Interim Report – 6 months 1 April-30 September 2017

Second quarter (1 July-30 September 2017)

• Revenue increased by 7 percent to MSEK 1,293 (1,210).
• Operating profit rose by 29 percent to MSEK 62 (48). Adjusted operating profit (excluding items affecting comparability) totalled MSEK 63 (48), corresponding to an adjusted operating margin of 4.9 percent (4.0).
• The return on working capital (P/WC) for the most recent 12-month period was 21 percent (21).
• Net profit increased by 34 percent to MSEK 47 (35).
• Earnings per share rose by 32 percent to SEK 1.65 (1.25).
• The operational net loan liability amounted to MSEK 348 (224) and the equity/assets ratio at the end of the quarter was 40 percent (37).
• Acquisition of 70 percent of the shares in TriffiQ Företagsprofilering AB, a leading reseller of workwear and protective footwear in Stockholm. TriffiQ generates annual revenue of approximately MSEK 70 with favourable profitability.

Reporting period (1 April-30 September 2017)

• Revenue increased by 4 percent to MSEK 2,693 (2,592).
• Operating profit rose by 3 percent to MSEK 104 (101). Adjusted operating profit (excluding items affecting comparability) totalled MSEK 115 (101), corresponding to an adjusted operating margin of 4.3 percent (3.9).
• Profit after financial items rose by 5 percent to MSEK 101 (96).
• Net profit increased by 4 percent to MSEK 78 (75).

After the end of the reporting period

• On 26 October 2017, the Board of Directors of Momentum Group AB (publ) decided to propose that an Extraordinary General Meeting of Shareholders be held on 28 November 2017 to resolve on an issue of call options for repurchased
  shares to key individuals in senior positions in the Group and to authorise the Board of Directors to resolve on the acquisition and conveyance of treasury shares. The notice of the Extraordinary General Meeting of Shareholders on 28 November 2017 will be published separately.
• In mid-October 2017, TOOLS Sweden acquired the remaining 70 percent of the shares in AB Knut Sehlins Industrivaruhus, which thus became a wholly owned subsidiary. Sehlins is one of the leading industrial resellers in Örnsköldsvik and generates annual revenue of approximately MSEK 40.

PRESIDENT’S STATEMENT

Positive trend for 2017/18 to date
The second quarter as an independent company was characterised by a positive trend for Momentum Group. Overall, the market conditions in the first six months of the financial year have been favourable. In general, the manufacturing industry in Sweden and Finland is performing well. While the market conditions in Norway are more challenging, with a relatively low activity level particularly in the oil and gas segment, the second quarter offered more positive signals with respect to future developments.

Action programmes in TOOLS generating results
Most of our units are continuing to improve their earnings compared with the preceding year. Many of the profitability measures we have implemented, primarily in TOOLS Sweden, since autumn 2016 (including the winding down of 15 less profitable sales units, a higher share of own purchasing and the establishment of our own central warehouse) have had a positive impact on earnings. The adjusted operating margin for TOOLS Sweden during the six-month reporting period amounted to approximately 2.5 percent, which is more than double compared with the preceding year. At the same time, TOOLS Finland continued to display a positive trend and reported a decidedly stronger operating margin of just over 5 percent for the reporting period. Operating profit in TOOLS Norway was impacted by lower organic revenue, which was largely offset by the implementation of cost cutting measures. The operating margin in TOOLS Norway amounted to just under 2 percent for the reporting period.

During the second quarter, closing took place for our new subsidiary TriffiQ Företagsprofilering, which also contributed positively to earnings. In total, the Tools & Consumables business area improved its adjusted operating profit by approximately 40 percent during the reporting period.

Within the Components & Services business area, Momentum Industrial continued to report a high profit level, with favourable growth during the second quarter (+8 percent). Gigant’s transition to a higher proportion of direct sales continued to progress well, albeit from a low level. In total, the business area posted an adjusted operating margin of 8.5 percent for the reporting period.

Good start as an independent listed company
The aim of the split of the former B&B TOOLS Group was to provide Momentum Group with better opportunities to develop based on our unique circumstances, with own responsibility for all of our business-critical processes. It therefore feels gratifying to be able to conclude that the measures we have taken, primarily in TOOLS Sweden, have impacted earnings for the year to date faster than we had initially planned. In accordance with our previous communications, we still expect the measures we have implemented to achieve full effect during the latter part of the financial year. We continue to prioritise customer proximity and the adaptation of our offerings, logistics and sales channels, both local and digital, as well as acquisitions of successful niche companies.

Stockholm, October 2017

Ulf Lilius
President & CEO

Presentation of the Interim Report – 6 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 Interim Report and answer any subsequent questions. The presentation will be held in English.

Time: Friday, 27 October 2017 at 11:00 a.m. CET.
Web link: www.financialhearings.com/event/10536.
Telephone no: SE +46 8 503 365 62 / UK +44 20 3008 9816 / US +1 85 5831 5948

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 and the Swedish Securities Market Act. The information was submitted for publication, through the agency of the contact persons set out above, at 8:00 a.m. CET on 27 October 2017.
This document is in all respects a translation of the Swedish original Interim Report. In the event of any differences between this translation and the Swedish original, the latter shall prevail.

Read the complete report here