NOTE (NOTE) Q3 2024 earnings summary

Executive summary

• Q3 sales declined 22% year-over-year to SEK 809 million, with organic growth at -20% due to weaker demand and customer inventory adjustments.

• Operating profit for Q3 was SEK 64 million, with an operating margin of 8% and underlying margin at 8.3% despite lower volumes.

• Cash flow after investments improved to SEK 120 million in Q3, with year-to-date free cash flow at SEK 340 million, supported by inventory and accounts receivable reductions.

• The company continues to invest in automation, new equipment, and facility expansions in Sweden, including capacity increases and relocations, to support anticipated future growth.

• Inventory reductions of SEK 50–75 million are expected in coming quarters.

Financial highlights

• Q3 net sales: SEK 809 million (down from SEK 1,034 million year-over-year); organic growth -20%.

• Q3 operating profit: SEK 64 million; adjusted operating profit SEK 67 million; operating margin: 8.0% (9.1% last year).

• Q3 profit after tax: SEK 43 million; EPS SEK 1.52.

• Cash flow from operations was SEK 157 million in Q3 and SEK 400 million year-to-date.

• Return on operating capital remained high at 23%, and equity ratio improved to 49%.

Outlook and guidance

• Q4 sales are guided to be about 8% lower year-over-year, with no significant recovery expected; run rate is expected to remain flat compared to Q2 and Q3.

• Q4 sales guidance: SEK 975–1,025 million; minimum operating margin of 9.5%.

• Full-year 2024 guidance: sales of SEK 3.83–3.90 billion and operating margin of 8.9–9.2%.

• 2024 is considered a weak year, but a recovery and growth are anticipated in 2025, with long-term guidance for 2028 unchanged.

• Order backlog down 3% year-over-year, reflecting shorter customer order horizons and cautious market conditions.