NCAB Group today launched our Interim Report for April – June 2020.
- Net sales increased by 23% to SEK 580.6 million (473.1). The increase is a result of the acquisitions of Flatfield and Bare Board Group. In USD, net sales increased 20%. Growth excluding acquisitions was -3%.
- Order intake increased 8% to SEK 486.2 million (450.0). In USD, order intake increased 5%. Order intake was affected by the unusually strong order intake in the first quarter.
- EBITA increased to SEK 50.6 million (37.3), representing an EBITA margin of 8.7% (7.9). SEK 9.1 million was charged to EBITA relating to transaction costs for Bare Board Group. Excluding transaction costs, EBITA amounted to SEK 59.7 million, corresponding to an EBITA margin of 10.3%.
- Operating profit was SEK 48.1 million (35.7). Operating margin was 8.3% (7.5).
- Profit after tax was SEK 20.4 million (23.5).
- Earnings per share was SEK 1.12 (1.39).
Strong earnings despite the crisis
„The second quarter of 2020 has been special for everyone, also for us at NCAB. In conjunction with the coronavirus outbreak in China in early 2020, many factories in China closed for four weeks in connection with the Chinese New Year. We worked intensively to ensure that our customers received their deliveries. We also saw a large build up in the backlog of orders when order intake increased by 27 per cent in first quarter year-on-year. As we wrote in the interim report, this was one way our customers endeavored to ensure deliveries in the future.
Following the strong order intake in the first quarter, we have now seen a decline in the second quarter, though order intake for the first half of the year is in parity with net sales, meaning a book to bill of 1,0. Net sales for the quarter fell by 3 per cent excluding acquisitions, though this is still an acceptable level given the lockdowns and continued unstable market in several countries. Earnings were highly favorable, noting an increase of 40 per cent excluding acquisitions. Our business model, entailing that we do not own factories and keep minimal inventory, is particularly appropriate in times such as these.
I am proud of our employees and their excellent handling of the situation. The good results are derived from our work close to customers in new and existing projects, at the same time as we have reduced costs and, in a few countries, could benefit of government support measures.
Which of these trends are sustainable? NCAB has gained a greater geographical coverage and reach, meaning that some regions can offer support when others are struggling. The same is true of our dependence on different sectors or customers. Our diversification balances our business. Our acquisitions made positive contributions and can only improve as we begin to benefit from the synergies. The strong earnings are also partly due to cost reductions for travel, conferences and trade fairs – activities that we will resume when things return to normal. Coming quarters are still uncertain, but to sum up, NCAB has an ability to deliver positive results even in times of uncertainty, but we will in the future again invest in growth and keep a stable level of earnings in line with our established targets”, comments Hans Ståhl, CEO of NCAB.