Strong profit growth and high demand
The third quarter was characterised by continued high activity in the market, and I proudly point out that the Group recorded an organic sales growth of 9 percent. EBITA increased strongly by 29 percent in the quarter, which is better than the increase we profited from earlier in the year. All business areas contributed to the improvement. The EBITA margin increased to 9.7 percent. Both acquisitions and higher sales contributed to the improved EBITA margin.
Demand for our products and solutions remained firm in most of our markets, and no clear indications of economic downturn in our business areas have been identified. Geographically, the highest growth rate was reached in Norway, while the business climate improved from an already high level in Finland. Also, in Denmark and Sweden, overall demand was positive, as was the business climate outside the Nordic region. Our UK units are experiencing a degree of Brexit-related uncertainty.
As a result of firm demand in our various customer segments, we increased sales of production components to manufacturers such as special vehicles, machinery, electronics, wind power and medical. Demand was stable in the telecom segment, and increased slightly in oil & gas.
Developments in the marine segment remained highly positive. Demand for aftermarket products for the forest and process industry showed a favourable trend, as did sales to the manufacturing industry. Sales of infrastructure products to power grid companies in the Nordic region increased, while demand for niche products in electric power distribution and electricity-related products from construction and installation customers remained stable.
We continuously evaluate acquisitions of independent, profitable technology companies with market-leading niche positions as well as bolt-on acquisitions via our existing companies, in order to strengthen market positions and profitability in attractive segments. Since the beginning of the financial year, we have made fourteen acquisitions, two of which were completed after the end of the quarter. Of the businesses acquired, eleven were independent companies and three bolt-on acquisitions, twelve based in the Nordic region, one in the UK and one in the Netherlands. The acquisitions together add annual sales of around SEK 960 million and bring 276 employees to the Group.
Many privately owned companies view Addtech as an attractive buyer, as they keep their decentralised responsibilities while simultaneously benefiting from support for development via an active, long-term owner. Addtech’s acquisition process is well integrated in the organisation
and we have the financial capacity to maintain a normal pace of acquisition
going forward. We see high potential for further acquisitions both in the Nordic
region and in northern Europe.
President and CEO