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February 11, 2020 8:00 AM
20
February
2020
8:00

Sdiptech AB (publ) publishes year-end report 2019

Press release
11 February 2020, 08:00

Sdiptech AB (publ) publishes year-end report 2019
The report will be available on the company's website: www.sdiptech.com

CONTINUED PROFIT GROWTH IN LINE WITH CHALLENGING GOALS

JANUARY - DECEMBER 2019

  • Operating profit EBITA* increased by 48% to SEK 262.2 m (177.2), corresponding to an EBITA* margin of 14.4% (11.8). The organic profit growth for the Group overall was +9%, of which +1% related to exchange rate differences.
  • Net sales increased by 22% to SEK 1,825.4 m (1,496.2). For the Group overall, the organic growth was +0.4%, of which +0.9% related to exchange rate differences.
  • Profit after acquisition costs before financial items (EBIT) increased by 55% and was SEK 221.9 m (143.3).
  • Earnings before tax increased by 65% to SEK 209.0 m (126.8).
  • Earnings after tax for the Group, excluding discontinued operations, totalled SEK 165.2 m (96.7), of which SEK 161.4 m (92.5) was attributable to the Parent Company’s shareholders.
  • Cash flow from current operations amounted to SEK 312.7 m (88.6), corresponding to a cash conversion of 115% (56).
  • During the period, Sdiptech AB completed four acquisitions: RedSpeed International Ltd, Water Treatment Products Ltd, Cryptify AB and Auger Site Investigations Ltd.
  • Earnings per ordinary share, including discontinued operations, less minority interests and dividends on preference shares, amounted to SEK 4.87 (3.69), of which SEK 0 (1.10) was attributable to discontinued operations.

         

FOURTH QUARTER 2019

  • Operating profit EBITA* increased by 48% to SEK 83.7 m (56.5), corresponding to an EBITA* margin of 16.3% (13.5). The organic profit growth for the Group overall was +23%, of which +2% related to exchange rate differences.
  • Net sales increased by 22% to SEK 513.0 m (419.2). For the Group overall, the organic growth was +3.3%, of which +1.6% related to exchange rate differences.
  • Profit after acquisition costs before financial items (EBIT) increased by 89% and amounted to SEK 79.5 m (42.0).
  • Earnings before tax increased by 105% and amounted to SEK 71.7 m (35.0).
  • Earnings after tax for the Group amounted to SEK 55.3 m (25.5), of which SEK 53.5 m (23.3) was attributable to the Parent Company’s shareholders.
  • Cash flow from current operations amounted to SEK 104.0 m (58.4), corresponding to a cash conversion of 128% (112).
  • Earnings per ordinary share, less minority interests and dividends on preference shares, was SEK 1.65 (0.65).

COMMENTS BY THE CEO:

Sdiptech’s overriding goal is to increase the Group’s profit through organic growth and acquisitions. During 2019, EBITA* profit increased with 48 percent, of which 8 percent were organic, 39 percent from acquisitions and 1 percent from currency effects. Meanwhile, the EBITA* margin in 2019 increased by 2.6 percentage points to 14.4 (11.8) percent. Cash flow generation during the year was a good 115 (56) percent and earnings per share increased by 88 percent to SEK 4.87 (2.59).

Several important ambitions were reached 2019
One of Sdiptech's financial goals is an average organic growth of 5-10 percent, we achieved 8 percent. We met our acquisition target of SEK 90 m. We exceeded our target of a cash flow generation of 100 percent per year. Finally, the operating margin was gradually strengthened during the year. Although a strong operating margin is not a financial goal in itself for Sdiptech, we are convinced that a good margin is a sign of strong market positions and scalable business models. The good margin improvement in 2019 is a result of profitable companies showing solid growth, combined with good profitability in acquired companies and implemented measures in our elevator operations.

FOURTH QUARTER – Continued good market situation and elevator operations at the highest annual levels since 2016
The market situation was good in our three business areas with strong demand generally and good organic profit growth.  Special Infrastructure Solutions increased its net sales organically by 6 percent and EBITA* increased organically by a strong 20 percent, thanks to growth in product companies with scalable business models.

Water & Energy performed well and managed to repeat the strong close to 2018. Net sales developed by -1 percent while EBITA* developed organically by 4 percent after growth in the most profitable companies. 

In Property Technical Services, the business unit’s net sales increased by 5 percent organically, while EBITA* showed an increase of 72 percent. The strong improvement in earnings was related to our elevator operations where in 2019 we were able to reap the positive effects from the completed profitability programme. In 2019, the profits in absolute terms were considerably higher in our elevator operations than they were before Sdiptech was listed in 2017. This is an important milestone for us and a confirmation of the inherent competence and strength in our organisation.

ACQUISITIONS – Four new quality companies in line with goals and strategy
We acquired four well-managed companies during the year equivalent to a total of SEK 93 m in additional EBITA. The companies all have a clear connection to the UN’s Sustainable Development Goals and in different ways contribute to more sustainable, efficient and safer societies.

OUTLOOK – The business model is working well and continued strong demand
The strong trend during 2019 is a confirmation that our business model is working well and that it is generating strong value growth. By acquiring and developing companies that offer solutions to critical needs within the infrastructure sector, we can also take an active role in the shift towards more sustainable, efficient and safer societies. With our focus on infrastructure, we are building detailed market insights and technical knowledge that creates added value for our subsidiaries and we can proudly state that we are continuing to attract owners of quality companies within infrastructure.

Our debt is calibrated against annual acquired growth of SEK 90 m EBITA and after a quieter acquisition period during the autumn, we can continue to work untiringly with unchanged growth targets during 2020. The long-term demand in our segments is solid as the investment needs are significant. Much of the current infrastructure is neglected, while society’s consumption of energy, water and transports is continuing to rise. Demand in our business areas is overall good and we are not seeing any strong indications of an economic slowdown.

We have met our own ambitious expectations for both 2019 and the fourth quarter and we are continuing to work with unchanged goals. By way of conclusion, I want to express a big thank you to all our dedicated employees for your commitment and strong efforts. I also want to welcome the 1,100 new shareholders who joined Sdiptech during the year.

Jakob Holm
President and CEO

For additional information, please contact:

Jakob Holm, CEO, +46 761 61 21 91, jakob.holm@sdiptech.com

Bengt Lejdström, CFO, +46 702 74 22 00, bengt.lejdstrom@sdiptech.com

Sdiptech's common share of series B share is traded under the short name SDIP B with ISIN code SE0003756758. Sdiptech AB's preferred shares are traded under the short name SDIP PREF with ISIN code SE0006758348. Sdiptech AB's Certified Adviser at Nasdaq First North Premier Growth Market is Erik Penser Bank, +468-463 83 00, certifiedadviser@penser.se. Further information is available on the company's website: www.sdiptech.com 

Sdiptech AB is a technology group with a primary focus on infrastructure segments critical to well-functioning societies and to welfare, e.g. water & sanitation, power & energy, transportation, energy efficiency and air climate. As part of our offering in urban areas, we also provide niched technical services for buildings and real-estate such as renovation of elevators and roofs. The company has approximately SEK 1,750 million in sales and is based in Stockholm.

Sdiptech AB (publ) is required to disclose this information pursuant to EU Market Use Regulation 596/2014. The company is based in Stockholm. The information was provided by the above contact person for publication 11 February 2020 at 08:00 CET.

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