Fourth quarter 2017
January – December 2017
Statement from the CEO
Strong results and a good acquisition rate end a successful year
For Ahlsell, the fourth quarter of 2017 was further proof that our strategy and hard work are producing results.
Compared with the previous year, sales for the quarter showed organic growth of 11 percent. The EBITA result was SEK 709 million. This corresponds to an increase of 13 percent and an adjusted EBITA margin of 9.3 (9.1) percent. In addition to good underlying development in all main markets, our strategy has continued to be successful. Our initiatives have shown continued positive development and we have increased both our sales and our profitability. We have actively worked to strengthen and expand our products-offering, developed our service portfolio and invested in our sales channels - both online and in the branch network. During the quarter, for example, we have opened and modernised another 13 branches according to our full-range concept. This means that our customers meet an even wider range of products in well-stocked branches. For us, it means increased cross-selling and an opportunity to reach even more customers.
In terms of acquisitions, we had a very strong end to the year with acquisitions in our three main markets. During the quarter, we completed eight acquisitions and signed an agreement to acquire two further businesses, which means that we, for the year 2017, signed agreements to acquire 13 operations with estimated sales of more than SEK 1,450 million. The acquisition of the Proffsmagasinet, a leading Nordic e-commerce business that we announced in December was probably the one getting the most attention. Both acquisitions and digital services are important components of our strategy for profitable growth. Already today, with 25 percent of sales, online is a significant and important sales channel for us. With the help of the fast-growing Proffsmagasinet, with annual turnover of approximately SEK 260 million, we will be able to develop our market-leading digital business further.
Ahlsell Sweden showed very strong development during the quarter – in terms of sales, earnings and acquisition rate. The high season and a favourable market situation created conditions for strong demand, while internal initiatives such as a focus on increased cross-selling and a broadening of the product range also contributed to increased sales in all product segments. The strongest growth was achieved within Electrical infrastructure and Construction. Sales showed organic growth of 13 percent and acquisitions contributed a further 3 percentage points. Six acquisitions were completed during the quarter, the majority of which were in the attractive product segment Tools & Supplies.
Ahlsell Norway achieved organic growth of 8 percent during the quarter. Demand was driven by favourable market conditions as a result of construction optimism among private operators, a high activity level and increased public investments in civil engineering. There was strong demand from electrical and HVAC installers in particular, but strategic initiatives within niche areas (such as aquaculture) also achieved a good sales rate. Our work towards best practice / “One Ahlsell” has been successful and the profitability has increased. I would also like to draw attention to the fact that the acquisition organisation in Norway is in place and that two interesting acquisitions were presented during autumn, one of which was completed. The other, the acquisition of Bekken & Strøm, which is one of Norway’s leading retailers of protective equipment, with annual sales of SEK 415 million, we expect to close in February.
Ahlsell Finland continues its positive development, with organic growth of 4 percent. We achieved the strongest growth from construction and industrial customers. It also makes me glad to see a slightly improved EBITA margin at the same time as our sales and marketing efforts are proceeding according to plan. One example is to strengthen Ahlsell's position in strategically important regions, such as the Helsinki region. The acquisition of Enexia Oy is an important milestone in our ambition for continued growth and broadened offering.
We enter 2018 with a number of completed acquisitions, which gives us a substantial sales increase. This, in combination with our initiatives for strengthened organic growth, provide good opportunities for continued profitable development.
Our broad exposure towards several market segments with different economic patterns means that we stand strong. The current favourable development in new residential construction is expected to dampen a little during the year, but our exposure to the segment is limited. Historically, our significant exposure to renovation has had a balancing effect on both sales and earnings at times when new construction has been weaker. My assessment is that it will not be any different in the future. Within industry and infrastructure, I see continuing positive developments.
All in all, I expect good demand for our products and services as we enter 2018.
Johan Nilsson, President and CEO
Webcast conference call for the report
On 26 January at 10.30 CET, a presentation will be held at Helio GT 30, Grev Turegatan 30 in Stockholm for analysts and investors, during which President and CEO Johan Nilsson and CFO Kennet Göransson will present the report. The presentation will be conducted in English and will also be broadcast in real time on the internet. There will be an opportunity to ask questions at the venue, via the telephone conference and via the webcast. To participate in the presentation, please register using the link below, which is also the link to the webcast. https://financialhearings.com/event/10307
SE: +468 5664 2662, UK +4420 3008 9806, US: +1855 753 2235. The presentation material and recorded webcast will be available on Ahlsell’s website after the presentation.
The full report is attached to this press release.
For further information, please contact:
Karin Larsson, Head of IR and external communications
+ 46 8 685 59 24, Karin.Larsson@ahlsell.se
Johan Nilsson, President and CEO Ahlsell AB
+46 705 532 829, Johan.Nilsson@ahlsell.se
Kennet Göransson, CFO
+46 706 211 294, Kennet.Goransson@ahlsell.se
|This information is information that Ahlsell AB (publ) is required to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of Johan Nilsson, on 26 January 2018 at 07.30 a.m. CET.|
Ahlsell is the Nordic region’s leading distributor of installation products, tools and supplies for installers, construction companies, facility managers, industrial and power companies and the public sector. The unique customer offer covers more than one million individual products and solutions. The Group has a turnover of over SEK 27 billion and is listed on Nasdaq Stockholm. About 97 percent of revenue is generated in the three main markets of Sweden, Norway and Finland. With about 5,500 employees, more than 220 branches and three central warehouses, we constantly fulfil our customer promise: Ahlsell makes it easier to be professional!
Press release, January 26, 2018