First quarter of 2022 in brief

• Sales increased to SEK 2,879 million (2,645)
• Operating profit (EBITA) was SEK 267 million (308)
• EBITA margin of 9.3% (11.6)
• Profit after tax was SEK 201 million (226)
• Diluted earnings per share were SEK 0.75 (0.84)
• Cash flow after investments amounted to SEK −41 million (71)

“The past quarter has once again seen fluctuating business conditions,” said Christer Wahlquist, Nolato President and CEO. “Our focus is always on customers, although this is resulting in temporarily higher costs and lower production efficiency, and on minimizing the impact of pandemic-related shortages of components, materials and personnel. In addition, since the invasion of Ukraine, we have been taking into account a range of geopolitical effects. Nolato therefore expects the business area’s sales for the second quarter to be around 20% lower than in the first quarter of this year, but with a comparable margin.”

Medical Solutions sales in the first quarter of 2022 amounted to SEK 1,088 million (1,006); adjusted for currency, sales increased by 1%. Operating profit (EBITA) was SEK 106 million (121), while the EBITA margin decreased to 9.7% (12.0).

“The combination of a change in the sales mix, with a greater share from the surgery segment and a lower share from IVD, along with higher material costs, is resulting in a lower margin, although the higher material costs have largely been offset,” noted Christer Wahlquist. “Investments in capacity made in 2021 are still not being fully used and are consequently having a negative impact on the margin.”

Integrated Solutions sales amounted to SEK 1,140 million (1,045), which, adjusted for currency, was a decrease of 1%. Operating profit (EBITA) was SEK 123 million (125), with an EBITA margin of 10.8% (12.0).

“Volumes in the quarter were lower than previously expected, which was mainly due to the restricted supply of electronic components,” said Christer Wahlquist. “Since March, end-customer demand in the VHP area has been adversely affected by the situation in Eastern Europe. The EMC business is continuing to perform well. After years of development work, since spring 2017 we have produced significant volumes of VHP products for a customer as a single-source partner. This segment has gradually grown in size and become increasingly important to our customer’s overall offering. As is normal, this customer is now undertaking a general assessment of its future sourcing strategy for new products in the VHP segment. Nolato has an excellent relationship with the customer in question and expects to also deliver significant volumes for the new products.”

Industrial Solutions sales amounted to SEK 653 million (595); adjusted for currency, sales increased by 5%. Operating profit (EBITA) was SEK 40 million (66), with an EBITA margin of 6.1% (11.1).

“Volumes were lower than in the same quarter last year, but the passing on of price increases in materials has a positive effect on sales. A shortage of components, particularly in the automotive sector, and in other areas more recently, is adversely affecting volumes, although demand is believed to remain good,” noted Christer Wahlquist.