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Sdiptech
Quarterly Report • Oct 25, 2024
2965_10-q_2024-10-25_7f36614b-a3ee-411a-a35d-4f18e7552bc6.pdf
Quarterly Report
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Interim Report
1 January – 30 September 2024
Comments refer to continuing operations unless otherwise stated
THIRD QUARTER 2024
- Net sales increased by 7% to SEK 1,210 million (1,129). In total for the Group, organic sales growth was 1%, excl. currency effects.
- EBITA, amounted to SEK 238 million (266), corresponding to an EBITA margin of 19.7% (23.6)
- Adjusted EBITA was unchanged SEK 231 million (231), corresponding to an adjusted EBITA margin of 19.1% (20.5). Organic adjusted EBITA growth for the Group was -8%, excl. currency effects.
- Profit before tax amounted to SEK 134 (168) million and profit after tax amounted to SEK 91 million (130). Profit attributable to divestment activities amounted to SEK -53 million (2). Attributable to the Parent Company's shareholders of the Group's total profit was SEK 37 million (132).
- Cash flow from operating activities amounted to SEK 167 million (247), corresponding to a cash conversion of 67% (92).
- Earnings per ordinary share (average number), less minority interests and dividends on preference shares, amounted to SEK 2.28 (3.34). Total earnings, including discontinued operations, per ordinary share amounted to SEK 0.88 (3.38).
- During the quarter, it was decided to restructure the Group's business areas as of 1 January 2025 in order to optimise resources and strengthen the opportunities for continued growth. It was also decided to initiate a divestment of the Group's unit for manufacturing of special elevators, installation and elevator service in Central Europe. This unit is reported separately in the interim report under discontinued operations.
FIRST NINE MONTHS 2024
- Net sales increased by 17% to SEK 3,830 million (3,280). In total for the Group, organic sales growth was 6%, excl. currency effects.
- EBITA increased by 10% to SEK 777 million (707), corresponding to an EBITA margin of 20.3% (21.6)
- Adjusted EBITA increased by 13% to SEK 751 million (664), corresponding to an adjusted EBITA margin of 19.6% (20.2). Organic adjusted EBITA growth for the Group was 1%, excl. currency effects.
- Profit before tax amounted to SEK 472 (472) million and profit after tax amounted to SEK 328 million (354). Results attributable to divestment activities amounted to SEK -66 million (0). Attributable to the Parent Company's shareholders of the Group's total profit was SEK 259 million (353).
- Cash flow from operating activities amounted to SEK 533 million (428), corresponding to a cash conversion of 74% (62).
- Earnings per ordinary share (average number), less minority interests and dividends on preference shares, amounted to SEK 8.27 (9.03). Total earnings, including discontinued operations, per ordinary share amounted to SEK 6.54 (9.03).
- During the period, the acquisition of JR Industries Ltd in the UK and WaterTech of Sweden AB was completed. Frigotech AB was divested.
SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
• No significant events are noted after the period.
| Financial overview, continued operations For detailed information see Definition of alternative key figures |
Jul-Sep 2024 |
Jul-Sep 2023 1 |
Jan-Sep 2024 |
Jan-Sep 2023 1 |
LTM Sep 2024 |
Jan-Dec 2023 1 |
|---|---|---|---|---|---|---|
| Net sales, (SEK million) | 1,210 | 1,129 | 3,830 | 3,280 | 5,132 | 4,582 |
| Adjusted EBITA2 , (SEK million) |
231 | 231 | 751 | 664 | 1,006 | 919 |
| EBITA (SEK million) | 238 | 266 | 777 | 707 | 1,030 | 961 |
| EBIT, (SEK million) | 203 | 231 | 669 | 615 | 888 | 834 |
| Earnings for the period after tax, (SEK million) | 91 | 130 | 328 | 354 | 424 | 450 |
| Earnings per ordinary share after dilution (SEK) | 2.28 | 3.34 | 8.27 | 9.03 | 10.69 | 11.45 |
| Adjusted EBITA margin | 19.1% | 20.5% | 19.6% | 20.2% | 19.6% | 20.1% |
| Financial net debt3/Adjusted EBITDA, multiple | 2.09 | 2.29 | 2.09 | 2.29 | 2.09 | 2.03 |
| Net debt4/ Adjusted EBITDA, multiple | 3.08 | 3.44 | 3.08 | 3.44 | 3.08 | 3.09 |
| Return on capital employed | 12.9% | 12.6% | 12.9% | 12.2% | 12.9% | 13.0% |
| Return on equity | 10.2% | 12,6% | 10.2% | 12,6% | 10.2% | 11.8% |
| Cash flow generation | 67% | 92% | 74% | 62% | 77% | 68% |
1) Comparative figures have been updated for comparability as the Group's elevator operations from Q3 2024 are reported as discontinued operations according to IFRS 5
4) Key ratios regarding net debt have been changed to be based on the liability at the balance sheet date
2) Adjusted EBITA is the Group's adjusted operating profit (previously called EBITA*)
3) Key ratios regarding financial net debt have been changed to include lease liabilities and are based on the liability at the balance sheet date
COMMENTS BY THE CEO
GOOD DEMAND, SOLID CASH FLOW AND AN ORGANISATION POSITIONED FOR CONTINUED GROWTH
The market situation remained stable for most of Sdiptech's units. Despite high comparative figures from last year's strong Q3, we have been able to maintain the same high level during the quarter, with sales increasing by 7 percent, of which 1 percent organically excl. currency. The Group's adjusted EBITA amounted to last year's level of SEK 231 million, with an operating margin in adjusted EBITA of 19.1 percent (20.5) for remaining units.
Group development
As previously communicated, the Group's elevator unit is not included in the long-term strategic plan, which is why it was decided during the quarter to initiate a divestment. The elevator unit will from now on be reported separately in accordance with IFRS 5. The discontinued operations impacted profit before tax by SEK -53 million, which includes impairment of goodwill of SEK -33 million and restructuring costs.
Special Infrastructure Solutions had a sales increase of 7 percent during the quarter. Adjusted EBITA was unchanged from the previous year and amounted to SEK 157 million. During the same period last year, we had very strong organic growth for most of the business area's units. We are pleased to be able to maintain last year's high levels, through good sales in, for example, the units for insurance claims management of underground infrastructure and equipment for winter road maintenance.
Resource Efficiency's sales growth of 7 percent in the quarter was mainly driven by good sales from several units, such as the business area's operations in chemical water treatment, temporary electricity and charging equipment for electric vehicles. At the same time, adjusted EBITA increased by 1 percent and amounted to SEK 92 million. Several units also had strong organic development during the same period last year.
Looking at the first nine months of the year, we have had a solid development. Sales increased by 17 percent of which 6 percent organically excl. currency effects. This demonstrates continued overall good demand. At the same time, our adjusted EBITA in the first three quarters increased by 13 percent, of which 1 percent organic excl. currency. The margin was 19.6 percent in adjusted EBITA.
Cash flow generation amounted to 67 percent for the quarter, and 74 percent for the year, resulting in a cash flow from operating activities of SEK 533 million, of which SEK 167 million in Q3.
We continue to reduce our debt/equity ratio. Our net financial debt to adjusted EBITDA ratio was 2.09 (2.29) at the end of the quarter. The total net debt/equity ratio, including provisions for future earn-outs, amounted to 3.08 (3.44).
Outlook
In connection with Sdiptech's growth and with the aim of creating an even more dynamic and focused business, we have established a new organisational structure consisting of four business areas. The new organisation will apply from 1 January 2025 and consist of the following areas with clear common driving forces:
- Supply Chain & Transportation operates in modernizing and streamlining transport and supply chains, driven by an increased demand for more sustainable and efficient logistics solutions.
- Energy & Electrification provides niche solutions in energy efficiency, electrification, power supply and temporary electricity, driven by the demand for sustainable and efficient energy systems.
- Water & Bioeconomy provides systems and technology in water, waste management and efficient and circular use of natural resources, driven by population growth, urbanization and increased environmental demands.
- Safety & Security offers solutions in physical security, increased safety in public environments and information security, driven by technological developments, changing societal needs and increased security requirements.
We are confident that the new structure will add further value to the business and will provide a clearer description of how these strong trends are driving growth. We will present a more detailed description and breakdown of the four business areas in our year-end report.
In addition to the Group's elevator operations, our units are progressing according to plan, and our assessment is that long-term order intake remains steady. At the same time, it should be noted that growth was very strong, also in the fourth quarter last year.
We are experiencing a more favourable acquisition climate and have many positive dialogues with entrepreneurs. With a very good pipeline, we look forward to welcoming more highquality companies to the Group shortly.
In conclusion, I would like to express my thanks to our shareholders for their continued confidence, as well as to all employees for your great commitment.
Bengt Lejdström, President & CEO
OVERVIEW OF OPERATIONS
Comments on the overview of operations refer to continued operations unless otherwise stated.
JULY - SEPTEMBER Net sales
Net sales amounted to SEK 1,210 million (1,129) during the quarter. Sales in comparable units, amounted to SEK 1,112 million (1,122), which corresponded to an organic growth of 1% for the period, excl. currency effects. The Group's unit for manufacturing of special elevators, installation and elevator service in Central Europe is reported separately and does not affect the net sales during the quarter.
Non-comparable units contributed SEK 98 (8) million to net sales for the quarter. Also see Business areas for more detailed information.
Earnings
Operating profit, EBIT, amounted to SEK 203 million (231).
Adjusted EBITA was unchanged and amounted to SEK 231 million (231), corresponding to an adjusted EBITA margin of 19.1% (20.5).
Adjusted EBITA in comparable units, amounted to SEK 227 million (248) corresponding to an organic growth of -8%, excl. currency effects. Several of the Group's comparable units showed stronger results than last year, while the others showed results in line with or slightly negative compared to the previous year. Non-comparable units contributed SEK 21 million (1) to the profit for the period.
Acquisition costs amounted to SEK -1 million (-4) in connection with acquisition activities during the period. Revaluation of contingent consideration amounted to SEK -0 million (27) net and refers to differences in final regulations. Last year was positively impacted due to a change in the discount rate
Depreciation and amortisation of property, plant and equipment and intangible fixed assets amounted to SEK -83 million (-84), of which amortisation of acquisition-related intangible fixed assets amounted to SEK -26 million (-24).
Net financial items consist of exchange rate differences of SEK -5 million (-8) in the quarter and SEK -63 million (-55) in interest expense, of which discount rates relating to contingent considerations of SEK –12 million (-9). The increased interest costs are partly due to increased interest rates, corresponding to SEK -1 million, and partly to higher interest-bearing liabilities, corresponding to SEK -4 million. See also Note 3.
The Group's discontinued operations contributed SEK -53 million (2) to the Group's total profit. The amount includes impairment of goodwill of SEK -33 million.
Profits after tax amounted to SEK 91 million (130). Profit compared with the previous year was affected by, among other things, increased interest expenses of SEK -8 million and the previous year being positively impacted by SEK 27 million due to a change in the discount rate. The Group's total profit, including discontinued operations, amounted to SEK 38 million (132).
Earnings per ordinary share for continued operations (average number) after deduction of minority and dividend to preference shares amounted to SEK 2.28 (3.34). Earnings per ordinary share including discontinued operations amounted to SEK 0.88 (3.38).
JANUARY - SEPTEMBER Net sales
Net sales amounted to SEK 3,830 million (3,280) during the period. Sales in comparable units, amounted to SEK 3,492 million (3,273), which corresponded to an organic growth of 6% for the period, excl. currency effects.
Non-comparable units contributed SEK 331 million (8) to net sales for the period. Also see Business areas for more detailed information.
Earnings
Operating profit, EBIT, increased by 9% and amounted to SEK 669 million (615).
Adjusted EBITA increased by 13% and amounted to SEK 751 million (664) in total for the Group, corresponding to an adjusted EBITA margin of 19.6% (20.2).
Adjusted EBITA in comparable units, amounted to SEK 725 million (714) corresponding to an organic growth of 1%, excl. currency effects. Most the Group's comparable units showed good results in line with the previous year or better. Noncomparable units contributed SEK 79 million (1) to the profit for the period. All acquired units had a result in line with or above expectations.
Acquisition costs amounted to SEK -9 million (-8) in connection with acquisition activities during the period. Revaluation of contingent consideration amounted to SEK -8 million (24) net and refers to differences in final regulations. Last year was positively impacted due to a change in the discount rate
Depreciation and amortisation of property, plant and equipment and intangible fixed assets amounted to SEK -253 million (-219), of which amortisation of acquisition-related intangible fixed assets SEK -76 million (-66).
Net financial items consist of exchange rate differences of SEK -1 million (2) in the quarter and SEK -192 million (-145) in interest expense, of which discount rates relating to contingent considerations of SEK –50 million (-36). The increased interest costs, is partly due to increased interest rates, corresponding to SEK -17 million, and partly to higher interest-bearing liabilities, corresponding to SEK -16 million. See also Note 3.
The Group's discontinued operations contributed SEK -66 million (0) to the Group's total profit. The amount includes impairment of goodwill of SEK -33 million.
The Group's total profit after tax amounted to SEK 328 million (354). Profit compared with the previous year was affected by, among other things, increased interest expenses of SEK -48 million and the previous year being positively impacted by SEK 27 million due to a change in the discount rate. The Group's total profit, including discontinued operations, amounted to SEK 262 million (354). Earnings per ordinary share for continuing operations (average number) after deduction of minority interests and dividends to preference shares amounted to SEK 8.27 (9.03). Earnings per ordinary share including operations for discontinued operations amounted to SEK 6.54 (9.03).
Acquisitions
On January 24, Sdiptech acquired all shares in JR Industries Ltd, a leading British niche manufacturer of roller shutter doors for commercial vehicles. The company has an annual EBIT of approximately GBP 4.5 million. JR Industries is part of business area Special Infrastructure Solutions as of January 2024.
On April 11, all shares in the Swedish company WaterTech of Sweden AB, which produces specialized chemicals, specifically focused on the optimization of industrial water systems, were acquired. WaterTech collaborates closely with Sdiptech's Kemi-
tech business unit in Denmark and Water Treatment Products in the UK. WaterTech of Sweden has a turnover of approximately SEK 20 million, with good profitability. The company is part of business area Resource Efficiency as of April 2024.
Divestments
During the period, Sdiptech's shares in the subsidiary Frigotech AB were divested, which on an annual basis had sales of approximately SEK 20 million and 10% in EBITA margin. The decision was based on careful assessment, where the company deviates from our main focus on product companies and associated services.
Frigotech will be part of Nordic Climate Group with similar sister companies.
During the period, it was decided to initiate a sale of the Group's elevator business, as the business is not included in Sdiptech's long-term strategic investment and development plan.
| Group | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec |
|---|---|---|---|---|---|---|
| Adjusted EBITA1 (SEK m) |
2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Resource Efficiency | 92 | 91 | 306 | 262 | 410 | 366 |
| Special Infrastructure Solutions | 157 | 157 | 499 | 452 | 668 | 621 |
| Business areas | 249 | 248 | 804 | 714 | 1,077 | 987 |
| Central units | -17 | -17 | -54 | -50 | -72 | -67 |
| Totalt | 231 | 231 | 751 | 664 | 1,006 | 919 |
| Discontinued operations | -18 | 4 | -26 | 5 | -29 | 2 |
The Group's development of net sales, adjusted EBITA1 and adjusted EBITA margin1 since 2017
1Adjusted EBITA/Adjusted EBITA margin corresponds to the previous designation EBITA*.
BUSINESS AREAS AND CENTRAL UNITS
Well-functioning infrastructure is essential for our societies and our everyday lives. However, large parts of Europe's infrastructure are outdated and underinvested. Population growth, climate change and striving for more sustainable, efficient and safe societies mean additional pressure on the systems.
Examples of areas that we have identified as particularly important for society's development, and thus show a good demand, are water and sanitation, electricity and energy, bioeconomy and waste management, air and climate control, transport and logistics as well as increased safety and security. For a description of the business areas' operations and which companies are included in each business area, see paragraph Description Business Areas.
During the third quarter, it was decided to initiate a sale of the Group's unit for the manufacture of special elevators, installation and elevator service in Central Europe. The units have been part of Special Infrastructure Solutions but will be reported separately as of the third quarter of 2024 and for all comparable periods under the line Discontinued operations as according to IFRS 5.
THE QUARTER
RESOURCE EFFICIENCY
The business area's sales increased by 7% for the quarter to SEK 423 million (396) compared to the previous year. Several comparable units showed good sales growth, while other units had challenging comparative figures from the same quarter last year, thus showing negative growth. For example, demand for the business area's chemical water treatment units remained good in the quarter, as well as for the business area's unit for temporary electricity and the unit for charging equipment for electric vehicles.
Adjusted EBITA for the quarter increased by 1% to SEK 92 million (91), primarily driven by challenging comparative figures. Acquisitions have also had a positive impact on the development.
Adjusted EBITA margin for the quarter amounted to 21.7% (23.0).
| Resource Efficiency (SEK m) |
Jul-Sep 2024 |
Jul-Sep 2023 |
Jan-Sep 2024 |
Jan-Sep 2023 |
LTM Sep 2024 |
Jan-Dec 2023 |
|---|---|---|---|---|---|---|
| Net sales | 423 | 396 | 1,341 | 1,190 | 1,801 | 1,650 |
| Adjusted EBITA1 | 92 | 91 | 306 | 262 | 410 | 366 |
| Adjusted EBITA margin1 % | 21.7% | 23.0% | 22.8% | 22.0% | 22.7% | 22.2% |
SPECIAL INFRASTRUCTURE SOLUTIONS
The business area's sales in the quarter increased by 7% to SEK 787 million (733). The increase in sales was mainly due to acquisitions. Some of the larger units did not reach the same level of sales as the same quarter last year given strong comparative figures. This applies primarily to the business area's units for solutions for transport refrigeration and control and monitoring of refrigeration systems. However, several units showed good sales, e.g. the units for damage management of underground infrastructure and equipment for winter road maintenance.
Adjusted EBITA for the quarter was unchanged and amounted to SEK 157 million (157). Acquisitions had a positive impact on the development.
The adjusted EBITA margin in the quarter was 19.9% (21.4) mainly due to a sales mix effect, where companies with high margins reduced their sales and profits.
| Special Infrastructure Solutions (SEK m) |
Jul-Sep 2024 |
Jul-Sep 2023 |
Jan-Sep 2024 |
Jan-Sep 2023 |
LTM Sep 2024 |
Jan-Dec 2023 |
|---|---|---|---|---|---|---|
| Net sales | 787 | 733 | 2,489 | 2,091 | 3,330 | 2,931 |
| Adjusted EBITA1 | 157 | 157 | 499 | 452 | 668 | 621 |
| Adjusted EBITA margin1 % | 19.9% | 21.4% | 20.0% | 21.6% | 20.1% | 21.2% |
CENTRAL UNITS – GROUP-WIDE FUNCTIONS
Central units consist of the Group's parent company, Sdiptech AB and the Group's holding companies. The Parent Company's revenue consists of management fees, directed to the subsidiaries for the Parent Company's services. The costs
consist of costs for central functions such as management, acquisition teams, group finance and other central functions.
Adjusted EBITA was SEK -17 million (-17) for the quarter.
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec | |
|---|---|---|---|---|---|---|
| Group-wide functions (SEK m) | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Adjusted EBITA1 | -17 | -17 | -54 | -50 | -72 | -67 |
DISCONTINUED OPERATIONS
During the third quarter, it was decided to initiate a process for the divestment of the Group's unit for the manufacture of special elevators, installation and elevator service in Central Europe. The units have been part of Special Infrastructure Solutions but are reported as Discontinued operations as from the third quarter of 2024 and for all comparable periods.
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec | |
|---|---|---|---|---|---|---|
| Discontinued operations (SEK m) | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Adjusted EBITA1 | -18 | 4 | -26 | 5 | -29 | 2 |
1Adjusted EBITA/Adjusted EBITA margin corresponds to the previous designation EBITA*.
GEOGRAPHICAL DISTRIBUTION OF SALES
Over the years, Sdiptech has acquired business units in Sweden, Norway, Finland, the UK and Croatia (with significant operations in Germany), the Netherlands, Italy and in Denmark. The Group's business units have customers primarily locally and regionally in their respective geographies, but some exports also occur.
The Group's turnover, broken down by geography where customers have their main operations.
eden ther urope ther rest of the orld A Germany or ay taly
Including discontinued operations
TURNOVER BY TYPE OF REVENUE
Sales of proprietary products have increased from 32 to 61 percent during the period full year 2019 to LTM September 2024. The turnover for service and installation as of 2022 and onwards is mainly related to our own products.
Consolidated sales by type of revenue
Including discontinued operations
COMMENTS ON THE FINANCIAL DEVELOPMENT
Comments on the financial development refer to continuing operations unless otherwise stated.
FINANCIAL POSITION JANUARY – SEPTEMBER Cash Flow
Cash flow from operating activities after changes in working capital amounted to SEK 533 million (428) during the period. The increased sales affected the cash flow during the period in the form of increased accounts receivable and some inventory build-up for continued expansion. However, the effect is significantly smaller than the previous year and less than the increase in sales. Cash flow generation, expressed as a percentage of profit before tax adjusted for non-cash items, amounted to 74% (62) during the period.
Cash flow from investing activities amounted to SEK -687 million (-704). The cash flow effect of completed acquisitions during the period amounted to SEK -327 million (-402), also see Note 8. Cash flow related to payment of contingent considerations on acquisitions from previous years, including both instalments as well as final settlement, amounted to SEK -218 million (-167) during the period. Investments in intangible and tangible fixed assets amounted to SEK -159 (-135).
Cash flow from financing activities amounted to SEK 7 million (366). Net borrowing amounted to SEK 95 million (401). Amortization of lease liabilities amounted to SEK -76 million (-49). Dividend on the preference share amounted to SEK -11 million (-11) and dividend to non-controlling interest amounted to SEK -2 million (-1).
Cash flow from the Group's discontinued operations amounted to SEK 3 million (6).
Liabilities
Interest-bearing liabilities including contingent considerations and lease liabilities amounted to SEK 4,245 million (4,124). The three largest items within interest-bearing liabilities consisted of financial liabilities where of SEK 2,000 million (1,832) in liabilities to credit institutions, SEK 600 million (600) in bond liabilities and SEK 1,228 million (1,226) in deferred payments of purchase prices for acquisitions, so-called contingent consideration payments. It can be noted that a large part of the contingent consideration debt requires an increase in profit compared to today's levels to be paid out.
These contingent considerations are classified as interestbearing according to IFRS as they are presented at net present value, but they do not give rise to any actual interest payments that are charged to the Group's cash flo . Ho e er, a discount interest rate is booked as a financial expense for the period. The Group's Financial expenses include this interest rate of SEK -38 million (-28) for the period.
Partial and final settlement of agreed contingent purchase prices resulted in a cost of SEK -8 million (24). Last year was positively impacted due to a change in the discount rate. The contingent consideration payments are recognised in accordance with IFRS at the present value of the estimated fair value based on the remaining term and expected outcome. The net of the revaluation is reported under other income or other external expenses.
During the period, the result was charged with SEK -12 million (-8) regarding discount rates in accordance with IFRS16 regarding leasing liabilities.
The net debt relating to continuing operations, consisting of interest-bearing liabilities with a deduction for cash and cash equivalents, amounted to SEK 3,828 million (3,658). The key figure Net debt as of the balance sheet date in relation to
adjusted EBITDA, which is calculated on a rolling twelve-month basis, amounted to 3.08 (3.44) as of September 30.
Net financial debt relating to continuing operations, according to the calculation method above but excluding contingent consideration, amounted to SEK 2,182 million (1,967). The key figure financial net debt as of the balance sheet date in relation to adjusted EBITDA, which is calculated on a rolling twelvemonth basis, amounted to 2.09 (2.29) on September 30.
Financing
In August 2023, Sdiptech issued senior secured sustainabilitylinked bonds of SEK 600 million under a framework of SEK 1,000 million. The bonds mature in August 2027. The link to the group's sustainability goals affects the final redemption amount at maturity, depending on the outcome.
The total utilized credit volume as of 30 September 2024, within the total framework of SEK 2,600 million with our lenders, amounted to a total of approximately SEK 1,916 million. The agreements run at a variable interest rate in 3–6-month intervals. However, the Group has agreements on so-called interest rate swaps, corresponding to approximately 45% of utilised credit volume, with a maturity of 2–4 years in order to reduce interest rate exposure. Part of the agreed credit volume is linked to the Group's sustainability targets, which may increase or decrease the agreed interest margin depending on the outcome. Together with the Group's cash and cash equivalents of SEK 418 million, there are approximately SEK 1,100 million in available funds for future payments.
In addition, the Group uses currency swaps and forwards to balance exposure to GBP, EUR and NOK. The purpose of these instruments is to balance the actual exposure between assets and liabilities, in the respective currency, which affects net financial items. At the end of the period, the volumes of these instruments amounted to the equivalent of approximately SEK 893 million for GBP, SEK 881 million for EUR and SEK 168 million for NOK.
Parent Company
The Parent Company diptech AB's internal net sales, containing mainly, management fee amounted to SEK 21 million (19) for the period and loss after financial items amounted to SEK -58 million (-28).
OTHER INFORMATION Employees
The number of employees at the end of September was 2,095 (1,974). Acquisitions completed during the last twelve months increased the number of employees by 110. The number of employees in discontinued operations amounts to 306 (332).
Incentive programme
At the 2024 Annual General Meeting, a new incentive program for managers and senior executives was resolved in the form of a long-term performance-based share plan. The program runs over three years and is related to the Group's adjusted EBITA growth per average outstanding ordinary share. The participants invest in Class B shares in Sdiptech AB (Saving Shares) and are thereafter given the opportunity to receive up to three Class B shares (Performance Shares) free of charge if set conditions are met. The program comprises a maximum of 30,000 saving shares.
For previous years' incentive programs, reference is made to the Annual Report 2023.
Financial risks and uncertainty factors
Through its operations, the Group and the Parent Company are exposed to various types of financial risks, mainly related to loans and receivables. The financial risks consist of:
- iquidity- and financing risk
- nterest rate risk
- Currency risk
- Customer- and counterparty risk
In February 2022, Russia's military invaded Ukraine, which in addition to great human suffering also affected global trade and financial markets. For Sdiptech, however, direct business exposure in Russia and Ukraine has been limited. Beyond this, we do not see any significant impact on demand. Ultimately, the long-term economic consequences, including the impact on the financial markets in general and the Group in particular, depend on the duration of the crisis and measures taken by governments, central banks and other authorities.
The ongoing tensions between Israel and its neighbouring countries have so far had limited impact, but if the conflict accelerates and, for example, shipping is affected even more in the Red Sea, there is a risk that logistics chains will be affected and deliveries to Sdiptech's companies may delay customer deliveries.
In 2022 and 2023, inflation has risen sharply in most of the countries in which the Group's companies operate. This has resulted in higher prices for input goods and higher personnel costs for the Group's companies, which have largely been compensated for by increased prices to customers. Rising inflation has also led to central banks raising their key interest rates, with increased borrowing costs as a result. This affects the Group to the extent that loan interest rates are variable.
Although the inflation rate has slowed recently, interest rates are expected to remain affected.
For more detailed information on risk factors, please refer to Note 17 of the Annual Report 2023.
Related party transactions
No substantial related party transactions occur within the group.
Events after the end of the reporting period
No significant events have occurred after the end of the reporting period.
Nomination Committee for the Annual General Meeting 2025 At the Annual General Meeting on 22 May 2024, the Chairman of the Board was instructed to contact the largest shareholders in terms of voting rights as of 30 September 2024 and ask them to appoint members. The Nomination Committee shall consist of three members. The Chairman of the Board shall be a coopted member of the Nomination Committee and shall
Accordingly, the following persons have been appointed as members of the Nomination Committee for the 2025 Annual General Meeting
convene the meetings of the Nomination Committee.
- Caroline jösten (representing Swedbank Robur Fonder)
- Helen Fasth Gillstedt (representing Handelsbanken Fonder)
- Ashkan Pouya
Proposals from shareholders to the Nomination Committee may be sent by mail to the company's address for further forwarding or by e-mail to: [email protected]
CONSOLIDATED INCOME STATEMENT
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec | ||
|---|---|---|---|---|---|---|---|
| Continuing operations (SEK m) | Note | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Net sales | 2 | 1,210 | 1,129 | 3,830 | 3,280 | 5,132 | 4,582 |
| Other operating income | 2 | 8 | 32 | 42 | 43 | 60 | 60 |
| Total income | 1,219 | 1,161 | 3,873 | 3,323 | 5,193 | 4,642 | |
| Operating expenses | |||||||
| Materials. contracting and subcontracting | -488 | -456 | -1,552 | -1,308 | -2,096 | -1,853 | |
| Other external expenses | -110 | -89 | -338 | -276 | -476 | -415 | |
| Employee expenses | -333 | -302 | -1,060 | -904 | -1,395 | -1,239 | |
| Depreciation and amortisation of tangible non-current assets | -49 | -48 | -146 | -126 | -195 | -175 | |
| Depreciation and amortisation of intangible non | |||||||
| current assets | -34 | -36 | -107 | -93 | -141 | -127 | |
| Operating profit | 203 | 231 | 669 | 615 | 888 | 834 | |
| Profit/loss from financial items | 3 | ||||||
| Financial income | 1 | 2 | 2 | 4 | 3 | 6 | |
| Financial expenses | -70 | -65 | -198 | -147 | -276 | -225 | |
| Profit after financial items | 134 | 168 | 472 | 472 | 615 | 615 | |
| Tax on profit for the period | 4 | -44 | -38 | -145 | -118 | -191 | -165 |
| Profit for the period from continuing operations | 91 | 130 | 328 | 354 | 424 | 450 | |
| Profit/loss for the period from discontinued operations | 5 | -53 | 2 | -66 | 0 | -70 | -4 |
| Total Profit for the period | 38 | 132 | 262 | 354 | 354 | 446 | |
| Profit attributable to continued operations: | |||||||
| Parent Company's shareholders | 90 | 130 | 325 | 353 | 420 | 448 | |
| Non-controlling interests | 1 | 0 | 3 | 1 | 4 | 1 | |
| Profit attributable to discontinued operations: | |||||||
| Parent Company's shareholders | -53 | 2 | -66 | 0 | -70 | -4 | |
| Earnings per share (average number), attributable to the | |||||||
| Parent Company's shareholders during the period, less | |||||||
| dividends to preference shareholders (in SEK per share) | |||||||
| Earnings per share, continued operations | 2,28 | 3,34 | 8,27 | 9,03 | 10,69 | 11,45 | |
| Earnings per share including discontinued operations | 0,88 | 3,38 | 6,54 | 9,03 | 8,84 | 11,34 | |
| Adjusted EBITA | 231 | 231 | 751 | 664 | 1,006 | 919 | |
| Average number of common shares | 37,991,938 | 37,991,938 | 37,991,938 | 37,949,352 | 37,991,938 | 37,949,352 | |
| Average number of common shares after dilution | 37,991,938 | 37,991,938 | 37,991,938 | 37,949,352 | 37,991,938 | 37,949,352 | |
| Number of ordinary shares at the end of the period | 37,991,938 | 37,991,938 | 37,991,938 | 37,991,938 | 37,991,938 | 37,991,938 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| (SEK m) | Jul-Sep 2024 |
Jul-Sep 2023 |
Jan-Sep 2024 |
Jan-Sep 2023 |
LTM Sep 2024 |
Jan-Dec 2023 |
|---|---|---|---|---|---|---|
| Total profit for the period | 38 | 132 | 262 | 354 | 354 | 446 |
| Other comprehensive income for the period | ||||||
| Changes in accumulated translation differences | 4 | -82 | 103 | 73 | 10 | -19 |
| Comprehensive income for the period | 42 | 50 | 365 | 427 | 364 | 426 |
| Attributable to: | ||||||
| Parent Company's shareholders | 39 | 50 | 362 | 426 | 361 | 426 |
| Non-controlling interest | 3 | 0 | 3 | 1 | 3 | 1 |
CONSOLIDATED BALANCE SHEET
| 30 Sep | 30 Sep | 31 Dec | ||
|---|---|---|---|---|
| (SEK m) | Note | 2024 | 2023 | 2023 |
| Non-current assets | ||||
| Intangible non-current assets | ||||
| Goodwill | 6 | 5,022 | 4,727 | 4,583 |
| Other intangible assets | 1,355 | 1,256 | 1,211 | |
| Tangible non-current assets | ||||
| Tangible non-current assets | 480 | 430 | 412 | |
| Right-of-use assets | 446 | 434 | 432 | |
| Financial non-current assets | ||||
| Other financial non-current assets | 16 | 17 | 16 | |
| Total non-current assets | 7,319 | 6,865 | 6,655 | |
| Current assets | ||||
| Completed products and goods for resale | 731 | 692 | 635 | |
| Accounts receivable | 891 | 776 | 785 | |
| Other receivables | 42 | 43 | 56 | |
| Current tax assets | 31 | 31 | 24 | |
| Prepaid expenses and accrued income | 244 | 238 | 230 | |
| Cash and cash equivalents | 418 | 465 | 550 | |
| Assets held for sale | 137 | 184 | 171 | |
| Total current assets | 2,493 | 2,430 | 2,450 | |
| Total assets | 9,812 | 9,295 | 9,105 | |
| Shareholders' equity | ||||
| Shareholders' equity attributable to Parent Company's shareholders | ||||
| Share capital | 1 | 1 | 1 | |
| Other contributed capital | 2,094 | 2,095 | 2,094 | |
| Profit/loss brought forward including earnings for the period | 2,206 | 1,863 | 1,857 | |
| Total equity attributable to Parent Company's shareholders | 4,302 | 3,959 | 3,952 | |
| Non-controlling interests | 8 | 5 | 5 | |
| Total shareholders' equity | 4,310 | 3,964 | 3,957 | |
| Long term liabilities | ||||
| Interest-bearing long-term liabilities | 7 | 3,705 | 3,784 | 3,681 |
| Non-interest-bearing long-term liabilities | 328 | 290 | 279 | |
| Total long-term liabilities | 4,033 | 4,074 | 3,960 | |
| Short term liabilities | ||||
| Interest-bearing short-term liabilities | 7 | 540 | 340 | 365 |
| Non-interest-bearing short-term liabilities | 841 | 851 | 762 | |
| Liabilities held for sale | 87 | 67 | 62 | |
| Sum short term liabilities | 1,468 | 1,258 | 1,188 | |
| Total liabilities | 5,502 | 5,331 | 5,148 | |
| Total shareholders' equity and liabilities | 9,812 | 9,295 | 9,105 |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
Shareholders' equity attributable to Parent Company
| Other Non Share contr. Retained controlling (SEK m) Note capital capital earnings Total interests Opening balance, January 1 2023 1 2,069 1,447 3,517 5 Income for the period - - 353 353 1 Other comprehensive income for the period - - 73 73 0 Total income for the period - - 426 426 1 Shareholder transactions Dividend paid to preference shareholders 9 - - -11 -11 - Dividend paid to non-controlling interests - - - - -1 Share issue of ordinary shares series B - 14 - 14 - Option premiums - 12 - 12 - Total shareholder transactions - 26 -11 16 -1 Closing balance, September 30, 2023 1 2,095 1,862 3,959 5 Opening balance, October 1, 2023 1 2,095 1,862 3,959 5 Income for the period - - 91 91 1 Other comprehensive income for the period - - -93 -93 0 Total income for the period -1 -1 1 Shareholder transactions Dividend paid to preference shareholders 9 - - -4 -4 - Dividend paid to non-controlling interests - - -1 -1 - Share issue of ordinary shares series B - 0 - 0 - Share issue expenses - -1 - -1 - Total shareholder transactions - -1 -5 -6 - Closing balance, December 31, 2023 1 2,094 1,857 3,952 5 Opening balance, January 1 2024 1 2,094 1,857 3,952 5 Income for the period - - 259 259 3 Other comprehensive income for the period - - 103 103 - Total income for the period 362 362 3 Shareholder transactions Dividend paid to preference shareholders 9 - - -11 -11 - Dividend paid to non-controlling interests - - -2 -2 - Share-based remuneration 10 - - 1 1 - |
shareholders | ||||||
|---|---|---|---|---|---|---|---|
| Share | |||||||
| holders' | |||||||
| equity | |||||||
| 3,522 | |||||||
| 354 | |||||||
| 73 | |||||||
| 427 | |||||||
| -11 | |||||||
| -1 | |||||||
| 14 | |||||||
| 12 | |||||||
| 15 | |||||||
| 3,964 | |||||||
| 3,964 | |||||||
| 92 | |||||||
| -93 | |||||||
| -1 | |||||||
| -4 | |||||||
| -1 | |||||||
| 0 | |||||||
| -1 | |||||||
| -6 | |||||||
| 3,957 | |||||||
| 3,957 | |||||||
| 262 | |||||||
| 103 | |||||||
| 365 | |||||||
| -11 | |||||||
| -2 | |||||||
| 1 | |||||||
| Total shareholder transactions | - | - | -12 | -12 | - | -12 | |
| Closing balance, September 30, 2024 1 2,094 2,207 4,302 8 |
4,310 |
CONSOLIDATED CASH FLOW STATEMENT
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Jan-Dec | |
|---|---|---|---|---|---|
| Continued operations (SEK m) | 2024 | 2023 | 2024 | 2023 | 2023 |
| Continued operations | |||||
| Earnings after financial items | 134 | 169 | 472 | 472 | 615 |
| Adjustment for items not included in cash flow1) | 114 | 99 | 252 | 221 | 306 |
| Paid taxes | -50 | -32 | -154 | -123 | -195 |
| Cash flow from continuing operations before change in | 198 | 235 | 570 | 570 | 726 |
| working capital | |||||
| Cash flow from change in working capital | |||||
| Increase(-)/decrease(+) in stock | 0 | 16 | -8 | -54 | -19 |
| Increase(-)/decrease(+) in operating receivables | 79 | -33 | 49 | -128 | -187 |
| Increase(+)/decrease(-) in operating liabilities | -110 | 29 | -78 | 40 | 108 |
| Cash flow from current operations | 167 | 247 | 533 | 428 | 628 |
| Investing activities | |||||
| Acquisitions of subsidiaries | - | -213 | -327 | -402 | -403 |
| Acquisitions of subsidiaries, paid contingent considerations | -136 | -10 | -218 | -167 | -182 |
| Disinvestments in subsidiaries | - | - | 17 | - | - |
| Acquisitions of intangible non-current assets | -21 | -26 | -58 | -50 | -81 |
| Acquisitions of tangible non-current assets | -37 | -43 | -101 | -85 | -112 |
| Cash flow from investing activities | -194 | -292 | -687 | -704 | -778 |
| Financing activities | |||||
| Warrant program | - | - | - | 12 | 12 |
| New share issue | - | - | - | 14 | 14 |
| Loans raised | 116 | 843 | 260 | 1,644 | 1,615 |
| Amortisation of loans | -53 | -689 | -165 | -1,243 | -1,228 |
| Amortisation of lease liability | -27 | -19 | -76 | -49 | -77 |
| Dividends paid | -5 | -5 | -12 | -12 | -16 |
| Cash flow from financing activities | 31 | 130 | 7 | 366 | 319 |
| Cash flow for the period | 4 | 85 | -147 | 90 | 170 |
| Cash and cash equivalents at beginning of year | 415 | 396 | 550 | 377 | 377 |
| Exchange rate difference in cash and cash equivalents | -1 | -15 | 15 | -1 | 4 |
| Cash and cash equivalents at end of period | 418 | 465 | 418 | 465 | 550 |
| Cash and cash equivalents at end of period, discontinued operations | 7 | 11 | 7 | 11 | 7 |
1) Adjustment for items included in profit or loss after financial items but which are not cash flow affecting consists substantially of depreciation and amortization, unrealized exchange gains/losses and revaluation of. contingent considerations.
PARENT COMPANY INCOME STATEMENT
| (SEK m) | Jul-Sep 2024 |
Jul-Sep 2023 |
Jan-Sep 2024 |
Jan-Sep 2023 |
LTM Sep 2024 |
Jan-Dec 2023 |
|---|---|---|---|---|---|---|
| Net sales | 7 | 6 | 21 | 19 | 27 | 25 |
| Other operating income | - | - | - | 1 | - | 1 |
| Total income | 7 | 6 | 21 | 20 | 27 | 26 |
| Operating expenses | ||||||
| Other external expenses | -6 | -7 | -16 | -16 | -23 | -23 |
| Employee expenses | -17 | -14 | -51 | -47 | -66 | -61 |
| Depreciation of tangible and intangible non-current | ||||||
| assets | 0 | 0 | -1 | -1 | 0 | -1 |
| Operating profit | -16 | -16 | -47 | -44 | -62 | -59 |
| Profit/loss from financial items | ||||||
| Financial income | 9 | 1 | 30 | 20 | 23 | 14 |
| Financial expenses | -13 | -16 | -40 | -4 | -54 | -18 |
| Profit/loss after financial items | -20 | -31 | -58 | -28 | -93 | -63 |
| Group contributions received | - | - | - | - | 70 | 70 |
| Tax on profit | - | - | - | - | -2 | -2 |
| Profit/loss for the period | -20 | -31 | -58 | -28 | -24 | 6 |
PARENT COMPANY BALANCE SHEET
| 30 Sep | 30 Sep | 31 Dec | |
|---|---|---|---|
| (SEK m) Non-current assets |
2024 | 2023 | 2023 |
| Tangible non-current assets | |||
| Tangible non-current assets | 1 | 1 | 1 |
| Financial non-current assets | |||
| Receivables on group companies | 2,469 | 2,589 | 2,578 |
| Total non-current assets | 2,470 | 2,590 | 2,579 |
| Current assets | |||
| Receivables on group companies | 1,364 | 1,279 | 1,319 |
| Other receivables | 1 | 1 | 2 |
| Prepaid expenses and accrued income | 12 | 15 | 14 |
| Cash and cash equivalents | 14 | 4 | 7 |
| Total current assets | 1,392 | 1,299 | 1,342 |
| Total assets | 3,862 | 3,889 | 3,921 |
| Shareholders' equity | |||
| Share capital | 1 | 1 | 1 |
| Share premium reserve | 2,094 | 2,095 | 2,094 |
| Retained earnings including profit/loss for the period | 157 | 195 | 224 |
| Total shareholder's equity | 2,253 | 2,291 | 2,320 |
| Liabilities | |||
| Other long-term interest-bearing liabilities | 1,176 | 1,351 | 1,310 |
| Short-term liabilities to group companies | - | 4 | - |
| Short-term liabilities | 433 | 243 | 291 |
| Total liabilities | 1,609 | 1,598 | 1,601 |
| Total equity and liabilities | 3,862 | 3,889 | 3,921 |
NOTES
ACCOUNTING PRINCIPLES IN ACCORDANCE WITH IFRS
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (EU). This interim report for the Group has been prepared in accordance with IAS 34 Interim Financial Reporting and applicable provisions in the Annual Accounts Act.
The Interim Report for the Parent Company has been prepared in accordance with the Swedish Annual Accounts Act, which is in accordance with the provisions of RFR 2 Accounting for Legal Entities.
The same accounting principles and calculation bases have been applied for the Group and the Parent Company as in the preparation of the most recent annual report for the 2023 financial year.
As a result of rounding off, differences in summaries may appear in the interim report.
New and amended standards for the financial year 2024
New or amended IFRS are not expected to have any significant effects.
NOTE 1 IMPORTANT ESTIMATES AND ASSUMPTIONS ON APPLICATION OF THE GROUP'S ACCOUNTING PRINCIPLES
Estimates and assumptions are continuously assessed based on historical experience and other factors, including expectations of future events considered reasonable under prevailing conditions. For more detailed information, please refer to Note 1 of the Annual Report 2023.
Valuation of financial assets and liabilities
Estimates of fair value in the operations primarily affect the Group's good ill, liabilities related to deferred payments on acquisitions and the Parent Company's shareholdings in subsidiaries. Goodwill is reported in the consolidated balance sheet at acquisition value minus any accumulated write-downs. Financial assets and liabilities in the balance sheet are reported at acquisition value, unless otherwise stated.
In the case of acquisitions, components of the purchase consideration are usually linked to the acquired company's financial results for a period after the acquisition. The book value of liabilities to sellers in the form of contingent consideration can be affected both positively and negatively because of assessments of each company's financial results for the remaining period. Liabilities for contingent additional purchase prices that arise in business acquisitions are measured at fair value through profit or loss.
NOTE 2 SEGMENT REPORTING
Sdiptech reports profit from operations in two segments: Resource Efficiency and Special Infrastructure Solutions.
RESOURCE EFFICIENCY
Companies within Resource Efficiency provide niche products and services that contribute to the use of resources, such as water, energy, minerals, forest and food, in an efficient and sustainable way. The main geographic markets are northern Europe, the United Kingdom and Italy.
SPECIAL INFRASTRUCTURE SOLUTIONS
The companies within Special Infrastructure Solutions provide niche products and services for specialised needs in air and climate control, safety and surveillance and transport systems. The main geographic markets are northern Europe and the United Kingdom.
Central units – Group-wide functions
Group- ide functions and eliminations consist of the Group's Parent Company, Sdiptech AB, the Group's holding companies. which also includes items affecting earnings, such as revaluation of contingent consideration and write-down of goodwill.
Discontinued operations
During the third quarter, it was decided to initiate a sale of the Group's unit for the manufacture of special elevators, installation and elevator service in Central Europe. The units have been part of Special Infrastructure Solutions but will be reported separately as of the third quarter of 2024 and for all comparable periods under the line Discontinued operations as according to IFRS 5.
Segment information. Group
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec | |
|---|---|---|---|---|---|---|
| Net Sales (SEK m), continued operations | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Resource Efficiency | 423 | 396 | 1,341 | 1,190 | 1,801 | 1,650 |
| Special Infrastructure Solutions | 787 | 733 | 2,489 | 2,090 | 3,329 | 2,931 |
| Net Sales | 1,210 | 1,129 | 3,830 | 3,280 | 5,132 | 4,582 |
| Operating profit (SEK m), continued | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec |
| operations | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Resource Efficiency | 83 | 82 | 279 | 239 | 370 | 331 |
| Special Infrastructure Solutions | 168 | 142 | 480 | 404 | 632 | 557 |
| EBIT Segment total | 251 | 224 | 758 | 644 | 1,002 | 887 |
| Central units | -47 | 6 | -89 | -29 | -114 | -54 |
| Total EBIT continuing operations | 203 | 231 | 669 | 615 | 888 | 834 |
| Net financials | -69 | -63 | -197 | -142 | -273 | -218 |
| Profit before tax | 134 | 168 | 472 | 472 | 615 | 615 |
| 2024 302 61 3 50 6 423 490 25 8 221 43 |
2023 278 75 2 34 7 396 422 87 4 191 28 |
2024 929 235 11 148 18 1,341 1,495 126 156 613 98 |
2023 839 213 13 105 21 1,190 1,175 200 78 553 |
2024 1,246 322 16 165 52 1,801 1,752 218 456 779 |
2023 1,156 300 18 122 55 1,650 1,432 292 379 719 |
|---|---|---|---|---|---|
| 84 | 124 | 110 | |||
| 787 | 733 | 2,489 | 2,090 | 3,330 | 2,931 |
| 792 | 700 | 2,424 | 2,014 | 2,998 | 2,587 |
| 592 | |||||
| 397 | |||||
| 226 | 761 | 657 | 945 | 841 | |
| 49 | 36 | 116 | 105 | 176 | 164 |
| 4,582 | |||||
| 86 11 271 1,210 |
162 6 1,129 |
361 167 3,830 |
413 91 3,280 |
540 473 5,132 |
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec | |
|---|---|---|---|---|---|---|
| Other income (SEK m), continued operations | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Resource Efficiency | 3 | 5 | 10 | 8 | 20 | 18 |
| Special Infrastructure Solutions | 6 | 3 | 20 | 9 | 25 | 14 |
| Business areas | 8 | 8 | 30 | 17 | 45 | 32 |
| Central units | - | 24 | 12 | 26 | 15 | 29 |
| Total other income | 8 | 32 | 42 | 43 | 60 | 60 |
NOTE 3 FINANCIAL INCOME AND COST
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec | |
|---|---|---|---|---|---|---|
| Continued operations (SEK m) | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Financial income | ||||||
| Interest income | 0 | 2 | 2 | 2 | 4 | 5 |
| Net exchange gain | - | - | - | 2 | -2 | - |
| Other financial income | 0 | 0 | 0 | 1 | 1 | 2 |
| Total financial income | 1 | 2 | 2 | 4 | 3 | 6 |
| Financial cost | ||||||
| Interest expense on financial liabilities to | ||||||
| credit institutions | -47 | -44 | -142 | -108 | -188 | -155 |
| Discount rate for lease liabilities | -4 | -3 | -12 | -8 | -16 | -13 |
| Discount rate on contingent considerations | -12 | -9 | -38 | -28 | -49 | -39 |
| Exchange rate difference | -5 | -8 | -1 | - | -15 | -14 |
| Other financial cost | -1 | -1 | -5 | -3 | -7 | -5 |
| Total financial cost | -70 | -65 | -198 | -147 | -276 | -225 |
| Net financial cost | -69 | -63 | -197 | -142 | -273 | -218 |
The Group's net financial items consist of interest expenses divided into interest expenses relating to financial liabilities to credit institutions and bondholders as well as discount rates regarding leasing liabilities in accordance with IFRS 16 and contingent consideration. These conditional purchase considerations are classified as interest-bearing as they are presented at net present value, but they do not gi e rise to any actual interest payments that are charged to the Group's cash flo . It can be noted that a large part of these debt-charged contingent considerations, as a rule of thumb 40%, require an increase in profit compared to today's levels, to be paid out. In addition, the Group is affected by exchange rate differences regarding internal and external loans in foreign currency.
NOTE 4 TAX
The Group's tax in relation to profit before tax is affected by non-taxable income and non-deductible expenses in operating activities, as well as acquisition costs, profit from revaluation of contingent purchase prices and capital gains from disposals, discount rates and the fact that tax losses are not capitalised.
The Group's weighted average effective tax rate is in turn affected by the Group's geographical mix. The relationship between tax percentage on recognized tax and actual tax percentage based on adjusted profit before tax for the Group is shown in the following table.
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec | |
|---|---|---|---|---|---|---|
| Continued operations (SEK m) | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Earnings before tax | 134 | 168 | 472 | 472 | 615 | 615 |
| Non-tax items: | ||||||
| Acquisition and divestment cost | 1 | 4 | 9 | 8 | 15 | 13 |
| Adjustment of liability for earnouts | 0 | -27 | 8 | -24 | 15 | -17 |
| Discount interest | 16 | 12 | 50 | 36 | 65 | 52 |
| Non-taxable earning divestment | - | - | -12 | - | -12 | - |
| Non activated loss | 34 | 27 | 102 | 37 | 124 | 59 |
| Adjusted earnings before tax | 185 | 184 | 629 | 529 | 822 | 721 |
| Income Tax | -44 | -38 | -145 | -118 | -191 | -165 |
| Adjusted tax, percentage | 23.6% | 20.7% | 23.0% | 22.3% | 23.3% | 22.9% |
NOTE 5 DISCONTINUED OPERATIONS
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec | |
|---|---|---|---|---|---|---|
| (SEK m) | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Revenues | 42 | 76 | 149 | 170 | 216 | 236 |
| Operating profit | -50 | 4 | -59 | 5 | -62 | 2 |
| Profit before tax | -53 | 3 | -65 | 1 | -69 | -3 |
| Income tax | 0 | -1 | -1 | -1 | -1 | -1 |
| Profit for the period | -53 | 2 | -66 | 0 | -70 | -4 |
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec | |
|---|---|---|---|---|---|---|
| (SEK m) | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Cash flow from operating activities, net | -7 | 9 | -10 | -7 | -12 | -9 |
| Cash flow from investing activities, net | 1 | -5 | -2 | 0 | 1 | 3 |
| Cash flow from financing activities, net | 8 | -5 | 15 | 13 | 10 | 8 |
| Total cashflow | 2 | -1 | 3 | 6 | -1 | 2 |
| 30 Sep | |
|---|---|
| (SEK m) | 2024 |
| Intangible assets | 24 |
| Tangible assets | 18 |
| Right-of-use assets | 8 |
| Financial assets | 1 |
| Inventories | 14 |
| Current receivables | 33 |
| Cash and cash equivalents | 28 |
| Total assets | 137 |
| Non-current interest-bearing liabilities | 16 |
| Non-current non-interest-bearing liabilities | 1 |
| Current interest-bearing liabilities | 23 |
| Current non-interest-bearing liabilities | 47 |
| Total liabilities | 87 |
NOTE 6 GOODWILL
| 30 Sep | 30 Sep | 31 Dec | |
|---|---|---|---|
| (SEK m) | 2024 | 2023 | 2023 |
| Opening balance including discontinued operations | 4,626 | 4,299 | 4,299 |
| Acquisitions for the period | 287 | 114 | 295 |
| Adj. of preliminary acquisition analysis | - | 20 | 22 |
| Divestments | -4 | - | - |
| Adjustment for discontinued operations | -43 | -44 | -43 |
| Currency translation effects | 156 | 151 | 10 |
| Carrying amount at end of period | 5,022 | 4,727 | 4,583 |
Compared with 31 December 2023, including discounted operations, goodwill has increased by a total of SEK 396 million and amounted to SEK 5,022 million as of 30 September 2024.
NOTE 7 INTEREST-BEARING LIABILITIES
| 30 Sep | 30 Sep | 31 Dec | |
|---|---|---|---|
| Continued operations (SEK m) | 2024 | 2023 | 2023 |
| Liabilities to credit institutions and bonds | 2,550 | 2,428 | 2,403 |
| Leases | 350 | 346 | 344 |
| Contingent consideration | 803 | 1,007 | 932 |
| Other non-current liabilities | 2 | 3 | 2 |
| Total non-current interest-bearing liabilities | 3,705 | 3,784 | 3,681 |
| Liabilities to credit institutions | 8 | 28 | 8 |
| Leases | 106 | 92 | 94 |
| Contingent consideration | 425 | 219 | 261 |
| Other current liabilities | 1 | 1 | 1 |
| Total current interest-bearing liabilities | 540 | 340 | 365 |
Contingent consideration payments refer to various types of obligations to the selling party that are linked to conditions based on the acquired company's results for a specific period after the acquisition. The contingent purchase prices are classified as Level 3 in the fair value hierarchy. The liabilities are reported at the present value of the expected outcome based on the assessed fair value at the balance sheet date based on outcomes and future forecast, and largely requires an increase in profit compared to today's levels, to have to be paid out.
| Contingent consideration | 30 Sep | 30 Sep | 31 Dec |
|---|---|---|---|
| (SEK m) | 2024 | 2023 | 2023 |
| Opening balance | 1,193 | 1,266 | 1,266 |
| Acquisitions | 169 | 85 | 85 |
| Paid purchase considerations relating previous acquisitions | -218 | -171 | -186 |
| Interest expenses (discount on present value calc.) | 38 | 28 | 39 |
| Revaluation via operating profit | 9 | -24 | -16 |
| Exchange differences | 37 | 42 | 6 |
| Carrying amount at period end | 1,228 | 1,225 | 1,193 |
The contingent consideration is recognized in accordance with IFRS at the present value of estimated fair value based on the remaining maturity and expected outcome. The contingent consideration is discounted by calculating present value.
| Repayment periods, contractual values (non | ||||
|---|---|---|---|---|
| discounted) | Year | Year | Year | After year |
| As of 30 September 2024 (SEK m) | 2024 | 2025-2026 | 2027-2029 | 2029 |
| Contingent consideration | 68 | 778 | 286 | 114 |
NOTE 8 BUSINESS ACQUISITIONS
| acquisitions during January to September 2024 (SEK m) |
JR Industries Ltd1 | WaterTech 2 | Sum |
|---|---|---|---|
| Tangible non-current assets | 19 | - | 19 |
| Right of use assets | 16 | 1 | 17 |
| Inventories and work in progress | 64 | 2 | 66 |
| Cash and cash equivalents | 18 | 2 | 20 |
| Trade receivables 3 | 56 | 2 | 58 |
| Tax receivable | 7 | - | 7 |
| Other current assets | 2 | - | 2 |
| Deferred tax liability | -1 | -1 | -2 |
| Other non-current liabilities | -20 | -1 | -21 |
| Other current liabilities | -51 | -2 | -53 |
| Net identifiable assets and liabilities | 110 | 4 | 114 |
| Consolidated goodwill | 263 | 24 | 287 |
| Brand and trademarks | 26 | - | 26 |
| Customer relations | 110 | 13 | 123 |
| Deferred tax liabilities | -33 | -2 | -35 |
| Total estimated purchase price | 476 | 40 | 516 |
| Cash and cash equivalents | 321 | 26 | 347 |
| Contingent consideration | 155 | 14 | 169 |
| Total remuneration | 476 | 40 | 516 |
| Liquidity impact on the Group | JR Industries Ltd1 | WaterTech 2 | Sum |
| Cash and cash equivalents acquired | 18 | 2 | 20 |
| Remuneration transferred | -321 | -26 | -347 |
| Total cash impact | -303 | -24 | -327 |
| Other information 4 | JR Industries Ltd1 | WaterTech 2 | Sum |
| Run rate, turnover | 319 | 20 | 339 |
| Run rate profit before tax | 60 | 5 | 65 |
| Contribution of the acquired entities to Group turnover | |||
| and profit (SEK million) | Sum | ||
| Acquired units' contribution to the Group's turnover Acquired units' contribution to the Group's profit before |
271 | ||
| tax | 55 | ||
| Where of: | |||
| Transaction costs | -8 |
1) JR Industries Ltd (Gwindy Ltd) with subsidiaries
Acquisition accounting
The acquisition analysis is preliminary. The acquisition analysis is kept open for 12 months from the date of entry. During the period, adjustments of the preliminary amounts recognized at the time of acquisition based on new information about the facts and circumstances that existed at the time of acquisition and which, if known, would have affected the calculation of the amounts recognised at that time.
Goodwill consists of the amount by which the consolidated cost of shares in acquired subsidiaries exceeds the fair value of the company's net assets recognised in the acquisition analysis at the time of acquisition and is mainly attributable to synergies and other intangible assets that do not meet the criteria for separate recognition. Goodwill relates to the expected contribution of the acquired entity to complement and broaden the Group's offering sales channels and synergies in infrastructure and contribute to the Group's continued gro th.
Acquisition-related expenses, known as transaction costs, are expensed as incurred. These costs. together with costs for di estments. are recognized in the income statement under the item " ther external costs". Acquisition and di estment costs for the period January to September 2024 amounted to SEK 9 million (8) including stamp fee amounting to SEK 3 million (0), see also page Alternative performance measures.
Description of acquisitions during the period January – September 2024
On 24 January, Sdiptech acquired all shares in the British company JR Industries Ltd with subsidiaries in France and Germany. Founded in 1970 and headquartered in Caerphilly, Wales, JR Industries has established itself as a leading manufacturer of roller shutter doors for commercial vehicles in Europe. The company offers a wide range of tailor-made products that increase the efficiency and safety of loading and unloading goods from vehicles. This includes the development of robust roller shutter door solutions and flexible partitions for refrigerated vehicles that are adaptable to different configurations.
2) WaterTech of Sweden AB
3) The receivables are measured at fair value no provision for bad debts is recognized
4) Run rate is based on sales and operating profit before tax, on a 12-month basis, at the time of acquisition. For foreign acquisitions, the result has been recalculated based on the price at the time of acquisition.
JR Industries' market has solid underlying growth driven by the electrification of delivery vehicles, the ongoing rise of e-commerce, and an increasing trend in fleet customization aimed at improving operational efficiency.
At the time of the acquisition, JR Industries had 87 employees. The company is Sdiptech's thirteenth business unit in the UK and is part of the business area Special Infrastructure Solutions from January 2024.
Sdiptech paid an initial consideration of GBP 26 million on the closing date, which was financed with own funds and an existing credit facility. The final purchase price, which will be settled at the end of a four-year earn-out period, is dependent on the company's earnings trend. A final total purchase price that is higher than the current level requires a higher profit level than the current one. The estimated contingent consideration for JR Industries amounted to SEK 155 million at the time of acquisition after present value calculation. The valuation is based on an assessment of the probable outcome based on forecasts for the company from the date of acquisition until the end of the period of the contingent consideration.
On April 11, Sdiptech acquired all shares in the Swedish company WaterTech of Sweden AB. WaterTech specializes in water chemistry to optimize industrial water systems. The company offers products and services to improve cooling water, boiler feed water and process water, among other things. Through its commitment to quality and innovation, WaterTech plays an important role in increasing efficiency and sustainability in industrial water use.
WaterTech will collaborate closely with Sdiptech's other business unit Kemi-tech, and the partnership aims to strengthen and expand the Group's offerings in industrial water treatment in the Northern European market. Kemi-tech, in turn, already has a close collaboration with the Sdiptech company Water Treatment Products Ltd, one of the UK's leading manufacturers of specialty chemicals with over 400 of its own products in its range and specialist knowledge in areas such as legionella control.
At the time of the acquisition, WaterTech had 4 employees. The company is included in the business area Resource Efficiency as of April 2024.
Sdiptech paid SEK 26 million on the closing date, which is financed with own funds and existing credit facility. The final purchase price, which is settled at the end of a three-year earn-out period, is dependent on the company's earnings development. A final total purchase price that is higher than the current one assumes a higher level of profit than the current one. The estimated contingent purchase price for WaterTech amounted to SEK 14 million at the time of acquisition after present value calculation. The valuation is based on an assessment of the likely outcome based on forecasts for the company from the time of acquisition until the end of the period of the contingent purchase price.
If the units acquired for the period had been consolidated as of January 1, 2024, net sales from January to September would have amounted to approximately SEK 3,854 million and adjusted EBITA would have amounted to approximately SEK 753 million.
NOTE 9 DIVIDENDS
In March 2015, 1,750,000 preference shares were issued with an issue price of SEK 100 per share. Dividend amounts to SEK 8 per year, divided into quarterly payments. Redemption price is SEK 120 during 0-24 months after the exhibition, SEK 110 during month 25-48, and SEK 105 thereafter. Dividends on preference shares require a general meeting resolution, but redemption can be decided by the board according to the articles of association. The holders of the preference shares have no right to demand redemption or demand a dividend. The dividend on preference shares is regulated in the Articles of Association. The dividend amounts to SEK 14.0 million annually, divided into SEK 3.5 million per quarter, with payment in March, June, September and December.
NOTE 10 SHARE-BASED REMUNERATION
At Sdiptech's Annual General Meeting 2024, it was decided to introduce a share savings program for senior executives where the employee can invest a certain part of their fixed annual salary in shares and after three years receive performance shares provided continued employment and outcome based on performance conditions.
The share savings plans are classified in accordance with IFRS 2 as an equity instrument-regulated program. Recognition of such a share-based remuneration program means that the fair value of the instruments at the time of grant is accrued over the term and is recognized under the line Personnel costs in the income statement, with a corresponding adjustment of equity. At each year-end meeting during the vesting period, the expected number of allotted shares is estimated and the effect of any change in the previous assessment of the number of allotted shares is reported in the income statement under the line Personnel costs with corresponding adjustment of equity. Social security contributions attributable to the share savings plan are expensed over the term of the program valued at fair value (based on the number of shares and share price) each reporting date.
COMPANIES PER BUSINESS AREA
RESOURCE EFFICIENCY
The companies within Resource & Efficiency provide niche products and services that contribute to the use of resources, such as water, energy, minerals, forests and food, in an efficient and sustainable manner. The principal geographic markets today are Northern Europe, the United Kingdom and Italy.
The companies included in Resource & Efficiency (in alphabetical order)
• Agrosistemi Srl Treatment and recovery of biological sludge
• CentralByggarna Sverige AB Producer of customised switching stations and electrical automation • Centralmontage i Nyköping AB Producer of customised switching stations and electrical automation
• EuroTech Sire System AB Installation and service of uninterruptible power supply • Hansa Vibrations & Omgivningskontrol AB Performs vibration measurements in infrastructure projects • HeatWork AS Manufacturing of mobile hydronic heating solutions • Hydrostandard Mätteknik Nordic AB Replacement, renovation and calibration of water meters • IDE Systems Ltd and IDE Rental Ltd Temporary power distribution and monitoring systems • Kemi-tech ApS Tailored chemical solutions for industrial water treatment
• Multitech Site Services Ltd Temporary infrastructure such as temporary electricity, water, fire
protection and lighting
• Polyproject Environment AB Installations and components for water treatment in industry and
municipalities
• Pure Water Scandinavia AB Producer of ultra-pure water products
• Rogaland Industri Automasjon AS Control and regulating systems for water and sewerage systems
• Rolec Services Ltd (One Stop Europe Ltd) Development and manufacture of charging equipment and systems for electric
vehicles
• Topas Vatten AB Installation and service of smaller water and wastewater treatment plants
• Unipower AB Measuring systems for monitoring of power quality
• Watertech of Sweden AB (as of Apr -24) Tailor-made chemical solutions for industrial water treatment • Water Treatment Products Ltd Preparation and manufacture of water treatment products
SPECIAL INFRASTRUCTURE SOLUTIONS
The companies within Special Infrastructure Solutions provide niched products and services for specialised needs in air and climate control, security and surveillance and transport systems. The principal geographic markets are Northern Europe and the United Kingdom.
The companies included in Infrastructure Solutions (in alphabetical order):
• Alerter Group Ltd Emergency communications systems for disabled people • Auger Site Investigations Ltd Specialised in claims management of underground infrastructure
• Castella Entreprenad AB Contracts for shell completion and internal plaster walls
• Certus Technologies Holding B.V. Systems for automation in ports, terminals and
logistics distribution centre
• Cliff Models AB Prototypes for industrial product development • Cryptify AB Software solution for secure communication
• e-l-m- Kragelund A/S Development and manufacturing of innovative attachments for forklifts • GAH (Refrigeration) Ltd Manufacture and service of transportation refrigeration solutions
• JR Industries Ltd (as of Jan -24) Manufacture of roller shutter doors and partitions for commercial vehicles
• Oy Hilltip Ab Manufacturer of road maintenance equipment, special winter • KSS Klimat & Styrsystem AB Indoor climate control. ventilation and energy efficiency
• Medicvent AB System for evacuation of noxious gases • Mecno Services S.r.l. Railway maintenance products and services
• Optyma Security Systems Ltd Integrated security systems for public and private environments
• Patol Ltd Designs and manufactures products for fire, smoke and heat detection • RedSpeed International Ltd Digital cameras for speed monitoring and traffic enforcement
• Resource Data Management Ltd Specialist product provider within refrigeration control and monitoring
• Storadio Aero AB Infrastructure and operational liaison centre for backup air traffic
communications and radio-based services for shipping
• TEL UK Ltd Design and manufacture of electronic airflow monitor and control • Thors Trading AB Durable products in hard metal material for racing and harness racing
DISCOUTED OPERATIONS
• Metus d.o.o. Production of special elevators for customer-specific needs and resource
supply to global elevator manufacturers
DEFINITIONS ALTERNATIVE PERFORMANCE MEASURES
Sdiptech presents alternative financial ratios in addition to the financial ratios established by IFRS to better understand the development of the business and the financial position. However, such ratios shall not be considered as a substitute for the key ratios required under IFRS. The alternative key figures presented in this report are described below.
Adjusted EBITA1 Adjusted EBITA is the Group's operating performance measure and is calculated as EBITA
before acquisition costs and disposal costs and before profit from revaluation of contingent consideration and capital gains from divestments, items affecting non-material corrections to previous years' results in the subsidiaries; less depreciation and amortization that are not
acquisition-related but relate to the operating units' intangible assets.
The key ratio increases the comparability of EBITA over time as it is adjusted for the impact of items affecting comparability. The key figure is also used in the internal follow-up and
constitutes a central financial objective for the business.
Adjusted EBITA-margin 1 Adjusted EBITA in relation to net sales.
EBITDA Operating profit before depreciation and impairment losses.
Adjusted EBITDA Adjusted EBITDA is calculated as EBITDA before acquisition and disposal costs and before gains from revaluation of contingent consideration and capital gains from divestments, items
affecting comparability relating to non-material corrections of previous years in the subsidiaries.
EBITA Operating profit after depreciation and amortisation of tangible fixed assets before impairment.
The key ratio enables comparisons of profitability over time regardless of amortisation and impairment of acquisition-related intangible assets and independent of the corporate tax rate and the company's financing structure. That said depreciation of tangible assets is included, which is a measure of the consumption of resources necessary to generate earnings.
Financial net debt/ Adjusted EBITDA
Calculated as net financial liability on the balance sheet date to credit institutions and other financial liabilities, such as outstanding bonds, as well as lease liabilities (largely discounted leases), in relation to adjusted EBITDA for the last four quarters. Financial net debt includes current and non-current interest-bearing liabilities less cash and cash equivalents, but excluding interest-bearing liabilities related to the contingent purchase price.
Net debt /Adjusted EBITDA Net debt as of the balance sheet date, in relation to adjusted EBITDA for the last four quarters.
Net debt includes current and non-current interest-bearing liabilities less cash and cash equivalents. Parts of the interest-bearing liabilities are related to the conditional purchase price for acquisitions, which are settled at the end of the vesting periods depending on the earnings trend during these periods. Paying the liability at the full current book value requires a higher
level of profit or loss than the current level.
Capital employed Calculated as a erage shareholders' equity and interest-bearing net debt for the past four
quarters less cash and cash equivalents and short-term investments.
Return on capital employed
(ROCE)
Calculated as EBITA for the last four quarters, in relation to the average capital employed for
the last four quarters at the closing date.
Return on equity Calculated as the average profit after tax attributable to shareholders, adjusted for dividends to preference shares, for the last four quarters, in relation to the average equity attributable to
shareholders adjusted for preference capital for the last four quarters at the balance sheet date.
Cash flow generation Calculated as cash flow from continuing operations in relation to profit before tax adjusted for
non-cash items.
Earnings per ordinary share (number share per end of period)
Calculated as profit after tax attributable to the Parent Company's shareholders less dividends to preference shareholders divided by the number of ordinary shares per the end of the period.
1Adjusted EBITA/Adjusted EBITA margin corresponds to the previous designation EBITA*.
ALTERNATIVE PERFORMANCE MEASURES
Alternative key figures are presented in the interim report for monitoring the group's operations. The alternative key figures presented in this interim report relate to adjusted EBITA1 , adjusted EBITDA, net debt/adjusted EBITDA, net financial debt/adjusted EBITDA, return on capital employed, cash flow generation, earnings per common share and diluted earnings per common share.
Adjusted EBITA1
Adjusted EBITA consists of EBITA before acquisition costs and before amortisation and write-downs of intangible fixed assets that arose in connection with acquisitions as well as before remeasurements of contingent consideration payments and write-downs of goodwill. Amortisation and write-downs of intangible assets that are not acquisition-related but derive from the operating units' intangible assets are not reversed.
Acquisition and divestment costs, which mainly relate to external consultants, are expensed during the periods in which they arise, and the services are performed.
Adjustment items for adjusted EBITA1
The costs and revenues that are excluded when calculating ADJ. EBITA have historically amounted to the amounts below:
| Acquisition costs (SEK m) | Q1 | Q2 | Q3 | Q4 | Total |
|---|---|---|---|---|---|
| 2024 | -7 | -1 | -1 | -9 | |
| 2023 | -2 | -2 | -4 | -6 | -13 |
| 2022 | -4 | -11 | -1 | -7 | -22 |
| Adjustment of liability for earnouts (SEK m) |
Q1 | Q2 | Q3 | Q4 | Total |
| 2024 | -0 | -8 | - | -8 | |
| 2023 | -3 | -0 | 27 | -7 | 17 |
| 2022 | -6 | 38 | 29 | 1 | 62 |
The remeasurement of liabilities relating to contingent consideration payments may entail corresponding revenues if liabilities have been written down, or an expense if the liabilities have been written-up. The fact that these items vary over time is due to the development of the participating companies and future forecasts. An evaluation of this development compared with book values takes place every quarter and can result in various remeasurements that affect earnings. These adjustments are made so that the book values are as close to the fair values as possible. see also Note 1.
For acquisitions, part of the purchase price is allocated to goodwill and amortisable intangible assets, also see Note 5. The heading "Amortisation and rite-do ns of intangible fixed assets" includes any rite-downs of goodwill. Amortisation, which is a result of Sdiptech allocating part of the purchase price to acquired intangible assets, such as trademarks, product rights, customer relations, etc. in connection with acquisitions, is also included under the heading. These assets are amortised over time, resulting in a cost. This type of allocation and resulting amortisation has increased over time and is expected to continue increasing in line with new acquisitions. As a rule of thumb, it can be stated that new amortisation of intangible assets that have arisen in connection with new acquisitions, is added at about 2% per year of the additional acquired companies' purchase price.
Effects on adjusted EBITA, compared to EBITA, are distributed as follows:
| Adjusted EBITA to EBIT bridge (SEK m), | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec |
|---|---|---|---|---|---|---|
| Continued operations | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Adjusted EBITA1 | 231 | 231 | 751 | 664 | 1,006 | 919 |
| Adjustment of liability for earnouts | - | 27 | -8 | 24 | -15 | 17 |
| Acquisition and divestment cost | -1 | -4 | -9 | -8 | -15 | -13 |
| Disinvestments | - | - | 12 | - | 12 | - |
| Of which non-acquisition-related amortization and | ||||||
| write-downs of intangible fixed assets | 8 | 12 | 31 | 27 | 42 | 38 |
| EBITA | 238 | 266 | 777 | 707 | 1,030 | 961 |
| Non-acquisition-related amortization and write | ||||||
| downs of intangible fixed assets | -8 | -12 | -31 | -27 | -42 | -38 |
| Acquisition-related amortization and write-downs | ||||||
| of intangible fixed assets | -26 | -24 | -76 | -66 | -100 | -90 |
| EBIT | 203 | 231 | 669 | 615 | 888 | 834 |
1Adjusted EBITA/Adjusted EBITA margin corresponds to the previous designation EBITA*.
Adjusted. EBITA-margin1
| Adjusted EBITA1 in relation to Net Sales (SEK m), Continued |
Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec |
|---|---|---|---|---|---|---|
| operations | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Adjusted EBITA1 | 231 | 231 | 751 | 664 | 1,006 | 919 |
| Net Sales | 1,210 | 1,129 | 3,830 | 3,280 | 5,132 | 4,582 |
| Adjusted EBITA margin1 % | 19.1% | 20.5% | 19.6% | 20.2% | 19.6% | 20.1% |
EBITDA
Operating profit before depreciation and impairment losses.
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec | |
|---|---|---|---|---|---|---|
| EBITDA (SEK m), Continued operations | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Operating profit | 203 | 231 | 669 | 615 | 888 | 834 |
| Depreciation and amortisation of tangible non-current assets | 49 | 48 | 146 | 126 | 195 | 175 |
| Depreciation and amortisation of intangible non-current assets | 34 | 36 | 107 | 93 | 141 | 127 |
| EBITDA Continued operations | 286 | 315 | 922 | 834 | 1,225 | 1,136 |
| Adjustment of liability for earnouts | - | -27 | 8 | -24 | 15 | -17 |
| Acquisition and divestment cost | 1 | 4 | 9 | 8 | 14 | 13 |
| Divestments | - | - | -12 | - | -12 | - |
| Adjusted EBITDA Continued operations | 287 | 292 | 927 | 817 | 1,242 | 1,132 |
Financial net debt/Adjusted EBITDA
Calculated as financial net debt to credit institutions and other financial liabilities at the balance sheet date, in relation to adjusted EBITDA for the last four quarters. Net financial debt includes current and non-current interest-bearing liabilities, including lease liabilities, less cash and cash equivalents, but excluding interest-bearing liabilities related to the conditional purchase price.
| 30 Sep | 30 Jun | 31 Mar | 31 Dec | 30 Sep | |
|---|---|---|---|---|---|
| Interest-bearing financial net debt (SEK m) | 2024 | 2024 | 2024 | 2023 | 2023 |
| Liabilities to credit institutions | 1,991 | 1,903 | 1,958 | 1,823 | 1,873 |
| Bonds | 600 | 600 | 600 | 600 | 600 |
| Leases | 463 | 471 | 484 | 447 | 448 |
| Sum Interest-bearing financial debt | 3,053 | 2,974 | 3,042 | 2,870 | 2,921 |
| Cash and cash equivalents | -428 | -422 | -436 | -557 | -480 |
| Interest-bearing financial net debt | 2,626 | 2,552 | 2,606 | 2,313 | 2,442 |
| Adjustment for discontinued operations | -28 | -24 | -20 | -14 | -13 |
| Total Interest-bearing financial net debt | 2,597 | 2,527 | 2,586 | 2,300 | 2,429 |
| Financial net debt in relation to Adjusted EBITDA (SEK m), continued operations |
LTM Sep 2024 |
LTM Sep 2023 |
Full year 2023 |
|---|---|---|---|
| Interest-bearing financial net debt | 2,597 | 2,429 | 2,300 |
| Adjusted EBITDA | 1,242 | 1,062 | 1,132 |
| Financial net debt/Adjusted EBITDA | 2.09 | 2.29 | 2.03 |
Net debt/Adjusted EBITDA
Calculated as net debt at the balance sheet date, in relation to adjusted EBITDA for the last four quarters. Net debt includes current and non-current interest-bearing liabilities less cash and cash equivalents. Parts of the interest-bearing liabilities are related to the conditional purchase price for acquisitions, which are settled at the end of the vesting periods depending on the earnings trend during these periods. Paying the liability at the current book value requires a higher level of profit than the current level.
| 30 Sep | 30 Jun | 31 Mar | 31 Dec | 30 Sep | |
|---|---|---|---|---|---|
| Interest-bearing net debt (SEK m) | 2024 | 2024 | 2024 | 2023 | 2023 |
| Sum Interest-bearing financial debt | 3,053 | 2,974 | 3,042 | 2,870 | 2,921 |
| Contingent consideration | 1,228 | 1,349 | 1,383 | 1,193 | 1,226 |
| Other non-current liabilities | 3 | 3 | 3 | 3 | 3 |
| Sum Interest-bearing liabilities | 4,284 | 4,326 | 4,428 | 4,067 | 4,150 |
| Cash and cash equivalents | -428 | -422 | -436 | -557 | -480 |
| Interest-bearing net debt | 3,856 | 3,904 | 3,992 | 3,510 | 3,670 |
| Adjustment for discontinued operations | -28 | -24 | -20 | -14 | -13 |
| Total Interest-bearing net debt | 3,828 | 3,879 | 3,972 | 3,496 | 3,658 |
| Average net debt in relation to EBITDA (SEK m), continued | LTM Sep | LTM Sep | Full year | ||
| operations | 2024 | 2023 | 2023 |
| Average net debt in relation to EBITDA (SEK m), continued | LTM Sep | LTM Sep | Full year |
|---|---|---|---|
| operations | 2024 | 2023 | 2023 |
| Interest-bearing net debt | 3,828 | 3,658 | 3,496 |
| EBITDA | 1,242 | 1,062 | 1,132 |
| Net debt/EBITDA | 3.08 | 3.44 | 3.09 |
Capital employed
Calculated as a erage shareholders' equity and interest-bearing liabilities for the last four quarters less cash and cash equivalents and short-term investments.
| Average capital employed (SEK m), continued operations | Average | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 |
|---|---|---|---|---|---|
| Interest-bearing net debt | 3,815 | 3,856 | 3,904 | 3,992 | 3,510 |
| Adjustment for discontinued operations | -22 | -28 | -24 | -20 | -14 |
| Shareholders' equity | 4,181 | 4,310 | 4,272 | 4,185 | 3,957 |
| Capital employed | 7,975 | 8,138 | 8,152 | 8,157 | 7,453 |
Return on capital employed (ROCE)
Calculated as EBITA for the most recent four quarters on closing day in relation to average capital employed for the four most recent quarters on closing day.
| Average EBITA in relation to average capital employed | LTM Sep | LTM Sep | Full year |
|---|---|---|---|
| (SEK m), continued operations | 2024 | 2023 | 2023 |
| EBITA | 1,030 | 912 | 961 |
| Capital employed | 7,975 | 7,228 | 7,414 |
| Return on capital employed % | 12.9% | 12.6% | 13.0% |
Return on equity
Calculated as average profit after tax. attributable to the Parent Company's shareholders, adjusted for dividend to preference shares, for the four most recent quarters in relation to average equity, attributable to the Parent Company's shareholders, adjusted for preference capital for the four most recent quarters on closing day.
| Average adjusted net profit in relation to average equity (SEK m), continued operations |
LTM Sep 2024 |
LTM Sep 2023 |
Full year 2023 |
|---|---|---|---|
| Profit after tax. adjusted | 336 | 446 | 430 |
| Adjustment for discontinued operations | 70 | 7 | 4 |
| Equity | 4,000 | 3,585 | 3,694 |
| Return on equity % | 10.2% | 12.6% | 11.8% |
Cash flow generation
Calculated as cash flow from continuing operations in relation to profit before tax adjusted for non-cash items.
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec | |
|---|---|---|---|---|---|---|
| Cash flow generation %, continued operations | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| EBT | 134 | 168 | 472 | 472 | 615 | 615 |
| Adjustment for items not included in cash flow | 114 | 99 | 252 | 221 | 337 | 306 |
| Adjusted EBT | 248 | 268 | 724 | 693 | 952 | 921 |
| Cash flow from continuing operations | 167 | 247 | 533 | 428 | 733 | 628 |
| Cash flow generation % | 67.3% | 92.2% | 73.6% | 61.8% | 77.0% | 68.2% |
Earnings per ordinary share (number share per end of period)
Calculated as profit after tax attributable to the Parent Company's shareholders less di idends to preference shareholders divided by the total number of ordinary shares outstanding at end of the period.
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | LTM Sep | Jan-Dec | |
|---|---|---|---|---|---|---|
| Earnings per ordinary share (SEK m) | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Profit/loss attributable to Parent Company's shareholders | 37 | 131 | 259 | 353 | 350 | 444 |
| Dividend paid to preference shareholders | -4 | -4 | -11 | -11 | -14 | -14 |
| Profit/loss attributable to Parent Company's shareholders | 33 | 128 | 248 | 343 | 336 | 430 |
| Number of ordinary shares outstanding (thousand) | 37,992 | 37,992 | 37,992 | 37,992 | 37,992 | 37,992 |
| Earnings per ordinary share | 0.87 | 3.36 | 6.54 | 9.02 | 8.84 | 11.32 |
<-- PDF CHUNK SEPARATOR -->
STOCKHOLM 25 OCTOBER 2024
Bengt Lejdström President and CEO
*******
This interim report has been the subject of a review by the company's auditors.
Auditor's report
Sdiptech AB (publ.) org nr 556672-4893
Introduction
We have reviewed the condensed interim financial information (interim report) of Sdiptech AB (publ.) as of 30 September 2024 and the nine-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information 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.
Scope of Review
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.
Stockholm den 25 October 2024
Öhrlings PricewaterhouseCoopers AB
Anna Rosendal Andreas Skogh
Authorized Public Accountant Authorized Public Accountant
Auditor-in-charge
*******
For additional information. please contact:
Bengt Lejdström, CEO, +46 702 74 22 00. [email protected]
Susanna Zethelius, CFO, +46 704 44 00 92, [email protected]
Sdiptech AB (publ) is required to disclose this information pursuant to EU Market Use Regulation 596/2014. The information was provided by the above contact persons for publication on 25 October 2024 at 08.00 CEST.
UPCOMING REPORTS
Year-end report 2024 11 February 2025 Interim report January - March 2025 29 April 2025 Annual General Metting 19 May 2025 Interim report April - June 2025 18 July 2025 Interim report July - September 2025 24 October 2025 Year-end report for 2025 10 February 2026
Payment of dividends to preference shareholders
For each preference share, an annual dividend of SEK 8.00 is paid, divided into four quarterly payments of SEK 2.00 each. The record dates for receipt of dividends of preference shares until next annual general meeting is:
- ecember
- arch
