The interim report has been prepared in accordance with IFRS as adopted by the EU, with IAS 34 Interim Financial Reporting being applied. Apart from in the financial statements and their accompanying notes, disclosures in accordance with IAS 34.16A also appear in other parts of the interim report. The interim report for the Parent Company has been prepared in accordance with the Annual Accounts Act and the Securities Market Act, which is in accordance with the provisions of RFR 2 Accounting for Legal Entities.
In the interim report, the same accounting principles and bases of calculation have been applied as in the most recent annual report, with the exception of the amended accounting principles described below.
New and amended standards for the 2020/2021 financial year
Other new or amended IFRS are not expected to have any significant effects on the Addtech Group.
Governmental support measures
Those governmental support measures that have been received or will be received as an effect of the Covid-19 pandemic will be recognized in the income statement when it is reasonably certain that the conditions for receiving the support have been met or will be met.
Alternative performance measures
The Company presents certain financial measures in the interim report that are not defined according to IFRS. The Company believes that these measures provide valuable supplemental information to investors and the Company's management as they allow for evaluation of trends and the Company's performance. Since all companies do not calculate financial measures in the same way, they are not always comparable to measures used by other companies. These financial measures should therefore not be considered to be a replacement for measurements as defined under IFRS. For definitions and reconciliation tables of the performance measures that Addtech uses, please see page 18-21.
Risks and factors of uncertainty
Addtech's profit and financial position, as well as its strategic position, are affected by a number of internal factors under Addtech's control and by a number of external factors over which Addtech has limited influence. The most important risk factors for Addtech are the state of the economy, combined with structural change and the competitive situation.
The Covid-19 pandemic that erupted during the beginning of 2020 affects the entire world market and will also affect Addtech. Addtech continues to follow the recommendations of the relevant authorities and takes relevant health precautions to protect staff and reduce the spread of infection in society. There are challenges in the supply chain and uncertainties exist about our customers’ ability to keep their businesses running at full capacity. We prepare and take measures on an ongoing basis to be able to act quickly and meet a decrease in sales. All companies in the Group have prepared action plans and cost-cutting programs ready to be executed to protect earnings, liquidity and cash flow.
Addtech has four operating subsidiaries within the UK as well as a few other subsidiaries doing business with the UK. The effects of Brexit are to this date unknown, but all affected subsidiaries are closely monitoring the developments. Addtech Group’s total exposure to possible negative effects from Brexit are not considered material. Beside this, risks and uncertainty factors are the same as in previous periods, please see section Risks and uncertainties (page 41-43) in the annual report for 2019/2020 for further details.
The Parent Company is indirectly affected by the above risks and uncertainty factors due to its role in the organisation.
Effects of the covid-19 pandemic
After the outbreak of the Covid-19 pandemic the Swedish government has decided on a number of government support measures. The same has also been decided in other countries where the Addtech group operates. Addtech has analyzed the conditions for these support measures and has applied where the criterias are judged to be met.
At the end of the first quarter, approximately 120 of the Group’s total approximately 3,000 employees have been notified of redundancy and a further 800 employees are affected by short-term lay-offs. For the group in total EBITA is affected positively by approximately SEK 25 million from governmental support measures.
Sales in the first quarter of 2020/2021 are estimated to have been negatively affected by approximately 7 percent compared to sales in the previous year due to the current pandemic. No significant write-downs have been done due to the current pandemic.
Transactions with related parties
No transactions between Addtech and related parties that have significantly affected the Group's position and earnings have taken place during the period.
Addtech's sales of high-tech products and solutions in the manufacturing industry and infrastructure are not subject to major seasonal variations. The number of production days and customers' demand and willingness to invest can vary over the quarters.
2020 Annual General Meeting
The Annual General Meeting of Addtech AB will be held on Friday, 28 August 2020, at 2.00 p.m. at IVA, Grev Turegatan 16, Stockholm.
As a precautionary measure to reduce the risk of spreading the Coronavirus, Addtech has determined that no beverages or food will be served, that the customary presentations will be kept as brief as possible and that the number of non-shareholders attending will be subject to certain limitations. The number of Board members, auditors, Nomination Committee members, employees and functionaries attending at the Meeting will be minimised. In light of the authorities’ regulations, Addtech would like to urge all shareholders to consider carefully the possibility of using the option of postal voting or exercising their right to vote by issuing a power of attorney to someone who the shareholder knows will be attending the Annual General Meeting, rather than attending the meeting in person. Addtech is monitoring developments closely and will update this information as and when necessary.
The notice of the Annual General Meeting will be published in the second half of July 2020 and will also be posted on www.addtech.com.
The Board of Directors proposes a dividend of SEK 4.00 (5.00) per share, corresponding to a total dividend of about SEK 269 million (336). Addtech’s dividend policy is to propose a dividend that exceeds 30 percent of average Group profit after tax over a business cycle. In proposing a dividend, the Group’s equity, long-term financing and investment needs, growth plans and other factors are taken into account that the Company’s Board of Directors consider important. With this in mind and taking into account the current global situation due to the Coronavirus pandemic, the Board has decided to propose a dividend of SEK 4.00.
The Board of Directors proposes to the Annual General Meeting that the number of shares in the company be increased by splitting each existing share, regardless of series, into four shares (what is referred to as 4:1 share split).
Events after the end of the period
No events requiring reporting have occured after the end of the period.
Stockholm July 14, 2020
CEO and President
This report has not been subject to review by the company's auditor
This information is information that Addtech AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out below, at 8.15 a.m CET on 14 July 2020.
2020-08-28 Annual General Meeting 2020 will be held at IVA, Grev Turegatan 16, Stockholm at 2.00 p.m
2020-10-23 Interim report 1 April - 30 September 2020
2021-02-04 Interim report 1 April – 31 December 2020
2020-05-18 Year-end report 1 April 2020 - 31 March 2021
For further information, please contact:
Niklas Stenberg, President and CEO, +46 8 470 49 00
Malin Enarson, CFO, +46 705 979 473