22 July 2021, 08:00
Sdiptech AB (publ) publishes interim report for the second quarter (April - June) 2021
The report is available on the company's website: www.sdiptech.se
SDIPTECH DELIVERS A STRONG FIRST HALF YEAR
SECOND QUARTER 2021
FIRST SIX MONTHS 2021
COMMENTS BY THE CEO
SDIPTECH DELIVERS A STRONG FIRST HALF YEAR
Sdiptech's overall goal is to increase profits through both organic growth and acquisitions. On average, we have had an annual profit growth rate of 36.1 percent since 2016. During the first half of the year, we increased the pace and EBITA* rose by a total of 54.1 percent. The multi-year trend of increased profitability continues and our EBITA* margin rose during the first half of the year by two percentage points, from 15.9 to 17.9 percent.
We can proudly present another good quarter for Sdiptech. During the three-month period, our business units delivered with full capacity and strong demand, corresponding to sales growth of 37.6 percent, of which 15.7 percent was organically excluding currency effects. The comparative figures from last year were however characterized by a period when the pandemic hit Sdiptech the hardest, mainly in the form of delayed projects. In accordance with what was communicated at the time, Sdiptech showed a delivery against planned orders of 85–95 percent.
While the comparative figures for sales were temporarily weakened during the second quarter of 2020, we had an extra good profitability as a result of cost reductions and subsidies received. This resulted in high comparative figures for the Group's profit development, which in turn led to a negative organic EBITA* growth of -7.8 percent in the quarter. Profitable acquisitions have, however, contributed to the EBITA* profit increasing by a total of 46.1 percent and to a continued margin strengthening corresponding to an EBITA* margin of 18.1 (17.1) percent for the second quarter. We maintain our margin guidance of 19–20 percent for the full year 2021.
We have not experienced any significant disruptions from the pandemic, Brexit or strains in supply chains during Q2. We are constantly working to review these risks and in particular the work with preventive stockpiling of critical components and materials. In addition, and as a result of strong sales, we have increased the amount of accounts receivable, and after high profits and deferred tax in 2020, we have paid more tax than normal. All this has had an effect on our otherwise strong cash generation.
During the quarter, our business activity at Group level was high in connection with preparations for the change of list, from First North to Nasdaq Stockholm's main market. It was a logical step that consolidates the Group's high quality, and we have already been able to see proofs that is has strengthened Sdiptech's awareness internationally.
We have also had the pleasure of launching four long-term sustainability goals. Our greatest opportunity to contribute to increased social and climate sustainability is through our business units' products and services - this has been the core of our business for several years. However, we work just as hard to develop and help our existing companies make even more long-term sustainable decisions. We have already identified efficiency opportunities that will reduce our climate footprint.
At the beginning of June, Finnish Ficon Oy, an additional acquisition to Hilltip Oy, was acquired. In the Finnish market, Ficon is a leading player in the manufacture of snow and ice clearing equipment adapted for smaller vehicles. In addition to increased traffic safety on smaller roads and resource efficiency where larger vehicles are not needed or can operate, Ficon facilitates for small-scale companies.
During the second quarter, our Swedish and Austrian elevator operations were divested, which is in line with our ambition to concentrate our growth in the Water & Energy and Special Infrastructure Solutions business areas. Our Croatian business unit Metus is now Sdiptech's remaining elevator business. With a unique service offering to global elevator companies, an in-house developed product and production as well as a local service business, Metus has a strong market position.
As we divested some companies before the earnout periods expired, the total profit effect from all divestments during both the second quarter and the first half of 2021 is SEK -20 million, when the companies submit the consolidated balance sheet and earnout agreements are dissolved with associated booked goodwill. Overall, however, our ownership over the years has been profitable, with a total profit contribution to the Group of SEK 153 million after tax and a return on equity of approximately 21 percent during the years the companies have been part of Sdiptech.
We see an unchanged good demand for our products and services, where the need for solutions that contribute to more sustainable, efficient and safe societies is solid. The inventory build-up continues and aims to ensure material supply and customer deliveries. Our purchase prices thus increase, but the vast majority of customers understand the situation and agree to share the cost increases. With that said, the global delivery situation is difficult to assess and some uncertainty about the supply of goods remains ahead of the second half of the year.
Regarding acquisitions, we have this year broadened our geographical search to more countries and we have a strong and exciting pipeline. Restrictions on travel and physical meetings have slightly extended our acquisition processes, but in connection with these restrictions being eased, we can intensify our acquisition dialogues. We look forward to being able to welcome new great companies during the second half of 2021.
President and CEO
For additional information, please contact:
Sdiptech AB (publ) is required to disclose this information pursuant to EU Market Use Regulation 596/2014.The company is based in Stockholm. The information was provided by the above contact persons for publication 22 July 2021 at 08:00 CEST.
Sdiptech’s common shares of series B are traded on Nasdaq Stockholm under the short name SDIP B with ISIN code SE0003756758. Sdiptech’s preferred shares are traded under the short name SDIP PREF with ISIN code SE0006758348.
Further information is available on the company's website: www.sdiptech.com
Sdiptech is a technology group that acquires and develops market-leading niche operations that contribute to creating more sustainable, efficient and safe societies. Sdiptech has approximately SEK 2,500 million in sales and is based in Stockholm.