Year-end report January-March 2023

A strong start to the year

Quarter 1, 2023

• Incoming orders amounted to SEK 1,505m (1,345), equivalent to currency neutral growth of 5.9 percent compared with the same period last year.
• Net sales amounted to SEK 1,482m (1,094), equivalent to currency neutral growth of 27.6 percent compared with the same period last year.
• Adjusted EBITA was SEK 172.7m (115.7), giving an adjusted EBITAmargin of 11.7 percent (10.6).
• Operating profit totalled SEK 127.1m (98.2), corresponding to an operating margin of 8.6 percent (9.0). Operating profit included a restructuring cost of SEK 20m.
• Net profit was SEK 77.8m (70.5).
• Earnings per share were SEK 2.22 (2.01).
• Cash flow from operating activities amounted to SEK 128.7m (-7.9).

CEO’s comments
 

” Nederman made a convincing start to 2023. During the first quarter, sales increased at a high rate, at the same time as we were able to match the strong orders received in 2022 and we improved profitability and cash flow. Our investments in more efficient production and logistics are beginning to generate increasingly clear results, while we are also continuing to advance our market positions globally.

The environmental technology company Nederman’s positive momentum continues. All four divisions displayed a significant increase in sales in the first quarter, which resulted in sales for the Group as a whole of SEK 1,482m (1,094), corresponding to currency neutral growth of 27.6 percent. At the same time, orders received came in at the same high level as sales and, in absolute numbers, were higher than last year, which is strong and establishes a solid foundation for sales in the coming quarter. Our efforts to increase operational efficiency continued undiminished, and together with higher sales volumes, helped us to strengthen profitability and cash flow during the quarter. Despite that sales mix, inflationary pressure and some continued supply problems had a negative impact on margins, we reported the best first quarter in the history of Nederman in terms of sales and profit. We still have work to do to further raise our margins.

A part of this work relates to our operations in China. We are currently relocating our production and warehouse units there while reviewing the supply chain and our sales resources. In this way, we will reduce fixed costs and create a platform that will be able to focus more effectively on profitable business. The important Chinese market has been challenging in recent years, partly as a consequence of the comprehensive covid-19-related lockdowns. Although the situation has improved, the market is more complex than before covid. Quite simply, we need to take action to create a platform for long-term profitable growth. As a consequence of this, a restructuring programme is being conducted in China, where a nonrecurring cost of SEK 20m was charged to first-quarter earnings.

Continuously reviewing opportunities to strengthen our competitiveness is an important and natural activity for a global and market-leading company such as Nederman. At the end of the quarter, the expanded production and warehouse facility in Thomasville in the US was ready for use, meaning that the new Nordfab Now logistics concept can now be implemented. We have also commenced the installation of the 10,000 m2 of solar panels on the roof of the building that will generate energy corresponding to half of the facility’s needs.

High priority is assigned to increasing sales within growing sectors in which investments are being made in new technology, and a great deal of work is being done in our divisions to ensure that we are always relevant. Renewable energy, metal recovery, food and ventures related to electrification are some of the areas in which we are advancing our positions with existing and completely new solutions. A key reason for these successes is our leading-edge digital offering, with the long-term objective of offering our customers completely digitally controlled airflow. We also offer digital and smart solutions that help our customers to reduce their high energy costs for industrial air filtration. Our new Nederman SAVE system is now in operation at customers in Europe and in certain cases, has led to more than 60 percent lower energy consumption. The next step is to launch SAVE in the US.

POSITIVE START TO THE YEAR IN OUR DIVISIONS
I can say that the year began well for all divisions, even if we saw a marginal decline in orders received, which is to be compared with the strong quarter in 2022. A strong base business, high order backlog and acquisitions gave Nederman Extraction & Filtration Technology a new boost in sales and income. New large orders were received in the welding segment in the US. Nederman Process Technology continued to deliver on its strong order backlog and added further orders in, for example, non-woven and recycling, and also delivered higher margins and continued high returns on capital employed. Nederman Duct & Filter Technology also improved its sales and profitability, and secured new orders beyond its traditional industries. Finally, Nederman Monitoring & Control Technology is beginning to generate increasingly healthy returns on its investments, with higher orders received, sales and profitability as a result.

CONTINUED OPTIMISM, BUT UNCERTAINTY REMAINS
Even if the performance of our divisions remains positive, the risk remains that challenges in our supply chain, high inflation and a weaker economic outlook will impact customers’ investment decisions and possibility of conducting business. In addition, the geopolitical uncertainty remains. However, Nederman stands strong in this macro environment. In terms of our large order backlog and our ability to grow our share of sales in industries with good structural growth, we take a positive view for the next quarter, but are somewhat more uncertain regarding development during the second half of the year.”

Sven Kristensson, CEO

For further information, please contact:

Sven Kristensson, CEO   
Telephone: +46 42 18 87 00   
e-mail: sven.kristensson@nederman.com

Matthew Cusick, CFO
Telephone: +46 42 18 87 00
e-mail: matthew.cusick@nederman.com

This information is information that Nederman Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 a.m. CET on April 24, 2023.

About Nederman
Nederman is an environmental technology company and a global leader in industrial air filtration dedicated to capturing, measuring, controlling and cleaning air to make industrial production more efficient, safe and sustainable. Based on industry leading products, solutions and services in combination with an innovative IoT platform we deliver knowledge and facts needed to optimise performance and guarantee emissions compliance to protect people, planet and production. 

The Nederman Group is listed on Nasdaq Stockholm. The Group has approximately 2 500 employees and presence in more than 50 countries. Learn more at nedermangroup.com

Nederman Holding AB (publ), P.O. Box 602, SE-251 06 Helsingborg, Sweden.
Corporate registration number: 556576-4205

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