Interim report 1 January – 31 March 2021

The first quarter
»  Net revenue totalled SEK 698 million (538)
»  Operating profit amounted to SEK 103 million (57)
»  Profit before tax amounted to SEK 104 million (52) 
»  Profit after tax amounted to SEK 81 million (40)
»  Earnings per share were SEK 2.80 (1.43)

CEO’s comments on the Group’s development during the period

THE GROUP
The Group’s development during the first quarter of the year is summarised by good growth and strengthened profitability. All business units reported higher sales and better profits than in the comparison period. As throughout more or less the whole of last year, the Coronavirus pandemic only had a limited negative impact on our operations. Within the Industrial Solutions business unit, project deliveries increased significantly and generated good results. Our profitability was also positively affected by a well-balanced mix of customer-specific assignments. For the Precision Technology business unit, the continued upturn in the medical technology sector, combined with a gradual stabilisation in other areas, resulted in a high level of growth. The newly acquired companies performed well, contributing to the improvement in profitability. The recovery in the automotive sector had a positive impact on several of the companies in the Industrial Products business unit, while volumes in other market segments also increased. For the Group as a whole, the above factors generated good growth that, combined with a high level of efficiency and well utilised resources in our operations, also resulted in strong margins for the period. Compared to last year’s opening quarter, revenue rose by 30 per cent, of which approx. 24 per cent was organic growth. Operating profit improved by 82 per cent and the operating margin rose from 10.5 to 14.8 per cent. The profit margin was 14.9 per cent.

THE INDUSTRIAL PRODUCTS BUSINESS UNIT
Within the Industrial Products business unit, sales rose by 11 per cent and operating profit improved by 45 per cent in relation to the comparison period. The period was characterised by continued good development for the companies’ proprietary products and a strong recovery for deliveries to the automotive sector. Higher levels of activity were also experienced within other market segments. The growth, combined with the effective utilisation of resources, significantly strengthened the business unit’s profitability. The sustainability work was a high priority, with many business unit-wide activities in relation to manufacturing methods, materials and circularity. A number of projects were also launched in collaboration with customers, with sustainability being one of the most significant business criteria.

THE INDUSTRIAL SOLUTIONS BUSINESS UNIT
Sales within the Industrial Solutions business unit rose by 26 per cent and operating profit improved by 61 per cent compared to corresponding period last year. Extensive project deliveries and ongoing, customer-specific assignments resulted in good growth during the period. Previously implemented organisational changes and continued work focusing on efficiency at every stage resulted in strengthened profitability. Affected markets developed well, and the companies in the business unit achieved considerable success geographically, including the USA. A number of new automation assignments have been won within neighbouring business areas, for example in relation to batteries for electric vehicles. These projects affect several of the business unit companies, and there are good opportunities for coordination. Our companies continue to be restricted in respect of aftersales activities and service as a result of the Coronavirus pandemic. There has also been some delay as regards the completion of projects. Our delivery capacity is good, although in certain cases customers have postponed installations due to the prevailing circumstances.

THE PRECISION TECHNOLOGY BUSINESS UNIT
The operations within the Precision Technology business unit reported 76 per cent higher sales, of which 35 per cent refers to business combinations. Operating profit surpassed the outcome of the comparison period by 169 per cent. All the companies in the business unit reported strong figures for the quarter. Continued growth for the medical technology sector and several other technical industries resulted in high volumes with stable profit levels. The start-up of series production for new assignments had a further positive impact on profitability. The previous quarter’s acquisitions of Modellteknik and Lasertech, as well as providing additional sales and profits, also resulted in expanded technical expertise and capacity that are strengthening the business unit. The companies experienced a generally stabilised market situation, even though some areas are continuing to be affected by the uncertainty associated with the pandemic.

FUTURE DEVELOPMENT
Coronavirus has continued to spread extensively around us, although we have been able to manage the situation well internally, with relatively few cases of illness within the Group as a result. However, we are looking forward to experiencing the positive effects of the ongoing vaccination programme on a broader scale. Despite the limited impact of the pandemic to date, we do have concerns. One such concern is the above-mentioned problem relating to installations and service assignments around the world. Material supplies are another. Generally speaking, the latter has not affected any of our business units to any great extent to date.
        For the immediate future, the situation therefore continues to look bright for the Group as a whole. Our targeted work on strategic sales has been a success. At the same time, our conscious focus on sustainable business in long-term collaborations with selected customers has provided us with a stable foundation. We have succeeded in winning business within new operational areas, and have advanced our position on several geographic markets, which is creating the potential for further growth. For example, we have achieved increased sales outside of Europe in recent times, and we are currently reviewing the potential to reinforce our presence on e.g. the North American market. We have launched collaborations with players related to the production of batteries for electric vehicles, and we are evaluating the preconditions for more extensive initiatives in respect of automation assignments in this area. In order to meet this growth, we are continuing to invest in machine capacity, premises, innovations and personnel. After a period of reluctance as regards investments, particularly during 2020, there is also a pent-up need for reinforcements within various areas. The newly acquired companies Modellteknik and Lasertech have enjoyed a positive start to their time in the Group. The preconditions for economies of scale are good, and we are already witnessing tangible opportunities for new business deals. This applies above all to their sister companies within Precision Technology, although other Group companies can also benefit from this new expertise. We are continuing to evaluate potential acquisitions in order to identify new technology and complementary business areas that can strengthen us ahead of future challenges.