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Mildef Group
Quarterly Report • Feb 10, 2022
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Quarterly Report
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MilDef Group
YEAR-END REPORT JANUARY - DECEMBER 2021
This is a translation of the Swedish original of MilDef Group's year-end report for the period 1 January–31 December 2021. In the event of any discrepancies between the two versions, the original Swedish version shall apply.
Q4
www.mildef.com Your number one choice for tactical IT
Year-end report January – December 2021
CHALLENGING FOURTH QUARTER, MARKET OUTLOOK REMAINS POSITIVE
Fourth quarter 2021
- Net sales decreased by 22% to SEK 200.7 million (257.7). Previously communicated delivery delays due to current component shortages have had a negative impact on the company's net sales. The estimation is that net sales of approximately SEK 50 million have been postponed until 2022 due to shifts in planned deliveries.
- Gross margin amounted to 46% (49).
- Adjusted EBITDA amounted to SEK 34.6 million (87.5), equivalent to an adjusted operating margin of 17.2% (34.0).
- Operating profit (EBIT) amounted to SEK 28.2 million (77.1) including non-recurring items of SEK 0.0 million (-4.0).
- Order bookings decreased by 43% to SEK 213.2 million (376.0). During the fourth quarter previous year, MilDef received a very large customer order on the British market. The order value amounted to SEK 275 million. Adjusted for that order, the underlying order bookings increased by 111 percent in the fourth quarter of 2021.
- Operating cash flow amounted to SEK -13.3 million (39.5).
Full year 2021
- Net sales increased by 18% to 469.6 million (398.5).
- Gross margin amounted to 45% (46).
- Adjusted EBITDA amounted to SEK 32.2 million (72.8), equivalent to an adjusted operating margin of 6,9% (18.3).
- Operating profit (EBIT) amounted to SEK -2,9 million (56.9) including non-recurring items of SEK -11.5 million (-4.3).
- Order bookings decreased by 18% to SEK 589.4 million (718.0).
- The order backlog as of December 31, 2021 increased by 64% to SEK 731.5 million (446.3).
- Operating cash flow amounted to SEK -71.4 million (53.1).
- The Board of Directors proposes unchanged dividend of SEK 0.75 (0.75 SEK after adjustment of split 2:1).
Summary of significant events in the fourth quarter, October–December 2021
• No events that are to be regarded as significant have occurred during the fourth quarter.
Summary of significant events after the end of the period
• MilDef established presence in the Finnish market at the beginning of 2022. MilDef already has strong positions in Sweden, Norway and Denmark and sees good opportunities to reach a similar position on the Finnish market.
ROLLING 12 MONTHS, JANUARY - DECEMBER 2021
| NET SALES | ADJUSTED OPERATING PROFIT (EBITDA) |
ADJUSTED OPERATING MARGIN (EBITDA) |
|---|---|---|
| 470 SEK m |
32.2 SEK m |
6.9 % |
| FINANCIAL SUMMARY | October 1 - December 31 | January 1 - December 31 | Rolling 12 months |
Full year | |||
|---|---|---|---|---|---|---|---|
| All figures are in SEK million unless other wise indicated |
2021 | 2020 | 2021 | 2020 | jan - dec 2021 |
2020 | |
| Net sales | 200.7 | 257.7 | 469.6 | 398.5 | 469.6 | 398.5 | |
| Sales growth, % | -22 | 62 | 18 | 20 | 18 | 19 | |
| Of which organic, % | -42 | 62 | -14 | 20 | -14 | 19 | |
| Of which acquisition-driven, % | 20 | 0 | 32 | 0 | 32 | 0 | |
| Gross margin, % | 46 | 49 | 45 | 46 | 45 | 46 | |
| Adjusted operating profit (EBITDA) | 34.6 | 87.5 | 32.2 | 72.8 | 32.2 | 72.8 | |
| Adjusted operating margin (EBITDA), % | 17.2% | 34.0% | 6.9% | 18.3% | 6.9% | 18.3% | |
| Order bookings | 213.2 | 376.0 | 589.4 | 718.0 | 589.4 | 718.0 | |
| Order backlog | 731.5 | 446.3 | 731.5 | 446.3 | 731.5 | 446.3 | |
| Operating cash flow | -13.3 | 39.5 | -71.4 | 53.1 | -71.4 | 53.1 |
For more information see the section "Financial overview" on page 9 under the heading "Order situation".
All amounts are presented in SEK m unless otherwise indicated. Rounding differences in totals may occur in the amount of +/- SEK 1 million. If, when rounded off, an underlying number becomes SEK 0 m, this is written as 0.
MilDef's financial development
ORDER SITUATION
Each individual column in the diagram above shows MilDef's order bookings over the past 12 months in SEK million. The order bookings are the total orders received during the period in question. Deliveries may take place over a number of years. MilDef monitors order bookings to analyze future revenue streams and to validate forecasts.
NET SALES
The columns above show MilDef's net sales for full years 2016-2021.
The columns in the diagram above show MilDef's current order backlog at the end of each calendar quarter in SEK million. The order backlog represents the total value of orders received. Deliveries may take place over a number of years. The Group's order backlog is measured to assess and calculate future revenue streams and cash flows.
The diagram's columns show MilDef's net sales over the past 12 months in SEK million. The columns show the data excluding seasonal variations during the year.
ADJUSTED OPERATING PROFIT (EBITDA) AND ADJUSTED OPERATING MARGIN (EBITDA)
The diagram above shows MilDef's operating margin (EBITDA) over the past 12 months as a percentage, adjusted for non-recurring items. The non-recurring items are specified in detail on page 22 in Note 2. The adjusted EBITDA margin is stated as a percentage of net sales. MilDef considers the adjusted EBITDA margin to be a useful indicator to measure the Group's operational efficiency.
CEO'S COMMENTS
Challenging quarter but a positive outlook
MilDef growth journey continued in 2021 and we can summarize the year with many positive achievements. Two value-creating acquisitions, a strategic diversification of our business offering, geographical expansion, growth-oriented investments in technology and to top it off, the Company's stock exchange listing. During the year MilDef's sales grew by 18%, slightly above our financial growth target. The adjusted operating profit (EBITDA) amounted to SEK 32.2 million (72.8), equivalent to an adjusted operating margin of 6.9% (18.3). The previously communicated delivery challenges due to the global component shortage resulted in a postponement of planned deliveries in the fourth quarter to the first half of 2022, which in turn led to sales growth not corresponding to the increase in costs. The cost increase in 2021 is mainly due to increased staff to enable MilDef's planned growth in the coming years.
Challenging fourth quarter year-on-year comparison
During the comparison quarter, Q4 2020, we experienced exceptionally strong sales growth. Based on this year-onyear comparison, the outcomes of some of key performance measures are weaker. During the fourth quarter of 2021 sales amounted to SEK 200.7 million (257.7), a decrease of 22%. The adjusted operating profit (EBITDA) amounted to SEK 34.6 million (87.5), equivalent to an adjusted operating margin of 17.2% (34.0). Order bookings for the fourth quarter amounted to SEK 213.2 million (376.0). It should be noted, however, that when adjusted for our long-term contracts in the UK market, which were signed at the end of 2020 for delivery in 2022, the underlying order bookings increase by 111% for the fourth quarter.
Acquisition-driven growth a foundation for acceleration
The two acquisitions implemented in 2021, Defcon and Sysint, both contributed good growth, solid operating margins and a strategic product diversification in software and services. The expanded portfolio created new opportunities in our important home markets and this is reflected in future business opportunities. During the year MilDef continued to actively drive its acquisition agenda and awaits the right opportunities for new interesting acquisitions.
Component shortage and its consequences
As reported in both the second and third quarters of 2021, the global component shortage in the semiconductor market is causing two main types of negative consequences for MilDef. The estimation is that net sales of approximately SEK 50 million have been postponed until 2022 due to shifts in planned deliveries, which in turn affected operating profit negatively by approximately SEK 20-25 million. The component shortage is expected to continue to cause uncertainty in delivery precision in 2022. Countermeasures include adjustment of the warehousing strategy for critical components.
Summary of 2021
MilDef exceeded its long-term growth target despite a market characterized by pandemic effects, logistics problems and a semiconductor component shortage. This outcome was achieved with the help of both existing operations and the two new important acquisitions in Norway and Sweden. The operating margin declined, landing below MilDef's long-term target. This is a consequence of the aforementioned challenges in the market. Naturally, we are not satisfied with this outcome, but we believe that the market's challenges are transitional in nature.
"Today we are a stronger company than ever before and firmly optimistic about the outlook for our future."
Outlook
5
It is 25 years since MilDef began to pave the way for a growth journey that has only just begun. Today we are a stronger company than ever before and firmly optimistic about the outlook for our future. The previously reported, fundamentally good market conditions still exist and have even become stronger, with a swift increase in the focus in the Nordics and globally on security and defense. In 2021 MilDef strengthened its positions in our Nordic home markets and in early 2022 we established a presence in Finland. To this we are adding strong footprint on our growth markets – the UK and USA.
We are entering 2022 with optimism and a strong order backlog which has increased by 64% to SEK 731.5 million (446.3). MilDef is not adjusting its long-term targets. We are reiterating the positive view we hold of both organic and acquisition-driven growth.
Thank you for coming with us on this journey to an exciting future.
Björn Karlsson, CEO, MilDef Group
MilDef in brief
Digitalization of operations and functions that are crucial for society is increasing and there is therefore a need for tactical IT in demanding environments. MilDef is taking an active role in this development. The goal is to be the most reliable partner in the industry. MilDef adds value through industry-leading quality and high delivery precision.
Brief facts
MilDef's shares are listed on the Nasdaq Stockholm Small Cap index. Ticker: MILDEF.
- Specialist in the global niche for tactical IT
- Operations in five countries
- Partner network in more than 30 countries
- Founded in 1997
- Around 190 employees on the date of the report
MilDef's head office is in Helsingborg, Sweden.
Vision
Your number one choice for tactical IT.
Mission
In an ever-changing and increasingly digitalized world, there is an urgent need for tactical IT systems for critical processes in society – systems that are robust, fit for purpose and produce the desired effect. MilDef will provide unique solutions to meet those needs with high quality, speed and precision.
Business concept
MilDef's business concept is to develop, deliver and offer tactical IT products and services for operations and functions that are crucial for society. We customize solutions to meet our customers' specific requirements in the demanding environments in which they are used. MilDef's hardware and software products are combined with services to deliver effective digitalization. MilDef Group operates in the global security and defense market and in other areas that are crucial for society.
Growth strategy
MilDef's growth strategy is based on three prioritized areas. The intention is to drive growth organically and through acquisitions, but also by expanding the customer offering. This strategy includes MilDef expanding both geographically and by adding products and services.
Organic growth
In established markets MilDef is aiming to increase the share of long-term contracts and framework agreements. A long-term presence, strong position and proven delivery capability increase the opportunities to win large contracts in markets that are already established.
Acquisitions
MilDef has a structured acquisition strategy to support market entry and add complementary technologies to its portfolio where the Company's strong international distribution channels can be reused. Based on implemented acquisitions, MilDef has created a structured model to identify potential acquisition candidates, address and evaluate these and, once the transaction is complete, integrate them.
Expanded customer offering MilDef also intends to expand its customer offering – which today is mainly focused on hardware – to include services and software. MilDef considers these three areas – hardware, services and software – to have the potential to be equally strong business divisions over time.
Financial targets
Growth
MilDef's target is to grow sales over time by at least 15% per year, including acquisitions.
Profitability
MilDef's target is an operating margin (EBITDA) over time of at least 10%.
Capital structure
MilDef's target is for interest-bearing net debt not to exceed 2.5 times operating profit (EBITDA), other than temporarily.
Dividend policy
MilDef's target is to pay out an annual dividend of 20–40% of profit after tax. However, MilDef's long-term development, capital structure and the prevailing market conditions are to be taken into account.
The MilDef Way
The MilDef Way is the name given to the Company's core values which serve as guidance for the employees. All MilDef employees have agreed to observe these. MilDef's relationships are based on trust and the business is to be operated in an open, honest, respectful and transparent way. Integrity must always be maintained. The core values are as follows:
Priority
Put 80% effort into the 20% that matters most
Proactivity Plan for the future; act today
Integrity We say what we do and we do what we say
Unity
Work together as one
Sustainability
MilDef aims to maintain a good balance between business, environmental and social sustainability. This is considered crucial in order to meet current needs without jeopardizing the ability of future generations to meet their needs.
MilDef complies with mandatory requirements, such as those in laws and regulations, applicable organization and industry standards, contractual obligations and codes of conduct. MilDef strives to maintain a sustainable strategy to ensure that investments are made responsibly.
A framework for KYC (know your customer) is used to ensure that the actors MilDef chooses to do business with live up to both regulatory and ethical standards.
Financial overview
Profit/loss items and cash flow are compared with the corresponding period the previous year. The balance sheet items are at the end of the period and compared with the corresponding date the previous year.
Fourth quarter: October – December 2021
Order situation
Order bookings decreased by 43% to SEK 213.2 million (376.0). The acquisition of Defcon Solutions AB contributed SEK 62.4 million to the quarter's order bookings. During the fourth quarter previous year, MilDef received a very large customer order on the British market. The order value amounted to SEK 275 million. Adjusted for that order, the underlying order bookings increased by 111 percent in the fourth quarter of 2021.
Net sales
Net sales in the fourth quarter of 2021 amounted to SEK 200.7 million (257.7), representing a decrease of 22%. Acquisition-driven growth amounted to SEK 52.2 million in the quarter, and is fully attributable to the acquisitions of Sysint AS and Defcon Solutions AB. Organic growth decreased with 42% in the fourth quarter, strongly affected by the global component shortage which in turn led to delays in planned deliveries.
Gross profit
Gross profit amounted to SEK 92.7 million (126.6), equivalent to a gross margin of 46% (49). The Company's gross margin may vary from quarter to quarter depending on sales volumes and the product and customer mix.
Operating expenses
Operating expenses amounted to SEK 64.5 million (49.5), of which SEK 26.8 million relates to acquired operating expenses in 2021. Excluding acquired operating expenses, the operating expenses decreased by 24%, equivalent to SEK 11.8 million. The adjusted operating expenses represented 19% (19) of sales.
Operating profit (EBIT)
Operating profit (EBIT) in the fourth quarter of 2021 amounted to SEK 28.2 million (77.1). Adjusted for non-recurring items, operating profit for the quarter amounted to SEK 28.2 million (81.1), corresponding to an operating margin of 14.1% (31.5). MilDef's sales and profits are affected by seasonal variations. Year-on-year comparisons between quarters can be made. The Group's strongest
quarter in terms of sales and profits is normally the fourth quarter.
Adjusted operating profit (EBITDA)
Adjusted operating profit before depreciation/amortization and impairment amounted to SEK 34.6 million (87.5), equivalent to a margin of 17.2% (34.0). Depreciation/ amortization and impairment amounted to SEK 6.4 million (6.4). Acquisitions in 2021 contributed SEK 5.0 million to the quarter's operating profit. The adjusted operating profit does not include non-recurring items of SEK 0.0 million (4.0). These items are specified in Note 2 on page 22.
Financial items
Net financial income/expense for the period amounted to SEK -0.9 million (-0.7).
Tax
The fourth quarter's tax effect contributed negative to net profit in the amount of SEK -6.7 million (-13.6).
Net profit for the quarter
Profit after tax amounted to SEK 20.6 million (62.7). Earnings per share amounted to SEK 0.57 (2.70 after adjustment for split 2:1).
Cash flow
Cash flow reported for the quarter amounted to SEK -15.9 million (30.1). The operating cash flow for the quarter amounted to SEK -13.3 million (39.5), with most of the decrease relating to changes in working capital and lower operating profit.
Cash flow from operating activities amounted to SEK -8.1 million (46.2). Cash flow from changes in working capital amounted to SEK -46.5 million (-29.2). The global component shortage has resulted in a partially altered strategy with respect to the inventory of critical components, which in turn has led to MilDef choosing to increase its stocks to improve lead times for customers.
Cash flow from investing activities amounted to SEK -5.2 million (-6.6).
Cash flow from financing activities amounted to SEK -2.6 million (-9.5). Amortization of leases was charged to financing activities in the amount of SEK -2.6 million (0.0).
Full-year: January–December 2021
Order situation
Order bookings decreased by 18% to SEK 589.4 million (718.0). The order backlog increased by 64% to SEK 731.5 million (446.3). Sysint AS, which was acquired in the first quarter of 2021, has not had any impact on order bookings or order backlog during the period. SEK 62.4 million of the period's order bookings and SEK 88.7 million of the order backlog relate to the acquisition of Defcon Solutions AB. The increase in order intake and the order backlog in the last 12 months depends to some extent that MilDef received a significant customer contract in it fourth quarter 2020 in the UK market. The total value of the contract is around SEK 275 million. The contract spans 10 years and serial delivery is not expected to start until 2023. MilDef is expecting planned deliveries to proceed according to the contract, in terms of both schedule and volume. However, the risk of changes or reduction in scope cannot be excluded.
Net sales
Net sales in 2021 amounted to SEK 469.6 million (398.5), which is equivalent to growth of 18% compared with the same period the previous year. Acquisition-driven growth amounted to SEK 127.1 million for the period, and is attributable entirely to the acquisitions of Sysint AS and Defcon Solutions AB. Organic net sales decreased with 14% for the period, strongly affected by the global component shortage which in turn led to delays in planned deliveries.
Gross profit
Gross profit amounted to SEK 210.1 million (182.1), equivalent to a gross margin of 45% (46). The Company's gross margin may vary slightly over time depending on sales volumes and the product and customer mix.
Operating expenses
Operating expenses amounted to SEK 213.0 million (182.1), of which SEK 57.9 relates to acquired operating expenses and SEK 11.5 million to non-recurring items (see Note 2). Excluding these items, the operating expenses increased by 15%, equivalent to SEK 18.4 million. The adjusted operating expenses represented 43% (31) of sales.
Operating profit (EBIT)
Operating profit (EBIT) in 2021 amounted to SEK -2.9 million (56.9). Adjusted for non-recurring items, the operating profit for the period amounted to SEK 8.6 million (61.2), which is equivalent to an operating margin of 1.8% (15.4).
Adjusted operating profit (EBITDA)
Adjusted operating profit before depreciation/amortization and impairment amounted to SEK 32.2 million (72.8), equivalent to a margin of 6.9% (18.3). Depreciation/ amortization and impairment amounted to SEK 23.6 million (11.6). The companies acquired in 2021 contributed SEK 17.5 million to operating profit for the period. The adjusted operating profit does not include non-recurring items of SEK 11.5 million (4,3). These items are specified in Note 2 on page 22.
Financial items
Net financial income/expense for the period amounted to SEK -2.4 million (-1.5).
Tax
The tax effect for the period had a positive impact on net profit in the amount of SEK 4.6 million (-12.8).
Net profit for the period
Profit after tax amounted to SEK 0.8 million (39.9). Earnings per share amounted to SEK -0.03 (1.83 after adjustment for split 2:1).
Cash flow
Cash flow reported for the period amounted to SEK 120.3 million (38.7). Operating cash flow amounted to SEK -71.4 million (53.1).
Cash flow from operating activities amounted to SEK -55.5 million (61.7). Cash flow from changes in working capital amounted to SEK -65.0 million (9.6). The global component shortage has resulted in a partially altered strategy with respect to the inventory of critical components, which in turn has led to MilDef choosing to increase its stocks to improve lead times for customers.
Cash flow from investment activities amounted to SEK -187.2 million (-8.6), of which SEK -171.2 million related to acquisitions made in the period. Cash flow from investments in property, plant and equipment and intangible assets amounted to SEK -16.4 (-8.9).
Cash flow from financing activities amounted to SEK 362.9 million (-14.4). The change compared to the previous year is mainly explained by the Company issuing new shares
in connection with the listing on Nasdaq Stockholm. The period was impacted by dividends paid to the shareholders amounting to SEK -17.4 million (-8.7). Amortization of leases was charged to financing activities in the amount of SEK -9.0 million (-4.9).
Equity
The Group's equity amounted to SEK 568.2 million (132.6) at the end of the period. The equity-assets ratio as of December 31, 2021 was 70% (36).
Net working capital
Net working capital amounted to SEK 148.0 million (72.7) at the end of the period. Higher inventory volumes have had a negative impact on the working capital. Net working capital in relation to net sales increased by 14 percentage points, from 18% for the same period the previous year to 32% as of December 31, 2021.
| SEK m | Dec. 31, 2021 |
Sept. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|---|
| Inventories | 85.8 | 95.4 | 57.3 |
| Accounts receivable | 136.2 | 90.2 | 161.4 |
| Other current receivables | 40.5 | 32.9 | 13.3 |
| Accounts payable | -39.5 | -57.8 | -62.8 |
| Other current liabilities | -75.0 | -76.0 | -96.4 |
| Net working capital | 148.0 | 84.7 | 72.7 |
| as a percentage of net sales LTM (%) | 32% | 16% | 18% |
Net debt and cash and cash equivalents
The net debt including lease liabilities amounted to SEK -67.1 million (19.9) at the end of the period. The change in cash and cash equivalents is mainly the result of the Company issuing new shares in connection with the stock exchange listing. At the end of the period there was also an unutilized revolving overdraft facility of SEK 50.0 million (27.1). Net debt at the end of the period in relation to adjusted operating profit (EBITDA) over the past 12 month-period, excluding the effects of IFRS 16 Leases, amounted to -4.0 (-0.6). When calculated including the effects of IFRS 16 the net indebtedness was -2.1 (0.3)
| SEK m | Dec. 31, 2021 |
Sept. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|---|
| Liabilities to credit institutions | - | - | - |
| Other interest-bearing liabilities | 41.4 | 55.1 | - |
| Lease liabilities | 60.7 | 65.2 | 66.7 |
| Cash and cash equivalents | -169.2 | -184.9 | -46.8 |
| Net debt incl. IFRS 16 | -67.1 | -64.6 | 19.9 |
| in relation to adjusted operating profit (EBITDA) LTM, multiple |
-2.1 | -0.8 | 0.3 |
Other information
Parent Company
The operations of MilDef Group AB (corp. reg. no. 556893-5414), registered office in Helsingborg, Sweden, are primarily focused on the Group's strategic development and group-wide functions such as HR, IT, finance, etc. Most of the funds from the Group's external financing are held within the Parent Company. As of the end of the period the Company had 30 employees.
MilDef Group AB's share
MilDef Group AB (publ) is listed on the Nasdaq Stockholm Small Cap index in the Industrial Goods and Services sector.
Share capital and number of shares
The total number of shares as of December 31, 2021 was 36,389,373 (11,618,422) and the share capital was SEK 9,097,343.25 (5,809,211). All of the shares are ordinary shares carrying the same voting rights. The shares have a quota value of SEK 0.25. At the end of the period the closing price was SEK 52.40 and the market value was SEK 1,907 million.
Nomination Committee
Based on guidelines decided on at a previous Annual General Meeting, the following individuals have been appointed to MilDef's Nomination Committee: Ulf Hedlundh, Svolder AB representing 7.7% of the shares, Marianne Trolle representing 11.0% of the shares, Peter Lundkvist, appointed by Tredje AP-fonden representing 6.6% of the shares and Jan Andersson, Chair of the Board. The Nomination Committee has appointed Ulf Hedlundh to chair the Committee.
Accounting principles
MilDef prepares its consolidated accounts in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU. This interim report was prepared in accordance with IAS 34 Interim Financial Reporting and the Annual Accounts Act. The Parent Company applies the Swedish Financial Reporting Board's recommendation RFR 2, Accounting for Legal Entities and the Annual Accounts Act. The accounting principles applied correspond to the accounting and valuation principles presented in the 2020 Annual Report. The 2020 Annual Report is available at www.mildef.com.
Judgements and estimates in the financial statements
Preparation of the financial statements in accordance with IFRS requires management to make judgements and estimates that affect the application of the accounting principles and the carrying amounts of assets, liabilities, revenue and expenses. Actual outcomes may deviate from these estimates and judgements. Estimates and assumptions are reviewed on a regular basis. Changes in estimates are reported in the period the change is made if the change has only affected that period, or in the period the change is made and in future periods if the change affects both the current period and future periods.
Alternative performance measures
MilDef applies the guidelines for alternative performance measures issued by ESMA, the European Securities and Markets Authority. Alterative performance measures are financial measures that cannot be directly gleaned or deduced from the financial statements. These financial measures are intended to facilitate management's and investors' analysis of the Group's development. Investors should not regard these alternative performance measures as substitutes for, but rather as complements to, the financial statements prepared in accordance with IFRS. Definitions of the alternative performance measures are presented on page 25.
Segments
MilDef's operations are treated as one segment as this reflects the Group's business, financial monitoring and management structure.
Seasonal variations
MilDef's sales and profits are affected by seasonal variations. Year-on-year comparisons between quarters can be made. The Group's strongest quarter in terms of sales and profits is normally the fourth quarter. Most of the seasonal variations are in the Nordic market.
Fluctuation in order inflow and sales
MilDef's markets are characterized by large procurements with irregular frequency. The lead times are often long due to extensive administrative processes and long sales cycles. Both order bookings and sales may fluctuate significantly between the quarters. The Company's development should therefore be evaluated in a longer
perspective and not based on an individual quarter or year.
Significant events during the period
On March 11, 2021 MilDef acquired 100% of the shares in the Norwegian service and software provider Sysint AS (Sysint). The acquisition was financed by an acquisition loan of SEK 30 million, the transfer of 711,087 treasury shares and the Company's own cash and cash equivalents. Sysint is an IT company with a service offering aimed at Norwegian public sector and industrial customers. For two decades Sysint has delivered IT services to defense actors, government agencies and sectors critical for society, such as health and energy. Software product development includes the NATO-compliant system OneCIS for fast and secure rollout of IT systems. This complements MilDef's hardware offering and creates a strong, comprehensive offering for MilDef's customers, and good potential for both further development locally and exports to other markets.
MilDef was listed on Nasdaq Stockholm's main index on June 4, 2021. In connection with admission to trading of the Company's shares, 10,958,904 new shares were issued.
On July 20 MilDef acquired all of the shares in Defcon Solutions AB (Defcon). In December 2021, Defcon was renamed MilDef Integration Sweden AB, however, the company is still referred to as Defcon in this report. Defcon supplies integration services to the defense market in Sweden and is considered to have good potential to continue to grow its business in the years ahead. This, combined with MilDef's product portfolio of tactical IT in hardware and software, means there are considerable opportunities for synergies between the companies – both in the Swedish market and internationally. Defcon was founded in 2014 and is based in Stockholm. The company has around 40 employees. Sales for the most recent financial year amounted to around SEK 92 million.
Significant events after the end of the period
To further reinforce MilDef's position in the Nordic market, MilDef Oy, MilDef's first subsidiary in Finland, was established. At the helm of MilDef Oy will be Eero Valkola, a decorated colonel and former Inspector of Signals in the Army Command of the Finnish Defence Forces, where he was responsible for developing, training and preparedness for the army's C4 system and for cyber defense. The Nordic region is extremely important to MilDef and we hold strong positions in Sweden, Norway
and Denmark. Finland is prioritized in our expansion plan and establishing MilDef Oy signals that the close cooperation among the Nordic countries is a strong industrial foundation for us – both within the Group's businesses and with our partners.
No other events that can be considered significant have taken place after the end of the period up to the date this interim report was signed.
Acquisition and acquisition analysis
At the time of acquisition preliminary acquisition analyses are performed based on estimates and judgements that are as accurate as possible. These analyses may however need to be adjusted at some point in the future. All acquisition analyses are subject to final adjustments no later than twelve months after the acquisition date.
Acquisition of Defcon Solutions AB
On July 20, 2021 MilDef acquired all of the shares in Defcon Solutions AB (Defcon). The first preliminary acquisition analysis showed that the acquisition generated a consolidation surplus of SEK 190.0 million including an estimated contingent consideration of SEK 35.6 million. The surplus has been allocated partly to goodwill (SEK 145.0 million) and partly to customer relationships (SEK 45,0 million). The identifiable intangible assets in the form of customer relationships are amortized on a straight-line basis over a 10-year period.
The consolidation surplus in the preliminary acquisition analysis was corrected in the fourth quarter. The consolidation surplus has been adjusted downwards in the amount of SEK 14.3 million to a total of SEK 175.7 million. The adjustment has been allocated in its entirety to goodwill. Accordingly, the goodwill relating to the Defcon acquisition amounted to SEK 130.7 million as of December 31, 2021.
Acquisition of Sysint AS
The first preliminary acquisition analysis showed that the acquisition of Sysint AS in the first quarter of 2021 generated a consolidation surplus of SEK 122.3 million including an estimated contingent consideration of SEK 18.2 million. The surplus has been allocated partly to goodwill (SEK 77.3 million), partly to customer relationships (SEK 22.5 million) and partly to software (SEK 22.5 million). The identifiable intangible assets in the form of customer relationships and software are amortized on a straight-line basis over a 10-year period.
The consolidation surplus in the preliminary acquisition analysis was corrected in the fourth quarter. The consolidation surplus has been adjusted downwards in the amount of SEK 6.8 million to a total of SEK 115.5 million. The adjustment has been allocated in its entirety to goodwill. Accordingly, the goodwill relating to the Sysint AS acquisition amounted to SEK 70.5 million as of December 31, 2021.
Employees
The number of employees in the Group, recalculated to full-time equivalents (FTEs), was 188 (119) at the end of the period. 147 (89) of the employees were men and 41 (30) were women. The average number of FTEs amounted to 190 during the period compared with 117 in the corresponding period the previous year.
Research and development
MilDef conducts extensive research and development. This is considered a critical factor for continued organic growth and for penetrating new markets. It is important to identify the customers' changing requirements and transform them into the best solutions for every given market situation. In 2021 resources were added to the R&D department to handle an increasing number of projects, many of which are highly complex. Around 15% of MilDef's employees work in R&D-related positions.
Significant risks and factors of uncertainty
MilDef's operations and results are affected by a number of external and internal factors. A constant process is under way to identify all of the risks that occur and to assess how to manage each risk. MilDef's risks can be divided into market-related, operational and financial risk. For a more detailed description of financial risk, see pages 32–33 in the Company's 2020 Annual Report. No other material financial risks, other than those described there, have been identified.
Transactions with related parties
No board member or senior executive has or has had any direct or indirect participation in any business transactions with Group companies during the current or previous financial years on terms that are or were unusual in nature. Nor has any Group company provided loans or guarantees, or entered into any surety agreement for any of the members of the Board or senior executives.
Long-term share-based incentive program
At an extraordinary meeting of shareholders on April 29, 2021 a decision was made to implement a long-term share-based incentive program based on call options for the Group's employees by issuing warrants with the subsequent right to subscribe for new shares in MilDef. For tax reasons the incentive program is only for employees who are required to pay taxes in Sweden. The program is for a maximum of 578,000 call options, equivalent to around 1.6% of the total number of shares in the Company. The right to acquire warrants is based on the following principles with respect to allocation categories: (i) CEO and members of the Management Team: maximum 30,000 warrants per participant; (ii) other senior executives and key individuals: maximum 15,000 warrants per participant and (iii) other employees: maximum 3,000 warrants per participant. The warrants have been transferred on market terms at a price (premium) that was established based on an estimated market value using the recognized Black & Scholes model. The calculation was carried out by an independent appraisal institution. Each warrant entitles the holder to subscribe for one new share in MilDef at a subscription price of SEK 48.55, which is equivalent to 133% of the price per share in the new share issue implemented in connection with admission to trading of the Company's shares on Nasdaq Stockholm on June 4, 2021. Registration to subscribe for shares can take place from September 1, 2024 until August 31, 2025. The Company reserves the right to buy back warrants if the participant's employment is terminated or if the
participant wishes to transfer the warrants. Buy-back may take place at the market price of the warrants at the time the preferential right is exercised. The Company has no outstanding share-based incentive programs other than the warrants described above.
Contingent liabilities
There have been no changes in the Group's contingent liabilities as described in more detail on page 55 in Note 20 of the 2020 Annual Report.
Disputes
The Company is not a party in any material dispute.
Forward-looking statements
This report may contain forward-looking statements based on the Management Team's current expectations. Even though management determines that the expectations expressed in such forward-looking statements are reasonable, there can be no guarantee that these expectations will prove to be correct. Consequently, future outcomes may vary significantly compared with those expressed in forward-looking statements, depending on factors such as changed conditions in the market for MilDef's products and more general changes in, for example, the economy, markets and competition, legal requirements and other political measures, and fluctuations in exchange rates.
Annual General Meeting
The Board has decided to hold the 2022 Annual General Meeting in Helsingborg on May 12, 2022. Notice will be given in due order.
Dividend proposal
The Board of Directors proposes that the dividend for the 2021 financial year shall be set at SEK 0.75 per share (0.75 SEK after adjustment of split 2:1). The proposed record date for entitlement to dividends is May 16, 2022. If the Annual General Meeting approves the proposal, it is anticipated that the dividend will be paid on May 19, 2022.
Audit review
This year-end report has not been reviewed by the Company's auditors.
Condensed consolidated income statement
| October 1 - December 31 | January 1 - December 31 | Rolling 12 months |
Full year | |||||
|---|---|---|---|---|---|---|---|---|
| MSEK | Not | 2021 | 2020 | 2021 | 2020 | Jan - Dec 2021 |
2020 | |
| Net sales | 1 | 200.7 | 257.7 | 469.6 | 398.5 | 469.6 | 398.5 | |
| Cost of goods sold | -108.0 | -131.1 | -259.5 | -216.4 | -259.5 | -216.4 | ||
| Gross profit | 92.7 | 126.6 | 210.1 | 182.1 | 210.1 | 182.1 | ||
| Selling expenses | -41.9 | -23.4 | -114.4 | -56.4 | -114.4 | -56.4 | ||
| Administrative expenses | -13.4 | -16.9 | -59.0 | -36.0 | -59.0 | -36.0 | ||
| Research and development expenses | -9.2 | -9.3 | -40.4 | -33.1 | -40.4 | -33.1 | ||
| Other operating income/expenses | - | 0.1 | 0.8 | 0.3 | 0.8 | 0.3 | ||
| Operating profit | 28.2 | 77.1 | -2.9 | 56.9 | -2.9 | 56.9 | ||
| Net financial items | -0.9 | -0.7 | -2.4 | -1.5 | -2.4 | -1.5 | ||
| Profit after financial items | 27.3 | 76.4 | -5.3 | 55.4 | -5.3 | 55.4 | ||
| Income tax | -6.7 | -13.6 | 4.6 | -12.8 | 4.6 | -12.8 | ||
| Net profit for the period | 20.6 | 62.7 | -0.7 | 42.5 | -0.7 | 42.5 | ||
| Other comprehensive income for the Group Items that may be reclassified subse quently to profit or loss |
||||||||
| Translation differences | 0.4 | -1.5 | 1.5 | -2.6 | 1.5 | -2.6 | ||
| Other comprehensive income for the period |
0.4 | -1.5 | 1.5 | -2.6 | 1.5 | -2.6 | ||
| Comprehensive income for the period |
21.0 | 61.2 | 0.8 | 39.9 | 0.8 | 39.9 | ||
| Earnings per share | October 1 - December 31 | January 1 - December 31 | Rolling 12 months |
Full year | ||
|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | Jan - Dec 2021 |
2020 | |
| Number of shares at end of period | 36,389,373 | 11,618,422 | 36,389,373 | 11,618,422 | 36,389,373 | 11,618,422 |
| Weighted average number of shares in the period before dilution |
36,389,373 | 11,618,422 | 26,243,169 | 11,618,422 | 26,243,169 | 11,618,422 |
| Weighted average number of shares in the period after dilution |
36,389,373 | 11,618,422 | 26,243,169 | 11,618,422 | 26,243,169 | 11,618,422 |
| Earnings per share before dilution (SEK) | 0.57 | 5.40 | -0.03 | 3.66 | -0.03 | 3.66 |
| Earnings per share after dilution (SEK) | 0.57 | 5.40 | -0.03 | 3.66 | -0.03 | 3.66 |
Condensed consolidated balance sheet
| SEK m | Dec. 31, 2021 | Dec. 31, 2020 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Capitalized product development expenses | 10.7 | 8.0 |
| Acquisition-related intangible assets | 285.2 | 2.7 |
| Other intangable assets | 0.5 | - |
| Right-of-use assets | 59.8 | 66.5 |
| Other property, plant and equipment | 14.5 | 6.6 |
| Deferred tax assets | 5.6 | 5.0 |
| Other financial non-current assets | 0.3 | 0.4 |
| Total non-current assets | 376.6 | 89.1 |
| Inventories | 85.8 | 57.3 |
| Accounts receivable | 136.2 | 161.4 |
| Other current receivables | 40.5 | 13.3 |
| Cash and cash equivalents | 169.2 | 46.8 |
| Total current assets | 431.7 | 278.8 |
| TOTAL ASSETS | 808.2 | 367.9 |
| EQUITY AND LIABILITIES | ||
| Equity | 568.2 | 132.6 |
| Non-current liabilities | ||
| Lease liabilities | 52.1 | 58.8 |
| Non-current interest-bearing liabilities | 31.7 | - |
| Provisions for taxes | 23.5 | 9.4 |
| Total non-current liabilities | 107.3 | 68.2 |
| Current liabilities | ||
| Current interest-bearing liabilities | 9.7 | - |
| Lease liabilities | 8.6 | 7.9 |
| Accounts payable | 39.5 | 62.8 |
| Other current liabilities | 75.0 | 96.4 |
| Total current liabilities | 132.8 | 167.1 |
| TOTAL EQUITY AND LIABILITIES | 808.2 | 367.9 |
Condensed consolidated statement of changes in equity
| SEK m | Dec. 31, 2021 | Dec. 31, 2020 |
|---|---|---|
| Equity, opening balance | 132.6 | 101.3 |
| Comprehensive income for the period after tax | 0.8 | 39.9 |
| New share issue | 452.2 | - |
| Dividend | -17.4 | -8.7 |
| Equity, closing balance | 568.2 | 132.6 |
Condensed consolidated cash flow statement
| October 1 - December 31 | January 1 - December 31 | Rolling 12 months |
Full year | |||
|---|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | 2021 | 2020 | Jan - Dec 2021 |
2020 |
| Cash flow from operating activities | ||||||
| Operating profit | 28.2 | 77.1 | -2.9 | 56.9 | -2.9 | 56.9 |
| Reversal of depreciation, amortization and impairment |
6.4 | 6.4 | 23.6 | 11.6 | 23.6 | 11.6 |
| Other non-cash items | -0.4 | 1.1 | -0.5 | 4.0 | -0.5 | 4.0 |
| Net interest income/expense | -0.9 | -0.8 | -2.4 | -1.5 | -2.4 | -1.5 |
| Income taxes paid | 5.1 | -8.3 | -8.2 | -18.9 | -8.2 | -18.9 |
| Change in working capital | -46.5 | -29.2 | -65.0 | 9.6 | -65.0 | 9.6 |
| Cash flow from operating activities | -8.1 | 46.2 | -55.5 | 61.7 | -55.5 | 61.7 |
| Cash flow from investing activities | ||||||
| Investments in intangible assets | -5.0 | -3.5 | -5.6 | -3.5 | -5.6 | -3.5 |
| Investments in property, plant and equipment | -0.3 | -3.3 | -10.8 | -5.4 | -10.8 | -5.4 |
| Acquisition of subsidiaries, net of acquired cash and cash equivalents |
- | - | -171.2 | - | -171.2 | - |
| Change in other non-current receivables | 0.1 | 0.2 | 0.5 | 0.3 | 0.5 | 0.3 |
| Cash flow from investing activities | -5.2 | -6.6 | -187.2 | -8.6 | -187.2 | -8.6 |
| Cash flow from financing activities | ||||||
| Dividend | - | -8.7 | -17.4 | -8.7 | -17.4 | -8.7 |
| New share issue | - | - | 389.3 | - | 389.3 | - |
| Change in overdraft facilities | - | -0.8 | - | -0.7 | - | -0.7 |
| Increase in liabilities to credit institutions | - | - | 30.0 | - | 30.0 | - |
| Repayment of loans issued by credit institutions | - | - | -30.0 | - | -30.0 | - |
| Repayment of lease liabilities | -2.6 | - | -9.0 | -4.9 | -9.0 | -4.9 |
| Cash flow from financing activities | -2.6 | -9.5 | 362.9 | -14.4 | 362.9 | -14.4 |
| Total cash flow for the period | -15.9 | 30.1 | 120.3 | 38.7 | 120.3 | 38.7 |
| Change in cash and cash equivalents | ||||||
| Cash and cash equivalents at beginning of period | 184.9 | 17.3 | 46.8 | 9.1 | 46.8 | 9.1 |
| Translation differences | 0.2 | -0.6 | 2.1 | -1.0 | 2.1 | -1.0 |
| Cash and cash equivalents at end of period | 169,2 | 46,8 | 169,2 | 46,8 | 169,2 | 46,8 |
Quarterly overview for the Group
| 2021 | 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK m | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 |
| Net sales | 200.7 | 136.6 | 81.3 | 51.0 | 257.7 | 57.1 | 51.0 | 34.5 | 158.9 |
| Cost of goods sold | -108.0 | -75.6 | -42.5 | -33.5 | -131.1 | -29.7 | -34.6 | -19.9 | -98.7 |
| Gross profit | 92.7 | 61.0 | 38.9 | 17.5 | 126.6 | 27.4 | 16.4 | 14.6 | 60.2 |
| Operating expenses | -64.5 | -58.7 | -49.4 | -40.4 | -49.5 | -26.7 | -21.4 | -34.2 | -38.8 |
| Operating profit | 28.2 | 2.3 | -10.5 | -22.9 | 77.1 | 0.7 | -5.0 | -19.6 | 21.4 |
| Net financial items | -0.9 | -1.7 | 1.6 | -1.4 | -0.7 | -0.3 | -0.5 | 0.2 | -1.5 |
| Profit before tax | 27.3 | 0.6 | -8.9 | -24.3 | 76.4 | 0.4 | -5.5 | -19.4 | 19.9 |
| Income tax on profit for the period | -6.7 | 0.9 | 5.3 | 5.1 | -13.6 | -0.1 | 0.3 | 3.7 | -5.3 |
| Net profit for the period | 20.6 | 1.4 | -3.6 | -19.2 | 62.8 | 0.3 | -5.2 | -15.7 | 14.6 |
Multi-year overview for the Group
| 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |
|---|---|---|---|---|---|---|---|---|
| Net sales, SEK m | 469.6 | 398.5 | 334.0 | 243.8 | 298.8 | 153.1 | 146.0 | 135.5 |
| Gross margin | 45% | 46% | 37% | 38% | 34% | 34% | 29% | 30% |
| Operating margin (EBITDA) | 5% | 17% | 10.7% | 9.9% | 15% | 7% | 7% | 12% |
| Operating margin (EBIT) | 0% | 14% | 7.4% | 7.3% | 12% | 4% | 5% | 9% |
| Profit margin | 0% | 14% | 8% | 8% | 11% | 5% | 5% | 9% |
| Earnings per share for the period, SEK | 0.03 | 1.72* | 1.64 | 1.04 | 2.24 | 0.48 | 0.55 | 0.83 |
| Net cash, SEK m | 169.2 | 46.8 | 9.1 | 31.5 | 26.7 | -10.1 | 34.9 | 38.7 |
| Cash flow from operating activities, SEK m |
-55.5 | 61.7 | -7.9 | 25.8 | 35.0 | -19.0 | 2.3 | -1.9 |
| Total assets, SEK m | 808.2 | 367.9 | 285.2 | 178.2 | 167.6 | 134.6 | 89.0 | 96.9 |
| Equity, SEK m | 568.2 | 132.6 | 101.3 | 87.7 | 85.2 | 61.9 | 59.4 | 61.2 |
| Equity/assets ratio | 70% | 36% | 36% | 49% | 51% | 46% | 67% | 63% |
| Return on capital employed | 0.2% | 36% | 20% | 25% | 36% | 10% | 12% | 19% |
| Return on equity | 0% | 36% | 20% | 14% | 34% | 9% | 10% | 14% |
| Equity per share, SEK | 15.61 | 11.41 | 8.72 | 7.55 | 8.10 | 5.61 | 5.41 | 5.58 |
| Dividend per share, SEK | 0.75 | 0.75* | 0.75 | 0.50 | 1.22 | 0.00 | 0.18 | 0.44 |
| Average number of employees | 154 | 97 | 85 | 81 | 75 | 64 | 54 | 50 |
| Number of employees at end of period |
188 | 119 | 93 | 86 | 76 | 69 | 57 | 51 |
*After adjustment for split 2:1
Condensed Parent Company income statement
| Jan - Dec SEK m 2021 2020 2021 2020 2020 2021 Net sales 17.3 16.0 64.0 50.1 64.0 50.1 Selling expenses -6.7 -2.7 -23.1 -16.5 -23.1 -16.5 Administrative expenses -7.2 -7.3 -37.9 -22.9 -37.9 -22.9 Research and development expenses -4.6 -13.0 -17.0 -12.8 -17.0 -12.8 Other operating income/expenses 0.5 -1.4 2.2 -3.2 2.2 -3.2 Operating profit -0.7 -8.3 -11.7 -5.3 -11.7 -5.3 Net financial items 0.2 -6.2 -1.0 -5.3 -1.0 -5.3 Profit after financial items -0.5 -14.5 -12.7 -10.6 -12.7 -10.6 Year-end appropriations 33.3 37.2 33.3 37.2 33.3 37.2 Profit before tax 32.8 22.7 20.6 26.6 20.6 26.6 Income tax -7.5 -7.3 - -7.3 - -7.3 Net profit for the period 25.3 15.4 20.6 19.3 20.6 19.3 Other comprehensive income Net profit for the period 25.3 15.4 20.6 19.3 20.6 19.3 Other comprehensive income Items that may be reclassified subsequently - - - - - - to profit or loss Other comprehensive income for the - - - - - - period Comprehensive income for the period 25.3 15.4 20.6 19.3 20.6 19.3 |
October 1 - December 31 | January 1 - December 31 | Rolling 12 months |
Full year | |
|---|---|---|---|---|---|
Condensed Parent Company income statement Condensed Parent Company balance sheet
| SEK m | Dec. 31, 2021 | Dec. 31, 2020 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Property, plant and equipment | 9.9 | 4.6 |
| Financial non-current assets | 360.6 | 65.2 |
| Total non-current assets | 370.5 | 69.8 |
| Current receivables from Group companies | 41.6 | 94.8 |
| Other current receivables | 5.4 | 5.2 |
| Cash and cash equivalents | 202.2 | 7.0 |
| Total current assets | 249.2 | 107.0 |
| TOTAL ASSETS | 619.7 | 176.8 |
| EQUITY AND LIABILITIES | ||
| Equity | 555.2 | 99.9 |
| Untaxed reserves | 5.5 | 23.8 |
| Non-current liabilities | ||
| Non-current interest-bearing liabilities | 31.7 | - |
| Total non-current liabilities | 31.7 | - |
| Current liabilities | ||
| Current interest-bearing liabilities | 9.7 | - |
| Current liabilities to Group companies | 3.7 | 25.6 |
| Accounts payable | 1.8 | 3.8 |
| Other current liabilities | 12.1 | 23.8 |
| Total current liabilities | 27.3 | 53.1 |
| TOTAL EQUITY AND LIABILITIES | 619.7 | 176.8 |
Condensed Parent Company statement of changes in equity
| SEK m | Dec. 31, 2020 | Dec. 31, 2020 |
|---|---|---|
| Equity, opening balance | 99.9 | 89.3 |
| Comprehensive income for the period after tax | 20.6 | 19.3 |
| New share issue | 452.2 | - |
| Dividend | -17.4 | -8.7 |
| Equity, closing balance | 555.2 | 99.9 |
Notes
Note 1. Net sales by geographic area
| SEK m | Q4 2021 | Q4 2020 | Jan - Dec 2021 |
Jan - Dec 2020 |
Rolling 12 months |
Full year 2020 |
|---|---|---|---|---|---|---|
| Nordics | 164.7 | 211.4 | 335.4 | 271.1 | 335.4 | 271.1 |
| Europe (excl. Nordics) | 28.7 | 20.0 | 80.2 | 49.6 | 80.2 | 49.6 |
| North America | 7.0 | 24.1 | 51.0 | 67.5 | 51.0 | 67.5 |
| Other countries | 0.3 | 2.2 | 3.0 | 10.3 | 3.0 | 10.3 |
| Total revenue | 200.7 | 257.7 | 469.6 | 398.5 | 469.6 | 398.5 |
Note 2. Non-recurring items
Refers to items reported separately to aid comparability, since these items are material in nature and are not deemed to form part of the ordinary core business. Examples include acquisition-related items, expenses for listing on a stock exchange, and restructuring costs.
| SEK m | Q4 2021 | Q4 2020 | Jan - Dec 2021 |
Jan - Dec 2020 |
Rolling 12 months |
Full year 2020 |
|---|---|---|---|---|---|---|
| Listing expenses | - | -4.0 | -11.1 | -4.3 | -11.1 | -4.3 |
| Acquisition-related expenses | - | - | -0.4 | - | -0.4 | - |
| Total non-recurring items | - | -4.0 | -11.5 | -4.3 | -11.5 | -4.3 |
Additional performance measures
The Group's performance measures are detailed below. Some of these are defined in accordance with IFRS. Other than these the Group has identified certain additional performance measures that provide the Company's investors and management with supplementary information to facilitate the assessment of relevant trends as well as the Company's performance. Since not all companies calculate financial measures in the same way, these are not always comparable with measures used by other companies. These financial measures are therefore to be seen as supplementing the performance measures defined according to IFRS.
| Operating profit (EBIT), SEK m | Q4 2021 | Q4 2020 | Jan - Dec 2021 |
Jan - Dec 2020 |
Rolling 12 months |
Full year 2020 |
|---|---|---|---|---|---|---|
| Operating profit (EBIT) | 28.2 | 77.1 | -2.9 | 56.9 | -2.9 | 56.9 |
| Listing expenses | - | 4.0 | 11.1 | 4.3 | 11.1 | 4.3 |
| Acquisition-related expenses | - | - | 0.4 | - | 0.4 | - |
| Adjusted operating profit (EBIT) | 28.2 | 81.1 | 8.6 | 61.2 | 8.6 | 61.2 |
| Adjusted operating profit (EBIT) | 28.2 | 81.1 | 8.6 | 61.2 | 8.6 | 61.2 |
| Net sales | 200.7 | 257.7 | 469.6 | 398.5 | 469.6 | 398.5 |
| Adjusted operating margin (EBIT), % | 14.1% | 31.5% | 1.8% | 15.4% | 1.8% | 15.4% |
| Operating profit (EBITA), SEK m | ||||||
| Operating profit (EBIT) | 28.2 | 77.1 | -2.9 | 56.9 | -2.9 | 56.9 |
| Amortization of intangible assets | 2.8 | 1.3 | 11.1 | 5.9 | 11.1 | 5.9 |
| Operating profit (EBITA) | 31.0 | 78.4 | 8.2 | 62.8 | 8.2 | 62.8 |
| Adjusted operating profit (EBITA), SEK m | ||||||
| Operating profit (EBITA) | 31.0 | 78.4 | 8.2 | 62.8 | 8.2 | 62.8 |
| Listing expenses | - | 4.0 | 11.1 | 4.3 | 11.1 | 4.3 |
| Acquisition-related expenses | - | - | 0.4 | - | 0.4 | - |
| Adjusted operating profit (EBITA) | 31.0 | 82.4 | 19.7 | 67.1 | 19.7 | 67.1 |
| Adjusted operating profit (EBITA) | 31.0 | 82.4 | 19.7 | 67.1 | 19.7 | 67.1 |
| Net sales | 200.7 | 257.7 | 469.6 | 398.5 | 469.6 | 398.5 |
| Adjusted operating margin (EBITA), % | 15.5% | 32.0% | 4.2% | 16.8% | 4.2% | 16.8% |
| Operating profit (EBITDA), SEK m | ||||||
| Operating profit (EBIT) | 28.2 | 77.1 | -2.9 | 56.9 | -2.9 | 56.9 |
| Depreciation/amortization | 6.4 | 6.4 | 23.6 | 11.6 | 23.6 | 11.6 |
| Operating profit (EBITDA) | 34.6 | 83.5 | 20.7 | 68.5 | 20.7 | 68.5 |
| Adjusted operating profit (EBITDA), SEK m | ||||||
| Operating profit (EBITDA) | 34.6 | 83.5 | 20.7 | 68.5 | 20.7 | 68.5 |
| Listing expenses | - | 4.0 | 11.1 | 4.3 | 11.1 | 4.3 |
| Acquisition-related expenses | - | - | 0.4 | - | 0.4 | - |
| Adjusted operating profit (EBITDA) | 34.6 | 87.5 | 32.2 | 72.8 | 32.2 | 72.8 |
| Adjusted operating profit (EBITDA) | 34.6 | 87.5 | 32.2 | 72.8 | 32.2 | 72.8 |
| Net sales | 200.7 | 257.7 | 469.6 | 398.5 | 469.6 | 398.5 |
| Adjusted operating margin (EBITDA), % | 17.2% | 34.0% | 6.9% | 18.3% | 6.9% | 18.3% |
Available cash and cash equivalents
| SEK m | Dec. 31, 2021 | Sept 30, 2021 | June. 30, 2020 | Dec. 31, 2020 |
|---|---|---|---|---|
| Cash and bank balances | 169.2 | 184.9 | 353.9 | 46.8 |
| Unutilized overdraft facilities | 50.0 | 50.0 | 51.1 | 27.1 |
| Available cash and cash equivalents | 219.2 | 234.9 | 405.0 | 73.9 |
Working capital including cash and bank balances
| SEK m | Dec. 31, 2021 | Sept 30, 2021 | June. 30, 2020 | Dec. 31, 2020 |
|---|---|---|---|---|
| Total current assets | 262.5 | 218.5 | 142.8 | 232.0 |
| Cash and bank balances | 169.2 | 184.9 | 353.9 | 46.8 |
| Current liabilities, non-interest-bearing | -114.2 | -133.9 | -96.9 | -159.2 |
| Working capital including cash and bank balances | 317.5 | 269.5 | 399.8 | 119.6 |
| Net sales last 12 months | 469.6 | 516.1 | 445.3 | 398.5 |
| Working capital including cash and bank balances in relation to net sales, % |
67.6% | 52.2% | 89.8% | 30.0% |
Working capital excluding cash and bank balances
| SEK m | Dec. 31, 2021 | Sept 30, 2021 | June. 30, 2020 | Dec. 31, 2020 |
|---|---|---|---|---|
| Inventories | 85.8 | 95.4 | 79.9 | 57.3 |
| Current receivables | 176.7 | 123.1 | 62.9 | 174.7 |
| Current liabilities, non-interest-bearing | -114.2 | -133.9 | -96.9 | -159.2 |
| Working capital excluding cash and bank balances | 148.3 | 84.6 | 45.9 | 72.8 |
| Net sales last 12 months | 469.6 | 516.1 | 445.3 | 398.5 |
| Working capital excluding cash and bank balances in relation to net sales, % |
31.6% | 16.4% | 10.3% | 18.3% |
Return on capital employed
| SEK m | Dec. 31, 2021 | Sept 30, 2021 | June. 30, 2020 | Dec. 31, 2020 |
|---|---|---|---|---|
| Profit after financial items, last 12 months | -5.3 | 43.7 | 47.0 | 55.4 |
| Financial expense, last 12 months | 5.2 | 5.8 | 2.6 | 1.7 |
| Profit before financial expense, last 12 months | -0.1 | 49.5 | 49.6 | 57.1 |
| Capital employed at beginning of period | 186.4 | 156.6 | 156.8 | 173.5 |
| Capital employed at end of period | 670.3 | 664.8 | 595.7 | 199.3 |
| Average capital employed | 428.3 | 410.7 | 376.3 | 186.4 |
| Return on capital employed, % | 0.0% | 12.1% | 13.2% | 30.6% |
Return on equity
| SEK m | Dec. 31, 2021 | Sept 30, 2021 | June. 30, 2020 | Dec. 31, 2020 |
|---|---|---|---|---|
| Profit after tax, last 12 months | -0.7 | 37.9 | 40.6 | 42.5 |
| Equity at beginning of period | 132.6 | 83.2 | 83.4 | 101.3 |
| Equity at end of period | 568.2 | 544.5 | 513.0 | 132.6 |
| Average equity | 350.4 | 313.9 | 298.2 | 117.0 |
| Return on equity, % | -0.2% | 12.1% | 13.6% | 36.3% |
Net debt/EBITDA
| SEK m | Dec. 31, 2021 | Sept 30, 2021 | June. 30, 2020 | Dec. 31, 2020 |
|---|---|---|---|---|
| Non-current liabilities, interest-bearing | 83.8 | 77.1 | 64.6 | 58.8 |
| Current liabilities, interest-bearing | 18.3 | 43.2 | 18.2 | 7.9 |
| Cash and bank balances | -169.2 | -184.9 | -353.9 | -46.8 |
| Net debt incl. IFRS 16 | -67.1 | -64.6 | -271.1 | 19.9 |
| Operating profit, last 12 months | -2.9 | 46.1 | 48.0 | 56.9 |
| Depreciation, amortization and impairment, last 12 months | 23.6 | 23.7 | 14.9 | 11.6 |
| Non-recurring items, last 12 months | 11.5 | 15.5 | 11.4 | 4.3 |
| Adjusted EBITDA, last 12 months | 32,2 | 85,3 | 74,3 | 72,8 |
| Net debt/EBITDA, multiple | -2,1 | -0,8 | -3,6 | 0,3 |
Board of Directors' assurance
The Board of Directors and CEO provide an assurance that this year-end report presents fairly the operations, position and results of the Parent Company and the Group, and describes material risks and uncertainties faced by the Parent Company and the companies included in the Group.
Helsingborg on February 10, 2022
Jan Andersson Chair
Marianne Trolle Board member
Charlotte Darth Board member
Berndt Grundevik Board member
Christian Hammenborn Board member
Lennart Pihl Board member
Björn Karlsson CEO
Definitions
NUMBER OF OUTSTANDING SHARES
Number of registered shares less repurchased shares, held by the Company.
RETURN ON EQUITY
Profit after tax attributable to owners of the parent as a percentage of average equity.
RETURN ON CAPITAL EMPLOYED
Profit after financial income as a percentage of average capital employed.
EBIT
Earnings before interest and taxes according to the income statement.
EBITDA
Earnings before interest, taxes, depreciation and amortization of property, plant and equipment and intangible asset.
NON-RECURRING ITEMS
Non-recurring items are specific material items that are reported separately because of their size or frequency, e.g. restructuring costs, impairment, divestments and acquisition-related expenses.
NET DEBT
Long-term and short-term interest-bearing liabilities less financial income-bearing assets.
OPERATING CASH FLOW
Cash flow from operating activities and cash flow from investing activities excluding acquisitions and divestments of intangible assets and of property, plant and equipment.
ORGANIC GROWTH
Annual growth in net sales excluding acquisition-related net sales, calculated as an increase in net sales excluding acquisition-related net sales compared with the previous year, expressed as a percentage.
WORKING CAPITAL
Current assets, excluding cash and cash equivalents and current tax assets, less interest-free current liabilities, excluding current tax liabilities.
OPERATING MARGIN
Operating profit as a percentage of net sales.
EQUITY/ASSETS RATIO
Equity as a percentage of total assets.
CAPITAL EMPLOYED
Equity plus interest-bearing net debt.
EARNINGS PER SHARE BEFORE DILUTION
Profit after tax attributable to owners of the parent as a percentage of average number of outstanding shares.
EARNINGS PER SHARE AFTER DILUTION
Profit after tax attributable to owners of the parent as a percentage of average number of outstanding shares plus average number of shares added upon conversion of outstanding convertibles and warrants.
Financial calendar:
| Interim report Q1 2022 | April 28, 2022 |
|---|---|
| Annual Report 2021 | Week 15, 2022 |
| Annual General Meeting | May 12, 2022 |
| Interim report Q2 2022 | July 28, 2022 |
| Interim report Q3 2022 | October 27, 2022 |
For further information contact:
Björn Karlsson, CEO +46 70 525 01 07 [email protected]
Daniel Ljunggren, CFO/EVP +46 70 668 00 15 [email protected]
Olof Engvall, Head of IR & Communications +46 733 41 45 73 [email protected]
Invitation to the presentation of MilDef's fourth quarter interim report
The presentation will be held in English and will conclude with a Q&A. The meeting will start at 11:00 CET on February 10, 2021 and will last for about 45 minutes. The report will be made available at www.mildef.com the same morning.
Connecting to the meeting
Connection to the meeting will be by phone (audio only). Please call in 5 minutes before the set start time.
Telephone numbers:
+46 8 502 413 79 (Sverige) +47 23 52 52 25 (Norge) +45 32 73 03 21 (Danmark) +358 9 23106849 (Finland) +44 20 3855 6017 (Storbritannien) +1 323-486-4735 (USA)
Enter conference ID 150 277 085#.
This information is the information that MilDef Group AB (publ) is required to publish in accordance with the EU's market abuse regulation and the Swedish Securities Market Act. The information is disclosed through the above-mentioned contact persons for publication on February 10, 2021 at 08:00 CEST.
MilDef was founded in 1997 in Helsingborg, Sweden, and is a supplier of tactical IT for demanding environments. Tactical IT includes rugged electronics, software and services. MilDef's products are currently sold to more than 160 customers through MilDef's subsidiaries in Sweden, Norway, Finland, the UK and the USA, and through a network of partners in more than 30 countries, mainly within the EU. The product portfolio encompasses all of the components in an IT system – from servers and client computers to network equipment and intelligent displays. The products have been developed to withstand extreme heat, cold, moisture, vibration, shock and other environmental impacts. MilDef is listed on Nasdaq Stockholm.
MilDef Group AB Muskötgatan 6 S-254 66 Helsingborg Sweden
Tel: +46 42 25 00 00 Mail: [email protected] https://mildef.com Org. nr. 556893-5414
