Strong growth, increased order bookings and improved operating profit

Transcription

1 Press Release from Lammhults Design Group AB (publ), corp. reg. no (The interim report for January-March 2017 is distributed as part of this press release.) Strong growth, increased order bookings and improved operating profit Net sales: SEK million (170.5) Operating profit: SEK 8.3 million (5.4) Order bookings: SEK million (168.1) Order backlog: SEK million (115.7) Earnings per share before and after dilution: SEK 0.67 (0.42) President and CEO Fredrik Asplund: In Q1 2017, we recorded sales growth of 37 percent, of which 11 percent was organic. We are continuing to see positive growth in our main markets, with the Norwegian market above all starting to show evidence of growth again. Abstracta and Lammhults Möbel performed well both in Sweden and in several of our export markets. Our latest acquisitions, Morgana and Ragnars, report a strong first quarter. At Public Interiors, the German and Danish markets were slightly weaker than anticipated, but other markets performed well. Order bookings in Q1 rose by 57 percent 17 percent organic with strong growth in Sweden and our export markets. We gained a number of major projects during the quarter, several of which will be delivered on an ongoing basis over the year. The operating margin increased during the quarter by 0.3 percentage points relative to the preceding year, to 3.5%. The number of major projects in Q1 was relatively high, leading to lower gross margins. The structure of the new company acquisitions also has a negative effect on the comparison with the gross margin for last year. We enter the second quarter with an order backlog that is 54 percent higher 9 percent organic than in the preceding year, which paves the way for continued strong growth in Lammhult, 27 April 2017 Lammhults Design Group AB For more information, please contact Fredrik Asplund, President and CEO, on +46-(0) , or Stefan Lijedahl, CFO, on +46 (0)

2 This information is such that Lammhults Design Group AB is required to publish in accordance with the Swedish Capital Markets Act, the Swedish Financial Instruments Trading Act and requirements stated in listing agreements. This information was submitted for publication at 2.00 p.m. on 27 April Lammhults Design Group AB (publ), corp. reg. no Interim Report 1 January 31 March 2017 Net sales: SEK million (170.5) Operating profit: SEK 8.3 million (5.4) Pre-tax profit: SEK 7.2 m (4.4) Profit after tax: SEK 5.6 m (3.5) Order bookings: SEK million (168.1) Order backlog: SEK million (115.7) Equity/assets ratio: 51.2% (63.1) Debt/equity ratio: 0.47 (0.25) Earnings per share before and after dilution: SEK 0.67 (0.42) Group s net sales and profit In Q1, the Group s net sales totalled SEK million (170.5), a rise of 37 percent from the preceding year, including 11 percent organic growth. The Office & Home Interiors business area increased sales by 51 percent, with organic growth accounting for 13 percent. Our latest acquisitions, Ragnars and Morgana, have started the year well. Abstracta and Lammhults Möbel performed well both in Sweden and in several of our export markets. Fora Form also increased sales in the quarter by 28 percent (net of currency effects, by 18 percent), and we see a recovery in the Norwegian market, with stronger activity than a year earlier. Sales for the Public Interiors business area increased 6 percent, with most markets other than Germany and Denmark performing well. Order bookings for the Group in Q1 totalled SEK million (168.1). Order bookings for Office & Home Interiors increased by 92 percent, partly as a result of the new acquisitions but also via an increase at Fora Form and Lammhults Möbel in particular. Order bookings for Public Interiors declined by 15 percent. Germany and France above all reported lower order bookings than in the same quarter last year. At the end of the quarter, the Group s order backlog was SEK 62.0 million higher than at the corresponding point in time last year, at SEK million (115.7). The Group s gross margin for the first quarter of 2017 declined relative to the preceding year, to 32.4% (36.8). The lower gross margin is due mainly to a higher proportion of major

3 projects. However, another reason was that, because of their structure, new acquisitions Ragnars and Morgana operate with lower gross margins than other companies in the Group. Selling and administration costs in Q1 totalled SEK 67.8 million (58.0). The increase arose through the acquisitions made. Operating profit increased to 8.3 million (5.4), leading to an improvement in the operating margin from 3.2 percent to 3.5 percent in Q1. Profit before tax totalled SEK 7.2 million (4.4) Profit after tax increased till SEK 5.6 million (3.5), leading to an increase in earnings per share of SEK 0.67 (0.42). Group s financial position and cash flow The Group s equity/assets ratio was 51.2 percent (63.1) on 31 March 2017, while the debt/equity ratio was 0.47 (0.25). The Group s cash flow from current operations in Q1 was SEK 10.9 million (-11.8). Cash flow for the period amounted to SEK -3.1 million (-11.2) Per-share data Earnings per share for the Group in Q1 totalled SEK 0.67 (0.42) before and after dilution. Equity per share on 31 March 2017 was SEK (48.05) before and after dilution. Business areas Office & Home Interiors The business area develops, produces, markets and sells products for interiors for public and home environments under the Lammhults, Abstracta, Fora Form, Ragnars, Morgana, Voice and Ire brands. Net sales in Q1 totalled SEK million (118.4), an increase of 51 percent, including 13 percent organic growth. We experienced positive developments in the Norwegian market, with good growth in both sales and order bookings. Both Abstracta and Lammhults Möbel performed strongly in Sweden and several of our export markets. Our latest acquisitions, Morgana and Ragnars, reported a satisfactory quarter. The order backlog on 31 March was 87 percent higher than at the same time last year, 17 percent from organic growth. Our order backlogs are considerably improved, above all at Fora Form, Lammhults Möbel and Abstracta. Our new acquisitions, Morgana and Ragnars, also start Q2 with a healthy order backlog. The gross margin weakened slightly, above all due to the new acquisitions, Ragnars and Morgana, which because of their structure operate with lower gross margins than other companies in the Group. However, the operating margin for the business segment improved from 6.3% till 8.0%.

4 Public Interiors The business area develops, markets and sells interiors and product solutions for public environments under the BCI, Schulz Speyer and Eurobib Direct brands. Net sales in Q1 totalled SEK 55.5 million (52.1). In project sales, most markets showed strong activity, with the exceptions of Germany and Denmark. Eurobib Direct (aftermarket sales) reported sales that were somewhat lower than in the same quarter last year, above all because of a lower initial order backlog. The gross margin was negatively affected by some major projects, together with an unfavourable country mix. Operating profit in Q1 totalled SEK 0.1 million (2.7). The operating margin declined to 0.2% (5.2%) in the quarter. Group s investments and depreciation The Group's investments in property, plant and equipment amounted to SEK 8.3 million (8.9), while investments in intangible assets totalled SEK 9.1 million (0.5). Total depreciation according to plan in Q1 was SEK 4.9 million (3.8). Group s liquidity and financing The Group s cash and cash equivalents, including unused overdraft facilities, totalled SEK 68.9 million (97.9) on 31 March Parent Company The Parent Company s business activities consist of Group Management and certain Groupwide functions. Net sales totalled SEK 2.1 million (1.7), and a pre-tax profit of SEK -5.7 million (-3.9) was recorded. Investments totalled SEK 8.0 million (1.1). Cash and cash equivalents, including unused overdraft facilities, totalled SEK 41.7 million (72.7) on 31 March Significant events during the reporting period In January, Abstracta, Lammhults Möbel and Ragnars together received an order for a single major office project in Stockholm. The order is valued at a total of approximately SEK 16 million, and is expected to be invoiced in Q2. In January, Morgana received an order from the National Property Board of Sweden. The order is valued at around SEK 16 million, and is expected to be invoiced on an ongoing basis during the year. Michael Grindborg has been recruited as new CFO and will take up his appointment no later than in October 2017.

5 Forthcoming financial reports Interim Report Q2 2017: 14 July 2017 Accounting policies This summary interim report for the Group was prepared in accordance with IAS 34 Interim Financial Reporting and relevant provisions of the Swedish Annual Accounts Act. The interim report for the Parent Company was prepared in accordance with Section 9, Interim Reports, of the Swedish Annual Accounts Act. For both Group and Parent Company, the same accounting policies and bases of calculation were used as in the Company s most recent annual report, with additions for new standards and interpretations and amendments to existing standards and interpretations for implementation on 1 January 2016 or later. Disclosures in accordance with IAS A occur not only in the financial statements but also in other parts of the interim report. Alternative KPIs The Company presents certain financial measures in its interim report that are not defined in IFRS. The Company considers that these measures provide valuable complementary information to investors and the Company s management, in that they enable trends and the Company s performance to be evaluated. Because not all companies calculate financial measures in the same way, these indicators are not always comparable with measures used by other companies. Consequently, these financial measures should not be regarded as replacements for measures defined in IFRS. This report includes additional information regarding definitions of financial measures. For definitions of the key performance indicators used by Lammhults Design Group AB, see below. Return on equity: Profit/loss for the year as a percentage of average equity. Return on capital employed: Profit after financial items plus financial expenses as a percentage of average capital employed. Gross margin: Gross profit/loss as a percentage of net sales. Equity per share: Equity divided by the number of shares at year-end. Net margin: Profit after financial items, as a percentage of net sales. Operating margin: Operating profit/loss as a percentage of net sales. Equity/assets ratio: Equity as a percentage of total assets.

6 Risks and uncertainties The significant risks and uncertainties faced by the Group and Parent Company include business risks in the form of high exposure to certain sectors. The Group is also exposed to financial risks. Chief among these are currency risks relating to fluctuations in exchange rates in conjunction with exports and imports, interest risks in connection with liquidity and debt management, and credit risks in connection with sales. The Group is also exposed to a certain extent to commodities risk. Other than the risks described in the 2016 Annual Report (see Note 25 for a more detailed description of the Group s and Parent Company s risk exposure and risk management), it is not believed that any significant new risks have arisen. The market remains uncertain, and a downturn in both the Nordic region and Europe may impact negatively on the Group s future sales. Lammhult, 27 April 2017 Fredrik Asplund President and CEO This interim report has not been subject to a general review by the Company s auditor.

7 CONSOLIDATED STATEMENT OF INCOME Amounts in SEK m / Net sales 234,0 170,5 889,9 826,4 Cost of goods sold -158,3-107,8-583,1-532,6 Gross profit 75,7 62,7 306,8 293,8 Other operating income 1,4 1,4 7,1 7,1 Sales and administration costs -67,6-58,0-262,5-252,9 Other operating costs -1,1-1,5-4,1-4,5 Outcome, participation in joint ventures -0,1 0,8 0,7 1,6 Operating profit 8,3 5,4 48,0 45,1 Net finance income/costs -1,1-1,0-3,0-2,9 Pre-tax profit 7,2 4,4 45,0 42,2 Tax -1,6-0,9-10,0-9,3 Profit/loss for the period 5,6 3,5 35,0 32,9 Profit/loss for the period attributable to: Shareholders in Parent Company 5,6 3,5 35,0 27,8 Non-controlling interests 0,0 0,0 0,0 0,0 Earnings per share before and after dilution: Remaining businesses (SEK) 0,67 0,42 4,15 3,29 Total, Group 0,67 0,42 4,15 3,29 Number of shares at end of period, thousands CONSOLIDATED STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME, SUMMARY Amounts in SEK m / Profit/loss for the period 5,6 3,5 35,0 32,9 Other comprehensive income Items transferred or transferrable to profit for the period Translation differences for the period 0,1 2,4 11,9 14,2 Change in Group structure -2,5 Cash flow hedges 0,0 0,0 0,0 0,0 Other comprehensive income for the period 0,1 2,4 11,9 11,7 Total comprehensive income for the period 5,7 5,9 46,9 44,6 Total comprehensive income for the period attributable to: Shareholders in Parent Company 5,7 5,9 46,9 44,5 Non-controlling interests 0,0 0,0 0,0 0,1 Notes to consolidated statement of income Depreciation Depreciation is distributed over the following lines in the income statement: Cost of goods sold -2,7-2,0-9,1-8,4 Cost of sales -0,5-0,4-1,8-1,7 Administrative expenses -1,7-1,4-7,3-7,0 Total -4,9-3,8-18,2-17,1

8 / Other operating income Exchange rate gains 0,9 1,4 3,3 3,8 Other operating income 0,5 0,0 3,8 3,3 Total 1,4 1,4 7,1 7,1 Other operating costs Exchange rate losses -0,9-1,5-3,9-4,5 Other operating costs -0,2 0,0-0,2 0,0 Total -1,1-1,5-4,1-4,5 Net finance income/costs Finance income 0,8 0,6 4,8 4,6 Finance costs -1,9-1,6-7,8-7,5 Total -1,1-1,0-3,0-2,9 CONSOLIDATED STATEMENT OF FINANCIAL POSITION, SUMMARY Amounts in SEK m. 31 Mar Mar 2016 Intangible non-current assets 328,6 236,1 Property, plant and equipment 170,8 129,8 Participations in joint ventures 5,0 5,0 Financial investments 1,0 0,4 Deferred income tax assets 7,7 4,6 Inventories 122,7 106,6 Current accounts receivable 193,4 139,5 Cash and cash equivalents 23,6 21,5 Total assets 852,8 643,5 Equity attributable to shareholders in Parent Company 435,3 405,9 Equity attributable to non-controlling interests 1,2 0,4 Non-current interest-bearing liabilities 71,7 34,9 Provisions 1,9 1,7 Deferred tax liabilities 13,8 9,4 Current interest-bearing liabilities 134,8 64,7 Other current liabilities 194,1 126,5 Total equity and liabilities 852,8 643,5 CONTINGENT LIABILITIES, GROUP Amounts in SEK m. 31 Mar Mar December 2016 Surety bonds 3,6 3,6 3,6 Warranties 4,2 4,2 4,2 Other contingent liabilities 1,4 1,4 1,4 Total contingent liabilities 9,2 9,2 9,2 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY, SUMMARY Jan-Mar Jan-Mar Jan Dec Amounts in SEK m Opening bal., equity attrib. to shareholders in Parent Com 430,3 400,0 400,0 Total comprehensive income for the period 5,7 5,9 44,6 Dividend paid -14,8 Closing bal., equity attrib. to shareholders in Parent Com 436,0 405,9 429,8 Opening bal., equity attrib. to non-controlling interests 0,5 0,4 0,5 Total comprehensive income for the period 0,0 0,0 0,0 Closing bal., equity attrib. non-controlling interests 0,5 0,4 0,5 Total closing balance, equity 436,5 406,3 430,3

9 CONSOLIDATED STATEMENT OF CASH FLOWS, SUMMARY Amounts in SEK m / Cash flow from operating activities before changes in working capital 7,9 5,9 53,6 51,6 Changes in working capital 3,1-17,7 6,4-14,4 Cash flow from operating activities 11,0-11,8 60,0 37,2 Purchases of property, plant and equipment -8,3-8,9-30,1-30,7 Sale of property, plant and equipment 0,2 0,0 0,2 0,0 Purchases of non-current intangible assets -9,1-0,5-17,7-9,1 Sale of non-current intangible assets 0,0 0,0-0,1-0,1 Investments in financial assets -0,6 0,0-0,5 0,1 Purchases of subsidiaries, net impact on liquidity -84,8-84,8 Sale of subsidiaries, net impact on liquidity 0,0 Cash flow from investing activities -17,8-9,4-133,0-124,6 Borrowings 10,1 13,4 130,7 133,9 Repayments of loans -6,3-3,3-39,3-36,3 Dividend paid to parent company owners -14,8-14,8 Cash flow from financing activities 3,8 10,0 76,6 82,8 Cash flow for the period -3,0-11,2 3,6-4,6 Cash and cash equivalents at beginning of period 26,9 32,0 26,9 32,0 Translation difference in cash and cash equivalents -0,3 0,7-1,5-0,5 Cash and cash equivalents at end of period 23,6 21,5 29,0 26,9 KEY FIGURES FOR THE GROUP / Growth, % ,7 Gross margin, % 32,4 36,8 36,7 35,5 Operating margin, % 3,5 3,2 4,7 5,5 Net margin, % 3,1 2,6 4,7 5,1 Return on shareholders' equity, % 1,3 0,9 7,0 7,9 Return on capital employed, % 1,4 1,2 7,8 8,9 Debt/equity ratio, times 0,47 0,25 0,47 Equity/assets ratio, % 51,2 63,1 50,9 Equity per share before dilution, SEK 51,53 48,05 50,88 Equity per share after dilution, SEK 51,53 48,05 50,88 Average number of employees Growth is defined as percentage change in net sales during the current period relative to net sales during the equivalent comparative period. For further definitions, see the Group s 2016 Annual Report.

10 OPERATING SEGMENTS Public Interiors develops, markets and sells interiors and product solutions for public environments. The business area is partly dedicated to selling total interior systems on a project basis and partly to after-market sales of furniture and consumables. The business area is made up of the companies Lammhults Biblioteksdesign AB (Sweden), Lammhults Biblioteksdesign A/S (Denmark) and Schulz Speyer Bibliothekstechnik AG (Germany) and subsidiaries. The business area includes the Eurobib Direct, BCI and Schulz Speyer brands. Office & Home Interiors develops, produces and markets products for interiors in public and domestic environments. The business area has three brands with high design values, focusing on public environments: Lammhults and Fora Form, which offer visually strong, timeless furniture, and Abstracta, with acoustic products, products for visual communication and storage. The business area has two brands focusing on home interiors, namely Voice, which offers innovative storage solutions, and Ire, which produces upholstered furniture featuring timeless design, clean lines and durable quality. Both the Voice and Ire product ranges are being gradu to include public environments. The business area is made up of the companies Lammhults Möbel AB (Sweden), Ire Möbel AB (Sweden), Fora Form AS (Norway), Ragnars Inredningar AB (Sweden), Morgana AB (Sweden) and Abstracta AB and subsidiaries (Sweden). The Parent Company, Group-wide functions, dormant companies and eliminations are accounted for under the heading Group-wide costs and eliminations. Net sales per business segment Amounts in SEK m / Public Interiors 55,5 52,1 257,4 254,0 Office & Home Interiors 178,5 118,4 632,5 572,4 Group-wide costs and eliminations 0,0 0,0 0,0 0,0 Total net sales 234,0 170,5 889,9 826,4 Operating income per business segment Amounts in SEK m / Public Interiors 0,1 2,7 25,6 28,2 Office & Home Interiors 14,2 7,4 44,9 38,1 Group-wide costs and eliminations -6,0-4,7-22,5-21,2 Total operating profit 8,3 5,4 48,0 45,1 Finance income 0,8 0,6 4,9 4,7 Finance costs -1,9-1,6-7,8-7,5 Pre-tax profit 7,2 4,4 45,1 42,3 ACQUISITION OF BUSINESS On 25 May 2016, Lammhults Design Group AB acquired 100% of the shares in Swedish furniture company Ragnars Inredningar AB. The initial purchase consideration was SEK 60.4 million, including net cash of SEK 10.4 million. The acquisition is also subject to a possible additional purchase consideration of no more than SEK 15 million within three years at the latest. The acquisition analysis below is provisional. The acquisition had the following impact on the Group's assets and liabilities: Ragnars net assets at acquisition Carrying Fair Fair value amount before value, recognised Amounts in SEK m. acquisition adjustment in Group Intangible assets 0,0 16,0 16,0 Property, plant and equipment 13,8 4,0 17,8 Deferred income tax assets 0,0 0,0 0,0 Inventories 12,3 0,0 12,3 Trade and other receivables 13,5 0,0 13,5 Cash and cash equivalents 14,6 0,0 14,6 Interest-bearing liabilities -6,1 0,0-6,1 Deferred tax liabilities -0,2-6,0-6,2 Trade payables and other operating liabilities -11,0-2,0-13,0 Net identifiable assets and liabilities 36,9 12,0 48,9 Goodwill on acquisition 26,5 Transferred compensation 12,0 75,4

11 On 16 December 2016, Lammhults Design Group AB acquired 100% of the shares in Swedish furniture company Morgana AB. The initial purchase consideration was SEK 45.9 million, including net cash of SEK 6.9 million. The acquisition analysis below is provisional. The acquisition had the following impact on the Group's assets and liabilities: Morgana net assets at acquisition Carrying Fair Fair value amount before value, recognised Amounts in SEK m. acquisition adjustment in Group Intangible assets 0,2 16,0 16,2 Property, plant and equipment 3,2 0,0 3,2 Deferred income tax assets 0,0 0,0 0,0 Inventories 4,5 0,0 4,5 Trade and other receivables 13,7 0,0 13,7 Cash and cash equivalents 6,9 0,0 6,9 Interest-bearing liabilities -5,5 0,0-5,5 Deferred tax liabilities 0,0-4,4-4,4 Trade payables and other operating liabilities -7,9-2,0-9,9 Net identifiable assets and liabilities 15,1 9,6 24,7 Goodwill on acquisition 21,2 Transferred compensation 9,6 45,9 The goodwill amount includes the value of synergetic benefits in the form of greater sales opportunities through use of Lammhults Design Group s sales organisation for exports, more efficient purchasing, marketing design and product development. In addition to goodwill, the intangible assets identified are the Ragnars brand and a surplus value in acquired property. Acquisition-related costs totalled SEK 0.8 million, consisting of fees to consultants in connection with due diligence. These costs are recognised as administrative expenses in the Group. PARENT COMPANY INCOME STATEMENT, SUMMARY Amounts in SEK m / Net sales 2,1 1,7 7,6 7,1 Gross profit 2,1 1,7 7,6 7,1 Administrative expenses -7,2-4,7-23,6-21,1 Operating profit -5,1-3,1-16,0-14,0 Result from financial items: Result from participations in Group companies 0,0 0,0 11,7 11,7 Other interest income 0,6 0,4 3,4 3,2 Interest costs -1,2-1,2-5,3-5,3 Profit after financial items -5,7-3,9-6,2-4,4 Appropriations 0,0 0,0 19,5 19,5 Pre-tax profit -5,7-3,9 13,3 15,1 Tax 0,8 0,9-0,9-0,8 Profit/loss for the period -4,9-3,0 12,4 14,3

12 PARENT COMPANY STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME, SUMMARY Amounts in SEK m / Profit/loss for the period -4,9-3,0 12,4 14,3 Other comprehensive income Items transferred or transferrable to profit for the period Translation differences for the period Other comprehensive income for the period Total comprehensive income for the period -4,9-3,0 12,4 14,3 PARENT COMPANY BALANCE SHEET, SUMMARY Amounts in SEK m. 31 Mar Mar 2016 Intangible non-current assets 0,4 0,6 Property, plant and equipment 7,5 3,5 Financial non-current assets 545,6 421,9 Current accounts receivable 285,4 214,1 Cash in hand and on deposit 0,0 0,0 Total assets 838,9 640,1 Equity 291,9 294,3 Non-current liabilities to credit institutions 41,3 11,3 Current liabilities to credit institutions 126,8 58,6 Other current liabilities 378,9 275,9 Total equity and liabilities 838,9 640,1 ADDRESSES Lammhults Design Group AB (publ) Box 75, SE Lammhult, Sweden. Telephone Street address: Lammengatan 2, Lammhult