Interim report January – June 2018
Strong organic growth and improved margins
· Revenue increased to MEUR 75.3 (71.4)
· Organic growth was 7.3%
· The gross margin was 43.2% (43.2)
· Adjusted EBITA amounted to MEUR 7.6 (6.9), corresponding to a margin of 10.1% (9.7)
· EBIT amounted to MEUR 4.3 (4.6), corresponding to a margin of 5.7% (6.5)
· Adjusted operating cash flow amounted to MEUR 7.9 (4.5)
· Vehicle Accessibility recovered revenue of approximately MEUR 0.5 on the deliveries postponed in the first quarter
· Expenses relating to the announced (in the interim report for the first quarter) reorganisation amounted to MEUR 2.0 during the quarter
· In August, President and CEO Asbjørn Eskild announced his decision to leave Handicare Group. Staffan Ternström has been appointed President and CEO effective 14 August
· Revenue increased to MEUR 146.9 (144.7)
· Organic growth was 5.0%
· The gross margin was 42.3% (42.9)
· Adjusted EBITA amounted to MEUR 12.8 (13.7), corresponding to a margin of 8.7% (9.5)
· EBIT amounted to MEUR 8.2 (9.3), corresponding to a margin of 5.6% (6.4)
· Adjusted operating cash flow amounted to MEUR 8.2 (4.8)
· The net effect of postponed deliveries in Vehicle Accessibility is estimated at approximately MEUR -1.5 in terms of revenue and about MEUR -0.8 in terms of EBITA
· Expenses relating to the reorganisation amounted to MEUR 2.0
Summary of the quarter
Organic growth amounted to 7.3% for the second quarter and 5.0% for the six-month period. The adjusted EBITA margin was 10.1% for the second quarter and 8.7% for the six-month period. The deliveries in Vehicle Accessibility that were postponed during the first quarter have started to be resumed, with corresponding revenue estimated at MEUR 0.5 for the second quarter. As previously announced, initiatives began during the quarter aimed at intensifying the sales focus and reducing administrative expenses. This generated costs of MEUR 2.0, which were charged to the quarter in their entirety.
We continued to strengthen our market position in stairlifts. Organic growth totalled 13% for stairlifts and the increase in North America alone was 47%. Volkswagen’s deliveries of minibuses in Norway resumed in the second quarter. Our estimate is that we have recovered approximately MEUR 0.5 of the MEUR 2.0 in revenue lost in the first quarter. Our assessment is that most of the remaining revenue loss will be recovered during the coming three quarters.
The revenue development in Patient Handling remains challenging. We have identified and implemented a number of initiatives to increase revenues. Patient Handling Europe displayed organic growth. Continued strong project sales in Puls resulted in organic revenue growth of 9.4%.
A distributor was acquired in Patient Handling, North America at the start of the year. The ambition is to transition fully to our product portfolio. The adjustment to our product portfolio continued during the quarter and revenue in the second quarter grew compared with the first quarter.
Lars Marcher – Chairman of the Board of Directors
Our medium-term aim is to grow by 10% per year, of which 4–6% organic, and with an adjusted EBITA margin exceeding 12%. During the first six months, we launched initiatives to further strengthen our sales focus and to reduce the resources within administration. Costs of approximately MEUR 2.0 were incurred in the second quarter and these primarily pertain to redundancies. In the long term, this will benefit sales and result in cost-savings of at least MEUR 3.0 annually as of 2019. We continue to identify and evaluate new acquisition targets as M&A is an important part of our growth strategy.
We would like to thank Asbjørn Eskild for his contribution to Handicare and welcome Staffan Ternström as the new President and CEO. Staffan has extensive experience from the medical device industry and I am convinced that he is well suited to lead Handicare in the next phase. Staffan’s first day is 14 August 2018. With sales growth that is well in line with our financial targets and an improved margin as well as favourable macro trends I am highly confident that we will achieve our financial targets in the medium term.
Asbjørn Eskild (outgoing President and CEO): ”As this is my last quarterly report as President and CEO of Handicare, I would like to thank our owners, Board of Directors, and employees for all their support during my period as CEO. I am proud of what we have accomplished and the second quarter implies that Handicare is on track. It has been a great privilege to work with all motivated and committed leaders and employees at Handicare. I wish Staffan all the best in his new role as CEO.”
This interim report has not been reviewed by the company’s auditors.
A telephone conference, hosted by Lars Marcher, Chairman of the Board of Directors, and Stephan Révay, CFO, will be held at 10:00 a.m. CET on 14 August 2018.
To participate, please register in advance using the following link
A presentation will be available at www.handicaregroup.com/investors.
Dates for financial reports
Interim report January – September 2018 24 October 2018
Year-end report 2018 19 February 2019
For more information, contact:
Stephan Révay, CFO, Tel: +46 729 666 532
Boel Sundvall, IR, Tel: +46 723 747 487
This information is information that Handicare Group AB (publ) is required to disclose 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 14 August 2018.
Handicare offers solutions to increase the independence of disabled or elderly people, and to facilitate for their care providers and family. The offering encompasses a comprehensive range of curved and straight stairlifts, transfer, lifting and repositioning aids, vehicle adaptations and medical equipment. Handicare is a global company with sales in more than 20 countries and is a market leader in this field. The head office is in Stockholm, Sweden and manufacturing is located at six sites distributed across North America, Asia and Europe. In the 12-month period to June 2018, revenue amounted to MEUR 287 and the adjusted EBITA margin was 8.8%. Employees numbered around 1,200 and the share is listed on Nasdaq Stockholm. For more information, www.handicaregroup.com.