Fourth quarter - a good end to another successful year
As in previous quarters, the fourth quarter of the financial year was characterised by a favourable climate for business, with good demand in most of our geographical markets and most customer segments. Sales increased by 9 percent, mainly driven by our acquisitions, and we achieved a profit growth of 15 percent. As a result, our operating margin continued to increase compared with the previous year. Overall, the acquisitions made contributed in line with expectations.
The Components Business Area again delivered a good quarter, via both organic growth and several acquisitions. The Energy Business Area reported weaker growth relative to a very strong quarter in the previous year, but maintained a high operating margin. Industrial Process is benefiting from generally favourable market conditions, and delivered good profit growth. Power Solutions is performing at a stable level overall in view of the disposal carried out earlier in the financial year.
Full year outcomes exceed our financial targets
At Addtech, 2017/2018 was a strong year, characterised by high activity, a favourable business climate and stable to rising demand in most of our markets. We can proudly state that once again, we exceeded our financial targets. Sales surpassed SEK 8 billion, with growth of 12 percent, of which 5 percent organic growth. Our profit growth, measured as EBITA, was 17 percent and our focused work on continuous development – while keeping costs under control – delivered a higher operating margin. Return on working capital (P/WC) amounted to 53 percent.
From a geographical perspective, our highest rate of growth was in Denmark, followed by Sweden, Finland and Norway. Our business volume outside the Nordic region expanded considerably over the year, through both strong organic growth and acquisitions.
With regard to demand in our various customer segments, we increased sales of production components to manufacturers of, for example, special vehicles, machinery, electronics, wind power and marine vessels. Demand from customers was stable in medical technology and oil & gas, but was lower from customers in the telecom segment. Demand for aftermarket products for the manufacturing industry continued to increase, while the pace of investment in the forest and process industry was relatively stable overall. Sales of infrastructure products to power grid companies in the Nordic region were stable overall. Demand for electricity-related products from building and installation customers continued to grow strongly.
Dynamisk graf: Sales per customer segment
Dynamisk graf: Sales per geographic market
Acquisitions remain an important part of our strategy, in order partly to create opportunities for gaining market-leading positions in various niches and partly as a way of achieving our ambition to establish long-term profitable growth. We maintained a high pace of acquisitions and ended our business year with a total of eleven completed acquisitions that contribute annual sales of around SEK 700 million. Since the end of the financial year, we have acquired four companies with aggregate annual sales of around SEK 230 million. Our business model attracts owners and entrepreneurs wishing to retain their system of decentralised responsibility, but also to gain support for development via an active, long-term owner.
President and CEO