Interim Report January–September 2024

• Net sales decreased by 11% to SEK 898.0 million (1,005.4). In USD, net sales decreased 7%. For comparable units, net sales decreased 12% in SEK, and 8% in USD.
• Order intake decreased 4% to SEK 887 million (924), while in USD order intake was unchanged. Order intake for comparable units decreased 5% year-on-year in SEK and was 1% lower in USD. Book to bill amounted to 0.99.
• EBITA decreased to SEK 118.5 million (176.0), representing an EBITA margin of 13.2% (17.5). SEK 2.2 million (0.2) was charged to EBITA relating to transaction costs. In the previous year, earnings were positively affected by the reversal of an additional purchase consideration of SEK 21.0 million linked to the acquisition of Phase 3 Technologies.
• Cash flow from operating activities was SEK 119.0 million (260.4).
• Operating profit was SEK 100.0 million (160.5).
• Profit after tax was SEK 50.0 million (110.4).
• Earnings per share before and after dilution was SEK 0.27 (0.59).

JANUARY–SEPTEMBER 2024

• Net sales decreased 13% to SEK 2,783.7 million (3,209.3). In USD, net sales decreased 13%. For comparable units, net sales decreased 17% in SEK as well as USD.
• Order intake decreased 3% to SEK 2,794 million (2,878). The decrease in USD was 2%. Order intake for comparable units decreased 7%. Book to bill was 1.00.
• EBITA decreased to SEK 381.5 million (527.9), representing an EBITA margin of 13.7% (16.4). SEK 3.1 million (9.4) was charged to EBITA relating to transaction costs. Earnings were charged with approximately SEK 13 million in costs for the Group’s business development conference that is held every second year for all employees. In the previous year, earnings were positively affected by the reversal of an additional purchase consideration of SEK 21.0 million. The roll-out costs for the new IT system were on a par with the preceding year at approximately SEK 26 million.
• Cash flow from operating activities was SEK 308.9 million (615.0).
• Operating profit was SEK 332.8 million (487.6).
• Return on equity was 20.7% (32.4).
• Profit after tax was SEK 213.2 million (336.6).
• Earnings per share before dilution was SEK 1.14 (1.80). After dilution SEK 1.14 (1.79).

SIGNIFICANT EVENTS DURING AND AFTER THE QUARTER

• Timothy Benjamin assumed the role as new CFO in September.
• On 1 July, 100% of the shares were acquired in ICOM Industrial Components AG in Switzerland.
• On 4 July, the PCB division was acquired from EPI Components in Austria.
• An agreement was signed on 22 July to acquire 100% of the shares in the PCB company DVS Global in Italy.
• On 2 September, 100% of the shares were acquired in Print Production A/S in Denmark.
• On 1 October, the preliminary third quarter results were announced.
• On 10 October, NCAB finalized the acquisition of the PCB company DVS Global in Italy.

MESSAGE FROM THE CEO
Weak demand in Europe negatively impacted sales

The global printed circuit board market has been affected by the weak global industrial activity and we noted a further slowing of the economy, particularly in Europe, during the third quarter. This meant that the expected market recovery has been delayed. The German economy, the largest in Europe, has continued to weaken in recent months and we could also see spill-over effects to other parts of Europe. Recently, we have also seen that several European PCB factories have been forced to close due to poor profitability. Market conditions were slightly more stable in North America and Asia and despite the lack of clear overall growth we can see opportunities.

During the quarter, net sales declined, as did order intake, compared with the corresponding quarter in the preceding year. During the third quarter of 2023, a high backlog of orders continued to support strong net sales. Currency effects were also a contributing factor to the lower net sales and order intake for the quarter compared with 2023. In USD, order intake was on par with 2023. Given that net sales decreased, we are satisfied that we were able to deliver a healthy EBITA margin of just over 13 per cent.

We saw a mixed picture in the Nordics segment. Net sales decreased 9 per cent compared with 2023. Industries such as electric vehicle charging and heat pumps have witnessed low demand recently and demand in general industry also reflected the weak economic conditions. However, order intake looked slightly brighter with an increase of just over 9 per cent. This was primarily driven by defence, though as delivery times are longer here net sales will mainly materialise in 2025. There are also signs that the electric vehicle charging market has bottomed out.

The effects of the weaker industrial economy were most evident in the Europe segment. Even though NCAB has little direct exposure to the automotive industry, which is going through a tough phase, this had negative knock-on effects in general industry. During the quarter, we also noted spill-over effects from Germany to other significant economies in Europe. A positive development during the quarter was that we became qualified to begin sales in several countries towards defence, where there is an increasing need for high-quality suppliers. It was also positive that we could finalise acquisitions in Austria, Switzerland and Italy, and that these will contribute to our business in the fourth quarter.

In the North America and East segments, we continued to grow year-on-year. This is a sign of strength as we did so without any support from the general economy in these markets, even if the macro situation may not be as negative as in Europe. Our network of sales agents in the USA is growing and in Asia we grew successfully with focus on high-tech applications for demanding customers.

Even if the weak economic situation remained and has deteriorated further in Europe during the third quarter, there are positive signs in terms of the number of new contracts and customers that are continuing to perform well. We also noted increased uncertainty in the market regarding the stability of PCB factories in Asia and Europe, which favours us. In this challenging market, NCAB is a stable partner that guarantees quality and continuity of supply. This will be important for our customers when the market recovers.

Despite the market climate we have maintained our margins and have had a strong cash flow. This allows us to continue our expansion and increase market share, so we stand ready when the market rebounds.

“In this challenging market, NCAB is a stable partner that guarantees quality and continuity of supply”

Peter Kruk
President and CEO, NCAB Group AB

This interim report has been reviewed by the company’s auditor.

NCAB Group AB (publ)
Tel: +46 (0) 8 4030 0050
Löfströms Allé 5, SE-172 66 Sundbyberg, Sweden
www.ncabgroup.com

NCAB Group is publishing the interim report for January–September 2024, on Tuesday 5 November at 7:30 a.m CET. A web-cast teleconference will be held at 10:00 a.m. CET on the same date, where President and CEO Peter Kruk and CFO Timothy Benjamin will present the report. The presentation will be followed by a Q&A session. The presentation will be held in English. For those who wish to participate via webcast, please use the link below: https://ir.financialhearings.com/ncab-group-q3-report-2024

For those who wish to participate via teleconference, please register on the link below. After registration, you will be provided with phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference.

https://conference.financialhearings.com/teleconference/?id=50048800

FINANCIAL CALENDAR
Year-end report 13 February 2025
Annual Report 10 April 2025
Interim report first quarter 25 April 2025
Annual General Meeting 8 May 2025
Interim report second quarter 22 July 2025
Interim report third quarter 24 October 2025
Year-end report 2025 13 February 2026