Interim report 2023, January - June - Seite 2

Our balance sheet remains strong with an interest-bearing net debt of SEK 93 million.

STRONG GROSS MARGIN
We continue to see a favorable development of our gross margin, which amounts to 64.7% (62.2), driven by a combination of a favorable currency situation and implemented price adjustments. Our operating costs increased to SEK 305 million (231), corresponding to an organic increase of 25%.


During the quarter, we achieve an operating result of SEK 150 million (143), corresponding to an operating margin of 21.4% (23.7). The result has been negatively affected due to postponed sales and roll-out cost related to the launch of the new ERP system and from higher costs for continued expansion.

The quarter’s cash flow amounts to SEK 79 million (56), which is impacted by the buildup of working capital related to our inventory. Currency effects and slightly lower sales than planned also affect the inventory buildup.

CONTINUED STRONG ORDER INTAKE IN EUROPE
Central Europe, which is our most important market, is performing well, and although we cannot match last year’s order intake, we see an improvement from the first quarter of this year. We get mixed signals from the automotive industry, with continued investments in manufacturing of electrified vehicles but weakened exports to China. Our business within Building automation continues to show strong growth.


In Japan, we see a mixed picture where some of our customers are reducing their inventories, while some major customers still place long-term orders. In China, we face a weak market where many customers are cautious and reduce their inventories, due to high expectations for China’s growth, currently not being met.

In North America, we see continued good sales but a certain effect of customers’ inventory adjustments that impacts the order intake negati­vely.

STRENGTHENING THE ORGANIZATION
In May, we went live with the roll out of a new ERP system with the goal of building a platform for future expansion and improving our internal efficiency. The most complex parts have now been implemented with good results, even though we experienced lower delivery capacity for a few weeks. We will continue the rollout of the new ERP system to our sales companies during the rest of this year and the following year.

During June and July, we have also recruited a Chief Operating Officer and a Chief Human Resources Officer. These two new roles will be important in further developing our organization for continued growth. Both will start after the summer.