Second quarter of 2023 in brief:
• Sales totaled SEK 2,478 million (2,905)
• Operating profit (EBITA) was SEK 198 million (264)
• EBITA margin of 8.0% (9.1)
• Profit after tax was SEK 155 million (190)
• Earnings per share, basic and diluted, were SEK 0.58 (0.71)
• Cash flow after investments rose to SEK 224 million (71) excluding acquisitions

“Adjusted for currency, the Group’s net sales decreased by 20% in the second quarter,” said Nolato’s President and CEO, Christer Wahlquist. “The decrease was entirely attributable to continued low volumes in the Integrated Solutions business area.”

Medical Solutions sales amounted to SEK 1,364 million (1,214); adjusted for currency, this was an increase of 6%. Operating profit (EBITA) was SEK 138 million (121), with an EBITA margin of 10.1% (10.0).

“Within Medical Solutions, Nolato is continuing to consolidate its position as a global, strategic partner with a strong local presence,” said Christer Wahlquist. “Most market areas are displaying good growth, with the exception of in vitro diagnostics (IVD), which remained at an unchanged level compared with the year-earlier period due to continued inventory adjustments in the value chain.”

Integrated Solutions sales amounted to SEK 392 million (1,019); adjusted for currency, this was a decrease of some 63%. Operating profit (EBITA) was SEK 16 million (109), with an EBITA margin of 4.1% (10.7).

“Low volumes and a change in sourcing strategy at a previously significant customer have meant lower sales in the quarter,” commented Christer Wahlquist. “Sales were also impacted by a fall in end-customer demand at most other consumer electronics customers due to weakening economic conditions. Our EMC operations are continuing to expand, chiefly in automotive, while telecom is being affected by a slower 5G roll-out.”

Industrial Solutions sales amounted to SEK 724 million (676); adjusted for currency, this was an increase of 1%. Operating profit (EBITA) grew to SEK 56 million (37) and the EBITA margin to 7.7% (5.5).

“Volumes in the automotive area have risen, while less disruption in the supply chain has led to more efficient production,” said Christer Wahlquist. “For the consumer discretionary sector, weakening economic conditions mean more restrained consumer spending, which leads to lower production volumes for us.”

Overall, the Group’s sales totaled SEK 4,954 million (5,784) in the first half of 2023, which is a decline of 20% when adjusted for currency. Operating profit (EBITA) decreased to SEK 391 million (531) and the EBITA margin to 7.9% (9.2). Cash flow after investments rose to SEK 178 million (30) excluding acquisitions.

The Group’s financial position remains strong, with net financial debt of SEK 1,163 million (640) and an equity/assets ratio of 52% (49).

“In an increasingly challenging operating environment, we are continually enhancing our competitiveness,” said Christer Wahlquist. “We now have a more diversified customer base than before, which, combined with our continual efforts to reduce our total costs and improve efficiency, means we are well equipped to harness opportunities and generate profitable, sustainable growth over time.”