OTHER FINANCIAL INFORMATION

Profitability, financial position and cash flow
The return on equity at the end of the period was 31 percent (29), and return on capital employed was 20 percent (21). Return on working capital P/WC (EBITA in relation to working capital) amounted to 54 percent (53).

At the end of the period the equity ratio amounted to 34 percent (35). The implementation of IFRS 16 had a negative effect and increased the balance sheet total by SEK 527 million. Equity per share, excluding non-controlling interest, totalled SEK 39.60 (33.05). The Group's net debt at the end of the period amounted to SEK 2,389 million (1,808), excluding pension liabilities of SEK 373 million (252), including leasing liabilities from IFRS 16 totallingSEK 529 million. The net debt/equity ratio, calculated on the basis of net debt excluding provisions for pensionsbut including leasing liabilities according to IFRS 16, amounted to 0.9 (0.8).

Cash and cash equivalents consisting of cash and bank equivalents and approved but non-utilised credit facilities amounted to SEK 861 million (477) at 31 December 2019.

Cash flow from operating activities amounted to SEK 667 million (320) during the period. The implementation of IFRS 16 has increased cash flow from operating activities by SEK 112 million and decreased cash flow from financing activities by the corresponding amount, on account of the fact that the amortization portion of lease payments is recognized as payments in the financing activities. Company acquisitions and disposals including settlement of contingent consideration regarding acquisitions implemented in previous years amounted toSEK 310 million (555). Investments in noncurrent assets totalled SEK 78 million (49) and disposal of non-current assets amounted to SEK 4 million (10). Dividend from associated companies amounted to SEK 1 million (2). Repurchase of treasury shares amounted to SEK 42 million (38) and repurchase of call options amounted to SEK 23 million (11). Exercised and issued call options totalled SEK 31 million (27). Dividends paid to the shareholders of the Parent Company totalled SEK 336 million (269), corresponding to SEK 5.00 (4.00) per share. The dividend was paid out in the second quarter.

Employees
At the end of the period, the number of employees was 2,931, compared to 2,759 at the beginning of the financial year. During the period, completed acquisitions and disposals resulted in a net increase of the number of employees by 135. The average number of employees in the latest 12-month period was 2,849.

Ownership structure
At the end of the period the share capital amounted to SEK 51.1 million.

Addtech has four outstanding call option programmes for a total of 1,062,000 shares. Call options issued on repurchased shares entail a dilution effect of about 0.2 percent during the latest 12-month period. Addtech's own shareholdings fully meet the needs of the outstanding call option programmes.

Acquisitions and disposals
During the period, 1 April to 30 September 2019 the following acquisitions were completed; Omni Ray AG, Thiim A/S and Promector Oy to become part of the Automation business area, Thurne Teknik AB, AB N.O. Rönne and BKC Products Ltd. to become part of the Industrial Process business area, Best Seating Systems Walter Tausch GmbH to become part of the Power Solutions business area and Profelec Oy to become part of the Energy business area.

During the third quarter, no company acquisitions took place.

The purchase price allocation calculations for the acquisitions completed during the period 1 April – 31 December 2018 have now been finalised. No significant adjustments have been made to the calculations. Acquisitions completed as of the 2018/2019 financial year are distributed among the Group’s business areas as follows:

If all acquisitions which have taken effect during the period had been completed on 1 April 2019, their impact would have been an estimated SEK 390 million on Group net sales, about SEK 10 million on operating profit and about SEK 7 million on profit after tax for the period.

Addtech normally employs an acquisition structure comprising basic purchase consideration and contingent consideration. The outcome of contingent purchase considerations is determined by the future earnings reached by the companies and is subject to a fixed maximum level. Of considerations not yet paid for acquisitions during the period, the discounted value amounts to SEK 31 million. The contingent purchase considerations fall due for payment within three years and the outcome is subject to a maximum of SEK 43 million. 

Transaction costs for acquisitions that resulted in an ownership transfer during the period, amounted to SEK 3 million (6) and are reported under Selling expenses.

Revaluation of contingent consideration had a positive net effect of SEK 22 million (11) during the period. The impact on profits are reported under Other operating income and Other operating expenses, respectively.

According to the preliminary acquisitions analyses, the assets and liabilities included in the acquisitions were as follows, during the period:

Parent Company

Parent Company net sales amounted to SEK 47 million (45) and profit after financial items was SEK -41 million (-12). Net investments in non-current assets were SEK 0 million (0). The Parent Company's financial net debt was SEK 328 million (150) at the end of the period.