Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NCAB Group AB (LTS:0AAQ, Financial) reported a 10% improvement in order intake compared to Q4 and Q3, with strong performance in North America and the East.
- The company announced the acquisition of B&B Light Service in Germany, enhancing its coverage in the industrial and energy sectors.
- NCAB Group AB (LTS:0AAQ) has invested in building a factory base outside China, providing opportunities to offset tariffs and diversify supply chains.
- The company maintains a strong book-to-bill ratio of 1.06, indicating healthy demand and future revenue potential.
- NCAB Group AB (LTS:0AAQ) continues to pursue an active M&A strategy, with a robust pipeline of potential acquisitions to drive growth.
Negative Points
- Gross margins decreased to 34.7% from 38.1% the previous year, impacted by pricing and higher freight costs.
- EBITDA decreased by 30% year-over-year to 100 million SEK, although it showed sequential improvement.
- The company decided not to pay out a dividend due to market uncertainties, including tariffs and potential economic impacts.
- The Nordic segment experienced weaker order intake, with significant FX effects impacting margins.
- Tariffs continue to pose challenges, particularly for US customers, with potential impacts on demand and pricing.
Q & A Highlights
Q: Can you elaborate on the strong order intake in North America and any changes in customer behavior?
A: Peter Kruk, CEO: We have seen strong order intake in North America, but no significant change in customer behavior. There is increased interest from US customers to explore factory opportunities outside China, with a slight drop in the share of orders from China. However, no pre-buying effect has been observed.
Q: How will the tariffs impact your organic growth and demand in the US?
A: Peter Kruk, CEO: Tariffs will likely lead to top-line growth in the US if they remain at current levels. However, the uncertainty around tariffs and trade wars could impact the general industry sentiment globally, which is a potential risk we are monitoring.
Q: What is the outlook for gross margins given the recent declines?
A: Peter Kruk, CEO: Excluding tariffs, we expect gross margins to stabilize around 35-36%. Recent declines were due to FX impacts and product mix changes, but we do not anticipate this trend to continue.
Q: Can you provide more insight into the decision to cut the dividend?
A: Peter Kruk, CEO: The decision was influenced by the need for financial flexibility amid market uncertainties, similar to our approach during the pandemic in 2020. We aim to maintain our M&A strategy and ensure we have the resources to pursue opportunities.
Q: How is the M&A pipeline looking, and do you expect more acquisitions this year?
A: Peter Kruk, CEO: M&A is a core part of our strategy, and we have an active pipeline. We aim to balance growth through acquisitions and organic means, with a historical target of 2-5 acquisitions per year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
