Financial Report 2017/18 – 1 April 2017-31 March 2018

Financial year 2017/18 (1 April 2017-31 March 2018)

• Revenue increased by 4 percent to MSEK 5,616 (5,411).
• Operating profit amounted to MSEK 240 (65). Adjusted operating profit (excluding items affecting comparability) increased by 31 percent to MSEK 252 (193), corresponding to an adjusted operating margin of 4.5 percent (3.6).
• The return on working capital (P/WC) was 24 percent (21).
• The return on equity was 17 percent (4).
• Profit after financial items totalled MSEK 235 (54).
• Net profit amounted to MSEK 182 (42).
• Earnings per share totalled SEK 6.45 (1.50).
• The operational net loan liability amounted to MSEK 295 (263) and the equity/assets ratio at the end of the financial year was 42 percent (39).
• A dividend of SEK 2.60 per share is proposed.

Fourth quarter (1 January-31 March 2018)

• Revenue increased by 3 percent to MSEK 1,437 (1,400).
• Operating profit amounted to MSEK 60 (-70). Adjusted operating profit (excluding items affecting comparability) increased by 27 percent to MSEK 61 (48), corresponding to an adjusted operating margin of 4.2 percent (3.4).
• Profit after financial items totalled MSEK 60 (-73).
• Net profit amounted to MSEK 46 (-56).
• The acquisition of Reklamproffsen in Örebro in March 2018 strengthened Momentum Group’s position as a leading supplier of workwear and profile clothing for industrial and service companies.

After the end of the financial year

• In April 2018, TriffiQ Företagsprofilering acquired all of the shares in Profilmakarna in Södertälje. The acquisition enables the formation of a leading player in profile clothing, promotional products and workwear in Stockholm and Södertälje.

PRESIDENT’S STATEMENT

First year as an independent listed company
When the Board of Directors of what was then B&B TOOLS decided to propose that the Group be split into two independent listed companies – Bergman & Beving and Momentum Group – a year ago, the aim was to create increased shareholder value over time. This would provide each company with better opportuni­ties to develop based on their own unique circumstances. For Momentum Group, this first financial year has been eventful, shown positive progress and we have taken several important steps on our journey of improvements toward sustainable profitability. Our sales and earnings trend has been positive for every quarter of the year, despite the impact of a total of seven fewer trading days than in the preceding financial year and the winding down of 15 less profitable sales units in TOOLS Sweden. In summary, growth in adjusted operating profit (excluding items affecting comparability) totalled approximately 30 percent for the full year and the operating margin was 4.5 percent.

The overall business situation was favourable for most of our businesses and we have strengthened our positions in our main markets in the Nordic region during the year. The earnings growth and improved operating margin were a result of the efficiency-enhancement efforts we have been implementing in several Group companies – combined with increased sales at improved gross margins. It feels particularly gratifying to note the positive earnings performance of TOOLS Sweden, which was enabled through improved efficiency in terms of logistics, purchasing and local presence during the year. In addition, the positive contribution of the companies we acquired, particularly in the area of workwear and profile clothing, was in line with our expectations.

Business area Tools & Consumables
Within the Tools & Consumables business area, TOOLS Finland delivered a favourable sales trend for the year, which contributed to a stronger operating margin. TOOLS Norway’s performance was negatively impacted by comparatively lower overall demand in the market at the start of the year and by the implementation of a new business system in the operations. With the system implementation completed and a stabilised revenue and earnings trend toward the end of the year, our Norwegian operations are now ready to take the next step in the development of logistics, purchasing and sales. Our ambition is that this will generate improved margins going forward, in the same way as the measures taken in TOOLS Sweden.

Toward the end of the year, we acquired Reklamproffsen, a leading reseller of workwear and profile clothing in Örebro whose geographic coverage and expertise are a good complement to Mercus Yrkeskläder and TriffiQ Företagsprofilering. The companies in this area all reported healthy profitability for the year and will continue to be operated as independent niche companies in accordance with our philosophy of decentralised business responsibility.

Business area Components & Services
Momentum Industrial’s targeted, consistent work related to its offering, sales, logistics and decentralised responsibility have contributed to a favourable and profitable organic sales trend during the year and the business surpassed SEK 1 billion in annual revenue for the first time. Momentum Industrial is also working actively to establish a presence in additional geographic locations in the Nordic region and established a new sales unit in Växjö during the year. We also continuously assess acquisition candidates in this area. Gigant was the company in what was then B&B TOOLS that was most affected by the split of the Group and has gradually strengthened its earnings performance toward the end of the year. Following the establishment of a new, jointly owned production company during the year and continued improve­ment measures, we expect to see a gradual margin increase during the 2018/19 financial year.

A new exciting year in 2018/19
As we summarise the past year, I would like to conclude by thanking all of our dedicated employees for your many outstanding efforts – and our customers and business partners for your continued confidence. We will continue along the established path, with earnings growth combined with a decrease in the funds tied up in working capital in our existing units high on the agenda for increased profitability. We will also continue to adapt the measures taken in our various companies to their unique situation and opportuni­ties. Customer proximity and the adaptation of our offerings, logistics and sales channels, both local and digital, as well as acquisitions of successful niche companies will enable us to continue to become “better than yesterday”.

Stockholm, May 2018

Ulf Lilius
President & CEO

Presentation of the Financial Report – 12 months 2017/18
Investors, analysts and media are welcome to participate in a webcast conference call in which CEO & President Ulf Lilius and CFO Niklas Enmark will present the Financial Report and answer any subsequent questions. The presentation will be held in English.

Time: Tuesday, 8 May 2018 at 11:00 a.m. CET.
Web link: http://www.financialhearings.com/event/10539.
Telephone no: SE +46 8 505 564 53/ UK +44 20 3008 9807/ US +1 85 5831 5944

Contact information

Ulf Lilius, President & CEO, Tel: +46 10 454 54 70
Mats Karlqvist, Head of Investor Relations, Tel: +46 70 660 31 32

The information in this report is such that Momentum Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 8:00 a.m. CET on 8 May 2018.
   This document is in all respects a translation of the Swedish original Financial Report. In the event of any differences between this translation and the Swedish original, the latter shall prevail.

Momentum Group is one of the leading resellers of industrial consumables and components, service and maintenance to professional end users in the industrial and construction sectors in the Nordic region. The Group has annual revenue of approximately SEK 5.5 billion and approximately 1,600 employees. Momentum Group AB (publ) has been listed on Nasdaq Stockholm since June 2017. Read more at www.momentum.group.