Interim report January-June 2019

APRIL-JUNE 2019 

 >      Net sales increased by 14% to SEK 473.1 million (415.8). In USD, net sales increased 4%. 

 >      Order intake increased by 10% to SEK 450.0 million (409.6). In USD, order intake increased 1%. 

 >      EBITA was SEK 37.3 million (22.8), representing an EBITA margin of 7.9% (5.5). 

 >      Adjusted* EBITA was SEK 37.3 million (32.0), representing an adjusted* EBITA margin of 7.9% (7.7). 

 >      Operating profit was SEK 35.7 million (21.7). Operating margin was 7.5% (5.2). 

 >      Profit after tax amounted to SEK 23.5 million (16.3). 

 >      Earnings per share was SEK 1.39 (0.99) before dilution and SEK 1.39 (0.92) after dilution**.  

 >      IFRS 16 increased EBITA by SEK 0.1 million. 

JANUARY-JUNE 2019 

 >      Net sales increased by 16% to SEK 919.0 million (790.2). In USD, net sales increased 5%. 

 >      Order intake increased 15% to SEK 892.1 million (778.6). In USD, order intake increased 5%. 

 >      EBITA was SEK 77.9 million (53.9), representing an EBITA margin of 8.5% (6.8). 

 >      Adjusted* EBITA was SEK 77.9 million (65.5), representing an adjusted* EBITA margin of 8.5% (8.3). 

 >      Operating profit was SEK 75.1 million (51.6). Operating margin was 8.2% (6.5). 

 >      Profit after tax amounted to SEK 58.2 million (37.3). 

 >      Earnings per share was SEK 3.45 (2.31) before dilution and SEK 3.45 (2.21) after dilution**.  

 >      IFRS 16 increased EBITA by SEK 0.3 million and increased total assets by SEK 36.7 million. 

SIGNIFICANT EVENTS DURING THE QUARTER  

 >      Tariffs on imports from China to USA were raised from 10% to 25% on 10 May.

 >      The Annual General Meeting on 13 May resolved to pay a dividend of SEK 4.50 per share.

MESSAGE FROM THE CEO

Good quarter for NCAB despite raised tariffs

There was a somewhat weaker growth for NCAB in the second quarter of 2019 in both sales and order intake. Sales increased 14 per cent (4 per cent in USD). Order intake increased 10 per cent (1 per cent in USD). The higher tariffs from China to the USA not only impacted our US operations but also parts of our sales in China whose final destination is the USA. Our US operations are of course impacted the most and if we exclude North America, order intake increased 16 per cent (7 per cent in USD) compared with the second quarter of 2018.  

Earnings remained strong, up 17 per cent year-on-year and an adjusted EBITA margin of 7.9 per cent.  

Of our segments, Nordic is continuing to deliver healthy growth and high margins. Growth of 25 per cent (15 per cent in USD) was mainly driven by Norway, which performed strongly, and the acquisition of Multiprint in Denmark. The high margin declined slightly due to the change in the mix between the countries.  

Growth in Europe was 12 per cent (2 per cent in USD) and the EBITA margin is continuing to increase and is now at more than 6 per cent. This is quite good given that the Europe segment comprises many newly started companies in which we are investing for growth. Our largest companies, such as the ones in Germany and the UK, performed strongly, while we saw a more cautious approach from customers in other countries like France and Spain.

The performance of the East segment, which includes Asia and Russia, was favourable for the quarter, despite a certain setback in China due to the higher tariffs to the USA. Reported growth was 26 per cent (16 per cent in USD) and the EBITA margin was 10.6 per cent. 

We saw a clear break in the trend in the North America segment when the 25 per cent tariffs were introduced in May. Sales declined by more than 20 per cent in USD in the quarter. It is clear that our customers are delaying their orders and hope that tariffs will at least return to 10 per cent. 

All in all, we are seeing a somewhat cautious approach from some of our customers in Europe and in North America, although it is difficult to say whether this is a temporary situation or the start of a weaker market. It is clear that the trade war between the USA and China is reducing buying pressure in many more countries. So, what can we do to mitigate this, or increase our resilience?  

Apart from intensifying our focus on sales, as we have a small market share, we have also partnered with a Taiwanese manufacturer for the US market in order to offer American customers import without tariffs. We also continuously scrutinize our cost base to ensure that we employ the right resources in the right places. Thanks to our strong purchasing power, we also succeeded in reducing prices from our factories, which should strengthen our competitiveness moving forward.

Hans Ståhl 

President and CEO, NCAB Group AB

This is information that NCAB Group AB is obligated to disclose pursuant to the EU Market Abuse Regulation and the Swedish Security Markets Act. The information was issued for publication on 30 July 2019, at 7:30 a.m. CEST.

This is a translation of the original Swedish interim report. In the event of difference between the English translation and the Swedish original, the Swedish interim report shall prevail. 

For further information, please contact:

Gunilla Öhman, IR Manager

Telephone: +46 707 63 81 25

E-mail: gunilla.ohman@ncabgroup.com

About NCAB

NCAB is a worldwide leading supplier of printed circuit boards, listed on NASDAQ Stockholm.

NCAB is offering PCBs for demanding customers, on time with zero defects, produced sustainably at the lowest total cost. NCAB was founded in 1993. Since its foundation, the operations have been characterized by an entrepreneurial and cost efficient culture and have over time showed strong growth and good profitability.

Today, NCAB has local presence in 17 countries in Europe, Asia and North America and customers in approximately 45 countries worldwide. Revenues in 2017 amounted to SEK 1 400 million. Organic growth and acquisitions are part of NCAB’s strategy. For more information about NCAB Group please visit us at www.ncabgroup.com.

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