Nolato (NOLA) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales reached SEK 2,439 million, down 2% year-over-year when adjusted for currency and acquisitions.

• Operating profit (EBITA) increased 24% to SEK 245 million, with margin rising to 10.0% from 8.0% last year, driven by cost adaptation and strategic price revisions.

• Strong cash flow from operations at SEK 434 million, supported by improved profit and reduced working capital.

• Net financial liabilities just above SEK 1.1 billion, with an adjusted debt ratio of 0.8x, indicating a robust financial position.

• Long-term supply agreement for medical devices signed, expected to generate SEK 700 million annual sales at full scale within five years.

Financial highlights

• Net sales for Q2: SEK 2,439 million (SEK 2,478 million in Q2 2023), down 2% due to VHP business effect; excluding VHP, the group showed growth.

• EBITA: SEK 245 million (SEK 198 million in Q2 2023); EBITA margin: 10.0% (8.0%).

• Earnings per share rose to SEK 0.63 from SEK 0.58 year-over-year.

• CapEx for the quarter was SEK 336 million, with full-year guidance at SEK 750 million.

• Cash conversion for the last 12 months was 70%.

Outlook and guidance

• VHP effect will be phased out in Q3; excluding VHP, underlying business is growing.

• Vacation effects expected to impact Q3 sales, especially in Engineered Solutions due to European exposure.

• Medical Solutions maintains long-term growth targets, with new large programs in preparation.

• New medical device agreement will require SEK 600 million in investments, with one-fifth in H2 2024.

• Strong financial position supports continued profitable expansion alongside customers.