NOTE (NOTE) CMD 2024 summary

Financial Performance and Guidance

• Q4 2024 sales are expected to exceed SEK 1 billion with double-digit profitability, and underlying operating profit for the last 12 months at 9.3% and equity ratio at 49%.

• 2024 sales guidance is set at a minimum of SEK 3.87 billion, slightly lower than last year, with an underlying operating margin of at least 9.2%; 2025 sales are estimated at SEK 3.9–4.3 billion and margins of 9.5–10.5%.

• Long-term target is SEK 7.5 billion in sales capacity by 2028, driven by organic growth and acquisitions, with operating margins expected to exceed 10%.

• Operating margin is expected to improve with sales growth, requiring at least SEK 300 million additional sales to maintain current margins after capacity investments.

• Dividend policy remains flexible, with annual evaluations to balance investment needs and shareholder returns.

Strategic Initiatives and Business Development

• Heavy investments in automation and factory expansion, including doubling Torsby capacity and moving to larger premises in Lund and Herrljunga.

• No acquisitions in 2024, but two in 2023; M&A remains a growth avenue, supported by a strong balance sheet.

• Growth plan focuses on expanding with existing customers, acquiring new high-potential customers, and selective acquisitions for cost and capability advantages.

• Defense segment is expected to grow 30% year-over-year for the next 3-5 years, outpacing overall business growth.

• Continued emphasis on operational excellence, flexibility, and customer-centricity, with decentralized decision-making at the factory level.

Market Trends and Segment Outlook

• EMS industry is expected to grow 6%-7% annually; the company aims for a 14%-17% CAGR over five years, despite a weak 2024.

• Greentech segment has sharply declined but is expected to stabilize and see some growth, though not to previous highs.

• Medtech and defense segments are stabilizing and projected to increase, while communication and industrial segments show steady or marginal growth.

• Regionalization and reshoring trends in Europe are driving demand, with Sweden and other European sites gaining relevance.

• Electronic component market is recovering for 2025, with improved availability, normalized lead times, and price reductions.