Absolent : Interim Report Q1 2021

Quarter 1

INTERIM REPORT

JANUARY - MARCH 2021

QUARTER 1, 2021

• Net sales amounted to 233.1 MSEK (279.1) which is a growth of -16.5 % (33.5)
• Operating profit before amortization of goodwill (EBITA) reached 26.4 MSEK (32.9) with a margin of 11.3 % (11.8).
• Operating profit after amortization of goodwill (EBIT) amounted to 2.7 MSEK (12.9) with a margin of 1.1 % (4,6). Amortizations of goodwill had an impact on EBIT with -23.7 MSEK (-20.1).
• Earnings per share amounted to -0.37 SEK (0.28).
• Cash flow from operating activities amounted 19.6 MSEK (-14.9)

KEY RATIOS	Jan-Mar	Jan-Mar	Jan-Dec	Jan-Dec
	2021	2020	2020	2019
Net sales (TSEK)	233,080	279,111	895,860	1,038,351
Sales growth (%)	-16.5	33,5	-13.7	61.3
EBITDA (TSEK)	29,764	37,117	73,455	174,968
EBITA (TSEK)	26,398	32,942	49,543	162,477
EBITA (%)	11.3	11.8	5.5	15.6
Amortization of goodwill (TSEK)	-23,719	-20,075	-80,728	-51,329
Operating profit EBIT (TSEK)	2,678	12,850	-31,184	111,148
Operating margin EBIT (%)	1.1	4.6	-3.5	10.7
Cash flow from operating
activities (TSEK)	19,645	-14,881	54,447	126,084
Debt/equity ratio (%)	29.7	44.2	30.5	41.7
Net debt (TSEK)	161,904	206,438	129,903	153,167
Earnings per share (SEK)	-0.4	0.3	-4.9	6.5
Equity per share (SEK)	32.0	39.2	30.4	37.7
Number of shares, end of period	11,320,968	11,320,968	11,320,968	11,320,968

COMMENTS BY THE CEO AXEL BERNTSSON

The first quarter was characterized by an order intake that was back to the same levels as before the Covid pandemic.

To meet the increased demand, we increased our production capacity in several factories during the quarter. Despite an increase in the order intake, there is only a slight growth in sales in the quarter, as the capacity expansion lags in time towards the order intake.

Sales amounted SEK 233 million which is an increase of two percent compared to the fourth quarter previous year. The costs of the business have followed the plan established in connection with the cost reduction program that was completed with the divestment of Gallito at the beginning of the year. The gross margin and operating margin for the quarter are in line with the corresponding quarter last year. Some material categories, such as sheet metal and electronics, have seen sharp price increases during the quarter. The increases are expected to be absorbed by price adjustments to our customers with some delayed effect.

Tessu, which was acquired in the commercial kitchen segment, has had an even and good start to the year as well as our commercial kitchen ventilation business as a whole. In this segment, we have not had any capacity constraints and have been able to plan production and adapt it to the order situation.

Our business towards industrial customers developed strongly during the quarter. Order intake was good in all regions as well as the inflow of new business opportunities. However, production restrictions affected sales that were lower than expected. Overall, we are pleased with how the industrial segment has recovered, but there is still some uncertainty as a result of the Covid pandemic.

We have a good level of new business opportunities and a good order intake. Although unpredictability is expected to continue for some time to come, we look with confidence at how the business will develop.

Axel Berntsson, MD and CEO

Lidköping, May 2021

2	ABSOLENT GROUP 2021

GROUP JANUARY TO MARCH 2021

NET SALES

The net sales for the Group amounted to 233.1 MSEK (279.1), which corresponds to a reduction of -16.5 % (33.5).

OPERATING PROFIT

Operating profit (EBIT) amounted to 2.7 MSEK (12.9), which corresponds to an operating margin (EBIT) of 1.1

• (4.6). The parent company and the Group do not apply IFRS/IAS 36. Thereby, impairment test of the goodwill is not performed. The Group amortize the goodwill linear over the estimated useful life, which is five to ten years. EBITA amounted to 26.4 MSEK (32.9), compare to the fourth quarter previous year EBITA increased with 2MSEK if you exclude the sale of a real estate. The currency rates impacted the operating profit (EBIT) positively with 2.5 MSEK (4.9) for the period. The financial items were positively impacted with 1.4 MSEK (-2.0) by the currency rates. The impact is related to the credit facility in foreign currency. After taxes and financial items of -6.8 MSEK (-9.6) the result for the period was -4.1 MSEK (3.2).

INVESTMENTS

The Group invested 4.4 MSEK (8.5) for the period January to March mainly in software, machinery and inventory in current operations. In January 2021, the group acquired the commercial kitchen ventilation company Tessu Systems B.V. in the Netherlands for 5.3 MEUR on a cash and debt-free basis with an opportunity for an additional earn out conditional on Tessu's performance in 2021 and 2022. In January 2021 Absolent Group has divested Gallito Limited in the UK. The divestment is in line with Absolent Group's strategy and sharpens the focus on core growth platforms.

CASH FLOW

Cash flow from the operating activities before changes in working capital amounted to 16.5 MSEK (21.9). Cash flow after changes in working capital amounted to 19.6 MSEK (-14.9).

FINANCIAL POSITION

Interest bearing liabilities amounted to 586.5 MSEK at the end of the period. At the beginning of the period the liabilities amounted to 581.7 MSEK. Net debt of the Group was 161.9 MSEK by the end of March compared to 129.9 MSEK in the beginning of the period. The debt/equity ratio was at the end of the period 29.7% (44.2). The parent company's credit facility amounts 600 MSEK and expires during 2022.

NET SALES PER REGION, JAN TO MAR

EUROPE

46 %

UK & I 21 %

APAC 10 %

AMERICAS

23 %

NET SALES

MSEK
300					1
250					0,8
200					0,6
150
100					0,4
50					0,2
0						0
Q1	Q2	Q3	Q4	Q1
	2020	2020	2020	2020	2021

EBITA OCH EBITA MARGIN (EBITA1* Q2-Q4 2020)

MSEK
35					14%
30					12%
25					10%
20					8%
15					6%
10					4%
5					2%
0						0%
Q1	Q2	Q3	Q4	Q1
	2020	2020	2020	2020	2021

CASH FLOW FROM OPERATING ACTIVITES

MSEK
40									100%
30									80%
20									60%
10
0										40%
								20%
-10
-20		Q1		Q2		Q3		Q4		Q1		0%
		2020		2020		2020		2020		2021

*EBITA1, Operating profit excluding one-time expenses related to the cost reduction program. For definition and more information see interim report, Q4, 2020.

3	ABSOLENT GROUP 2021

OTHER INFORMATION

RISKS AND UNCERTAINTIES

The Group and the parent company are exposed to different risks in their daily operations such as business risk, competitor risk, distributor risk, supplier risk and acquisition risk. These risks are described in detail in the Annual Report of Absolent Group for 2020 (available on www.absolentgroup.com). The risk profile remains since the Annual Report of 2020 was published. However, the spread of Covid-19 has created uncertainties in the market that are difficult to predict.

FINANCIAL IMPACT OF COVID 19

The Group has received governmental grants of approximately 1.1 MSEK (-) during the period January to March 2020. The impact of Covid-19 is still uncertain, and the Group management follows the development closely and evaluates both the operational and financial impact and takes proactive measures to limit the effects.

ACCOUNTING PRINCIPLES

The Group and the parent company applies the Swedish Annual Accounts Act (1995:1554) and General recommendation BFNAR 2012:1 Annual Accounts and Consolidated Financial Statements (K3) of the Swedish Accounting Standard Board. The accounting principles applied are the same as those described in the disclosures of the annual report for 2020 (available on www.absolentgroup.com). The group have changed the presentation of deferred tax assets and liabilities, and the comparison figures have been adjusted accordingly. Government grant is reported as other operating income.

No new accounting principles for 2021 has been applied by the Group.

OTHER INFORMATION

The Group CFO, Anna Åkerblad, has left the group and will be replaced by Karin Brossing Lundqvist during the second quarter of the year 2021.

CONTACT INFORMATION

Axel Berntsson, Managing Director and CEO Absolent Group AB (publ)

Staplaregatan 1, SE-531 40 Lidköping Company ID: 556591-2986 Phone: [phone]

Fax: [phone]

E-mail:[e-mail]

Website:www.absolentgroup.com

CERTIFIED ADVISER

Erik Penser Bank AB is the Company's Certified Adviser.

FINANCIAL CALENDER
Second quarter 2021	Aug 18, 2021
Third quarter 2021	Nov 12, 2021

This interim report has not been reviewed by the company auditors.

This document is a translation of the Swedish original. In the event of any discrepancies between this translation and the Swedish original, the latter shall prevail.

The interim report is available on the Group website (www.absolentgroup.com).

Lidköping May 4, 2021

Axel Berntsson

MD and CEO

This information is information Absolent Group AB (publ.) is obligated 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 1:00 p.m. CEST May 4, 2021.

4	ABSOLENT GROUP 2021

GROUP - INCOME STATEMENT

		Jan-Mar	Jan-Mar	Jan-Dec
(TSEK)		2021	2020	2020
Net sales	233,080	279,111	895,860
Cost of products and services sold	-145,458	-172,908	-592,490
Gross profit	87,622	106,203	303,370
Sales expenses	-54,394	-58,136	-211,431
Administrative expenses	-28,498	-33,207	-124,761
Research and development expenses	-5,558	-5,800	-24,948
Other operating income and expenses	3,506	3,790	26,586
Operating result (EBIT)	2,678	12,850	-31,184
Financial items	-457	-3,787	-9,947
Result before tax	2,221	9,063	-41,131
Taxes	-6,361	-5,840	-13,955
Result for the period	-4,141	3,223	-55,086

5	ABSOLENT GROUP 2021