Ahlsell AB - Interim Fourth Quarter and Year-end Report 2016

STOCKHOLM, Jan 27, 2017 /PRNewswire/ --

Fourth quarter 2016 - strong finish to 2016!

• Net sales increased by 14 percent to SEK 6,902 million (6,036). Organic sales growth was 8 percent.
• Operating profit (EBIT), which includes flotation costs of SEK 65 million, increased by 3 percent to SEK 477 million (462). Excluding flotation costs, EBIT increased by 14 percent to SEK 542 million (SEK 475 million excluding items impacting comparability from previous years).
• Profit (EBITA) increased by 3 percent to SEK 563 million (546). Adjusted EBITA increased by 12 percent to SEK 628 million (559), representing an adjusted EBITA margin of 9.1 percent (9.3).
• Profit after tax was SEK 62 million (44).
• Basic earnings per share were SEK 0.16 (0.15).
• One company with annual sales of SEK 80 million was acquired. Ahlsell has thus made three acquisitions during the year with combined annual sales of approximately SEK 600 million.
• Ahlsell made an issue of shares and the company was listed on the Nasdaq Stockholm stock exchange on 28 October.
• A share savings program and a warrants program for senior executives were launched in conjunction with the company's flotation.

January – December 2016

• Net sales increased by 9 percent to SEK 24,606 million (22,586). Organic growth was 7 percent (3).
• Operating profit (EBIT) increased by 14 percent to SEK 1,719 million (1,505).
• Profit (EBITA) increased by 12 percent to SEK 2,058 million (1,837). Adjusted EBITA increased by 13 percent to SEK 2,131 million (1,878), representing an adjusted EBITA margin of 8.7 percent (8.3).
• Profit after tax was SEK 342 million (70).
• Basic earnings per share were SEK 1.11 (0.21).
• The Board proposes a dividend of SEK 0.35 per share (0.00) for 2016.

CEO Statement

2016 closed with a strong fourth quarter and proved to be the best year in our 140-year history. As a result of successful growth initiatives, a strong underlying market and three acquisitions we exceeded our growth and profit targets.

We continued to grow and increased net sales by 14 percent to SEK 6,902 million in the quarter. We also developed our offering and all our three main markets contributed to the higher sales. Organic growth was up 8 percent and acquisitions, in the Swedish operations, added a further 3 percentage points. Business has benefited from strong market growth which, along with our growth­ initiatives in the various areas and geographic regions, has helped to improve market positions. Our performance once again demonstrates that our dedicated employees, with the support of the Ahlsell model, provide our customers with a value-adding, competitive offering.

Improved positions in main markets

The Swedish operations have succeeded in further consolidating their position in a growing market. All the product areas reported improvements in sales and profit. Our focus on growth initiatives brought us new customers and business in construction, lighting, personal protective equipment and other areas. The operations in Norway received a boost from the improved market conditions and higher growth. Initiatives focused on customers in real estate management and aqua culture have been implemented alongside leadership and organisational ­changes. The Norwegian process of change also includes initiatives to improve the branch network, extend the portfolio and develop the product area of personal protective equipment. Finland also reported good sales growth in the fourth quarter, with 13 percent organic growth. Confidence in the Finnish economy improved as the year progressed and pent-up need for new homes and renovations is driving demand in expanding urban regions. The strategic growth initiatives in Finland have been aimed at developing new customer and product segments, such as construction and facility managment, and improving the branche network, particularly in the city regions.

Increased earnings

Group earnings, excluding items impacting comparability ­and measured as adjusted EBITA, grew by 12 percent during the fourth quarter. Key reasons for a slightly reduced gross margin during the last quarter of the year were a changed mix with a higher percentage of large projects, especially in Sweden, and strong comparative figures for the fourth quarter of 2015. In addition, the gross profit was impacted by costs related to the re-organisation in conjunction with the ongoing extension of the central warehouse in Hallsberg.

Ahlsell returns to the stock exchange

The flotation of Ahlsell's shares on the Nasdaq Stockholm stock exchange on 28 October piqued considerable interest. The listing gives the company a wider shareholder base and new opportunities to strengthen the brand among customers, the labour market and the capital market.

Acquisitions strengthen our position

All of the companies acquired during the year are situated in south-west Sweden and will help us to consolidate our position in the expansive region of Gothenburg. The "West Swedish package" and the major investments in infrastructure that are taking place in the region are expected to contribute to a growing market for many years to come. Businesses were acquired in all of Ahlsell's product areas with aggregate annual sales of SEK 600 million.

Our ambition is that the operations will continue to grow both organically and through acquisitions in all main markets. The acquisition process has, through a more decentralised approach, led to greater activity in the organisation and we see many potential acquisition opportunities.

Outlook for 2017

Population growth, housing shortages and urbanisation, combined with continuing low interest rates and positive growth in GDP are driving activity in the construction sector. Major infrastructure investments in several of our main markets and a stable industrial economy are also fuelling demand. In conclusion, we expect to see the market and sales continuing to grow, underpinned by our own growth initiatives and an internal programme of improvement. This year already, our strategic programme of work has brought added value for customers, suppliers and shareholders. When things go well for our customers, it goes well for Ahlsell too. Which is why we are committed to improving our customers' competitive position.

Johan Nilsson
President and CEO

This report will be commented upon as follows:

Through a conference call/webcast today at 09:00 p.m. (CET) under the following link: https://wonderland.videosync.fi/ahlsell-q4-report-2016

To participate, please call 

SE: +46-8-566-426-62,
UK: +44 (0)20-300-898-02,
US: +1-85-575-322-36.

For further information, please contact:

Johan Nilsson,
President and CEO,
Telephone: +46-705-532-829,
E-mail: Johan.nilsson@ahlsell.se

Kennet Göransson,
CFO,
Telephone: +46-706-211-294,
E-mail: Kennet.goransson@ahlsell.se

Anna Oxenstierna,
Investor relations,
Telephone: +46-708-158-485,
E-mail: Anna.oxenstierna@ahlsell.se

This information is information that Ahlsell 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 person set out above, at 7:30 CET on 27 January 2017

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