The future calls for more sustainable technology, but better industrial processes, automation systems and renewable energy solutions don’t just appear. They are created by entrepreneurs – committed people with passion, ideas, and drive. The ones bold enough to try something new, that is who [Addtech](https://quartr.com/companies/addtech_3552) are. 140+ independent niche companies, delivering leading technical solutions to customers around the globe.

The company Is a Swedish distributor of electro-mechanical components with global presence – mostly operating in the Nordic region. They offer a broad range of products, including hydraulics, electrical safety, industry components, and various system solutions. The customers are mainly in the manufacturing industry and the public sector.

With its broad understanding of the customer’s needs and deep supplier relations, the company offers what is meant to be the most favorable solution for the customer. This solution comes in different variations, either through the sourcing of for example, a completed joystick, sourcing single components to be sub-assembled, or may even involve Addtech producing the components or subassemblies themselves.

In September 2021, Addtech turned 20 years old as a publicly listed company. They have exceeded their financial goals – despite IT-crises, financial crises, recessions, oil crisis, a cyber-attack, and a [pandemic](https://sv.wikipedia.org/wiki/Covid-19-pandemin). Since the spin-off from [Bergman & Beving](https://quartr.com/companies/bergman-beving_5617) they have grown into a Large Cap company with a favorable position.

## Addtech the acquirer

To expand its franchises geographically and by product market, Addtech has relied on a program of acquisitions. For example, they have acquired family-owned businesses. Their strategy post-acquisition involves keeping the individual businesses largely independent, to not micromanage. Freedom with responsibility is their fundamental principle, permeating the entire organization.

The company intelligently identifies and cultivates acquisition candidates. They add value from various sources and share best practices broadly, using thoughtful managerial accounting systems that aid individual units in improving profitability and returns on capital employed.

They combine the flexibility, personal touch and efficiency of a small business with the resources, networks, and long-term perspective of a large company. Addtech also provides capital to the individual divisions if needed, to make investments in, say product development, sales capability, or additional acquisitions.

This scalable model enables the company to grow multidimensionally. The combination of increased geographical presence and greater spread among customer segments makes Addtech less vulnerable to individual trends and declines. A broad spread builds beneficial resilience.

## Why serial acquirers? 

[Peter Lynch](https://en.wikipedia.org/wiki/Peter_Lynch), legendary fund manager and author of the bestselling books [One Up on Wall Street](https://www.amazon.com/One-Up-Wall-Street-Already/dp/0743200403) and [Beating the Street](https://www.amazon.com/Beating-Street-Peter-Lynch/dp/0671891634), says the following about acquisitive companies: “Acquisitions, in general, make me nervous,” and “There's a tendency for companies that are flush with cash and feeling powerful to overpay for acquisitions, to expect too much from them, and then mismanage them".

However, many acquirers have found great success. These are disciplined, strategic and long-term players who have managed to crack the code for capitalizing fully on the strengths of the acquired companies, without impeding them.

The alluring with serial acquirers is the possibility of the companies to reinvest most of their free cash flow, for a very long time at high rates of return.

The serial acquirer or “Compounder” has the benefit of becoming a more diversified business over time. The great compounder, hence, has the ability to acquire at high rates of return, and simultaneously have less idiosyncratic risk.

Addtech sees their acquisition strategy as a cornerstone in generating long-term growth in profits and shareholder value. Acquired companies bring additional sales volumes, customers, and expertise, and, in particular, motivated employees and entrepreneurs. Furthermore, new companies bring opportunities for synergies and development.


Addtech

Addtech (ADDT) Q2 24/25 Summary | Quartr

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Sales and margins rose 6% and 11%, with strong outlook and acquisition-driven growth.

Q1 26/27

Q2 delivered 6% sales and 11% EBITA growth, strong cash flow, and continued expansion.

Q2 25/26

Record 16.0% EBITA margin and 4% sales growth driven by acquisitions and strong cash flow.

Q4 25/26

Earnings and margins rose, acquisitions accelerated, and outlook remains positive.

Q3 25/26

Record 15.3% margin and 7% sales growth driven by acquisitions and strong segment performance.

Q1 24/25

Q3 net sales up 11% and EBITA up 17%, led by Energy and acquisitions, with strong margins.

Q3 24/25

Strong growth, high margins, and robust acquisitions drive positive outlook despite uncertainty.

Q4 24/25

Strong sales and profit growth led by Energy and Industrial Solutions, with a positive outlook.

Q1 25/26

### Executive summary
- Net sales increased by 5% in Q2 2024 to SEK 5,127 million, with 2% organic growth and high activity across most business areas.
- EBITA grew 5% year-over-year to SEK 764 million, maintaining a 14.9% margin; six-month EBITA up 12% to SEK 1,595 million, margin at 15.1%.
- Nine acquisitions announced year-to-date, adding SEK 1,250 million to SEK 1.2 billion in sales and supporting growth.
- Four out of five business areas contributed positively, with Energy and Electrification leading growth, while Automation and special vehicles faced softness.
- Profit after tax for Q2 was SEK 446 million (flat year-over-year), and SEK 941 million for the period, up 12%; EPS for the period was SEK 3.40 (up from 3.00).

### Financial highlights
- EBITA margin stable at 14.9% for Q2; six-month margin improved to 15.1% from 14.3% year-over-year.
- Cash flow from operating activities for H1 was SEK 1,195 million; cash flow per share (LTM) SEK 9.70.
- Working capital profitability reached 72% in the quarter (up from 67%).
- Equity ratio at 36%; leverage at 1.6; gearing at 0.9.
- Earnings per share before dilution reached SEK 3.40, up from SEK 3.00.

### Outlook and guidance
- Short-term outlook remains positive, supported by a solid order backlog, diversified portfolio, and continued high activity.
- Economic cycle and market conditions will influence future performance, but strategic positions and niche markets support a positive outlook.
- Measures to improve cost efficiency, especially in Automation, are planned for the coming quarter.
- Acquisition pipeline remains strong, with further deals expected in both Nordic and selected international markets.

Addtech (ADDT) Q2 24/25 earnings summary

Q2 24/25 earnings summary

Executive summary

Financial highlights

Outlook and guidance

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