- Net sales increased 18.7 per cent to SEK 5,959 (5,022) million. Organically, net sales grew by 7.6 per cent.
- EBITA increased 30.9 per cent to SEK 1,330 (1,016) million.
- The EBITA margin increased to 22.3 (20.2) per cent.
- Profit before tax grew 26.1 per cent to SEK 1,057 (838) million.
- Net profit for the period grew 26.3 per cent to SEK 793 (628) million.
- Earnings per share increased 26.5 per cent till SEK 1.72 (1.36).
- Cash flow from operating activities amounted to SEK 731 (322) million.
- Six new businesses were consolidated during the period with total annual net sales of
- New distribution of divisions in the Systems Solutions business area.
Summary of financial performance
FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2023 2022 change change 2022
Net sales 5,959 5,022 18.7% 22,489 4.3% 21,552
EBITA 1,330 1,016 30.9% 4,976 6.7% 4,662
EBITA margin 22.3% 20.2% 2.1 22.1% 0.5 21.6%
Profit before tax 1,057 838 26.1% 4,061 5.7% 3,842
Net profit for the 793 628 26.3% 2,993 5.8% 2,828
period
Earnings per share 1.72 1.36 26.5% 6.49 5.9% 6.13
Return on capital 22.8% 22.5% 0.3 22.8% 0.2 22.6%
employed
Return on capital 134% 160% -26 134% -1 135%
employed excl.
goodwill
COMMENTS FROM THE CEO
Net sales increased 18.7 per cent in the quarter to SEK 5,959 (5,022) million as the result of acquisitions, organic growth and foreign exchange gains. The generally favourable market environment in all business areas was a strong contributing factor to organic growth of 7.6 per cent. Net sales were also positively affected by price increases to compensate for higher costs.
EBITA increased by 30.9 per cent in the first quarter, to SEK 1,330 (1,016) million, and the EBITA margin expanded by 2.1 percentage points to 22.3 (20.2) per cent. Organic growth, acquisitions and exchange rate effects contributed to the increase in EBITA.
Earnings per share increased 26.5% till SEK 1.72 (1.36) in the first quarter. Cash flow from operating activities amounted to SEK 731 (322) million during the quarter. The low cash flow in the preceding year was due primarily to increased inventory build-up as the result of high demand and disruptions to the global supply chain that led to requirements for greater safety stock.
Lifco consolidated six acquisitions during the quarter. In Dental, operations were expanded with the German medical technology company Kohler Medizintechnik, the German dental lab Welte Dentallabor and the Swedish product company Doxa Dental. In Demolition & Tools, the British company Broughton Plant Hire and Sales was acquired, which is a niche provider of plant hire solutions for the construction industry. In Systems Solutions, the British companies Alwayse Engineering and Didsbury Engineering were acquired in the Transportation Products division. Alwayse Engineering is a global supplier of ball transfer units and Didsbury Engineering is a global supplier of equipment for ground service and maintenance of aircraft. Taken together, the acquisitions will have a positive impact on Lifco's results and financial position in the current year.
As a consequence of the divestment of a major company in the Forest division in 2022, and to increase transparency in Systems Solutions, a partly new distribution of divisions is reported from the first quarter of 2023. The change means that the Service and Distribution division is divided into the Transportation Products and Special Products divisions. The remaining operations in the Forest division are reported in the Special Products division. The Construction Materials division has changed name to Infrastructure Products to more clearly clarify the companies' direction.
Lifco's financial position remains good and interest-bearing net debt amounted to 1.2 times EBITDA at 31 March 2023, which is well in line with our target of interest-bearing net debt of a maximum of three times EBITDA and means that Lifco possesses the financial scope to make additional acquisitions.
Per Waldemarson
President and CEO
GROUP PERFORMANCE IN JANUARY - MARCH
Net sales increased 18.7 per cent to SEK 5,959 (5,022) million. Acquisitions contributed 9.5 per cent, organic growth accounted for 7.6 per cent, while foreign exchange gains had a positive impact of 4.5 per cent. The divestment in May 2022 of the Estonian company Hekotek, which mainly sells sawmill equipment to Russia, had a negative impact on net sales of 2.9 per cent. The British companies Alwayse Engineering, Broughton Plant Hire and Sales and Didsbury Engineering, the Swedish company Doxa Dental and the German company Kohler Medizintechnik were consolidated during the quarter. Assets of the German company Welte Dentallabor were also consolidated.
EBITA increased by 30.9 per cent to SEK 1,330 (1,016) million and the EBITA margin expanded by 2.1 percentage points to 22.3 (20.2) per cent. Organic growth, acquisitions and positive exchange rate effects contributed to the increase in EBITA. Foreign exchange gains had a positive impact on EBITA of 4.1 per cent. During the period, 44 (42) per cent of EBITA was generated in EUR, 23 (25) per cent in SEK, 10 (11) per cent in NOK, 8 (9) per cent in GBP, 6 (6) per cent in DKK, 4 (4) per cent in USD and 5 (3) per cent in other currencies.
Net financial items were SEK -65 (-17) million, negatively impacted primarily by higher interest expenses.
Profit before tax grew by 26.1 per cent to SEK 1,057 (838) million and net profit for the period increased by 26.3 per cent to SEK 793 (628) million.
Average capital employed excluding goodwill increased by SEK 279 million during the quarter, to SEK 3,723 million at 31 March 2023, compared with SEK 3,444 million at 31 December 2022. EBITA in relation to average capital employed excluding goodwill declined during the quarter to 134 per cent from 135 per cent at year-end.
The Group's net debt increased by SEK 893 million from 31 December 2022 to SEK 9,469 million at 31 March 2023, of which liabilities related to put/call options for acquisitions amounted to SEK 2,013 (1,903) million. Interest-bearing net debt increased by SEK 757 million since year-end and amounted to SEK 6,347 (4,938) million at 31 March 2023.
The net debt/equity ratio at 31 March 2023 was 0.7 (0.7) and net debt/EBITDA was 1.7 (1.8) times. Interest-bearing net debt/EBITDA was 1.2 (1.1) times. At period-end, 38 (58) per cent of the Group's interest-bearing liabilities were denominated in EUR.
Cash flow from operating activities amounted to SEK 731 (322) million. The low cash flow in the preceding year was due primarily to increased inventory build-up as the result of high demand and disruptions to the global supply chain that led to requirements for greater safety stock. Cash flow from investing activities was SEK -1,379 (-574) million, which was mainly attributable to acquisitions.
FINANCIAL PERFORMANCE - BUSINESS AREAS
Dental
FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2023 2022 change change 2022
Net sales 1,525 1,306 16.8% 5,514 4.1% 5,295
EBITA 328 255 28.6% 1,090 7.2% 1,017
EBITA margin 21.5% 19.5% 2.0 19.8% 0.6 19.2%
The companies in Lifco's Dental business area are leading suppliers of consumables, equipment and technical service to dentists across Europe, and the business area also has operations in the US. Lifco sells dental technology to dentists in the Nordic countries and Germany, and develops and sells medical record systems in Denmark, Sweden and Germany. The business area also includes a number of manufacturers which produce, inter alia, fitting products for dentures, disinfectants, saliva ejectors, bite registration and dental impression materials, bonding agents and other consumables that are sold to dentists through distributors around the world. In recent years, Dental has through acquisitions and organic growth increased its earnings in manufacturing, dental technology and software faster than in distribution, which has had a positive impact on margin growth in the business area.
Net sales in Dental increased by 16.8 per cent to SEK 1,525 (1,306) million during the first quarter, primarily as the result of organic growth and acquisitions.
EBITA increased by 28.6 per cent to SEK 328 (255) million during the period and the EBITA margin improved by 2.0 percentage points to 21.5 (19.5) per cent. In the preceding year, profitability was negatively impacted by disruptions in production of dental prosthetics in China due to the pandemic.
From January 2023, Doxa Dental of Sweden, which develops, manufactures and commercialises bioceramic dental products, was consolidated. The company had sales of approximately SEK 12 million in 2021. Assets of the German company Welte Dentallabor were consolidated from January 2023. In 2021, the company had a turnover of about EUR 1.3 million and has 12 employees. The German company Kohler Medizintechnik, which manufactures dental instruments, was consolidated from March 2023. The company had a turnover of around EUR 7 million in 2022 and has 36 employees.
Demolition & Tools
FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2023 2022 change change 2022
Net sales 1,810 1,338 35.3% 6,757 7.5% 6,285
EBITA 446 319 39.8% 1,734 7.9% 1,607
EBITA margin 24.6% 23.8% 0.8 25.7% 0.1 25.6%
The Demolition & Tools business area develops, manufactures and sells equipment for the infrastructure, demolition and construction industries. The Group is the world's leading supplier of demolition robots and crane attachments. The Group is also one of the leading global suppliers of excavator attachments. The business area's EBITA margin may fluctuate between quarters due to single, major special orders and changes to the product mix.
Net sales increased 35.3 per cent during the quarter to SEK 1,810 (1,338) million, primarily as the result of acquisitions and organic growth. The market situation during the quarter was generally strong. Net sales were also positively affected by price increases to compensate for higher costs in the business.
EBITA increased by 39.8 per cent to SEK 446 (319) million, positively impacted primarily by organic growth and acquisitions. The EBITA margin improved 0.8 of a percentage point to 24.6 (23.8) per cent.
The British company Broughton Plant Hire and Sales was consolidated from March 2023, which is a niche provider of plant hire solutions for the construction industry. The company had a turnover of around GBP 22 million in 2022 and has 100 employees.
Systems Solutions
FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2023 2022 change change 2022
Net sales 2,624 2,378 10.3% 10,218 2.5% 9,972
EBITA 594 480 23.8% 2,298 5.2% 2,184
EBITA margin 22.6% 20.2% 2.4 22.5% 0.6 21.9%
Through its operating units, the Systems Solutions business area operates in industries offering systems solutions. Systems Solutions is divided into five divisions: Contract Manufacturing, Environmental Technology, Infrastructure Products, Special Products and Transportation Products. The distribution of the division changed as of the first quarter of 2023. More information about the divisions can be found of pages 11-12.
Net sales in Systems Solutions increased by 10.3 per cent to SEK 2,624 (2,378) million during the quarter, mainly on the back of acquisitions and organic growth in the Contract Manufacturing and Environmental Technology divisions. Net sales were also positively affected by price increases to compensate for higher costs.
EBITA increased during the period by 23.8 per cent to SEK 594 (480) million and the EBITA margin increased by 2.4 percentage points to 22.6 (20.2) per cent, primarily as the result of organic growth and acquisitions.
Contract Manufacturing reported a healthy sales trend in the quarter with improved profitability.
Environmental Technology reported a healthy sales and profitability trend in the quarter.
Infrastructure Products reported a healthy sales trend in the quarter as the result of acquisitions, but profitability declined.
Special Products reported a decline in sales in the quarter due to the divestment of the Estonian company Hekotek in May 2022, while profitability improved substantially.
Transportation Products grew to a certain extent in the quarter with a favourable profitability trend.
In the Transportation Products division, the British company Alwayse Engineering was consolidated from March 2023, which is a global supplier of ball transfer units. The company had a turnover of around GBP 5.6 million in 2022 and has 41 employees. In the Transportation Products division, the British company Didsbury Engineering was also consolidated from March 2023, which is a global supplier of equipment for ground service and maintenance of aircraft. The company had a turnover of around GBP 6.5 million in 2022 and has 33 employees.
ACQUISITIONS
Lifco consolidated the following acquisitions in the period:
[][][]
Consolidated Acquisitions Business area Net sales 2022 Employees
from month
January Doxa Dental Dental SEK 12m[1] -
January Welte Dental EUR 1.3m[1] 12
Dentallabor
March Alwayse Systems Solutions GBP 5.6m 41
Engineering
March Broughton Plant Demolition & Tools GBP 22m 100
Hire and Sales
March Didsbury Systems Solutions GBP 6.5m 33
Engineering
March Kohler Dental EUR 7m 36
Medizintechnik
[1 ]Refers
to assessed
annual net
sales in
2021.
Further information on the acquisitions is provided on page 15. The figures for net sales and number of employees refer to estimated annual net sales and the number of employees at the acquisition date.
Taken together, the acquisitions will have a positive impact on Lifco's results and financial position in the current year.
OTHER INFORMATION
Employees
The average number of employees was 6,583 (6,258) in the first quarter. At the end of the period, the number of employees was 6,694 (6,311). Acquisitions added 222 employees.
Events after the end of the reporting period
Consolidation of the British company The Real Spirit of Coffee is expected to take place in the second quarter of 2023 in the Systems Solutions business area, division Special Products. The Real Spirit of Coffee is a supplier of high-end coffee machines and consumables, mainly for the British market. The company had a turnover of around GBP 24 million in 2022 and has 66 employees. The acquisition, which encompasses all shares, was announced on 13 February 2023.
Consolidation of the German company Datamed Is expected to take place in the second quarter of 2023 in the Dental business area. Datamed develops, sells and supports a software program used by German dental clinics. The company had a turnover of around EUR 2 million in 2022 and has ten employees. The acquisition, which encompasses all shares, was announced on 23 March 2023.
Consolidation of the Norwegian company Aura Electric will take place in April 2023 in the Systems Solutions business area, division Infrastructure Products. Aura Electric manufactures low volt electrical supplies. The company reported net sales of about NOK 38 million in 2022 and has ten employees. The acquisition, which encompasses a majority of the shares, was announced on 24 March 2023.
On 6 April 2023, Lifco announced the acquisition of the majority of the shares in the Italian company Geax, a niche manufacturer of compact piling rigs. Geax had a turnover of around EUR 15 million in 2022 and has 26 employees. Consolidation is expected to take place in the second quarter of 2023 in the Demolition & Tools business area.
Related party transactions
No significant transactions with related parties took place during the period.
Risks and uncertainties
The risk factors which have the biggest impact for Lifco are global macroeconomic factors, the competitive situation, structural changes in the market and general level of economic activity. Lifco is also exposed to financial risks, including currency risks, interest rate risks, credit and counterparty risks.
Lifco is working actively to monitor and continually evaluate sustainability-related risks and their impact on the Group's operations and earnings. The Group has established a governance structure that involves Group management and the Board and works to continually improve the company's sustainability-related activities and minimise related risks. As part of this governance, Group management evaluates the compliance of, for example, the Code of Conduct, occupational injuries, IT security and legal disputes, for every subsidiary on a quarterly basis.
The Parent Company is affected by the above risks and uncertainties in its capacity as owner of the subsidiary companies. For further information on Lifco's risks and risk management, see the 2022 Annual Report.
Accounting policies
The Group's interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. In respect of the Parent Company, the report has been prepared in accordance with the Annual Accounts Act and Recommendation RFR 2 Financial Reporting for Legal Entities of the Swedish Financial Reporting Board. The accounting policies have been applied in accordance with those which are presented in the 2022 Annual Report and should be read in conjunction with these.
This report has not been examined by the company's auditors.
DECLARATION OF THE BOARD OF DIRECTORS
The Board of Directors and Chief Executive Officer warrant and declare that this three-month report gives a true and fair view of the Parent Company's and Group's operations, financial positions and results, and that it describes significant risks and uncertainties faced by the Parent Company and the companies included in the Group.
Enköping, 28 April 2023
Carl BennetChairman of Ulrika DellbyDirector Annika EspanderDirector
the Board
Dan FrohmDirector Erik Gabrielson Ulf GrunanderDirector
Director
Tobias NordinDirector, Johan SternVice Caroline af
employee representative Chairman UgglasDirector
Axel Per Peter
WachtmeisterDirector WaldemarsonPresident WibergDirector,employee
and CEO, Director representative
FINANCIAL CALENDAR
The report for the second quarter will be published on 14 July.
The report for the third quarter will be published on 20 October.
The year-end report and the report for the fourth quarter will be published on 2 February 2024.
The Annual Report and Sustainability Report 2023 will be published in March 2024.
FURTHER INFORMATION
Media and investor relations: Åse Lindskog, ir@lifco.se,telephone: +46 730 24 48 72.
ONLINE PRESENTATION
An online presentation with Per Waldemarson, CEO, and Therése Hoffman, CFO, will take place on Friday, 28 April at 9.00 a.m. CEST. The presentation can be listened to online or by calling in to the telephone conference. Questions can be asked at the telephone conference.
Link to the presentation: https://ir.financialhearings.com/lifco-q1-2023
If you wish to participate at the telephone conference, you can register using the link below. Following registration, you will receive a telephone number and a conference ID to log in to the conference.
Link to register for the telephone conference:
https://conference.financialhearings.com/teleconference/?id=5005427
LIFCO IN BRIEF
Lifco offers a safe haven for small and medium-sized businesses. Lifco's business concept is to acquire and develop market-leading niche businesses with the potential to deliver sustainable earnings growth and robust cash flows. Lifco is guided by a clear philosophy centred on long-term growth, a focus on profitability and a strongly decentralised organisation. The Group has three business areas: Dental, Demolition & Tools and Systems Solutions. At year-end, the Lifco Group consisted of 211 operating companies in 30 countries. In 2022, Lifco reported EBITA of SEK 4.7 billion on net sales of SEK 21.6 billion. The EBITA margin was 21.6 per cent. Read more at www.lifco.se.
This information constitutes information that Lifco AB is required to publish
under theEU's Market Abuse Regulation. The information was submitted for
publication through the aforementioned contact person on 28 April 2023, at
7.30 a.m. CEST.
CONDENSED CONSOLIDATED INCOME STATEMENT
FIRST QUARTER FULL YEAR
SEK million 2023 2022 change 2022
Net sales 5,959 5,022 18.7% 21,552
Cost of goods sold -3,350 -2,983 12.3% -12,544
Gross profit 2,609 2,039 28.0% 9,008
Selling expenses -664 -520 27.7% -2,256
Administrative expenses -782 -619 26.3% -2,651
Development costs -46 -39 17.9% -163
Other income and expenses 5 -6 -183% 15
Operating profit 1,122 855 31.2% 3,953
Net financial items -65 -17 282% -111
Profit before tax 1,057 838 26.1% 3,842
Tax -264 -210 25.7% -1,014
Net profit for the period 793 628 26.3% 2,828
Profit attributable to:
Parent Company shareholders 782 619 26.3% 2,784
Non-controlling interests 11 9 22.2% 44
Earnings per share before and after 1.72 1.36 26.5% 6.13
dilution for the period, attributable to
Parent Company shareholders
EBITA 1,330 1,016 30.9% 4,662
Depreciation of tangible assets 129 104 24.0% 454
Amortisation of intangible assets 5 5 - 24
Amortisation of intangible assets arising 191 157 21.7% 673
from acquisitions
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FIRST QUARTER FULL YEAR2022
SEK million 2023 2022 change
Net profit for the period 793 628 26.3% 2,828
Other comprehensive income
Items which can later be
reclassified to profit or
loss:
Hedge of net investment 32 -35 -191% -79
Translation differences 41 176 -76.7% 856
Tax related to other -7 7 -200% 16
comprehensive income
Total comprehensive income 859 776 10.7% 3,621
for the period
Comprehensive income
attributable to:
Parent Company shareholders 850 764 11.3% 3,569
Non-controlling interests 9 12 -25.0% 52
859 776 10.7% 3,621
SEGMENT OVERVIEW
Lifco's operations are monitored and evaluated by the CEO and resources are allocated based on information from the three operating segments Dental, Demolition & Tools and Systems Solutions. The defined quantitative limits have been exceeded only by Dental and Demolition & Tools. One further operating segment, Systems Solutions, is presented. This operating segment consists of a merger of those divisions which have similar economic characteristics and which do not individually meet the defined quantitative limits. Until 31 December 2022, these divisions were Construction Materials, Contract Manufacturing, Environmental Technology, Service and Distribution and Forest. The Forest division became significantly smaller than other divisions following the divestment in May 2022 of the Estonian company Hekotek, which mainly sells sawmill equipment to Russia. As a consequence of the decrease in the size of the Forest division, and to increase transparency concerning Systems Solutions, a partly new distribution of divisions is reported from the first quarter of 2023. The change means that the Service and Distribution division is divided into the Transportation Products and Special Products divisions. Operations in the Forest division have been relocated to the Special Products division. The Construction Materials division has changed name to Infrastructure Products to clearly clarify the companies' direction.
NET SALES TO EXTERNAL CUSTOMERS
No sales are made between the segments.
FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2023 2022 change change 2022
Dental 1,525 1,306 16.8% 5,514 4.1% 5,295
Demolition & Tools 1,810 1,338 35.3% 6,757 7.5% 6,285
Systems Solutions 2,624 2,378 10.3% 10,218 2.5% 9,972
Group 5,959 5,022 18.7% 22,489 4.3% 21,552
Net sales by type of income:
FIRST QUARTER Rolling 12 months FULL YEAR
SEK million 2023 2022 change change 2022
Dental products 1,525 1,306 16.8% 5,514 4.1% 5,295
Machinery and tools 1,810 1,338 35.3% 6,757 7.5% 6,285
Infrastructure Products 479 368 30.2% 1,715 6.9% 1,604
Contract Manufacturing 554 428 29.4% 2,160 6.2% 2,034
Environmental Technology 748 641 16.7% 3,010 3.7% 2,903
Transportation Products 609 592 2.9% 2,890 0.6% 2,336
Special Products 234 349 -33.0% 443 -20.6% 1,095
Group 5,959 5,022 18.7% 22,489 4.3% 21,552
Net sales for the Systems Solutions business area by type of income quarters 2-4 2022 and total 2022:
2022
SEK million Q2 Q3 Q4 FULL YEAR
Contract Manufacturing 525 466 614 2,034
Environmental Technology 714 684 865 2,903
Infrastructure Products 389 364 483 1,604
Special Products 288 211 246 1,095
Transportation Products 598 553 594 2,336
Total Systems Solutions 2,514 2,278 2,802 9,972
EBITA
A breakdown of results by segment is made up to and including EBITA. EBITA is reconciled to profit before tax in accordance with the following table:
FIRST Rolling FULL
QUARTER 12 YEAR
months
SEK million 2023 2022 change change 2022
Dental 328 255 28.7% 1,090 7.2% 1,017
Demolition & Tools 446 319 39.8% 1,734 7.9% 1,607
Systems Solutions 594 480 23.8% 2,298 5.2% 2,184
Central Group functions -38 -38 - -146 - -146
EBITA before acquisition 1,330 1,016 30.9% 4,976 6.7% 4,662
costs
Acquisition costs -17 -4 325% -49 36.1% -36
EBITA 1,313 1,012 29.7% 4,927 6.5% 4,626
Amortisation of -191 -157 21.7% -707 5.1% -673
intangibleassets arising from
acquisitions
Net financial items -65 -17 282% -159 43.2% -111
Profit before tax 1,057 838 26.1% 4,061 5.7% 3,842
CONDENSED CONSOLIDATED BALANCE SHEET
SEK million 31 Mar 2023 31 Mar 2022 31 Dec 2022
ASSETS 19,553
Intangible assets 16,234 18,286
Tangible assets 2,547 2,091 2,364
Financial assets 364 340 365
Inventories 3,965 3,362 3,682
Accounts receivable - trade 3,209 2,664 2,853
Current receivables 729 547 518
Cash and cash equivalents 1,754 1,474 1,703
TOTAL ASSETS 32,121 26,712 29,771
EQUITY AND LIABILITIES
Equity 14,180 11,470 13,339
Non-current interest-bearing 2,564 2,700 1,725
liabilities incl. pension
provisions
Other non-current liabilities 4,269 3,458 4,053
and provisions
Current interest-bearing 6,647 4,581 6,608
liabilities
Accounts payable - trade 1,773 1,596 1,449
Other current liabilities 2,688 2,907 2,597
TOTAL EQUITY AND LIABILITIES 32,121 26,712 29,771
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to Parent Company shareholders
SEK million 31 Mar 2023 31 Mar 2022 31 Dec 2022
Opening equity 13,238 10,645 10,645
Comprehensive income for the period 850 764 3,569
Change in value, owner transactions -18 -57 -295
Dividend - - -681
Closing equity 14,070 11,352 13,238
Equity attributable to:
Parent Company shareholders 14,070 11,352 13,238
Non-controlling interests 110 118 101
14,180 11,470 13,339
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FIRST QUARTER FULL YEAR
SEK million 2023 2022 2022
Operating activities
Operating profit 1,122 855 3,953
Depreciation of right-of-use assets 62 47 211
Other non-cash items 258 219 940
Interest and financial items, net -65 -17 -111
Tax paid -296 -242 -911
Cash flow before changes in working capital 1,081 862 4,082
Changes in working capital
Inventories -238 -480 -737
Current receivables -374 -384 -429
Current liabilities 262 324 153
Cash flow from operating activities 731 322 3,069
Business acquisitions and sales, net -1,273 -505 -2,399
Net investment in tangible assets -80 -61 -249
Net investment in intangible assets -26 -8 -69
Cash flow from investing activities -1,379 -574 -2,717
Borrowings/repayment of borrowings, net 708 186 540
Dividends paid - - -681
Dividends paid to non-controlling interests - -9 -167
Cash flow from financing activities 709 177 -308
Cash flow for the period 60 -75 44
Cash and cash equivalents at beginning of period 1,703 1,509 1,509
Translation differences -9 40 150
Cash and cash equivalents at end of period 1,754 1,474 1,703
ACQUISITIONS IN 2023
Six businesses were consolidated in the first three months of the year. The consolidated business are the British companies Alwayse Engineering, Broughton Plant Hire and Sales and Didsbury Engineering, the Swedish company Doxa Dental and the German company Kohler Medizintechnik. Assets of the German company Welte Dentallabor were also consolidated.
The purchase price allocation includes all acquisitions consolidated during the first three months of the year.
Acquisition-related expenses of SEK 17 million are included in administrative expenses in the consolidated income statement for the first three months of the year. Since the respective consolidation dates, the acquired companies have added SEK 45 million to consolidated net sales and SEK 14 million to EBITA. If the businesses had been consolidated as of 1 January 2023, consolidated net sales for the year would have increased by a further SEK 97 million and EBITA would have increased by a further SEK 34 million.
Acquired net assets
Net assets, SEK million Carrying Value Fair
amount adjustment value
Trademarks, customer relationships, licences 3 730 733
Tangible assets 85 - 85
Inventories, accounts receivable and other receivables 157 -11 146
Accounts payable and other liabilities -39 -192 -231
Cash and cash equivalents 73 - 73
Total net assets 279 527 806
Goodwill - 586 586
Total net assets 279 1,113 1,392
Effect on cash flow, SEK million
Consideration 1,392
Considerations not paid -46
Cash and cash equivalents in acquired -73
companies
Consideration paid relating to acquisitions from -
previous years
Total cash flow 1,273
effect
FINANCIAL INSTRUMENTS
[]
SEK million 31 Mar 2023 31 Mar 2022 31 Dec 2022
Financial assets at amortised cost
Accounts receivable - trade 3,209 2,664 2,853
Other non-current financial receivables 17 12 15
Cash and cash equivalents 1,754 1,474 1,703
Total 4,980 4,150 4,571
Liabilities at fair value
Other liabilities[1] 2,013 1,903 1,946
Financial liabilities at amortised cost
Interest-bearing borrowings 9,121 7,224 8,263
Accounts payable - trade 1,773 1,596 1,449
Total 12,907 10,723 11,658
[1] Other liabilities classified as financial instruments refer to mandatory put/call options related to non-controlling interests.
The carrying amount is the same as the fair value. Financial instruments at fair value are classified into different levels depending on how fair value is determined. All financial instruments at fair value in the Lifco Group have been classified as level 3, i.e. non-observable inputs. The fair value of short-term borrowings is equal to the carrying amount, as the discount effect is insignificant.
KEY PERFORMANCE INDICATORS
ROLLING TWELVE MONTHS TO 202331 MAR 202231 DEC 202231 MAR
Net sales, SEK million 22,489 21,552 18,633
Change in net sales, % 4.3 23.3 6.6
EBITA, SEK million 4,976 4,662 3,910
EBITA margin, % 22.1 21.6 21.0
EBITDA, SEK million 5,479 5,140 4,336
EBITDA margin, % 24.4 23.8 23.3
Capital employed, SEK million 21,778 20,668 17,387
Capital employed excl. goodwill and 3,724 3,444 2,448
other intangible assets, SEK million
Return on capital employed, % 22.8 22.6 22.5
Return on capital employed excl. 134 135 160
goodwill, %
Return on equity, % 23.1 23.1 24.6
Net debt, SEK million 9,469 8,576 7,710
Net debt/equity ratio 0.7 0.6 0.7
Net debt/EBITDA 1.7 1.7 1.8
Interest-bearing net debt, SEK 6,347 5,590 4,938
million
Interest-bearing net debt/EBITDA* 1.2 1.1 1.1
Equity/assets ratio, % 44.1 44.8 42.9
Number of shares, thousands 454,216 454,216 454,216
Average number of employees 6,583 6,495 6,258
CONDENSED PARENT COMPANY INCOME STATEMENT
[]
FIRST QUARTER FULL YEAR
SEK million 2023 2022 2022
Administrative expenses -33 -35 -120
Other operating income[1] 0 0 63
Operating loss -33 -35 -57
Net financial items 48 -5 501
Profit/loss after financial items 15 -40 444
Appropriations - - -8
Tax -3 8 8
Net profit/loss for the period 12 -32 444
[1] Invoicing of Group-wide services.
CONDENSED PARENT COMPANY BALANCE SHEET
SEK million 31 Mar 2023 31 Mar 2022 31 Dec 2022
ASSETS
Financial assets 7,792 6,404 6,892
Current receivables 9,029 8,128 8,618
Cash and cash equivalents 578 634 587
TOTAL ASSETS 17,399 15,166 16,097
EQUITY AND LIABILITIES
Equity 3,661 3,854 3,649
Untaxed reserves 114 122 114
Provisions 0 0 -
Non-current interest-bearing liabilities 1,500 1,820 750
Current interest-bearing liabilities 6,361 4,354 6,302
Current non-interest-bearing liabilities 5,763 5,016 5,282
TOTAL EQUITY AND LIABILITIES 17,399 15,166 16,097
DEFINITIONS AND OBJECTIVES
Return on equity Net profit for the period divided by
average equity.
Return on capital employed EBITA before acquisition costs divided
by capital employed.
Return on capital employed excluding EBITA before acquisition costs divided
goodwill and other intangible assets by capital employed excluding goodwill
and other intangible assets.
EBITA EBITA is a measure which Lifco considers
relevant for investors who wish to
understand the earnings generated after
investments in tangible and intangible
assets requiring reinvestment but before
investments in intangible assets
attributable to acquisitions. Lifco
defines earnings before interest, tax
and amortisation (EBITA) as operating
profit before amortisation and
impairment of intangible assets arising
from acquisitions excluding acquisition
costs.
EBITA margin EBITA divided by net sales.
EBITDA EBITDA is a measure which Lifco
considers relevant for investors who
wish to understand the earnings
generated before investments in non
-current assets. Lifco defines earnings
before interest, tax, depreciation and
amortisation (EBITDA) as operating
profit before depreciation, amortisation
and impairment of tangible and
intangible assets excluding acquisition
costs.
EBITDA margin EBITDA divided by net sales.
Net debt/equity ratio Net debt divided by equity.
Net debt Lifco uses the alternative KPI net debt.
Lifco considers that this is a useful
additional KPI which allows users of the
financial reports to assess the Group's
ability to pay dividends, make strategic
investments and meet its financial
obligations. Lifco defines the KPI as
follows: current and non-current
liabilities to credit institutions,
bonds, interest-bearing pension
provisions, liabilities related to
put/call options relating to
acquisitions as well as lease
liabilities less cash and cash
equivalents.
Earnings per share Profit after tax attributable to Parent
Company shareholders, divided by the
average number of shares outstanding.
Interest-bearing net debt Lifco uses the alternative KPI interest
-bearing net debt. Lifco considers that
this is a useful additional KPI which
allows users of the financial reports to
assess the Group's ability to pay
dividends, make strategic investments
and meet its financial obligations.
Lifco defines the KPI as follows:
current and non-current liabilities to
credit institutions, bonds as well as
interest-bearing pension provisions less
cash and cash equivalents.
Equity/assets ratio Equity divided by total assets (balance
sheet total).
Capital employed Capital employed is a measure which
Lifco uses for calculating the return on
capital employed and for measuring how
efficient the Group is. Lifco considers
that capital employed is useful in
helping users of the financial reports
to understand how the Group finances
itself. Lifco defines capital employed
as total assets less cash and cash
equivalents, interest-bearing pension
provisions and non-interest-bearing
liabilities with the exception of
liabilities related to put/call options
and additional considerations relating
to acquisitions, calculated as the
average of the last four quarters.
Capital employed excluding goodwill Capital employed excluding goodwill and
and other intangible assets other intangible assets is a measure
which Lifco uses for calculating the
return on capital employed and for
measuring how efficient the Group is.
Lifco considers that capital employed
excluding goodwill and other intangible
assets is useful in helping users of the
financial reports to understand the
impact of goodwill and other intangible
assets on that capital which requires a
return. Lifco defines capital employed
excluding goodwill and other intangible
assets as total assets less cash and
cash equivalents, interest-bearing
pension provisions, non-interest-bearing
liabilities with the exception of
liabilities related to put/call options
relating to acquisitions, goodwill and
other intangible assets, calculated as
the average of the last four quarters.
RECONCILIATION OF ALTERNATIVE KEY PERFORMANCE INDICATORS
The interim report presents alternative key performance indicators for assessing the Group's performance. The primary alternative KPIs presented in this interim report are EBITA, EBITDA, net debt and capital employed. Definitions of the alternative KPIs are presented on pages 18-19.
EBITA compared with financial statements in accordance with IFRS
SEK million THREE THREE MONTHS2022 FULL YEAR2022
MONTHS2023
1,122
Operating profit 855 3,953
Amortisation of intangible 191 157 673
assets arising from
acquisitions
EBITA 1,313 1,012 4,626
Acquisition costs 16 4 36
EBITA before acquisition 1,330 1,016 4,662
costs
EBITDA compared with financial statements in accordance with IFRS
SEK million THREE THREE MONTHS2022 FULL YEAR2022
MONTHS2023
1,122
Operating profit 855 3,953
Depreciation of tangible 129 104 454
assets
Amortisation of intangible 5 5 24
assets
Amortisation of intangible 191 157 673
assets arising from
acquisitions
EBITDA 1,447 1,121 5,104
Acquisition costs 17 4 36
EBITDA before acquisition 1,464 1,125 5,140
costs
Net debt compared with financial statements in accordance with IFRS
SEK million 31 Mar 2023 31 Mar 2022 31 Dec 2022
Non-current interest-bearing 1,711 2,014 920
liabilities including pension
provisions
Current interest-bearing 6,390 4,398 6,373
liabilities
Cash and cash equivalents -1,754 - 1,474 -1,703
Interest-bearing net debt 6,347 4,938 5,590
Put/call options, additional 2,013 1,903 1,946
considerations
Lease liability 1,109 869 1,040
Net debt 9,469 7,710 8,576
Capital employed and capital employed excluding goodwill and other intangible assets compared with financial statements in accordance with IFRS
SEK million 31 Mar 31 Dec 2022 30 Sep 2022 30 Jun 2022
2023
Total assets 32,121 29,771 29,243 27,296
Cash and cash equivalents -1,754 -1,703 -1,368 -1,255
Interest-bearing pension -90 -70 -65 -61
provisions
Non-interest-bearing -6,717 -6,153 -6,151 -5,934
liabilities
Capital employed 23,560 21,845 21,659 20,046
Goodwill and other intangible -19,553 -18,286 -17,753 -16,624
assets
Capital employed excluding 4,007 3,559 3,906 3,422
goodwill and other intangible
assets
Capital employed and capital employed excluding goodwill and other intangible assets calculated as the average of the last four quarters compared with financial statements in accordance with IFRS
SEK million Average Q12023 Q42022 Q32022 Q2
2022
Capital employed 21,778 23,560 21,845 21,659 20,046
Capital employed excluding goodwill 3,724 4,007 3,559 3,906 3,422
and other intangible assets
Total
EBITA 4,976 1,330 1,322 1,103 1,221
Return on capital employed 22.8%
Return on capital employed excluding 134%
goodwill and other intangible assets