NOTE (NOTE) CMD 2024 summary

Financial performance and guidance

• Expecting Q4 2024 sales above SEK 1 billion and double-digit profitability, with underlying operating profit for the last 12 months at 9.3% and equity ratio at 49%.

• 2024 sales projected at SEK 3.9 billion, slightly lower than last year, with a significant reduction in headcount to adjust to demand.

• Guidance for 2025 is more cautious, anticipating stable growth with a gradual increase as customer inventory reductions subside.

• Operating margin expected to improve with sales growth, requiring at least SEK 300 million additional sales to maintain current margins after capacity investments.

• Long-term financial targets remain unchanged, with a focus on reaching SEK 7.5 billion in sales capacity through ongoing investments.

Strategic initiatives and business development

• Heavy investments in automation and factory expansion, notably doubling Torsby capacity and moving to larger premises in Lund.

• No acquisitions in 2024, but two in 2023; M&A remains a growth avenue, with a strong balance sheet supporting future deals.

• Focus on organic growth, especially with existing customers, while also targeting new customer wins and select acquisitions.

• Defense segment expected to grow 30% year-over-year for the next 3-5 years, outpacing overall business growth.

• Continued emphasis on operational excellence, flexibility, and customer-centricity, with decentralized decision-making at factory level.

Market trends and segment outlook

• EMS industry expected to grow 6%-7% annually; company aims to outpace this with 14%-17% CAGR, even after a weak 2024.

• Greentech segment has sharply declined due to market and customer-specific issues, but is expected to stabilize and see some growth, though not to previous highs.

• Medtech and defense segments are stabilizing and projected to increase, while communication and Industrial segments show steady or marginal growth.

• Regionalization and reshoring trends in Europe are driving demand, with Sweden and other European sites gaining relevance.

• Component supply chain has normalized post-pandemic, with lead times and on-time delivery back to pre-crisis levels; future market upturns expected to be rapid.