The interim report has been prepared in accordance with IFRS as adopted by the EU, with IAS 34 Interim Financial Reporting being applied. Apart from in the financial statements and their accompanying notes, disclosures in accordance with IAS 34.16A also appear in other parts of the interim report. The interim report for the Parent Company has been prepared in accordance with the Annual Accounts Act and the Securities Market Act, which is in accordance with the provisions of RFR 2 Accounting for Legal Entities.
In the interim report, the same accounting principles and bases of calculation have been applied as in the most recent annual report, with the exception of the amended accounting principles described below.
New and amended standards for the 2020/2021 financial year
Other new or amended IFRS are not expected to have any significant effects on the Addtech Group.
Governmental support measures
Those governmental support measures that have been received or will be received as an effect of the COVID-19 pandemic will be recognized in the income statement when it is reasonably certain that the conditions for receiving the support have been met or will be met.
Alternative performance measures
The Company presents certain financial measures in the interim report that are not defined according to IFRS. The Company believes that these measures provide valuable supplemental information to investors and the Company's management as they allow for evaluation of trends and the Company's performance. Since all companies do not calculate financial measures in the same way, they are not always comparable to measures used by other companies. These financial measures should therefore not be considered to be a replacement for measurements as defined under IFRS. For definitions and reconciliation tables of the performance measures that Addtech uses, please see page 18-21.
Risks and factors of uncertainty
Addtech's profit and financial position, as well as its strategic position, are affected by a number of internal factors under Addtech's control and by a number of external factors over which Addtech has limited influence. The most important risk factors for Addtech are the state of the economy, combined with structural change and the competitive situation.
The COVID-19 pandemic that erupted during the beginning of 2020 affects the entire world market and will also affect Addtech. Addtech continues to follow the recommendations of the relevant authorities and takes relevant health precautions to protect staff and reduce the spread of infection in society. There are challenges in the supply chain and uncertainties exist about our customers’ ability to keep their businesses running at full capacity. We prepare and take measures on an ongoing basis to be able to act quickly and meet a decrease in sales. All companies in the Group have prepared action plans and cost-cutting programs ready to be executed to protect earnings, liquidity and cash flow.
Addtech has four operating subsidiaries within the UK as well as a few other subsidiaries doing business with the UK. The effects of Brexit are to this date unknown, but all affected subsidiaries are closely monitoring the developments. Addtech Group’s total exposure to possible negative effects from Brexit are not considered material.
Beside this, risks and uncertainty factors are the same as in previous periods, please see section Risks and uncertainties (page 41-43) in the annual report for 2019/2020 for further details.
The Parent Company is indirectly affected by the above risks and uncertainty factors due to its role in the organisation.
Effects of the COVID-19 pandemic
After the outbreak of the COVID-19 pandemic the Swedish government has decided on a number of government support measures. The same has also been decided in other countries where the Addtech group operates. Addtech has analyzed the conditions for these support measures and has applied where the criterias are judged to be met.
At the end of the third quarter, approximately 240 of the Group’s total approximately 3,100 employees have been notified of redundancy and a further 200 employees are affected by short-term lay-offs. For the group in total EBITA was marginally positively affected during the third quarter and during the period there has been a positive effect of approximately the equivalent of 0,5% of sales due to governmental support measures.
Sales are estimated to have been moderately negatively affected during the third quarter and in the period as a whole, with a sequential improvement after the first six-month period. It is primarily sales in the special vehicles, the marine and the mechanical industry segments that have been affected. No significant write-downs have been done due to the current pandemic.
Transactions with related parties
No transactions between Addtech and related parties that have significantly affected the Group's position and earnings have taken place during the period.
Addtech's sales of high-tech products and solutions in the manufacturing industry and infrastructure are not subject to major seasonal variations. The number of production days and customers' demand and willingness to invest can vary over the quarters.
The 2020 Annual General Meeting authorised the Board Chairman to establish a nomination committee for upcoming elections to the Board, by appointing members among representatives of the five shareholders who controlled the largest number of votes in the Company at 31 December 2020, to serve on the nomination committee. In accordance with the above, the committee comprises these appointed members: Anders Börjesson (appointed by Tisenhult Invest AB), Henrik Hedelius (appointed by Tom Hedelius), Marianne Nilsson (appointed by Swedbank Robur Fonder), Per Trygg (appointed by SEB Investment Management) and Mats Gustafsson (appointed by Lannebo Fonder). Information on how to contact the committee is available on the Addtech website.
Events after the end of the period
On 4 January, Synective Labs AB, Sweden, was acquired to become part of the Automation business area. Synective Labs are specialized in high performance systems, creating optimized hardware and software designs within FPGA and ASIC designs. The company has 27 employees and sales of around SEK 30 million.
On 5 January, Powernor AS, Norway, was acquired to become part of the Power Solutions business area. Powernor is based in Norway, where they specify, design and deliver complete UPS systems with battery backup in demanding applications for hospitals, infrastructure and industry. Powernor has a turnover of approximately NOK 35 million and have 6 employees.
On 21 January, Impact Air Systems Ltd. and Impact Technical Services Ltd., Great Britain, was acquired to become part of the Industrial Process business area. Impact provides waste and trim extraction and separation systems to various industries and recycling facilities around the world. The company´s bespoke solutions contribute to a more sustainable management of waste and the circular economy. The company has 33 employees and sales of around GBP 8 million.
Preliminary purchase price allocations has not yet been completed.
Stockholm February 4, 2021
CEO and President
This report has not been subject to review by the company's auditor.
This information is information that Addtech AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out below, at 8.15 a.m CET on 4 February 2021.
2021-05-18 Year-end report 1 April 2020 - 31 March 2021
2021-07-16 Interim report 1 April – 30 June 2021
2021-08-26 Annual General Meeting 2021 will be held at IVA, Grev Turegatan 16, Stockholm at 2.00 p.m
The Group's annual report for 2020/2021 will be published on Addtech's website in July 2021.
For further information, please contact:
Niklas Stenberg, President and CEO, +46 8 470 49 00
Malin Enarson, CFO, +46 705 979 473