NCAB Group (NCAB) Q2 2024 earnings summary

Executive summary

• Net sales declined 12% year-over-year to SEK 935.1 million, mainly due to weak demand in Europe, especially Germany, while North America and East segments showed growth and order intake was stable at SEK 938 million.

• Gross margin improved to 38.5% (from 36.4%), but EBITA fell to SEK 120.4 million (down 28%) due to lower topline and non-recurring costs.

• Four acquisitions were completed or announced in Belgium, Switzerland, Austria, and Italy, with a SEK 500 million credit facility added to support further M&A.

• Order intake up 1% to SEK 938 million; book-to-bill ratio at 1.00.

• Profit after tax for Q2 was SEK 73.5 million (down 27%).

Financial highlights

• Q2 net sales: SEK 935.1 million (-12%); organic decline of 15% in both SEK and USD.

• Q2 EBITA: SEK 120.4 million (-28%), margin 12.9%; gross margin: 38.5% (up from 36.4%).

• Q2 profit after tax: SEK 73.5 million (-27%); EPS: SEK 0.39 (down from SEK 0.54).

• Operating cash flow: SEK 101.2 million (down from SEK 152.7 million); working capital stable at 6.2%.

• Available liquidity: SEK 1,455 million (up from SEK 743 million); net debt/EBITDA at 1.1x.

Outlook and guidance

• Market recovery in Europe is slower than anticipated, with continued weak demand in Germany and gradual improvement deferred by at least one quarter.

• North America and East expected to maintain positive momentum, supported by large projects and new customer wins.

• Recent acquisitions are expected to add SEK 300 million in annual sales and strengthen the European position.

• Price pressure is expected to ease by year-end; gross margins are expected to remain healthy.

• Defense sector expansion in Europe is underway, but significant order impact is not expected in Q3.