Fourth quarter (1 January–31 March 2024)

• Revenue amounted to MSEK 1,214 (1,237).
• EBITA increased by 12 percent to MSEK 116 (104) and the EBITA margin improved to 9.6 percent (8.4).
• Net profit totalled MSEK 49 (54).
• Cash flow from operating activities totalled MSEK 101 (145).

12 months (1 April 2023–31 March 2024)

• Revenue amounted to MSEK 4,723 (4,749).
• EBITA increased by 15 percent to MSEK 438 (382) and the EBITA margin improved to 9.3 percent (8.0).
• Net profit totalled MSEK 201 (214).
• Earnings per share for the 2023/2024 operating year totalled to SEK 7.15 (7.80) before and after dilution.
• Cash flow from operating activities increased by 99 percent to MSEK 663 (333).
• Seven acquisitions have been completed, one of which after the end of the period, with total annual revenue of approximately MSEK 485.
• The Board proposes a dividend of SEK 3.80 (3.60) per share.

CEO’s comments

Another quarter of increased earnings despite weaker demand
We have completed yet another quarter in which we maintained our positive earnings trend. EBITA in the fourth quarter increased by 12 percent year on year to MSEK 116. Furthermore, we improved our EBITA margin by 1.2 percentage points to 9.6 percent. This positive development was mainly attributable to an improved product mix combined with reduced costs and acquisitions of highly profitable companies.

During the quarter, revenue decreased by 12 percent organically, driven by a weaker market and our focus on improving the Group’s profitability before increasing revenue. The decrease in revenue was offset by acquisitions. Through good cost control and increased operational efficiency, we reduced our costs, with organic costs falling by almost 10 percent.

Cash flow from operating activities amounted to a strong MSEK 101 for the period. The Building Materials and Tools & Consumables divisions posted solid earnings and margin increases, while the Workplace Safety division did not meet our expectations. To accelerate the rate of improvement in the division Workplace Safety, we took further cost-saving measures during the quarter and implemented a management change in April.

An operating year that brought us closer to our goals
Despite a weaker underlying market in the second half of the operating year, we succeeded in increasing our full-year EBITA by 15 percent. The EBITA margin improved by 1.3 percentage points to 9.3 percent. In addition to acquisitions and reduced costs, we also improved our product mix, increasing the share of proprietary products to 72 percent (70).

Two of our three divisions performed very well during the year. Tools & Consumables increased its EBITA by 56 percent and Building Materials by 32 percent, both with EBITA margins above 10 percent. These two divisions also significantly improved their profitability (P/WC) compared with the previous year. Workplace Safety, which has a large exposure to construction and industrial resellers in the Nordic region, experienced weaker demand and EBITA fell.

During the year, we reduced our inventory by just over MSEK 200, corresponding to an organic reduction of 17 percent. Our inventory turnover rate has not returned to our pre-pandemic level and there is still work to be done before we get there. I would like to thank all our employees who have contributed to the improvements we achieved during the year. Our inventory reduction and increased earnings strengthened our cash flow from operating activities by 99 percent to MSEK 663 (333) for the full year. Our profitability (P/WC) improved to 26 percent (21). Overall, our decentralised governance model and the commitment of our employees have allowed us to adjust rapidly to changing conditions, which contributed to the Group’s positive performance and improved key financial ratios during the year. In the autumn 2023, we presented our “500/10/45” supplementary financial targets, which state that the Group is to deliver MSEK 500 in operating profit (EBIT) with an EBIT margin above 10 percent by the 2025/2026 operating year and achieve profitability of at least 45 percent the following year. It is satisfying to note that we achieved a rate of improvement over the past year that is in line with our objectives.

Focus model central to our companies’ priorities
During the year, our companies worked to further develop their business strategies and goals to align with our Focus Model, a capital allocation model that guides the companies’ priorities based on their profitability and potential for earnings growth. To increase understanding and acceptance of the Focus Model and its application, we have established an internal training programme in which the Focus Model is a central component, and over 20 percent of the Group’s employees have completed the programme in the last two years.

During the year, we devoted considerable effort to ensuring that the companies are run by competent and independent management teams that work according to our Focus Model. Two examples are our companies Luna and FireSeal. During the year Luna chose to increase its profitability before growth. The company focused on improving its product mix, which increased its gross margin by several percentage points, while also reducing its costs by 15 percent. As a result of these efforts, the company’s operating margin improved and its P/WC almost tripled during the year. In contrast, our company FireSeal, which specialises in fire seal products, mainly for the marine sector, has reached a level of profitability that will allow us to invest in growth. With a focus on growth, the company succeeded in generating a double-digit increase in revenue during the year, which meant that its operating profit nearly tripled.

Six acquisitions of market-leading and highly profitable niche companies
Our vision is to be the leading niche supplier of productive, safe and sustainable solutions to the construction and industrial sectors. With this in mind, we have broadened our acquisition focus to include more technology areas. During the past operating year, we acquired six companies that generate combined annual revenue of approximately MSEK 450, with profitability well above the Group average. One example of our expansion is the acquisition of Orbital Fabrications, which gave us a platform in the niche market for systems for handling gases with high demands on cleanliness. Another example is the acquisition of Ateco, which offers its own and other suppliers’ fire alarm products and systems for public and commercial buildings. The acquisition of Itaab, the leading manufacturer and supplier of metal suspended ceilings in Sweden, also represents a new technology niche for us. Of our six acquisitions, Orbital Fabrications, Sandbergs and Tema Norge are part of the Tools & Consumables division, Elkington and Itaab are part of Building Materials and Ateco is part of Workplace Safety. All companies had a successfull start in the Group and their earnings performance has been in line with, or exceeded, our expectations. Since all acquired companies have profitability above 45 percent, our focus for these companies will be growth while maintaining profitability.

Good potential to reach 500/10/45
We will continue to prioritise earnings growth over volume growth and allocate capital to the Group companies that have profitability of at least 45 percent and the best growth prospects. We have now increased our EBITA for 17 consecutive quarters and continue to see favourable prospects for increasing our profitability, improving our profit margin and strengthening cash flow within the Group. With a lower cost base and a better product mix, we are well positioned for when the construction and industrial sectors begin to regain momentum. Combined with our capacity and ability to attract and acquire highly profitable companies with strong cash flows and good growth prospects, we are well placed to deliver on our targets.

Stockholm, May 2024


Magnus Söderlind
President & CEO