AGES Industri (AGES) Q4 2023 earnings summary

Executive summary

• FY2023 revenue rose 13.9% to SEK 1,503M; operating profit increased 84% to SEK 93M, with operating margin up to 6.2% from 3.8%.

• Q4 revenue grew 10.6% to SEK 384M, while operating profit was SEK 18M; SEK 5M of costs related to phasing out unprofitable die-casting contracts weighed on the quarter.

• Acquisitions expanded technical capabilities and the customer offering; a new Engineering Solutions business area complements Precision Components.

Financial highlights

• FY revenue was SEK 1,503M versus SEK 1,319M; operating profit SEK 93M versus SEK 51M; profit after tax SEK 58M versus SEK 34M.

• FY gross profit was SEK 149M versus SEK 109M; gross margin improved 1.6 percentage points to 9.9%, attributed to contract selection, growth and higher-technology investments.

• FY EPS was SEK 8.30 versus SEK 4.85; Q4 EPS was SEK 1.56 versus SEK 1.85.

• FY operating cash flow increased to SEK 143M from SEK 103M; Q4 operating cash flow was SEK 39M versus SEK 19M.

Outlook and guidance

• After a strong 2023, sales volumes are expected to return to more normal levels; automotive volumes are expected to be below 2023 levels in some customer segments.

• New projects in hydrogen, security and aviation are expected to support growth; Engineering Solutions is intended to add value earlier in customer development and manufacturing processes and support higher margins.

• Integration of the two October 2023 acquisitions is proceeding as planned and is expected to continue through mid-2024.