Sdiptech AB (publ) publishes interim report for the first quarter (January - March) 2020 - Seite 2

COMMENTS BY THE CEO:

A STRONG FIRST QUARTER, SOME DELAYS IN DELIVERIES AS A RESULT OF THE PANDEMIC – SDIPTECH WELL EQUIPPED WITH GOOD CASH FLOW AND A STABLE VOLUME OF ORDERS

Despite current circumstances, we have established a good start to 2020. Net sales increased by 15 percent during the first quarter. Simultaneously, EBITA* increased by 37 percent to 70,8 MSEK (51,8), corresponding to an EBITA*-margin of 14,6 percent (12,3). The organic EBITA*-growth was 12,1 percent, of which 0,4 derived from currency-effects.

MARKET OUTLOOK – A relatively stable first quarter
During the first few months of 2020, a lot has revolved around the coronavirus pandemic in all markets where we operate. However, Covid-19 has had a limited impact on Sdiptechs sales and results for the first quarter. Despite disruptions in some of our business units, as a result of local restrictions concerning limitation of movement, the Group's overall earnings were strong with organic sales growth of 1 percent and organic EBITA* growth of 12 percent.

During the first quarter, the vast majority of our business units continued to deliver at full capacity and with steady demand, despite the pandemic. Our actions to keep business continuity, for example the increased stock of critical components that was initiated in the beginning of this year already, had the desired effect. In some areas of our business, our sales have even increased, specifically the manufacturing of disinfectants and temperature control in grocery stores. Another area where we can confirm positive effects is encryption of desktop and mobile communications, where demand has increased as more people are working remotely.

The pandemic related interference experienced by some business units has mainly concerned limitations for field workers and service technicians, whom need to be able to move freely in order to carry out their work. This has not been a problem in Sweden, our biggest market, so much as other parts of Europe where restrictions are considerably tougher and we, just like the whole industry, experienced delays in booked deliveries. For the affected business units, we have taken stabilizing measures such as short-term contract work and general cost reductions, adapted to each business area and country in which they operate.