NFO Drives (NFO) Q4 2023 earnings summary

Executive summary

• FY2023 revenue reached a record SEK 47.0m, up 10.5% organically YoY, while the second-half market became more cautious after a strong start to the year.

• Full-year loss before tax widened to SEK 3.0m from SEK 1.4m, reflecting higher R&D and operating costs, a warranty provision, personnel-option costs and an additional tax expense.

Financial highlights

• Q4 revenue fell 5.3% YoY to SEK 10.8m; gross profit was SEK 2.2m versus SEK 2.5m.

• FY gross profit rose to SEK 9.2m from SEK 8.4m; reported gross margin was 19.5% versus 19.6%.

• FY EBIT was -SEK 3.4m versus -SEK 2.1m; net income was -SEK 2.8m versus -SEK 1.1m.

• Operating cash flow was -SEK 4.5m for FY2023 versus SEK 1.7m in 2022; Q4 operating cash flow improved to SEK 0.1m from -SEK 0.4m.

Outlook and guidance

• Better component availability and implemented price increases support a more positive outlook for 2024.

• Volume orders are expected in 2024 for a permanent-magnet motor application developed on the Optimal 2.2kW platform; customer testing progressed well.

• UL certification for North America is expected before summer 2024; another model is targeted for introduction toward year-end 2024.

• 2024 customer development will focus on Optimal 2.2kW, with further OEM customer wins targeted.