Financial development during the year

Net sales and profit

The AddLife Group’s net sales increased by 2 percent during the financial year and totalled SEK 10,442 million (10,286). Growth excluding currency fluctuations amounted to 5 percent, of which organic growth accounted for 4 percent and acquired growth for 1 percent. Currency fluctuations had a negative impact of 3 percent on net sales during the financial year, corresponding to SEK 310 million (10).

Adjusted EBITA increased by 8 percent to SEK 1,259 million (1,165) and the adjusted EBITA margin amounted to 12.1 percent (11.3). EBITA amounted to SEK 1,417 million (1,159). Adjusted EBITA is adjusted for a divestment of operations of SEK 158 million during the financial year and for a reversed contingent consideration and restructuring costs of a total of SEK 6 million in the preceding year. Currency fluctuations had a negative impact of 4 percent on EBITA, corresponding to SEK 46 million.

Net financial items amounted to SEK -221 million (-316) and profit after financial items increased to SEK 772 million (405). Net financial items mainly consist of interest expenses related to the financing of previous acquisitions and currency fluctuations. Interest expenses amounted to SEK -202 million (-300) and exchange rate losses to SEK -10 million (0).

Profit for the year increased by 121 percent to SEK 562 million (254) and the effective tax rate was 27 percent (37). The somewhat high effective tax rate is, as in previous years, mainly attributable to non-deductible interest expenses. Earnings per share increased to SEK 4.59 (2.06).

Profitability, financial position and cash flow

The equity ratio amounted to 43 percent (41) at the end of the financial year. Equity per share amounted to SEK 44.67 (43.54) and return on equity was 11 percent (5).

Return on working capital (P/WC) amounted to 62 percent (51). The long-term target for P/WC for the Group and all units is 45 percent. The profitability measure P/WC rewards high operating profit and low capital tied up and, together with the growth target of 15 percent, creates favourable conditions for profitable growth in both the companies and the Group. Average working capital, which in the calculation of P/WC includes inventories plus the net of trade receivables and trade payables, amounted to SEK 2,286 million (2,284) at the end of the financial year.

Cash and bank balances together with approved but non-utilised credit facilities, amounted in total to SEK 1,447 million (1,311) at the end of the financial year. The net debt/equity ratio was 0.7 (0.9).

The Group’s interest-bearing net debt decreased during the year to SEK 4,048 million (4,920), corresponding to 2.2 times (3.2) EBITDA. Interest-bearing net debt includes pension liabilities of SEK 58 million (62), lease liabilities of SEK 504 million (531), contingent consideration of SEK 124 million (106) and provisions amounting to SEK 29 million (118). Outstanding bank loans amounted to SEK 4,146 million (4,434) at the end of the financial year, of which short-term bank loans amounted to SEK 1,736 million (749).

The Group has good headroom in the covenants applicable under the bank agreements, which are an interest coverage ratio of at least 4.0 times and an equity ratio exceeding 25 percent. At the end of the financial year, the interest coverage ratio amounted to 9.9 times according to the definition in the bank agreements.

Cash flow from operating activities during the financial year amounted to SEK 1,392 million (1,095), mainly attributable to higher profit after financial items and improved working capital. During the financial year, payments for corporate acquisitions amounted to SEK 196 million (59) and contingent considerations paid related to corporate acquisitions from previous years amounted to SEK 51 million (45). Net investments in non-current assets amounted to SEK 254 million (281) and mainly relate to investments in instruments for rental to customers. Issued, redeemed and repurchased call options amounted to SEK 0 million (12). A dividend of SEK 91 million (61) was paid to the Parent Company’s shareholders and loan repayments totalled SEK 50 million (496).