vbg group year-end report 2017 · vbg group interim report year-end report 2017 1 fourth quarter of...

17Q4VBG Group AB (publ) in Vänersborg is the Parent Company of an international engi-neering Group with wholly owned companies in Europe, North America, Brazil, South Africa, Australia, India and China. The Group’s operations are divided into four divi-sions — VBG Truck Equipment, Edscha Trailer Systems, Mobile Climate Control and Ringfeder Power Transmission — with products that are marketed under strong, well-known brands. VBG Group AB’s Series B share was introduced on the stock exchange in 1987 and is listed today on the Nasdaq Stockholm Mid Cap list.

SEK 3,002 MConsolidated sales almost doubled to SEK 3,002.0 M (1,543.9) in the full-year 2017.

SEK 351MOperating profit increased to SEK 351.1 M (184.0) in the full-year 2017.

VBG GROUPYEAR-END REPORT2017

VBG GROUP INTERIM REPORT YEAR-END REPORT 2017

1

Fourth quarter of 2017:• The Group’s net sales increased by 58.6 per cent to SEK 737.0 M (464.7)• Adjusted operating profit increased to SEK 75.7 M (45.3).• Items affecting comparability during the quarter amounted to a negative

SEK 7.5 M (neg: 12.7) relating to reorganisation costs in Edscha Trailer Systems.• Reported operating profit increased to SEK 68.2 M (32.6).• Profit after financial items amounted to SEK 52.7 M (21.7).• The acquisition balance pertaining to Mobile Climate Control was adjusted

and adopted as final.

Full-year 2017:• The Group’s annual sales increased by 94.4 per cent to SEK 3,002.0 M (1,543.9).• Adjusted operating profit increased to SEK 358.6 M (196.7).• Items affecting comparability for the year amounted to a net expense of SEK 7.5 M

(expense: 12.7) relating to reorganisation costs in Edscha Trailer Systems.• Reported operating profit increased to SEK 351.1 M (184.0).• Profit after financial items amounted to SEK 315.6 M (168.2).• The Group’s profit after tax amounted to SEK 220.5 M (120.8).• Earnings per average number of outstanding shares amounted to SEK 9.62 (9.66). • The Board of Directors proposes an increased dividend to SEK 81.3 M (43.8), which after the

implemented new share issue in 2017 is equivalent to SEK 3.25 per outstanding share (1.75).• Fully subscribed preferential share issue 1:1 was completed in the first quarter, doubling the

number of outstanding shares and contributed SEK 779 M net in equity to the company, after deductions for issue expenses.

INTERIM REPORTYEAR-END REPORT 2017

KEY FIGURES

Group, SEK M Q4 2017 Q4 2016 Full-year 2017 Full-year 2016

Net sales 737.0 464.7 3,002.0 1,543.9

Operating profit before items affecting comparability 75.7 45.3 358.6 196.7

Operating margin, % 10.3 9.7 11.9 12.7

Items affecting comparability –7.52 –12.71 –7.52 –12.71

Reported operating profit 68.2 32.6 351.1 184.0

Reported operating margin, % 9.2 7.0 11.7 11.9

Profit after financial items 52.7 21.7 315.6 168.2

Profit margin, % 7.1 4.7 10.5 10.9

Profit after tax 30.7 9.6 220.5 120.8

Earnings per share, SEK 1.34 0.76 9.62 9.66

Return on capital employed (ROCE), % 10.7 12.7

Return on equity (ROE), % 12.3 12.7

Equity/assets ratio, % 54.7 28.7 54.7 28.7

Average number of outstanding shares during the period (‘000) 25,004 12,502 22,920 12,502

Number of outstanding shares 25,004 12,502 25,004 12,502

1 Negative SEK 7.9 M pertaining to acquisition-related costs attributable to the acquisition of Mobile Climate Control, and negative SEK 4.8 M pertaining to an action programme to increase profitability in Ringfeder Power Transmission.

2 Negative SEK 7.5 M pertaining to costs in connection with the reorganisation relating to Edscha Trailer System.


2

THIS IS THE VBG GROUP

VBG Group AB (publ), domiciled in Vänersborg, is the Parent

Company of an international engineering Group with wholly

owned companies in the USA, Canada, India, Brazil, China,

Australia, South Africa and nine countries in Europe. The

Group’s operations are divided into four divisions — VBG Truck

Equipment, Edscha Trailer Systems, Mobile Climate Control and

Ringfeder Power Transmission — with products that are mar-

keted under strong, well-known brands. VBG Group AB’s Series

B share was introduced on the stock exchange in 1987 and is

listed today on the Nasdaq Stockholm Mid Cap list.

Vision

We are number one or two globally in the industrial niches in

which we are active. We make a difference by creating the

products and services of the future.

Business concept

The VBG Group will, within selected product and market seg-

ments, acquire, own and develop industrial companies in busi-

ness-to-business commerce with strong brands and good

growth potential. Based on a long-term commitment and with

a focus on growth and profitability, the VBG Group’s share-

holders will be offered attractive value growth.

Goals

• > 10 per cent in average annual sales growth over a five-

year period, of which 5 per cent attributable to actual

organic growth and 5 per cent to structural growth.

• > 12 per cent in average operating margin rolling five years.

Strategies

The Parent Company, VBG Group AB, is responsible for the

strategic governance of the Group as a whole, which entails

the approval and follow-up of divisional targets and strategies,

providing support in the form of industrial expertise and iden-

tifying and conducting strategic acquisitions. Furthermore, the

Parent Company is responsible for allocating capital, strategic

HR and IT work and the operation of all shared IT systems.

Strategies for the divisions:

• Strong brands and leading market positions in selected niches.

• High customer value in the products.

• Diversified customer base.

• International expansion.

Stable ownership situation

The VBG Group’s principal owners comprise three foundations

that were established by the Group’s founder, Herman Kreft-

ing. This ownership structure has historically provided a high

degree of financial stability, which in turn has resulted in solid

total returns for shareholders.

VBG GROUP IN THE WORLD

Own companies Importers/Agents

The VBG Group has 31 wholly owned companies in 16 countries and more than 1,500 employees in 18 countries worldwide.


3

SALES BY DIVISION SALES BY MARKET

Sweden, 8%

Other Nordic countries, 6%

Germany, 16%

Other European countries, 17%

North America, 45%

Brazil, 2%

Australia/New Zealand, 3%

Rest of world, 3%

VBG Truck Equipment, 28%

Edscha Trailer Systems, 9%

Mobile Climate Control, 47%

Ringfeder Power Transmission, 16%

This is the VBG Group, cont.

DIVISIONS

VBG TRUCK EQUIPMENT

By virtue of its own strong brands, the division is an interna-tionally leading supplier of coupling equipment for trucks with heavy trailers, where the division accounts for more than 50 per cent of the global market via the Ringfeder and VBG brands. The division also has Onspot – automatic tyre chains with a world-leading position in its niche.

EDSCHA TRAILER SYSTEMS

By virtue of its own strong brands, the division is an interna-tionally leading supplier of equipment for trailers. The division accounts for more than 40 per cent of the global market for sliding roofs via the Edscha Trailer Systems and Sesam brands.

BRANDS

Our divisions

RINGFEDER POWER TRANSMISSION

By virtue of its own strong brands, the division is a recognised global market leader in selected niches within mechanical power transmission and energy and shock absorption. The division’s brands are Ringfeder, Tschan, Henfel and Gerwah. The custom-ers are found in such widely disparate industrial markets as con-struction, machinery, power and mining.

MOBILE CLIMATE CONTROL

By virtue of its own strong brand, the division is an indus-try-leading supplier of complete climate control systems (HVAC systems) to commercial motor vehicles, primarily in North America and Europe. The customers are mainly found in four market segments: buses, off-road vehicles, utility vehicles and defence vehicles.

Overall, 2017 was a strong year for the VBG Group. One mile-

stone is that we reported more than SEK 3 billion in sales. This

is naturally due to the inclusion of Mobile Climate Control in

the Group for the entire financial year, but another key con-

tributing factor was the highly favourable underlying eco-

nomic trend in several of the segments where we operate,

both in Europe and the USA. One example is the growth in

both freight and passenger transport by road and thereby

an increase in the number of bus and heavy truck registra-

tions, which is positive for our vehicle-related operations.

Ringfeder Power Transmission, our supplier of compo-

nents for power transmission and shock absorption, also

experienced a healthy economic trend during the year,

and increased both sales and profit.

VBG Truck Equipment – another record year

With an operating margin of 20.8 per cent for the

fourth quarter, VBG Truck Equipment continued to

perform at the same high level as earlier in the

year. The division reported its highest sales and

operating profit ever and has achieved another

record year. This is noteworthy, given that VBG

Truck Equipment is continuing to invest

resources in developing the business and

establishing operations in new markets.

The new organisa-tional structure will create the conditions to continue to develop both the business and long-term strategies.


4

AN INTENSE YEARWITH POSITIVE RESULTS


5

I am positive to the divisional management team’s decision –

in a period of strong economic growth it is important to have

the courage to invest and accept the cost in order to build for

the future.

Edscha Trailer Systems – creating good conditions for

improved profitability

Edscha Trailer Systems had a slower end to the year, and a

slightly weaker quarter compared with the year-earlier period.

The division’s earnings were also charged with a nonrecurring

cost that arose in conjunction with the appointment of a new

divisional management team. However, I take a positive view

of the future, as the division has now overcome its earlier sup-

plier problems and the division management team also worked

hard and successfully to streamline operations and cut costs in

recent years. Together with rising demand from several of the

division’s largest customers, this means Edscha Trailer Systems

is developing the right conditions to achieve better profitability

moving forward.

Mobile Climate Control – positive sales and continued

investments in the future

Mobile Climate Control reported stable sales in the fourth

quarter. During the year, the division has seen consistently

strong markets and a healthy economy and has used the

favourable situation to invest in product development and

sales and established operations in both new customer seg-

ments and in new geographic markets, which is in line with

our plans, though it does have a short-term impact on profit.

In Mobile Climate Control’s North American market, the seg-

ment for buses stands out with a continued positive perfor-

mance. The division has secured important contracts and also

market shares in this segment during the year. In Europe,

Mobile Climate Control’s business in the off-road vehicles seg-

ment noted the strongest development during the quarter,

and again we can see rising demand.

Ringfeder Power Transmission – strong fourth quarter

Ringfeder Power Transmission noted strong earnings and profit-

ability growth during the year, which was largely a result of the

favourable performance of the German export industry. The

fourth quarter followed a similar line as earlier quarters during

the year, and was therefore one of the strongest fourth quarters

for the division. The past year was characterised by intensive

work with restructuring of operations to increase profitability.

This work has taken longer than we had anticipated, but I

expect us to complete the final restructuring measures during

the first half of the year. During 2017, there were also a number

of nonrecurring costs associated with restructuring work, but

following the action programme, Ringfeder Power Transmission

is set for higher profitability moving forward.

VBG Group — focus on profitability and growth

During the year’s fourth quarter, we conducted a reorganisa-

tion and established a new Group management. The new

Group Management has begun working and I am convinced

that this organisational structure will create good conditions to

continue to develop both the business and the Group’s long-

term strategies, to achieve our targets for financial growth and

profitability.

The full-year 2017 was marked by a healthy economic trend

in almost all of the Group’s markets and overall we also have

high capacity utilisation in our factories, which is positive,

though we must also then handle the typical consequences, in

the form of rising pressure, higher raw material prices and lon-

ger delivery times from suppliers. There is no indication of any

changes in the economic outlook for 2018 and considering the

risk spread in the Group today, in terms of both geography

and customers, we are probably less sensitive to cyclical fluc-

tuations than in previous years.

2017 was also an intense year when we worked to “solidify

the Group financially” following the acquisition of Mobile Cli-

mate Control and we now have the financial situation we had

planned for. In 2018, we will continue to develop the business,

focusing on profitability and growth.


6

GROUP TREND

Sales and earnings, fourth quarter of 2017

Sales of SEK 737.0 M (464.7) were 58.6 per cent higher com-

pared with the fourth quarter of 2016. Excluding the annual

effect of the acquired volume of SEK 221.1 M with respect to

Mobile Climate Control, volume change was 11.0 per cent.

After exchange rate changes, actual organic growth was 11.9

per cent (12.3).

The Group’s adjusted operating profit rose to SEK 75.7 M

(45.3), with an adjusted operating margin of 10.3 per cent

(9.7). The quarter was charged with an item affecting compa-

rability in the form of a reorganisation cost of SEK 7.5 M relat-

ing to Edscha Trailer Systems (cost of SEK 12.7 M for the

year-earlier period).

Accordingly, the Group’s reported operating profit for the

quarter amounted to SEK 68.2 M (32.6), with an operating

margin of 9.2 per cent (7.0). Sales and operating profit of the

individual divisions are presented on pages 9–15.

Group-wide overheads in the Parent Company that have

not been allocated to the divisions totalled SEK 7.3 M (14.5).

Net interest expense for the quarter was SEK 8.3 M

(expense: 6.9) and the fourth-quarter currency effect on the

Swedish companies’ foreign-currency denominated credits

resulted in a negative currency effect of SEK 7.1 M (neg: 3.8).

Taken together, this resulted in a net financial expense of SEK

15.5 M (expense: 10.7). The reason for the increased financial

expenses was the loans taken in conjunction with the acquisi-

tion of Mobile Climate Control. Profit after financial items

amounted to SEK 52.7 M (21.7). Profit after tax totalled SEK

30.7 M (9.6) and earnings per share amounted to 1.34 (0.76).

NET SALES, SEK M PROFIT/LOSS AFTER FINANCIAL ITEMS, SEK M

0

100

50

150

200

250

300

0

60

40

20

100

80

120

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q4Q3Q2 Q3 Q4 Q1

Quarterly figures Rolling 4 quarters

2014 2015 2016 2017

0

600

1,200

1,800

3,000

2,400

2014Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q4Q3Q2 Q3 Q4 Q1

2015 2016


0

400

200

600

800

1,000

2017

SEK MFull-year

2017Q4

2017Q3

2017Q2

2017Q1

2017Full-year

2016Q4

2016Q3

2016Q2

2016Q1

2016

Net sales 3,002.0 737.0 719.2 777.2 768.6 1,543.9 464.7 335.2 372.4 371.6

Adjusted operating profit 358.6 75.7 81.7 98.5 102.7 196.7 45.3 51.7 48.6 51.1

Adjusted operating margin, % 11.9 10.3 11.4 12.7 13.4 12.7 9.7 15.4 13.1 13.7

Items affecting comparability –7.52 –7.52 — — — –12.71 –12.71 — — —

Reported operating profit 351.1 68.2 81.7 98.5 102.7 184.0 32.6 51.7 48.6 51.1

Reported operating margin, % 11.7 9.2 11.4 12.7 13.4 11.9 7.0 15.4 13.1 13.7

Profit after financial items 315.6 52.7 75.1 93.6 94.2 168.2 21.7 50.5 47.1 48.9

Profit margin, % 10.5 7.1 10.4 12.0 12.3 10.9 4.7 15.1 12.6 13.2

Profit after tax 220.5 30.7 53.2 70.1 66.6 120.8 9.6 40.0 36.3 34.9

Cash flow from operating activities 243.8 87.6 43.4 38.5 74.3 251.0 106.4 76.5 13.4 57.4

ROCE (cumulative), % 10.7 10.7 11.0 11.0 13.7 12.7 12.7 18.0 18.3 19.0

ROE (cumulative), % 12.3 12.3 14.0 15.8 17.6 12.7 12.7 15.8 15.7 15.6

Equity/assets ratio, % 54.7 54.7 53.0 51.7 51.0 28.7 28.7 71.1 68.9 68.5

Earnings per share, SEK (average outstanding) 9.62 1.34 2.13 2.80 3.80 9.66 0.76 3.20 2.91 2.79

Equity per share (outstanding) 80.18 80.18 75.69 74.75 74.68 82.01 82.01 80.22 75.29 72.95

Average number of outstanding shares 22,920 25,004 25,004 25,004 17,503 12,502 12,502 12,502 12,502 12,502

Number of outstanding shares 25,004 25,004 25,004 25,004 25,004 12,502 12,502 12,502 12,502 12,502

1 Negative SEK 7.9 M pertaining to acquisition-related costs attributable to the acquisition of Mobile Climate Control, and negative SEK 4.8 M pertaining to an action programme to increase profitability.

2 Negative SEK 7.5 M in connection with reorganisation costs relating to Edscha Trailer Systems.


7

Sales and earnings, full-year 2017

Consolidated sales for the full year increased 94.4 per cent to

SEK 3,002.0 M (1,543.9). Excluding the annual effect of the

acquired volumes amounting to SEK 1,309.2 M pertaining to

Mobile Climate Control, the change in volume was 9.6 per

cent. Adjusted for currency effects, the actual organic growth

was 8.4 per cent (5.4).

The Group’s adjusted operating profit rose to SEK 358.6 M

(196.7), with an operating margin of 11.9 per cent (12.7). The

Group was impacted by an item affecting comparability of a

negative SEK 7.5 M (neg: 12.7) in connection with reorganisa-

tion costs for Edscha Trailer Systems. Accordingly, the reported

full-year operating profit amounted to SEK 351.1 M (184.0),

with a margin of 11.7 per cent (11.9).

The acquired company Mobile Climate Control contributed

SEK 127.9 M (5.0) to the operating profit.

The consolidated operating profit included Group-wide

overheads of SEK 20.5 M (22.5) that were not allocated

among the various divisions.

Net interest expense for the full-year amounted to SEK 40.1

M (expense: 10.8) and the Swedish companies’ foreign-cur-

rency denominated credits were impacted positively by a cur-

rency effect of SEK 4.7 M (neg: 5.0). Taken together, this

resulted in a net financial expense of SEK 35.5 M (expense:

15.8), where increased costs were the result of loans taken in

conjunction with the acquisition of Mobile Climate Control.

Accordingly, profit after financial items amounted to SEK

315.6 M (168.2), with a margin of 10.5 per cent (10.9).

Profit after tax totalled SEK 220.5 M (120.8), corresponding

to earnings per average number of outstanding shares of SEK

9.62 (9.66).

Return on capital employed declined to 10.7 per cent (12.7),

while return on equity was 12.3 per cent (12.7). The Group’s

equity/assets ratio increased from the end of last year to 54.7

per cent (28.7).

Tax expense

The tax expense for the year was SEK 95.1 M (47.4), of which

current tax accounted for SEK 77.4 M (50.9) and deferred tax

for a positive SEK 17.7 M (neg: 3.5). The tax expense for the

year corresponds to a tax rate for the Group of 30.1 per cent

(28.2). Part of the cost for deferred tax is the result of the

reduction in corporate taxation in the USA in 2018, meaning

the value of the Group’s deferred tax assets in the USA were

impaired by SEK 3.8 M.

Capital expenditures

The Group’s new capital expenditures for the year amounted

to SEK 54.5 M (SEK 45.9 M excluding acquired subsidiaries).

Financial position

Profit after tax for the full-year amounted to SEK 220.5 M

(120.8) and other comprehensive income to SEK 24.2 M

(73.7), which comprises exchange rate changes and the impact

of the translation of defined-benefit pension plans, the com-

bined effect of which resulted in comprehensive income of

SEK 244.7 M (194.5). The new share issue carried out gener-

ated SEK 778.6 M, net. After the payment of dividends total-

ling SEK 43.8 M (40.6) to the shareholders, consolidated

equity increased to SEK 2,004.9 M (1,025.3).

The equity/assets ratio increased during the year to 54.7 per

cent (28.7).

Cash and cash equivalents increased by SEK 45.0 M (132.5)

during the year to SEK 321.4 M (276.4) at year end. In addi-

tion, there were unutilised overdraft facilities of SEK 100.0 M

(0.0), giving the Group an available liquidity of SEK 421.4 M

(276.4) at year-end.

The Group’s interest-bearing net debt (including pension lia-

bility) declined by SEK 950.2 M during the year to SEK 742.3

M (1,692.4) at year-end. The reason for the reduction is the

result of new share issue that contributed SEK 778.6 M in new

capital to the Group, net, which was used to pay off the

bridge loan of SEK 800 M taken during the acquisition of

Mobile Climate Control in November 2016.

The ratio of interest-bearing net debt to equity was 0.37 at

31 December 2017 (1.65 at 31 December 2016) and the ratio

of net debt to consolidated operating profit before deprecia-

tion/amortisation and impairment (EBITDA) was 1.73 (7.31).

The acquisition of Mobile Climate Control resulted in pre-

liminary goodwill of SEK 1,446.7 M in 2016. In the first quar-

ter of 2017, the preliminary acquisition balance was updated,

which is described in the interim report for January-March

2017. The acquisition balance was preliminary pending the

completion of the process to identify and determine the fair

value of intangible assets separate from goodwill. During the

fourth quarter, the final acquisition balance was confirmed,

meaning the Mobile Climate Control brand with indefinite

useful life was set at SEK 400 M and customer relationships

with an expected useful life of 20 years was valued at SEK

396.9 M. Taken together, the final acquisition balance means

the goodwill value attributable to Mobile Climate Control has

been reduced by SEK 681.8 M to SEK 764.9 M on the acquisi-

tion date. The final acquisition plan is recognised retroactively

on the acquisition date, meaning the Group’s balance sheet

and key figures at 31 December 2016 and subsequent periods

have been updated. The final acquisition balance has not

affected the value of amortisation on acquisition-related

intangible assets recognised for earlier periods in 2016 and

2017.


8

The Group’s remaining goodwill declined SEK 3.4 M due to

exchange rate changes. The net effect of this was the Group’s

goodwill at the end of the year amounted to SEK 1,118.9 M

(1,122.3), which in relation to equity amounted to a ratio of

0.56 (1.09).

Cash flow

Cash flow from operating activities declined to SEK 243.7 M

(251.0). Paid capital expenditures during the year amounted to

SEK 60.3 M (SEK 1,295.2 M, where SEK 1,263.9 M pertained

to the acquisition of Mobile Climate Control Group Holding

AB in 2016). During the year, the Group’s total borrowings

and current financial liability declined SEK 873.9 M (increase

of SEK 1,203.3 M), net, with a dividend payment to the share-

holders of SEK 43.8 M (40.6). The new share issue carried out

contributed SEK 778.7 M in new capital, which overall resulted

in a negative cash flow from financing activities of SEK 139.0

M (pos: 1,162.6). Consequently, net cash flow for the year was

SEK 44.4 M (118.4).

Outlook for 2018

The Group makes no forecast.

Personnel

At 31 December 2017, there were 1,502 employees in the VBG

Group (1,401), of which 785 (688) in Mobile Climate Control.

Of the total number of employees, 211 were in Sweden (201).

The Group employed an average of 1,446 persons (764) in

2017, representing an increase of 89.0 per cent. Of these, 207

(205) were active in Sweden. During 2017, the cost of salaries

and social security contributions increased 72.6 per cent, of

which the acquired company Mobile Climate Control

accounted for 70.2 per cent, to SEK 717.1 M (415.5).

Per share data

In the first quarter, an oversubscribed new share issue was

completed, 1:1 of outstanding Series A shares (1,220,000

shares) and Series B shares (11,282,024 shares) with preferen-

tial rights for existing shareholders, whereby VBG Group

received SEK 778.6 M net after issue expenses. The total num-

ber of outstanding shares (Series A and Series B) increased

accordingly from 12,502,024 shares to 25,004,048 shares. The

issue price was set at SEK 64 per share for both Series A and

Series B shares.

For the full-year 2017, the average number of outstanding

shares is estimated at 22,920,377 shares (12,502,024 for the

year-earlier period) and the number of outstanding shares at

the end of the year was 25,004,048 shares (12,502,024). This

has consequently impacted the key figures for the year.

Earnings per share for the year (average number) amounted

to SEK 9.62 (9.66). At 31 December 2017, equity per share

(total outstanding) was SEK 80.18, compared with SEK 82.01

one year earlier.

At the end of the year, the share price was SEK 132.00,

which corresponds to a market capitalisation of SEK 3,301 M,

compared to a share price of SEK 160.50 and market capital-

isation of SEK 2,006 M one year earlier.

The number of shareholders declined by 110 in the fourth

quarter, while the number increased by 75 for the full-year,

and amounted to 4,670 at 31 December 2017 (4,595).


9

VBG TRUCK EQUIPMENT

Full-year 2017:• Sales rose 10.5 per cent to SEK 836.7 M (757.3).• Reported operating profit increased to SEK 169.8 M

(147.2), with a margin of 20.3 per cent (19.4).

SALES/EARNINGS

SEK M 2017Q4

2017Q3

2017 Q2

2017Q1

2017

Full-year

2016Q4

2016Q3

2016Q2

2016Q1

2016

Net sales 836.7 223.1 185.5 202.3 225.8 757.3 197.5 172.3 194.1 193.4

Reported operating profit 169.8 46.5 33.9 36.1 53.3 147.2 39.3 35.8 35.0 37.1

Reported operating margin, % 20.3 20.8 18.3 17.9 23.6 19.4 19.9 20.8 18.0 19.2

SALES BY MARKET

SEK M 2017Q4

2017Q3

2017 Q2

2017Q1

2017

Full-year

2016Q4

2016Q3

2016Q2

2016Q1

2016

Sweden 199.0 48.7 44.0 50.3 56.0 204.4 55.7 45.4 51.8 51.5

Other Nordic countries 135.9 32.6 28.0 34.3 41.0 125.1 31.7 27.4 34.1 31.9

Germany 118.8 29.8 28.6 27.2 33.2 106.4 24.8 23.8 30.4 27.4

Other European countries 196.5 47.0 44.7 50.3 54.5 178.0 41.8 40.4 50.0 45.8

North America 92.0 28.6 20.5 18.8 24.1 85.6 29.2 18.7 14.9 22.8

Australia/New Zealand 67.7 22.9 16.3 15.1 13.4 44.7 10.7 12.2 10.7 11.1

Rest of world 26.8 13.6 3.4 6.2 3.6 13.1 3.6 4.4 2.2 2.9

VBG Truck Equipment 836.7 223.1 185.5 202.3 225.8 757.3 197.5 172.3 194.1 193.4

Fourth-quarter 2017• Sales rose 13.0 per cent to SEK 223.1 M (197.5).• Reported operating profit increased to SEK 46.5 M

(39.3), with a margin of 20.8 per cent (19.9).


10

Fourth-quarter 2017

During the fourth quarter, VBG Truck Equipment broke sales

records for both the month of December and for the final quar-

ter, and concluded a very strong year in terms of sales and prof-

itability, and also from an operational perspective, where many

important initiatives were implemented to develop the business.

VBG Truck Equipment’s sales for the fourth quarter

increased 13.0 per cent year-on-year to SEK 223.1 M (197.5).

Adjusted for exchange rate changes, the actual organic growth

was 14.6 per cent.

Operating profit for the division increased compared with

the year-earlier period and amounted to SEK 46.5 M (39.3).

The operating margin increased to 20.8 per cent (19.9).

Full-year 2017

VBG Truck Equipment reported an increase in sales of almost

17 per cent and an operating margin just over 23 per cent for

the first quarter. This was a result of a healthy economic trend

and a strong market situation in the industry, combined with a

highly efficient operating structure. The division followed this

with a very strong second quarter, where part of the success is

a result of work to develop the Onspot business through digi-

tal marketing. Digitalisation has also begun for the division’s

other brands and VBG Truck Equipment is considered to be

relatively early with this in its industry. The third quarter

remained strong, but the slightly weaker result was explained

by the use of resources to establish operations in Brazil and

China, and that the division continued its intensive work with

product development and the digitalisation of sales and mar-

keting. The division then ended the year with the strongest

fourth quarter ever, making the year as a whole the best in its

history.

For the full-year 2017, sales increased 10.5 per cent to SEK

836.7 M (757.3). Adjusted for currency effects during the

year, the actual organic growth was 9.8 per cent.

Full-year operating profit increased to SEK 169.8 M (147.2),

with a continued strong operating margin of 20.3 per cent (19.4).

During 2017, VBG Truck Equipment had an average of 271

employees (264), and 278 persons (267) were employed in the

division at 31 December 2017.

0

200

400

600

800

0

50

100

150

200

250

2014 2015 2016 2017

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q4Q3Q2 Q3 Q4 Q1


0

60

120

180

0

40

20

60

2014 2015 2016 2017Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q4Q3Q2 Q3 Q4 Q1


NET SALES, SEK M OPERATING PROFIT*, SEK M

* Before items affecting comparability.


11


SALES/EARNINGS

SEK M 2017Q4

2017Q3

2017 Q2

2017Q1

2017

Full-year

2016Q4

2016Q3

2016Q2

2016Q1

2016

Net sales 259.7 63.4 57.5 69.3 69.5 270.5 66.0 61.2 74.8 68.5



Items affecting comparability –7.51 –7.51 — — — — — — — —

Reported operating profit/loss 13.6 –2.8 0.7 7.6 8.2 30.0 5.9 6.1 9.2 8.8

Reported operating margin, % 5.3 –4.5 1.2 10.9 11.8 11.1 8.9 10.0 12.3 12.8

1 Negative SEK 7.5 M in connection with reorganisation costs.

SALES BY MARKET

SEK M 2017Q4

2017Q3

2017 Q2

2017Q1

2017

Full-year

2016Q4

2016Q3

2016Q2

2016Q1

2016

Sweden 0.2 0.0 0.1 0.0 0.1 0.3 0.1 0.0 0.1 0.1


Germany 147.0 36.5 31.9 37.1 41.4 159.8 28.2 40.8 47.4 43.4


Rest of world 0.9 0.1 0.0 0.7 0.1 1.1 0.1 0.1 0.5 0.4

Edscha Trailer Systems 259.7 63.4 57.5 69.3 69.5 270.5 66.0 61.2 74.8 68.5

Fourth-quarter 2017• Sales decreased by 4.0 per cent to SEK 63.4 M

(66.0).• Adjusted operating profit fell to SEK 4.7 M (5.9),

with an adjusted margin of 7.4 per cent (8.9).• The reorganisation and the appointment of a

new division management team was completed.• Items affecting comparability during the quarter

amounted to a negative SEK 7.5 M (0.0) relating to reorganisation costs.

• The reported operating loss amounted to SEK 2.8 M (profit: 5.9), with a negative margin of 4.5 per cent (pos: 8.9).

Full-year 2017:• Sales decreased by 4.0 per cent to SEK 259.7 M

(270.5).• Adjusted operating profit fell to SEK 21.1 M (30.0),

with an adjusted margin of 8.1 per cent (11.1).• Items affecting comparability amounted to a

negative SEK 7.5 M (0.0).• The reported operating profit declined to SEK

13.6 M (profit: 30.0), with a margin of 5.3 per cent (11.1).


12

0

60

120

180

300

240

0

20

40

60

100

80

2014 2015 2016 2017Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q4Q3Q2 Q3 Q4 Q1


0

6

18

12

24

36

30

0

2

4

10

8

6

12

2014Q4 2015 2016 2017

Q1 Q2 Q3 Q4 Q1 Q2 Q4Q3Q2 Q3 Q4 Q1




Fourth-quarter 2017

Sales improved slightly in the fourth quarter and the measures

implemented by the division to solve the sourcing and produc-

tion-related problems that arose in the third quarter began to

have some impact. Moreover, organisational changes were

introduced at Edscha Trailer Systems and a new Division Man-

ager and management was appointed. The reorganisation

resulted in a staff-related nonrecurring cost of SEK 7.5 M that

was charged to earnings for the quarter.

Edscha Trailer Systems’ sales decreased by 4.0 per cent to

SEK 63.4 M (66.0). The translation of the sales of foreign

Group companies to Swedish kronor had a positive impact,

and the actual organic growth was a negative 4.6 per cent.

Accordingly, the adjusted operating profit before items

affecting comparability (reorganisation cost of SEK 7.5 M) for

the fourth quarter decreased to SEK 4.7 M (5.9), with an oper-

ating margin of 7.4 per cent (8.9). Reported operating loss

amounted to SEK 2.8 M (profit: 5.9), with a negative operating

margin of 4.5 per cent (pos: 8.9).

Full-year 2017

Edscha Trailer Systems had a stable start to the year, with

strong sales in Germany that compensated for weaker perfor-

mance in the Turkish market. The division’s second quarter

maintained a similar level, with sales of almost SEK 70 M,

meaning operating margin for the first six months of the year

was slightly above 11 per cent. The profitability trend ended in

the third quarter, when sales declined to below SEK 60 M.

Lower sales meant low capacity utilisation, which had a nega-

tive impact on profitability. Two of the division’s main suppli-

ers also experienced delivery problems, which resulted in extra

costs. Measures implemented in the fourth quarter had a

slightly positive effect relatively quickly, and there is reason to

expect a strong business moving forward.

Sales for the full-year decreased by 4.0 per cent to SEK

259.7 M (270.5). Adjusted for exchange rate changes, the

actual organic growth was a negative 5.8 per cent.

The adjusted operating profit declined to SEK 21.1 M (30.0),

with an operating margin of 8.1 per cent (11.1). Operating

profit amounted to SEK 13.6 M (30.0), with a margin of 5.3

per cent (11.1).

In 2017, Edscha Trailer Systems had an average of 91

employees (79) and, at 31 December 2017, 88 persons (85)

were employed in the division.


13


Fourth-quarter 2017

As the largest share of production is located in Canada and the

majority of sales are in the USA in USD, Mobile Climate Con-

trol is impacted by the relationship between USD and CAD. In

the fourth quarter, the USD grew weaker which resulted in

exchange losses for the division. Costs for organisational

changes during the quarter, in both North America and

Europe, contributed to the slightly weaker profit than normal.

Sales during the fourth quarter amounted to SEK 338.6 M.

Operating profit for the period was SEK 20.3 M, with an oper-

ating margin of 6.0 per cent.

Full-year 2017

Mobile Climate Control noted favourable demand in almost all

markets in the first quarter, which together with the fourth

quarter, is normally the weakest quarter in terms of sales

during the financial year. The acquisition balance drawn up by

the VBG Group following the acquisition of the division identi-

fied consolidated intangible assets that are depreciated, and

thereby impact the division’s operating profit by SEK 20 M per

year for 20 years. Consequently, each quarter is charged with

a SEK 5 M in amortisation, corresponding to a lower operating

margin of between 1.3 and 1.5 percentage points. The second

quarter was stronger than the first quarter both in terms of

sales and earnings. This positive growth meant the division

needed to employ new staff in both sales and product devel-

opment, which entailed increased costs. This fact, combined

with certain seasonal fluctuations that normally occur in the

fourth quarter, were felt already in the third quarter, which

had a slightly negative impact on sales and earnings for the

third quarter. Mobile Climate Control also had costs for closing

Mobile Climate Control Holding AB in Stockholm and transfer-

ring the registered office to Vänersborg in the third quarter. In

general, the first three quarters also noted rising prices for key

input materials, such as copper and aluminium, which has had

some impact on earnings. Overall for the year, operations

grew significantly, though profitability has failed to keep pace.

However, market and product development initiatives will

result in profitability improvements by a number of percentage

points compared with the outcome for 2017. Mobile Climate

Control’s first year as part of the VBG Group has entailed sales

of SEK 1,426.7 M for the full-year.

Operating profit for the full-year was SEK 127.9 M, with an

operating margin of 9.0 per cent.

Mobile Climate Control had 785 employees (688) at 31

December 2017. An average of 767 people (69) were

employed in 2017. The sharp increase in the average number

of employees is because the calculation of the average number

in 2016 is based on the acquisition date of 23 November 2016.

SALES/EARNINGS

SEK M 2017Q4

2017Q3

2017 Q2

2017Q1

2017

Full-year

2016Q4

2016Q3

2016Q2

2016Q1

2016

Net sales 1,426.7 338.6 357.4 383.2 347.5 101.4 101.4

Reported operating profit 127.9 20.3 34.6 44.2 28.8 5.0 5.0

Reported operating margin, % 9.0 6.0 9.7 11.5 8.3 4.9 4.9

SALES BY MARKET

SEK M 2017Q4

2017Q3

2017 Q2

2017Q1

2017

Full-year

2016Q4

2016Q3

2016Q2

2016Q1

2016

Sweden 37.3 8.0 8.2 9.1 11.9 2.9 2.9

Other Nordic countries 28.6 7.9 8.3 6.8 5.6 1.7 1.7

Germany 24.1 6.3 7.0 5.7 5.2 3.5 3.5

Other European countries 152.8 37.3 38.2 39.0 38.4 10.9 10.9

North America 1,155.7 273.6 288.2 316.6 279.5 78.5 78.5

Rest of world 28.2 5.7 7.4 6.0 7.0 4.0 4.0

Mobile Climate Control 1,426.7 338.6 357.4 383.2 347.5 101.4 101.4

Fourth-quarter 2017• Sales amounted to SEK 338.6 M.• Reported operating profit was SEK 20.3 M with

a margin of 6.0 per cent.

Full-year 2017:• Sales amounted to SEK 1,426.7 M.• Reported operating profit was SEK 127.9 M with

a margin of 9.0 per cent.


14


SALES/EARNINGS

SEK M 2017Q4

2017Q3

2017 Q2

2017Q1

2017

Full-year

2016Q4

2016Q3

2016Q2

2016Q1

2016

Net sales 479.1 112.0 118.8 122.4 125.8 414.7 99.9 101.7 103.5 109.6



Items affecting comparability — — — — — –4.81 –4.81 — — —

Reported operating profit/loss 60.3 11.5 15.5 16.6 16.7 24.2 –3.1 11.9 7.2 8.2

Reported operating margin, % 12.6 10.3 13.0 13.5 13.3 5.8 –3.1 11.7 7.0 7.5

1 A negative SEK 4.8 M pertaining to an action programme to increase profitability.

SALES BY MARKET

SEK M 2017Q4

2017Q3

2017 Q2

2017Q1

2017

Full-year

2016Q4

2016Q3

2016Q2

2016Q1

2016

Sweden 4.6 1.3 1.1 0.7 1.5 4.2 0.9 1.3 0.8 1.2


Germany 170.3 37.7 43.1 43.5 46.0 153.8 36.7 38.9 37.3 40.9


North America 101.1 24.3 24.2 26.0 26.6 87.1 22.8 19.7 22.2 22.4

Brazil 66.7 16.0 16.2 18.9 15.6 56.7 14.5 12.7 18.9 10.6

Australia/New Zealand 11.5 1.9 2.5 2.5 4.6 8.8 1.2 3.1 2.7 1.8

Rest of world 58.7 15.3 15.3 14.2 13.9 46.9 9.3 12.7 5.3 19.6

Ringfeder Power Transmission 479.1 112.0 118.8 122.4 125.8 414.7 99.9 101.7 103.5 109.6

Fourth-quarter 2017• Sales rose 12.1 per cent to SEK 112.0 M (99.9).• Adjusted operating profit rose to SEK 11.5 M

(1.7), with a margin of 10.3 per cent (1.7)• Items affecting comparability during the quarter

amounted to SEK 0.0 M (neg: 4.8).• Reported operating profit increased to SEK 11.5 M

(loss: 3.1), with a margin of 10.3 per cent (neg: 3.1).

Full-year 2017:• Sales rose 15.5 per cent to SEK 479.1 M (414.7).• Adjusted operating profit increased to SEK 60.3 M

(29.0), with an adjusted margin of 12.6 per cent (7.0).

• Items affecting comparability during the year amounted to SEK 0.0 M (neg: 4.8).

• Reported operating profit amounted to SEK 60.3 M (24.2), with a margin of 12.6 per cent (5.8).


15

0

100

200

300

500

400

0

30

60

90

150

120

2014 2015 2016 2017Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q4Q3Q2 Q3 Q4 Q1


0

15

30

45

60

0

5

15

10

20

2014 2015 2016 2017Q4 Q1 Q2 Q3

Q4Q1 Q2 Q4Q3Q2 Q3 Q4 Q1




Fourth-quarter 2017

Ringfeder Power Transmission ended the year with a strong

fourth quarter.

During the fourth quarter, sales rose by 12.1 per cent to SEK

112.0 M (99.9). Adjusted for exchange rate changes, actual

organic growth was 13.4 per cent.

Adjusted operating profit for the fourth quarter amounted to

SEK 11.5 M (1.7), with an operating margin of 10.3 per cent (1.7).

The reported operating profit amounted to SEK 11.5 M

(loss: 3.1), with a margin of a 10.3 per cent (neg: 3.1).

Full-year 2017

At the end of 2016, Ringfeder Power Transmission was work-

ing intensively with an action programme with the aim of

implementing structural improvements internally. Most of the

work was conducted during the first quarter, but also contin-

ued for the remainder of 2017. The start of the year was better

than expected, both in terms of sales and earnings, in part due

to the cost savings achieved through the action programme.

There was also clearly rising demand in the European market

during the first quarter. In the second quarter, the division

doubled its operating profit year-on-year, thanks to cost-sav-

ing measures implemented and a favourable shift in the prod-

uct mix, with higher sales of more profitable products. The

positive trend continued in the third quarter, both for sales

and earnings, with very positive developments in the two key

markets of Germany and the USA. The strong finish to the

year meant the division was nearing SEK 500 M in sales and

also that operating profit for the year exceeded SEK 60 M and

profitability improved sharply to more than 12 per cent.

For the full-year, Ringfeder Power Transmission increased

sales by 15.5 per cent to SEK 479.1 M (414.7). If the changes

in exchange rates between the years are taken into account,

the actual organic growth was 13.1 per cent.

Adjusted operating profit increased to SEK 60.3 M (29.0),

with an adjusted margin of 12.6 per cent (7.0). The division’s

reported operating profit increased to SEK 60.3 M (24.2). The

reported operating margin was 12.6 per cent (5.8).

During 2017, Ringfeder Power Transmission had an average

of 309 employees (343) and, at 31 December 2017, 342 per-

sons (355) were employed in the division.


16

Parent Company

VBG Group AB’s operations are focused on managing, develop-

ing and coordinating the Group. The assets in the Parent Com-

pany consist primarily of shares in subsidiaries and trademarks.

During the year, the company sold the industrial property in

Vänersborg to the subsidiary VBG Group Truck Equipment AB.

The objective is that the Group’s intellectual property in the

form of trademarks and other rights should be gathered in the

Parent Company. VBG Group AB focuses on maintaining and

developing all the Group’s trademarks and rights.

The Parent Company’s net sales pertain primarily to intra-

Group services, licence revenues and rentals and amounted to

SEK 29.2 M during the year (26.9). The operating loss for the

year was SEK 16.7 M (loss: 12.9). After dividends from Group

companies totalling SEK 64.9 M (52.2), negative exchange

rate differences of SEK 12.4 M (pos: 1.6), net interest expenses

totalling SEK 21.65 M (expense: 4.5), and impairment losses

on shares in subsidiaries of SEK 50.0 M, the loss after financial

items amounted to SEK 35.8 M (profit: 36.3).

In 2017, an impairment loss was incurred for shares in sub-

sidiaries of SEK 50 M, which was prompted by the changes to

the company’s business direction to become a dedicated distri-

bution company.

Updated acquisition balance of Mobile Climate Control

Group Holding AB

In the fourth quarter of 2016, the Group’s Parent Company

completed the acquisition of Sweden’s Mobile Climate Control.

The acquired company formed a new division from 23 Novem-

ber 2016. The purchase consideration for all shares in the com-

pany amounted to SEK 1,372 M for a debt-free company and

normalised working capital. In conjunction with the takeover, a

fully-subscribed new share issue was completed and generated

SEK 800 M in new capital to part-finance the acquisition. An

updated preliminary acquisition plan was presented in the

report for the first quarter of 2017. As previously reported, the

acquisition plan was preliminary pending the completion of the

process to identify and determine the fair value of intangible

assets separate from goodwill. The final acquisition balance was

established during the fourth quarter as follows:

Preliminary 2017 Final 2017

Purchase consideration 1,372.8 1,372.8

Acquired net assets:

Cash and cash equivalents 108.9 108.9

Property, plant and equipment 104.9 104.9

Trademarks 300.0 400.0

Customer relationships — 396.9

Other intangible assets 5.0 5.0

Long-term investments 16.3 16.8

Inventories 208.5 207.0

Receivables 251.7 251.7

Deferred tax liability, trademarks –66.0 –88.0

Deferred tax liabilities, customer relationships — –87.3

Other liabilities –769.2 –708.0

Goodwill 1,212.7 764.9

Accounting policies

The VBG Group applies the EU-endorsed IFRS standards and

interpretations thereof (IFRIC). This interim report for the

Group has been prepared in accordance with the Annual

Accounts Act and IAS 34 Interim Financial Reporting, and for

the Parent Company, in accordance with the Annual Accounts

Act and recommendation RFR 2, Accounting for Legal Entities.

The same accounting policies and calculation methods were

applied as in the most recent annual report.

IFRS 15 is the new standard for revenue recognition. IFRS

15 replaces IAS 18 Revenue and IAS 11 Construction Con-

tracts. IFRS 15 is based on the principle that revenue is rec-

ognised when the customer gains control of the presold goods

or services – a principle that replaces the earlier principle that

revenue is recognised when risks and rewards are transferred

to the buyer.

IFRS 9 Financial Instruments replaces most of the guidance

in IAS 39. The new standard updates classifying, recognising

and impairment testing for financial assets and sets new

requirements in the application of hedge accounting.

Both of the new standards apply from 1 January 2018 and are

applicable for the Group. An analysis by the Group indicates

that the implementation of IFRS 9 and IFRS 15 will not have a

material impact on the Group’s financial statements. Conse-

quently, no transitional effects will arise as a consequence of

the introduction of these reporting standards.

This report may contain rounding differences.

Risks and uncertainty factors

The Group’s and the Parent Company’s significant risks and

uncertainty factors include business-related operational risks

in the form of commodity risks, product risks, development

risks, intellectual property risks, environmental risks, political

risks, business interruption and property risks, cyclical risks, IT

security risks and legal risks. To these can be added financial

risks such as financing risks, liquidity risks, interest rate risks,

currency risks and credit and counterparty risks.

For a more detailed description of the Group’s risks and

risk management, see Note 2 of VBG Group AB’s annual

report for 2016.

Proposed dividend

The Board of Directors of VBG Group AB (publ) proposes that

the 2018 Annual General Meeting resolve to approve a divi-

dend of SEK 3.25 per share (1.75) for the 2017 financial year.

The proposed dividend entails a total distribution of funds

from the Parent Company of SEK 81.3 M (43.8), equivalent to

4.1 per cent of the Group’s equity at year end. The Group

reported profit after tax of SEK 220.5 M (120.8), which means

that the proposed dividend represents 36.9 per cent of net

profit for the year (36.3).

OTHER INFORMATION


17

Note

The information in this year-end report is of the type that VBG

Group AB is obligated to disclose in accordance with the Swed-

ish Securities Exchange and Clearing Operations Act and/or the

Financial Instruments Trading Act. The information was sub-

mitted for publication on 20 February 2018 at 2:00 p.m.

Press releases since the previous report

Interim report Jan-Sep 2017 26 Oct 2017

VBG Truck Equipment signs distribution

agreement with Hyva China Mechanics 31 Oct 2017

VBG Group to establish new Group Management 18 Dec 2017

For further information, please contact:

Anders Birgersson, Managing Director and CEO

Telephone: 0521–27 77 67, 0702–27 77 78

E-mail: [email protected]

Vänersborg, 20 February 2018

VBG Group AB (publ)

The Board of Directors

No significant events occurred after the close of the period.

Annual General Meeting and Annual Report

The 2018 Annual General Meeting will be held at 5:00 p.m. on

25 April in Vänersborg. The annual report will be published on

the company’s website in the week beginning 26 March 2018

and will also be available at VBG Group AB’s offices in Väners-

borg and Trollhättan.

Financial information 2018

Interim report, three months 2018 25 April 2018

Annual General Meeting 2018 25 April 2017 at 5:00 p.m.

Interim report, six months 2018 21 August 2018

Interim report, nine months 2018 22 October 2018

Related party transactions

There have been no related party transactions in 2017 that

have significantly affected the company’s financial position

and results. Related party transactions during 2016 are dis-

closed in Note 5 in the annual report for 2016.

Auditor’s review

This year-end report is unaudited.


18

Consolidated Income Statement and Statement of other comprehensive income – Highlights

SEK MQ4

Oct-Dec 2017Q4

Oct-Dec 2016Full-year

2017Full-year

2016

Net sales 737.0 464.7 3,002.0 1,543.9

Cost of goods sold –481.2 –294.2 –1,934.1 –918.0

Gross profit 255.8 170.5 1,067.9 625.9

Selling expenses –87.9 –64.7 –332.1 –233.8

Administrative expenses –71.12 –57.41 –253.52 –164.11

Research and development costs –27.9 –17.9 –106.4 –46.8

Other operating income and expenses –0.8 1.9 –24.9 2.7

Operating profit 68.2 32.4 351.1 184.0

Net financial items –15.5 –10.7 –35.5 –15.8


Tax –22.0 –12.2 –95.1 –47.4

Profit for the period 30.7 9.5 220.5 120.8

Profit for the period attributable to Parent Company shareholders 30.7 9.5 220.5 120.8

Depreciation and amortisation charged to profit –20.0 –14.7 –77.2 –47.6

Other comprehensive income

Profit for the period 30.7 9.5 220.5 120.8

Items that will not be reversed in the Income Statement

Effect of translation of defined-benefit pension plans, net after tax –5.8 –2.1 –5.8 –2.1

Other items

Items that may later be reversed in the Income Statement

Translation differences pertaining to foreign operations 86.1 12.0 28.8 70.7

Translation differences pertaining to hedge accounting for net investments in foreign operations 1.2 4.7 1.2 5.1

Other comprehensive income, net after tax 81.5 14.6 24.2 73.7

Comprehensive income for the period 112.2 24.1 244.7 194.5

Comprehensive income for the period attributable to Parent Com-pany shareholders 112.2 24.1 244.7 194.5

Earnings per share, basic and diluted, SEK 1.23 0.76 9.62 9.66

Number of outstanding shares at end of period (‘000) 25,004 12,502 25,004 12,502

Average number of shares during the period 25,004 12,502 22,920 12,502

Number of own shares at end of period 1,192 1,192 1,192 1,192

1 Includes acquisition-related costs attributable to the acquisition of Mobile Climate Control of a negative SEK 7.9 M, and a negative SEK 4.8 M pertaining to an action programme at Ringfeder Power Transmission to increase profitability.

2 Negative SEK 7.5 M in connection with reorganisation costs relating to Edscha Trailer System.


19

Sales and earnings by segment

SEK M

VBG Truck

Equipment

Edscha Trailer

Systems

Mobile Climate Control

Ringfeder Power

Transmission Group-wide Group

2017

Q4 Oct-Dec Net sales 223.1 63.4 338.6 112.0 737.0

Operating profit/loss before items affecting comparability 46.5 4.7 20.3 11.5 –7.3 75.7

Operating margin, % 20.8 7.4 6.0 10.3 10.3

Items affecting comparability — –7.53 — — — –7.53

Reported operating profit/loss 46.5 –2.8 20.3 11.5 –7.3 68.2

Reported operating margin, % 20.8 –4.5 6.0 10.3 9.2

Net financial items –15.5 –15.5

Profit after financial items 52.7

12 months: Net sales 836.7 259.7 1,426.7 479.1 3,002.0



Items affecting comparability — –7.53 — — — –7.53

Reported operating profit/loss 169.8 13.6 127.9 60.3 –20.5 351.1

Reported operating margin, % 20.3 5.3 9.0 12.6 11.7



2016

Q4 Oct-Dec Net sales 197.5 66.0 101.4 99.9 464.8



Items affecting comparability — — — –4.82 –7.91 –12.7

Reported operating profit/loss 39.3 5.9 5.0 –3.1 –14.5 32.4

Reported operating margin, % 19.9 8.9 4.9 –3.1 7.0



12 months: Net sales 757.2 270.5 101.4 414.7 1,543.9



Items affecting comparability — — — –4.82 –7.91 –12.7

Reported operating profit/loss 147.2 30.0 5.0 24.2 –22.5 183.9

Reported operating margin, % 19.4 11.1 4.9 5.8 11.9



1 Negative SEK 7.9 M pertaining to acquisition-related costs attributable to the acquisition of Mobile Climate Control. 2 Negative SEK 4.8 M pertaining to an action programme to increase profitability. 3 Negative SEK 7.5 M in connection with reorganisation costs relating to Edscha Trailer System.


20

Changes in consolidated equity SEK M Full-year 2017 Full-year 2016

Opening equity according to balance sheet at 31 December 1,025.3 871.5

Total comprehensive income for the period 244.7 194.5

Contributed capital, new share issue, net 778.6 —

Dividend –43.8 –40.6

Equity at end of period 2,004.9 1,025.3

Cash Flow Statement – HighlightsSEK M Full-year 2017 Full-year 2016

Cash flow from operating activities before changes in working capital 274.3 221.0

Change in working capital –30.5 30.0

Cash flow from operating activities 243.7 251.0

Cash flow from investing activities –60.3 –1,295.2

Cash flow from financing activities –139.0 1,162.6

Cash flow for the period 44.4 118.4

Cash and cash equivalents at start of year 276.4 143.9

Translation difference, cash and cash equivalents 0.6 14.0

Cash and cash equivalents at end of period 321.4 276.4

Unutilised overdraft facilities 100.0 —

Available cash and cash equivalents 421.4 276.4

Key figures for Group SEK M Full-year 2017 Full-year 2016

Profit margin (ROS), % 10.5 10.9

Return on equity (ROE), % 12.3 12.7

Return on capital employed (ROCE), % 10.7 12.7

Equity/assets ratio, % 54.7 28.7

Equity per outstanding share at end of period, SEK 80.18 82.01

Cash flow from operating activities, per average outstanding share, SEK 10.64 20.08

Profit per average outstanding share during the period, SEK 9.62 9.66

Share price at end of period, SEK 132.00 160.50

Number of employees, average 1,446 764

Number of outstanding shares at end of period (‘000) 25,004 12,502

Number of own shares at end of period (‘000) 1,192 1,192

Average number of outstanding shares during the period (‘000) 22,920 12,502

Consolidated Balance Sheet – HighlightsSEK M

31 December 2017

31 December 20161

Goodwill 1,118.9 1,122.3



Long-term investments 48.3 67.9

Total non-current assets 2,341.5 2,374.4

Inventories 496.0 479.7


Cash on hand, demand deposits and short-term investments 321.4 276.4

Total current assets 1,322.0 1,202.5

TOTAL ASSETS 3,663.6 3,576.9

Equity 2,004.9 1,025.3

Non-current liabilities 1,219.3 1,346.9

Current liabilities 439.4 1,204.6

TOTAL EQUITY AND LIABILITIES 3,663.6 3,576.9

1 The balance sheet as per 31 December 2016 was adjusted after the acquisition balance relating to the acquisition of Mobile Climate Control. The changes have not influenced the Group’s equity. Refer to page 16 for more information about the reclassifications that followed the final acquisition plan.


21

Parent Company Balance Sheet

SEK M Full-year 2017 Full-year 2016



Long-term investments 1,992.6 2,042.5

Total non-current assets 1,996.7 2,053.3


Cash on hand, demand deposits and short-term investments 119.4 91.7

Total current assets 590.5 654.4

TOTAL ASSETS 2,587.2 2,707.7

Equity 1,282.8 532.8

Untaxed reserves 4.8 7.8

Provisions 12.7 12.8

Non-current liabilities 795.7 904.0

Current liabilities 491.3 1,250.3

TOTAL EQUITY AND LIABILITIES 2,587.2 2,707.7

Parent Company Income Statement

SEK M Full-year 2017 Full-year 2016

Net sales 29.2 26.9

Operating expenses –45.9 –39.8

Operating profit –16.7 –12.9

Net financial items –19.1 49.2

Profit/loss after financial items –35.8 36.3

Appropriations 51.8 30.2

Tax –0.8 –3.5

Profit for the period 15.2 63.0


22

Alternative performance measuresReconciliation between IFRS and performance measures used

Certain information in this report that is used by company management and analysts to assess the Group’s performance has not

been prepared in accordance with IFRS. Company management believes that this information makes it easier for investors to

analyse the Group’s earnings performance and financial structure. Investors should view this information as a supplement rather

than a replacement of financial reporting in accordance with IFRS.

OPERATING PROFIT AND OPERATING MARGIN BEFORE ITEMS AFFECTING COMPARABILITY

Items affecting comparability refer to material income or expense items that are recognised separately due to the significance of

their character or amount.

SEK MQ4

Oct-Dec 2017Q4


2017Full-year

2016

Group

Net sales 737.0 464.7 3,002.0 1,543.9



Items affecting comparability –7.5 –12.7 –7.5 –12.7


Operating margin before items affecting comparability, % 10.3 9.7 11.9 12.7

VBG Truck Equipment

Net sales 223.1 197.5 836.7 757.2



Items affecting comparability — — — —



Edscha Trailer Systems

Net sales 63.4 66.0 259.7 270.5

Reported operating profit/loss –2.8 5.9 13.6 30.0

Reported operating margin, % –4.5 8.9 5.3 11.1

Items affecting comparability –7.5 0.0 –7.5 0.0




Net sales 338.6 101.4 1,426.7 101.4



Items affecting comparability — — — —



Ringfeder Power Transmission

Net sales 112.0 99.9 479.1 414.7

Reported operating profit/loss 11.5 –3.1 60.3 24.2

Reported operating margin, % 10.3 –3.1 12.6 5.8

Items affecting comparability — –4.8 — –4.8




23

ACTUAL ORGANIC GROWTH

Growth in net sales excluding effects of structural changes, meaning acquired

or divested operations, and excluding currency effects.

SEK MQ4

Oct-Dec 2017Q4


2017Full-year

2016

Group

Net sales 737.0 464.7 3,002.0 1,543.9

Acquired volume (incl. full-year effect from preceding year) –221.1 –101.4 –1,309.2 –150.2

Currency effect 4.2 –0.8 –20.0 –6.9

Net sales excluding acquisitions and currencies 520.2 362.5 1,672.9 1,386.8

Actual organic growth 55.5 39.5 129.0 71.5

Organic growth, % 11.9 12.2 8.4 5.4

VBG Truck Equipment

Net sales 223.1 197.5 836.7 757.3

Acquired volume (incl. full-year effect from preceding year) — — — —

Currency effect 3.2 0.5 –5.2 0.7

Net sales excluding acquisitions and currencies 226.3 198.0 831.5 758.0


Organic growth, % 14.6 11.5 9.8 8.6

Edscha Trailer Systems

Net sales 63.4 66.0 259.7 270.5

Acquired volume (incl. full-year effect from preceding year) — — — —

Currency effect –0.4 –0.6 –4.8 –3.3


Actual organic growth –3.0 8.9 –15.6 45.5

Organic growth, % –4.6 15.6 –5.8 20.5


Net sales 338.6 101.4 1,426.7 101.4

Acquired volume (incl. full-year effect from preceding year) –221.1 — –1,309.2 —

Currency effect — — — —



Organic growth, % 15.9 n/a 15.9 n/a

Ringfeder Power Transmission

Net sales 112.0 99.9 479.1 414.7

Acquired volume (incl. full-year effect from preceding year) — — — –48.8

Currency effect 1.3 –0.7 –10.0 –4.8


Actual organic growth 13.4 10.3 54.3 –34.8

Organic growth, % 13.4 11.7 13.1 –8.8

INTEREST-BEARING NET DEBT

Interest-bearing provisions and loan liabilities less cash and cash equivalents.

Group, SEK MQ4

Oct-Dec 2017Q4


2017Full-year

2016

Provisions for pensions 185.7 175.7 185.7 175.7

Overdraft facilities — — — —

Loans 878.0 1,793.1 878.0 1,793.1

Bank balances –321.4 –276.4 –321.4 –276.4

Interest-bearing net debt 742.3 1,692.4 742.3 1,692.4


24

EBITDA

Operating profit before depreciation/amortisation and impairment.

Group, SEK MQ4

Oct-Dec 2017Q4


2017Full-year

2016


Depreciation/amortisation 20.0 14.7 77.2 47.6

EBITDA 88.2 47.3 428.3 231.6

EBITA

Operating profit before amortisation and impairment of intangible assets.

Group, SEK MQ4

Oct-Dec 2017Q4


2017Full-year

2016


Amortisation of intangible assets 8.0 3.2 31.7 12.2

EBITA 76.2 35.8 382.8 196.2

INTEREST-BEARING NET DEBT/EBITDA

Interest-bearing net debt in proportion to operating profit before depreciation/amortisation and impairment.

Group, SEK MFull-year

2017Full-year

2016

Interest-bearing net debt 742.3 1,692.4

EBITDA 428.3 231.6

INTEREST-BEARING NET DEBT/EBITDA 1.7 7.3

PROFIT MARGIN

Profit after financial items as a percentage of net sales.

Group, SEK MQ4

Oct-Dec 2017Q4


2017Full-year

2016

Net sales 737.0 464.7 3,002.0 1,543.9


PROFIT MARGIN, % 7.1 4.7 10.5 10.9

South AfricaMCC AFRICA PTY (LTD)Unit 7B, Rinaldo Industrial Park50 Moreland Drive, Red Hill4071 DurbanTel +27 31 569 3971

IndiaMOBILE CLIMATE CONTROL THERMAL SYSTEMS INDIA PVT. LTD.Plot No. 4BRoad No.2, Phase-IKIADB Industrial Area NarasapuraKolar – 56313, Karnataka

BrazilMCC DO BRASIL LTDARua Silverio Finamore, 920-Gp 3Louveira- SP, 13.290-000Tel +55 19 3878 2058


GermanyRINGFEDER POWER TRANSMISSION GMBHWerner-Heisenberg-Straße 18 DE-64823 Groß-UmstadtTel +49 6078-9385-0

RINGFEDER POWER TRANSMISSION TSCHAN GMBHPostfach 2166DE-66521 NeunkirchenTel +49 6821 866 0

Czech RepublicRINGFEDER POWER TRANSMISSION S.R.O. Oty Kovala 1172CZ-33441 DobranyTel +420 377 201 511

USARINGFEDER POWER TRANSMISSION USA CORPORATION165 Carver AvenueWestwood, NJ 07675Tel +1 201 666 3320

IndiaRINGFEDER POWER TRANSMISSION INDIA PRIVATE LTD.Plot No. 4, Door No. 220Mount Poonamallee High RoadKattuppakkamChennai-600056Tel +91 44 2679 1411

ChinaKUNSHAN RINGFEDER POWER TRANSMISSION CO., LTD.No. 10, Dexin RoadZhangpu 215321Kunshan, Jiangsu ProvinceTel +86 512 5745 3960

BrazilHENFEL INDÚSTRIA METALÚRGICA LTDA.Major Hilario Tavares Pinheiro, 3447 Cep 14871 - 300Jaboticabal, SPTel +55 16 3209 3422

VBG TRUCK EQUIPMENT

Sweden VBG GROUP TRUCK EQUIPMENT AB Box 1216SE-462 28 VänersborgTel +46 521 27 77 00

GermanyVBG GROUP TRUCK EQUIPMENT GMBHPostfach 13 06 55DE-47758 KrefeldTel +49 2151 835-0

DenmarkVBG GROUP SALES A/SIndustribuen 20–22DK-5592 EjbyTel +45 64 46 19 19

NorwayVBG GROUP SALES ASPostboks 94 LeirdalNO-1009 OsloTel +47 23 14 16 60

UKVBG GROUP SALES LIMITEDUnit 9, Willow CourtWest Quay Road, Winwick QuayWarrington, Cheshire WA2 8UFTel +44 1925 23 41 11

BelgiumVBG GROUP TRUCK EQUIPMENT NVIndustrie Zuid Zone 2.2Lochtemanweg 50BE-3580 BeringenTel +32 11 458 379

USAONSPOT OF NORTH AMERICA, INC.P.O. Box 1077North Vernon, IN 47265-5077Tel +1 800 224 2467

Branch:555 Lordship BlvdStratford, CT 06615-7124Tel +1 800 766 7768

FranceONSPOT E.U.R.L14 Route de SarrebruckFR-57645 Montoy-FlanvilleTel +33 387 763 080


Germany EUROPEAN TRAILER SYSTEMS GMBHIm Moerser Feld 1fDE-47441 MoersTel +49 2841 6070 700

VBG GROUP

SwedenVBG GROUP AB (PUBL) Kungsgatan 57SE–461 34 TrollhättanTel +46 521 27 77 00www.vbggroup.com

Czech RepublicEUROPEAN TRAILER SYSTEMS S.R.O.Ke Gabrielce 786CZ-39470 Kamenice nad LipouTel +420 565 422 402


SwedenMOBILE CLIMATE CONTROL GROUP HOLDING ABKungsgatan 57SE-461 34 TrollhättanTel +46 521–27 77 00

MOBILE CLIMATE CONTROL SVERIGE ABSikvägen 9SE-761 21 NorrtäljeTel +46 8 402 21 40

MOBILE CLIMATE CONTROL SVERIGE ABOdinslundsgatan 15SE-412 66 GothenburgTel +46 8 402 21 40

CanadaMOBILE CLIMATE CONTROL INC.7540 Jane St.Vaughan, OntarioL4K 0A6Tel +1 (905) 482–2750

MOBILE CLIMATE CONTROL INC.6659 Ordan DriveMississauga, OntarioL5T 1K6Tel +1 (905) 482–2750

USAMOBILE CLIMATE CONTROL CORP.P.O. Box 803Goshen, Indiana 46527Tel +1 (574) 534–1516

MOBILE CLIMATE CONTROL CORP.3189 Farmtrail RoadYork, PA 17406Tel +1 (717) 767–6531

MOBILE CLIMATE CONTROL CORP.27 Corporate Circle Suite 1East Syracuse, NY 13057Tel +1 (315) 434–1851

PolandMOBILE CLIMATE CONTROL S.P.Z.OOUl. Szwedzka 155-200 OławaTel +48 71 3013 701

ChinaNINGBO MOBILE CLIMATE CONTROL MANUFACTURING/TRADING CO., LTDNo.7 Jinxi RoadZhenhai, Ningbo, 315221Tel +86 (574)–863 085 77

vbg group year-end report 2017 · vbg group interim report year-end report 2017 1 fourth quarter of...

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