Interim report 2024, January - March - Seite 2

The quarter’s net sales amounted to SEK 616 million (773), which corresponds to an organic decrease of 20% compared to the corresponding period last year.

The order book decreased by SEK 137 million and amounts to SEK 641 million at the end of the quarter, which we consider to be a normal level going forward.

Although we see a slight improvement in demand, we are now taking measures to be able to handle a short-term decline in turnover, to protect our operating profit and enable growth investments going forward. We also take advantage of early cost synergies from the acquisition of Red Lion Controls. We are therefore now starting a restructuring program that aims to lower our cost level by SEK 30 million in 2024, with an expected full-year effect of SEK 55 million. The program is expected to affect 45 positions in total, of which 25 are in Sweden. The second quarter is expected to be burdened by restructuring costs of SEK 35 million related to the program.

Our gross margin, burdened mainly by lower volumes and product mix, lands at 62.6% (64.8). During the quarter, we have also cut back on staff in our production to handle the lower demand.

We have already taken certain measures during the quarter to keep our operating costs down primarily by postponing a number of activities. Operating costs amount to SEK 256 million (290) and includes integration and transaction costs of SEK 3 million, related to the acquisition of Red Lion Controls. Organically, operating costs excluding integration and transaction costs decreased by 13%. During the latter part of the year, we will carry out previously postponed activities and will therefore see a slightly higher cost level, despite the above-mentioned cost savings.

The adjusted operating profit in the quarter amounted to SEK 133 million (211), which corresponds to an operating margin of 21.6% (27.4). The quarter’s cash flow from current operations amounts to SEK 58 million (155), which is affected by continued increased working capital, mainly related to our relatively large inventory.

STILL WEAK DEVELOPMENT IN EUROPE, BUT TENDENCIES FOR IMPROVEMENT

Although still week, In Europe we see some improvement in order intake compared to the second half of 2024 and we have indications from our customers that the trend should continue in the right direction in the second quarter, and that during the second half of the year expect to see a more clear improvement.