Interim Report January-March 2022

Reporting period January – March

  • Net sales increased 29.8 per cent to SEK 5,022 (3,869) million. Organically, net sales grew by 13.6 per cent.
  • EBITA increased 24.7 per cent to SEK 1,016 (815) million.
  • The EBITA margin was 20.2 (21.1) per cent.
  • Profit before tax grew 25.4 per cent to SEK 838 (668) million.
  • Net profit for the period grew 25.3 per cent to SEK 628 (501) million.
  • Earnings per share increased 24.8 per cent till SEK 1.36 (1.09).
  • Cash flow from operating activities amounted to SEK 322 (321) million.
  • Four new businesses were consolidated during the period with total annual net sales of
    about SEK 230 million.

Summary of financial performance

FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2022 2021 change change 2021
Net sales 5,022 3,869 29.8% 18,633 6.6% 17,480
EBITA 1,016 815 24.7% 3,910 5.4% 3,709
EBITA margin 20.2% 21.1% -0.9 21.0% -0.2 21.2%
Profit before tax 838 668 25.4% 3,240 5.6% 3,070
Net profit for the period 628 501 25.3% 2,556 5.2% 2,429
Earnings per share1 1.36 1.09 24.8% 5.53 5.1% 5.26
Return on capital employed 22.5% 20.5% 2.0 22.5% 22.5%
Return on capital employed excl. goodwill 160% 151% 9.0 160% -2.0 162%

  1 Comparative figures have been recalculated after the share split in May 2021, whereby each share was split into five new shares of the same share class (split 5:1).

COMMENTS FROM THE CEO

Net sales increased 29.8 per cent during the quarter to SEK 5,022 (3,689) million, driven by organic growth, acquisitions and positive exchange rate effects. The generally favourable market environment in Demolition & Tools and Systems Solutions was a strong contributing factor to organic growth of 13.6 per cent.

During the first quarter, EBITA increased 24.7 per cent to SEK 1,016 (815) million and the EBITA margin was 20.2 (21.1) per cent. Profitability was negatively impacted by sales and marketing activities returning to pre-pandemic levels from the third quarter of 2021. Margins were also impacted negatively by certain operations not having received full cross-compensation of elevated raw-material prices.

Earnings per share increased 24.8% till SEK 1.36 (1.09) in the first quarter. Cash flow from operating activities increased to SEK 322 (321) million during the quarter. The relatively low cash flow is mainly due to increased inventory build-up as the result of high demand and disruptions to the global supply chain that led to requirements for greater safety stock.

During the quarter, Lifco consolidated four acquisitions, of which two in the Dental business area and one each in Demolition & Tools and Systems Solutions. The acquisitions in Dental pertain to Zenith Dental, a niche distributor of dental products in Denmark and Specialist Alarm Services in the UK that develops and manufactures staff attack alarms and nurse call systems for the healthcare sector. Operations in Demolition & Tools have expanded with the Italian company Cormidi, which manufactures mini loaders and mini dumpers. Construction Materials in the Systems Solutions business area was strengthened with the Norwegian Cenec Tavlebygg, which manufactures low-voltage electrical supplies. The acquisitions will have a positive impact on Lifco’s results and financial position during the year.

Lifco’s financial position remains good and interest-bearing net debt amounted to 1.1 times EBITDA at 31 March 2022, which is well in line with our target of interest-bearing net debt of a maximum of three times EBITDA and means that Lifco possesses the financial scope to make additional acquisitions.

Per Waldemarson

President and CEO

GROUP PERFORMANCE IN JANUARY – MARCH

Net sales increased 29.8 per cent to SEK 5,022 (3,869) million. Organic growth was 13.6 per cent, acquisitions contributed 11.7 per cent while changes in exchange rates had a positive impact of 4.5 per cent. During the quarter, the assets of the Danish company Zenith Dental were consolidated as well as the majority of the Norwegian company Cenec Tavlebygg, the Italian company Cormidi and the British company Specialist Alarm Services.

EBITA increased 24.7 per cent to SEK 1,016 (815) million and the EBITA margin was 20.2 (21.1) per cent. Profitability was negatively impacted by sales and marketing activities returning to pre-pandemic levels from the third quarter of 2021. Margins were also impacted negatively by certain operations not having received full cross-compensation of elevated raw-material prices.

Foreign exchange gains added 3.4 per cent to EBITA. During the period, 42 (40) per cent of EBITA was generated in EUR, 25 (24) per cent in SEK, 11 (12) per cent in NOK, 9 (7) per cent in GBP, 6 (7) per cent in DKK, 4 (5) per cent in USD and 3 (5) per cent in other currencies.

Net financial items were SEK -17 (-14) million.

Profit before tax grew by 25.4 per cent to SEK 838 (668) million and net profit for the period increased by 25.3 per cent to SEK 628 (501) million.

Average capital employed excluding goodwill increased by SEK 154 million during the quarter, to SEK 2,448 million at 31 March 2022, compared with SEK 2,294 million at 31 December 2021. EBITA in relation to average capital employed excluding goodwill declined during the quarter to 160 per cent from 162 per cent at year-end.

The Group’s net debt increased by SEK 597 million from 31 December 2021 to SEK 7,710 million at 31 March 2022, of which liabilities related to put/call options and additional considerations for acquisitions amounted to SEK 1,903 (1,299) million. Interest-bearing net debt increased by SEK 335 million since year-end and amounted to SEK 4,938 (3,895) million at 31 March 2022.

The net debt/equity ratio at 31 March 2022 was 0.7 (0.6) and net debt/EBITDA was 1.8 (1.8) times. Interest-bearing net debt/EBITDA was 1.1 (1.2) times. At period-end, 58 (43) per cent of the Group’s interest-bearing liabilities were denominated in EUR.

Cash flow from operating activities amounted to SEK 322 (321) million and was impacted by increased inventory build-up and increased accounts receivable. Cash flow from investing activities was SEK -574 (-872) million, which was mainly attributable to acquisitions.

FINANCIAL PERFORMANCE – BUSINESS AREAS

Dental

FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2022 2021 change change 2021
Net sales 1,306 1,339 -2.5% 5,090 -0.6% 5,123
EBITA 255 303 -15.8% 1,032 -4.4% 1,080
EBITA margin 19.5% 22.6% -3.1 20.3% -0.8 21.1%

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, Sweden and Germany. The business area also includes a number of manufacturers which produce fitting products for dentures, disinfectants, saliva ejectors, bite registration and dental impression materials, bonding agents and other consumables that are sold to dentists through distributors around the world. In recent years, Dental has through acquisitions and organic growth increased its earnings in manufacturing, dental technology and software faster than in distribution, which has had a positive impact on margin growth in the business area.

Dental’s sales decreased by 2.5 per cent to SEK 1,306 (1,339) million during the first quarter. Sales were impacted in the quarter by disruptions in production of dental prosthetics in China due to the pandemic.

EBITA declined by 15.8 per cent during the period to SEK 255 (303) million and the EBITA margin was 19.5 (22.6) per cent. Profitability was negatively impacted by the production disruptions in China and sales and marketing activities returning to pre-pandemic levels from the third quarter of 2021.

In January 2022, the assets of the Danish company Zenith Dental were consolidated. The company is a niche distributor of dental products in Denmark and generated net sales of around DKK 21 million in 2020. In March 2022, the majority of the shares of the British company Specialist Alarm Services Ltd were consolidated. The company develops and manufactures staff attack alarms and nurse call systems for the healthcare sector. Specialist Alarm Services had a turnover of around GBP 3.9 million in 2021 and has 27 employees.

Demolition & Tools

FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2022 2021 change change 2021
Net sales 1,338 915 46.2% 5,124 9.0% 4,701
EBITA 319 232 37.5% 1,348 6.9% 1,261
EBITA margin 23.8% 25.4% -1.6 26.3% -0.5 26.8%

The Demolition & Tools business area 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 business area’s EBITA margin may fluctuate between quarters due to single, major special orders and changes to the product mix.

Net sales increased 46.2 per cent during the quarter to SEK 1,338 (915) million, driven by organic growth and acquisitions. The market situation during the quarter was generally very strong.

EBITA increased by 37.5 per cent to SEK 319 (232) million and the EBITA margin was 23.8 (25.4) per cent. EBITA was positively impacted by organic growth and acquisitions. Profitability was negatively impacted by sales and marketing activities returning to pre-pandemic levels from the third quarter of 2021. Margins were also impacted negatively by certain operations not having received full cross-compensation of elevated raw-material prices.

The majority of shares of the Italian company Cormidi were consolidated as of March 2022, a leading manufacturer of mini dumpers and mini loaders. The company had a turnover of around EUR 13 million in 2020 and has 45 employees.

Systems Solutions

FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2022 2021 change change 2021
Net sales 2,378 1,615 47.2% 8,419 10.0% 7,656
EBITA 480 309 55.3% 1,665 11.4% 1,494
EBITA margin 20.2% 19.1% 1.1 19.8% 0.3 19.5%

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

Net sales in Systems Solutions increased 47.2 per cent to SEK 2,378 (1,615) million during the quarter, mainly on the back of organic growth in all divisions as well as acquisitions. The market for Systems Solutions was healthy overall during the quarter.

EBITA increased during the period 55.3 per cent to SEK 480 (309) million and the EBITA margin increased 1.1 percentage points to 20.2 (19.1) per cent, positively impacted by acquisitions and organic growth. Profitability was negatively impacted by sales and marketing activities returning to pre-pandemic levels from the third quarter of 2021. Margins were also impacted negatively by certain operations not having received full cross-compensation of elevated raw-material prices.

Construction Materials reported a healthy sales trend in the quarter with strong improvements in profitability.

Contract Manufacturing reported a healthy sales trend in the quarter with a slight decline in profitability.

Environmental Technology reported a healthy sales and profitability trend in the quarter.

Service and Distribution reported a healthy sales trend in the quarter with stable profitability, positively impacted by acquisitions.

Forest reported a healthy sales trend with somewhat weaker profitability compared with the same quarter last year. Sales and earnings may vary substantially between the quarters depending on the outcomes in the project-related component of the business.

In the Construction Materials division, the majority of shares of the Norwegian company Cenec Tavlebygg AS, which manufactures low-voltage electrical supplies, were consolidated as of January 2022. The company had net sales of about NOK 17 million in 2020 and has eight employees.

ACQUISITIONS

Lifco consolidated the following acquisitions in the period:

Consolidated from month Acquisitions Business area Net sales Employees
January Zenith Dental Dental DKK 21m1
January Cenec Tavlebygg Systems Solutions NOK 17m1 8
March Cormidi Demolition & Tools EUR 13m1 45
March Specialist Alarm Services Dental GBP 3.9m 27
1 Refers to net sales in 2020.

Further information on the 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 was 6,258 (5,862) in the first quarter. At the end of the period, the number of employees was 6,311 (5,745). Acquisitions added 80 employees.

Events after the end of the reporting period

On 26 April 2022 Lifco signed an agreement to sell all the shares in the Estonian company Hekotek. The company develops and delivers sawmill equipment mainly to the Russian market. Hekotek has 130 employees and reported net sales of MEUR 40 in 2021. The company is based in Tallin, Estonia and has been consolidated in Business Area Systems Solutions, division Forest. The buyers are management of the company, who owned 17.5% of the shares before the transaction. The divestment is expected to be completed in May, 2022. The divestment will not have any significant effect on Lifco’s earnings or financial position in the financial year 2022.

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 global macroeconomic factors, 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.

Lifco is monitoring developments in the conflict in Ukraine and currently finds it difficult to assess the effect of sanctions against Russia and the implications that the conflict could have on the economic situation in Europe. Sales to Russia in 2021 amounted to SEK 387 million or 2.2 per cent of the Group’s sales and mainly refer to sales in the Forest division in the Systems Solutions business area. The Group’s sales to Ukraine in 2021 amounted to SEK 0.3 million.

The pandemic did not negatively affect the market situation in 2021 or the first quarter of 2022. Lifco continues to monitor the effects of the pandemic.

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 2021 Annual Report.

Accounting policies

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 policies have been applied in accordance with those which are presented in the 2021 Annual Report and should be read in conjunction with these.

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, 29 April 2022

Carl BennetChairman of the Board Ulrika DellbyDirector Annika EspanderDirector
Dan FrohmDirector Erik Gabrielson
Director
Ulf GrunanderDirector
Anders LorentzsonDirector, employee representative Johan SternVice Chairman Caroline af UgglasDirector
Axel WachtmeisterDirector Per WaldemarsonPresident and CEO, Director Peter WibergDirector,employee representative

FINANCIAL CALENDAR

The report for the second quarter will be published on 15 July.

The report for the third quarter will be published on 21 October.

The 2022 year-end report and the report for the fourth quarter will be published on 3 February 2023.

FURTHER INFORMATION

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

ONLINE PRESENTATION

An online presentation with Per Waldemarson, CEO, and Therése Hoffman, CFO, will take place on Friday, 29 April at 8.30 a.m. CEST. The presentation can be listened to online or by calling one of the telephone numbers below. The presentation will be followed by a question-and-answer session.

Link to the presentation: https://tv.streamfabriken.com/lifco-q1-2022

Telephone numbers:

Sweden +46 8 505 583 75
UK +44 3333 00 90 31
US +1 631 913 14 22, the PIN code for the US number: 32216869#

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 198 operating companies in 31 countries. In 2021, Lifco reported EBITA of SEK 3.7 billion on net sales of SEK 17.5 billion. The EBITA margin was 21.2 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 29 April 2022, at 7.30 a.m. CEST.

CONDENSED CONSOLIDATED INCOME STATEMENT

FIRST QUARTER FULL YEAR
SEK million 2022 2021 change 2021
Net sales 5,022 3,869 29.8% 17,480
Cost of goods sold -2,983 -2,227 33.9% -10,150
Gross profit 2,039 1,642 24.2% 7,330
Selling expenses -520 -400 30.0% -1,788
Administrative expenses -619 -522 18.6% -2,249
Development costs -39 -34 14.7% -140
Other income and expenses -6 -4 50.0% -12
Operating profit 855 682 25.4% 3,141
Net financial items -17 -14 21.4% -71
Profit before tax 838 668 25.4% 3,070
Tax -210 -167 25.7% -641
Net profit for the period 628 501 25.3% 2,429
Profit attributable to:
Parent Company shareholders 619 493 25.6% 2,390
Non-controlling interests 9 8 12.5% 39
Earnings per share before and after dilution for the period, attributable to Parent Company shareholders 1.36 1.09 24.8% 5.26
EBITA 1,016 815 24.7% 3,709
Depreciation of tangible assets 104 93 11.8% 393
Amortisation of intangible assets 5 3 66.7% 20
Amortisation of intangible assets arising from acquisitions 157 120 30.8% 526

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FIRST QUARTER FULL YEAR2021
SEK million 2022 2021 change
Net profit for the period 628 501 25.3% 2,429
Other comprehensive income
Items which can later be reclassified to profit or loss:
Hedge of net investment -35 -53 -34.0% -53
Translation differences 176 352 -50.0% 426
Tax related to other comprehensive income 7 12 -41.7% 12
Total comprehensive income for the period 776 812 -4.4% 2,814
Comprehensive income attributable to:
Parent Company shareholders 764 800 -4.5% 2,770
Non-controlling interests 12 12 44
776 812 -4.4% 2,814

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, Contract Manufacturing, Environmental Technology, Service and Distribution and Forest.

NET SALES TO EXTERNAL CUSTOMERS

No sales are made between the segments.

FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2022 2021 change change 2021
Dental 1,306 1,339 -2.5% 5,090 -0.6% 5,123
Demolition & Tools 1,338 915 46.2% 5,124 9.0% 4,701
Systems Solutions 2,378 1,615 47.2% 8,419 10.0% 7,656
Group 5,022 3,869 29.8% 18,633 6.6% 17,480

Net sales by type of income:

FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2022 2021 change change 2021
Dental products 1,306 1,339 -2.5% 5,090 -0.6% 5,123
Machinery and tools 1,338 915 46.2% 5,124 9.0% 4,701
Construction Materials 368 280 31.4% 1,355 6.9% 1,267
Contract Manufacturing 428 318 34.6% 1,636 7.2% 1,526
Environmental Technology 641 454 41.2% 2,262 9.0% 2,075
Service and Distribution 707 434 62.9% 2,296 13.5% 2,023
Forest 234 129 81.4% 870 13.7% 765
Group 5,022 3,869 29.8% 18,633 6.6% 17,480

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 2022 2021 change change 2021
Dental 255 303 -15.8% 1,032 -4.4% 1,080
Demolition & Tools 319 232 37.5% 1,348 6.9% 1,261
Systems Solutions 480 309 55.3% 1,665 11.4% 1,494
Central Group functions -38 -29 31.0% -135 7.1% -126
EBITA before acquisition
costs
1,016 815 24.7% 3,910 5.4% 3,709
Acquisition costs -4 -13 -69.2% -33 -21.4% -42
EBITA 1,012 802 26.2% 3,877 5.7% 3,667
Amortisation of intangibleassets arising from acquisitions -157 -120 30.8% -563 7.0% -526
Net financial items -17 -14 21.4% -74 4.2% -71
Profit before tax 838 668 25.4% 3,240 5.5% 3,070

CONDENSED CONSOLIDATED BALANCE SHEET

SEK million 31 Mar 2022 31 Mar 2021 31 Dec 2021
ASSETS 16,234
Intangible assets 13,085 15,497
Tangible assets 2,091 1,732 2,052
Financial assets 340 223 320
Inventories 3,362 2,306 2,821
Accounts receivable – trade 2,664 1,914 2,257
Current receivables 547 453 420
Cash and cash equivalents 1,474 1,266 1,509
TOTAL ASSETS 26,712 20,979 24,876
EQUITY AND LIABILITIES
Equity 11,470 9,499 10,756
Non-current interest-bearing liabilities incl. pension provisions 2,700 2,454 3,228
Other non-current liabilities and provisions 3,458 2,659 3,144
Current interest-bearing liabilities  4,581 3,417 3,737
Accounts payable – trade 1,596 1,052 1,294
Other current liabilities 2,907 1,898 2,717
TOTAL EQUITY AND LIABILITIES 26,712 20,979 24,876

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to Parent Company shareholders
SEK million 31 Mar 2022 31 Mar 2021 31 Dec 2021
Opening equity 10,645 8,614 8,614
Comprehensive income for the period 764 800 2,770
Change in value, owner transactions -57 -6 -194
Dividend -545
Closing equity 11,352 9,408 10,645
Equity attributable to:
Parent Company shareholders 11,352 9,408 10,645
Non-controlling interests 118 91 111
11,470 9,499 10,756

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

FIRST QUARTER FULL YEAR
SEK million 2022 2021 2021
Operating activities
Operating profit 855 682 3,141
Depreciation of right-of-use assets 47 41 173
Other non-cash items 219 175 766
Interest and financial items, net -17 -14 -71
Tax paid -242 -174 -684
Cash flow before changes in working capital 862 710 3,325
Changes in working capital
Inventories -480 -275 -627
Current receivables -384 -338 -463
Current liabilities 324 224 703
Cash flow from operating activities 322 321 2,938
Business acquisitions and sales, net -505 -819 -2,990
Net investment in tangible assets -61 -48 -266
Net investment in intangible assets -8 -5 -31
Cash flow from investing activities -574 -872 -3,287
Borrowings/repayment of borrowings, net 186 584 1,216
Dividends paid -545
Dividends paid to non-controlling interests -9 -5 -98
Cash flow from financing activities 177 579 573
Cash flow for the period -75 28   224
Cash and cash equivalents at beginning of period 1,509 1,170 1,170
Translation differences 40 68 115
Cash and cash equivalents at end of period 1,474 1,266 1,509

ACQUISITIONS IN 2022

Four businesses were consolidated in the first three months of the year. The acquisition pertains to the assets of the Danish company Zenith Dental as well as the majority of the Norwegian company Cenec Tavlebygg, the Italian company Cormidi and the British company Specialist Alarm Services.

The purchase price allocation includes all acquisitions consolidated during the first three months of the year.

Acquisition-related expenses of SEK 4 million are included in administrative expenses in the consolidated income statement for the first three months of the year. Since the respective consolidation dates, the acquired companies have added SEK 27 million to consolidated net sales and SEK 6 million to EBITA. If the businesses had been consolidated as of 1 January 2022, net sales for the year would have increased by a further SEK 37 million and EBITA would have increased by a further SEK 4 million.

Acquired net assets
Net assets, SEK million Carrying amount Value adjustment Fair value
Trademarks, customer relationships, licences 404 404
Tangible assets 10 10
Inventories, accounts receivable and other receivables 101 -1 100
Accounts payable and other liabilities -63 -99 -162
Cash and cash equivalents 41 41
Total net assets 89 304 393
Goodwill 312 312
Total net assets 89 616 705
Effect on cash flow, SEK million
Consideration 705
Considerations not paid -166
Cash and cash equivalents in acquired companies                                       -41
Consideration paid relating to acquisitions from previous years 7
Total cash flow effect                                                  505

FINANCIAL INSTRUMENTS

SEK million 31 Mar 2022 31 Mar 2021 31 Dec 2021
Financial assets at amortised cost
Accounts receivable – trade 2,664 1,914 2,257
Other non-current financial receivables 12 13 13
Cash and cash equivalents 1,474 1,266 1,509
Total 4,150 3,193 3,779
Liabilities at fair value
Other liabilities1 1,903 1,299 1,657
Financial liabilities at amortised cost
Interest-bearing borrowings 7,224 5,827 6,908
Accounts payable – trade 1,596 1,052 1,294
Total 10,723 8,178 9,859

1 Other liabilities classified as financial instruments refer to mandatory put/call options related to non-controlling interests and additional considerations.

The carrying amount is the same as the fair value. 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.

KEY PERFORMANCE INDICATORS

ROLLING TWELVE MONTHS TO 202231 MAR 202131 DEC 202131 MAR
Net sales, SEK million 18,633 17,480 14,010
Change in net sales, % 6.6 26.8 1.6
EBITA, SEK million 3,910 3,709 2,865
EBITA margin, % 21.0 21.2 20.5
EBITDA, SEK million 4,336 4,122 3,229
EBITDA margin, % 23.3 23.6 23.0
Capital employed, SEK million 17,387 16,447 13,981
Capital employed excl. goodwill and other intangible assets, SEK million 2,448 2,294 1,899
Return on capital employed, % 22.5 22.5 20.5
Return on capital employed excl. goodwill, % 160 162 151
Return on equity, % 24.6 24.6 20.6
Net debt, SEK million 7,710 7,113 5,903
Net debt/equity ratio, times 0.7 0.7 0.6
Net debt/EBITDA, times 1.8 1.7 1.8
Interest-bearing net debt, SEK million 4,938 4,603 3,895
Interest-bearing net debt/EBITDA, times 1.1 1.1 1.2
Equity/assets ratio, % 42.9 43.2 45.3
Number of shares, thousand1 454,216 454,216 90,843
Average number of employees 6,258 5,995 5,862
1 In May 2021, Lifco carried out a share split whereby each share was split into five new shares of the same share class (split 5:1).

CONDENSED PARENT COMPANY INCOME STATEMENT

FIRST QUARTER FULL YEAR
SEK million 2022 2021 2021
Administrative expenses -35 -28 -119
Other operating income1 0 0 170
Operating profit/loss -35 -28 51
Net financial items -5 -22 711
Profit/loss after financial items -40 -50 762
Appropriations -54
Tax 8 10 -8
Net profit/loss for the period -32 -40 700

1 Invoicing of Group-wide services.

CONDENSED PARENT COMPANY BALANCE SHEET

SEK million 31 Mar 2022 31 Mar 2021 31 Dec 2021
ASSETS
Financial assets 6,404 5,420 5,946
Current receivables 8,128 6,358 8,333
Cash and cash equivalents 634 590 584
TOTAL ASSETS 15,166 12,368 14,863
EQUITY AND LIABILITIES
Equity 3,854 3,691 3,886
Untaxed reserves 122 75 122
Provisions 0 8 2
Non-current interest-bearing liabilities 1,820 1,793 2,363
Current interest-bearing liabilities 4,354 3,192 3,522
Current non-interest-bearing liabilities 5,016 3,609 4,968
TOTAL EQUITY AND LIABILITIES 15,166 12,368 14,863
Pledged assets
Contingent liabilities 237 202 241

DEFINITIONS AND OBJECTIVES

Return on equity Net profit for the period divided by average equity.
Return on capital employed EBITA 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 excluding acquisition costs.
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 non-current assets. Lifco defines earnings before interest, tax, depreciation and amortisation (EBITDA) as operating profit before depreciation, amortisation and impairment of tangible and intangible assets excluding acquisition costs.
EBITDA margin EBITDA divided by net sales.
Net debt/equity ratio Net debt divided by equity.
Net debt Lifco uses the alternative KPI net 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, bonds, interest-bearing pension provisions, liabilities related to put/call options and additional considerations relating to acquisitions as well as lease liabilities less cash and cash equivalents.
Earnings per share Profit after tax attributable to Parent Company shareholders, divided by the average number of shares outstanding.
Interest-bearing net debt Lifco uses the alternative KPI interest-bearing net 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, bonds as well as interest-bearing pension provisions less 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 with the exception of liabilities related to put/call options and additional considerations relating to acquisitions, 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 with the exception of liabilities related to put/call options and additional considerations relating to acquisitions, 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 THREE MONTHS2022 THREE MONTHS2021 FULL YEAR2021
855
Operating profit 682 3,141
Amortisation of intangible assets arising from acquisitions 157 120 526
EBITA 1,012 802 3,667
Acquisition costs 4 13 42
EBITA before acquisition costs 1,016 815 3,709

EBITDA compared with financial statements in accordance with IFRS

SEK million THREE MONTHS2022 THREE MONTHS2021 FULL YEAR2021
855
Operating profit 682 3,141
Depreciation of tangible assets 104 93 393
Amortisation of intangible assets 5 3 20
Amortisation of intangible assets arising from acquisitions 157 120 526
EBITDA 1,121 898 4,080
Acquisition costs 4 13 42
EBITDA before acquisition costs 1,125 911 4,122

Net debt compared with financial statements in accordance with IFRS

SEK million 31 Mar 2022 31 Mar 2021 31 Dec 2021
Non-current interest-bearing liabilities including pension provisions 2,014 1,904 2,554
Current interest-bearing liabilities 4,398  3,257 3,558
Cash and cash equivalents – 1,474 -1,266 -1,509
Interest-bearing net debt 4,938 3,895 4,603
Put/call options, additional considerations 1,903 1,299 1,657
Lease liability 869 709 853
Net debt 7,710 5,903  7,113

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

SEK million 31 Mar 2022 31 Dec 2021 30 Sep 2021 30 Jun 2021
Total assets 26,712 24,876 23,543 21,781
Cash and cash equivalents -1,474 -1,509 -1,450 -1,178
Interest-bearing pension provisions -57 -57 -57 -45
Non-interest-bearing liabilities -6,059 -5,497 -5,248 -4,732
Capital employed 19,122 17,813 16,788 15,826
Goodwill and other intangible assets -16,234 -15,497 -14,513 -13,513
Capital employed excluding goodwill and other intangible assets 2,888 2,316 2,275 2,313

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 Q12022 Q42021 Q32021 Q2 2021
Capital employed 17,387 19,122 17,813 16,788 15,826
Capital employed excluding goodwill and other intangible assets 2,448 2,888 2,316 2,275 2,313
Total
EBITA 3,910 1,016 1,013 862 1,019
Return on capital employed 22.5%
Return on capital employed excluding goodwill and other intangible assets 160%

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 implying that the company has a long-term view on its holdings, a focus on profitability and a strongly decentralised organisation. The Group has three business areas: Dental, Demolition & Tools and Systems Solutions. At the end of 2021 the Lifco Group consisted of 198 operating companies in 31 countries. In 2021 Lifco reported an EBITA margin of 21.2 per cent on net sales of SEK 17.5 billion.

 

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LIFCO AB
Verkmästaregatan 1
745 85 Enköping, Sweden
ir@lifco.se
+46 72 717 59 33
Org.nr: 556465-3185

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