AQ Group AB (publ), interim report January - June, 2017

Second quarter, April- June 2017
in brief

  • Net sales increased by 25% to SEK 1 077 million (860)
  • Operating profit (EBIT) decreased by 19 % to SEK 74 million (92)
  • Profit after financial items (EBT) decreased by 22 % to SEK 70 million (91)
  • Profit margin before tax (EBT %) 6.5% (10.6)
  • Cash flow from operating activities increased by 3 % to SEK 79 million (76)
  • Equity ratio 60 % (60)
  • Earnings per share after tax decreased by 23 % to SEK 3.20 (4.18)

Six months, January - June 2017
in brief

  • Net sales increased by 25% to SEK 2 079 million (1 661)
  • Operating profit (EBIT) decreased by 5 % to SEK 161 million (169)
  • Profit after financial items (EBT) decreased by 2 % to SEK 163 million (167)
  • Profit margin before tax (EBT %) 7.8% (10.0)
  • Cash flow from operating activities decreased by 44 % to SEK 94 million (168)
  • Earnings per share after tax decreased by 3 % to SEK 7.40 (7.64)

A word from the CEO


The second quarter was our 91st consecutive quarter with profit. AQ’s second quarter with a turnover exceeding a billion SEK. The highest turnover in the history of the group. We have increased our turnover every year since the start October 1, 1994 i.e. for 22 years.

We are satisfied with the growth and cash flow is better than in the first quarter 2017, but we are not satisfied with the margin (EBT) 6.5%. We need to work on improving the margin.

The organic growth for the quarter was 10.1% compared to 6.2% the second quarter of 2016.

The second quarter of 2017 shows our margin sliding downwards, partly because of additional costs in conjunction with increasing utilization and partly because we haven’t succeeded in increasing our prices in the same pace as raw material prices have increased. It is important that we quickly adjust prices to our customers when prices of raw material are increasing. We still have work to do here. We are also intensifying our work to get our supplier base to be more competitive. Our goal is to have an EBT margin of 8%. As we have previously communicated, the second quarter of 2016 had a number of unusually profitable projects in telecom.

There is an economic expansion in the industry. Several of AQ’s leading industrial customer show good growth. This partly explains AQ’s high organic growth in the second quarter. In parallel I believe that we are gaining market shares in several business areas.

Gradually during the year, several of our production units have had increasing utilization rate and we see a need of increased investments in production capacity in several areas. We have signed an agreement to buy adjacent real estate to our production unit in Hungary. We are negotiating more production space in Poland and we are planning for expansion space in Mexico. This is obviously a good sign that our customers have a good order backlog and that our customers have confidence in AQ.

We have had some late deliveries to our customers, which have cost a lot of money in express shipments, overtime and extra personnel. Late deliveries don’t only cost money, the biggest cost is that it affects our customers’ confidence and it’s contrary to our value “We are reliable” and intense improvement work is ongoing.

The cash flow from operating activities during the second quarter 2017 was better than the first quarter 2017 and we are working to reduce the capital tied up in accounts receivable and inventory. There is still a pressure from customers to extend credit terms though.


Gerdins was acquired on October 3, 2016. It is our biggest acquisition so far when it comes to turnover. The subsidiaries of Gerdins have been integrated into AQ’s existing business areas, the EBT margin is however still below AQ’s goal. We have gained competent and dedicated employees and exciting customers so we are looking positively at the future for “Gerdins”

We are always looking at a number of acquisition opportunities. We would like to strengthen our presence and capabilities in the growth areas where we are already present. We also work to follow some of our important customers to completely new geographic regions.


Our focus is always to adapt to customers’ requirements and real demands. It’s a strategy we will continue to follow, to be fast movers and adaptable no matter of market conditions. Our organisation is built on entrepreneurship and it is a foundation of our core values.


My assessment is that we are gaining market shares in several areas and we are also entering new markets. However, one shall be aware of the fact that AQ is acting in a global competition with subsequent price pressure.

With operations in 12 countries and more than 5 000 employees it is important for us to maintain our simplicity and speed in our decision making and to minimise bureaucracy which can easily occur in a larger organisation.

AQ is well positioned for new acquisitions from a financial as well as from a management view.

With strong relations to world leading customers and engaged employees I am looking positively at the future with continued growth with a stable profit level. An important part of this is our core values and our efforts to be a reliable supplier to leading industrial customers.

Claes Mellgren


För further information contact:
CEO, Claes Mellgren, telephone, +46 70 592 83 38
 or CFO, Mia Tomczak, telephone +4670 833 00 80 or IR, Glen Nilsson, telephone +46 70 654 40 03

AQ Group is required to make the information in this press release public in accordance with the EU Market Abuse Regulation. The information was released by CEO Claes Mellgren for publication at 08:00 hours CET on August 17, 2017.


AQ in brief

AQ is a leading supplier to demanding industrial customers and is listed on Nasdaq Stockholm’s main market.

The Group consists mainly of operating companies each of which develop their special skills and in cooperation with other companies, striving to provide cost effective solutions in close cooperation with the customer.

The Group headquarter is in Västerås, Sweden. AQ has, on December 31, 2016, in total about 5,100 employees in Sweden, Bulgaria, China, Estonia, Hungary, India, Italy, Lithuania, Mexico, Poland, Serbia and Thailand.

In 2016 AQ had net sales of SEK 3.3 billion and the group has since its start in 1994 shown profit every quarter.

AQ has the highest credit rating AAA according to Bisnode.

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.