year-end reportmb.cision.com/main/968/2174328/619565.pdfabout axis communications axis offers...
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About Axis Communications Axis offers intelligent security solutions that enable a smarter, safer world. As the market leader in network video, Axis is driving the industry by continually launching innovative network products based on an open platform - delivering high value to customers through a global partner network. Axis has long-term relationships with partners and provides them with knowledge and groundbreaking network products in existing and new markets. Axis has more than 2,600 dedicated employees in more than 50 countries around the world, supported by a network of over 90,000 partners across 179 countries. Founded in 1984, Axis is a Sweden-based company listed on Nasdaq Stockholm under the ticker AXIS. For more information about Axis, please visit our website www.axis.com.
Continued growth during 2016 resulted in record sales for the fourth quarter and for the full-year. For the first time, we generated sales of more than SEK 2 billion in a quarter, while full-year sales were well over SEK 7 billion. The weak Swedish krona had a significant positive effect on our growth during the fourth quarter. The full-year effect was not as significant.
Our investments in development of new products and solutions made a strong contribution to growth. In 2016, we were able to release a number of such innovations, for example, network speakers and camera models featuring laser focus technology. During the fourth quarter, we also unveiled updates to two of our most important network camera series AXIS Q35 and AXIS P32. Another important factor was the three acquisitions carried out during 2016. We can now see that they are making an increasing contribution to the company’s development and to our market offering.
Axis’ growth is being noted not least in terms of the number of employees. Acquisitions and new recruitments meant that the number of employees during the year increased by more than 20 percent and now exceeds 2,600 people. Continued market growth and a strong foundation will enable us to continue to drive developments as we enter 2017. We will continue investing in innovation and employees, in boosting our market presence and in improving the efficiency of our expanding organization.
President’s comments
Year-end report2016
Ray Mauritsson, President
The fourth quarter > Net sales increased by 17 percent during the fourth quarter to SEK 2,059 M (1,758). Net sales increased by 11 percent in local currencies.
> Operating profit increased to SEK 253 M (231), which corresponds to an operating margin of 12.3 percent (13.1)
> Profit after tax amounted to SEK 169 M (176) > Earnings per share amounted to SEK 2.43 (2.54) > The board proposes that no dividend should be declared for the 2016 fiscal year (SEK 0.64)
January - December > Net sales increased by 11 percent during the period to SEK 7,386 M (6,635). Net sales increased by 10 percent in local currencies.
> Operating profit increased to SEK 885 M (881), which corresponds to an operating margin of 12.0 percent (13.3)
> Profit after tax amounted to SEK 639 M (652)
> Earnings per share amounted to SEK 9.20 (9.39)
2
Events during the fourth quarter Continued growth and expansion during 2016 During the fourth quarter, Axis released updated versions of a number of the company’s
network cameras. For example, the AXIS Q35 series was enhanced with the latest image
sensor technology and has become more vandal resistant with an extended temperature
range. The AXIS P32 series can now offer even better image quality and improved light
sensitivity.
The earthquake in Japan during the spring, which caused damage at a factory of one of
Axis’ suppliers for image sensor manufacturing, temporarily affected Axis’ release rate of
new products in the second and third quarter. Actions taken by Axis resulted in almost
unchanged availability of existing products during 2016.
The number of employees increased by 69 people during the fourth quarter. During the full-
year 2016, the number of employees increased by 507 people, an increase of 24 percent.
The large increase in employees was partly due to the acquisitions carried out by Axis
during 2016, but was also due to a continued high recruitment rate as there is still a strong
need for skilled employees, particularly in research and development and the global sales
organization. A number of office expansions also contributed to growth on a global basis,
such as in the UK, Latvia, Hong Kong, Thailand and in the US states of Texas and Florida.
Satisfied employeesIn the middle of October, Axis conducted an employee survey for all employees in collaboration
with Great Place to Work. In previous surveys, Axis received consistently high ratings, as
was also the case this time. 91 percent of those who participated in the survey considered
that Axis is a very good workplace the same very good result as the last time Axis conducted
a similar survey.
Several awardsDuring the fourth quarter, Axis and its employees received several awards. In December, Axis
received the Sustainability Leadership Award for the company’s sustainability leadership
efforts from the international organization the Business Intelligence Group. In November,
Axis’ Vice President Operations was named as Supply Chain Professional of the Year 2016
by the training company Silf Competence, for his change efforts for increased efficiency
and growth in the value chain. A further example was Axis’ Vice President Americas who
in November received the Lippert Award from the American trade association SIA (the
Security Industry Association), for his contribution to the security industry.
Number of employees
Q1 Q2 Q3 Q4 01 02 03 Q4 2015 2016
10001050110011501200125013001350140014501500155016001650170017501800185019001950200020502100215022002250230023502400245025002550260026502700
20192061
21092139
2192
2493
25772646
3
0100200300400500600700800900
100011001200130014001500160017001800190020002100
0
10
20
30
40
50
60
70
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016
Comments on the income statement and balance sheetNet salesThe fourth quarter
Net sales in the fourth quarter amounted to SEK 2,059 M (1,758), which was an increase of
17 percent. Growth was 11 percent in local currencies. Foreign currency effects impacted
sales positively by SEK 101 M.
Sales in the EMEA region amounted to SEK 824 M (740) during the fourth quarter,
corresponding to growth of 11 percent. Growth was 7 percent in local currency. As earlier
in the year, the region displayed a stable performance, with the exception of the Middle
East, which was negatively impacted by investment restraint.
Sales in the Americas region amounted to SEK 993 M (832) during the fourth quarter,
corresponding to growth of 19 percent. Growth was 14 percent in local currency. After
a slightly weaker third quarter, the growth curve turned upwards again in the American
market during the fourth quarter.
Sales in the Asia region amounted to SEK 242 M (187) during the fourth quarter, corresponding
to growth of 30 percent. Growth was 17 percent in local currency. Asia was the region that
showed the strongest growth during the fourth quarter. The region has huge potential and
Axis is continuing to strengthen its local presence there.
Full-year 2016
Net sales in 2016 amounted to SEK 7,386 M (6,635), which was an increase of 11 percent
in Swedish kronor and 10 percent in local currency. Foreign currency effects positively
impacted sales during the period by SEK 86 M.
Invoiced sales per product group (SEK M)
Q4 2016
Q4 2015
Full-year 2016
Full-year 2015
Video 1,941.8 1,738.8 7,067.7 6,579.4
Other 117.0 19.6 318.0 55.3
TOTAL 2,058.8 1,758.4 7,385.7 6,634.7
Invoiced sales per region (SEK M)
Q4 2016
Q4 2015
Full-year 2016
Full-year 2015
EMEA 823.8 739.5 2,645.7 2,366.3
Americas 992.7 832.0 3,855.7 3,489.7
Asia 242.3 186.9 884.3 778.7
TOTAL 2,058.8 1,758.4 7,385.7 6,634.7
Sales
Sales SEK M
Total growth %
Sales per region,Q4 2016
SEK M %
Sales per region, SEK M
EMEA Asia
050
100150200250300350400450500550600650700750800850900950
100010501100
Q1 Q2 Q3 Q4 Q1 02 03 Q4 2015 2016
Americas
Americas
EMEA
Asia
40%
48%12%
4
EarningsThe fourth quarter Operating profit during the fourth quarter amounted to SEK 253 M (231), which corresponds to an operating margin of 12.3 percent (13.1). Gross margin during the quarter amounted to 51.3 percent (49.3). Profit before tax was SEK 253 M (231). Profit after tax amounted to SEK 169 M (176). Exchange rate fluctuations impacted operating profit positively by SEK 65 M, compared to the year-earlier period.
Full-year 2016The group’s operating profit during the period amounted to SEK 885 M (881), which correspondsto an operating margin of 12.0 percent (13.3) Gross margin amounted to 50.2 percent (50.8). Profit before tax was SEK 884 M (881) and profit after tax was SEK 639 M (652). Exchange rate fluctuations impacted operating profit positively by SEK 105 M, compared to the previous year.
Condensed income statement (SEK M)
Q4 2016
Q4 2015
Full-year2016
Full-year 2015
Net sales 2,058.8 1,758.4 7,385.7 6,634.7
Gross profit 1,055.9 867.1 3,706.8 3,372.5
Gross margin, % 51.3 49.3 50.2 50.8Operating profit 252.9 231.2 885.0 881.2Operating margin, % 12.3 13.1 12.0 13.3Profit before tax 252.8 231.1 884.2 880.5
Cash flow, investments and financial positionCash flow from operating activities amounted to SEK 721 M (803) for the full-year 2016. Net investments totaled SEK 832 M (181), of which acquisitions amounted to SEK 600 M (0) andcapitalized development costs amounted to SEK 77 M (69). Axis had SEK 858 M (1,016) in cash and cash equivalents at the end of the period, as well as unutilized credit facilities of SEK 50 M (50). Accordingly, the company had a total of SEK 908 M (1,066) at its disposal at December 31, 2016.
EquityConsolidated equity amounted to SEK 2,352 M (1,742). The total number of shares at year-end was69,461,250 (69,461,250). Axis has no outstanding stock option programs. The group’s equity/assets ratio was 58.7 percent (57.3) at December 31, 2016.
(Mkr) Share capital Other contributed
capitalOther
reserves Retained earnings
Total equity
Opening balance at Jan 1, 2015 0.7 279.2 -15.6 832.8 1,097.1Total comprehensive income for the period
- - 13.8 652.1 665.9
Dividend - - - -21.5 -21.5
Closing balance at Dec 31, 2015 0.7 279.2 -1.8 1,463.4 1,741.5
Opening balance at Jan 1, 2016 0.7 279.2 -1.8 1,463.4 1,741.5Total comprehensive income for the period
- - 16.6 638.6 655.3
Dividend - - - -44.5 -44.5
Closing balance Dec 31, 2016 0.7 279.2 14.8 2,057.6 2,352.3
Parent companyThe parent company’s operations are primarily focused on company-wide administration. The parent company has no employees. During the period, sales amounted to SEK 119 M (108) and operating profit amounted to SEK 58 M (-2). Cash and cash equivalents at the end of the period amounted to SEK 312 M (578) and borrowing was SEK 0 M (0). Investments in the parent company amounted to SEK 68 M (0) during the period.
Operating profit
Operating profit SEK M
Gross margin %EBIT margin %
SEK M %
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016
0
30
60
90
120
150
180
210
240
270
300
330
360
390
0
10
20
30
40
50
60
70
80
90
100
5
OutlookThe market activity and inflow of new projects means that Axis’ view on the current market growth rate remains unchanged. An important factor for continued strong growth is increased penetration in installations for smaller systems and in emerging markets. In order to meet market demand and retain its position as the market-leading supplier of network video solutions, Axis will continue to develop and release a large number of innovative products, refine the partner network, recruit more employees and continue to expand globally.
OtherRisks and uncertaintiesAxis’ operations are subject to a number of risks and uncertainties, which are described in the 2015 Annual Report. No new material risks have arisen during 2016.
Accounting policiesThe consolidated financial statements in this interim report have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. The parent company’s financial statements have been prepared according to the Swedish Annual Accounts Act and the Swedish Financial Reporting Board’s recommendation RFR 2, Accounting for Legal Entities. This interim report has been prepared in accordance with IAS 34, Interim Financial Reporting. The accounting and valuation principles and judgement criteria applied in the 2015 Annual Report have also been used in preparing this interim report. No new or revised IFRS standards, which became effective in 2016, have had any material impact on the group.
Annual General MeetingAxis’ Annual General Meeting will be held on Thursday, April 20, 2017 at 3.00 p.m. in the company’s premises at Edison Park Emdalavägen 14, Lund.
The Axis share The company’s share is listed on Nasdaq Stockholm in the Large Cap segment, under the ticker AXIS. Axis’ share had a turnover during the period January-December 2016, of 1,432,159 shares, which gave an average turnover of 5,863 shares per trading day, to a value of SEK 1,934,906. The average price of the share during the period was SEK 350.
DividendAxis’ majority owner Canon Inc has informed the company’s board of directors that Canon Inc at the 2017 Annual General Meeting (AGM) will vote that no dividend should be paid to the shareholders. In light of this information, Axis’ board of directors and President have decided not to propose any dividend at the 2017 AGM and that the earnings at the disposal of the AGM shall be carried forward.
Reporting dates
Axis will report on the following dates during the 2017 fiscal year: Interim report, January-March: April 21Interim report, January-June: July 12Interim report, January-September: October 20
Lund, January 27, 2017
Ray Mauritsson
President
AuditThe company’s auditors have not performed an audit of the report for the fourth quarter in 2016.
6
Consolidated comprehensive income
(SEK M)Q4
2016 Q4
2015Full-year
2016Full-year
2015
Net sales 2,058.8 1,758.4 7,385.7 6,634.7
Cost of goods and services sold -1,002.9 -891.3 -3,678.9 -3,262.2
Gross profit 1,055.9 867.1 3,706.8 3,372.5
Other income and changes in value 17.5 -6.8 63.5 -32.6
Sales and marketing expenses -381.9 -305.6 -1,353.0 -1,180.8
Administrative expenses -85.6 -61.8 -298.9 -292.2
Research and development expenses -353.0 -261.7 -1,233.4 -985.7
Operating profit * 252.9 231.2 885.0 881.2
Net financial items -0.1 -0.1 -0.8 -0.7
Profit before tax 252.8 231.1 884.2 880.5
Taxes -83.7 -54.9 -245.5 -228.4
Net profit for the period 169.1 176.2 638.7 652.1
Other comprehensive incomeItems that later may be transferred to the income statementExchange differences -5.1 -6.6 16.6 13.8
Other comprehensive income for the period, net after tax -5.1 -6.6 16.6 13.8
Total comprehensive income for the period 164.0 169.6 655.3 665.9
Total comprehensive income attributable to:
The parent company’s shareholders 164.0 169.6 655.3 665.9
Net profit per share, SEK 2.43 2.54 9.20 9.39
Number of shares, average, thousands 69,461 69,461 69,461 69,461
*Net effects of changes in exchange rates in underlying receivables and liabilities in foreign currencies have impacted operating profit positively by SEK 17 M (negatively by SEK 7 M) in the fourth quarter and positively by SEK 61 M (negatively by SEK 33 M) for the full-year 2016.
Consolidated cash flow statement
(SEK M)Q4
2016 Q4
2015Full-year
2016 Full-year
2015Cash flow from operating activities before change in working capital
261.7 239.1 772.1 860.1
Change in working capital -0.2 51.6 -50.7 -56.9
Cash flow from operating activities 261.5 290.7 721.4 803.2
Cash flow from investing activities -76.0 -48.5 -831.6 -180.5
Cash flow from financing activities -0.4 0.0 -47.2 -21.5
Cash flow for the period 185.1 242.2 -157.4 601.2Cash and cash equivalents at the beginning of the period 673.2 773.6 1,015.8 414.6
Cash and cash equivalents at the end of the period 858.3 1,015.8 858.3 1,015.8
7
Consolidated balance sheet (SEK M) Dec 31, 2016 Dec 31, 2015Non-current assets* 1,167.9 452.9
Inventories 1,106.5 1,022.2
Trade receivables** 656.5 423.0
Other receivables 220.1 124.4
Cash and cash equivalents 858.3 1,015.8
Total 4,009.4 3,038.3
Equity 2,352.3 1,741.5
Non-current liabilities* 391.0 282.2
Trade payables 621.3 532.9
Other current liabilities 644.8 481.7
Total 4,009.4 3,038.3
* Deferred tax was reclassified from non-current liabilities to non-current assets of SEK 39 M at December 31, 2015. ** This item includes receivables from contract manufacturers of SEK 2 M (6).
Key ratios (see note 2)Q4
2016Q4
2015Full-year
2016Full-year
2015Net sales growth (%) 17.1 16.9 11.3 21.7
Gross margin (%) 51.3 49.3 50.2 50.8
Operating margin (%) 12.3 13.1 12.0 13.3
Profit margin, (%) 12.3 13.1 12.0 13.3
Depreciation/amortization (SEK M)* 135.8 103.6 135.8 103.6
Equity (SEK M) 2,352 1,742 2,352 1,742
Equity/assets ratio (%) 58.7 57.3 58.7 57.3
Total assets (SEK M)** 4,009 3,038 4,009 3,038
Interest-bearing liabilities (SEK M) 3 0 3 0
Net receivables, (SEK M) 855 1,016 855 1,016
Capital employed 2,355 1,742 2,355 1,742
Return on capital employed (%)* 43.3 62.1 43.3 62.1
Return on equity (%)* 33.7 48.4 33.7 48.4
Number of employees (average for the period) 2,631 2,137 2,414 2,065
Sales per employee (SEK M)* 2.8 3.1 3.1 3.2
Operating profit per employee (SEK M)* 0.3 0.4 0.4 0.4 * Key ratios have been recalculated to rolling 12-month values where appropriate.** Comparative figures for the balance sheet total were adjusted due to a reclassification of deferred tax. This has meant that certain other key ratios have been adjusted. for example the equity/assets ratio for the comparative periods.
Per-share dataDec 31, 2016 Dec 31, 2015
Share price at the close of the period, SEK 340.60 343.40
Dividend, SEK 0.64 0.31
P/E ratio* 37 37
Earnings per share, SEK 9.20 9.39
Number of shares, thousands 69,461 69,461
Number of outstanding shares, thousands 69,461 69,461
* The PE ratio has been recalculated to rolling 12-month values.
8
Parent Company Income Statement(SEK M) Full-year
2016Full-year
2015Net sales 118.6 108.3
Gross profit 118.6 108.3
Administrative expenses -60.6 -110.2
Operating profit 58.0 -1.9
Financial income 0.9 0.5
Financial expenses -29.0 -3.2
Profit after financial items 29.9 -4.6
Appropriations 542.2 614.4
Tax -126.7 -135.1
Net profit for the period 445.4 474.7
Parent Company Balance Sheet(SEK M) Dec 31, 2016 Dec 31, 2015Non-current assets 71.4 5.5
Receivables from group companies 1,902.7 1,168.8
Trade receivables and other receivables 1.3 2.3
Tax assets 0.0 0.0
Cash and cash equivalents 312.1 578.2
Total 2,287.5 1,754.8
Equity 1,277.5 876.6
Untaxed reserves 976.0 843.5
Liabilities to Group companies 2.3 1.0
Current liabilities 31.7 33.7
Total 2,287.5 1,754.8
Quarterly dataInvoiced sales per product group (SEK M)
Q4 2016
Q3 2016
Q22016
Q12016
Q42015
Q32015
Q22015
Q12015
Q42014
Q32014
Q22014
Q12014
Video 1,941.8 1,864.1 1,714.9 1,546.9 1,738.8 1,885.5 1,607.6 1,347.5 1,496.2 1,458.3 1,354.0 1,121.2
Other 117.0 133.1 47.8 20.1 19.6 20.2 8.7 6.8 7.6 3.8 0.7 7.9
TOTAL 2,058.8 1,997.2 1,762.7 1,567.0 1,758.4 1,905.7 1,616.3 1,354.3 1,503.8 1,462.1 1,354.7 1,129.1
Invoiced sales per region (SEK M)
Q4 2016
Q3 2016
Q22016
Q12016
Q42015
Q32015
Q22015
Q12015
Q42014
Q32014
Q22014
Q12014
EMEA 823.8 671.0 565.2 585.7 739.5 602.2 554.2 470.4 596.1 522.9 478.7 401.5
Americas 992.7 1,068.9 984.1 810.0 832.0 1,084.8 859.9 713.0 692.7 758.2 700.4 591.4
Asia 242.3 257.3 213.4 171.3 186.9 218.7 202.2 170.9 215.0 181.0 175.6 136.2
TOTAL 2,058.8 1,997.2 1,762.7 1,567.0 1,758.4 1,905.7 1,616.3 1,354.3 1,503.8 1,462.1 1,354.7 1,129.1
Q4 2016
Q3 2016
Q22016
Q12016
Q42015
Q32015
Q22015
Q12015
Q42014
Q32014
Q22014
Q12014
Net sales growth (%) 17.1 4.8 9.1 15.7 16.9 30.3 19.3 19.9 15.8 10.6 21.6 15.0
Gross profit (SEK M) 1,055.9 989.4 876.0 785.5 867.1 973.6 821.7 710.1 784.4 760.9 706.9 569.8
Gross margin (%) 51.3 49.5 49.7 50.1 49.3 51.1 50.8 52.4 52.2 52.0 52.2 50.5
Operating profit (SEK M) 252.9 312.2 166.8 153.1 231.2 388.7 116.5 144.8 199.2 256.5 187.6 72.1
Operating margin (%) 12.3 15.6 9.5 9.8 13.1 20.4 7.2 10.7 13.2 17.5 13.8 6.4
9
NOTE 1 Acquisitions
The significant business acquisitions completed by the group during the year are shown below.
1.1 Citilog SAOn January 31, 2016, Axis Communications AB acquired 100 percent of the shares in Citilog SA, a leading provider of video monitoring solutions for the transportation sector. The acquisition broadens Axis’ product portfolio with reliable video analytics tools for transportation monitoring. The group can thus offer a more comprehensive traffic solution, generating increased opportunities in the fast-growing traffic analytics market.
At the time of the acquisition, Citilog had 29 employees. For the fiscal year ended on March 31, 2016, Citilog’s sales amounted to about SEK 50 M.
Citilog’s results and assets and liabilities are consolidated from January 31, 2016. The acquisition impacted consolidated sales by SEK 39 M and operating profit by SEK 3 M during 2016. Expenses in connection with the acquisition of SEK 3.9 M were charged to earnings during 2016.
The purchase price amounted to SEK 91.1 M and was paid in cash. The goodwill arising through the acquisition is related to Citilog’s strong position in the market. No portion of the acquired goodwill is expected to be deductible for tax purposes.
Purchase price analysis SEK M
Impact on cash and cash equivalentsPurchase price 91.1
Less: acquired cash balances -28.0
Impact on cash and cash equivalents 63.1
Fair value of identifiable assets and liabilities in Citilog on the acquisition dateNon-current assets 49.3
Inventories 4.1
Trade receivables 16.4
Other receivables 4.0
Cash and cash equivalents 28.0
Total assets 101.8
Non-current liabilities 15.3
Trade payables 3.9
Other current liabilities 8.3
Total liabilities 27.5
Total identifiable net assets at fair value 74.3Goodwill 16.8
Purchase price 91.1
1.2 Axis Stockholmsledet 11 ABOn February 3, Axis AB acquired 100% of the shares in the property company Axis Stockholmsledet 11 AB (formerly Sagax Stockholm 11 AB). The exclusive aim of the acquisition was to acquire land for construction of a new headquarters in Lund. The new headquarters will be located adjacent to Axis’ current premises.
The purchase price amounted to SEK 38.6 M. In connection with the acquisition, the company’s debt of SEK 27.0 M was amortized. Expenses in connection with the acquisition of SEK 0.3 M were charged to earnings during 2016.
Purchase price analysis SEK M
Impact on cash and cash equivalentsPurchase price 38.6
Plus: amortization of loan 27.0
Less: acquired cash balances -0.1
Impact on cash and cash equivalents 65.5
Fair value of identifiable assets and liabilities in Axis Stockholmsledet 11 on the acquisition dateNon-current assets 65.5
Cash and cash equivalents 0.1
Total assets 65.6
Non-current liabilities 27.0
Total liabilities 27.0
Total identifiable net assets at fair value 38.6Purchase price 38.6
10
1.3 2N Telekomunikace a.s. On May 30, 2016, Axis Beta AB acquired 100 percent of the shares in 2N TELEKOMUNIKACE a.s. and 2N USA LLC. 2N is a leading player in the IP intercom field and is also active in other areas such as IP audio and communication solutions for lifts. The company has well-established sales channels, through electricians and telecom installers as well as lift manufacturers, which will complement Axis’ present global sales channels. Together with 2N, Axis can meet the increased demand for integrated intercom solutions based on open standards that deliver increased security. An important shared mission is to accelerate the shift from analog to IP-based intercom systems and to develop new opportunities. The market is growing and Axis can continue to drive the market trend through this acquisition.
At the time of the acquisition, 2N had 197 employees. In 2015, the 2N companies’ sales amounted to just over SEK 200 M.
2N’s results and assets and liabilities are consolidated from May 30, 2016. The acquisition impacted consolidated sales by SEK 91 M and operating profit by SEK 7 M during 2016. Expenses in connection with the acquisition of SEK 4.2 M were charged to earnings during 2016.
The purchase price amounted to SEK 475.9 M, of which SEK 437.8 M was paid in cash on the acquisition date. The remainder of the purchase price will be settled in two parts, of which the first half shall be paid 12 months after the acquisition date and the other half 24 months after the acquisition date. The goodwill arising through the acquisition is related to 2N’s strong position in the market. No portion of the acquired goodwill is expected to be deductible for tax purposes.
Preliminary purchase price analysis* SEK M
Impact on cash and cash equivalentsInitial purchase price 437.8
Less: acquired cash balances -20.5
Impact on cash and cash equivalents 417.3
Fair value of identifiable assets and liabilities in 2N on the acquisition dateNon-current assets 158.3
Inventories 54.7
Trade receivables 40.1
Other receivables 4.8
Cash and cash equivalents 20.5
Total assets 278.4
Deferred tax liabilities 27.5
Trade payables 29.3
Other current liabilities 18.1
Total liabilities 74.9
Total identifiable net assets at fair value 203.5Goodwill 272.4
Purchase price 475.9
11
NOTE 2 Key ratios
2.1 DefinitionsReturn on equityProfit after financial items less full tax divided by average equity.
Return on capital employedProfit after financial items plus financial expenses divided by average capital employed.
Gross marginGross profit as a percentage of net sales.
Net receivablesNet interest-bearing receivables and liabilities.
Sales per employee Net sales divided by the average number of employees.
P/E ratioShare price divided by earnings per share.
Earnings per shareNet profit for the year by the average number of shares.
Operating marginOperating profit as a percentage of net sales.
Operating profit per employee Operating profit divided by the average number of employees.
Equity/assets ratioEquity as a percentage of total assets.
Capital employedTotal assets less non interest-bearing liabilities including deferred tax liability.
Profit marginProfit before tax as a percentage of net sales.
2.2 AimReturn on equityThe key ratio shows the operation’s return on the equity contributed by the shareholders and is thus a measurement of how profi-table the group is. Investors can compare this metric with current bank interest or returns from alternative investments. The metric can also be used to compare profitability between companies in the same industry.
Return on capital employedThe key ratio shows the operation’s return on the equity that the shareholders and lenders have made available. The metric thus shows the group’s return, independent of financing choice, and can be used in connection with investment evaluations.
Net receivablesThe key ratio is useful for users of financial statements as a complement to evaluate the possibility of dividends and strategic invest-ments and also to evaluate the group’s potential to meet its financial obligations.
Sales per employee The key ratio shows users of financial statements how effectively the company’s employees contribute to sales.
P/E ratioThe P/E ratio gives an indication of how long it will take before investors get back their money, provided that profits remain unchanged.
Operating profit per employee The key ratio is used to show how each employee contributes to the group’s operating profit.
Equity/assets ratioThe key ratio shows how large a proportion of the assets are financed with equity. The metric can be of interest when evaluating the group’s solvency in the longer term.
12
2.3 Reconciliation with financial statements according to IFRS Q4
2016Q4
2015Full-year
2016Full-year
2015Return on equityProfit after financial items R12 884 881 884 881
Full tax -195 -194 -195 -194
Profit after financial items R12 less full tax 690 687 690 687
Average equity 2,047 1,420 2,047 1,420
33.7% 48.4% 33.7% 48.4%
Return on capital employedProfit after financial items R12 884 881 884 881
Financial expenses R12 -3 -1 -3 -1
Profit after financial items R12 plus financial expenses 887 882 887 882
Average capital employed 2,049 1,420 2,049 1,420
43.3% 62.1% 43.3% 62.1%
Net receivablesCash and cash equivalents 858 1,016 858 1,016
Interest-bearing liabilities -3 0 -3 0
855 1,016 855 1,016
Sales per employee Net sales R12 7,386 6,635 7,386 6,635
Average number of employees 2,631 2,137 2,414 2,065
2.8 3.1 3.1 3.2
P/E ratioShare price at end of the period 340.60 343.40 340.60 343.40
Earnings per share R12 9.20 9.39 9.20 9.39
37 37 37 37
Operating profit per employee Operating profit R12 885 881 885 881
Average number of employees 2,631 2,137 2,414 2,065
0.3 0.4 0.4 0.4
Equity/assets ratioEquity 2,352 1,742 2,352 1,742
Total assets 4,009 3,038 4,009 3,038
58.7% 57.3% 58.7% 57.3%
Some of the key ratios such as gross margin, earnings per share, operating margin and profit margin may be easily calculated from the financial statements. Thus these metrics are regarded as reconciled and are not presented above.
For further information please contact:Björn Hallerborn, PR & Corporate Communications Manager
E-mail: [email protected]
Phone: +46 46 272 18 00
This report contains future-oriented information that is based on the present expectations of
Axis’ Management. Even if the Management believes that the expectations reflected in such
future-oriented information are reasonable, no assurance may be given that these expectations
will prove to be correct. Consequently, actual future outcomes may deviate significantly from
what is reflected in the future-oriented information due to changed conditions relating to
the economy, market and competition, changes in legal requirements and other political
measures, fluctuations in exchange rates and other factors.
Axis discloses the information provided herein pursuant to the Swedish Securities Markets
Act and/or the Swedish Financial Instruments Trading Act. This information was submitted
for publication at 08.00 CET on Friday, January 27, 2017.
Axis AB (publ)
Corporate identity no. 556241-1065
Emdalavägen 14, 223 69 Lund
Phone: +46 46 272 18 00
www.axis.com