NOTE’s Second-quarter Interim Report 2023
Financial performance in April-June
• Sales increased by 20% to SEK 1,078 (898) million. Adjusted for acquisitions and currency effects, organic growth was 7%. Underlying organic growth was 12% (adjusted for extraordinary sales in the second quarter of 2022).• Operating profit increased by 27% to SEK 106 (83) million.• The operating margin widened by 0.5 percentage points to 9.8% (9.3%).• Profit after financial items was up by 35% to SEK 96 (72) million.• Profit after tax rose by 35% to SEK 79 (59) million, corresponding to SEK 2.73 (2.02) per share.• Cash flow after investments amounted to SEK -2 (-4) million, or SEK -0.07 (-0.14) per share. Adjusted for acquisition-related payments in the period, operating cash flow after investments was SEK 28 (-4) million.
Financial performance in January–June• Sales increased by 24% to SEK 2,129 (1,719) million. Adjusted for acquisitions and currency effects, organic growth was 10%. Underlying organic growth was 15% (adjusted for extraordinary sales in the first half-year 2022).• Operating profit increased by 37% to SEK 218 (159) million.• The operating margin widened by 0.9 percentage points to 10.2% (9.3%).• Profit after financial items was up by 42% to SEK 200 (141) million.• Profit after tax rose by 43% to SEK 164 (115) million, corresponding to SEK 5.65 (3.98) per share.• Cash flow after investments amounted to SEK 47 (5) million, or SEK 1.62 (0.17) per share. Adjusted for acquisition-related payments in the period, operating cash flow after investments was SEK 100 (5) million.
CEO’s comment – In Q2, we once again delivered our highest sales to date. We’re growing with profitability and the operating margin for the first half-year was 10.2%“NOTE’s sales in the second quarter developed strongly. Despite us encountering progressively stronger comparative figures, in the second quarter we achieved a growth of 20% and sales of SEK 1,078 million were our highest to date for a single quarter. Sales growth for the first half-year was 24%.
Growth together with rationalisation on our cost side drives our profitability and the operating margin for the second quarter (incl. currency translation losses) amounted to 9.8%. For the first half-year, the corresponding number was 10.2%. Profitability is in line with the target we set for our business to achieve by 2025 at the latest.
Just after the end of the quarter, we carried out an expansive acquisition of British DVR Ltd. The British EMS market is expected to have strong growth over the coming years and through the acquisition NOTE becomes a bigger player on this growing market. The company has a strong customer portfolio combined with a good influx of customers in recent years. DVR’s turnover for 2023 is expected to reach GBP 12 million with profitability in line with NOTE’s.
We see an improved situation on the materials market, which means that customers don’t need to place orders with such long timelines. Obviously, this has a reductive effect on order intake. Our order position remains strong with an order backlog (for comparable units) that was just over 10% higher than at the corresponding point of the previous year. For the full year 2023, we see continued high demand and expect to achieve sales of at least SEK 4.3 billion. We anticipate a continued increase in operating profit and a strengthening of our operating margin”, says Johannes Lind-Widestam, CEO and President.
About NOTENOTE produces PCBAs, subassemblies and box build products. NOTE is a competitive EMS provider and stable business partner to customers with high standards. NOTE’s products are embedded in complex systems for electronic control, surveillance and security, for example. NOTE’s business model builds on delivering high end manufacture, custom logistics solutions and consulting for the best possible total cost through long-term customer relationships and partnerships. Its customer offering covers complete product lifecycles, from design to after-sales. Primarily, its customer base consists of large corporations operating on the global market, and enterprises whose main sales are in northern Europe. NOTE has a presence in Sweden, Finland, the UK, Estonia, Bulgaria and China. Sales over the last 12 months were SEK 4,097 million, and the group has approximately 1,500 employees. NOTE is listed on Nasdaq Stockholm. For more information, please go to www.note-ems.com.
