Hello, welcome to the Lifco Q1 Report 2019 call. Throughout the call, all participants will be in listen only mode. Afterwards, there will be a question and answer session. Just to remind you, this conference call is being recorded. Today, I am pleased to present Per Waldemarson, the CEO, and Therése Hoffman, the CFO. Please go ahead with your meeting.
Thank you. Hello, everyone. This is Per Waldemarson. I would like to just give a few short comments about the quarterly results. We can turn directly into page two in the presentation. As everyone can see, it's a quarter that can be summarized of growth organically, also through exchange rates and acquisition. All three areas is contributing to our sales and results development. It's also worthwhile mentioning that this quarter contains one-time cost, non-recurring cost of SEK 56 million that is being adjusted for in the EBITDA numbers. That relates to the management change we have in this quarter. Everyone is aware of that effect. I can turn to page three where we go through the different business areas very briefly.
This year, Easter came fully in April, which has a positive effect in this year for Dental, especially in the part of the Nordic region. We have also a contribution from acquisitions made during last year that contributes to our sales and results development in this quarter. In the Demolition & Tools area, we have an improvement from a rather weak 2018 first quarter, as some of you might remember. We have some organic development there in this quarter, as well as acquisitions that has been carried out in the beginning of Q1 in this business area. In Systems Solutions, it's strong organic development pretty much in all divisions. We assume or expected slight positive effect also from Easter in certain parts of Systems Solutions where working days makes a difference.
We can turn into page four, which is just a short reminder. This is a more of looking back at historical numbers that I want to remind everyone that the value creation at Lifco has been and hopefully will be coming from two areas, the acquisition part, which has been giving us historical growth in the range of 10%-14%. Also from organic development, which you can see is more volatile depending on the business cycle and other things. As you can see there, the organic growth has been good in the last four years and also in this quarter, thanks to the business cycle overall being positive. We turn to page five.
Just want to highlight, in the balance sheet, that we have now implemented the IFRS 16, which has an impact on the tangible fixed assets of about actually SEK 447 million. The same effect also in the interest-bearing liabilities of SEK 447. Just to highlight that. Here you can see that our net debt to EBITDA ratio is going up from year-end due to acquisitions and also partly due to a little bit higher working capital in Q1, which is partly a normal effect and partly an effect of the business cycle being very strong, which ties up capital in inventory and receivables mainly. Actually I would just flip all the way over to page 26 to skip the other pages. Just a short comment on the recent acquisitions that we made. In the presentation of Q4, we already had Indexator and Hammer being published.
Indexator is a leading supplier of rotators for forest industry, but also the general, so to say, construction market. Then we have acquired Hammer in Italy, which is focused on the hydraulic breaker segment. Both of these acquisition falls into Demolition & Tools. Then we have after the closing of Q1, acquired a company in U.K., which is in the Systems Solutions area that is an asset-light business selling to various customer group, different display solutions, mainly through catalog, telephone, and also now through internet, mainly in the U.K. This was a very short introduction to the quarter, and I would like to open up for any questions.
Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will be a brief pause while questions are being registered. To remind you, if you would like to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will be a further pause while questions are being registered. We have a question from the line of Oskar Vikström of ABG. Please go ahead. Your line is open.
Hi. Thank you. I have a question regarding Demolition & Tools. You mentioned in the text there that the market situation was generally good. Could you help define a bit what you mean by generally? Is that a comment on the year or just the quarter, or how should we look at Demolition & Tools going forward?
Well, first of all, we don't give any forecasts. It's a historical-
Okay
conclusion of what we saw in Q1 and also a lot in 2018. We are speaking about the current situation in the quarter.
Generally good, could you help define that?
I think the organic, as you can see, we have organic growth in the segment, which is referring to this generally good business plan.
Following up on that, the Systems Solutions had a very strong performance this quarter, and especially, on EBITA level. Was that supported largely by volumes or the profitability in the segment?
Yeah. You have the effect of good organic growth being translated into good results.
There's no pricing increases or anything like that, it's mainly driven by volume?
The Systems Solutions area is such a diversified area, I can only say that we split it into different division, all our divisions are performing well this first quarter. Some of them having, I think, some positive effect from the Easter, as I mentioned initially.
Yeah.
Some others, maybe less so, in overall, it's a very strong quarter for the organic development Systems Solutions for the quarter.
Understood. All right. That's all I had. Thank you.
Thank you.
Thank you. There are no further questions at this time. Please go ahead.
If there's are no further questions, I would like to thank everyone for listening and, I'll leave it over to Vidar. Thank you.
This now concludes our conference call. Thank you all for attending. You may now disconnect.