Quarterly Report • Nov 22, 2022
Quarterly Report
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Vestum AB (publ)
11.3 % EBITA margin, Jul-Sep 2022
| SEK million (unless otherwise stated) | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 months |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Net sales | 1,797 | 292 | 4,904 | 328 | 5,892 | 1,316 |
| EBITA | 203 | 27 | 474 | 28 | 546 | 100 |
| EBITA margin, % 1) | 11.3 | 9.4 | 9.7 | 8.6 | 9.3 | 7.6 |
| Adjusted EBITA 1) | 185 | 31 | 472 | 37 | 551 | 116 |
| Adjusted EBITA margin, % 1) | 10.3 | 10.7 | 9.6 | 11.2 | 9.4 | 8.8 |
| EBITA per share, SEK 1) | 0.55 | 0.11 | 1.30 | 0.20 | 1.53 | 0.53 |
| Earnings per share, SEK 2) | 0.20 | 0.02 | 0.28 | 0.02 | 0.28 | 0.01 |
| Operating profit (EBIT) | 124 | 15 | 253 | 15 | 283 | 45 |
| Cash flow from operating activities | 35 | -20 | 210 | -21 | 222 | -10 |
1) See pages 26-28 for definitions and reconciliation of alternative performance measures
2) Attributable to remaining operations and Parent company's shareholders
This report is a translation of the Swedish original. In the event of discrepancies, the Swedish version shall prevail.
Vestum continued to deliver stable growth and profitability in the third quarter. Net sales for the quarter amounted to SEK 1,797 million (SEK 292 million) and EBITA amounted to SEK 203 million (SEK 27 million), corresponding to an EBITA margin of 11.3%. The increase in net sales in the third quarter amounted to SEK 1,505 million and was driven by acquired net sales, but the quarter also showed strong organic growth of 30%, corresponding to 6% of the total increase in net sales1) . The organic growth was primarily driven by the Infrastructure segment, and especially our operations within the railway and public transport industries. Vestum currently has a broad offering of services within railway, where we have acquired several niche companies with leading market positions and where continued solid demand is expected. The previously announced process of moving our listing to Nasdaq Stockholm has entered its final phase.
The third quarter's EBITA of SEK 203 million was primarily driven by stable demand and profitability within all three segments, but also by non-recurring effects including the revaluation of contingent con siderations and costs for moving the listing, which positively affected the result by a total of SEK 18 million. So far this year, the process of moving the listing has affected the result negatively by SEK 4 million.
1) See pages 26-28 for definitions and reconciliation of alternative performance measures
Within the Infrastructure segment, volumes and earnings remain at solid levels and are basically identical to those for the second quarter, which means that the Infrastructure segment represents a bit more than 50% of the Group's net sales and earnings with an EBITA margin of 11.1%. Within the Water and Services segments, the EBITA margin amounted to 12.1% and 10.1%, respectively. We are experiencing continued disruptions on the cost side due to high inflation and supply chain challenges, which have affected profitability to some extent. At the same time, we can see the strength of our decentralised business model where our local presence and extensive industry experience of our business leaders help contribute positively in the challenging environment we are still in.
Operating cash flow amounted to SEK 132 million, which represents a cash conversion rate of 50%. The level of tied-up working capital was relatively high during the quarter. Many of our businesses, which are entrepreneur-led companies, did not prioritise working capital optimisation before being owned by Vestum. Therefore, this is a clear area where there is potential for improvement, and we see solid opportunities to free up working capital over time and increase the Group's cash flow generation. Seasonally, the second, third and fourth quarters are relatively stable when it comes to volume, while the first quarter is the weakest. This generally means that cash flow is at its strongest during the first quarter. Net debt in relation to pro-forma EBITDA
amounted to 2.8x at the end of the quarter, which is in line with the second quarter.
Vestum's growth has led us to making certain organisational changes during the quarter in order to streamline operations. This in turn has led to certain staff reductions and shorter reporting lines within the Group.
Vestum has intentionally kept a low acquisition pace during the quarter. When processing potential acquisition candidates, we are currently primarily focused on add-on acquisitions and acquisitions that complement our existing portfolio.
During the quarter we have implemented VeNet, a communication platform for digital networking within Vestum. The purpose of VeNet is to create collaborations between the businesses, strengthen the Vestum community and increase the Group's efficiency. With VeNet we can create positive synergies by collaborating within various areas, such as projects, sustainability issues, purchase agreements for cars, leasing and insurances.
We believe that our exposure to water infrastructure and other civic infrastructure, with solid investment demand regardless of the economic cycle, and our presence in six countries create conditions for continued stability. Coupled with our industry experience and decentralised business model, I am convinced that it is in these market conditions and tougher environment that we will prove ourselves as industry specialists. We now look forward to taking our next step as a Group and become listed on the main list of Nasdaq Stockholm.
Conny Ryk Chief executive officer, Vestum AB (publ)
Vestum is an industrial group that provides services and products to civic infrastructure. We have the most prominent specialists on the market with extensive industry experience and strong local presence within our business areas. Vestum has over 2,300 employees in the Nordics, Germany and the UK.
Vestum's organisation has extensive experience in starting, developing and acquiring businesses. Entrepreneurship is in our DNA and it is important that the entrepreneur's driving forces and customer focus permeate the entire organisation. Therefore, we believe that operational decisions should be made in the operating unit rather than at group level. At the same time, we work closely with our entrepreneurs where experienced representatives from Vestum can participate in making strategic decisions in order to optimise the time for financial, commercial and operational development.
Our ambition is to grow to become the leading Nordic industrial group with a distinct focus on niched services and products for civic infrastructure. We do this by developing and acquiring well-managed and profitable businesses where, together with ambitious entrepreneurs and company management, we can work for continued development and sustainable profitable growth.
Vestum's overall goal is to create longterm profitable growth by acquiring and developing high-quality companies with proven business models, strong market positions and solid cash flows. Vestum's current financial targets are as follows:
Vestum's target is to generate an average annual growth in EBITA per share of at least 15 percent.
Vestum's target is to achieve an adjusted EBITA margin of at least 10.0 percent.
Vestum's target is to have a financial net debt in relation to EBITDA of 2.5-3.5x.
All of Vestum's profits and available cash flows will be reinvested in the business and/or used for new acquisitions.
Vestum views sustainability as an important issue. Through a long-term commitment, Vestum's operations can contribute to a sustainable society.
Vestum's first Sustainability Forum was conducted during the quarter. The Sustainability Forum is a network within Vestum's operations that provides support, knowledge sharing and an opportunity to exchange experiences and good examples. The Sustainability Council also conducted its first meeting during the quarter. The Sustainability Council consists of representatives from different parts of the company, who serve as ambassadors for Vestum's sus tainability work. During the council's first meeting, the items of discussion included Vestum's sustainability strategy and long-term sustainability goals.
Vestum submits its sustainability report in connection with the annual report. The quarterly reports include central KPIs linked to issues we view as the most essential within sustainability. The intention is to gradually increase the extent of sustainability reporting in the quarterly reports. During the fourth quarter Vestum will finalise the Group's sustainability strategy, including its overall sustainability targets.
Sustainability issues are closely linked together, but in our reporting we have chosen to divide them into Environment, Social Responsibility and Governance.
The Environment area encompasses several important issues, including climate issues which involve reducing the climate impact and adapting to a world that has already been affected by climate change.
Vestum aims to minimise and optimise its own use of resources. The goal is for our efforts to contribute to a decrease in climate emissions, energy consumption and the use of natural resources as well as minimising the amount of waste. During the quarter we have signed an agreement with Bixia, which is certified as a Good Environ mental Choice and delivers fossil-free electricity that can be used by all our companies in Sweden. For our compa nies in other countries, we have signed an agreement with Eneas, which also delivers fossil-free and renewable electricity.
| Focus area | Jul-Sep 2022 Target | |
|---|---|---|
| Total energy usage | 1,256 MWh Target is set during 2022 | |
| Carbon dioxide equivalent (CO 2e) |
21.1 ton Target is set during 2022 | |
| Carbon dioxide emissions per SEK turnover |
0.13 g/1 sek Target is set during 2022 | |
| Proportion of fossil-free energy use (%) 1) |
45.9% Target is set during 2022 | |
| Energy generated from solar cells (MWh) |
42 MWh Target is set during 2022 |
1 ) Includes reaching 100% renewable, fossil-free energy on the premises of all our operations
During the third quarter, Vestum in collaboration with KPMG, have started to develop routines and working methods to report in accordance with EU's Taxonomy regulation. The process will continue during 2022.
Social sustainability issues include issues of human rights, work environment and equality.
Vestum's companies had a total of 2,367 employees at the end of the period. It is our employees who provide the Group with its innovative thinking and competitiveness. The Group's vision is for all employees to be offered healthy and safe workplaces at all times, without accidents, injuries or discrimination, as well as a more even gender balance. As part of our work environment initiatives, we have imple mented a reporting tool for incidents and accidents that is used throughout the Group. LTIFR (Lost Time Injury Fre quency Rate) shows the number or reported work acci dents that led to at least one day's medical leave per 1 million worked hours.
In order to be able to follow our work environment indica tors over time when turnover and staff size fluctuate, we need to measure work environment indicators in relation to size. Therefore we measure LTIFR that is linked to the number of hours worked.
| Focus area | Jul-Sep 2022 Target | |
|---|---|---|
| Number of accidents leading to medical leave |
16 Target is set during 2022 | |
| LTIFR | 3.56 Target is set during 2022 |
By setting targets and implementing activities we con tribute to an equal workplace and, in extension, a more equal society. The ability of a workplace to recruit and motivate workers and create loyalty depends largely on whether everyone see themselves as part of the team and have equal opportunities to develop. Our starting point is to make sure all employees feel welcome at our work places, so that we don't risk losing valuable skillsets. In the sectors where Vestum operates there is currently not enough women in operative and managerial positions, which we are actively trying to change.
Vestum supports diversity and equality at our workplaces. We are monitoring the gender distribution in both the Group as a whole as well as in management positions. Our recruitment process is a key aspect of our efforts to reach equality. Today Vestum is actively inclusive when recruiting for all positions in order to increase diversity in the workplace.
| Focus area | Jul-Sep 2022 Target | |
|---|---|---|
| Proportion of women at Vestum |
9.0 % | Target is set during 2022 |
| Proportion of women in managerial positions at Vestum |
13.1% | Target is set during 2022 |
During the third quarter we have initiated a collaboration with Yrkesgymnasiet, which provides vocational high school educations within areas such as construction, electricity and industry. Vestum's companies can offer internships to give school students workplace experience while also taking part in the latest educational developments.
Governance for us is about having a sustainability strategy, policies, targets and activities that we monitor regularly. The process of establishing this governance is ongoing and will be implemented during 2022. By including large parts of our operations in the process, Vestum is ensuring that our sustainability work is deeply entrenched and a part of our business strategy.
For more detailed information about Vestum's sustainability work, see Vestum's 2021 Annual Report.
The Group's net sales for the remaining operations for the third quarter amounted to SEK 1,797 (292) million. The growth from the same period last year consists of acquired net sales of SEK 1,418 million and organic growth of SEK 87 million. The organic growth corresponds to a growth in net sales of 30% and is driven primarily by high demand but also by price increases.
For the period January - September 2022, the Group's net sales for the remaining operations amounted to SEK 4,904 (328) million. The growth from the same period last year consists of acquired net sales of SEK 4,475 million and organic growth of SEK 101 million.
Vestum's activities are affected by seasonality due to weather conditions and number of working days. The Group's diversified structure, regarding both market offering and geographical presence, limits exposure to seasonality to some extent. Typically, the second, third and fourth quarters are relatively stable in terms of volume, while the first quarter is the weakest. This generally means that cash flow is at its strongest during the first quarter.
Profit before amortisation and write-downs of acquired surplus value (EBITA) for the remaining operations for the third quarter amounted to SEK 203 (27) million which corresponds to an EBITA-margin of 11.3% (9.4%). Adjusted EBITA amounted to SEK 185 (31) million and operating profit (EBIT) amounted to SEK 124 (15) million.
Extraordinary items that are adjusted in EBITA affected the quarter positively by SEK 18 (-4) million. These consisted of revaluation of contingent consideration which affects the result positively with SEK 25 million, costs related to preparation for change of listing of SEK 2 million, and restructuring costs of SEK 6 million.
Net financials for the third quarter amounted to SEK -43 (-7) million of which positive exchange rate changes amounted to SEK 6 (0) million. Interest costs for loans and leasing amounted to SEK 51 (7) million and interest income amounted to SEK 1 (0)
million. The increase is explained by interest on bond loans, which were added during the fourth quarter of 2021. The period's profit after tax for the remaining operations amounted to SEK 73 (6) million, which corresponds to a profit per share attributable to remaining operations and the Parent company's shareholders before and after dilution of SEK 0.20 (0.02).
Earnings before amortisation and write-downs of acquired surplus value (EBITA) for the remaining operations for January - September 2022 amounted to SEK 474 (28) million, which corresponds to an EBITA-margin of 9.7% (8.6%). Adjusted EBITA amounted to SEK 472 (37) million and operating profit (EBIT) amounted to SEK 253 (15) million. Net financial items amounted to SEK -133 (-10) million of which interest costs for loan and leasing amounted to SEK 133 (8) million. The period's profit after tax for the remaining operations amounted to SEK 101 (4) million which corresponds to a profit per share attributable to remaining operations and the Parent Company's shareholders before and after dilution of SEK 0.28 (0.02).
Extraordinary items that are adjusted in EBITA affected the period January-September 2022 positively by SEK 2 (-9) million. These consisted of revaluation of contingent consideration which affects the result positively by SEK 22 million, acquisition-related transaction costs of SEK 11 million, costs related to preparation for change of listing of SEK 4 million and restructuring costs of SEK 6 million.
Within Water, we offer specialised services and products in water technology that focus on improving the water infrastructure.
| SEK million | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 months |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Net sales | 351 | - | 1,065 | - | 1,276 | 211 |
| EBITA | 42 | - | 112 | - | 120 | 8 |
| EBITA-margin | 12.1% | - | 10.5% | - | 9.4% | 3.8% |
The quarter has shown solid demand for our products and services. The quarter has been affected by increased raw material prices that are passed on to customers with a certain delay, which in turn has put pressure on the margins to some extent.
Net sales for the third quarter amounted to SEK 351 (-) million, and for the period January - September 2022 net sales amounted to SEK 1,065 (-) million. The increase compared to prior year refers to acquired net sales.
EBITA for the third quarter amounted to SEK 42 (-) million, corresponding to an EBITA margin of 12.1% (-%). EBITA for the period January-September 2022 amounted to SEK 112 (-) million, corresponding to an EBITA margin of 10.5% (-%).
Within Services, we offer niche services and products to commercial properties.
| SEK million | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 months |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Net sales | 464 | 125 | 1,376 | 129 | 1,647 | 400 |
| EBITA | 47 | 10 | 142 | 11 | 165 | 34 |
| EBITA-margin | 10.1% | 8.3% | 10.3% | 8.4% | 10.0% | 8.5% |
Demand for our services and products continues to be strong and we continue to actively work on meeting the challenges that arise as a result of rising raw material prices and disruptions in supply chains.
Net sales for the third quarter amounted to SEK 464 (125) million, and for the period January - September 2022 net sales amounted to SEK 1,376 (129) million. The increase compared with prior year is primarily driven by acquired net sales.
EBITA for the third quarter amounted to SEK 47 (10) million, corresponding to an EBITA margin of 10.1% (8.3%). EBITA for the period January - September 2022 amounted to SEK 142 (11) million, corresponding to an EBITA margin of 10.3% (8.4%).
Since prior year several acquisitions have been added to the segment and the acquisitions which made up the segment as of September 30, 2021 did not contribute to the segment's results during the entire period, hence the periods are not completely comparable.
Within Infrastructure, we offer niche work in land & civil engineering, railways and other infrastructure.
| SEK million | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 months |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Net sales | 983 | 167 | 2,464 | 199 | 2,969 | 704 |
| EBITA | 109 | 28 | 259 | 36 | 310 | 87 |
| EBITA-margin | 11.1% | 16.6% | 10.5% | 18.2% | 10.4% | 12.4% |
Demand has been strong and we have had high occupancy within the segment. The quarter has continued to be affected by increased fuel and raw material prices.
Net sales for the third quarter amounted to SEK 983 (167) million, and for the period January - September 2022 net sales amounted to SEK 2,464 (199) million. The increase compared with prior year is primarily driven by acquired net sales.
EBITA amounted to SEK 109 (28) million, corresponding to an EBITA margin of 11.1% (16.6%). EBITA for the period January - September 2022 amounted to SEK 259 (36) million, corresponding to an EBITA margin of 10.5% (18.2%).
Since prior year several acquisitions have been added to the segment and the acquisitions which made up the segment as of September 30, 2021 did not contribute to the segment's results during the entire period, hence the periods are not completely comparable.
Cash flow from operating activities during the third quarter amounted to SEK 35 (-20) million, of which changes in working capital amounted to SEK -126 (-57) million. The operating cash flow amounted to SEK 132 (-21) million, which corresponds to a cash conversion of 50% (-44%). For the period January - September 2022, cash flow from operating activities amounted to SEK 210 (-21) million, changes in working capital amounted to SEK -163 (-51) million and operating cash flow amounted to SEK 455 (-11) million, which corresponds to a cash conversion of 70% (-22%). The Group's working capital varies over the quarters, mainly due to fluctuations in the items ongoing projects, accounts receivable and accounts payable. The change in working capital in the third quarter was mainly driven by increased accounts receivable.
The Group's investments during the third quarter excluding acquisitions amounted to SEK 9 (12) million, and SEK 34 (10) million for January - September 2022. During the quarter no acquisitions of subsidiaries have been completed. Total purchase price for the acquisition of subsidiaries for January - September 2022 amounted to 1,874 (1,002) million. For more information, see the section Acquisitions. Paid contingent consideration amounted to SEK 63 (0) million in the third quarter and SEK 143 (0) million for January - September 2022.
Equity at the end of the period amounted to SEK 4,312 (3,593) million. Equity in the Parent company amounted to SEK 4,116 (3,552) million.
The Group's cash and cash equivalents at the end of the period amounted to SEK 581 (1,518) million. The interest-bearing liabilities, including lease liabilities, amounted to SEK 3,368 (3,003) at the end of the period. At the end of the period, the Group had a net financial debt, defined as interest-bearing liabilities less cash and cash equivalents, of SEK 2,786 (1,486) million. The net financial debt in relation to pro forma EBITDA was 2.8x (2.3x). Contingent consideration by the end of the third quarter amounted to SEK 407 (465) million. Total liabilities amounted to SEK 5,715 (4,726) million as of September 30, 2022.
In March, Vestum entered into a credit facility agreement with Skandinaviska
Enskilda Bank AB (publ) and Swedbank AB (publ) as creditors, amounting to SEK 600 million. During the third quarter this facility was extended by SEK 300 million and Danske Bank A/S, Denmark, Swedish Branch, was added as a creditor. The total credit facility thus amounts to total SEK 900 million, of which Vestum has utilized SEK 203 million at the end of the period. Total available liquidity at the end of the period amounted to SEK 1,278 million.
The number of full-time employees as of September 30, 2022, amounted to 2,367 (1,764) people.
During the Extraordinary General Meeting in Vestum AB (publ) at December 17, 2021, it was decided to establish a warrant-based incentive program by issuing a maximum of 3,520,193 warrants, to key people in the Group and the portfolio companies. The warrants have been transferred on market terms at a price that was established based on an estimated market value calculated by an independent valuation institute. The payment of the incentive program starting in the first quarter of 2022, has been recorded against equity and increases equity by SEK 11,475,831.
At the annual general meeting in May 23, 2022, it was decided to introduce another incentive program by issuing a maximum of 3,650,000 warrants, to key people in the Group and the portfolio companies. The warrants have been transferred on market terms at a price that was established based on an estimated market value calculated by an independent valuation institute. The payment of the incentive program starting in the second quarter of 2022, has been recorded against equity and increases equity by SEK 8,103,000. As of September 30, 2022 the incentive programs do not have a diluting effect on equity.
| Outstanding program |
Number of options |
Corresponding number of shares |
Redemption rate per option (SEK) |
Redemption period |
Maximum increase in share capital (SEK) |
|---|---|---|---|---|---|
| 2021/2025 | 3,520,193 | 3,520,193 | 70.9 | 1 Jan 2025 - 31 Mar 2025 |
1,161,664 |
| 2022/2025 | 3,650,000 | 3,650,000 | 31.4 1 Jun 2025 - 31 Aug 2025 |
1,216,667 |
The Parent company's net sales during the third quarter amounted to SEK 6 (-0) million. Operating profit amounted to SEK 12 (-0) million. Net financial items amounted to SEK -21 (-5) million and consisted mostly of interest on loans. Profit for the period amounted to SEK 0 (-6) million. During the period, revaluation of contingent consideration affected the result positively by SEK 25 million.
For January - September 2022, net sales amounted to SEK 16 (-0) million, operating profit amounted to SEK -18 (-8) million and net financial items amounted to SEK -37 (-8) million. Loss for January - September 2022 amounted to SEK -37 (-16) million.
The balance sheet total as of September 30, 2022, amounted to SEK 6,475 (5,552) million, of which equity amounted to SEK 4,116 (3,552) million. Cash and cash equivalents in the Parent Company amounted to SEK 414 (1,244) million.
No significant events after the end of the period.
During the period January - September 2022, 22 acquisitions were agreed, of which 20 were completed. In all cases, 100 percent of the shares were acquired. Total purchase price for the acquisition of subsidiaries amounted to SEK 1,874 million, of which SEK 585 million has been paid with equity shares, and the remaining part has or will be paid with cash and cash equivalents. Equity interests are calculated based on a volume weighted average share price over ten days for the Vestum share. A total of 15,737,515 shares have been issued to settle these commitments.
| Closed by the end of the period (SEKm) | Segment Completed | Annual net sales |
Number of employees |
|
|---|---|---|---|---|
| Mobile Container Repair AB | Infrastructure | January | 124 | 36 |
| NA Altanglas AB | Services | January | 51 | 14 |
| Mälarmontage Glas & Metall AB | Services | January | 30 | 11 |
| KvalitetsMark R AB | Infrastructure | January | 169 | 11 |
| Västsvensk Byggskruv AB | Services | January | 167 | 19 |
| Galore i Uppsala AB | Services | February | 89 | 44 |
| Lerums Tekniska Isolering LTI AB | Services | February | 54 | 37 |
| Scanregn A/S | Water | February | 97 | 18 |
| KylKontroll Göteborg AB | Services | February | 86 | 32 |
| Marbit AB | Infrastructure | March | 238 | 49 |
| ABAX Dörrsystem AB | Services | April | 72 | 19 |
| Fibber A/S | Infrastructure | April | 36 | 25 |
| Kjellgrens El i Tumba AB | Services | April | 28 | 18 |
| Spännbalkkonsult SBK AB | Infrastructure | April | 95 | 24 |
| Østcom A/S | Infrastructure | April | 105 | 56 |
| Pordrän AB | Infrastructure | April | 78 | 10 |
| Högsbo El AB | Services | April | 47 | 23 |
| ABR Mark & Järnväg AB | Infrastructure | May | 65 | 13 |
| Rockcon AB | Infrastructure | June | 11 | 2 |
| Akershus Elektro A/S | Services | June | 46 | 35 |
1,688 496
Transaction costs for the acquisitions of SEK 11 million have been charged to the Group's earnings during the period January - September 2022. These are reported under Other operating expenses in the income statement. The goodwill of SEK 1,071 million that was generated by the acquisitions is attributable to synergy effects, employees and future financial benefits that are not individually identified and reported separately.
In accordance with agreements on contingent considerations, the Group must pay cash compensation and/or with the issue of shares linked to future earnings. Equity interests are calculated based on a volume weighted average share price over 10 days for the Vestum share. The maximum non-discounted amount that may be paid to the previous owners amounts to SEK 628 million, of which SEK 141 million refers to acquisitions made during 2022. The likely outcome of the contingent consideration is based on the Group's forecast of future development and earnings in each entity. Total contingent consideration liability amounts to SEK 407 million, of which SEK 98 million refers to acquisitions completed in 2022. During the period, contingent consideration of SEK 143 million was paid. Paid and revalued contingent consideration had a positive net impact of SEK 22 (0) million on the period's result, which is reported in Other operating income and Other operating expenses in the income statement. The fair value of the contingent consideration is at level 3 in the fair value hierarchy. Contingent consideration payments are reported in Other current liabilities and Other long-term liabilities in the balance sheet.
| SEK million | 30 Sep 2022 | 30 Sep 2021 | 31 Dec 2021 |
|---|---|---|---|
| Opening balance | 465 | 0 | 0 |
| Acquisitions during period | 104 | 216 | 467 |
| Paid contingent consideration | -143 | - | - |
| Revaluation of contingent consideration, via operating profit | -22 | - | - |
| Exchange rate difference | 2 | - | -2 |
| Closing balance at period end | 407 | 216 | 465 |
The acquisitions made during the period January to September 2022 have had the following effects on the Group's assets and liabilities. The effects are preliminary as the Group has not received final audited information from the acquired companies. Any adjustments in connection with the final PPA are not expected to have a significant impact on the Group's earnings or financial position. Equity interests are calculated based on a volume weighted average share price over 10 days for the Vestum share.
| SEK million | Total |
|---|---|
| Intangible assets | 588 |
| Other non-current assets | 47 |
| Other current assets | 443 |
| Cash and cash equivalents | 117 |
| Non-current liabilities | -6 |
| Deferred tax liabilities | -136 |
| Current liabilities | -241 |
| Non-controlling interests | - |
| Net assets and liabilities | 803 |
| Goodwill | 1,071 |
| Total purchase price | 1,874 |
| Impact on cash and cash equivalents | |
|---|---|
| Total purchase price | 1,874 |
| Conditional purchase price | -104 |
| Settlement in shares | -585 |
| Exchange rate adjustment | - |
| Cash and cash equivalents in acquired units |
-117 |
| Impact on cash and cash equivalents |
1,068 |
| Paid contingent consideration | 143 |
| Total impact on cash and cash equivalents |
1,211 |
| 962 |
|---|
| 127 |
| 80 |
| 58 |
| Net sales | 1,372 |
|---|---|
| EBITA | 166 |
| Operating profit (EBIT) | 160 |
| Profit/loss for the period | 131 |
Vestum has entered into agreements of two acquisitions which are expected to be completed after the publication of this report. In each case, 100 percent of the shares will be acquired. The acquisitions are subject to customary closing conditions, including competition law approval.
| Yet to be completed | Segment | Annual net sales | Number of employees |
|---|---|---|---|
| MDT Markvaruhuset AB | Infrastructure | 143 | 19 |
| Isodrän AB | Infrastructure | 75 | 13 |
| 218 | 32 |
| SEK million | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 months |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Remaining operations | ||||||
| Net sales | 1,797 | 292 | 4,904 | 328 | 5,892 | 1,316 |
| Total operating income | 1,797 | 292 | 4,904 | 328 | 5,892 | 1,316 |
| Materials and purchased services | -1,017 | -139 | -2,676 | -156 | -3,181 | -662 |
| Other external costs | -134 | -33 | -408 | -36 | -500 | -128 |
| Personnel costs | -401 | -69 | -1,186 | -79 | -1,457 | -349 |
| Other operating income | 34 | 1 | 48 | 1 | 47 | 0 |
| Other operating expenses | -12 | -3 | -30 | -8 | -38 | -16 |
| Total operating expenses and other operating income |
-1,530 | -244 | -4,252 | -278 | -5,129 | -1,155 |
| EBITDA | 267 | 48 | 652 | 50 | 763 | 161 |
| Depreciation excl. acquired surplus value |
-65 | -20 | -178 | -22 | -217 | -61 |
| EBITA | 203 | 27 | 474 | 28 | 546 | 100 |
| Amortisation attributable to acquired surplus value |
-80 | -12 | -221 | -13 | -263 | -55 |
| Operating profit (EBIT) | 124 | 15 | 253 | 15 | 283 | 45 |
| Financial items net | -43 | -7 | -133 | -10 | -160 | -37 |
| Earnings before tax | 80 | 8 | 120 | 5 | 123 | 9 |
| Income tax | -7 | -2 | -19 | -1 | -24 | -6 |
| Profit/loss for the period from con tinuing operations |
73 | 6 | 101 | 4 | 99 | 2 |
| Profit/loss from operations held for sale |
2 | 5 | 4 | 7 | 0 | 4 |
| Profit/loss for the period | 75 | 12 | 105 | 11 | 99 | 6 |
| SEK million | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 months |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| The profit/loss for the period attributable to: |
||||||
| Parent company shareholders | 74 | 11 | 104 | 10 | 99 | 5 |
| Non-controlling interests | 0 | 1 | 1 | 1 | 1 | 1 |
| Average number of shares during the period 1) 2) |
367,645,024 260,425,997 363,451,674 139,233,893 356,533,735 | 188,831,121 | ||||
| Number of shares issued at the end of the period 1) |
367,645,024 272,685,045 367,645,024 272,685,045 367,645,024 351,907,509 | |||||
| Profit/loss attributable to remaining operations and the Parent compa ny's shareholders per share 2), SEK |
0.20 | 0.02 | 0.28 | 0.02 | 0.28 | 0.01 |
| Profit/loss attributable to Parent company's shareholders per share 2), SEK |
0.20 | 0.04 | 0.29 | 0.08 | 0.28 | 0.03 |
1) Number of shares is adjusted based on reverse split 2021 2) Before and after dilution
| SEK million | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 months |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Profit/loss for the period | 75 | 12 | 105 | 11 | 99 | 6 |
| Other comprehensive income | ||||||
| Exchange differences on translation of foreign operations |
-1 | 0 | 14 | 0 | 39 | 25 |
| Total comprehensive income for the period |
73 | 12 | 118 | 11 | 138 | 31 |
| Total comprehensive income for the period attributable to: |
||||||
| Parent company's shareholders | 73 | 11 | 117 | 10 | 137 | 30 |
| Non-controlling interests | 0 | 1 | 1 | 1 | 1 | 1 |
| Total comprehensive income attributable to Parent company's shareholders, originated from: |
||||||
| Remaining operations | 72 | 6 | 115 | 4 | 138 | 27 |
| Operations held for sale | 2 | 5 | 4 | 7 | 0 | 4 |
| SEK million | 30 Sep 2022 | 30 Sep 2021 | 31 Dec 2021 |
|---|---|---|---|
| Assets | |||
| Intangible assets | 6,272 | 1,797 | 4,813 |
| Property, plant and equipment | 300 | 153 | 271 |
| Right of use assets | 663 | 321 | 486 |
| Financial assets | 8 | 5 | 7 |
| Deferred tax assets | 41 | - | - |
| Other non-current assets | 2 | 0 | 2 |
| Total non-current assets | 7,286 | 2,277 | 5,580 |
| Inventories | 397 | 32 | 197 |
| Accounts receivable | 1,141 | 287 | 680 |
| Contract assets | 301 | - | 116 |
| Other current assets | 94 | 79 | 50 |
| Prepaid expenses and accrued income | 160 | 84 | 133 |
| Cash and cash equivalents | 581 | 183 | 1,518 |
| Assets held for sale | 66 | 75 | 45 |
| Total current assets | 2,740 | 741 | 2,738 |
| Total assets | 10,027 | 3,018 | 8,318 |
| SEK million | 30 Sep 2022 | 30 Sep 2021 | 31 Dec 2021 |
|---|---|---|---|
| Equity and liabilities | |||
| Equity attributable to owners of the company | 4,310 | 1,041 | 3,591 |
| Non-controlling interests | 2 | 1 | 2 |
| Total equity | 4,312 | 1,042 | 3,593 |
| Non-current provisions | 9 | 5 | 7 |
| Non-current interest-bearing liabilities | 2,704 | 734 | 2,510 |
| Non-current lease liabilities | 486 | 248 | 362 |
| Deferred tax liabilities | 570 | 157 | 454 |
| Other non-current liabilities | 162 | 142 | 334 |
| Total non-current liabilities | 3,930 | 1,285 | 3,667 |
| Current provisions | 4 | - | 1 |
| Current interest-bearing liabilities | 4 | 152 | 12 |
| Current lease liabilities | 174 | 68 | 119 |
| Accounts payable | 619 | 194 | 322 |
| Contract liabilities | 167 | - | 68 |
| Other current liabilities | 482 | 111 | 315 |
| Accrued expenses and deferred income | 318 | 126 | 209 |
| Liabilities relating to assets held for sale | 17 | 40 | 13 |
| Total current liabilities | 1,785 | 690 | 1,059 |
| Total liabilities | 5,715 | 1,976 | 4,726 |
| Total equity and liabilities | 10,027 | 3,018 | 8,318 |
| Equity attributable to the Parent company's shareholders | ||||||
|---|---|---|---|---|---|---|
| Share premium | Retained earnings incl. profit/loss for the |
Non-controlling | ||||
| SEK million | Share capital | reserve | Reserves | period | interests | Total equity |
| Opening balance as of January 1, 2021 | 13 | 274 | -14 | -281 | - | -9 |
| Profit/loss for the period | - | - | - | 10 | 1 | 11 |
| Other comprehensive income for the period | - | - | 0 | - | - | 0 |
| Total comprehensive income | - | - | 0 | 10 | 1 | 11 |
| Total transactions with owners | 78 | 962 | - | - | 0 | 1,040 |
| Closing balance as of September 30, 2021 | 91 | 1,235 | -14 | -271 | 1 | 1,042 |
| Opening balance as of October 1, 2021 | 91 | 1,235 | -14 | -271 | 1 | 1,042 |
| Profit/loss for the period | - | - | - | -5 | 0 | -5 |
| Other comprehensive income for the period | - | - | 25 | - | - | 25 |
| Total comprehensive income | - | - | 25 | -5 | 0 | 20 |
| Total transactions with owners | 26 | 2,503 | - | - | 1 | 2,530 |
| Closing balance as of December 31, 2021 | 117 | 3,739 | 11 | -276 | 2 | 3,593 |
| Opening balance as of January 1, 2022 | 117 | 3,739 | 11 | -276 | 2 | 3,593 |
| Profit/loss for the period | - | - | - | 104 | 1 | 105 |
| Other comprehensive income for the period | - | - | 14 | - | - | 14 |
| Total comprehensive income | - | - | 14 | 104 | 1 | 118 |
| Total transactions with owners | 5 | 596 | - | - | -1 | 601 |
| Closing balance as of September 30, 2022 | 123 | 4,335 | 25 | -172 | 2 | 4,312 |
| SEK million | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 months |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Earnings before tax | 80 | 8 | 120 | 5 | 123 | 9 |
| Adjustment for non-cash items | 121 | 34 | 377 | 32 | 460 | 115 |
| Income tax paid | -41 | -6 | -123 | -7 | -121 | -5 |
| Changes in working capital | -126 | -57 | -163 | -51 | -240 | -128 |
| Cash flow from operating activities | 35 | -20 | 210 | -21 | 222 | -10 |
| Purchase and sale of intangible assets | 0 | -2 | 0 | -0 | -33 | -33 |
| Purchase of property, plant and equipment | -9 | -10 | -34 | -10 | -66 | -42 |
| Purchase of subsidiaries and activities 1) |
-63 | -360 | -1,211 | -877 | -2,467 | -2,133 |
| Proceeds from other financial assets net | 0 | 0 | 1 | 0 | 2 | 1 |
| Other | 0 | 0 | 1 | 0 | 0 | -0 |
| Cash flow from investing activities | -72 | -371 | -1,243 | -886 | -2,564 | -2,207 |
| Proceeds from borrowings | 1 | 381 | 203 | 848 | 881 | 1,526 |
| Repayments of lease liabilities | -44 | -12 | -120 | -14 | -143 | -37 |
| Proceeds from capital increase | 9 | -0 | 20 | 300 | 2,008 | 2,288 |
| Changes in other non-current liabilities | -0 | -1 | -4 | -1 | 0 | 3 |
| Cash flow from financing activities | -34 | 368 | 98 | 1,133 | 2,745 | 3,780 |
| Net cash flow from continuing operations | -72 | -24 | -934 | 226 | 403 | 1,563 |
| Net cash flow from operations held for sale | 19 | 7 | -4 | -45 | -8 | -49 |
| Net cash flow for the period | -53 | -16 | -938 | 181 | 396 | 1,515 |
| Cash and cash equivalents at the beginning of the period | 634 | 200 | 1,518 | 2 | 183 | 2 |
| Cash flow for the period | -53 | -16 | -938 | 181 | 396 | 1,515 |
| Exchange rate difference in cash and cash equivalents | 1 | 0 | 2 | 0 | 2 | 1 |
| Cash and cash equivalents at the period end | 581 | 183 | 581 | 183 | 581 | 1,518 |
| Cash flow regarding interest | ||||||
| Interest paid | -37 | -5 | -102 | -8 | -112 | -17 |
| Interest received | 1 | 0 | 1 | 0 | 0 | 0 |
1) Cash and cash equivalents from purchase of subsidiaries. see Acquisitions, page 15
Vestum divides its operations into three segments: Water, Services and Infrastructure. Vestum has identified these three segments as complementary, both over a business cycle and seasonally.
The tables below only include the financial outcome for the periods in which each portfolio company was part of the Vestum Group.
Cost for Group functions refers to group management, IT, legal, M&A and group finance functions. Costs related to operating group functions (country- and division managers, business control, HR and sustainability) have been distributed to each segment.
All segment's have revenue recognition at a point in time, and over time.
| SEK million | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 months |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Net sales per geographic market |
||||||
| Sweden | 1,442 | 292 | 3,905 | 328 | 4,721 | 1,143 |
| Norway | 147 | - | 380 | - | 438 | 58 |
| Other countries | 208 | - | 619 | - | 733 | 114 |
| Total net sales | 1,797 | 292 | 4,904 | 328 | 5,892 | 1,316 |
| SEK million | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 months |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Net sales per segment | ||||||
| Water | 351 | - | 1,065 | - | 1,276 | 211 |
| Services | 464 | 125 | 1,376 | 129 | 1,647 | 400 |
| Infrastructure | 983 | 167 | 2,464 | 199 | 2,969 | 704 |
| Total net sales | 1,797 | 292 | 4,904 | 328 | 5,892 | 1,316 |
| SEK million | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 months |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| EBITA per segment | ||||||
| Water | 42 | - | 112 | - | 120 | 8 |
| Services | 47 | 10 | 142 | 11 | 165 | 34 |
| Infrastructure | 109 | 28 | 259 | 36 | 310 | 87 |
| Group functions | -14 | -7 | -41 | -10 | -45 | -14 |
| Adjusted EBITA | 185 | 31 | 472 | 37 | 551 | 116 |
| Adjustments | 18 | -4 | 2 | -9 | -5 | -16 |
| EBITA | 203 | 27 | 474 | 28 | 546 | 100 |
| Amortisation attributable to |
||||||
| acquired surplus value | -80 | -12 | -221 | -13 | -263 | -55 |
| Operating profit (EBIT) |
124 | 15 | 253 | 15 | 283 | 45 |
| Financial items net | -43 | -7 | -133 | -10 | -160 | -37 |
| Earnings before tax | 80 | 8 | 120 | 5 | 123 | 9 |
| SEK million | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 months |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Net sales | 6 | -0 | 16 | -0 | 23 | 7 |
| Total operating income | 6 | -0 | 16 | -0 | 23 | 7 |
| Other external expenses | -5 | -4 | -19 | -6 | -27 | -15 |
| Personnel costs | -11 | -1 | -34 | -2 | -38 | -6 |
| Other operating income | 25 | 0 | 25 | 0 | 25 | 0 |
| Other operating expenses | -2 | 5 | -6 | -0 | -6 | -0 |
| Depreciation | -0 | -0 | -0 | -0 | -1 | -0 |
| Total operating expenses and other operating income |
7 | -0 | -34 | -8 | -47 | -21 |
| Operating profit/loss | 12 | -0 | -18 | -8 | -24 | -15 |
| Financial items net | -21 | -5 | -37 | -8 | -55 | -26 |
| Earnings before tax | -9 | -6 | -54 | -16 | -79 | -41 |
| Income tax | 9 | - | 17 | - | 25 | 8 |
| Profit/loss for the period | 0 | -6 | -37 | -16 | -53 | -32 |
| SEK million | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Rolling | Jan-Dec |
|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | 12 months | 2021 | |
| Profit/loss for the period and total comprehensive income for the period |
0 | -6 | -37 | -16 | -53 | -32 |
| SEK million Net sales Total operating income |
Jul-Sep | Jan-Sep | Jan-Sep | Rolling | Jan-Dec | SEK million | 30 Sep 2022 | 30 Sep 2021 | 31 Dec 2021 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | 12 months | 2021 | Assets | ||||
| 6 | -0 | 16 | -0 | 23 | 7 | Intangible assets | 0 | 0 | ||
| 6 | -0 | 16 | -0 | 23 | 7 | Property, plant and equipment | 2 | 2 | ||
| Other external expenses | -5 | -4 | -19 | -6 | -27 | -15 | Financial assets | 5,748 | 2,048 | 1,105 |
| Personnel costs | -11 | -1 | -34 | -2 | -38 | -6 | Deferred tax asset | 25 | 0 | |
| Other operating income | 25 | 0 | 25 | 0 | 25 | 0 | Non-current intercompany receivables | 219 | 0 | 3,067 |
| Other operating expenses | -2 | 5 | -6 | -0 | -6 | -0 | Total non-current assets | 5,995 | 2,050 | 4,183 |
| Depreciation | -0 | -0 | -0 | -0 | -1 | -0 | Current intercompany receivables | 50 | 101 | 123 |
| Total operating expenses and | Other current receivables | 4 | 3 | |||||||
| other operating income | 7 | -0 | -34 | -8 | -47 | -21 | Prepaid expenses and accrued income | 12 | 9 | |
| Operating profit/loss | 12 | -0 | -18 | -8 | -24 | -15 | Cash and cash equivalents | 414 | 22 | 1,244 |
| Financial items net Earnings before tax |
-21 -9 |
-5 -6 |
-37 -54 |
-8 -16 |
-55 -79 |
-26 -41 |
Total current assets | 480 | 136 | 1,369 |
| Total assets | 6,475 | 2,186 | 5,552 | |||||||
| Income tax | 9 | - | 17 | - | 25 | 8 | Equity and liabilities | |||
| Profit/loss for the period | 0 | -6 | -37 | -16 | -53 | -32 | Equity attributable to owners of the company | 4,116 | 1,038 | 3,552 |
| Total equity | 4,116 | 1,038 | 3,552 | |||||||
| The Parent company report on comprehensive income in summary | ||||||||||
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Rolling | Jan-Dec | Non-current interest-bearing liabilities | 1,581 | 721 | 1,479 | |
| SEK million | 2022 | 2021 | 2022 | 2021 | 12 months | 2021 | Other non-current liabilities | 101 | 140 | 299 |
| Profit/loss for the period and | 0 | -6 | -37 | -16 | -53 | -32 | Total non-current liabilities | 1,682 | 861 | 1,779 |
| total comprehensive income for the period |
Current interest-bearing liabilities | 0 | 140 | |||||||
| Current intercompany liabilities | 472 | 58 | 143 | |||||||
| Accounts payable | 8 | 5 | ||||||||
| Other current liabilities | 173 | 82 | ||||||||
| Accrued expenses and deferred income | 23 | 2 | ||||||||
| Total current liabilities | 676 | 287 | ||||||||
| Total liabilities | 2,358 | 1,148 | 4 60 14 221 2,000 |
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the interpretations provided by the IFRS Interpretations Committee (IFRIC) that have been adopted by the European Commission for use within the EU. The standards and interpretations applied are those valid as of January 1, 2022, and which were adopted by the EU. The Group's interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and RFR 1, Supplementary Accounting Rules for Groups. The interim report for the Parent Company has been prepared in accordance with the Annual Accounts Act and RFR 2, Accounting for Legal Entities. The interim report uses the same accounting principles and valuation methods as were used in the annual report for 2021.
Amounts in tables and calculations can be rounded, which means the stated total amounts are not always an exact sum of the rounded individual amounts.
From January 1, 2022, other standards, amendments and interpretations of existing standards that have not yet entered into force or been published by the IASB have also not been applied by the Group.
Vestum's main risk factors consist of market risks such as changes in the macro economic environment and/or the current competitive situation. In addition, the Group is exposed to operational risks such as project, customer and quality risks. The Group is also exposed to financial risks such as currency, interest rate, counterparty and credit risks.
Vestum has not identified any direct exposure to the Russian or Ukrainian markets. The consequenses of the conflict on energy and raw material prices, material distribution and delivery security, may have a negative impact on the Group's possibility to conduct its business and thus have a negative impact on Vestum's result and financial position.
During 2022, inflation has increased significantly on the markets where Vestum operates, which has led to higher prices on materials and labour. Vestum compensates
for the main part of these cost increases by increasing prices against customers which, however, takes affect with a certain delay.
The Group's interest-bearing liabilities are to some extent exposed to floating interest rates. Increasing inflation has led to higher interest rates, which affects Vestum to the extent it has floating interest rates. Vestum strives to, at all times, have a structured and efficient management of financial risks in accordance with the Group's finance policy.
Due to the changes in the risk factors described above, Vestum has evaluated the assumptions made regarding the valuation of assets and liabilities in the Group, and assesses that the changes of these assumptions do not have any significant impact.
The Parent company is affected by the above risks and uncertainties through its function as owner of the Group's subsidiaries. For more information on Vestum's risks and risk management please refer to the Annual report for 2021.
During the period, there were no transactions between Vestum and related parties that had a significant impact on the Company's financial position or earnings. For more information on related parties, refer to the annual report for 2021, note 28.
Contingent consideration that is valued at fair value in the balance sheet amounts to SEK 407 (465) million and is classified in level 3 according to the fair value hierarchy. The section Acquisitions presents how fair value is determined. Revaluation of the contingent consideration recorded in operating profit had a positive effect on the result of SEK 22 (0) million. Financial assets in the form of non-current securities holdings valued at fair value in the balance sheet are classified in level 1 according to the fair value hierarchy. The non-current securities holdings amount to SEK 8 (7) million. For assets and liabilities reported at amortized cost, the carrying value corresponds to its fair value since the interest rate is at par with current market interest rates, or because the item is short-term.
The WeSC brand's operations have continued to develop positively with net sales in the first three quarters amounting to SEK 99 (86) million. The increase in net sales is attributable to the North American market. The earnings for January - September 2022 amounted to SEK 4 (7) million.
In connection with changing the operations, it was determined that the subsidiary WeSC is no longer part of the Group's core business. On the back of WeSC's positive development and the fact that the brand's operations are not part of the Group's core business, the Board has decided that the business will be divested. The Board's assessment is that a divestment can take place within the coming twelve months, and therefore the results from the business are reported separately in the income statement in accordance with IFRS 5 regarding discontinued operations. Furthermore, assets and liabilities attributable to the business are reported as assets held for sale and liabilities that are directly related to assets held for sale.
| SEK million | Jul-Sep 2022 |
Jul-Sep 2022 |
Jan-Sep 2022 |
Jan-Sep 2022 |
Rolling 12 month |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Total net sales from operations held for sale | 36 | 46 | 99 | 86 | 111 | 98 |
| Total costs from operations held for sale | -34 | -40 | -96 | -79 | -111 | -94 |
| Tax attributable to operations held for sale | 0 | 0 | 0 | 0 | 0 | 0 |
| Profit/loss from operations held for sale | 2 | 5 | 4 | 7 | 0 | 4 |
The ten largest shareholders as of September 30, 2022, according to Monitor.
| Name | Number of shares | Share of total |
|---|---|---|
| Conny Ryk | 56,550,000 | 15% |
| Anders Rosenqvist | 29,686,350 | 8% |
| Swedbank försäkring | 26,784,254 | 7% |
| Per-Arne Åhlgren | 22,893,444 | 6% |
| Handelsbanken Fonder | 21,787,913 | 6% |
| Avanza Pension | 14,699,798 | 4% |
| Futur Pension | 13,811,299 | 4% |
| Olle Nykvist | 13,577,586 | 4% |
| Olof Andersson | 13,500,000 | 4% |
| Erkan Sen | 13,500,000 | 4% |
| Total for the 10 largest shareholders based on no. of shares | 226,790,644 | 62% |
| Total number of shares, other shareholders | 140,854,380 | 38% |
| Total number of outstanding shares at the end of the period | 367,645,024 | 100% |
| SEK million (unless otherwise stated) | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 months |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Net sales | 1,797 | 292 | 4,904 | 328 | 5,892 | 1,316 |
| EBITDA 1) | 267 | 48 | 652 | 50 | 763 | 161 |
| EBITA1) | 203 | 27 | 474 | 28 | 546 | 100 |
| Operating profit/loss (EBIT) | 124 | 15 | 253 | 15 | 283 | 45 |
| EBITA margin %1) | 11.3 | 9.4 | 9.7 | 8.6 | 9.3 | 7.6 |
| EBIT margin % | 6.9 | 5.3 | 5.2 | 4.6 | 4.8 | 3.4 |
| Adjusted EBITA1) | 185 | 31 | 472 | 37 | 551 | 116 |
| Adjusted EBITA margin %1) | 10.3 | 10.7 | 9.6 | 11.2 | 9.4 | 8.8 |
| Financial net debt1) | 2,786 | 1,018 | 2,786 | 1,018 | 2,786 | 1,486 |
| Financial net debt in relation to pro forma EBITDA1) |
2.8x | N/A | 2.8x | N/A | 2.8x | 2.3x |
| Number of employees at end of period1) | 2,367 | 837 | 2,367 | 837 | 2,367 | 1,764 |
| Average number of shares during the period 2) |
367,645,024 260,425,997 363,451,674 139,233,893 356,533,735 | 188,831,121 | ||||
| EBITA per share, SEK 1) | 0.55 | 0.11 | 1.30 | 0.20 | 1.53 | 0.53 |
| Adjusted EBITA per share, SEK 1) | 0.50 | 0.12 | 1.30 | 0.26 | 1.55 | 0.61 |
| Earnings per share attributable to remaining operations and Parent company's shareholders, SEK |
0.20 | 0.02 | 0.28 | 0.02 | 0.28 | 0.01 |
| Earnings per share attributable to Parent company's shareholders, SEK |
0.20 | 0.04 | 0.29 | 0.08 | 0.28 | 0.03 |
| Operating cash flow 1) | 132 | -21 | 455 | -11 | 424 | -42 |
| Cash conversion, % 1) | 50 | -44 | 70 | -22 | 56 | -26 |
1) The alternative performance measure (APM) is an alternative performance measure according to ESMA's guidelines. For reconciliation of alternative APMs, see pages 27-28
2) Average number of shares is adjusted based on reverse split 2021
N/A: The APM cannot be calculated fairly
| Performance measure Definition | Purpose | Performance measure Definition | Purpose | |||
|---|---|---|---|---|---|---|
| EBITDA | Earnings before taxes, financial items and depreciation of tangible and intangible fixed assets and |
EBITDA is used to measure profit/loss from operating activities, independent of depreciation. |
EBIT margin | EBIT as a percentage of net sales. | EBIT margin is used to put the underlying operating profit/loss in relation to net sales. |
|
| EBITA | consolidated surplus value. Operating profit before amortisation of consolidated surplus values. |
Financial net debt EBITA is used to measure the underlying operating profit/loss before amortisation of consolidated |
Non-current and current interest bearing liabilities (including lease liabilities) less cash and cash equivalents. |
The performance measure is used to show the size of the debt minus current cash (which in theory could be used to repay loans). |
||
| surplus value from operating activities. |
Pro forma EBITDA | EBITDA as if all acquisitions were a | The performance measure is used to | |||
| EBITA margin | EBITA as a percentage of net sales. | EBITA margin is used to put the underlying operating profit/loss |
part of the Group during the last twelve months, adjusted with adjustment items. |
provide an indication of the Company's ability to pay its debt. |
||
| before amortisation on consolidated surplus value in relation to net sales. |
Financial net debt in relation to pro |
Refers to financial net debt divided by pro forma EBITDA. |
The performance measure can be used to assess the Group's financial leverage. |
|||
| Rolling 12 months | Refers to the last twelve months | Rolling 12 months is used to evaluate | forma EBITDA | |||
| Adjustment items | from period end. Adjustment items refers to |
the latest twelve-month period. The performance measure is used |
Net sales growth | Refers to net sales growth for one period compared to the same period prior year. |
The performance measure is used to follow up the development in net sales between two comparable periods. |
|
| acquisition-related transaction costs, revaluation of contingent consideration, cost related to the change of listing to Nasdaq Stockholm, and restructuring costs. |
when calculating adjusted EBITA, adjusted EBITA margin and pro forma EBITDA. |
Organic net sales growth |
Refers to net sales growth, excluding exchange rate and acquisition effects, compared to same period prior year. Acquired |
The performance measure illustrates the underlying net sales development. |
||
| Adjusted EBITA | Refers to EBITA adjusted with adjustment items. |
Adjusted EBITA is used by management to measure the underlying earnings development. |
companies are included in organic growth from the point they have comparison figures for the actual period. |
|||
| Adjusted EBITA margin |
Adjusted EBITA as a percentage of net sales. |
Adjusted EBITA margin is used to put adjusted EBITA in relation to net sales. |
Operating cash flow |
EBITDA reduced by net investment in intangible |
The performance measure shows the cash flow from operations and is used |
|
| EBIT | Operating profit. Profit before tax on income for the period and financial items. |
EBIT is used to measure the underlying operating profit/loss from operating activities. |
and tangible fixed assets and change in working capital. |
when calculating cash conversion. | ||
| Cash conversion | Operating cash flow as a percentage of EBITDA. |
Cash conversion is used to monitor cash generation from operations. |
Vestum presents a number of performance measures that are not defined in accordance with IFRS. The Company considers these measures to provide valuable supplementary information to investors and the management as they allow an evaluation of trends and performance. As not all companies calculate these measures in the same way, they are not always comparable with those used by other companies. These measures should therefore not be regarded as replacing measures that are defined in accordance with IFRS. Reconciliation of these measures is presented below. For definitions of performance measures, se previous page.
| SEK million | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 month |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Earnings measures | ||||||
| (A) Net sales | 1,797 | 292 | 4,904 | 328 | 5,892 | 1,316 |
| Operating expenses and other operating income | -1,530 | -244 | -4,252 | -278 | -5,129 | -1,155 |
| (B) EBITDA | 267 | 48 | 652 | 50 | 763 | 161 |
| Depreciation excl. acquired surplus values | -65 | -20 | -178 | -22 | -217 | -61 |
| (C) EBITA | 203 | 27 | 474 | 28 | 546 | 100 |
| (C/A) EBITA margin | 11.3% | 9.4% | 9.7% | 8.6% | 9.3% | 7.6% |
| Adjustments items | ||||||
| Acquisition-related transaction costs | 0 | 4 | 11 | 9 | 18 | 16 |
| Impact on profit/loss from contingent consideration | -25 | - | -22 | - | -22 | 0 |
| Costs related to preparations for change of listing | 2 | - | 4 | - | 4 | - |
| Restructuring costs | 6 | - | 6 | - | 6 | - |
| Total adjustments | -18 | 4 | -2 | 9 | 5 | 16 |
| (D) Adjusted EBITDA | 185 | 31 | 472 | 37 | 551 | 116 |
| (D/A) Adjusted EBITA margin | 10.3% | 10.7% | 9.6% | 11.2% | 9.4% | 8.8% |
| (E) Average number of shares during the period 1) | 367,645,024 260,425,997 363,451,674 139,233,893 356,533,735 | 188,831,121 | ||||
| (C/E) EBITA per share | 0.55 | 0.11 | 1.30 | 0.20 | 1.53 | 0.53 |
| Net sales growth | ||||||
| Organic net sales growth | 87 | - | 101 | - | 101 | - |
| Exchange rate effect | - | - | - | - | - | - |
| Net sales from acquired companies | 1,418 | 292 | 4,475 | 328 | 5,462 | 1,316 |
| Net sales growth | 1,505 | 292 | 4,576 | 328 | 5,563 | 1,316 |
1) Average number of shares is adjusted based on reverse split 2021
| SEK million | Jul-Sep 2022 |
Jul-Sep 2021 |
Jan-Sep 2022 |
Jan-Sep 2021 |
Rolling 12 month |
Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Balance measures | ||||||
| Non-current interest-bearing liabilities |
2,704 | 734 | 2,704 | 734 | 2,704 | 2,510 |
| Current interest-bearing liabilities | 4 | 152 | 4 | 152 | 4 | 12 |
| Lease liabilities | 660 | 316 | 660 | 316 | 660 | 481 |
| Cash and cash equivalents | -581 | -183 | -581 | -183 | -581 | -1,518 |
| (F) Financial net debt | 2,786 | 1,018 | 2,786 | 1,018 | 2,786 | 1,486 |
| (G) Pro forma EBITDA | 983 | N/A | 983 | N/A | 983 | 643 |
| (F/G) Financial net debt in relation to pro forma EBITDA | 2.8x | N/A | 2.8x | N/A | 2.8x | 2.3x |
| Cash conversion | ||||||
| (B) EBITDA | 267 | 48 | 652 | 50 | 763 | 161 |
| Net investment in intangible assets and property, plant and equipment |
-9 | -12 | -34 | -10 | -98 | -75 |
| Change in working capital | -126 | -57 | -163 | -51 | -240 | -128 |
| (H) Operating cash flow | 132 | -21 | 455 | -11 | 424 | -42 |
| (H/B) Cash conversion | 50% | -44% | 70% | -22% | 56% | -26% |
The Board of Directors and the CEO ensure that the interim report gives a true and fair view of the Parent Company's and the Group's operations, position and results and describes the significant risks and uncertainties faced by the Parent Company and the companies that are part of the Group.
Per Åhlgren Board chairman Johan Heijbel Board member Johannes Lien Board member
Helena Fagraeus Lundström Board member
Olle Nykvist Board member
Anders Rosenqvist Board member
Conny Ryk CEO
This report has not been subject to review by the company's auditors.
This information is information that Vestum AB (publ) is obliged to publish in accordance with the EU Market Abuse Regulation. The information was provided by the contact person below for publication on November 22, 2022 at 07:00 CET.
The year-end report for 2022 will be published on February 17, 2023. The financial statements for 2022 will be published on April 6, 2023. Interim report for the first quarter 2023 will be published on May 12, 2023. The Annual General Meeting 2023 will be held in May 23, 2023. Interim report for the second quarter 2023 will be published on August 18, 2023. Interim report for the third quarter 2023 will be published on November 17, 2023.
Conny Ryk; CEO Olof Andersson; CFO: Olle Nykvist; Head of communications and IR: [email protected] [email protected] [email protected]
Vestum AB (publ) Riddargatan 10 114 35 Stockholm Sweden
E-mail: [email protected] Website: www.vestum.se
Company information Org nr 556578-2496 Registered office: Stockholm Vestum's share is traded under the short name VESTUM on Nasdaq First North Growth Market, the company's Certified Adviser is G&W Fondkommission: phone: +46 (0)8 503 000 50, e-mail: [email protected]
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