Interim report and Year-End report 2023

Fourth quarter 2023

• Order intake increased by 14% to SEK 8,044 million (7,052). For comparable units, it was an increase of 4%.
• Net sales increased by 8% to SEK 7,821 million (7,228). For comparable units, it was unchanged.
• EBITA increased by 6% to SEK 1,141 million (1,081), corresponding to an EBITA margin of 14.6% (15.0%).
• Profit for the quarter increased by 5% to SEK 710 million (677), and earnings per share amounted to SEK 1.95 (1.86).
• Cash flow from operating activities amounted to SEK 1,520 million (850).

1 January - 31 December 2023

• Order intake increased by 13% to SEK 31,211 million (27,701). For comparable units, it was an increase of 1%.
• Net sales increased by 18% to SEK 31,835 million (27,016). For comparable units, it was an increase of 6%.
• EBITA increased by 16% to SEK 4,769 million (4,098), corresponding to an EBITA margin of 15.0% (15.2%).
• Profit for the year increased by 7% to SEK 2,866 million (2,681), and earnings per share amounted to SEK 7.86 (7.36).
• Cash flow from operating activities amounted to SEK 4,491 million (2,372).
• The Board proposes a dividend of SEK 2.85 (2.60) per share.

CEO's message

Indutrade summarizes a successful 2023 with a strong fourth quarter. For the full year, sales increased by 18% and amounted to SEK 32 billion, with a maintained high EBITA margin of 15.0%. Thanks to our balanced diversification and entrepreneurial companies, we have been able to act on business opportunities and manage the uncertain market situation in a good way. We have also continued to strengthen our strategic platform, not least through the launch of our new Group structure, which over the long term increases our ability to achieve sustainable profitable growth.

Fourth quarter
Demand increased overall during the fourth quarter, but varied between companies, customer segments and geographies. Order intake increased by 14% compared to the corresponding period previous year and was 3% higher than sales. Organically, growth was 4%, primarily thanks to strong demand from customers in the medical technology and pharmaceuticals segment. Among the larger customer segments, the process industry and energy sector also had an improved demand and the development in infrastructure and construction was stable. Development was somewhat weaker in engineering. The Flow Technology business area had the strongest organic order growth, primarily driven by larger orders of flow technology components and products for pharmaceutical manufacturing.

Sales growth was 8% and net sales amounted to SEK 7.8 (7.2) billion. Organically, net sales were unchanged, but with varied performance between companies. The Industrial Components and Fluids & Mechanical Solutions business areas reported the strongest organic sales growth, with growth in the majority of the companies. The Benelux business area had the weakest organic development, primarily due to lower sales of valves for power generation.

EBITA increased by 6% compared to the corresponding period previous year and amounted to SEK 1.1 billion. The EBITA margin remained high and stable at 14.6%, at the same underlying level as previous year. Newly acquired companies contributed positively while the organic growth overall was somewhat dampened. The EBITA margin improved in five of the eight business areas, with the strongest growth in the DACH business area, primarily due to good performance in newly acquired companies.

Cash flow from operating activities amounted to SEK 1.5 billion, which is a new record for Indutrade and contributed to a reduction in net debt. The improvement is primarily explained by a favourable working capital development, including a continued reduction of inventories. Indutrade's financial position is overall strong and we have a low net debt/equity ratio.

Acquisitions
In 2023, we welcomed nine stable and well-managed companies to the Indutrade family, with total annual sales of approximately SEK 1.2 billion. During the fourth quarter we acquired Irish Powerpoint Engineering, which operates in electrical safety, measuring and test equipment and Swiss TSE Troller, which is a leading manufacturer of high-quality coating dies. After the end of the quarter, we acquired the German technical trading company pure!, which specialises in industrial compressed air treatment and process filtration, and the Irish medical technology company, MeHow. We also signed an agreement to acquire the Swedish company SDT, which specialises in machine automation.

The acquisition market in 2023 was stable and Indutrade has a continued high inflow of interesting acquisition candidates. However, due to the generally uncertain market situation, we chose to prolong some of our acquisition processes in 2023. Activity in the ongoing acquisition processes is good, which, together with our increased acquisition resources and strong financial position gives us the prerequisites for a good acquisition pace in 2024.

Outlook
Despite an uncertain macro-economic situation, demand during the last quarter remained at a high level, with order growth in nearly half of the companies. However, the general uncertainty remains high for the upcoming quarters and the comparison figures are challenging. At the same time, the conditions are good for positive development in many industries, among others connected to the green technology transition and a growing medical technology and pharmaceutical sector, in which many of our companies have strong positions and opportunities.  In this environment, we are convinced that our decentralised business model, with flexible and entrepreneurial companies that are opportunity-oriented and able to effectively adapt their businesses to the prevailing market situation will be a strength.

As of 1 January, Indutrade has a new Group structure with five international business areas. The new structure improves the prerequisites for both organic and acquired growth, by further promoting opportunities for knowledge sharing between companies with similar businesses and challenges. Besides strengthening our platform for various forms of knowledge sharing, it also improves our scalability, while still retaining our decentralised structure. We look forward to working together in our new organisation in order to drive organic growth and value-creating acquisitions - always with focus on the individual company.

Bo Annvik, President and CEO

Note
The information in this report is such that Indutrade AB is obligated to make public in accordance with the EU Market Abuse Regulation. The information was submitted for publication by the agency of the following contact persons on 1 February 2024 at 7.30 CET.

For further information, please contact:
Bo Annvik, President and CEO, tel. [phone],
Patrik Johnson, CFO, tel. [phone].

This report will be commented upon as follows:
A webcast of the report will be presented on 1 February at 9.30 CET via the following link:
https://ir.financialhearings.com/indutrade-q4-report-2023

To participate in the presentation by phone and ask questions, please register via the link below. After registration, you will receive a telephone number and conference ID to login to the conference call.

https://conference.financialhearings.com/teleconference/?id=50046722

About Indutrade
Indutrade is an international technology and industrial business group that today consists of approximately 200 companies in some 30 countries, mainly in Europe. In a decentralised way, we aim to provide sustainable profitable growth by developing and acquiring successful companies managed by passionate entrepreneurs. Our companies develop, manufacture, and sell components, systems and services with significant technical content in selected niches. Our value-based culture, where people make the difference, has been the foundation of our success since the start in 1978. Indutrade's net sales totalled SEK 32 billion in 2023, and the share is listed on Nasdaq Stockholm in Sweden.

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