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QUARTERLY REPORT
JANUARY - SEPTEMBER 2023
Delivering sustainable solutions
FROM END
TO END AND
BEYOND
Elanders is a global logistics company with a broad range of services of integrated solutions in supply chain management.
The business is mainly run through two business areas, Supply Chain Solutions and Print & Packaging Solutions. The Group has over 7,000 employees and operates in some 20 countries on four continents. The most important markets are China, Singapore, the United Kingdom, Sweden, Germany, and the USA. Our major customers are active in the areas Automotive, Electronics, Fashion, Health Care and Industrial.
Contents
- Bulletpoints
- Comments by the CEO
- Group
- Parent company
- Other information
- Auditor's report
- Consolidated financial statements
- Quarterly data
- Five year overview
- Reconciliation of alternative performance measures
- Parent company's financial statements
- Financial definitions
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.
Further information can be found on Elanders' website www.elanders.com or requested via e-mail info@elanders.com. Questions concerning this report can be addressed to:
Magnus Nilsson | Andréas Wikner |
President and CEO | Chief Financial Officer |
Phone: +46 31 750 07 50 | Phone: +46 31 750 07 50 |
Elanders AB (publ) (Company ID 556008-1621)
Flöjelbergsgatan 1 C, 431 35 Mölndal, Sweden Phone: +46 31 750 00 00
This information is information that Elanders AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 13:00 CET on 17 October 2023.
NET SALES, MSEK
4,000 | |||
3,500 | |||
3,000 | |||
2,500 | |||
2,000 | |||
1,500 | |||
1,000 | |||
500 | |||
0 | |||
Q3 2020 | Q3 2021 | Q3 2022 | Q3 2023 |
ADJUSTED EBITA, MSEK
250 | |||
200 | |||
150 | |||
100 | |||
50 | |||
0 | |||
Q3 2020 | Q3 2021 | Q3 2022 | Q3 2023 |
OPERATING CASHFLOW, MSEK
600 | |||
500 | |||
400 | |||
300 | |||
200 | |||
100 | |||
0 | |||
Q3 2020 | Q3 2021 | Q3 2022 | Q3 2023 |
2 | Elanders | Q3 2023 |
Bulletpoints
January - September 2023
- Net sales increased to MSEK 10,292 (10,875), which corresponded to an organic net sales reduction of eight percent, excluding acquisitions and discontinued operations, and using unchanged exchange rates. The reduction is mainly due to normalized freight rates and linked to the Group's Air & Sea freight forwarding operations.
- Adjusted EBITA increased to MSEK 638 (635), which equaled an adjusted EBITA margin of 6.2 (5.8) percent.
- The period's reported result included one-off items of MSEK -81 (32). Most of these referred to errors discovered in one of the Group's companies in North America, which were corrected in the first quarter. The remaining part referred to a provision during the second quarter for additional consideration for an acquisition that has developed better than expected. Last year's one-off items mainly referred to a revaluation of shares in associated companies in connection with a merger.
- Adjusted net result amounted to MSEK 223 (315), corresponding to SEK 6.19 (8.52) per share. The reduction is primarily due to higher interest expenses.
- Reported net result amounted to MSEK 156 (347), corresponding to SEK 4.32 (9.42) per share.
- Operating cash flow increased to MSEK 1,558 (715).
- Cash conversion increased to 113 (54) percent.
Third quarter 2023
- Net sales were MSEK 3,253 (3,979), which corresponded to an organic net sales reduction of eleven percent, excluding acquisitions and discontinued operations, and using unchanged exchange rates. The reduction is to a large extent due to normalized freight rates and linked to the Group's Air & Sea freight forwarding operations.
- Adjusted EBITA amounted to MSEK 211 (224), which equaled an adjusted EBITA margin of 6.5 (5.6) percent.
- The period's reported result included one-off items of MSEK 0 (-8). Last year's one-off items referred to a provision for additional consideration for an acquisition that developed better than expected.
- Adjusted net result amounted to MSEK 66 (124), corresponding to SEK 1.83 (3.33) per share. The reduction is primarily due to higher interest expenses.
- Reported net result amounted to MSEK 66 (115), corresponding to SEK 1.83 (3.10) per share.
- Operating cash flow increased to MSEK 510 (229).
- Cash conversion increased to 106 (59) percent.
Financial overview
January - September | Third quarter | Last 12 | Full year | ||||
2023 | 2022 | 2023 | 2022 | months | 2022 | ||
Net sales, MSEK | 10,292 | 10,875 | 3,253 | 3,979 | 14,391 | 14,974 | |
EBITDA, MSEK | 1,399 | 1,403 | 500 | 466 | 1,937 | 1,940 | |
EBITDA excl. IFRS 16, MSEK | 635 | 762 | 238 | 246 | 941 | 1,068 | |
EBITA adjusted, MSEK 1) 3) | 638 | 635 | 211 | 224 | 969 | 966 | |
EBITA-margin adjusted, % 1) 3) | 6.2 | 5.8 | 6.5 | 5.6 | 6.7 | 6.5 | |
EBITA, MSEK 1) | 556 | 666 | 211 | 216 | 830 | 940 | |
EBITA-margin, % 1) | 5.4 | 6.1 | 6.5 | 5.4 | 5.8 | 6.3 | |
Result after tax adjusted, MSEK 3) | 223 | 315 | 66 | 124 | 406 | 499 | |
Earnings per share adjusted, SEK 3) | 6.19 | 8.52 | 1.83 | 3.33 | 11.30 | 13.63 | |
Result after tax, MSEK | 156 | 347 | 66 | 115 | 296 | 487 | |
Earnings per share, SEK | 4.32 | 9.42 | 1.83 | 3.10 | 8.19 | 13.29 | |
Operating cash flow, MSEK | 1,558 | 715 | 510 | 229 | 2,054 | 1,210 | |
Cash conversion, % | 112.7 | 54.2 | 105.7 | 58.6 | 107.0 | 64.6 | |
Net debt, MSEK | 7,022 | 7,227 | 7,022 | 7,227 | 7,022 | 7,276 | |
Net debt excl. IFRS 16, MSEK | 2,875 | 3,231 | 2,875 | 3,231 | 2,875 | 3,022 | |
Net debt/EBITDA ratio, times 2) | 3.8 | 3.9 | 3.5 | 3.9 | 3.6 | 3.7 | |
Net debt/EBITDA ratio adjusted, times 2) 4) | 3.0 | 3.3 | 3.0 | 3.2 | 2.7 | 2.8 | |
- EBITA refers to operating result plus amortization of assets identified in conjunction with acquisitions.
- Return ratios have been annualized (the result has been recalculated to correspond to the result for a 12-month period).
- One-offitems have been excluded in the adjusted measures.
- Net debt/EBITDA ratio adjusted excludes IFRS 16 effects and one-off items.
Elanders | Q3 2023 | 3 |
Comments by the CEO
COMMENTS BY THE CEO
The third quarter continued to be challenging with weaker demand in nearly all customer segments. However, our strategy to discontinue business with high net sales and low or negative margins had a positive effect on the EBITA margin.
Another positive was that operating cash flow continued to improve significantly during the quarter.
Our strategic choices have primarily affected sales in business area Supply Chain Solutions, where we have mainly discontinued business in customer segments Automotive and Electronics. Apart from this, the reduction in net sales was largely attributable to the Group's Air & Sea freight forwarding operations, due to a normalization of freight rates. A certain amount of overcapacity in both the USA and Europe, which has arisen after the investments made before inflation began to soar, has entailed extra costs for operations.
Business area Print & Packaging Solutions presented an improvement in the third quarter compared to the same period last year, despite a challenging market with an increasing number of
bankruptcies in the industry. We have now implemented higher prices for most of our customers to compensate for the higher
energy and material costs. Access to material has also stabilized, which increases efficiency in production. We continue to see a strong demand for online print products which compensates for the declining demand for more traditional printed matter.
The higher interest rates and current net debt incur high interest expenses and negatively affect the net result on the bottom line. In order to counteract the effects of this, we continue to work actively
to improve our cash flow and reduce our working capital. This is apparent in, among other things, the Group's cash conversion, i.e. the Group's ability to generate cash flows from recognized results, which has significantly improved compared to the same period last year.
The Group's sustainability work and preparations for CSRD are progressing well. At the moment we are calculating carbon emissions in the Group's value chain, i.e. scope 3. We hope to have
a result in the autumn so that we can then make a commitment within the Science Based Targets initiative, aimed at getting our climate targets approved in the coming years.
Magnus Nilsson
President and Chief Executive Officer
4 | Elanders | Q3 2023 |
Group
GROUP
NET SALES AND RESULT
January - September
Net sales contracted by MSEK 583 to MSEK 10,292 (10,875) compared to the same period last year. Cleared of exchange rate fluctuations, discontinued operations and acquisitions, net sales contracted organically by eight percent. The organic net sales reduction was mainly linked to business area Supply Chain Solutions due to lower freight rates in the Group's Air & Sea operations. Discontinued operations refer to the closure of some road transportation operations in Germany, which we announced in the fourth quarter 2022, and the Group's buy and sell business in components. Both these businesses have had very low or negative margins.
The market continues to be uncertain in general. Many Group customers are finding it difficult to maintain volumes or grow at the same pace as previously. Fluctuations continued in demand from Automotive in Europe due to problems in their supply chain.
Business area Print & Packaging Solutions presented a better result than for the same period last year. This is in part due to the implemented higher prices for most of our customers to compensate for higher energy and material costs and in part because access to material has stabilized, which increases efficiency in production.
Adjusted EBITA, i.e. the operating result adjusted for amortization of assets identified in conjunction with acquisitions and one-off items, increased by MSEK 3 to MSEK 638 (635). The improvement in the result was primarily due to changes in exchange rates that had a positive effect on adjusted EBITA by about MSEK 37. The adjusted EBITA margin increased from 5.8 to 6.2 percent. Including one-off items EBITA contracted from MSEK 666 to MSEK 556.
The period's one-off items amounted to net MSEK -81 (32). They were mainly a result of correcting historical errors in reporting from a subsidiary in business area Print & Packaging Solutions. These
errors were corrected in the first quarter. The remaining part refers to a provision during the second quarter for additional consideration for an acquisition that has developed better than expected. Last year's positive one-off items mainly referred to a revaluation of shares in associated companies in connection with a merger.
Current net debt in combination with high interest rates negatively affects the net result, as interest expenses have increased considerably compared to last year.
Third quarter
Net sales contracted by MSEK 726 to MSEK 3,253 (3,979) compared to the same period last year. Cleared of exchange rate fluctuations, discontinued operations and acquisitions, net sales contracted organically by eleven percent. The reduction is mainly due to a weaker market and lower freight rates in the Group's Air
-
Sea operations. Discontinued operations refer to the closure of some road transportation operations in Germany, which we announced in the fourth quarter 2022, and the Group's buy and sell business in components.
Adjusted EBITA, i.e. the operating result adjusted for amortiza- tion of assets identified in conjunction with acquisitions and one-off items, contracted by MSEK 13 to MSEK 211 (224). At the same time the adjusted EBITA margin increased from 5.6 to 6.5 percent.
The period's reported result did not include any one-off items. Last year's one-off item of MSEK -8 referred to a provision for additional consideration for an acquisition that developed better than expected.
Current net debt in combination with high interest rates nega- tively affects the net result, as interest expenses have increased considerably compared to the same period last year.
Net sales - organic growth
January - September | Third quarter | Last 12 | Full year | ||||
MSEK | 2023 | 2022 | 2023 | 2022 | months | 2022 | |
Comparison periods | 10,875 | 8,369 | 3,979 | 2,865 | 14,240 | 11,733 | |
Currency exchange rate fluctuations | 782 | 646 | 235 | 296 | 1,144 | 1,008 | |
Discontinued operations/businesses | -571 | - | -526 | - | -571 | - | |
Acquisitions | 30 | 1,333 | - | 462 | 213 | 1,516 | |
Organic change | -824 | 527 | -435 | 356 | -635 | 717 | |
Current period | 10,292 | 10,875 | 3,253 | 3,979 | 14,391 | 14,974 | |
Organic growth, % | -7.6 | 6.3 | -10,9 | 12.4 | -4.5 | 6.1 | |
Elanders | Q3 2023 | 5 |
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Disclaimer
Elanders AB published this content on 16 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 October 2023 11:40:33 UTC.