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Nolato B
Quarterly Report • Oct 23, 2019
2950_10-q_2019-10-23_3d455f29-7edf-4add-b37f-90cf08dd536e.pdf
Quarterly Report
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Nolato AB (publ) nine-month interim report 2019
Positive earnings performance by all business areas
- Third quarter of 2019 in brief
- ‒ Sales totalled SEK 1,980 million (1,980)
- ‒ Operating profit (EBITA) rose to SEK 238 million (SEK 222 million excl. a negative non-recurring item of SEK –17 million)
- ‒ EBITA margin of 12.0% (11.2% excl. non-recurring items)
- ‒ Profit after tax increased to SEK 186 million (154)
- ‒ Basic earnings per share rose to SEK 7.02 (SEK 6.50 excl. non-recurring items)
- ‒ Cash flow after investments was SEK –4 million (SEK –68 million excl. a divestment)
First nine months of 2019 in brief
- ‒ Sales totalled SEK 5,623 million (6,321)
- ‒ Operating profit (EBITA) was SEK 646 million (735)
- ‒ Basic earnings per share totalled SEK 18.82 (21.44)
- ‒ Cash flow after investments was SEK 199 million (SEK 471 million excl. a divestment)
| Q3 | Q3 | Q1 - Q3 | Q1 - Q3 | Rolling | Full year | ||
|---|---|---|---|---|---|---|---|
| SEK million unless otherwise specified | Note | 2019 | 2018* | 2019 | 2018* | 12 months | 2018* |
| Net sales | 1 | 1,980 | 1,980 | 5,623 | 6,321 | 7,404 | 8,102 |
| 1) Operating profit (EBITDA) |
326 | 267 | 906 | 914 | 1,181 | 1,189 | |
| 2) Operating profit (EBITA) |
238 | 205 | 646 | 735 | 860 | 949 | |
| EBITA margin, % | 12.0 | 10.4 | 11.5 | 11.6 | 11.6 | 11.7 | |
| 3) Operating profit (EBIT) |
2 | 236 | 203 | 641 | 728 | 854 | 941 |
| Profit after financial income and expense | 2 | 232 | 198 | 621 | 711 | 831 | 921 |
| Profit after tax | 186 | 154 | 497 | 564 | 655 | 722 | |
| Basic earnings per share, SEK | 3 | 7.02 | 5.85 | 18.82 | 21.44 | 24.83 | 27.44 |
| Diluted earnings per share, SEK | 3 | 7.01 | 5.81 | 18.79 | 21.33 | 24.82 | 27.37 |
| 4) Basic adjusted earnings per share, SEK |
3 | 7.09 | 5.93 | 18.98 | 21.67 | 24.98 | 27.67 |
| 4) Diluted adjusted earnings per share, SEK |
3 | 7.09 | 5.89 | 18.94 | 21.56 | 24.97 | 27.59 |
| Cash flow after investm., excl. acquisitions and disposals | – 4 | – 68 | 199 | 471 | 321 | 593 | |
| Net investm. affecting cash fl., excl. acquis. and disposals | 87 | 107 | 279 | 336 | 395 | 452 | |
| Cash conversion, %5) | — | — | — | — | 38 | 60 | |
| Return on capital employed, % | 23.4 | 31.2 | 23.4 | 31.2 | 23.4 | 29.7 | |
| Return on shareholders' equity, % | 24.7 | 33.1 | 24.7 | 33.1 | 24.7 | 30.4 | |
| Equity/assets ratio, % | 47 | 46 | 47 | 46 | 47 | 50 | |
| Net financial assets excl. pension- & lease liabilities | 186 | 208 | 186 | 208 | 186 | 341 | |
Group highlights
* Including non-recurring items of SEK +20 million in Q1 2018 and SEK –17 million in Q3 2018, which affected operating profit by a net amount of SEK +3 million in full year 2018.
1) Operating profit (EBITDA): Earnings before financial income and expense, taxes and depreciation/amortisation.
2) Operating profit (EBITA): Earnings before financial income and expense, taxes and amortisation of intangible assets arising from acquisitions.
3) Operating profit (EBIT): Earnings before financial income and expense and taxes.
- 4) Adjusted earnings per share: Profit after tax, excluding amortisation of intangible assets arising from acquisitions, divided by the average number of shares.
- 5) Cash conversion: Cash flow after investments, excl. acquisitions and disposals, divided by operating profit (EBIT). Cash flow and operating profit have been adjusted by non-recurring items, if any.
This document is a translation from Swedish. In the event of any difference between this version and the Swedish original, the latter shall prevail.
Third quarter 2019
- Sales totalled SEK 1,980 million (1,980); adjusted for currency, sales decreased by 5%
- Operating profit (EBITA) rose to SEK 238 million (SEK 222 million excl. non-recurring items)
- Positive earnings performance by all business areas
- Strong EBITA margin of 12.0% (11.2% excl. non-recurring items)
Sales
Consolidated sales totalled SEK 1,980 million (1,980). Adjusted for currency, this was a decrease of 5%.
Medical Solutions sales rose to SEK 612 million (596); adjusted for currency, sales were unchanged. The second half of last year included very high development sales and additional billing of production equipment, which is also expected to have an effect on growth in the fourth quarter.
Integrated Solutions sales totalled SEK 862 million (892). Following inventory adjustments in Vaporiser Heating Products (VHP) late last year and in the first quarter of this year, the inventory situation has now normalised and sales have risen sequentially. Heating Devices started delivering new product variants in the third quarter. Growth in the EMC area was impacted by a cautious Asian market at the end of the quarter, while mobile phone volumes performed well. Adjusted for currency, sales decreased by 12%.
Industrial Solutions sales amounted to SEK 512 million (492); adjusted for currency, sales increased by 3%. Volumes were stable in most product areas.
Profit
The Group's operating profit (EBITA) increased to SEK 238 million (SEK 222 million excluding non-recurring items).
Operating profit (EBITA) increased to SEK 80 million (76) for Medical Solutions, to SEK 116 million (114) for Integrated Solutions and to SEK 44 million (35) for Industrial Solutions.
The EBITA margin for Medical Solutions was 13.1% (12.8). Last year the margin was negatively affected by higher billing of production equipment with lower margins. The EBITA margin for Integrated Solutions was a very strong 13.5% (12.8). Good volumes of older products in Vaporiser Heating Products (VHP) with high production efficiency, good capacity utilisation in mobile phones and currency effects had a positive impact on the margin. The EBITA margin for Industrial Solutions was 8.6% (7.1). Measures implemented to enhance efficiency are gradually leading to an improvement in the margin.
Overall, the Group's EBITA margin was a strong 12.0% (11.2% excluding non-recurring items).
Sales, operating profit (EBITA) and EBITA margin by business area
| Sales | Sales | Operating profit | Operating profit | EBITA margin | EBITA margin | |
|---|---|---|---|---|---|---|
| SEK million | Q3/2019 | Q3/2018 | EBITA Q3/2019 | EBITA Q3/2018 | Q3/2019 | Q3/2018 |
| Medical Solutions | 612 | 596 | 80 | 76 | 13.1% | 12.8% |
| Integrated Solutions | 862 | 892 | 116 | 114 | 13.5% | 12.8% |
| Industrial Solutions | 512 | 492 | 44 | 35 | 8.6% | 7.1% |
| Intra-Group adj., Parent Company* | – 6 | — | – 2 | – 20 | — | — |
| Group total | 1,980 | 1,980 | 238 | 205 | 12.0% | 10.4% |
* Including a non-recurring item of SEK –17 million in Q3 2018, which had a negative impact on operating profit. Operating profit (EBITA): Earnings before financial income and expense, taxes and amortisation of intangible assets arising from acquisitions.
Operating profit (EBIT) rose to SEK 236 million (SEK 220 million excluding non-recurring items).
Profit after net financial income/expense was SEK 232 million (198).
Profit after tax was SEK 186 million (154). Basic earnings per share rose to SEK 7.02 (SEK 6.50 excluding non-recurring items). Adjusted basic earnings per share excluding amortisation of intangible assets arising from acquisitions amounted to SEK 7.09 (5.93).
First nine months 2019
Sales and earnings
Consolidated sales amounted to SEK 5,623 million (6,321) in the first nine months of 2019. Adjusted for currency and Group structure, this was a decrease of 15%.
Sales for Medical Solutions rose by 10% to SEK 1,857 million (1,690), while for Integrated Solutions they decreased by 27% to SEK 2,195 million (3,017) and declined for Industrial Solutions by 2% to SEK 1,586 million (1,614).
The Group's operating profit (EBITA) was SEK 646 million (SEK 732 million excluding non-recurring items). Overall, the Group's EBITA margin was a strong 11.5% (11.6).
Operating profit (EBIT) amounted to SEK 641 million (SEK 725 million excluding non-recurring items).
Profit after net financial income/expense was SEK 621 million (711). Last year, there was a positive impact on profit of SEK 20 million as a result of a distribution from a customer bankruptcy in 2006, under other operating income. Last year also included the sale of a subsidiary. The sale price was SEK 58 million, resulting in a consolidated capital loss of SEK 17 million, which was recognised under other operating expenses. These non-recurring items were recognised at Group level and did not impact the business areas' profit.
Profit after tax was SEK 497 million (564). Basic earnings per share were SEK 18.82 (SEK 21.17 excluding non-recurring items). Adjusted basic earnings per share excluding amortisation of intangible assets arising from acquisitions amounted to SEK 18.98 (21.67). The effective tax rate was 20.0% (20.7).
The return on capital employed was 23.4% for the last 12 months (29.7% for the 2018 calendar year). Return on equity was 24.7% for the last 12 months (30.4% for the 2018 calendar year).
Medical Solutions
| Sales and profit Q1-Q3 (SEK million) | 2019 | 2018 |
|---|---|---|
| Sales | 1,857 | 1,690 |
| Operating profit (EBITA) | 240 | 218 |
| EBITA margin (%) | 12.9 | 12.9 |
| Operating profit (EBIT) | 238 | 214 |
Medical Solutions sales rose to SEK 1,857 million (1,690); adjusted for currency, sales grew by a strong 6%. Sales increased in both Medical Devices and Pharma Packaging, and most product areas experienced good growth. Growth in the fourth quarter is expected to be affected by a strong quarter last year, which contained very high development sales and billing of production equipment.
Operating profit (EBITA) rose to SEK 240 million (218). The EBITA margin was 12.9% (12.9).
Integrated Solutions
| Sales and profit Q1-Q3 (SEK million) | 2019 | 2018 |
|---|---|---|
| Sales | 2,195 | 3,017 |
| Operating profit (EBITA) | 280 | 374 |
| EBITA margin (%) | 12.8 | 12.4 |
| Operating profit (EBIT) | 280 | 374 |
Integrated Solutions sales decreased to SEK 2,195 million (3,017); adjusted for currency, sales declined by 33%. Following inventory adjustments in Vaporiser Heating Products (VHP) late last year and in the first quarter of this year, the inventory situation has now normalised. As a result of this the first quarter began with low volumes, but these grew sequentially in the second and third quarters. Heating Devices started delivering new product variants in the third quarter. Volumes in the EMC area were stable over the period, while mobile phones have been weak but performed well in the third quarter.
Operating profit (EBITA) was SEK 280 million (374). The EBITA margin was a strong 12.8% (12.4).
During the quarter Nolato entered into an agreement to acquire US-based Ja-Bar Silicone, with annual sales equivalent to approximately SEK 150 million and good profitability within EMC. The acquisition provides Nolato with complementary production technologies, an expanded customer base and a stronger presence on the American continent. The transaction is expected to be completed in November, when the company will also be consolidated into the Group. The purchase price is approximately SEK 95 million (debt-free basis) and the acquisition will be funded by using existing credit agreements.
Medical Solutions sales 600 700
Industrial Solutions
| Sales and profit Q1-Q3 (SEK million) | 2019 | 2018 |
|---|---|---|
| Sales | 1,586 | 1,614 |
| Operating profit (EBITA) | 134 | 147 |
| EBITA margin (%) | 8.4 | 9.1 |
| Operating profit (EBIT) | 131 | 144 |
Industrial Solutions sales totalled SEK 1,586 million (1,614); adjusted for currency and Group structure, sales decreased by 3%. Inventory adjustments in the hygiene area in the first half of the year had a negative effect. Volumes were stable in most other product areas.
Operating profit (EBITA) totalled SEK 134 million (147), with an EBITA margin of 8.4% (9.1). The lower margin was due to the continued unsatisfactory efficiency of one production facility, combined with lower volumes. Implemented and ongoing efficiency improvements are gradually having an effect.
Industrial Solutions sales
Cash flow after investments in the third quarter amounted to SEK −4 million (SEK −68 million excluding a divestment). Improved profit and lower investments had a positive impact. As was the case last year, increased sales at the end of the quarter are driving working capital requirements.
Net investment affecting cash flow totalled SEK 87 million (107). On an accumulated nine month-basis, cash flow after investments decreased to SEK 199 million (SEK 471 million excluding non-recurring items) as a result of lower profit and, in particular, a negative change in working capital. On an accumulated basis, investment affecting cash flow totalled SEK 279 million (SEK 336 million excluding a divestment).
Cash conversion for the last 12 months was 38% (60% for the 2018 calendar year).
Cash flow Cash flow after investments
Financial position
Interest-bearing assets amounted to SEK 851 million (818), and interestbearing financial liabilities were SEK 665 million (610). Net financial assets consequently totalled SEK 186 million (208). There are also interest-bearing pension liabilities of SEK 208 million (192) and interest-bearing lease liabilities of SEK 317 million (0). Shareholders' equity rose to SEK 2,833 million (2,422). A dividend totalling SEK 368 million (329) was paid to shareholders in the second quarter. The equity/assets ratio increased to 47% (46).
Financial position
| SEK million | 30/09/2019 | 30/09/2018 | 31/12/2018 |
|---|---|---|---|
| Interest-bearing liabilities, credit institutions | – 665 | – 610 | – 612 |
| Cash and bank | 851 | 818 | 953 |
| Net financial assets | 186 | 208 | 341 |
| Interest-bearing pension liabilities | – 208 | – 192 | – 182 |
| Net financial liabilities (–) / assets (+) incl. pension liabilities | – 22 | 16 | 159 |
| Lease liabilities | – 317 | — | — |
| Net financial liabilities (–) / assets (+) incl. pension- & lease liabilities | – 339 | 16 | 159 |
| Working capital | 558 | 279 | 228 |
| As a percentage of sales (avg.) (%) | 5.7 | 4.1 | 3.8 |
| Capital employed | 4,022 | 3,225 | 3,387 |
| Return on capital employed (avg.) (%) | 23.4 | 31.2 | 29.7 |
| Shareholders' equity | 2,833 | 2,422 | 2,592 |
| Return on shareholders' equity (avg.) (%) | 24.7 | 33.1 | 30.4 |
Consolidated performance analysis
| Q3 | Q3 | Q1 - Q3 | Q1 - Q3 | Rolling | Full year | ||
|---|---|---|---|---|---|---|---|
| SEK million | Note | 2019 | 2018 | 2019 | 2018 | 12 months | 2018 |
| Net sales | 1 | 1,980 | 1,980 | 5,623 | 6,321 | 7,404 | 8,102 |
| Gross profit excl. depreciation/amortisation | 403 | 354 | 1,158 | 1,146 | 1,505 | 1,493 | |
| As a percentage of net sales | 20.4 | 17.9 | 20.6 | 18.1 | 20.3 | 18.4 | |
| Costs | – 77 | – 87 | – 252 | – 232 | – 324 | – 304 | |
| As a percentage of net sales | 3.9 | 4.4 | 4.5 | 3.7 | 4.4 | 3.8 | |
| Operating profit (EBITDA) | 326 | 267 | 906 | 914 | 1,181 | 1,189 | |
| As a percentage of net sales | 16.5 | 13.5 | 16.1 | 14.5 | 16.0 | 14.7 | |
| Depreciation and amortisation | – 88 | – 62 | – 260 | – 179 | – 321 | – 240 | |
| Operating profit (EBITA) | 238 | 205 | 646 | 735 | 860 | 949 | |
| As a percentage of net sales | 12.0 | 10.4 | 11.5 | 11.6 | 11.6 | 11.7 | |
| Amortisation of intangible assets arising from acquisitions | – 2 | – 2 | – 5 | – 7 | – 6 | – 8 | |
| Operating profit (EBIT) | 2 | 236 | 203 | 641 | 728 | 854 | 941 |
| Financial income and expense | 2 | – 4 | – 5 | – 20 | – 17 | – 23 | – 20 |
| Profit after financial income and expense | 2 | 232 | 198 | 621 | 711 | 831 | 921 |
| Tax | – 46 | – 44 | – 124 | – 147 | – 176 | – 199 | |
| As a percentage of profit after financial income and expense | 19.8 | 22.2 | 20.0 | 20.7 | 21.2 | 21.6 | |
| Profit after tax | 186 | 154 | 497 | 564 | 655 | 722 | |
Personnel Contact:
The average number of employees during the period was 5,716 people (6,376). The decrease in the number of employees is mainly attributable to Integrated Solutions' operations in China.
Significant risks and uncertainty factors
The business risks and risk management of the Group and the Parent Company, along with the management of financial risks, are described in the 2018 Annual Report on pages 53 – 55, and in Note 30 on pages 79 – 82.
No significant events have occurred during the period that would significantly affect or change these descriptions of the Group's and the Parent Company's risks or the management thereof.
Seasonal effects
Nolato does not experience any significant seasonal variations. However, in the third quarter sales within Industrial Solutions, and to a certain degree Medical Solutions, can be negatively affected by the fact that the holiday period falls in this quarter both for Nolato and its customers.
Events after the balance sheet date
No significant events have occurred since the end of the period.
Ownership and legal structure
Nolato AB (publ), Swedish corporate identity number 556080-4592, is the Parent Company of the Nolato Group.
Nolato's Class B shares are listed on the Nasdaq Stockholm exchange in the Large Cap segment, where they are included in the Industrials sector.
There were 12,023 shareholders at 30 September. The largest shareholders are the Jorlén family with 10%, the Boström family and the Hamrin family with 9% each, Capital Group with 7%, Lannebo Funds with 6%, Didner & Gerge Funds with 4%, Handelsbanken Funds with 3%, of the capital.
- Christer Wahlquist, President and CEO, tel. +46 705 804848
- Per-Ola Holmström, CFO, tel. +46 705 763340
Webcast conference call on 23 October:
In connection with the interim report, Nolato will hold a webcast conference call in English at 3.00 p.m. CET. Nolato will be represented by President and CEO Christer Wahlquist and CFO Per-Ola Holmström, who will present the interim report and answer questions. Information regarding telephone numbers and website is available at https://financialhearings.com/ event/11898. The presentation will be available at www.nolato.com/ir after publication of the interim report. The webcast will be available at the same address after the live broadcast.
The Parent Company
For the Parent Company, which has no operational activities, sales amounted to SEK 49 million (49). Profit after financial income and expense amounted to SEK 115 million (101). Contingent liabilities amounted to SEK 102 million (134).
Accounting and valuation principles
Nolato's consolidated accounts have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU.
The consolidated year-end report has been prepared in accordance with IAS 34 (Interim Financial Reporting) and the applicable provisions of the Swedish Annual Accounts Act. The Swedish Securities Market Act has been applied in relation to publication of this interim report.
The consolidated accounts have been prepared in accordance with the same principles as those applied in the most recent Annual Report, which are described in the 2018 Annual Report.
Of the new or revised IFRS standards or IFRIC interpretations, which came into effect on 1 January 2019, only IFRS 16 Leases have had a material effect on the consolidated income statement or balance sheet.
The interim report for the Parent Company was prepared in accordance with Chapter 9 of the Swedish Annual Accounts Act.
IFRS 16 Leases
In transitioning to IFRS 16 on 1 January 2019 the Group has used a modified retrospective method, meaning that the 2018 financial year is not recalculated. The lease liability is the sum of the net present value of all future lease payments. The simplification rule, that a right-of-use asset (prior to adjustments for any advance payments) should correspond to the lease liability, was applied at transition. All components, with the exception of property tax in Sweden, have been deemed to be a lease component. Exemptions to not recognise short-term leases and low-value assets have also been applied.
The discount rate is based on high-quality mortgage bond yields in Sweden, with reference to the term of leases, which for foreign companies are then adjusted for differences between 10-year government bond yields of Sweden and foreign countries.
The largest asset class for leases is property, such as production plants and offices.
Prior to publication this information constituted inside information that Nolato AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the above contact persons, at 2:00 p.m. CET on 23 October 2019.
This report has not been audited by the Company's auditors.
Impact on Group from IFRS 16 Leases
The following figures and key performance indicators are Nolato's impact of IFRS 16.
| Impact on consolidated balance sheet of IFRS 16 | Before transition | Adjustment due | Adj. open. bal. |
|---|---|---|---|
| SEK million | 31/12/2018 | to transition | 01/01/2019 |
| Property, plant & equipment | 1,518 | 362 | 1,880 |
| Total fixed assets (increase of balance sheet item) | 1,518 | 362 | 1,880 |
| Long-term liabilities and provisions (interest-bearing) | 704 | 292 | 996 |
| Current liabilities and provisions (interest-bearing) | 90 | 70 | 160 |
| Total interest-bearing liabilities and provisions (increase of balance sheet item) |
794 | 362 | 1,156 |
| Impact on consolidated income statement of IFRS 16 | Q3 | Q3 | Q1 - Q3 | Q1 - Q3 | Rolling | Full year |
|---|---|---|---|---|---|---|
| SEK million | 2019 | 2018 | 2019 | 2018 | 12 months | 2018 |
| Cost of goods sold | 19 | — | 59 | — | 59 | — |
| EBITDA (increase of performance measure) | 19 | — | 59 | — | 59 | — |
| Depreciation in cost of goods sold | – 18 | — | – 56 | — | – 56 | — |
| EBITA/EBIT (increase of performance measure) | 1 | — | 3 | — | 3 | — |
| Interest expenses | – 2 | — | – 8 | — | – 8 | — |
| Profit after financial income and expense (decrease of performance measure) |
– 1 | — | – 5 | — | – 5 | — |
| Tax | — | — | 1 | — | 1 | — |
| Profit after tax (decrease of performance measure) | – 1 | — | – 4 | — | – 4 | — |
| Effect on basic earnings per share (SEK) | – 0.04 | — | – 0.15 | — | – 0.15 | — |
Impact on consolidated balance sheet of IFRS 16
| SEK million | 30/09/2019 | 30/09/2018 | 31/12/2018 |
|---|---|---|---|
| Property, plant & equipment | 315 | — | — |
| Deferred tax assets | 1 | — | — |
| Total fixed assets | 316 | — | — |
| Other current assets | – 1 | — | — |
| Total current assets | – 1 | — | — |
| Total assets (increase of balance sheet item) | 315 | — | — |
| Shareholders' equity | – 4 | — | — |
| Long-term liabilities and provisions (interest-bearing) | 248 | — | — |
| Current liabilities and provisions (interest-bearing) | 69 | — | — |
| Current liabilities and provisions (non-interest-bearing) | 2 | — | — |
| Total liabilities and provisions | 319 | — | — |
| Total shareholders' equity and liabilities (increase of balance sheet item) |
315 | — | — |
| Impact on consolidated cash flow statement of IFRS 16 | Q3 | Q3 | Q1 - Q3 | Q1 - Q3 | Rolling | Full year |
|---|---|---|---|---|---|---|
| SEK million | 2019 | 2018 | 2019 | 2018 | 12 months | 2018 |
| Operating profit | 1 | — | 3 | — | 3 | — |
| Adjustments for items not included in cash flow: | ||||||
| Depreciation | 18 | — | 56 | — | 56 | — |
| Interest paid | – 2 | — | – 8 | — | – 8 | — |
| Cash flow from oper. act. before changes in working capital | 17 | — | 51 | — | 51 | — |
| Other changes in working capital | 1 | — | 3 | — | 3 | — |
| Cash flow from operating activities | 18 | — | 54 | — | 54 | — |
| Cash flow from financing activities | – 18 | — | – 54 | — | – 54 | — |
| Cash flow for the period | — | — | — | — | — | — |
Nomination Committee
In accordance with a decision at Nolato's AGM on 8 May 2019, the five largest shareholders in terms of the number of votes at the end of September 2019 have appointed the following individuals to be included in Nolato's Nomination Committee ahead of the 2020 AGM: Henrik Jorlén, chairman (Jorlén family), Gun Boström (Boström family), Lovisa Hamrin (Hamrin family) and Johan Ståhl (Lannebo Funds).
Shareholders who would like to submit proposals to the Nomination Committee can contact the chairman of the Nomination Committee, Henrik Jorlén, by email at [email protected] or by post at Kommendörsgatan 4, 269 77 Torekov, Sweden.
Annual General Meeting
The Annual General Meeting will be held on 4 May 2020.
Financial calendar
- 2019 year-end report: 10 February 2020
- Three-month interim report 2020: 4 May 2020
- 2020 Annual General Meeting: 4 May 2020
- Six-month interim report 2020: 17 July 2020
- Nine-month interim report 2020: 23 October 2020
- 2020 year-end report: 10 February 2021
Torekov, 23 October 2019 Nolato AB (publ) Christer Wahlquist, President and CEO
The company in brief
Nolato's business
Nolato is a global, advanced high-tech cooperation partner and manufacturer of polymer products and systems for leading customers in welldefined market areas such as medical technology, pharmaceuticals, consumer electronics, telecom, automotive and other selected industrial sectors.
With its many years of experience, in-depth materials and processes expertise, early involvement in customer projects, advanced project management and detailed knowledge of each customer's specific requirements, Nolato is an effective and innovative partner.
Nolato's business model
Our business model is based on three decentralised business areas, which with their own decision-making and shared ambitions endeavour to fulfil our vision and financial targets.
The sharing of experience between our business areas, leading-edge technology, wide-ranging development and design know-how, advanced project management and efficient production allow us to establish longterm, innovative cooperation with our customers and partners and generate added value for both them and our shareholders.
Our shared values of being professional, well organised and responsible are reflected in everything we do.
Nolato's strategies
- Early involvement in customers' development processes
- Close and long-term collaboration/partnerships with our customers
- Innovative, integrated and high-tech solutions
- High productivity/Lean manufacturing
- Advancing up the value chain/Greater added value
- Global presence
- Responsible business practice
Consolidated income statement (summary)
| Q3 | Q3 | Q1 - Q3 | Q1 - Q3 | Rolling | Full year | ||
|---|---|---|---|---|---|---|---|
| SEK million | Note | 2019 | 2018 | 2019 | 2018 | 12 months | 2018 |
| Net sales | 1 | 1,980 | 1,980 | 5,623 | 6,321 | 7,404 | 8,102 |
| Cost of goods sold | – 1,665 | – 1,687 | – 4,722 | – 5,351 | – 6,216 | – 6,845 | |
| Gross profit | 315 | 293 | 901 | 970 | 1,188 | 1,257 | |
| Other operating income | 7 | 5 | 8 | 27 | 18 | 37 | |
| Selling expenses | – 31 | – 29 | – 94 | – 90 | – 123 | – 119 | |
| Administrative expenses | – 55 | – 53 | – 174 | – 162 | – 229 | – 217 | |
| Other operating expenses | — – 79 |
– 13 – 90 |
— – 260 |
– 17 – 242 |
— – 334 |
– 17 – 316 |
|
| Operating profit | 2 | 236 | 203 | 641 | 728 | 854 | 941 |
| Financial income and expense | 2 | – 4 | – 5 | – 20 | – 17 | – 23 | – 20 |
| Profit after financial income and expense | 2 | 232 | 198 | 621 | 711 | 831 | 921 |
| Tax | – 46 | – 44 | – 124 | – 147 | – 176 | – 199 | |
| Profit after tax | 186 | 154 | 497 | 564 | 655 | 722 | |
| All earnings are attrib. to the Parent Co.'s shareholders | |||||||
| Depreciation/amortisation regarding non-current assets | 90 | 64 | 265 | 186 | 327 | 248 | |
| Basic earnings per share, SEK* | 3 | 7.02 | 5.85 | 18.82 | 21.44 | 24.83 | 27.44 |
| Diluted earnings per share, SEK* | 3 | 7.01 | 5.81 | 18.79 | 21.33 | 24.82 | 27.37 |
| Number of shares at the end of the period, before dilution* | 26,539,548 | 26,307,408 | 26,539,548 | 26,307,408 | 26,539,548 | 26,307,408 | |
| Number of shares at the end of the period, after dilution* | 26,542,660 | 26,485,487 | 26,542,660 | 26,485,487 | 26,542,660 | 26,427,262 | |
| Average number of shares, before dilution* | 26,498,103 | 26,307,408 | 26,402,756 | 26,307,408 | 26,383,686 | 26,307,408 | |
| Average number of shares, after dilution* | |||||||
| 26,534,668 | 26,500,451 | 26,456,251 | 26,439,691 | 26,391,809 | 26,384,021 |
* At the end of the period the Group had three share warrant programmes, Series 1, Series 2 and Series 3. Series 1 has redemptions from 01/05/2019 to 15/12/2019, Series 2 from 01/05/2020 to 15/12/2020 and Series 3 from 01/05/2021 to 15/12/2021. The subscription price is SEK 296.30 for Series 1, SEK 485.10 for Series 2 and SEK 502.00 for Series 3. Accumulated after nine months 232,140 class B shares were subscribed for under Series 1 and 8,360 class B shares remain to be redeemed. Upon full subscription, the programmes provide a maximum of additional 398,060 new class B shares. The programmes have been taken into account in calculating the number of shares after dilution.
Consolidated comprehensive income
| Q3 | Q3 | Q1 - Q3 | Q1 - Q3 | Rolling | Full year | |
|---|---|---|---|---|---|---|
| SEK million | 2019 | 2018 | 2019 | 2018 | 12 months | 2018 |
| Profit after tax | 186 | 154 | 497 | 564 | 655 | 722 |
| Other comprehensive income | ||||||
| Items that cannot be transferred to profit for the period | ||||||
| Revaluations of defined benefit pension plans | – 11 | — | – 21 | — | – 18 | 3 |
| Tax attributable to items that cannot be transferred to | ||||||
| profit for the period | 3 | — | 5 | — | 4 | – 1 |
| – 8 | — | – 16 | — | – 14 | 2 | |
| Items that have been converted or can be converted into | ||||||
| profit for the period | ||||||
| Translation diff. for the period on transl. of foreign operations | 28 | – 34 | 61 | 30 | 67 | 36 |
| Changes in the fair val. of cash flow hedges for the period* | – 2 | 1 | – 2 | – 3 | — | – 1 |
| Tax attr. to changes in the fair val. of cash flow hedges* | — | — | — | 1 | – 1 | — |
| 26 | – 33 | 59 | 28 | 66 | 35 | |
| Other comprehensive income, net of tax | 18 | – 33 | 43 | 28 | 52 | 37 |
| Total comp. income for the period attributable to the Parent Co.'s shareholders |
204 | 121 | 540 | 592 | 707 | 759 |
* Financial instruments are measured at fair value in the statement of financial position, pursuant to measurement hierarchy Level 2.
Consolidated balance sheet (summary)
| SEK million | 30/09/2019 | 30/09/2018 | 31/12/2018 |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Intangible non-current assets | 818 | 780 | 780 |
| Property, plant and equipment | 1,902 | 1,471 | 1,518 |
| Non-current financial assets | 2 | 2 | 2 |
| Other non-current receivables | 1 | 1 | 1 |
| Deferred tax assets | 77 | 51 | 111 |
| Total fixed assets | 2,800 | 2,305 | 2,412 |
| Current assets Inventories |
700 | 742 | 566 |
| Accounts receivable | 1,351 | 1,012 | 949 |
| Other current assets* 2) | 349 | 351 | 276 |
| Cash and bank | 851 | 818 | 953 |
| Total current assets | 3,251 | 2,923 | 2,744 |
| Total assets | 6,051 | 5,228 | 5,156 |
| Shareholders' equity and liabilities | |||
| Shareholders' equity | 2,833 | 2,422 | 2,592 |
| 1) Long-term liabilities and provisions |
1,117 | 806 | 795 |
| Deferred tax liabilities1) | 91 | 87 | 116 |
| Current liabilities and provisions* 1) 3) | 2,010 | 1,913 | 1,653 |
| Total liabilities and provisions | 3,218 | 2,806 | 2,564 |
| Total shareholders' equity and liabilities | 6,051 | 5,228 | 5,156 |
| 1) Interest-bearing/non-interest-bearing liabilities and provisions: | |||
| Interest-bearing liabilities and provisions | 1,190 | 802 | 794 |
| Non-interest-bearing liabilities and provisions | 2,028 | 2,004 | 1,770 |
| Total liabilities and provisions | 3,218 | 2,806 | 2,564 |
| * Financial instruments are measured at fair value in the statement of financial position, pursuant to | |||
| measurement hierarchy Level 2. 2) Derivative assets are included in other current assets at |
1 | — | 5 |
| 3) Derivative liabilities are included in current liabilities and provisions at | 33 | 18 | 4 |
3) Derivative liabilities are included in current liabilities and provisions at
Changes in consolidated shareholders' equity (summary)
| Q1 - Q3 | Q1 - Q3 | Full year | |
|---|---|---|---|
| SEK million | 2019 | 2018 | 2018 |
| Shareholders' equity at the beginning of the period | 2,592 | 2,159 | 2,159 |
| Total comprehensive income for the period | 540 | 592 | 759 |
| Dividends | – 368 | – 329 | – 329 |
| Share warrants included in incentive programme | — | — | 3 |
| Exercise of warrants included in incentive programme | 69 | — | — |
| Shareholders' equity at the end of period attrib. to Parent Co's shareholders | 2,833 | 2,422 | 2,592 |
In 2019, a dividend totalling SEK 368 million was paid to the Parent Company's shareholders, corresponding to a dividend of SEK 14.00 per share. At the end of the period the Group had three share warrant programmes, Series 1, Series 2 and Series 3. Series 1 has redemptions from 01/05/2019 to 15/12/2019, Series 2 from 01/05/2020 to 15/12/2020 and Series 3 from 01/05/2021 to 15/12/2021. The subscription price is SEK 296.30 for Series 1, SEK 485.10 for Series 2 and SEK 502.00 for Series 3. Accumulated after nine months 232,140 class B shares were subscribed for under Series 1 and 8,360 class B shares remain to be redeemed. Upon full subscription, the programmes provide a maximum of additional 398,060 new class B shares. The programmes have been taken into account in calculating the number of shares after dilution.
Consolidated cash flow statement (summary)
| Q3 | Q3 | Q1 - Q3 | Q1 - Q3 | Rolling | Full year | |
|---|---|---|---|---|---|---|
| SEK million | 2019 | 2018 | 2019 | 2018 | 12 months | 2018 |
| Cash flow from operating activities bef. changes in working capital | 282 | 220 | 677 | 722 | 915 | 960 |
| Changes in working capital | – 199 | – 181 | – 199 | 85 | – 199 | 85 |
| Cash flow from operating activities | 83 | 39 | 478 | 807 | 716 | 1,045 |
| Cash flow from investment activities | – 87 | – 53 | – 279 | – 282 | – 395 | – 398 |
| Cash flow before financing activities | – 4 | – 14 | 199 | 525 | 321 | 647 |
| Cash flow from financing activities | 11 | – 27 | – 351 | – 395 | – 349 | – 393 |
| Cash flow for the period | 7 | – 41 | – 152 | 130 | – 28 | 254 |
| Cash and cash equivalents at the beginning of the period | 828 | 891 | 953 | 669 | — | 669 |
| Exchange rate difference in liquid assets | 16 | – 32 | 50 | 19 | — | 30 |
| Cash and cash equivalents at the end of the period | 851 | 818 | 851 | 818 | — | 953 |
Note 1 Revenue
| Q1 - Q3 - 2019 | Q1 - Q3 - 2018 | Full year - 2018 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Medical | Integr. | Indust. | Medical | Integr. | Indust. | Medical | Integr. | Indust. | ||||
| SEK million | Sum | Sol. | Sol. | Sol. | Sum | Sol. | Sol. | Sol. | Sum | Sol. | Sol. | Sol. |
| Sweden | 858 | 116 | 31 | 711 | 894 | 106 | 40 | 748 | 1,189 | 140 | 51 | 998 |
| Other Europe | 2,374 | 1,222 | 422 | 730 | 2,100 | 1,104 | 279 | 717 | 2,889 | 1,492 | 473 | 924 |
| North America etc. | 566 | 449 | 20 | 97 | 531 | 411 | 25 | 95 | 716 | 544 | 41 | 131 |
| Asia | 1,840 | 70 | 1,722 | 48 | 2,796 | 69 | 2,673 | 54 | 3,315 | 94 | 3,155 | 66 |
| Elimination internal sales | – 15 | — | – 7 | |||||||||
| Tot. revenues fr. customer contr. | 5,623 | 1,857 | 2,195 | 1,586 | 6,321 | 1,690 | 3,017 | 1,614 | 8,102 | 2,270 | 3,720 | 2,119 |
The above table essentially covers products transferred at a specific date.
For the first 9 months, the Group has a provision for anticipated credit losses on trade receivables and contract assets, with SEK 6 million (10) among the cost of goods sold.
Note 2 Reconciliation of consolidated income before tax
| Q1 - Q3 | Q1 - Q3 | Rolling | Full year | |
|---|---|---|---|---|
| SEK million | 2019 | 2018 | 12 months | 2018 |
| Operating profit (EBIT) | ||||
| Medical Solutions | 238 | 214 | 315 | 291 |
| Integrated Solutions | 280 | 374 | 379 | 473 |
| Industrial Solutions | 131 | 144 | 169 | 182 |
| Group adjustments, Parent Company* | – 8 | – 4 | – 9 | – 5 |
| Consolidated operating profit (EBIT)* | 641 | 728 | 854 | 941 |
| Financial income and expense (not distributed by business areas) | – 20 | – 17 | – 23 | – 20 |
| Consolidated profit before tax | 621 | 711 | 831 | 921 |
* Including non-recurring items of SEK +20 million in Q1 2018 and SEK –17 million in Q3 2018, which affected operating profit by a net amount of SEK +3 million in full year 2018.
Note 3 Earnings per share (IFRS measures)
| Q3 | Q3 | Q1 - Q3 | Q1 - Q3 | Rolling | Full year | |
|---|---|---|---|---|---|---|
| SEK million | 2019 | 2018 | 2019 | 2018 | 12 months | 2018 |
| Profit after tax | 186 | 154 | 497 | 564 | 655 | 722 |
| Average number of shares, before dilution | 26,498,103 | 26,307,408 | 26,402,756 | 26,307,408 | 26,383,686 | 26,307,408 |
| Basic earnings per share (SEK) | 7.02 | 5.85 | 18.82 | 21.44 | 24.83 | 27.44 |
| Non-recurring items | — | 17 | — | – 7 | — | – 7 |
| Profit after tax excl. non-recurring items | 186 | 171 | 497 | 557 | 655 | 715 |
| Basic earnings per share excl. non-recurring items (SEK) | 7.02 | 6.50 | 18.82 | 21.17 | 24.83 | 27.18 |
| Dilutive shares from Series 1 incentive programme with | ||||||
| exercise price SEK 296.30 per share; total 240,500 warrants | 18,711 | 136,178 | 53,495 | 101,820 | 8,123 | 76,613 |
| Dilutive shares from Series 2 incentive programme with | ||||||
| exercise price SEK 485.10 per share; total 196,200 warrants | 10,504 | 56,865 | — | 30,463 | — | — |
| Dilutive shares from Series 3 incentive programme with | ||||||
| exercise price SEK 502.00 per share; total 193,500 warrants | 7,350 | — | — | — | — | — |
| Average number of shares, after dilution | 26,534,668 | 26,500,451 | 26,456,251 | 26,439,691 | 26,391,809 | 26,384,021 |
| Diluted earnings per share (SEK) | 7.01 | 5.81 | 18.79 | 21.33 | 24.82 | 27.37 |
| Diluted earnings per share excl. non-recurring items (SEK) | 7.01 | 6.45 | 18.79 | 21.07 | 24.82 | 27.10 |
| Number of shares at the end of the period, before dilution | 26,539,548 | 26,307,408 | 26,539,548 | 26,307,408 | 26,539,548 | 26,307,408 |
| Number of shares at the end of the period, after dilution | 26,542,660 | 26,485,487 | 26,542,660 | 26,485,487 | 26,542,660 | 26,427,262 |
At the end of the period the Group had three share warrant programmes, Series 1, Series 2 and Series 3. Series 1 has redemptions from 01/05/2019 to 15/12/2019, Series 2 from 01/05/2020 to 15/12/2020 and Series 3 from 01/05/2021 to 15/12/2021. The subscription price is SEK 296.30 for Series 1, SEK 485.10 for Series 2 and SEK 502.00 for Series 3. Accumulated after nine months 232,140 class B shares were subscribed for under Series 1 and 8,360 class B shares remain to be redeemed. Upon full subscription, the programmes provide a maximum of additional 398,060 new class B shares. The programmes have been taken into account in calculating the number of shares after dilution.
Adjusted earnings per share (alternative performance measures)
| Q3 | Q3 | Q1 - Q3 | Q1 - Q3 | Rolling | Full year | |
|---|---|---|---|---|---|---|
| SEK million | 2019 | 2018 | 2019 | 2018 | 12 months | 2018 |
| Profit after tax | 186 | 154 | 497 | 564 | 655 | 722 |
| Adjusted earnings: | ||||||
| Amortisation of intangible assets arising from acquisitions | 2 | 2 | 5 | 7 | 6 | 8 |
| Tax on amortisation | — | — | – 1 | – 1 | – 2 | – 2 |
| Adjusted earnings | 188 | 156 | 501 | 570 | 659 | 728 |
| Average number of shares, before dilution | 26,498,103 | 26,307,408 | 26,402,756 | 26,307,408 | 26,383,686 | 26,307,408 |
| Adjusted basic earnings per share (SEK) | 7.09 | 5.93 | 18.98 | 21.67 | 24.98 | 27.67 |
| Non-recurring items | — | 17 | — | – 7 | — | – 7 |
| Adjusted earnings after tax, excl. non-recurring items | 188 | 173 | 501 | 563 | 659 | 721 |
| Adj. basic earnings per share excl. non-recurring items (SEK) | 7.09 | 6.58 | 18.98 | 21.40 | 24.98 | 27.41 |
| Average number of shares, after dilution | 26,534,668 | 26,500,451 | 26,456,251 | 26,439,691 | 26,391,809 | 26,384,021 |
| Adjusted diluted earnings per share (SEK) | 7.09 | 5.89 | 18.94 | 21.56 | 24.97 | 27.59 |
| Adj. diluted earnings per share excl. non-recurring items (SEK) | 7.09 | 6.53 | 18.94 | 21.29 | 24.97 | 27.33 |
Five-year overview
| IFRS measures | 2018 | 2017 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|
| Operating profit (EBIT) (SEK million) | 941 | 749 | 443 | 556 | 454 |
| Basic earnings per share (SEK) | 27.44 | 21.74 | 12.77 | 15.97 | 13.84 |
| Diluted earnings per share (SEK) | 27.37 | 21.74 | 12.77 | 15.97 | 13.84 |
| Alternative performance measures |
| Net sales (SEK million) | 8,102 | 6,720 | 4,447 | 4,726 | 4,234 |
|---|---|---|---|---|---|
| Operating profit (EBITA) (SEK million) | 949 | 763 | 457 | 570 | 470 |
| EBITA margin (%) | 11.7 | 11.4 | 10.3 | 12.1 | 11.1 |
| Profit after financial income and expense (SEK million) | 921 | 731 | 438 | 555 | 462 |
| Profit after tax (SEK million) | 722 | 572 | 336 | 420 | 364 |
| Cash flow after investments, excl. acq. and disposals (SEK million) | 593 | 496 | 245 | 288 | 127 |
| Cash conversion (%) | 60 | 66 | 55 | 52 | 28 |
| Return on capital employed (%) | 29.7 | 26.6 | 20.6 | 29.6 | 28.4 |
| Return on shareholders' equity (%) | 30.4 | 29.4 | 19.0 | 25.3 | 25.0 |
| Net financial assets (+) liabilities (–), excl. pension- & lease liab. (SEK million) | 341 | 31 | – 206 | 249 | 187 |
| Equity/assets ratio (%) | 50 | 45 | 47 | 54 | 54 |
| Adjusted basic earnings per share (SEK) | 27.67 | 22.16 | 13.19 | 16.35 | 14.29 |
| Adjusted diluted earnings per share (SEK) | 27.59 | 22.15 | 13.19 | 16.35 | 14.29 |
| Dividend per share (SEK) | 14.00 | 12.50 | 10.50 | 10.00 | 8.50 |
| Average number of employees | 6,449 | 7,249 | 6,418 | 7,759 | 8,020 |
Including any non-recurring items.
Quarterly data (summary)
| 2019 173 232 236 — — Operating profit (EBIT) (SEK million) 2 2018 261 264 203 213 941 2 2017 142 174 206 227 749 2019 4.98 6.82 7.02 — — Basic earnings per share (SEK) 3 2018 7.83 7.75 5.85 6.01 27.44 3 2017 4.11 4.98 5.82 6.84 21.74 2019 4.97 6.81 7.01 — — Diluted earnings per share (SEK) 3 2018 7.80 7.70 5.81 5.98 27.30 3 2017 4.11 4.98 5.82 6.84 21.74 Alternative performance measures 2019 1,656 1,987 1,980 — — Net sales (SEK million) 1 2018 2,039 2,302 1,980 1,781 8,102 1 2017 1,370 1,675 1,749 1,926 6,720 Operating profit (EBITDA) (SEK million) 2019 259 321 326 — — 2018 322 325 267 275 1,189 2017 199 232 263 286 980 2019 175 233 238 — — Operating profit (EBITA) (SEK million) 2018 264 266 205 214 949 2017 146 178 209 230 763 EBITA margin (%) 2019 10.6 11.7 12.0 — — 2018 12.9 11.6 10.4 12.0 11.7 2017 10.7 10.6 11.9 11.9 11.4 2019 166 223 232 — — Profit after financial income and expense (SEK million) 2 2018 256 257 198 210 921 2 2017 138 170 198 225 731 Profit after tax (SEK million) 2019 131 180 186 — — 2018 206 204 154 158 722 2017 108 131 153 180 572 2019 130 265 83 — — Cash flow from operating activities (SEK million) 2018 296 472 39 238 1,045 2017 67 103 381 222 773 2019 4.94 10.04 3.13 — — Cash flow from operations per share before dilution (SEK) 2018 11.25 17.94 1.48 9.05 39.72 2017 2.55 3.92 14.48 8.44 29.38 2019 25 178 – 4 — — Cash flow after investments, excl. acq. and disp. (SEK million) 2018 187 352 – 68 122 593 2017 3 28 308 157 496 2019 0.95 6.75 – 0.15 — — Cash fl. aft. inv., excl. acq. and disp. per sh. bef. dilut. (SEK) 2018 7.11 13.38 – 2.58 4.64 22.54 2017 0.11 1.06 11.71 5.97 18.85 2019 5.06 6.82 7.09 — — Adjusted basic earnings per share (SEK) 3 2018 7.91 7.83 5.93 6.01 27.67 3 2017 4.22 5.09 5.93 6.92 22.16 2019 106 98 107 — — Shareholders' equity per share, before dilution (SEK) 2018 92 87 92 99 99 2017 74 69 74 82 82 2019 16.1 15.2 15.5 — — Return on total capital (%) 2018 18.8 19.6 19.1 18.4 18.4 2017 14.0 14.8 16.1 17.1 17.1 2019 25.3 23.6 23.4 — — Return on capital employed (%) 2018 29.8 32.0 31.2 29.7 29.7 2017 20.8 22.3 24.7 26.6 26.6 2019 34.4 31.6 30.7 — — Return on operating capital (%) 2018 36.8 41.1 41.1 40.0 40.0 2017 24.3 25.7 29.1 32.1 32.1 2019 25.9 24.5 24.7 — — Return on shareholders' equity (%) 2018 32.6 33.1 30.4 30.4 34.9 2017 20.0 22.9 26.2 29.4 29.4 525.50 — — Closing share price Nolato B (Nasdaq Stockholm) 2019 386.50 566.50 2018 609.00 723.00 548.00 366.50 366.50 |
IFRS measures | Note | Q1 | Q2 | Q3 | Q4 | Full year | |
|---|---|---|---|---|---|---|---|---|
| 2017 | 267.00 | 316.50 | 393.00 | 539.00 | 539.00 |
Including non-recurring items of SEK +20 million in Q1 2018 and SEK –17 million in Q3 2018, which affected operating profit by a net amount of SEK +3 million in full year 2018.
Quarterly data business areas
Alternative performance measures
| Net sales (SEK million) | Note | Q1 | Q2 | Q3 | Q4 | Full year | |
|---|---|---|---|---|---|---|---|
| Medical Solutions | 1 | 2019 | 611 | 634 | 612 | — | — |
| 1 | 2018 | 532 | 562 | 596 | 580 | 2,270 | |
| 2017 | 487 | 498 | 459 | 511 | 1,955 | ||
| Integrated Solutions | 1 | 2019 | 512 | 821 | 862 | — | — |
| 1 | 2018 | 939 | 1,186 | 892 | 703 | 3,720 | |
| 2017 | 399 | 692 | 819 | 900 | 2,810 | ||
| Industrial Solutions | 1 | 2019 | 533 | 541 | 512 | — | — |
| 1 | 2018 | 568 | 554 | 492 | 505 | 2,119 | |
| 2017 | 488 | 489 | 473 | 518 | 1,968 | ||
| Group adjustments, Parent Company | 1 | 2019 | — | – 9 | – 6 | — | — |
| 1 | 2018 | — | — | — | – 7 | – 7 | |
| 2017 | – 4 | – 4 | – 2 | – 3 | – 13 | ||
| Group total | 1 | 2019 | 1,656 | 1,987 | 1,980 | — | — |
| 1 | 2018 | 2,039 | 2,302 | 1,980 | 1,781 | 8,102 | |
| 2017 | 1,370 | 1,675 | 1,749 | 1,926 | 6,720 | ||
| Operating profit (EBITA) (SEK million) | Q1 | Q2 | Q3 | Q4 | Full year | ||
| Medical Solutions | 2019 | 78 | 82 | 80 | — | — | |
| EBITA margin (%) | 12.8 | 12.9 | 13.1 | — | — | ||
| 2018 | 69 | 73 | 76 | 77 | 295 | ||
| EBITA margin (%) | 13.0 | 13.0 | 12.8 | 13.3 | 13.0 | ||
| 2017 | 65 | 64 | 60 | 68 | 257 | ||
| EBITA margin (%) | 13.3 | 12.9 | 13.1 | 13.3 | 13.1 | ||
| Integrated Solutions | 2019 | 57 | 107 | 116 | — | — | |
| EBITA margin (%) | 11.1 | 13.0 | 13.5 | — | — | ||
| 2018 | 120 | 140 | 114 | 99 | 473 | ||
| EBITA margin (%) | 12.8 | 11.8 | 12.8 | 14.1 | 12.7 | ||
| 2017 | 38 | 73 | 105 | 116 | 332 | ||
| EBITA margin (%) | 9.5 | 10.5 | 12.8 | 12.9 | 11.8 | ||
| Industrial Solutions | 2019 | 44 | 46 | 44 | — | — | |
| EBITA margin (%) | 8.3 | 8.5 | 8.6 | — | — | ||
| 2018 | 57 | 55 | 35 | 39 | 186 | ||
| EBITA margin (%) | 10.0 | 9.9 | 7.1 | 7.7 | 8.8 | ||
| 2017 | 48 | 48 | 47 | 52 | 195 | ||
| EBITA margin (%) | 9.8 | 9.8 | 9.9 | 10.0 | 9.9 | ||
| Group adjustments, Parent Company* | 2019 | – 4 | – 2 | – 2 | — | — | |
| 2018 | 18 | – 2 | – 20 | – 1 | – 5 | ||
| 2017 | – 5 | – 7 | – 3 | – 6 | – 21 | ||
| Group total | 2019 | 175 | 233 | 238 | — | — | |
| EBITA margin (%) | 10.6 | 11.7 | 12.0 | — | — | ||
| 2018 | 264 | 266 | 205 | 214 | 949 | ||
| EBITA margin (%) | 12.9 | 11.6 | 10.4 | 12.0 | 11.7 | ||
| 2017 | 146 | 178 | 209 | 230 | 763 | ||
| EBITA margin (%) | 10.7 | 10.6 | 11.9 | 11.9 | 11.4 | ||
* Including non-recurring items of SEK +20 million in Q1 2018 and SEK –17 million in Q3 2018, which affected operating profit by a net amount of SEK +3 million in full year 2018.
| Depreciation/amortisation (SEK million) |
Q1 | Q2 | Q3 | Q4 | Full year | |
|---|---|---|---|---|---|---|
| Medical Solutions | 2019 | 39 | 40 | 40 | — | — |
| 2018 | 28 | 28 | 28 | 28 | 112 | |
| 2017 | 27 | 27 | 27 | 27 | 108 | |
| Integrated Solutions | 2019 | 17 | 17 | 16 | — | — |
| 2018 | 8 | 8 | 8 | 7 | 31 | |
| 2017 | 9 | 8 | 8 | 8 | 33 | |
| Industrial Solutions | 2019 | 30 | 32 | 34 | — | — |
| 2018 | 25 | 25 | 28 | 26 | 104 | |
| 2017 | 21 | 22 | 23 | 24 | 90 | |
| Parent Company | 2019 | — | — | — | — | — |
| 2018 | — | — | — | 1 | 1 | |
| 2017 | — | — | — | — | — | |
| Group total | 2019 | 86 | 89 | 90 | — | — |
| 2018 | 61 | 61 | 64 | 62 | 248 | |
| 2017 | 57 | 57 | 58 | 59 | 231 |
Group financial highlights
| Q3 | Q3 | Q1 - Q3 | Q1 - Q3 | Rolling | Full year | ||
|---|---|---|---|---|---|---|---|
| IFRS measures | Note | 2019 | 2018* | 2019 | 2018* | 12 months | 2018* |
| Basic earnings per share (SEK) | 3 | 7.02 | 5.85 | 18.82 | 21.44 | 24.83 | 27.44 |
| Diluted earnings per share (SEK) | 3 | 7.01 | 5.81 | 18.79 | 21.33 | 24.82 | 27.37 |
| Alternative performance measures | |||||||
| Net sales (SEK million) | 1 | 1,980 | 1,980 | 5,623 | 6,321 | 7,404 | 8,102 |
| Sales growth (%) | — | 13 | – 11 | 32 | – 10 | 21 | |
| Percentage of sales outside Sweden (%) | 87 | 88 | 85 | 86 | 85 | 86 | |
| Operating profit (EBITDA) (SEK million) | 326 | 267 | 906 | 914 | 1,181 | 1,189 | |
| 1) Operating profit (EBITA) (SEK million) |
238 | 205 | 646 | 735 | 860 | 949 | |
| 1) EBITA margin (%) |
12.0 | 10.4 | 11.5 | 11.6 | 11.6 | 11.7 | |
| Profit after financial income and expense (SEK million) | 2 | 232 | 198 | 621 | 711 | 831 | 921 |
| 1) Profit margin (%) |
11.7 | 10.0 | 11.0 | 11.2 | 11.2 | 11.4 | |
| Profit after tax (SEK million) | 186 | 154 | 497 | 564 | 655 | 722 | |
| 1) Return on total capital (%) |
15.5 | 19.1 | 15.5 | 19.1 | 15.5 | 18.4 | |
| 1) Return on capital employed (%) |
23.4 | 31.2 | 23.4 | 31.2 | 23.4 | 29.7 | |
| 1) Return on operating capital (%) |
30.7 | 41.1 | 30.7 | 41.1 | 30.7 | 40.0 | |
| 1) Return on shareholders' equity (%) |
24.7 | 33.1 | 24.7 | 33.1 | 24.7 | 30.4 | |
| Equity/assets ratio (%) | 47 | 46 | 47 | 46 | 47 | 50 | |
| Debt/equity (%) | 42 | 33 | 42 | 33 | 42 | 31 | |
| Interest coverage ratio (times) | 31 | 33 | 25 | 38 | 29 | 40 | |
| Net investm. affecting cash flow, excl. acq. and disposals | 87 | 107 | 279 | 336 | 395 | 452 | |
| (SEK million) | |||||||
| Cash flow after investments, excl. acq. and disposals | – 4 | – 68 | 199 | 471 | 321 | 593 | |
| (SEK million) | |||||||
| 1) Cash conversion (%) |
— | — | — | — | 38 | 60 | |
| Net fin. assets, excl. pension- & lease liab. (SEK million) | 186 | 208 | 186 | 208 | 186 | 341 | |
| Adjusted basic earnings per share (SEK) | 3 | 7.09 | 5.93 | 18.98 | 21.67 | 24.98 | 27.67 |
| Adjusted diluted earnings per share (SEK) | 3 | 7.09 | 5.89 | 18.94 | 21.56 | 24.97 | 27.59 |
| Cash flow from operations per share, before dilution (SEK) | 3.13 | 1.48 | 18.12 | 30.68 | 27.17 | 39.72 | |
| Cash flow from operations per share, after dilution (SEK) | 3.13 | 1.47 | 18.08 | 30.51 | 27.13 | 39.52 | |
| Cash flow after investments excluding acquisitions and | – 0.15 | – 2.58 | 7.55 | 17.90 | 12.18 | 22.54 | |
| disposals, per share, before dilution (SEK) | |||||||
| Cash flow after investments excluding acquisitions and | – 0.15 | – 2.57 | 7.53 | 17.81 | 12.16 | 22.43 | |
| disposals, per share, after dilution (SEK) | |||||||
| Shareholders' equity per share, before dilution (SEK) | — | — | 107 | 92 | — | 99 | |
| Shareholders' equity per share, after dilution (SEK) | — | — | 107 | 91 | — | 98 | |
| Average number of employees | — | — | 5,716 | 6,376 | — | 6,449 |
* Including non-recurring items of SEK +20 million in Q1 2018 and SEK –17 million in Q3 2018, which affected operating profit by a net amount of SEK +3 million in full year 2018.
1) KPIs calculated as specified on page 21.
Definitions - IFRS measures
Earnings for the period that are attributable to the parent company's owners divided by the average number of outstanding shares.
Definitions - Alternative performance measures
Earnings per share Operating profit (EBIT)
Earnings before financial income and expense and taxes.
Nolato presents certain financial measures in this report that are not defined according to IFRS. Nolato considers that these measures provide valuable supplementary information for investors and company management, as they enable an assessment of trends and the company's performance. Since not all companies calculate financial measures in the same way, these are not always comparable to measures used by other companies. These financial measures should not therefore be regarded as substitutes for measures defined according to IFRS.
Profit after tax, excluding amortisation of intangible assets arising from acquisitions, divided by the average number of shares.
Average number of shares
The average basic number of shares comprises the parent company's weighted intangible assets arising from acquisitions. average number of outstanding shares during the period. After dilution, a weighted average of the shares that may be issued under the ongoing share warrant programme is added, if they are in-the-money, but only insofar as the average listed share price for the period exceeds the subscription price of the warrants.
Cash conversion Return on capital employed
Cash flow after investments, excl. acquisitions and disposals, divided by operating profit (EBIT). Cash flow and operating profit have been adjusted by non-recurring items, if any.
Cash flow after inv. act. excl. acq. and disposals, per share Return on operating capital
Cash flow after investing activities excl. acquisitions and disposals, divided by the average number of shares.
Cash flow from operating activities per share
Debt/equity ratio Cash flow from operating activities, divided by the average number of shares.
Interest-bearing liabilities and provisions divided by shareholders' equity.
EBITA margin
Equity/assets ratio
Interest coverage ratio Shareholders' equity as a percentage of total capital in the balance sheet.
Profit after financial income and expense, plus financial expenses, divided by financial expenses.
Adjusted earnings per share Net financial assets (+) / liabilities (–)
Operating profit (EBITA) Interest-bearing liabilities from credit institutions less interest-bearing assets.
Earnings before financial income and expense, taxes and amortisation of
Operating profit (EBITDA)
Earnings before financial income and expense, taxes and depreciation/ amortisation.
Profit margin
Profit after financial income and expense as a percentage of net sales.
Profit after financial income and expense, plus financial expenses as a percentage of average capital employed. Capital employed consists of total capital less non-interest-bearing liabilities and provisions.
Operating profit as a percentage of average operating capital. Operating capital consists of total capital less non-interest-bearing liabilities and provisions, less interest-bearing assets.
Return on shareholders' equity
Profit after tax as a percentage of average shareholders' equity.
Return on total capital
Profit after financial income and expense, plus financial expenses as a Operating profit (EBITA) as a percentage of net sales. percentage of average total capital in the balance sheet.
Forward-looking information
Some of the items reported relate to future events and actual outcomes may differ materially. In addition to those factors explicitly commented on, other factors may also materially affect the actual outcome, such as economic conditions, exchange rates and interest rate levels, political risks, competition and pricing, product development, commercialisation and technical difficulties, supply problems and customer credit losses.
Alternative performance measures
| Q3 | Q3 | Q1 - Q3 | Q1 - Q3 | Rolling | Full year | ||
|---|---|---|---|---|---|---|---|
| SEK million unless otherwise specified | Note | 2019 | 2018 | 2019 | 2018 | 12 months | 2018 |
| Operating profit (EBITDA) | 326 | 267 | 906 | 914 | 1,181 | 1,189 | |
| Non-recurring items | — | 17 | — | – 3 | — | – 3 | |
| Adjusted operating profit (EBITDA) | 326 | 284 | 906 | 911 | 1,181 | 1,186 | |
| Operating profit (EBIT) | 2 | 236 | 203 | 641 | 728 | 854 | 941 |
| Reversal of amortisation of intangible assets arising in connection with acquisitions |
2 | 2 | 5 | 7 | 6 | 8 | |
| Operating profit (EBITA) | 238 | 205 | 646 | 735 | 860 | 949 | |
| Non-recurring items | — | 17 | — | – 3 | — | – 3 | |
| Adjusted operating profit (EBITA) | 238 | 222 | 646 | 732 | 860 | 946 | |
| EBITA margin (%) | 12.0 | 10.4 | 11.5 | 11.6 | 11.6 | 11.7 | |
| Adjusted EBITA margin (%) | 12.0 | 11.2 | 11.5 | 11.6 | 11.6 | 11.7 | |
| Profit after financial income and expense | 2 | 232 | 198 | 621 | 711 | 831 | 921 |
| Non-recurring items | — | 17 | — | – 3 | — | – 3 | |
| Adjusted profit after financial income and expense | 232 | 215 | 621 | 708 | 831 | 918 | |
| Profit margin (%) | 11.7 | 10.0 | 11.0 | 11.2 | 11.2 | 11.4 | |
| Adjusted profit margin (%) | 11.7 | 10.9 | 11.0 | 11.2 | 11.2 | 11.3 | |
| Profit after tax | 186 | 154 | 497 | 564 | 655 | 722 | |
| Non-recurring items | — | 17 | — | – 3 | — | – 3 | |
| Tax on non-recurring items | — | — | — | – 4 | — | – 4 | |
| Adjusted profit after tax | 186 | 171 | 497 | 557 | 655 | 715 | |
| Cash flow after investm., excl. acquisitions and disposals | — | — | — | — | 321 | 593 | |
| Non-recurring items (affecting cash flow) | — | — | — | — | — | – 29 | |
| Adjusted cash fl. after investm., excl. acq. and disposals | — | — | — | — | 321 | 564 | |
| Operating profit (EBIT) | 2 | — | — | — | — | 854 | 941 |
| Non-recurring items | — | — | — | — | — | – 3 | |
| Adjusted operating profit (EBIT) | — | — | — | — | 854 | 938 | |
| Cash conversion (%) | — | — | — | — | 38 | 60 | |
Non-recurring items consist of a distribution from the previous bankruptcy of a customer in 2006 and a capital loss on a divested business. The dividend in Q1 2018 had a positive effect on operating profit of SEK +20 million (0) within other operating income and the capital loss in Q3 2018 had a negative impact on operating profit of SEK –17 million (0) within other operating expenses. These non-recurring items have been recognised at Group level and have consequently not affected the profit of the business areas.
| Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | |
|---|---|---|---|---|---|---|---|---|---|
| SEK million unless otherwise specified | 2019 | 2019 | 2019 | 2018 | 2018 | 2018 | 2018 | 2017 | 2017 |
| Profit after financial income and expense, rolling 12 months | 831 | 797 | 831 | 921 | 936 | ||||
| Financial expense, rolling 12 months | 30 | 29 | 26 | 24 | 23 | ||||
| Adjusted profit after financial income and exp., rolling 12 months | 861 | 826 | 857 | 945 | 959 | ||||
| Total capital, at the end of period | 6,051 | 5,593 | 5,733 | 5,156 | 5,229 | 5,381 | 5,148 | 4,752 | 4,612 |
| Average total capital, last 5 quarters | 5,552 | 5,418 | 5,329 | 5,133 | 5,024 | ||||
| Return on total capital (%) | 15.5 | 15.2 | 16.1 | 18.4 | 19.1 | ||||
| Adjusted profit after financial income and exp., rolling 12 months | 861 | 826 | 857 | 945 | 959 | ||||
| Capital employed, at the end of period | 4,022 | 3,771 | 3,982 | 3,387 | 3,225 | 3,131 | 3,188 | 2,980 | 2,836 |
| Average capital employed, last 5 quarters | 3,499 | 3,383 | 3,182 | 3,072 | |||||
| Return on capital employed (%) | 23.4 | 23.6 | 25.3 | 29.7 | 31.2 | ||||
| Operating profit (EBIT), rolling 12 months | 855 | 821 | 853 | 941 | 955 | ||||
| Capital employed, at the end of period | 4,022 | 3,771 | 3,982 | 3,387 | 3,225 | 3,131 | 3,188 | 2,980 | 2,836 |
| Cash and bank, at the end of period | – 851 | – 828 – 1,034 | – 953 | – 818 | – 891 | – 817 | – 669 | – 561 | |
| Operating capital, at the end of period | 3,171 | 2,943 | 2,948 | 2,434 | 2,407 | 2,240 | 2,371 | 2,311 | 2,275 |
| Average operating capital, latest 5 quarters | 2,781 | 2,594 | 2,480 | 2,353 | 2,321 | ||||
| Return on operating capital (%) | 30.7 | 31.6 | 34.4 | 40.0 | 41.1 | ||||
| Profit after tax, rolling 12 months | 655 | 623 | 647 | 722 | 744 | ||||
| Shareholders' equity, at the end of period | 2,833 | 2,604 | 2,783 | 2,592 | 2,422 | 2,301 | 2,412 | 2,159 | 1,950 |
| Average shareholders' equity, latest 5 quarters | 2,647 | 2,540 | 2,502 | 2,377 | 2,249 | ||||
| Return on shareholders' equity (%) | 24.7 | 24.5 | 25.9 | 30.4 | 33.1 |
Parent Company income statement (summary)
| Q3 | Q3 | Q1 - Q3 | Q1 - Q3 | Rolling | Full year | |
|---|---|---|---|---|---|---|
| SEK million | 2019 | 2018 | 2019 | 2018 | 12 months | 2018 |
| Net sales | 14 | 18 | 49 | 49 | 63 | 63 |
| Selling expenses | – 2 | – 2 | – 6 | – 5 | – 8 | – 7 |
| Administrative expenses | – 11 | – 11 | – 36 | – 36 | – 49 | – 49 |
| Other operating income | — | — | 2 | 4 | 3 | 5 |
| Other operating expenses | – 11 | – 13 | – 36 | – 35 | – 48 | – 47 |
| Operating profit | – 10 | – 8 | – 27 | – 23 | – 39 | – 35 |
| Profit from participations in Group companies | — | 14 | 182 | 151 | 526 | 495 |
| Financial income | 4 | 3 | 12 | 10 | 16 | 14 |
| Financial expenses | – 22 | – 9 | – 52 | – 37 | – 75 | – 60 |
| Profit after financial income and expense | – 28 | — | 115 | 101 | 428 | 414 |
| Appropriations | — | — | — | — | 252 | 252 |
| Tax | 4 | — | 6 | – 1 | – 48 | – 55 |
| Profit after tax | – 24 | — | 121 | 100 | 632 | 611 |
| Depreciation/amortisation | — | — | — | — | 1 | 1 |
Parent Company balance sheet (summary)
Subsidiary Jan-Sep 2019 Subsidiary Jan-Sep 2018
| SEK million | 30/09/2019 | 30/09/2018 | 31/12/2018 | |||||
|---|---|---|---|---|---|---|---|---|
| Assets | ||||||||
| Intangible fixed assets | 1 | 1 | 1 | |||||
| Property, plant and equipment | 1 | 1 | 1 | |||||
| Financial assets | 1,756 | 1,626 | 1,675 | |||||
| Deferred tax assets | 18 | 14 | — | |||||
| Total fixed assets | 1,776 | 1,642 | 1,677 | |||||
| Other receivables | 507 | 360 | 903 | |||||
| Cash and bank | 100 | 40 | 59 | |||||
| Total current assets | 607 | 400 | 962 | |||||
| Total assets | 2,383 | 2,042 | 2,639 | |||||
| Shareholders' equity and liabilities | ||||||||
| Shareholders' equity | 1,398 | 1,066 | 1,577 | |||||
| Untaxed reserves | 199 | 200 | 199 | |||||
| Deferred tax liabilities | — | — | 6 | |||||
| Other provisions | 14 | 15 | 12 | |||||
| Long-term liabilities | 599 | 554 | 556 | |||||
| Current liabilities | 173 | 207 | 289 | |||||
| Total shareholders' equity and liabilities | 2,383 | 2,042 | 2,639 | |||||
| Transactions with related parties: | ||||||||
| SEK million | Period | Services | Services | Interest | Interest | Res. from shares | Rec. fr. rel. part. | Liab. to rel. part. |
| Related party | sold | bought | income | expenses | in Group comp. | on bal. sh. date | on bal. sh. date |
None of the company's Board members or senior executives currently have, or have previously had, any direct or indirect involvement in any business transaction with the company which is, or was, of an unusual character in terms of its conditions. Nor has the Group issued any loans, pledged any guarantees or entered into any surety arrangements for any of the company's Board members or senior executives.
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Nolato AB, SE-269 04 Torekov, Sweden • Tel. +46 431 442290 • Fax +46 431 442291 Corp. id. number 556080-4592 • E-mail [email protected] • Website www.nolato.com