LEAX Interim Financial Report Q1

Challenging and Exciting Times

Summary of the first quarter of 2022

• Net Sales amounted to SEK 436.8 million (471.2)
• Adjusted EBITDA amounted to SEK 34.8 million (52.6)
• Earnings before tax (EBT) decreased to SEK -8.4 million (15.9)
• Cash flow from operations increased to SEK 13.9 million (-10.1)
• Net income for the period decreased to SEK -7.3 million (11.8)
• Earnings per share amounted to SEK -0.62 (0.88)

Revenue in the first quarter of 2022 was down just over 7% versus Q1 2021, SEK 436.8 million (473.1) and was directly attributable to supply chain disruptions at our customers, with the ongoing semiconductor shortage being the primary factor.  Despite strong order boards including those in our largest end market, commercial vehicles, our customers continue to reduce call-offs because of supply chain disturbances. In Q1 one of our largest customers had multiple stop days due to issues within their supply chain which had a direct impact on our revenue and operating profit.

These customer reductions are coming with short notice and presents a challenge to our production systems, but we continue to work on flexibility and cost management.

Demand for commercial vehicles remains high with OEM’s reporting declining some new orders as lead times for new vehicle deliveries grow. Customers are seeing that access to semiconductors should improve later this year.

The war in the Ukraine has been in focus from a humanitarian perspective and our thoughts are with those that are suffering as a result. On an operating level the war has had some indirect effects on our business including customer order cancellations because of the sanctions and spiking energy costs that are flowing through the European supply chain.

Amongst the global political turmoil and remaining uncertainties within the supply chain our organization is doing an outstanding job of managing the short-term challenges while remaining focused on the future. This performance is highlighted by the intensive effort and success our team has had managing the inflationary pressure that rising energy costs are having on our industry.

On group strategy our shift into new customer end markets and higher engineering content continues and our efforts have been rewarded with a contract for an engineering pre-study to develop a gearbox for an electrified vehicle program. Our investment in rapid prototyping to help our customers reduce time to market is attracting new customers to LEAX.

We are also seeing an increase in customer activity in outsourcing and onshoring as they evaluate far east sourcing strategies with rising freight costs.

Finally, on April 1st, we announced that our current majority owners and AMF have made a significant investment in LEAX Group. We are extremely proud that AMF, whose portfolio includes some of the best global industrial companies, has chosen to invest in us. As LEAX celebrated our 40-year anniversary on February 1st the confidence our new and existing investors have in LEAX gives our team the confidence that we have at least another 40 years of success in our future.

This disclosure contains information that LEAX Group AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 05-05-2022 08:30 CET.

Contact

Tony Nicol, Group President and CEO 
Telephone: +44 (0)755 728 67 67
E-mail: tony.nicol@leax.com
 

About LEAX

LEAX Group AB (publ) is the parent company of a group (“LEAX Group”) with about 1 200 employees. LEAX has operations in Köping, Falun and Falköping in Sweden, Riga and Rezekne in Latvia, Curitiba in Brazil, Detmold in Germany, Mezökövesd in Hungary and Wuxi in China. The Group is a manufacturer of mechanical components and subsystems for the heavy vehicle industry, passenger car industry, mining and construction industries and other engineering industries. LEAX Group also delivers customized gearboxes for various mechanical engineering industries. The Group had a turnover of SEK 1,7 billion in 2021.