AQ Group AB (publ), interim report January - March, 2019
First quarter, January-March 2019
- Continued good growth, improved profit and strong cash flow
- Net sales increased by 14.9% to SEK 1 253 million (1 090)
- Operating profit (EBIT) increased by 33.8 % to SEK 96 million (72)
- Profit after financial items (EBT) increased by 35.9 % to SEK 93 million (68)
- Profit margin before tax (EBT %) was 7.4 % (6.3)
- Cash flow from operating activities increased by 378 % to SEK 165 million (35)
- Earnings per share after tax increased by 32.3 % to SEK 4.14 (3.13)
- Equity ratio 54 % (61), first quarter 2019 affected by new IFRS 16 rules
A word from the CEO
AQ Group grows 14.9% in the quarter and increases operating profit (EBT) by 35.9%. The earnings improvement comes from a higher turnover in many of our companies, while we no longer have losses in the companies that we restructured in 2018.
A strong operating cash flow of SEK 165 million is also gratifying. The cash flow improvement comes from intensive efforts to reduce overdue accounts receivable, which were high at year-end. We also see good effect from the projects we conduct in our factories to increase the stock turnover rate.
We continue to increase our business both with existing and new customers. The comparable organic growth is 9.1% and compensates by a margin for the operations we discontinued last year. Some good examples of growth in the quarter are, e.g. our wiring systems factory in Mexico with a new customer who makes delivery cars for global logistics companies. The Inductive Components business area has had a good development driven by the ongoing trend towards more electrified solutions. We are also delivering a larger order for complete machines to a customer in medical technology. Finally, our operations for automation and electrical cabinets have had high deliveries from their factories in Bulgaria and Sweden.
In our role as a supplier, AQ is always ready for changes in demand. We need to be quick to change both in growth and when demand for our customers' products decreases
In AQ Group, we work intensively at all our companies to become an even better supplier to demanding industrial customers.
We remain aware that we have not lived up to some of our customers' expectations of, above all, delivery reliability. Just under a third of our manufacturing units have unsatisfactory delivery reliability. Often caused by a sharp increase in order intake but also because of system change, component shortage and lack of machine capacity. We are not happy with this and work hard to improve routines, standards and processes to become even more robust and flexible in the future. One part of this is capacity expansion and machine investments. During the quarter, for example, we have installed a new modern 3D laser cutting machine in our unit in Lyrestad and we installed a 1500-tonne plastic injection molding machine in Torslanda.
AQ Group has a strong company culture with values that are for real in customer focus, entrepreneurship, simplicity, cost efficiency, courage and respect.
We run our business in decentralized companies with talented leaders and employees who work close to their customers and have a mandate to run the business. In this way, we can be quick and utilize all the opportunities available in the market. This is a strategy we will continue with.
Acquisitions are an important part of AQ's strategy to strengthen our presence and ability in the product areas and geographical markets where we see opportunities for growth and improved profitability.
Another central part of the acquisition strategy is to follow some of our most important customers into new geographical areas. The integrations of AQ B3CG and AQ Mecanova are now completed, and not least AQ B3CG in North America has contributed to the increasing profit in the quarter.
Our guideline is to be a long-term, stable, growing and profitable group with a profit margin (EBT) of 8% and a strong financial position. We like to do business with the customer in focus. Our employees and managers are doing a good job and it will also be reflected in new business in the future.
With strong relationships with world-leading customers and committed employees, we will work hard with new acquisitions, continued organic growth, good cash flow and a stable profit level. A continued important part of this is our core values and our efforts to be a long-term and Reliable supplier to leading industrial customers.
For further information, please contact:
Anders Carlsson, CEO, +46 70 513 42 99 or CFO, Mia Tomczak, telephone +46 70-833 00 80
AQ Group is required to make the information in this press release public in accordance with the EU Market Abuse Regulation and the Securities Markets Act. The information was released by CEO Anders Carlsson for publication at 08:00 hours CEST on April 25, 2019.
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, provides cost effective solutions in close cooperation with the customer.
The Group headquarter is in Västerås, Sweden. AQ has, on December 31, 2018, in total about 6,100 employees in Sweden, Bulgaria, China, Estonia, Hungary, India, Italy, Lithuania, Mexico, Poland, Serbia, Finland, Canada and USA.
In 2018 AQ had net sales of SEK 4.7 billion and the group has since its start in 1994 shown profit every quarter.