NOTE (NOTE) Q3 2024 earnings summary

Executive summary

• Q3 sales declined 22% year-over-year to SEK 809 million, with underlying profitability at 8.3% and operating profit margin at 8%, reflecting operational strength despite lower volumes.

• Cash flow was strong at SEK 157 million for the quarter and nearly SEK 400 million year-to-date, with free cash flow at SEK 340 million after excluding acquisitions.

• Inventory and accounts receivable reductions contributed positively to cash flow, with further inventory reductions of SEK 50–75 million expected in coming quarters.

• The company is expanding capacity in Sweden, relocating operations, and investing in automation and new equipment to support anticipated future growth.

• Quality and delivery performance improved, with restructuring and staff downsizing mainly in China, incurring SEK 7 million in restructuring costs.

Financial highlights

• Q3 2024 sales were SEK 809 million, down 22% from Q3 2023; year-to-date sales were SEK 2,876 million, down 9%.

• Q3 operating profit was SEK 64 million (8.0% margin), with underlying margin at 8.3%; profit after tax for Q3 was SEK 43 million, and EPS SEK 1.52.

• Cash flow from operations was SEK 157 million in Q3 and SEK 400 million year-to-date; cash flow after investments improved to SEK 120 million in Q3.

• Return on operating capital remained high at 23%, and equity ratio improved to 49%.

• Net debt at period end was SEK 203 million (excluding IFRS 16 lease liabilities).

Outlook and guidance

• Q4 sales are guided to be about 8% lower year-over-year, with no significant recovery expected; run rate is expected to remain flat compared to Q2 and Q3.

• Q4 sales guidance: SEK 975–1,025 million; minimum operating margin of 9.5%.

• Full-year 2024 sales expected between SEK 3.83–3.90 billion, with operating margin of 8.9–9.2%; long-term target set at SEK 7.5 billion in sales by 2028.

• 2024 is considered a weak year, but a recovery and growth are anticipated in 2025, with long-term guidance unchanged.

• Order backlog down 3% year-over-year, reflecting shorter customer order horizons and cautious market conditions.