STRONG CASH FLOW, SOLID MARGIN AND HIGH-QUALITY ACQUISITIONS

Comments refer to continuing operations unless otherwise stated

FOURTH QUARTER 2024

• Net sales increased by 3% to SEK 1,336 million (1,302). In total for the Group, organic sales growth was -6%, excl. currency effects.

• EBITA increased by 5% and amounted to SEK 265 million (252), corresponding to an EBITA margin of 19.8% (19.4).

• Adjusted EBITA increased by 2% and amounted to SEK 260 million (255), corresponding to an adjusted EBITA margin of 19.5% (19.5). Organic adjusted EBITA growth for the Group was -8%, excl. currency effects.

• Profit before tax amounted to SEK 163 (143) million and profit after tax amounted to SEK 108 million (96). Profit attributable to divestment activities amounted to SEK -13 million (-4). Attributable to the Parent Company’s shareholders of the Group’s total profit was SEK 94 million (91).

• Cash flow from operating activities amounted to SEK 302 million (199), corresponding to a cash conversion of 109% (88).
• Earnings per ordinary share (average number), less minority interests and dividends on preference shares, amounted to SEK 2.73 (2.43). Total earnings, including discontinued operations, per ordinary share amounted to SEK 2.39 (2.31).

• During the period, the acquisition of Eagle Automation Systems Ltd, DadoLab Srl and Wintex Agro ApS was completed.

JANUARY - DECEMBER 2024

• Net sales increased by 13% to SEK 5,166 million (4,582). In total for the Group, organic sales growth was 3%, excl. currency effects.

• EBITA increased by 8% to SEK 1,041 million (961), corresponding to an EBITA margin of 20.2% (21.0).

• Adjusted EBITA increased by 10% to SEK 1,010 million (919), corresponding to an adjusted EBITA margin of 19.6% (20.1). Organic adjusted EBITA growth for the Group was -2%, excl. currency effects.

• Profit before tax amounted to SEK 635 (615) million and profit after tax amounted to SEK 436 million (450). Results attributable to divestment activities amounted to SEK -79 million (-4). Attributable to the Parent Company’s shareholders of the Group’s total profit was SEK 353 million (444).

• Cash flow from operating activities amounted to SEK 823 million (628), corresponding to a cash conversion of 83% (68).
• Earnings per ordinary share (average number), less minority interests and dividends on preference shares, amounted to SEK 11.00 (11.44). Total earnings, including discontinued operations, per ordinary share amounted to SEK 8.93 (11.33).

• During the period, the acquisition of JR Industries Ltd, WaterTech of Sweden AB, Eagle Automation Systems Ltd, DadoLab Srl and Wintex Agro ApS was completed. Frigotech AB was divested. It was also decided to initiate a divestment of the Group's unit for manufacturing of special elevators, installation and elevator service in Central Europe.

SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
After the period, the acquisition of Phase 3 Connectors Ltd was completed.

COMMENTS BY THE CEO

Sdiptech sums up another year of profitable growth. In 2024, we had the pleasure of welcoming five new companies to the Group. Sales increased by 13 percent and adjusted EBITA by 10 percent, with a margin of 19.6 percent. Cash flow from operating activities was a record high of SEK 823 million, corresponding to a cash flow generation of 83 percent.

Overview of the year
In terms of the market, the year was stable for the Group's operations and demand generally remained solid. However, we were not completely unaffected by the economic situation, especially our few units that have exposure to the construction sector had a continued low level of activity. This resulted in a decreased organic growth rate, which was mainly noticeable towards the end of the year. In total, organic sales growth was 3 percent, excluding currency effects, while adjusted organic EBITA growth decreased by 2 percent excluding currency effects. At the same time, we have been able to welcome five new high-quality companies with a profit of SEK 109 million in EBITA on a rolling twelve-month basis. Thus, total sales increased by 13 percent, while adjusted EBITA increased by 10 percent.

Demand in the Special Infrastructure Solutions business area remained solid. Especially in some of the larger operations in transport and logistics, as well as in several of the smaller ones within the security area. In the Resource Efficiency business area, the smaller Swedish companies in both the water and energy sectors continued to have good demand. The development of the units in temporary electricity and biological sludge management was also strong. From a geographical perspective, the business situation was generally stable in all our main markets.

The four new business areas, which are presented further in this report, applies as of January 1, 2025.

Quarterly summary
As mentioned above, the organic development during the quarter was weaker compared to last year. However, acquisitions have made a positive contribution, resulting in total net sales that increased by 3 percent, of which -6 percent was organic, excluding currency effects. Adjusted EBITA increased by 2 percent, corresponding to a margin of 19.5 percent. During the quarter, the organic development of adjusted EBITA was -8 percent excluding currency effects. This was mainly due to a weak performance in our units with exposure to the construction sector, which was largely driven by a one-off effect.

The fourth quarter generated a strong cash flow of SEK 302 million, corresponding to a cash flow generation of 109 percent. This is the result of our long-term efforts to improve working capital efficiency, among other led to reductions in inventory levels.

Acquisition
Our growth journey continues in a positive direction, where we strengthen our position and create long-term value through carefully selected acquisitions. During the quarter, we acquired the companies Eagle Automation Systems in the UK, Dado Labs in Italy, and Wintex Agro in Denmark. All of which work to solve important problems in society through advanced access and security solutions, reliable air quality measurements, and soil sampling that promote sustainable agriculture. In February 2025, Phase 3 Connectors Ltd in the UK was also acquired, ensuring reliable and efficient power distribution for events, data centres and industrial facilities, among others.

Outlook
Our pipeline for further acquisitions remains strong and our financial position is solid, which gives us good opportunities to expand our business with strategic acquisitions. At the same time, we have a new organizational structure in place that creates clearer governance and supports our growth journey. An important part of this is the recruitment of Peter Helsing as the new Head of M&A. Peter starts in May and will further strengthen our capacity within the group by working strategically to continue acquiring high-quality companies.

Sdiptech continues to attract entrepreneurs who recognize the value of our governance model with a focus on selected areas and clear niches where we can add market knowledge, strategic support and business acumen. Each company brings specialized knowledge within its field, while Sdiptech provides the framework and resources to foster growth and development. As we grow in numbers, we further diversify across industries, end markets, and geographies, strengthening the group's resilience and market reach.

Despite some uncertainties both geopolitically and in the economic situation, we enter 2025 with good prospects and an ambitious plan for continued growth. I have great confidence in the strength of our strategic positions, our diversification and the clear drivers that the transition towards more sustainable, efficient and safe societies brings. We are also pleased to note that we have continued to reduce our emissions. While growing, we have reduced our absolute CO2e emissions during the year and also reduced the Group's total carbon intensity in scope 1 and 2 by 10 percent, and by 24 percent since the base year 2021.

In conclusion, I would like to extend a big thank you to our companies' customers – through close collaboration, we create solutions that make a difference. I would also like to thank our dedicated employees, whose efforts every day contribute to building long-term and sustainable value. Finally, I would like to express my appreciation to our shareholders for your continued confidence. I look forward to a new year with continued development and success.

Bengt Lejdström
President and CEO

For additional information, please contact:
Bengt Lejdström, CEO, +46 702 74 22 00, bengt.lejdstrom@sdiptech.com
My Lundberg, Head of Sustainability & IR, +46 703 61 18 10, my.lundberg@sdiptech.com