LEAX Interim Financial Report Q3 2022

Steady Growth but Challenges Persist

The third quarter in summary

• Net Sales increased to SEK 445.9 million (365.0)
• Operating profit decreased to SEK -5.7 million (3.2)
• Earnings before tax (EBT) decreased to SEK -12.5 million (-10.2)
• Net income for the period decreased to SEK -16.4 million (-10.5)
• Cash flow from operating activities amounted to SEK 17.2 million (-39.4)

The first nine months in summary

• Net Sales increased to SEK 1,422.4 million (1,302.4)
• Operating profit decreased to SEK 13.2 million (54.0)
• Earnings before tax (EBT) decreased to SEK 0.8 million (22.4)
• Net income for the period decreased to SEK -5.1 million (18.3)
• Cash flow from operating activities amounted to SEK 84.4 million (31.3)

Comments from the Group President and CEO, Tony Nicol;

In the third quarter of 2022 revenue continued to grow despite the persistent supply chain challenges faced by our customers, specifically in Heavy Commercial Vehicles and Passenger Car markets.  

Sales within our largest customer end market, Heavy Commercial Vehicles, increased during the third quarter 2022 compared to the third quarter 2021. In general, our customers have done a better job at managing the difficulties in global supplies. However, a more stable supply of components has been somewhat offset by logistics bottlenecks driven by driver shortages. From a financial perspective we continue to be suboptimized from a capacity utilisation perspective and continue to underperform relative to what we expect from the strong order books in the market.

In the third quarter our Passenger Car business was directly affected by China’s zero-Covid policy which is causing massive output disruptions in areas where outbreaks occur. Group profitability was impacted on this lower volume along with significant increases in the prices for energy, logistics and other commodities which impacted all LEAX businesses. Inflationary costs have impacted our result in the third quarter, but this is mostly a timing effect as we have contractual mechanisms in place and are taking an active approach to cost recovery and reduction.

The business outlook is difficult to predict with all this uncertainty in the global economy. Despite this uncertainty we remain focused on delivering all aspects of the LEAX value proposition to our customers. We continue to make strategic investments which are supporting sustainable value and the strategic vision we have for LEAX. 

To support this vision, we made a strategic investment in Green Tech start-up BRUDELI Green Mobility AS. BRUDELI offer long-haul trucking powered by 80 percent electricity. BRUDELI’s goal is to bring its patented electrified truck transmissions to the market, starting serial deliveries in 2026. With this investment we see a clear strategic fit with LEAX ambition to develop fully integrated systems with a high degree of innovation. There is a strong cultural fit with the highly experienced and motivated BRUDELI team, and we look forward to helping them develop their ground-breaking technology.

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 commercial vehicles, 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.