CEO´S COMMENTS
SECOND QUARTER – CUSTOMER ACTIVITY STILL AT A HIGH LEVEL
The second quarter can be summed up as another strong quarter with high levels of customer activity in all business areas. Total sales increased by 36 percent, of which 19 percent was organic growth. Despite continued disruptions in the value chains and increased prices for input goods, our entrepreneurial companies succeeded in meeting their customer commitments and, through active dialogues with customers and suppliers, defended their operating margins in a highly satisfactory manner. EBITA increased by 37 percent with a historically high margin of 13.2 percent.
MARKET TREND
Over the second quarter, the business situation generally remained strong in most segments and geographies. The demand of infrastructure products for national and regional power grids was very good. Over the quarter, we saw demand for energy-efficient solutions increase and the trend among products for the defence industry also remained strong. The market situation for input components for manufacturers of special vehicles, as well as companies in the medical technology and mechanical industries remained favourable, while we experienced decreased demand from high levels on new projects in the forest industry. From a geographical perspective, the market situation was favourable in all of the Nordic countries, with our units in Norway experiencing the strongest development. For our companies operating outside the Nordic region, the market trend during the quarter was generally positive.
Driven by the strong profit growth, cash flow from operating activities strengthened over the quarter compared with last year and P/WC remained at high levels.
ACQUISITIONS
We continue to make acquisitions as planned. To date, seven acquisitions have been completed during the financial year, adding total sales of about SEK 600 million and 197 new employees. Two carefully selected acquisitions were completed in the second quarter: Gotapack International AB, with a strong offering in processing and packaging machines in medical technology, and Allied Insulators Ltd, which complements and strengthens our offering in electrical transmission outside the Nordic region. On the whole, we take a positive view of the acquisitions market and our pipeline in all business areas is well-filled with attractive acquisition candidates that would clearly strengthen the areas we have selected strategically for future growth.
OUTLOOK
Demand remained strong during the quarter and we currently see no clear signs of a general slowdown in customer activity. As expected, the total order backlog decreased slightly in volume over the quarter as disruptions in the value chains subsided. However, the order backlog remains at a high level and is of good quality.
We face a highly uncertain global situation and are humbled by the development. At the same time, we are well prepared and have strong positions in segments experiencing underlying structural growth, such as industrial automation, power transmission, society’s electrification and solutions for reducing emissions. This, combined with our well-proven business model with entrepreneurial and strictly decentralised companies used to quickly adapting to challenges while capturing opportunities, will continue to serve us well in the future. I am convinced that regardless of how the market develops in the future, we enjoy favourable conditions for continued sustainable and profitable growth.
In conclusion, I would like to take this opportunity to thank all of the committed and skilled employees in our companies for their amazing efforts over the quarter.
Niklas Stenberg
President and CEO