Continued good profitability development
Quarter 2, 2024
- Orders received amounted to SEK 1,415m (1,546), equivalent to a currency neutral decline of 8.9 percent compared with the same period last year.
- Net sales amounted to SEK 1,467m (1,631), equivalent to a currency neutral decline of 10.6 percent compared with the same period last year.
- Adjusted EBITA was SEK 187.7m (195.2), giving an adjusted EBITA margin of 12.8 percent (12.0).
- Operating profit amounted to SEK 159.6m (168.5), corresponding to an operating margin of 10.9 percent (10.3).
- Net profit was SEK 97.2m (100.4).
- Earnings per share were SEK 2.77 (2.86).
- Cash flow from operating activities amounted to SEK 74.5m (97.9).
CEO's comments
"Higher margins and strengthened position
A constant and focused development of the range is strengthening our leading position even in the current more uncertain macro environment. This contributed to strong profitability in the second quarter, with a stable cash flow and advanced positions in structurally growing industries worldwide.
Last year's second quarter was Nederman's most profitable ever in absolute terms. The fact that we are even close to this level during the second quarter of 2024, despite considerably lower sales, is a sign of strength. I consider this confirmation that our investments in advanced digital solutions, in the service business and in increased operational efficiency are producing results. During the quarter, the gross margin increased to 40.3 percent (35.1) and the adjusted EBITA margin was 12.8 percent (12.0) including lower profitability in our largest division due to the relocation of operations in the US. Sales decreased currency neutrally by 10.6 percent to SEK 1,467m (1,631) and orders received decreased currency neutrally by 8.9 percent to SEK 1,415m (1,546). While I am not satisfied with this development, I believe we are gaining market share in the current slightly more challenging market. At the same time, we have increased our presence in structurally growing industries, such as green energy, battery manufacturing and transportation. The lower orders received, and lower sales, are entirely the result of a reduction in the number of major orders and fewer project deliveries in the Process Technology Division. The other three divisions displayed a stable or clearly positive trend in both orders received and sales for the quarter.
We can see that our investments in production and logistics are making an increasingly clear contribution to profitability. Over the past year, we have accelerated these, in response to demand, and to further advance our positions in prioritised industries. Investments are taking place in all four divisions, but differ depending on needs and strategy. The investment in Thomasville in the US, Duct & Filter Technology's plant, has given clear competitive advantages. Being able to offer fast and reliable deliveries of a large number of high-quality products can be crucial to securing new orders, not least in critical infrastructure sectors. This philosophy, to simply facilitate and strengthen possibilities for our customers, also lies behind the investment in our new ultra-modern plant in Helsingborg, the relocation of RoboVent's operations in the US, and our routine investments to upgrade the machine park and increase automation. A strong financial position and stable cash flow have enabled all of these initiatives.
As a leading global environmental technology company in advanced air filtration, we have a major focus on innovation. During the quarter, we launched a new complete industrial air filtration solution for welding fumes, and took additional steps ahead of the launch of the new generation of Insight products. Energy efficiency is an important element of our range and addresses a growing need among customers, and society as a whole. During the quarter, we launched a new range of high-vacuum dust separators for extraction and filtering of dust and fumes that is up to 60 percent more energy-efficient, and for which we have already received a number of orders. In parallel, significant interest remains from new and existing customers in our service bundle for energy-efficient filter systems, Nederman SAVE, and our efficient fan system for textile plants.
A GROWING SERVICE BUSINESS IN OUR DIVISIONS
Nederman's divisions reported continued positive development for their respective operations, where qualified service with high availability to guarantee continuous operation among customers is becoming an increasingly important feature. Extraction & Filtration Technology noted a new record number of large orders, and continued healthy growth in its service business. Process Technology also benefitted from a strong trend in service that contributed to a new boost to profitability, while orders received and sales declined. Duct & Filter Technology's production and logistics initiatives in the US have strengthened competitiveness and a continued high level of profitability. Monitoring & Control Technology noted a new sales record for a single quarter and a recovery of its profitability.
CAUTIOUSLY POSITIVE IN A MORE UNCERTAIN WORLD
Even if the performance of our divisions remains largely positive, the risk remains that current interest rates and a weaker economic outlook will impact customers' investment decisions. Moreover, we believe that there is a risk that the growing geopolitical uncertainty could eventually lead to increased protectionism. However, Nederman stands strong in this macro environment. In view of our large order backlog and our ability to increase our share of sales in industries with good structural growth, we take a cautiously positive view of opportunities during the second half of the year.
Sven Kristensson, VD"
For further information, please contact:
Sven Kristensson, CEO
Telephone: +46 42 18 87 00
e-mail: sven.kristensson@nederman.com
Matthew Cusick, CFO
Telephone: +46 42 18 87 00
e-mail: matthew.cusick@nederman.com
This information is information that Nederman Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 a.m. CET on July 12, 2024.
About Nederman
Nederman is an environmental technology company and a global leader in industrial air filtration dedicated to capturing, measuring, controlling and cleaning air to make industrial production more efficient, safe and sustainable. Based on industry leading products, solutions and services in combination with an innovative IoT platform we deliver knowledge and facts needed to optimise performance and guarantee emissions compliance to protect people, planet and production.
The Nederman Group is listed on Nasdaq Stockholm. The Group has approximately 2 500 employees and presence in more than 50 countries. Learn more at nedermangroup.com
Nederman Holding AB (publ), P.O. Box 602, SE-251 06 Helsingborg, Sweden
Corporate registration number: 556576-4205
