AQ Group AB (publ) Interim report January-March 2016

First quarter, January – March 2016

In brief

  • §  Best quarterly result in the history of the group
  • §  Net sales SEK 802 million (715)
  • §  Operating profit (EBIT) SEK 77 million (52)
  • §  Profit after financial items (EBT) SEK 76 million (56)
  • §  Equity ratio 60 % (62)
  • §  Earnings per share after tax SEK 3.46 (2.47)
AQ in briefAQ is a leading supplier to demanding industrial customers and is listed on AktieTorget since year 2001.The Group consists of operating companies each of which develop their special skills, and in cooperationwith other companies, striving to provide cost effective solutions in close cooperation with the customer.The Group operates in two business segments: Component, which produces transformers, wiringsystems, mechanical components, punched sheet metal and injection-moulded thermoplastics andSystem, which produces systems, power and automation solutions and assembles complete machinesin close collaboration with the customers.The Group headquarter is located in Västerås, Sweden. AQ has about 4,500 employees in Sweden,Bulgaria, China, Estonia, India, Italy, Lithuania, Mexico, Poland, Thailand and Hungary.In 2015 AQ had net sales of SEK 2.9 billion.AQ has the highest credit rating, AAA.

(See picture in pdf-file)

A word from the CEO

First quarter of 2016 was yet another good quarter in regards to results (all time high). However, I want to highlight that we during the first quarter have finished an unusual amount of projects with good contribution margin. I want to underline that the EBIT margin in Q1 shall not be seen as a base for future profit margins.

Our companies in Eastern Europe have good growth and profits. The Swedish companies have a harder time to generate growth. In Sweden AQ Enclosure Systems, who had a loss in Q1 of 2015, has turned around to profit. Our company in India is growing in turnover, but is still not profitable.
Our Chinese operations have seen a lower activity with our customers e.g. within the mining industry.
Our Mexican company has developed positively and its results have improved compared to 2015.

Our investment to employ a marketing manager at group level, who is developing our sales force, is giving results and is contributing to increasing organic growth. The sales force is also focusing to find synergies in the production of our customers’ products by utilizing the different strengths of our different AQ companies.

AQ is financially strong with an equity ratio of 60% despite the large acquisitions of last year. Our acquisition of the well managed and successful Anton Kft. (under name change to AQ Anton) in Hungary is moving forward according to plan. These two factors enable us to continue being active in acquisitions.

The work to transfer our listing from AktieTorget to Nasdaq Stockholm is moving ahead with full speed and is planned to be completed in the later part of the year. A stock exchange auditor has been appointed and we are in the process of putting all required documents in our document management system. We view the work as a positive thing for the group as we at the same time get a structure and an archive of all the important documents and agreements.

My feeling is that we are gaining market share from our competitors in several areas and also are entering new markets.

With fantastic customers and engaged employees I am looking positively at the future with an opportunity to develop AQ to continued growth with stable result level. An important part of this is our core values and our efforts to be a reliable supplier to demanding industrial customers.

Claes Mellgren


Group overview, key figures

Data by quarters


The Board of Directors of AQ Group has set the goals for the Group. The Group is governed with respect
to solid profit, high quality and delivery performance, strong growth with a healthy financial risk level.
The dividend policy; the dividend corresponds to about 25 % of profit after tax over a business cycle.
However, the Group’s financial consolidation nmust always be considered.

                                                                 Goals            Jan-Mar 2016

Product quality                                           100 %            99.6 %          

Delivery performance                                   98 %            95.6 %

Equity ratio                                                >40 %              60 %

Margin (EBT)                                                  8 %            9.5 %

Group development

First quarter

Net sales for the first quarter was SEK 802 million (715), an increase of SEK 87 million compared to the same period in the previous year. The largest part of increase in turnover can be explained by the acquisition of Anton Kft. last year. Sales in Poland and Bulgaria have also increased.

The organic growth in the first quarter was 3.6% and the growth through acquisitions was 9.7%. The total growth excluding currency effects was 12.1%.

Operating margin (EBIT) in the first quarter was SEK 78 million (52), an increase of SEK 26 million. The increase can be partly explained by the acquisition of Anton Kft. and partly by an unusual number of projects with good operating margin.

Goodwill and immaterial assets have increased with SEK 88 million compared to the same period in the previous year, which is due to the acquisition of Anton Kft.

Net investments of the group in the quarter was SEK 20.5 million (10). Investments in grinding machines were made in Hungary and in injection moulding machines in Sweden and Bulgaria.

Interest bearing debts of the group are SEK 220 million (138) and cash and cash equivalents amount to SEK 148 million (149), which means that the group has a net debt of SEK 72 million. In the same period in the previous year the group had a net cash position of SEK 11 million. The change is due to a loan in conjunction with the acquisition of Anton in quarter four of 2015.

Equity at the end of the period was SEK1 241 million (1 119) for the group.

In conjunction with the liquidation of our Norwegian subsidiary, AQ Wiring Systems AS, accumulated translation differences have had a negative effect on our result. These amounted to SEK 6.7 million and are included in other operating expenses.

Significant events during the quarter

AQ Group AB (publ) has submitted a preliminary application for admission to trading of its shares on Nasdaq Stockholm’s main market. The shares of the company have been traded on AktieTorget since 2001. Under the condition that Nasdaq Stockholm approves the application, the intention is to begin trading of the company’s shares on Nasdaq Stockholm during the latter part of the year.

Glen Nilsson has been employed as responsible for Investor Relations (IR) as part of the change to Nasdaq Stockholm. Glen has among other things been CFO of Systemair. Systemair is a company which is traded on the Nasdaq Stockholm exchange Mid Cap list.

AQ Plast AB has decided to close down the manufacturing site in Vadstena. The background to
the change is to improve the competitiveness of AQ Plast AB by having fewer production sites.
Production will be moved from Vadstena to Anderstorp and Västerås. As a consequence of the change
a notice of redundancy was given for all 32 employees in Vadstena. The plan is to cease operations in Vadstena during 2016.

Our operations in Mexico is developing positively and is approaching break-even.

In our company in India we have begun deliveries of complex aluminium enclosures to a train manufacturer. The enclosures are welded with our new FSW (Friction Stir Welding) equipment.

We have received a permit for our investment of ED (Electro Discharge) painting equipment in AQ Electric in Radomir, Bulgaria. AQ will have the first ED installation in Bulgaria. It is an investment of about one million Euro. ED is a surface treatment method being used in the automotive industry.

Significant events after the end of the period

There have been no significant events after the end of the period.

Future prospects

The goal of the group is continued profitable growth. The goal for profit after financial items (EBT) is 8%.

The Board of directors are not giving any forecast for turnover or profit. Statements in this report can be perceived as forward looking and the real outcome can be significantly different. In addition to factors
mentioned the real outcome can be affected by political events, economic cycles, currency rates, interest
rates, competing products and their pricing, product development, commercial and technical difficulties,
delivery problems and large credit losses to customers.

Transactions with related parties

There have been no transactions between AQ and related parties during Q1, which has significantly affected the position of the company and its profit.

Risks and uncertainties

AQ is a global company with operations in eleven countries. Within the group there are a number of
risks and uncertainties of both operational and financial characteristics, which were described in the
annual report of 2015. No additional significant risks have been identified since the annual report of

The risks that are most evident in a shorter perspective are risks related to interest rates and currency. The exposure to risks related to interest rates are low and relates to the group’s financing with credit institutions and are currently with floating interest, connected to the base interest of the bank which is connected to the interest rate of Sweden’s central bank.

Transactions and assets and debts in foreign currency are managed centrally within AQ in order to create balance in the respective currency thereby achieving highest possible levelling effect within the group in order to minimize currency differences.

AQ is not buying any direct raw material, but only intermediate goods for further production such as sheet metal of steel and aluminium, cables, insulated wire etc. The risk is minimized through customer agreements with price clauses.

The group’s credit risks are mainly connected to receivables from customers.

The mother company is indirectly affected by the same risks and uncertainties.

Nomination committee

The nomination committee before the annual general meeting 2016 consists of P-O Andersson, Claes
Mellgren and Johan Hagberg. The task of the nomination committee is to propose Board members and
Chairman and remuneration to Board members and auditor to the annual general meeting. For the annual general meeting of 2016 the nomination committee has proposed election of P-O Andersson, Claes Mellgren and Björn Henriksson of Nordea Fonder as members of the nomination committee.

Future reporting dates                        

Interim report Q2, 2016                              July 21, 2016 at 8:30 AM     

Interim report Q3, 2016                              October 20, 2016 at 8:30 AM

Financial information

The information of this interim report shall be made public according to the Securities Market Act of Sweden. AQ Group AB (publ) is listed on AktieTorget.

The information was made public on April 21, 2016 at 8.30 AM.

This report has not been audited by the company’s financial auditors.

Further information about AQ Group AB can be given by:

CEO, Claes Mellgren, telephone +46 70-592 83 38, or via

Chairman P-O Andersson, telephone +46 70-526 90 77,

Financial reports and press releases are published in Swedish and English. If there are discrepancies between the two, the Swedish version shall prevail.  They are available at


The Chief Executive Officer certifies that the interim report gives a true and fair overview of the Group's and the parent company's operations, financial position and results and describes material risks and uncertainties facing the parent company and the companies that form part of the Group.

Västerås, April 21, 2016

Claes Mellgren,


About Us

To develop, manufacture and assemble components and systems for demanding industrial customers. With our commitment to Total Quality our customers become long-term partners.


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