Interim report January-March 2018

Apr 24 2018

Interim report January-March 2018

Reporting period January – March 

  • Net sales increased by 10.4 per cent to SEK 2,674 (2,423) million. Organically, net sales decreased by 0.6 per cent
  • EBITA* increased by 8.6 per cent to SEK 418 (385) million
  • The EBITA margin* amounted to 15.6 (15.9) per cent
  • Earnings before tax grew by 3.9 per cent to SEK 346 (333) million
  • Net profit for the period grew by 3.6 per cent to SEK 259 (250) million
  • Earnings per share increased by 3.7 per cent to SEK 2.82 (2.72)
  • Cash flow from operating activities was SEK 31 (136) million
  • During the period, Lifco acquired two businesses with total annual sales of around SEK 97 million
  • During the period, SEK 1,750 million in bonds were issued to refinance existing bank loans and bonds

Summary of financial performance 

FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2018 2017 change change 2017
Net sales 2,674 2,423 10.4% 10,281 2.5% 10,030
EBITA* 418 385 8.6% 1,765 1.9% 1,732
EBITA margin* 15.6% 15.9% -0.3 17.2% -0.1 17.3%
Profit before tax 346 333 3.9% 1,486 0.9% 1,473
Net profit for the period 259 250 3.6% 1,116 0.8% 1,107
Earnings per share 2.82 2.72 3.7% 12.04 0.8% 11.94
Return on capital employed 19.4% 19.2% 0.2 19.4% -0.3 19.7%
Return on capital employed excl. goodwill 182% 146% 36 182% 5  177%

   * Before acquisition costs. 

COMMENTS FROM THE CEO 

The three-month period saw generally good demand in all three business areas. However, in many of our manufacturing units we were affected by increased delivery times and delays among our subcontractors. Coupled with bottlenecks in production, this led to lower organic growth and more cash being tied up in inventories. Net sales increased by 10.4 per cent to SEK 2,476 (2,423) million in the quarter, driven mainly by acquisitions. Cash flow from operating activities for the period was SEK 31 (136) million, mainly due to the increase in cash tied up in inventories.

EBITA before acquisition costs increased by 8.6 per cent to SEK 418 (385) during the period while the EBITA margin declined to 15.6 (15.9) per cent as a result of a weak performance in Demolition & Tools. Earnings per share increased in the quarter by 3.7 per cent to SEK 2.82 (2.72).

In the quarter, Lifco consolidated two new businesses with combined annual sales of around SEK 97 million. The consolidated companies were a majority stake in Computer konkret, a German software company, and Spocs, a Swedish provider of final assembly and testing services for electronic products. Both acquisitions had together a positive impact on Lifco’s earnings and financial position in the first quarter.

During the period, we also issued two unsecured bond loans of SEK 1,750 million in total with a tenor of two years. The proceeds of the bond issues were used to refinance existing bank loans and bonds. The bonds generated strong investor interest and the issues were oversubscribed.

Lifco has a good financial position and ample financial scope for further acquisitions, as net debt stands at 2.0 times EBITDA before acquisition costs, still well below our target of a net debt of up to three times EBITDA.

Fredrik Karlsson

CEO

 

GROUP PERFORMANCE IN JANUARY – MARCH 

Net sales increased by 10.4 per cent to SEK 2,674 (2,423) million, driven by acquisitions and foreign exchange gains. Acquisitions added 9.7 per cent while foreign exchange gains had a positive impact of 1.3 per cent. Organic growth was -0.6 per cent. During the period, Spocs of Sweden and Lifco’s majority stake in Computer konkret of Germany were consolidated.

EBITA* increased by 8.6 per cent to SEK 418 (385) million, driven by acquisitions and foreign exchange gains. Foreign exchange gains accounted for 1.4 percentage points of the increase in EBITA*. The EBITA margin* decreased by 0.3 percentage points to 15.6 (15.9) per cent. During the period, 37 per cent of EBITA* was generated in EUR, 28 per cent in SEK, 14 per cent in NOK, 7 per cent in DKK, 6 per cent in USD, 2 per cent in GBP and 6 per cent in other currencies.

Net financial items were SEK -13 (-9) million.

The profit before tax increased by 3.9 per cent to SEK 346 (333) million and the net profit for the period increased by 3.6 per cent to SEK 259 (250) million.

Average capital employed excluding goodwill decreased by SEK 12 million over the three-month period, to SEK 968 million at 31 March 2018, compared with SEK 980 million at 31 December 2017. EBITA* in relation to average capital employed excluding goodwill was 177 per cent at year-end and increased to 182 (146) per cent over the period.

The Group’s net interest-bearing debt increased by SEK 160 million from 31 December 2017 to SEK 3,696 million at 31 March 2018. During the period, Lifco issued two unsecured bond loans of SEK 1,750 million in total with a tenor of two years. The proceeds of the bond issues were used to refinance existing bank loans and bonds.

The net debt to equity ratio at 31 March 2018 was 0.6 (0.7) and net debt to EBITDA* was 2.0 (2.1) times. At the end of the period, 32 per cent of the Group’s interest-bearing liabilities were denominated in EUR.

Cash flow from operating activities decreased to SEK 31 (136) million during the period, mainly due to an increase in cash tied up in inventories. Cash flow from investing activities was SEK -107 (-562) million, which was mainly attributable to acquisitions.

FINANCIAL PERFORMANCE – BUSINESS AREAS 

Dental 

FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2018 2017 change change 2017
Net sales 1,010 1,000 1.0% 3,827 0.3% 3,817
EBITA* 191 185 3.2% 707 0.9% 701
EBITA margin* 18.9% 18.5% 0.4 18.5% 0.1 18.4%

The companies in Lifco’s Dental business area are leading suppliers of consumables, equipment and technical service to dentists across Europe, and the business area also has operations in the US. Lifco sells dental technology to dentists in the Nordic countries and Germany, and develops and sells medical record systems in Denmark and Sweden. The business area also includes a number of manufacturers which produce disinfectants, saliva ejectors, bite registration and dental impression materials, bonding agents and other consumables that are sold to dentists through distributors around the world.

Net sales in Dental increased by 1.0 per cent to SEK 1,010 (1,000) million in the first three months of the year. EBITA* increased by 3.2 per cent to SEK 191 (185) million during the period and the EBITA margin* expanded by 0.4 percentage points to 18.9 (18.5) per cent.

The dental market remains generally stable. The results of individual companies in Lifco’s Dental business may in any individual quarter be influenced by significant fluctuations in exchange rates, calendar effects such as Easter, gained or lost contracts in procurements of consumables by public-sector or major private-sector customers and fluctuations in the delivery of equipment. In the first quarter of 2018, the early Easter had a slight negative impact on net sales and earnings in Dental.

Lifco’s majority stake in Computer konkret, a German software provider to dentists and orthodontists, was consolidated as of January 2018. The company had net sales of around SEK 36 million in 2017 and has around 50 employees.

Demolition & Tools 

FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2018 2017 change change 2017
Net sales 597 479 24.6% 2,379 5.2% 2,261
EBITA* 117 111 5.4% 604 1.0% 598
EBITA margin* 19.6% 23.2% -3.6 25.4% -1.1 26.5%

DDemolition & Tools develops, manufactures and sells equipment for the construction and demolition industries. The Group is the world’s leading supplier of demolition robots and crane attachments. The Group is also one of the leading global suppliers of excavator attachments. The operations are divided into two divisions, Demolition Robots and Crane & Excavator Attachments, which are of roughly equal size in terms of sales.

Net sales increased by 24.6 per cent over the period to SEK 597 (479) million. The market situation was generally good. Among the larger markets, the US, Australia, France and Germany saw the fastest growth. EBITA* increased by 5.4 per cent during the year to SEK 117 (111) million and the EBITA margin* decreased by 3.6 percentage points to 19.6 (23.2) per cent, mainly due to provisions for doubtful trade receivables. Changes in the product mix and a weaker dollar also had a negative impact on the margin.

Systems Solutions 

FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2018 2017 change change 2017
Net sales 1,067 944 13.0% 4,075 3.1% 3,952
EBITA* 138 116 19.0% 559 4.1% 537
EBITA margin* 12.9% 12.3% 0.6 13.7% 0.1 13.6%

Through its operating units, Systems Solutions operates in industries offering systems solutions. Systems Solutions is divided into five divisions: Construction Materials, Interiors for Service Vehicles, Contract Manufacturing, Environmental Technology and Forest.

Net sales in Systems Solutions increased by 13.0 per cent to SEK 1,067 (944) million during the period. All divisions increased their sales apart from Interiors for Service Vehicles, where sales were on a par with the year-before period, and Contract Manufacturing, which saw a decline in sales.

EBITA* increased by 19.0 per cent to SEK 138 (116) million in the first three months of the year. All divisions except Contract Manufacturing improved their earnings during the period. The EBITA margin* expanded by 0.6 percentage points to 12.9 (12.3) per cent.

Construction Materials reported good sales and earnings growth for the period as a result of acquisitions.

Sales in Interiors for Service Vehicles were in line with the same quarter in 2017 with increased profitability.

In Contract Manufacturing, sales and earnings for the period were down year on year due to delayed deliveries and the decision by a major customer to move its production to China. Spocs, a Swedish provider of final assembly and testing services for electronic products, was consolidated as of March 2018. The company had net sales of around SEK 61 million in 2017 and has 23 employees.

Environmental Technology reported good sales and earnings growth for the period, mainly on the back of acquisitions.

Forest reported good sales and earnings growth for the period. The projects which created problems in Forest in 2017 have now been concluded. This, coupled with strong demand, led to a good performance during the three-month period.

ACQUISITIONS 

Lifco made the following acquisitions during the period:

Consolidated from month Acquisitions Business area Net sales Employees
January Computer konkret Dental SEK 36m 50
March Spocs Systems Solutions SEK 61m 23

Further information on acquisitions is provided on page 15. The figures for net sales and number of employees refer to estimated annual net sales and the number of employees at the acquisition date.

Taken together, the acquisitions will have a positive impact on Lifco’s results and financial position in the current year.

 

OTHER FINANCIAL INFORMATION 

Employees 

The average number of employees in the first quarter was 4,714 (3,669) and the number of employees at the end of the period was 4,736 (3,740). Acquisitions added 73 employees.

Events after the end of the reporting period 

After the end of the reporting period the majority of Dental Direct of Norway and its Danish subsidiary 3D Dental have been consolidated in business area Dental. Net sales in the companies in 2016 amounted to about 95 MNOK and 25 MDKK respectively. The companies are distributors of dental products and have together about 20 employees.

Related party transactions

No significant transactions with related parties took place during the period.

Risks and uncertainties 

The risk factors which have the biggest impact for Lifco are the competitive situation, structural changes in the market and general level of economic activity. Lifco is also exposed to financial risks, including currency risks, interest rate risks, credit and counterparty risks.

The parent company is affected by the above risks and uncertainties in its capacity as owner of the subsidiary companies.

For further information on Lifco’s risks and risk management, see the annual report for 2017.

Accounting principles 

The Group’s interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. In respect of the parent company, the report has been prepared in accordance with the Annual Accounts Act and Recommendation RFR 2 Financial Reporting for Legal Entities of the Swedish Financial Reporting Board. The accounting principles have been applied in accordance with those which are presented in the annual report for 2017 and should be read in conjunction with these.

The Group has evaluated the effects of implementing IFRS 9 Financial Instruments, which became effective on 1 January 2018 and has established that the impact is marginal. No adjustments have therefore been made to the opening balances for 2018. IFRS 15 Revenue from Contracts with Customers became effective on 1 January 2018, and the effects of the standard in Lifco’s subsidiaries have been assessed in a project that was initiated in 2016. No material differences compared with the previous standards have been identified, and no adjustments have therefore been made to the opening balances for 2018. IFRS 15 is being applied from 1 January 2018 and the disclosures in the interim report have been adapted in accordance with this new standard. The Group is currently evaluating the effects of introducing the IFRS 16 Leases standard, which will become effective on 1 January 2019. The Group does not currently intend to apply the standard prior to the effective date.

This report has not been examined by the Company’s auditors.

DECLARATION OF THE BOARD OF DIRECTORS 

The Board of Directors and Chief Executive Officer warrant and declare that this three-month report gives a true and fair view of the parent company’s and Group’s operations, financial positions and results, and that it describes significant risks and uncertainties faced by the parent company and the companies included in the Group.

Enköping, 24 April 2018

Carl Bennet Chairman of the Board Gabriel Danielsson Director Ulrika Dellby Director
Erik Gabrielson
Director
Ulf Grunander Director Anna Hallberg Director
Annika Espander Jansson Director Fredrik Karlsson President and CEO, Director Annika Norlund Director, employee representative
Johan Stern Vice Chairman Axel Wachtmeister Director Hans-Eric Wallin Director,employee representative

FINANCIAL CALENDAR 

The report for the second quarter will be published on 18 July

The report for the third quarter will be published on 25 October

The year-end report for 2018 will be published on 6 February 2019

 

ANNUAL GENERAL MEETING 2018 

The Annual General Meeting of Lifco AB will be held on Tuesday 24 April 2018, at 3 p.m. CET, at Epicenter, Mäster Samuelsgatan 36, Stockholm.

FURTHER INFORMATION 

Media and investor relations: Åse Lindskog, ir@lifco.se, telephone +46 (0)730 24 48 72

TELECONFERENCE 

Media and analysts are welcome to call in to a teleconference, where CEO Fredrik Karlsson, CFO Therése Hoffman and Deputy CEO Per Waldemarson will present the interim report. The presentation is expected to take around 20 minutes, after which participants will be invited to ask questions.

Time: Tuesday 24 April, 1 p.m.

Link to the presentation:

https://tv.streamfabriken.com/lifco-q1-2018

Telephone numbers:

Sweden +46 8 566 426 62
UK +44 203 008 98 02
US +1 855 753 22 35

LIFCO IN BRIEF 

Lifco offers a safe haven for small and medium-sized businesses. Lifco’s business concept is to acquire and develop market-leading niche businesses with the potential to deliver sustainable earnings growth and robust cash flows. Lifco is guided by a clear philosophy centred on long-term growth, a focus on profitability and a strongly decentralised organisation. The Group has three business areas: Dental, Demolition & Tools and Systems Solutions. At year-end the Lifco Group consisted of 138 operating companies in 29 countries. In 2017, Lifco reported EBITA of SEK 1,732 million on net sales of SEK 10.0 billion. The EBITA margin was 17.3 per cent. Read more at www.lifco.se

This information constitutes information that Lifco AB is required to publish under
the EU’s Market Abuse Regulation.
The information was submitted for publication through the aforementioned
contact person on 24 April 2018, at 11:30 a.m.

CONDENSED CONSOLIDATED INCOME STATEMENT 

FIRST QUARTER FULL YEAR
SEK million 2018 2017 change 2017
Net sales 2,674 2,423 10.4% 10,030
Cost of goods sold -1,550 -1,418 9.3% -5,766
Gross profit 1,124 1,005 11.8% 4,264
Selling expenses -310 -258 20.2% -1,095
Administrative expenses -409 -374 9.4% -1,525
Development costs -37 -24 54.2% -105
Other income and expenses -9 -7 28.6% -20
Operating profit 359 342 5.0% 1,519
Net financial items -13 -9 44.4% -46
Profit before tax 346 333 3.9% 1,473
Tax -87 -83 4.8% -366
Net profit for the period 259 250 3.6% 1,107
Profit attributable to:
Parent company shareholders 256 248 3.2% 1,084
Non-controlling interests 3 2 50.0% 23
Earnings per share before and after dilution for the period, attributable to Parent company shareholders 2.82 2.72 3.7% 11.94
EBITA* 418 385 8.6% 1,732
Depreciation of tangible assets 30 26 15.4% 112
Amortisation of intangible assets 3 2 50.0% 11
Amortisation of intangible assets arising from acquisitions 57 41 39.0% 196

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 

FIRST QUARTER FULL YEAR
SEK million 2018 2017 change 2017
Net profit for the period 259 250 3.6% 1,107
Other comprehensive income
Items which can later be reclassified to profit or loss: Hedge of net investment 20 10 100%  99
Transla­tion differ­ences Tax related to other comprehensive income 197-4 -23-2 -956%100% -59-22
Total comprehensive income for the period 472 235 101% 1,125
Comprehensive income attributable to:
Parent company shareholders 467 233 100% 1,102
Non-controlling interests 5 2 150% 23
472 235 101% 1,125

SEGMENT OVERVIEW 

Lifco’s operations are monitored and evaluated by the CEO and resources are allocated based on information from the three operating segments: Dental, Demolition & Tools and Systems Solutions. The defined quantitative limits have been exceeded only by Dental and Demolition & Tools. One further operating segment, Systems Solutions, is presented. This operating segment consists of a merger of those divisions which have similar economic characteristics and which do not individually meet the defined quantitative limits. These divisions are Construction Materials, Interiors for Service Vehicles, Contract Manufacturing, Environmental Technology and Forest.

NET SALES TO EXTERNAL CUSTOMERS 

No sales are made between the segments.

FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2018 2017 change change 2017
Dental 1,010 1,000 1.0% 3,827 0.3% 3,817
Demolition & Tools 597 479 24.6% 2,379 5.2% 2,261
Systems Solutions 1,067 944 13.0% 4,075 3.1% 3,952
Group 2,674 2,423 10.4% 10,281 2.5% 10,030

Net sales by type of income:

FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2018 2017 change change  2017
Dental products 1,010 1,000 1.0% 3,827 0.3% 3,817
Machinery and tools 597 479 24.6% 2,379 5.2% 2,261
Construction materials 244 170 43.5% 878 9.2% 804
Interiors for service vehicles 136 141 -3.5% 548 -0.9% 553
Contract manufacturing 208 239 -13.0% 870 -3.4% 901
Environmental technology 315 288 9.4% 1,151 2.4% 1,124
Forest 164 106 54.7% 628 10.2%  570
Group 2,674 2,423 10.4% 10,281 2.5% 10,030

EBITA 

A breakdown of results by segment is made up to and including EBITA. EBITA is reconciled to profit before tax in accordance with the following table:

FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2018 2017 change change 2017
Dental 191 185 3.2% 707 0.9% 701
Demolition & Tools 117 111 5.4% 604 1.0% 598
Systems Solutions 138 116 19.0% 559 4.1% 537
Central Group functions -28 -27 3.7% -105 1.0% -104
EBITA before restructuring, integration and acquisition costs 418 385 8.6% 1,765 1.9% 1,732
Restructuring, integration and acquisition costs -2 -2 -17 -17
EBITA 416 383 8.6% 1,748 1.9% 1,715
Amortisation of intangible assets arising on acquisition -57 -41 39.0%  -212 8.2%  -196 
Net financial items -13 -9 44.4% -50 8.7%  -46
Profit before tax 346 333 3.9% 1,486 0.9% 1,473

 

CONDENSED CONSOLIDATED BALANCE SHEET 

SEK million 31 Mar 2018 31 Mar 2017 31 Dec 2017
ASSETS
Intangible assets 8,606 7,265 8,288
Tangible fixed assets 576 511 550
Financial assets 151 112 130
Inventories 1,555 1,214 1,391
Accounts receivable – trade 1,497 1,222 1,274
Current receivables 274 293 254
Cash and cash equivalents 250 255 305
TOTAL ASSETS 12,909 10,872 12,192
EQUITY AND LIABILITIES
Equity 6,011 4,988 5,546
Non-current interest-bearing liabilities incl. pension provisions 1,055 1,116 1,033
Other non-current liabilities and provisions 1,072 661 1,025
Current interest-bearing liabilities 2,891 2,568 2,808
Accounts payable – trade 673 595 557
Other current liabilities 1,207 944 1,223
TOTAL EQUITY AND LIABILITIES 12,909 10,872 12,192

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 

Attributable to parent company shareholders
SEK million 31 Mar 2018 31 Mar 2017 31 Dec 2017
Opening equity 5,496 4,712 4,712
Comprehensive income for the period 467 233 1,102
Dividend -318
Closing equity 5,963 4,945 5,496
Equity attributable to:
Parent company shareholders 5,963 4,945 5,496
Non-controlling interests 48 43 50
6,011 4,988 5,546

CONDENSED CONSOLIDATED CASH FLOW STATEMENT 

FIRST QUARTER FULL YEAR
SEK million 2018 2017 2017
Operating activities
Operating profit 359 342 1,519
Non-cash items 90 69 318
Interest and financial items, net -13 -9 -46
Tax paid -151 -110 -368
Cash flow before changes in working capital 285 292 1,423
Changes in working capital
Inventories -155 -23 -124
Current receivables -198 -188 -85
Current liabilities 99 55 112
Cash flow from operating activities 31 136 1,326
Business acquisitions and sales, net -66 -515 -1,378
Net investment in tangible fixed assets -39 -45 -137
Net investment in intangible assets -2 -2 -9
Cash flow from investing activities -107 -562 -1,524
Borrowings/repayment of borrowings, net 1 394 557
Dividends paid -7 -5 -337
Cash flow from financing activities -6 389 220
Cash flow for the period -82 -37 22
Cash and cash equivalents at beginning of period 305 293 293
Transla­tion differ­ences 27 -1 -10
Cash and cash equivalents at end of period 250 255 305


ACQUISITIONS IN 2018 

Two new businesses were consolidated during the year. The acquisitions comprised all shares of Spocs and a majority stake in Computer konkret.

The purchase price allocation includes all acquisitions that were made in the first three months of the year. Purchase price allocations are preliminary until one year after the acquisition date.

Acquisition-related expenses of SEK 2 million are included in administrative expenses in the consolidated income statement for the first three months of 2018. If the businesses had been consolidated from 1 January 2018, consolidated net sales would have increased by around SEK 15 million. The acquisitions would have had a positive impact on earnings if the companies had been consolidated from 1 January 2018.

Acquired net assets
Net assets, SEK million Carrying amount Value adjustment Fair value
Trademarks, customer relationships, licences 4 46 50
Tangible assets 1 1 2
Inventories, trade and other receivables 29 29
Trade and other payables -27 -15 -42
Cash and cash equivalents 3 3
Net assets 10 32 42
Goodwill 44 44
Total net assets 10 76 86
Effect on cash flow, SEK million
Consideration 86
Consideration not paid -17
Cash and cash equivalents in acquired companies -3
Total cash flow effect 66

FINANCIAL INSTRUMENTS 

CARRYING AMOUNT FAIR VALUE
SEK million 31 Mar 2018 31 Mar 2017 31 Mar 2018 31 Mar 2017
Loans and receivables
Accounts receivable – trade 1,497 1,222 1,497 1,222
Other non-current financial receivables 6 4 6 4
Cash and cash equivalents 250 255 250 255
Total 1,753 1,481 1,753 1,481
Liabilities at fair value through profit or loss
Other liabilities 278 57 278 57
Other financial liabilities
Interest-bearing borrowings 3,913 3,651 3,913 3,651
Accounts payable – trade 673 595 673 595
Total 4,864 4,303 4,864 4,303

Financial instruments at fair value are classified into different levels depending on how fair value is determined. All financial instruments at fair value in the Lifco Group have been classified as level 3, i.e. non-observable inputs. The fair value of short-term borrowings is equal to the carrying amount, as the discount effect is insignificant. Other liabilities classified as financial instruments refer to mandatory put/call options related to non-controlling interests.

KEY PERFORMANCE INDICATORS 

ROLLING TWELVE MONTHS TO 2018 31 MAR 2017 31 DEC 2017 31 MAR
Net sales, SEK million 10,281 10,030 9,359
Change in net sales, % 2.5 11.6 4.1
EBITA*, SEK million 1,765 1,732 1,488
EBITA margin*, % 17.2 17.3 15.9
EBITDA*, SEK million 1,892 1,855 1,596
EBITDA margin, % 18.4 18.5 17.1
Capital employed, SEK million 9,110 8,787 7,744
Capital employed excl. goodwill and other intangible assets, SEK million 968 980 1,017
Return on capital employed, % 19.4 19.7 19.2
Return on capital employed excl. goodwill, % 182 177 146
Return on equity, % 20.7 21.5 21.5
Net interest-bearing debt, SEK million 3,696 3,536 3,429
Net debt/equity ratio 0.6 0.6 0.7
Net debt/EBITDA* 2.0 1.9 2.1
Equity/assets ratio, % 46.6 45.5 45.9
Number of shares, thousand 90,843 90,843 90,843
Average number of employees 4,714 4,107 3,669

CONDENSED PARENT COMPANY INCOME STATEMENT

FIRST QUARTER FULL YEAR
SEK million 2018 2017 2017
Administrative expenses -33 -34 -128
Other operating income* 89
Operating profit -33 -34 -39
Net financial items** 44 329 683
Profit after financial items 11 295 644
Appropriations -41
Tax 6 1 -10
Net profit for the period 17 296 593

* Invoicing of Group-wide services. 

** Net financial items include SEK 39 (302) million in dividends received during the three-month period. 

CONDENSED PARENT COMPANY BALANCE SHEET 

SEK million 31 Mar 2018 31 Mar 2017
ASSETS
Tangible fixed assets 0 0
Financial assets 4,335 3,988
Current receivables 3,817 3,701
Cash and cash equivalents 29 27
TOTAL ASSETS 8,181 7,716
EQUITY AND LIABILITIES
Equity 2,759 2,729
Untaxed reserves 70 41
Provisions 1
Non-current interest-bearing liabilities 1,022 1,078
Current interest-bearing liabilities 2,872 2,556
Current non-interest-bearing liabilities                          1,457 1,312
TOTAL EQUITY AND LIABILITIES 8,181 7,716
Pledged assets
Contingent liabilities 135 3

DEFINITIONS AND OBJECTIVE 

Return on equity Net profit for the period divided by average equity.
Return on capital employed EBIT before acquisition costs divided by capital employed.
Return on capital employed excluding goodwill and other intangible assets EBITA before acquisition costs divided by capital employed excluding goodwill and other intangible assets.
EBITA EBITA is a measure which Lifco considers relevant for investors who wish to understand the earnings generated after investments in tangible and intangible assets requiring reinvestment but before investments in intangible assets attributable to acquisitions. Lifco defines earnings before interest, tax and amortisation (EBITA) as operating profit before amortisation and impairment of intangible assets arising from acquisitions. In its financial reports Lifco excludes acquisition costs. This is indicated by an asterisk.
EBITA margin EBITA divided by net sales.
EBITDA EBITDA is a measure which Lifco considers relevant for investors who wish to understand the earnings generated before investments in fixed assets. Lifco defines earnings before interest, tax, depreciation and amortisation (EBITDA) as operating profit before depreciation, amortisation and impairment of tangible and intangible assets. In its financial reports Lifco excludes acquisition costs. This is indicated by an asterisk.
EBITDA margin EBITDA divided by net sales.
Net debt/equity ratio Net interest-bearing debt divided by equity.
Earnings per share Profit after tax attributable to parent company shareholders divided by average number of outstanding shares.
Net interest-bearing debt Lifco uses the alternative KPI net interest-bearing debt. Lifco considers that this is a useful additional KPI which allows users of the financial reports to assess the Group’s ability to pay dividends, make strategic investments and meet its financial obligations. Lifco defines the KPI as follows: current and non-current liabilities to credit institutions, bond loans and interest-bearing pension provisions less estimated contingent consideration for acquisitions, and cash and cash equivalents.
Equity/assets ratio Equity divided by total assets (balance sheet total).
Capital employed Capital employed is a measure which Lifco uses for calculating the return on capital employed and for measuring how efficient the Group is. Lifco considers that capital employed is useful in helping users of the financial reports to understand how the Group finances itself. Lifco defines capital employed as total assets less cash and cash equivalents, interest-bearing pension provisions and non-interest-bearing liabilities, calculated as the average of the last four quarters.
Capital employed excluding goodwill and other intangible assets Capital employed excluding goodwill and other intangible assets is a measure which Lifco uses for calculating the return on capital employed and for measuring how efficient the Group is. Lifco considers that capital employed excluding goodwill and other intangible assets is useful in helping users of the financial reports to understand the impact of goodwill and other intangible assets on that capital which requires a return. Lifco defines capital employed excluding goodwill and other intangible assets as total assets less cash and cash equivalents, interest-bearing pension provisions, non-interest-bearing liabilities, goodwill and other intangible assets, calculated as the average of the last four quarters.

RECONCILIATION OF ALTERNATIVE KEY PERFORMANCE INDICATORS 

The interim report presents alternative key performance indicators for assessing the Group’s performance. The primary alternative KPIs presented in this interim report are EBITA, EBITDA, net debt and capital employed. Definitions of the alternative KPIs are presented on pages 1819.

EBITA compared with financial statements in accordance with IFRS

SEK million 3 MTHS2018 3 MTHS2017 FULL YEAR2017
Operating profit 359 342 1,519
Amortisation of intangible assets arising from acquisitions 57 41 196
EBITA 416 383 1,715
Restructuring, integration and acquisition costs 2 2 17
EBITA before acquisition costs 418 385 1,732

EBITDA compared with financial statements in accordance with IFRS

SEK million 3 MTHS2018 3 MTHS2017 FULL YEAR2017
Operating profit 359 342 1,519
Depreciation of tangible assets 30 26 112
Amortisation of intangible assets 3 2 11
Amortisation of intangible assets arising from acquisitions 57 41 196
EBITDA 449 411 1,838
Restructuring, integration and acquisition costs 2 2 17
EBITDA before acquisition costs 451 413 1,855

Net interest-bearing debt compared with financial statements in accordance with IFRS

SEK million 31 Mar 2018 31 Mar 2017 31 Dec 2017
Non-current interest-bearing liabilities incl. pension provisions 1,055 1,116 1,033
Current interest-bearing liabilities 2,891 2,568 2,808
Cash and cash equivalents -250 -255 -305
Net interest-bearing debt 3,696 3,429 3,536

 

Capital employed and capital employed excluding goodwill and other intangible assets compared with financial statements in accordance with IFRS

SEK million 31 Mar 2018 31 Dec 2017 30 Sep 2017 30 Jun 2017
Total assets 12,909 12,192 11,843 11,308
Cash and cash equivalents -250 -305 -237 -227
Interest-bearing pension provisions -33 -36 -36 -35
Non-interest-bearing liabilities -2,951 -2,805 -2,568 -2,329
Capital employed 9,675 9,046 9,002 8,717
Goodwill and other intangible assets -8,606 -8,288 -8,017 -7,656
Capital employed excluding goodwill and other intangible assets 1,069 758 985 1,061

Capital employed and capital employed excluding goodwill and other intangible assets calculated as the average of the last four quarters compared with financial statements in accordance with IFRS

SEK million Average Q1 2018 Q4 2017 Q32017 Q2 2017
Capital employed 9,110 9,675 9,046 9,002 8,717
Capital employed excluding goodwill and other intangible assets 968 1,069 758 985 1,061
Total
EBITA* 1,765 418 510 404 433
Return on capital employed 19.4%
Return on capital employed excl. goodwill and other intangible assets 182%