VBG Group (VBG) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales declined by 12% to SEK 1,273M, with organic growth at -11.5%, reflecting softening market conditions, especially in North America and Mobile Thermal Solutions.

• Gross margins improved across all divisions despite lower volumes, driven by efficiency gains, cost management, and product mix improvements.

• EBITA for Q3 was SEK 171.8M (13.5% margin), down from SEK 217M, and EPS dropped 29% to SEK 4.49.

• Operating cash flow remained stable at SEK 153M, and the group maintained a strong net cash position.

• Decision made to consolidate three Mobile Thermal Solutions production facilities in Toronto into one, with land acquisition and SEK 750M financing expansion.

Financial highlights

• EBITDA decreased by almost 24% year-over-year, with Q3 net sales at SEK 1,272.9M and EBITA at SEK 171.8M (13.5% margin).

• Earnings per share fell by nearly 29% to SEK 4.49 in Q3.

• Year-to-date net sales reached SEK 4,302.3M (+0.3%), with EBITA at SEK 648.2M (15.1% margin) and EPS at SEK 19.03.

• Operating cash flow for Q3 was SEK 153M, and cash flow from operating activities for nine months was SEK 502.3M.

• Interest-bearing net debt/EBITDA improved to 0.20, and equity/assets ratio was 64.4%.

Outlook and guidance

• Market conditions are expected to remain soft, with no significant improvement anticipated in Q4 and continued volatility and geopolitical unrest.

• Order intake visibility is three to four months, and management does not foresee drastic changes in demand.

• Focus areas include acquisitions, organic growth, new production facilities, and sustainable profitability.

• No formal forecast provided for 2024.

• The group is prepared for continued uncertainty, especially in the U.S. consumer market.