Troax Group: Interim report January- June 2023
Hillerstorp 16th of August 2023, 12:30 CET
APRIL – JUNE
- Order intake in the quarter decreased by 10 percent compared with the same period last year and amounted to 65,4 (72,6) MEUR. Adjusted for currency and acquisitions the decrease was 9 percent.
- Sales in the quarter decreased by 12 percent compared with the same period last year and amounted to 68,5 (77,9) MEUR. Adjusted for currency and acquisitions sales decreased by 11 percent.
- Operating profit before amortizations (EBITA) decreased to 13,0 (14,0) MEUR.
- Operating margin before amortizations (EBITA margin) increased to 19,0 (18,0) percent.
- Financial net was -0,6 (-0,3) MEUR.
- Profit after tax decreased to 9,1 (10,5) MEUR.
- Earnings per share after dilution amounted to 0,15 (0,18) EUR.
JANUARY - JUNE
- Order intake in the period decreased by 8 percent compared with the same period last year and amounted to 135,3 (147,1) MEUR. Adjusted for currency and acquisitions the decrease was 8 percent.
- Sales in the period decreased by 8 percent compared with the same period last year and amounted to 136,3 (147,5) MEUR. Adjusted for currency and acquisitions the decrease was 8 percent.
- Operating profit before amortizations (EBITA) decreased to 25,7 (26,8) MEUR.
- Operating margin before amortizations (EBITA) increased to 18,9 (18,2) percent.
- Financial net was -1,2 (-0,5) MEUR.
- Profit after tax decreased to 18,0 (19,8) MEUR.
- Earnings per share after dilution amounted to 0,30 (0,33) EUR.
CEO COMMENTS
Troax' order intake decreased during the second quarter. This follows the pattern from the last few quarters, where the previously strong order intake from customers within the Automated warehouse sector decreased due to earlier overinvestments. This trend is expected to continue throughout 2023, which means that the comparative figures for the second half of 2022 were also affected by this negative trend, due to the decline in Automated Warehouses starting in the second quarter of the previous year.
As we disclosed in the interim report for the first quarter, we have noted an increase in demand in this segment among small and medium-sized players, which is a signal that the long-term trend is still positive. Other customer segments continue to increase volumes during the second quarter, which is a good indication that our core business continues to develop positively. No reduction due to a general drop in demand has been noticeable.
Demand from our automotive customers has continued to increase. We note greater interest from this customer segment in both North America and Europe, compared to 2022. The low demand from customers in Automated warehouses is again most noticeable in Natom Logistic (part of Continental Europe) and North America, where order intake has been low in the period. Overall, for the second quarter, order intake is 9% lower than in 2022, when we exclude acquired companies and currency effects.
In terms of invoicing, however, we have been able to maintain the numbers in general due to our loyal small and medium-sized customers continuing to buy at an unabated rate, even though the UK measures itself against high comparative figures for 2022. The decline is approximately 11% and our price adjustments are now gone in the comparison against 2022. This means that implemented price increases have had full impact already in previous quarters.
The gross margin has gradually improved and is now almost on par with the group's internal target of 39–40%. Behind this is again the fact that purchase costs of various kinds have been relatively stable and declining during the period (with the exception of energy costs) while the volumes continued at the planned level. Reductions in capacity have been made mainly in the first quarter in North America and in Poland. The improved gross margin is achieved even though it is still negatively affected by lower volumes compared to 2022 and thus under-absorbed costs.
The improved gross margin can also be seen in an improved EBITA margin, where, despite volume reductions in our factories, we clearly exceed the margin for the same period last year. In absolute terms, EBITA is slightly lower than in 2022, but the operating margin has increased in the quarter from 18% to 19% in 2023 despite the volume reduction.
Cash flow has remained strong during the second quarter and positively affected by reductions in inventory levels. This means that Troax has a continued stable financial situation and sees good opportunities to continue looking for interesting complementary companies to acquire.
In the quarter, we have continued to invest long-term for continued capacity growth and for increased productivity, primarily in Natom Logistic in Poland, where additional production equipment has been put into use. We are also in the process of partially moving production from an old rented factory to our own in Sroda, Poland. This move will continue into 2024. Operations in Hillerstorp are being expanded further in 2023 and we expect the building to be completed by the turn of the year. The companies acquired in 2022 in Spain, Claitec, and in Sweden, Svenska Cykelrum, have had a continued positive development in the period.
During the quarter, an exciting market launch was made, of our new 'panel detection system'. This means that customers who invest in this new system get a significantly higher level of safety and protection, as the system alerts the user if any panels are missing in the installation. Once installed and configured, this means that a machine cannot be started, without the safety guarding system being complete
Thomas Widstrand, President and CEO
TELEPHONE CONFERENCE
Invitation to presentation of the second quarter result:
Thomas Widstrand, CEO presents the result on a phone conference on the 16th of August 2023 at 16:00 CET. The conference will be held in English. For more information, please refer to https://www.troax.com/global/en/press
For additional information, please contact:
Thomas Widstrand
President and CEO
Troax Group AB
Box 89
SE-335 04 Hillerstorp
Tel +46 (0)370-828 31
thomas.widstrand@troax.com
This information is information that Troax Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014 and the Securities Markets Act (2007:528). The information was submitted for publication, through the agency of the contact person set out above, at 12:30 CET on the 16th of August 2023.
About Troax
Troax is the leading global supplier of indoor perimeter protection (“metal-based mesh panel solutions”) for the market segments: Machine guarding, Warehouse partitioning and Property Protection. Troax develops high quality and innovative safety solutions to protect people, property and processes.
Troax Group AB (publ), Reg. No. 556916-4030, has a global organisation with a strong sales force and efficient logistics setup, enabling local presence and short delivery times in 45 countries.
In 2022 Troax net sales amounted to around 284 MEUR and the number of employees amounted to about 1 100 persons at the end of 2022. The Company’s head office is located in Hillerstorp, Sweden.
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