Interim report first quarter 2023 for NCAB


> Net sales were in line with the previous year, at SEK 1,146.4 million (1,141.3). In USD, net sales decreased 10%. For comparable units, the decrease for net sales was 2% in SEK, and 12% in USD.
> Order intake decreased 12% to SEK 1,029.6 million (1,171.3). The decrease in USD was 21%. Order intake was negatively impacted by shorter lead times back to normal and utilisation of the remaining orderbook from 2022. For comparable units, the decrease for order intake was 14% in SEK, and 23% in USD.
> EBITA increased 26% to SEK 183.7 million (146.3), representing an EBITA margin of 16.0% (12.8).
> Cash flow from operating activities was SEK 201.9 million (24.2).
> Operating profit was SEK 172.6 million (93.8).
> Return on equity was 43.8% (37.6).
> Profit after tax was SEK 125.0 million (66.2).
> Earnings per share before and after dilution was SEK 0.67 (0.35).


> On 10 January, the acquisition of 100% of the shares in Bare Board Consultants in Italy was closed.
> The Board of Directors proposes a dividend of SEK 1.10 (0.60) per share to be paid in May.


Strong result for NCAB in the first quarter
We are pleased that we in the first quarter of 2023 delivered significantly higher earnings than in 2022. Customer demand remained favourable during the quarter. The number of contracts for new articles won and new customers secured during the quarter were at very good levels. Some sectors, such as industrial automation and the defence industry, demonstrated particularly strong growth.

Order intake and sales were adversely impacted by lower prices for PCBs, due to low utilisation levels in the Asian factories. This was primarily the result of weaker business activity in China in 2022 and in the beginning of 2023. However, we saw clear signs of increased activity in China during the first quarter, which is why we believe prices will stabilise.

The effects of our customers’ reduced inventory levels during the past two quarters have slowed down, and we noted a positive trend in order intake during the quarter.

In terms of our various regions, it is positive that all segments reported better earnings during the quarter compared to previous year. This is despite the strong first quarter of 2022. A lot has gone our way during this quarter, where cost efficiencies and improvements of gross margin have contributed to a strong result as well as a good product mix and benefits of scale.

Our two European regions, Nordic and Europe, both reported strong development. Companies acquired in recent years, including those in Germany, the UK and Norway, developed very well in terms of both sales and earnings. It is clear that our acquisitions also lead to higher organic growth and economies of scale. In the USA, the beginning of 2023 was in line with the end of 2022, meaning it was slightly weaker year-on-year. Contract manufacturers in the USA are still adjusting inventory levels, which had a negative impact on order intake and sales. We began to see a clear improvement in customer activity and order intake in the East segment, which mainly comprises China, which augurs well for upcoming quarters.
The acquisitions market is still full of opportunities. We have an active pipeline of potential acquisition targets and are taking part in a number of positive discussions.

Following the end of 2022 and beginning of 2023 marked by macroeconomic uncertainties, we are now seeing greater customer confidence and market stability and are entering the second quarter with good momentum. NCAB is making good progress towards our financial targets for 2026, which entail sales of SEK 8 billion and EBITA exceeding SEK 1 billion.

Peter Kruk
President and CEO, NCAB Group AB