Release Date: October 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nederman Holding AB (FRA:5QR, Financial) reported strong order intake growth in 3 out of 4 divisions, indicating robust demand in key areas.
- The company maintained solid profitability with an improved EBITA margin of 11.4% compared to 11.1% in Q3 2023.
- Strong cash flow from operations was reported, increasing to SEK181 million from SEK137 million in Q3 last year.
- The acquisition of Duroair Technologies complements Nederman's existing solutions, expanding its reach into new sectors such as defense and aeronautics.
- Nederman's investment in new manufacturing and logistics facilities in Helsingborg and Chesterfield is expected to enhance operational efficiency.
Negative Points
- The process technology division experienced a significant decline in orders and sales, impacting overall group performance.
- Currency fluctuations, particularly the appreciation of the Swedish Kroner against the US dollar, negatively affected financial results.
- Sales for the quarter were lower than expected due to delays in major orders and external factors like storms.
- The monitoring and control technology segment saw a decline in EBITA margin, attributed to delays in sales shipments.
- Challenges in the Chinese and Indian markets, particularly in the textile and fiber sectors, continue to affect growth in the APAC region.
Q & A Highlights
Q: On a group level, which industries are currently driving order intake? Are sectors like battery, renewable energy, and metal recycling showing higher growth compared to traditional industries?
A: Metal recycling, including aluminum and lead, is performing well, while the woodworking industry is weaker due to lower construction activity. Recycling sectors are generally doing better than others. - Sven Kristensson, CEO
Q: How is the overproduction of battery manufacturing in China affecting competition and price pressure in other markets?
A: We are not significantly involved in the Chinese battery market. However, we see growth in the US due to reshoring. The market remains positive, especially in recycling and filtration for lead batteries. - Matthew Cusick, CFO
Q: Can you quantify the financial impact of Hurricane Helen on sales, and will it affect Q4?
A: The hurricane caused a delay in shipments, impacting revenue by a few million SEK. This is expected to be recovered in Q4, so the impact is temporary. - Matthew Cusick, CFO
Q: What are the main drivers behind the decline in EBITA for the monitoring and control technology segment, and what can we expect going forward?
A: The decline is due to delayed sales shipments. We expect improved margins as production efficiency and capacity increase, given the high contribution margins in this division. - Sven Kristensson, CEO
Q: How has market competition developed in recent quarters?
A: We have gained orders from competitors facing financial difficulties. Our focus remains on quality and financial stability rather than engaging in price wars. - Sven Kristensson, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
