020 | 2019 | |
| Provision 2014 | – | 73 |
| Provision 2015 | 110 | 110 |
| Provision 2016 | 108 | 108 |
| Provision 2017 | 142 | 142 |
| Provision 2018 | 120 | 120 |
| Provision 2019 | 120 | 120 |
| Provision 2020 | 75 | – |
| BS Total |
675 | 673 |
To the general meeting of the shareholders of Indutrade AB (publ), corporate identity number 556017-9367.
We have audited the annual accounts and consolidated accounts of Indutrade AB (publ) for the year 2020, with the exception of the Corporate Governance Report on pages 34-41. The annual accounts and consolidated accounts of the company are included on pages 14-15, 22-26, 29-41,43, and 45-85 in this document.
In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 December 2020 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2020 and their financial performance and cash flow for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act. Our opinion does not cover the Corporate Governance Report on pages 34-41. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.
We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet for the parent company and the group.
Our opinions in this report on the annual accounts and consolidated accounts are consistent with the content of the additional report that has been submitted to the parent company's audit committee in accordance with the Audit Regulation (537/2014) Article 11.
We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. This includes that, based on the best of our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited company or, where applicable, its parent company or its controlled companies within the EU.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.
We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements. In particular, we considered areas where management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.
Indutrade markets and sells components, systems and services with high-tech content in selected niches to the industry. The Group consists of more than 200 companies in 30 countries and has a clearly defined acquisition strategy the Group has grown, mainly through acquisitions.
The single largest company in the Group is HP Valves Odenzaal BV in the Netherlands. With the exception of this company the Group consists of individually small entities with respect to the Group as a total. The most significant balance sheet items are inventories and accounts receivables.
In order to ensure that we in our audit of the consolidated accounts have a common focus on important areas, and to ensure that we obtain a sufficient coverage of the Group's net sales, the Group audit team have assigned each subsidiary audit scopes. These scopes vary from no audit (non-significant subsidiary or no statutory audit obligation) to so called full audit which means interim audit procedures during fall with a focus on internal controls, review procedures as of September 30 and year-end audit procedures. Through this scope of our work we as Group auditors obtain enough coverage from subsidiaries in Group reporting scope when we issue this Auditor's report. In addition, local statutory audit procedures are performed for all legal entities within the Group subject to such requirements according to local law.
The strongly decentralized governance model adopted by Indutrade, means local management in the individual subsidiaries have important responsibilities in terms of establishing and maintaining proper internal controls. Within the Indutrade Group there is an annual process for selfassessment whereby the companies respond to an internal control questionnaire. Answers are summarized and evaluated by the parent company's finance department and business area controllers. In addition, we perform as part of our audit a validation of selected questions in the self-assessment.
On Group level we audit areas such as impairment of goodwill, actuarial reports for significant pension plans and acquisition balances.
Our audit is carried out continuously during the year. In 2020, with respect to the interim reports for the third quarter and year-end, we reported our main observations to Group management, audit committee and the Board of Directors. For the third quarter, we issued a public review report.
We have considered the impact covid-19 has had on our audit and tailored our procedures to properly cover any new and/or increased risks. On an overall level we have been able to conduct our audit although the pandemic has led to other ways of working and use of digital tools for communication and collection of audit evidence
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as a whole. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters.
Inventories is a significant item in the consolidated balance sheet. As per December 31 2020 inventory amounts to SEK 3,3 billion. The existence and valuation of inventories are important factors to consider. The obsolescence provisions are to some extent affected by management's judgments
Refer to the Annual Report Note 21 Inventories
In our audit we have mapped and assessed the companies' inventory processes including routines for valuation and assessment of obsolescence in order to gain an understanding of risks and controls. We have also participated in stocktaking and performed audit procedures of pricing of articles in stock.
Considering the company's operations, system support, inventory turnover and other relevant factors we have tested the obsolescence models in the subsidiaries against Indutrade's general accounting principles considering.
We have traced the disclosures information included in Note 21 Inventories to the accounting records and other supporting documentation and ensured that they are in line with the disclosure requirements in IAS 2 Inventory.
Accounts receivable amount to SEK 2.9 billion as of December 31, 2020 which constitutes a significant balance sheet item. Key audit areas to consider when auditing accounts receivable are existence and valuation. Accounts receivables also are affected by elements of management's judgments in terms of impaired accounts receivable and assessment of credit risk. Allowances for account receivables are recorded based on assessment of the expected credit losses during the lifespan of the receivables. The model is based on historical data and various risk scenarios. The historical loss level is adjusted according to the most likely scenario. As the Group consist of more than 200 companies the balance consists of several minor amounts.
Refer to the Annual Report Note 2 – Risk and risk management and note 22 – Trade accounts receivable
The sales process, covering controls related to credit assessment, follow-up and monitoring of receivables past due and valuation of impaired accounts receivable, is an important process to focus on in our audit. In connection with the year-end audit we have had a specific focus in our audit on provisions for impaired trade accounts receivable, where we need to assess the chosen model for provisioning and management's judgment with respect to significant credit risks or customers with payment difficulties. We have also performed tests over subsequent payments in order to confirm existence of accounts receivable. Based on our work, we had no material observations for the overall audit on Indutrade's valuation of accounts receivable.
We have traced the disclosures information included in Note 22 Trade accounts receivables to the accounting records and other supporting documentation and ensured that they are in line with the disclosure requirements in IFRS 9 Financial instruments
Goodwill amount to SEK 4,3 billion as of December 31, 2020 which constitutes a significant balance sheet item. Goodwill is subject to the risk of impairment. Goodwill is tested for goodwill impairment based on the lowest levels of separable identified cash flows (cash generated units). This represents the segment levels for Indutrade with the exception of newly acquired entities with a remaining earn out period which are evaluated separately. Management is performing a goodwill impairment test on a yearly basis which includes estimates and judgements relating to future expected cashflows, market growth rate and discount rate (WACC). The estimates are subject to managements estimates and judgements. Goodwill has been written-off with SEK 141 million during the year.
Refer to the Annual Report Note 16 Intangible assets
We have included a combination of analytical procedures and a detailed test of managements impairment test of goodwill which included a test of significant assumptions. We have included assistance from our valuation experts to challenge the assumptions and estimates applied by management.
We have traced the disclosures information included in Note 16 Intangible assets to the accounting records and other supporting documentation and ensured that they are in line with the disclosure requirements in IAS 36 Impairment of assets.
This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1-5, 27-28, 44, 91-95 and the sustainability report on page 6-13,16-21,30-32 and remuneration report on page 42. Board of Directors and the Managing Director are responsible for this other information.
Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information.
In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated.
If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts
and consolidated accounts that are free from material misstatement, whether due to fraud or error.
In preparing the annual accounts and consolidated accounts, The Board of Directors and the Managing Director are responsible for the assessment of the company's and the group's ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intends to liquidate the company, to cease operations, or has no realistic alternative but to do so.
The Audit Committee shall, without prejudice to the Board of Director's responsibilities and tasks in general, among other things oversee the company's financial reporting process
Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts.
A further description of our responsibility for the audit of the annual accounts and consolidated accounts is available on Revisors- inspektionen's website www.revisorsinspektionen.se/revisornsansvar. This description is part of the auditor´s report.
In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of Indutrade AB (publ) for the year 2020 and the proposed appropriations of the company's profit or loss.
We recommend to the general meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.
We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.
The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company's and the group's type of operations, size and risks place on the size of the parent company's and the group's equity, consolidation requirements, liquidity and position in general.
The Board of Directors is responsible for the company's organization and the administration of the company's affairs. This includes among other things continuous assessment of the company's and the group's financial situation and ensuring that the company's organization is designed so that the accounting, management of assets and the company's financial affairs otherwise are controlled in a reassuring manner. The Managing Director shall manage the ongoing administration according to the Board of Directors' guidelines and instructions and among other matters take measures that are necessary to fulfill the company's accounting in accordance with law and handle the management of assets in a reassuring manner.
Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect:
Our objective concerning the audit of the proposed appropriations of the company's profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accordance with the Companies Act.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company's profit or loss are not in accordance with the Companies Act.
A further description of our responsibility for the audit of the administration is available on Revisorsinspektionen's website: www.revisorsinspektionen.se/revisornsansvar. This description is part of the auditor´s report.
The Board of Directors is responsible for that the Corporate Governance Report on pages 34-41 has been prepared in accordance with the Annual Accounts Act.
Our examination of the corporate governance report is conducted in accordance with FAR's auditing standard RevU 16 The auditor's examination of the corporate governance statement. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions.
A corporate governance report has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2-6 of the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the other parts of the annual accounts and consolidated accounts and are in accordance with the Annual Accounts Act.
PricewaterhouseCoopers AB, Torsgatan 21, 113 97 Stockholm, was appointed auditor of Indutrade AB (publ) by the general meeting of the shareholders on 2 June, 2020 and has been the company's auditor since before 1994.
Stockholm 19 March 2021
PricewaterhouseCoopers AB
Anna Rosendal Authorized Public Accountant Lead partner
To the general meeting of the shareholders in Indutrade AB (publ), corporate identity number 556017-9367
It is the board of directors who is responsible for the statutory sustainability report for the year 2020 on pages 6-13,16-21, and 30-32 that it has been prepared in accordance with the Annual Accounts Act.
Our examination has been conducted in accordance with FAR's auditing standard RevR 12 The auditor's opinion regarding the
statutory sustainability report. This means that our examination of the statutory sustainability report is substantially different and less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions.
A statutory sustainability report has been prepared.
Stockholm March 19, 2021
PricewaterhouseCoopers AB
Anna Rosendal Authorized Public Accountant Lead partner
| SEK million | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net sales | 19,217 | 18,411 | 16,848 | 14,847 | 12,955 | 11,881 | 9,746 | 8,831 | 8,384 | 7,994 |
| Cost of goods sold | –12,681 | –12,126 –11,099 | –9,881 | –8,607 | –7,847 | –6,464 | –5,833 | –5,545 | –5,268 | |
| Development costs | –227 | –217 | –204 | –178 | –156 | –133 | –107 | –110 | –95 | –74 |
| Selling costs | –3,009 | –2,990 | –2,737 | –2,463 | –2,179 | –2,044 | –1,708 | –1,601 | –1,527 | –1,430 |
| Administrative expenses | –1,123 | –1,103 | –991 | –893 | –791 | –635 | –535 | –449 | –426 | –398 |
| Other operating income/expenses | 89 | 41 | 8 | –52 | 50 | 13 | 49 | 18 | 6 | –2 |
| Operating profit | 2,266 | 2,016 | 1,825 | 1,380 | 1,272 | 1,235 | 981 | 856 | 797 | 822 |
| Financial income/expenses | –126 | –124 | –75 | –70 | –78 | –98 | –86 | –100 | –83 | –93 |
| Profit after financial items | 2,140 | 1,892 | 1,750 | 1,310 | 1,194 | 1,137 | 895 | 756 | 714 | 729 |
| Income Tax | –471 | –409 | –382 | –280 | –258 | –243 | –192 | –169 | –145 | –189 |
| Net profit for the year | 1,669 | 1,483 | 1,368 | 1,030 | 936 | 894 | 703 | 587 | 569 | 540 |
| EBITA | 2,615 | 2,330 | 2,087 | 1,613 | 1,484 | 1,427 | 1,134 | 990 | 905 | 917 |
| EBITA margin, % | 13.6 | 12.7 | 12.4 | 10.9 | 11.5 | 12.0 | 11.6 | 11.2 | 10.8 | 11.5 |
| SEK million | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|---|---|---|
| Assets | ||||||||||
| Goodwill | 4,306 | 4,031 | 3,170 | 2,845 | 2,388 | 1,942 | 1,572 | 1,308 | 1,188 | 822 |
| Other intangible assets | 2,693 | 2,672 | 2,169 | 2,102 | 1,879 | 1,636 | 1,445 | 1,286 | 1,215 | 888 |
| Property, plant and equipment | 3,106 | 3,002 | 1,736 | 1,618 | 1,451 | 1,117 | 971 | 849 | 741 | 706 |
| Financial assets | 228 | 182 | 158 | 139 | 117 | 101 | 87 | 61 | 59 | 45 |
| Inventories | 3,307 | 3,400 | 2,834 | 2,517 | 2,249 | 1,931 | 1,617 | 1,546 | 1,472 | 1,328 |
| Trade receivables | 2,925 | 3,025 | 2,877 | 2,469 | 2,292 | 1,995 | 1,702 | 1,435 | 1,411 | 1,263 |
| Other receivables | 639 | 513 | 418 | 412 | 345 | 300 | 336 | 208 | 204 | 149 |
| Cash and cash equivalents | 758 | 719 | 708 | 464 | 332 | 339 | 357 | 261 | 243 | 264 |
| Total assets | 17,962 | 17,544 | 14,070 | 12,566 | 11,053 | 9,361 | 8,087 | 6,954 | 6,533 | 5,465 |
| Liabilities and equity | ||||||||||
| Equity | 8,634 | 7,170 | 6,218 | 5,168 | 4,399 | 3,707 | 3,162 | 2,626 | 2,290 | 2,064 |
| Non-current interest-bearing liabilities, incl. pension liabilities |
4,450 | 4,707 | 2,811 | 1,569 | 2,274 | 1,260 | 1,216 | 2,201 | 1,158 | 837 |
| Other non-current liabilities and provisions | 770 | 720 | 619 | 600 | 563 | 480 | 412 | 353 | 333 | 255 |
| Current interest-bearing liabilities | 1,186 | 2,142 | 1,806 | 2,724 | 1,686 | 2,028 | 1,635 | 381 | 1,424 | 1,083 |
| Trade payables | 1,136 | 1,237 | 1,168 | 1,081 | 968 | 848 | 763 | 602 | 586 | 556 |
| Other current liabilities | 1,786 | 1,568 | 1,448 | 1,424 | 1,163 | 1,038 | 899 | 791 | 742 | 670 |
Lease liabilities and right-of-use assets according to IFRS 16 are included in the key data as of 2019. The comparative financial information has not been restated.
| SEK million | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|---|---|---|
| Cash flow from operating activities before changes in working capital |
2,582 | 2,271 | 1,821 | 1,514 | 1,318 | 1,315 | 970 | 790 | 720 | 764 |
| Changes in working capital | 198 | –349 | –461 | 40 | –111 | –239 | –66 | 69 | –201 | –55 |
| Cash flow from operating activities | 2,780 | 1,922 | 1,360 | 1,554 | 1,207 | 1,076 | 904 | 859 | 519 | 709 |
| Net capital expenditures in non-current assets | –399 | –403 | –299 | –236 | –320 | –221 | –124 | –206 | –127 | –139 |
| Company acquisitions and divestments | –978 | –1,484 | –586 | –1,007 | –1,164 | –878 | –585 | –444 | –572 | –467 |
| Change in other financial assets | 11 | 3 | 0 | 1 | 8 | –1 | 3 | 1 | –5 | 13 |
| Cash flow from investing activities | –1,366 | –1,884 | –885 | –1,242 | –1,476 | –1,100 | –706 | –649 | –704 | –593 |
| Net borrowing | –1,407 | 541 | 225 | 116 | 620 | 303 | 165 | 88 | 442 | 134 |
| Dividend paid out | – | –544 | –453 | –384 | –360 | –310 | –282 | –282 | –270 | –204 |
| Payment for issued warrants | – | – | 0 | 8 | – | – | – | – | – | – |
| New issues | 87 | – | 7 | 95 | – | – | – | – | – | – |
| Cash flow from financing activities | –1,320 | –3 | –221 | –165 | 260 | –7 | –117 | –194 | 172 | –70 |
| Cash flow for the period | 94 | 35 | 254 | 147 | –9 | –31 | 81 | 16 | –13 | 46 |
| Cash and cash equivalents at start of year | 719 | 708 | 464 | 332 | 339 | 357 | 261 | 243 | 264 | 219 |
| Exchange rate differences | –55 | –24 | –10 | –15 | 2 | 13 | 15 | 2 | –8 | –1 |
| Cash and cash equivalents at end of year | 758 | 719 | 708 | 464 | 332 | 339 | 357 | 261 | 243 | 264 |
| SEK million | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|---|---|---|
| Non-current interest-bearing liabilities | 4,450 | 4,707 | 2,811 | 1,569 | 2,274 | 1,260 | 1,216 | 2,201 | 1,158 | 837 |
| Current interest-bearing liabilities | 1,186 | 2,142 | 1,806 | 2,724 | 1,686 | 2,028 | 1,635 | 381 | 1,424 | 1,083 |
| Cash and cash equivalents | –758 | –719 | –708 | –464 | –332 | –339 | –357 | –261 | –243 | –264 |
| Interest-bearing net debt | 4,878 | 6,130 | 3,909 | 3,829 | 3,628 | 2,949 | 2,494 | 2,321 | 2,339 | 1,656 |
| Net debt/equity ratio, % | 56 | 85 | 63 | 74 | 82 | 80 | 79 | 88 | 102 | 80 |
| Interest coverage ratio, times | 21.0 | 17.2 | 25.1 | 21.1 | 16.5 | 14.6 | 12.2 | 8.9 | 9.0 | 8.9 |
| Equity ratio, % | 48 | 41 | 44 | 41 | 40 | 40 | 39 | 38 | 35 | 38 |
| Net debt/EBITDA, times | 1.5 | 2.1 | 1.7 | 2.1 | 2.2 | 1.8 | 1.9 | 2.1 | 2.3 | 1.6 |
| Return measures | ||||||||||
| Capital employed, average, SEK million | 13,541 | 12,416 | 9,839 | 8,444 | 7,491 | 6,537 | 5,324 | 4,894 | 4,078 | 3,680 |
| Return on capital employed, % | 19 | 19 | 21 | 19 | 20 | 22 | 21 | 20 | 22 | 25 |
| Equity, average, SEK million | 7,899 | 6,715 | 5,715 | 4,746 | 3,976 | 3,440 | 2,818 | 2,377 | 2,113 | 1,849 |
| Return on equity, % | 21 | 22 | 24 | 22 | 24 | 26 | 25 | 25 | 27 | 29 |
| Number of employees | ||||||||||
| Average number of employees | 7,349 | 7,167 | 6,710 | 6,156 | 5,495 | 4,978 | 4,418 | 4,151 | 3,939 | 3,778 |
| Number of employees at year-end | 7,270 | 7,357 | 6,778 | 6,545 | 5,705 | 5,107 | 4,578 | 4,218 | 4,086 | 3,807 |
Lease liabilities and right-of-use assets according to IFRS 16 are included in the key data as of 2019. The comparative financial information has not been restated.
| 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Share price at 31 December, SEK | 176.2 | 111.7 | 68.5 | 74.5 | 61 | 53.4 | 34.7 | 29.8 | 21.9 | 20.3 |
| Market cap at 31 December, SEK million | 64,069 | 40,511 | 24,848 | 27,011 | 21,960 | 19,220 | 12,480 | 10,740 | 7,880 | 7,320 |
| Dividend, SEK | 1.802) | – | 1.50 | 1.25 | 1.07 | 1.00 | 0.86 | 0.78 | 0.78 | 0.75 |
| Earnings before dilution, SEK | 4.60 | 4.09 | 3.77 | 2.85 | 2.60 | 2.48 | 1.96 | 1.63 | 1.58 | 1.50 |
| Earnings after dilution, SEK | 4.59 | 4.09 | 3.77 | 2.84 | 2.59 | 2.48 | 1.96 | 1.63 | 1.58 | 1.50 |
| Number of shares outstanding, 000s | 363,615 | 362,565 362,565 362,397 360,000 360,000 360,000 360,000 360,000 360,000 | ||||||||
| Average number of shares before dilution, '000 | 362,721 | 362,565 362,496 361,371 360,000 360,000 360,000 360,000 360,000 360,000 | ||||||||
| Average number of shares after dilution, '000 | 363,320 | 362,754 362,529 361,851 360,753 360,282 360,000 360,000 360,000 360,000 | ||||||||
| Number of shareholders at 31 December | 12,880 | 10,287 | 9,553 | 9,816 | 10,518 | 7,965 | 5,970 | 6,038 | 5,721 | 5,025 |
| Highest price paid during the financial year, SEK | 179.9 | 112.8 | 83.1 | 77.7 | 63.7 | 54.3 | 35.5 | 30.3 | 25.5 | 26.6 |
| Lowest price paid during the financial year, SEK | 73.7 | 67.6 | 67.3 | 55.7 | 45.4 | 34.5 | 26.8 | 22 | 19.4 | 17.1 |
| Direct yield3), % | 1.0 | – | 2.2 | 1.7 | 1.7 | 1.9 | 2.5 | 2.6 | 3.6 | 3.7 |
| Equity, SEK | 23.72 | 19.74 | 17.11 | 14.21 | 12.19 | 10.29 | 8.78 | 7.29 | 6.36 | 5.73 |
| Cash flow from operating activities, SEK | 7.66 | 5.30 | 3.75 | 4.30 | 3.35 | 2.99 | 2.51 | 2.39 | 1.44 | 1.97 |
1) A 2:1 bonus issue was executed during December 2020. All comparison figures have been restated for the new number of shares.
2) Board's proposal for 2020.
3) Dividend divided by the share price on 31 December.
In this annual report Indutrade presents certain key ratios (Alternative Performance Measures – APMs) that complement the financial measures defined in IFRS. Indutrade believes that these key ratios provide valuable information to readers, as they contribute to assessment of the Group's performance, trends, ability to repay debt and invest in new business opportunities, and they reflect the Group's acquisition-intensive business model.
EBITA calculated on a moving 12-month basis divided by average capital employed per month.
Net profit for the period on a moving 12-month basis divided by average shareholders' equity per month.
Gross profit divided by net sales.
Operating profit before amortisation of intangible non-current assets arising in connection with company acquisitions (Earnings Before Interest, Tax and Amortisation). EBITA is the principal measure of the Group's earnings.
EBITA divided by net sales.
Operating profit before depreciation and amortisation (Earnings Before Interest, Tax, Depreciation and Amortisation).
Shareholders' equity attributable to owners of the parent divided by the number of shares outstanding.
Purchases less sales of intangible non-current assets and of property, plant and equipment, excluding those included in acquisitions and divestments of subsidiaries and operations.
Interest-bearing net debt divided by shareholders' equity.
Interest-bearing net debt at the end of the period divided by EBITDA on a moving 12-month basis.
Shareholders' equity plus interest-bearing net debt.
Since not all companies calculate their financial key ratios in the same way, they are not always comparable. They should therefore not be regarded as a substitute for the key ratios defined in IFRS. Following are definitions of Indutrade's key ratios, of which most are APMs.
Net profit for the period attributable to owners of the parent divided by the average number of shares outstanding. Definition according to IFRS.
Net profit for the period attributable to owners of the parent divided by the average number of shares outstanding after dilution.
Interest-bearing liabilities including pension liability and estimated contingent earn-out payments for acquisitions, less cash and cash equivalents.
Operating profit plus interest income divided by interest expenses
Shareholders' equity divided by total assets.
| Net sales | 2020 | 2019 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| SEK million | Total | Oct–Dec | Jul–Sep | Apr–Jun | Jan–Mar | Total | Oct–Dec | Jul–Sep | Apr–Jun | Jan–Mar | |
| Benelux | 2,773 | 714 | 688 | 695 | 676 | 2,288 | 704 | 569 | 543 | 472 | |
| DACH | 1,529 | 362 | 360 | 394 | 413 | 1,403 | 374 | 375 | 349 | 305 | |
| Finland | 1,679 | 417 | 394 | 432 | 436 | 1,689 | 436 | 419 | 416 | 418 | |
| Flow Technology | 4,071 | 1,054 | 996 | 976 | 1,045 | 3,798 | 997 | 946 | 965 | 890 | |
| Fluids & Mechanical Solutions | 1,979 | 507 | 479 | 481 | 512 | 2,041 | 503 | 501 | 532 | 505 | |
| Industrial Components | 3,803 | 1,130 | 842 | 862 | 969 | 3,513 | 917 | 823 | 883 | 890 | |
| Measurement & Sensor Technology | 2,120 | 545 | 523 | 495 | 557 | 2,259 | 597 | 584 | 536 | 542 | |
| UK | 1,322 | 314 | 329 | 294 | 385 | 1,469 | 349 | 387 | 374 | 359 | |
| Parent company and Group items | –59 | –15 | –12 | –15 | –17 | –49 | –14 | –9 | –11 | –15 | |
| 19,217 | 5,028 | 4,599 | 4,614 | 4,976 | 18,411 | 4,863 | 4,595 | 4,587 | 4,366 |
| EBITA | 2020 | 2019 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| SEK million | Total | Oct–Dec | Jul–Sep | Apr–Jun | Jan–Mar | Total | Oct–Dec | Jul–Sep | Apr–Jun | Jan–Mar | |
| Benelux | 360 | 103 | 89 | 85 | 83 | 315 | 116 | 71 | 67 | 61 | |
| DACH | 169 | 39 | 42 | 43 | 45 | 134 | 36 | 36 | 33 | 29 | |
| Finland | 247 | 61 | 72 | 66 | 48 | 223 | 61 | 68 | 51 | 43 | |
| Flow Technology | 607 | 154 | 162 | 151 | 140 | 491 | 134 | 122 | 130 | 105 | |
| Fluids & Mechanical Solutions | 268 | 66 | 66 | 73 | 63 | 279 | 64 | 67 | 73 | 75 | |
| Industrial Components | 569 | 193 | 122 | 130 | 124 | 432 | 115 | 101 | 108 | 108 | |
| Measurement & Sensor Technology | 334 | 89 | 96 | 58 | 91 | 366 | 95 | 98 | 83 | 90 | |
| UK | 159 | 31 | 41 | 37 | 50 | 208 | 36 | 59 | 62 | 51 | |
| Parent company and Group items | –98 | –24 | –5 | –41 | –28 | –118 | –26 | –34 | –33 | –25 | |
| 2,615 | 712 | 685 | 602 | 616 | 2,330 | 631 | 588 | 574 | 537 |
| EBITA-margin | 2020 | 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| SEK million | Total | Oct–Dec | Jul–Sep | Apr–Jun | Jan–Mar | Total | Oct–Dec | Jul–Sep | Apr–Jun | Jan–Mar |
| Benelux | 13.0 | 14.4 | 12.9 | 12.2 | 12.3 | 13.8 | 16.5 | 12.5 | 12.3 | 12.9 |
| DACH | 11.1 | 10.8 | 11.7 | 10.9 | 10.9 | 9.6 | 9.6 | 9.6 | 9.5 | 9.5 |
| Finland | 14.7 | 14.6 | 18.3 | 15.3 | 11.0 | 13.2 | 14.0 | 16.2 | 12.3 | 10.3 |
| Flow Technology | 14.9 | 14.6 | 16.3 | 15.5 | 13.4 | 12.9 | 13.4 | 12.9 | 13.5 | 11.8 |
| Fluids & Mechanical Solutions | 13.5 | 13.0 | 13.8 | 15.2 | 12.3 | 13.7 | 12.7 | 13.4 | 13.7 | 14.9 |
| Industrial Components | 15.0 | 17.1 | 14.5 | 15.1 | 12.8 | 12.3 | 12.5 | 12.3 | 12.2 | 12.1 |
| Measurement & Sensor Technology | 15,8 | 16.3 | 18.4 | 11.7 | 16.3 | 16.2 | 15.9 | 16.8 | 15.5 | 16.6 |
| UK | 12.0 | 9.9 | 12.5 | 12.6 | 13.0 | 14.2 | 10.3 | 15.2 | 16.6 | 14.2 |
| 13.6 | 14.2 | 14.9 | 13.0 | 12.4 | 12.7 | 13.0 | 12.8 | 12.5 | 12.3 |
Indutrade AB (publ.) (CIN: 556017-9367) will hold its AGM on Tuesday, 13 April 2021.
Due to the COVID-19 pandemic and the recommendations of the Public Health Agency of Sweden, Indutrade has decided to conduct the AGM without shareholders, proxies or members of the public being physically present. Furthermore, shareholders will only be allowed to exercise their voting rights via advance voting. Information about the resolutions by the AGM will be made public on 13 April 2021, as soon as the results from advance voting have been finalised and compiled.
A presentation by Bo Annvik. President and CEO of Indutrade, where he comments on the company's performance in 2020 will be published on Indutrade's website, www.indutrade.se, on Tuesday, 13 April 2021.
Those who would like to participate in the AGM via postal voting must:
In order to be entitled to participate in the AGM, shareholders whose shares are registered in the names of a trustee must, besides registering to participate in the AGM by sending in a postal vote, have their shares re-registered temporarily in their own names so that they are included in the shareholder register as of the record date, Thursday 1 April 2021. This type of registration can be temporary (voting right registration) and it must be requested of the trustee in accordance with their routines, which will also specify how far in advance this must be done. Voting right registration that has been carried out by the trustee no later than Wednesday 7 April 2021 will be included when compiling the share register.
Information that is submitted when registering will be administered and used only for the 2021 AGM.
Shareholders may exercise their voting rights at the meeting only by voting in advance in accordance with Section 22 of the Swedish Act (2020:198) on Temporary Exemptions to Facilitate the Execution of General Meetings in Companies and Associations.
For postal voting, a specific form must be used. The form is available at www.indutrade.se. The postal voting form is valid as registration to participate in the AGM. The completed postal voting form must be received by Euroclear Sweden AB no later than Monday, 12 April 2021. The completed form must be sent by mail to Indutrade AB, "AGM", c/o Euroclear Sweden AB, Box 191, 101 23 Stockholm.
It is also possible to complete the form electronically and sign it using BankID in accordance with the instructions at: https://anmalan.vpc.se/ euroclearproxy or by sending the completed form via email to: [email protected].
If the shareholder votes in advance through a proxy, the power of attorney form must also be attached and submitted. If the shareholder is a legal entity, a registration certificate or other authorization document must be attached and submitted. When voting in advance, shareholders may not stipulate or attach any special instructions or conditions to the vote. If they do so, the vote will be invalid.
Additional instructions and conditions are printed on the postal voting form.
The Board proposes a dividend of SEK 1.80 per share.
The proposed record date for the dividend is Thursday, 15 April 2021. Provided that the AGM resolves in accordance with the Board's proposal, payment of the dividend is expected to be made via Euroclear Sweden AB on Tuesday, 20 April 2021.
Production: Indutrade and Addira Photo: Fond&Fond and Ola Olson Print: Larsson Offsettryck Paper: Cover 300 g Algro design, insert 150 g Tom & Otto silk
Indutrade AB, Box 6044, SE-164 06 Kista, Sweden Visiting address: Raseborgsgatan 9 Reg.nr. 556017-9367 Tel: +46 (0)8 703 03 00 E-mail: [email protected] www.indutrade.com
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