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OEM International

Quarterly Report Oct 24, 2011

3090_10-q_2011-10-24_299dd93c-790e-460d-947f-667f7560726e.pdf

Quarterly Report

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INTERIM REPORT Q3 2011

THIRD QUARTER 2011

  • Incoming orders increased by 2% to SEK 345 million (338)
  • Net sales rose by 11% to SEK 382 million (345)
  • Profit before tax increased by 24% to SEK 47 million (38)

JANUARY – SEPTEMBER 2011

  • Incoming orders increased by 10% to SEK 1,181 million (1,078)
  • Net sales rose by 13% to SEK 1,174 million (1,038)
  • Profit before tax increased by 28% to SEK 129 million (101)
  • Profit after tax increased by 31% to SEK 94 million (72)
  • Earnings per share were SEK 4.04 (3.13)

EVENTS AFTER THE REPORTING DATE

• Acquisition of Svenska Batteripoolen AB completed

OEM International AB , Org. no. 556184-6691. Norrabyvägen 6B, Box 1009, SE-573 28 Tranås, Sweden. Tel. +46 (0)75 242 40 00 www.oem.se

Managing Director REVIEW

Record results for third quarter

OEM International's sales figures rose by 11% to SEK 382 million for the third quarter. After adjustments for currency effects, growth was 17% in local currency. As a result of strong invoiced sales and improvements in margins, profit before tax rose by 24% to SEK 47 million which is one of the Group's best quarterly results.

More or less all the companies have reported improved sales and profits for the quarter. The companies in the UK, Finland, the Czech Republic and Elektro Elco and OEM Electronics in Sweden showed the strongest growth.

Incoming orders increased by 2% to SEK 345 million and were below sales by 10% for the third quarter. After adjustments for currency effects, incoming order increased by 8 %. It is normal for incoming orders to be below sales in the third quarter following the holiday season, but the difference was slightly greater than for last year, which suggests that demand has softened. The order book has increased by SEK 11 million since the beginning of the year.

Four acquisitions to date this year

An agreement for the acquisition of Svenska Batteripoolen i Borlänge AB was signed during the quarter with takeover scheduled for 17th October. Earlier this year, we acquired Svenska Helag AB, Scapro AB's operations and Echobeach Ltd in the UK. The total annual turnover of the acquired companies is approximately SEK 80 million. The acquisition of companies enables us to expand our customer offering and is a key dimension of our strategy for growth. It is our ambition to acquire at least SEK 100 million in annual turnover this year. The new companies gain leverage through OEM's sales organisation and greater efficiencies through the coordination of purchasing and logistics.

New company to start in Hungary

This autumn, we will be starting up OEM Automatic in Hungary with the head office in Budapest. We will be expanding our partnerships with existing suppliers and strengthening the collaboration we have with customers in the Hungarian market today. The business will be fully operational during the first quarter of next year.

Strong financial position

During the first nine months of the year, we have generated a positive cash flow of SEK 64 million from operating activities and have paid out SEK 70 million in dividends. The equity/assets ratio is 64%, which puts us in a strong financial position to drive organic expansion and engage in acquisitions.

Advanced positions

During the first nine months of the year, sales increased by 13% and operating profit by 28%. We have reached new record levels in operating profit for the third quarter and the trailing 12-month period.

We are growing, improving our performance and have a larger order book than at the start of the year. Moreover, we have advanced our positions by means of acquisitions and by establishing in a new market. Furthermore, our experienced management and efficient structure allows us to quickly adapt our operations to fluctuating market conditions. We proved this during one quarter when our operating margin was at its lowest at 3% during the financial crisis in 2009.

THE GROUP

INCOMING ORDERS (SEK million)

Incoming orders increased during the third quarter by 2% compared with the previous year and amounted to SEK 345 million (338).

During the period, incoming orders were 10% below net sales. It is normal for incoming orders to be below net sales in the third quarter due to the impact of the holiday season.

For the first three quarters of the year, incoming orders exceeded the previous year by 10%. Practically all companies have reported positive growth. On 30 September 2011, the order book had increased

by 5% over the previous year to SEK 252 million (241).

NET SALES (SEK million)

Net sales increased during the third quarter by 11% over the previous year to reach SEK 382 million (345). For the first three quarters of the year, net sales exceeded last year's level by 13%. Net sales increased by about 17 % excluding the impact of currency translation.

Acquired businesses have increased net sales by SEK 48 million, which is equivalent to 4 % for the first three quarters of the year.

Percentage sales growth was strongest in Finland, the UK, the Czech Republic and Elektro Elco and OEM Electronics in Sweden.

SALES BY REGION (SEK million)

Small changes between the regions, mainly based on currency fluctuations and completed acquisitions.

Volume growth has been relatively consistent between the regions.

OPERATING PROFIT (SEK million)

Operating profit increased during the third quarter by 15% over the previous year to reach SEK 47 million (41).

The operating profit for the first three quarters of the year exceeded the previous year by 28%. The increase is due to sales growth and margin improvement.

Operating profit for the trailing 12-month period rose by 36% to reach SEK 167 million (123).

Note: Q1 2008 sale of property + SEK 5.4 million

OPERATING MARGIN (%)

The operating margin increased to 12.3% (11.8%) in the third quarter.

The operating margin increased to 11.1% (9.9%) for the first three quarters of the year.

The operating margin for the trailing 12-month period increased to 10.7% compared to 9.7% for the whole of 2010.

RETURN ON EQUITY (%)

Return on equity increased to 5.4% (4.4) in the third quarter.

Return on equity for the trailing 12-month period reached 20%, which meets the target set.

On 30 September 2011, shareholders' equity amounted to SEK 623 million (569) and the equity/assets ratio reached 64% (63).

THE REGIONS

SWEDEN

Sales are conducted under the company names of OEM Automatic, OEM Motor, OEM Electronics, Internordic Bearings, Telfa, Elektro Elco and Svenska Helag.

Q1- Q1- Full
Q3 Q3 year Trailing
SEK million 2011 2010 2010 12
Incoming orders 772 668 923 1027
Net sales 759 645 905 1019
Operating profit/loss 108 82 113 139
Operating margin (%) 14 13 13 14

FINLAND AND THE BALTIC STATES

Sales are conducted under the company names of OEM Automatic, OEM Electronics and Internordic Bearings.

Q1- Q1- Full
Q3 Q3 year Trailing
SEK million 2011 2010 2010 12
Incoming orders 167 165 224 226
Net sales 172 159 215 228
Operating profit/loss 18 15 20 23
Division Production Technology
Operating margin (%)
10 9 9 10

Net sales rose by 18% during the first three quarters of the year. The increase in volume was approximately 23%.

Acquired businesses have increased net sales by about SEK 43 million for the first three quarters of the year.

Incoming orders exceeded net sales by 2 %. Increased net sales and margin improvement resulted in a 32% increase in the operating profit.

Net sales rose by 8% during the first three quarters of the year. In local currency, net sales increased by 17%. Incoming orders were below net sales

by 3 %. Increased net sales and margin improvement

resulted in a 19% increase in the operating profit.

Q1 Q1 Full year Trailing SEK million 2010 2009 2009 12 DENMARK, NORWAY, UK AND CENTRAL EASTERN EUROPE

Net sales 20 26 92 86 Operating profit/loss -3 0 -11 -14 Sales are conducted under the company names of OEM Automatic, OEM Automatic Klitsö and OEM Electronics.

Q1- Q1- Full
Q3 Q3 year Trailing
SEK million 2011 2010 2010 12
Incoming orders 242 245 321 318
Net sales 243 234 310 319
Operating profit/loss 18 15 18 21
Operating margin (%) 8 6 6 7

Operating margin (%) -17 1 -12 -17 Net sales rose by 4% during the first three quarters of the year. In local currency, net sales increased by approximately 11%.

Acquired businesses have increased net sales by about SEK 5 million for the first three quarters of the year.

Incoming orders are in line with net sales. Increased net sales and margin improvement resulted in a 23% increase in the operating profit.

OTHER FINANCIAL INFORMATION

Cash flow

Cash flow from operating activities was SEK 67 million (58). Cash flow generated by operating activities was SEK 124 million (93) in the trailing 12 months. Total cash flow was SEK -23 million (-30) during the first three quarters of the year. This was impacted by SEK -34 million (-14) from investing activities and by SEK -70 million (-46) through dividends. Total cash flow was SEK 19 million in the trailing 12 months and was affected, in part, by investing activities by SEK -40 million and dividend payouts of SEK -70 million.

Investments

The Group's net investments in property, plant and equipment totalled SEK 32 million (14). Property, machinery and equipment accounted for SEK 11 million of this total, and business combinations for SEK 21 million. SEK -2.7 million (2.9) of this amount is attributable to currency translation.

Cash and cash equivalents

Cash and cash equivalents, comprising cash and bank balances, amounted to SEK 151 million (132). Together with committed but undrawn credit facilities, cash and cash equivalents amounted to SEK 378 million (352) on 30 September, 2011.

Intangible assets

Amortisation of intangible assets totalling SEK 9.4 million (8.0) has been charged to the income statement. On 30 September 2011, the balance sheet carrying amount was SEK 120 million (105).

Equity/assets ratio

On 30 September 2011, the equity/assets ratio was 64% (63).

Employees

The Group's average number of employees for the period was 551 (496). At the end of the period, the number of employees was 572. 13 employees have joined the Group this year as a result of acquisitions.

Share repurchase

The company has not repurchased any shares during the period. The Company did not hold any of its own shares on 30 September 2011. The Annual General Meeting's authorisation for the repurchase of shares extends to 10% of the number of shares, i.e. 2,316,930 shares.

Acquisitions in 2011

All shares in Echobeach Ltd and Svenska Helag AB have been acquired. In addition, OEM Electronics AB has acquired Scapro AB's components sales business.

Echobeach Ltd. reports sales of approximately SEK 12 million and markets electrical components in the United Kingdom. The company was merged with OEM Automatic Ltd. during the spring of 2011. On the 1 March 2011, the company became part of the Denmark, Norway, UK and Central Eastern Europe region. The consideration for the acquired business was SEK 4.7 million and a contingent consideration, based on the performance of the business throughout 2011, is estimated at SEK 2.2 million. The acquisition is expected to have a marginal positive impact on OEM's profit in 2011.

Svenska Helag, based in the Swedish town of Borås, produces and markets connection technology components for electrical systems and electronics. The company reported sales of SEK 21 million in 2010. This acquisition will strengthen OEM's range of products within connection technology. The takeover date was 1 April 2011. The consideration is SEK 10 million and a contingent consideration, based on how the company develops during 2011 and 2012, is estimated at SEK 5 million. The acquisition is expected to have a marginal positive impact on OEM's profit in 2011.

OEM Electronics AB has acquired Scapro AB's components sales business. The annual turnover is approximately SEK 30 million and the product range consists of keyboards, capacitors and ferrites. The acquisition is an asset deal where OEM acquires stock of goods, equipment, customer and supplier deals as well as intellectual property. The takeover date was 1 June 2011. The consideration is SEK 2.7 million plus a contingent consideration based on how the business develops during 2011. The acquisition is expected to have a marginal positive impact on OEM's profit for 2011.

Preliminary acquisition cost estimate

The acquired companies' net assets at the time of acquisition Company
carrying values
Fair value
adjustment
Group fair value
Intangible assets - 16,2 16,2
Other non-current assets 0,2 - 0,2
Inventories 7,5 - 7,5
Other current assets 6,3 - 6,3
Other liabilities including deferred tax liabilities -6,1 -4,4 -10,5
Net identifiable assets/liabilities 7,9 11,8 19,7
Consolidated
goodwill - 5,0 5,0
Cash consideration 24,7

As a result of the acquisitions, other intangible assets have increased by SEK 16.2 million. This amount relates to customer relationships that will be amortised over a 5-year period.

OEM normally applies an acquisition structure with a base consideration and contingent consideration. The contingent consideration is initially evaluated at the present value of the probable earnings, which amounts to SEK 7.2 million for the acquisitions this year. The period for contingent considerations is two years and the earnings may amount to a maximum of SEK 9.2 million.

Transaction expenses for the acquisitions completed during the period amount to SEK 0.2 million and are included in the operating costs.

The effect of the above acquisitions on consolidated sales during the period is approximately SEK 24 million, and on profit before tax approximately SEK 2.3 million.

Developments of acquired operations have not led to any revaluation of continent considerations during the period.

Accounting policies

This condensed consolidated interim report has been prepared in compliance with IAS 34 Interim Financial Reporting and applicable provisions of the Swedish Annual Accounts Act. The interim report for the Parent Company has been prepared in compliance with the Swedish Annual Accounts Act and the Swedish Securities Market Act, as required by the provisions of the RFR 2, Accounting for Legal Entities. The Group and the Parent Company have applied the same accounting policies and basis of preparation as in the latest annual report, apart from the changes described below. The Group's operations are divided into operating segments based on the business areas for which the company's chief operating decision maker, the Group management, monitors the profit, returns and cash flows that the Group's various segments generate. From January 2011, the Group has undergone a reorganisation and is primarily managed as three market regions, i.e. Sweden, Finland and the Baltic States, and Denmark, Norway, the UK and Central Eastern Europe. The purpose of the new organisation is to consolidate OEM's long-term competitive edge and increase growth outside of Sweden. Before 2011, OEM was a matrix organisation with product and country lines, grouped into three divisions: Automation, Components and Production Technology. The Production Technology Division was discontinued in 2010. The focus was moved from the product organisation to the market regions. Each operating segment in the form of a market region has one manager, except for Sweden which has two managers who are responsible for the day-to-day operations and who provide the Group management with regular reports on the performance of the segment and resource requirements. The Group's internal reporting system is designed to allow the Group management to monitor the performance and results of each of the market regions. The Group's segments have been identified using data from this internal reporting system, through a process of assessing the different areas in order to merge segments that are similar. This

means that segments have been merged if they share similar economic properties, such as long-term gross margins and have similar product areas, customer categories and methods of distribution, and operate in an environment that has similar sets of rules and regulations.

Risks and uncertainties

The OEM Group is exposed to both business-related risks and financial risks through its activities. Business-related risks include competition and operational risks, and financial risks include liquidity risk, interest rate risk and currency risk. The OEM Group's financial activities and management of financial risks are conducted primarily by the Parent Company. Frameworks for risk management procedures and risk mitigation are in place. These systems are characterised by a low risk level. The basis is the structured and efficient management of the financial risks that arise in the business. For a complete report on the risks affecting the Group, please refer to the annual report for 2010, page 7 and pages 46-48. No changes have occurred during the period.

Estimates and assessments

Preparation of the interim report requires company management to make estimates, assessments and assumptions that affect the application of the accounting policies and the reported amounts for assets, liabilities, income and expenses. Actual outcomes may differ from these estimates and assessments. The critical assessments and sources of uncertainty in the estimates are the same as in the latest annual report, page 51.

Transactions with associated parties

No transactions between OEM and associated parties that significantly affect the Group's position and income have occurred during the period.

Parent Company

Net turnover was SEK 14 million (14) and profit after financial items was SEK -4.5 million (15).

Events after the close of the reporting period

A takeover of shares in Svenska Batteripoolen i Borlänge AB took place on 17th October after the close of the reporting period. Svenska Batteripoolen markets batteries in Sweden and has an annual turnover of approximately SEK 17 million. The acquisition bolsters OEM's position in batteries in the Swedish market. The consideration amounts to approximately SEK 4 million plus a consideration based on how the business develops during 2012 and 2013. The acquisition is expected to have a marginal positive impact on OEM's profit for the current year.

Nomination Committee

The Nomination Committee for the Annual General Meeting on 26 April 2012 comprises: Lars-Åke Rydh (Chairman) Jerker Löfgren, Orvaus AB Hans Franzén Agne Svenberg Bengt Stillström, AB Traction The Nomination Committee can be contacted through Lars-Åke Rydh, tel. 0705-92 45 70 or via e-mail [email protected]

Date of next report

The financial statement for the whole of 2011 will be published on 21 February 2012.

Tranås, 24 October 2011

Jörgen Zahlin Managing Director and Chief Executive Officer

For further information, please contact MD Jörgen Zahlin, phone +46 (0)75-242 40 22 or CFO Jan Cnattingius on +46 (0)75-242 40 03.

The information in this report is of such a nature that its disclosure by OEM International AB (publ.) is required under the Swedish Securities Market Act. The information was released to the media for publication on 24 October 2011 at 2 p.m.

Auditors' report on review of interim financial information

To the Board of Directors of OEM International AB (publ.) Corporate Identity Number 556184-6691

Introduction

We have reviewed the interim report for OEM International AB (publ) as per 30 September 2011 and the nine-month period that ended on that date. The Board of Directors and Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

The objectives and scope of the review

We have conducted our review in accordance with the Swedish Standard on Review Engagements SÖG 2410, Review of Interim Report performed by the company's elected auditors. A review consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical procedures to financial data and taking other review measures. A review has a different focus and is of significantly smaller scope than the objectives and scope of an audit conducted in accordance with the International Standards on Auditing (ISA) and other generally accepted auditing practices. The measures undertaken during a review allow us to be certain that we are aware of all the important factors that it would have been possible to identify had an audit been carried out. Therefore, the conclusion expressed based on a review does not have the same certainty as a conclusion expressed based on an audit.

Conclusion

Based on our review, no factors have come to light that give us reason to believe that the interim report has not, in all significant respects, been prepared for the Group in accordance with IAS 34 and the Swedish Annual Accounts Act, and, for the Parent Company, in accordance with the Swedish Annual Accounts Act.

Tranås, 24 October 2011 KPMG AB

Kjell Bidenäs Chartered Accountant

REGIONS' SALES AND INCOME

TURNOVER AND RESULTS BY REGION *

Net turnover (SEK million) *

Jan- Jan- Q3 Q2 Q1 Q4 Q3 Rolling Full year
Sept Sept 2011 2011 2010 2010 2010 12 mth 2010
2011 2010
Sweden, external income 759 645 244 270 245 260 208 1 019 905
Sweden, income from other segments 47 45 17 15 15 15 16 61 60
Finland and the Baltic States, external income 172 159 57 58 57 56 58 228 215
Finland and the Baltic States, income from other segments 1,7 2,0 0,4 0,6 0,7 0,8 -3,7 2,5 2,8
Denmark, Norway, the United Kingdom and
Central Eastern Europe, external income 243 234 80 80 82 76 79 319 310
Denmark, Norway, the United Kingdom and
Central Eastern Europe, income from other segments 3,5 0,8 0,3 3,0 0,2 0,3 0,2 3,8 1,1
Other operating segments/elimination -52 -47 -17 -19 -15 -16 -12 -67 -63
1 174 1 038 382 408 384 392 345 1 566 1 430
Operating profit (SEK million) *
Jan- Jan- Q3 Q2 Q1 Q4 Q3 Rolling Full year
Sept Sept 2011 2011 2010 2010 2010 12 mth 2010
2010
2011
Sweden 108 82 37 39 32 31 30 139 113
Finland and the Baltic States 18 15 6,7 5,2 5,8 4,8 7,1 23 20
Denmark, Norway, the United Kingdom and
Central Eastern Europe 18 15 7,0 4,9 6,3 3,2 6,1 21 18
144 111 51 49 44 39 43 183 151
Consolidated profit/loss (SEK million) *
Jan- Jan- Q3 Q2 Q1 Q4 Q3 Rolling Full year
Sept Sept 2011 2011 2010 2010 2010 12 mth 2010
2011 2010
Operating profit, above segments 144 111 51 49 44 39 43 183 151
Group functions -13 -9,0 -4,4 -5,3 -3,1 -3,4 -2,4 -16 -12
Net financial items -1,6 -1,9 0,1 -0,8 -0,9 0,1 -2,9 -1,5 -1,8
Profit/loss before tax 129 101 47 43 40 36 38 165 136
Other disclosures (SEK million) *
Jan- Jan- Q3 Q2 Q1 Q4 Q3 Rolling Full year
Sept Sept 2011 2011 2010 2010 2010 12 mth 2010
2011 2010
Sweden
Assets 477 422 477 460 452 443 422 458 443
Liabilities 161 152 161 179 220 227 152 197 227
Finland and the Baltic States
Assets 88 84 88 88 88 85 84 87 85
Liabilities 36 42 36 42 38 39 42 39 39
Denmark, Norway, the United Kingdom and
Central Eastern Europe
Assets
167 151 167 162 170 144 148 161 144
Liabilities 67 58 67 72 81 61 58 70 61

* Continuing operations

THE GROUP'S PERFORMANCE AND FINANCIAL POSITION

CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENT (SEK MILLION)

Jan-
Sept
2011
Jan-
Sept
2010
Q3
2011
Q2
2011
Q1
2010
Q4
2010
2010 Q3 Rolling
12 mth
Full year
2010
Continuing operations
Net sales 1 174 1 038 382 408 384 392 345 1 566 1 430
Operating costs -1 022 -916 -328 -358 -337 -349 -297 -1371 -1 265
Intangible asset amortisation -9,4 -8,0 -3,2 -3,2 -3,0 -3,0 -2,7 -12 -11
Depreciation of property, plant and equipment -12 -12 -3,9 -3,9 -3,8 -4,4 -4,2 -16 -17
Operating profit/loss 131 102 47 43 41 36 41 167 138
Net finance income/expense -1,6 -1,9 0,1 -0,8 -0,9 0,1 -2,9 -1,5 -1,8
Profit/loss before tax 129 101 47 43 40 36 38 165 136
Tax -36 -28 -13 -12 -11 -8,4 -11 -44 -37
Profit/loss for the period from continuing operations 94 72 34 31 29 28 27 121 100
Discontinued operations
Profit/loss for the period from discontinued
operations,
net after tax
-0,2 -5,1 0,1 -0,1 -0,1 0,6 -1,0 0,4 -4,5
Profit/loss for the period 93 67 34 31 29 28 26 122 95
Other comprehensive income
Exchange differences for the period arising on
translation of foreign operations 4,7 -17 2,2 3,9 -1,4 -2,8 -6,9 1,9 -20
Other comprehensive income for the period 4,7 -17 2,2 3,9 -1,4 -2,8 -6,9 1,9 -20
Total comprehensive income for the period 98 50 36 35 27 25 19 123 76
Earnings per share, SEK* 4,03 2,91 1,48 1,31 1,24 1,21 1,11 5,24 4,12
Earnings per share from
continuing operations, SEK*
4,04 3,13 1,48 1,32 1,24 1,19 1,15 5,23 4,32

* No effects of dilution present and the results are attributable to shareholders of the parent.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (SEK MILLION)

2011-09-30 2010-09-30 2010-12-31
Goodwill 60 50 55
Other intangible assets 60 55 52
Property, plant and equipment 182 183 182
Financial assets 2,3 3,9 4,6
Deferred tax assets 2,4 4,1 3,9
Total fixed assets 307 296 298
Inventories 246 195 220
Current receivables 269 285 241
Cash and cash equivalents 151 132 173
Total current assets 666 611 634
Total assets 973 907 932
Equity 623 569 594
Non-current interest-bearing liabilities 20 17 17
Deferred tax liabilities 54 48 50
Total long-term liabilities 74 66 68
Current interest-bearing liabilities 76 73 65
Current non-interest-bearing liabilities 201 199 205
Total current liabilities 277 273 270
Total equity and liabilities 973 907 932

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (SEK MILLION)

2011-09-30 2010-09-30 2010-12-31
At beginning of year 594 565 565
Total comprehensive income for the period 98 50 76
Dividends paid -70 -46 -46
At the end of the period 623 569 594

CONDENSED CONSOLIDATED CASH FLOW STATEMENT (SEK MILLION)

Jan-
Sept
2011
Jan-
Sept
2010
Q3
2011
Q2
2011
Q1
2010
Q4
2010
2010 Q3 Rolling
12 mth
Full year
2010
Cash flows from operating activities
before changes in working capital 116 83 46 34 36 50 36 166 134
Changes in working capital -49 -25 -21 -7,0 -21 6,9 -5,1 -42 -18
Cash flows from
operating activities 67 58 24 27 16 57 31 124 116
Cash flows from investing activities -34 -14 -6,8 -13 -14 -6,7 -4,6 -40 -20
Cash flows after
investing activities 33 45 18 14 1,3 50 26 84 95
Cash flows from
financing activities
- Change in liabilities 13 -28 -9,9 6,5 17 -8,1 -15 5,0 -36
- Dividends paid -70 -46 0,0 -70 0,0 0,0 0,0 -70 -46
Cash flows for the period -23 -30 7,8 -49 18 42 11 19 13
Cash and cash equivalents at the beginning of the period 173 165 143 191 173 132 122 132 165
Exchange rate differences 1,4 -3,8 0,4 1,2 -0,2 -0,8 -1,1 0,6 -4,6
Cash and cash equivalents at the end of the period 151 132 151 143 191 173 132 151 173

KEY PERFORMANCE INDICATORS

Jan- Jan- Q3 Q2 Q1 Q4 Q3 Rolling Full year
Sept Sept 2011 2011 2010 2010 2010 12 mth 2010
2011 2010
Return on equity, % 15,4 11,9 5,4 5,2 4,8 4,6 4,4 20,0 16,5
Return on capital employed, % * 19,2 15,0 6,7 6,7 5,8 5,5 6,1 24,7 21,0
Return on total capital % * 14,1 11,0 5,0 4,8 4,3 4,0 4,4 18,1 15,5
Equity/assets ratio, % 64,0 62,7 63,8
Earnings per share, SEK* 4,03 2,91 1,48 1,31 1,24 1,21 1,11 5,24 4,12
Earnings per share from continuing operations, SEK/* 4,04 3,13 1,48 1,32 1,24 1,19 1,15 5,23 4,32
Equity per share, SEK 26,87 24,45 25,63
Average number of shares
(thousands) 23 169 23 169 23 169 23 169 23 169 23 169 23 169 23 169 23 169
Average number of diluted shares
(thousands) 23 169 23 169 23 169 23 169 23 169 23 169 23 169 23 169 23 169
Operating margin, % * 11,1 9,9 12,3 10,6 10,6 9,3 11,8 10,7 9,7

* Under IFRS 5, Division Production Technology operations are recognised as discontinued operations. Marked KPIs apply to continuing operations.

Comparative figures have been restated. Other KPIs apply for the total operations (incl. Production Technology operations)

as the balance sheet for the comparative periods, under IFRS 5, is not restated.

** There are no dilution effects

THE PARENT COMPANY'S PERFORMANCE AND FINANCIAL POSITION

CONDENSED INCOME STATEMENT OF THE PARENT COMPANY (SEK MILLION)

Jan- Jan- Q3 Q2 Q1 Q4 Q3 Rolling Full year
Sept Sept 2011 2011 2010 2010 2010 12 mth 2010
2011 2010
Net sales 14 14 4,4 4,9 4,3 24 3,9 37 37
Operating costs -30 -28 -9,2 -11 -8,9 -8,9 -8,1 -38 -37
Depreciation -2,3 -1,6 -0,8 -0,8 -0,7 -1,0 -0,4 -3,3 -2,6
Operating profit/loss -18 -16 -5,5 -7,3 -5,3 14 -4,6 -4,3 -2,5
Income from shares
in Group companies 12 31 0,0 12 0,0 -9,9 0,0 2,2 21
Net financial income/expense 1,6 0,6 0,5 0,6 0,4 0,4 0,2 2,0 1,1
Profit/loss after
financial items -4,5 15 -5,0 5,4 -4,9 4,4 -4,3 -0,1 20
Appropriations 0,0 0,0 0,0 0,0 0,0 -12 0,0 -12 -12
Profit/loss before tax -4,5 15 -5,0 5,4 -4,9 -8,1 -4,3 -13 7,2
Tax 4,3 4,1 1,2 1,8 1,3 -1,0 1,0 3,3 3,1
Profit/loss for the period -0,2 19 -3,8 7,2 -3,6 -9,0 -3,4 -9,2 10

CONDENSED PARENT COMPANY BALANCE SHEET (SEK MILLION)

2011-09-30 2010-09-30 2010-12-31
Assets
Intangible assets 3,4 3,7 3,9
Property, plant and equipment 20 20 20
Financial assets 309 305 304
Current receivables 124 146 203
Cash and bank balances 101 93 122
Total assets 558 568 653
Equity and liabilities
Equity 290 303 359
Untaxed reserves 98 85 98
Deferred tax liabilities 2,0 1,9 1,9
Current interest-bearing liabilities 0,0 0,0 0,0
Current non-interest-bearing liabilities 168 177 194
Total equity and liabilities 558 568 653
Pledged assets 7,5 7,5 7,5
Contingent liabilities 196 247 196

OEM is one of Europe's leading technology trading companies and consists of 22 operating units in 14 countries.

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