First quarter of 2025 in brief

• Sales totaled SEK 2,453 million (2,442)
• Operating profit (EBITA) increased to SEK 271 million (238)
• EBITA margin of 11.0% (9.7)
• Profit after tax was SEK 199 million (162)
• Earnings per share, basic and diluted, rose to SEK 0.74 (0.60)
• Cash flow from operating activities amounted to SEK 135 million (136)
• Net financial liabilities in relation to adjusted operating profit (EBITDA) was 0.5x

The Group’s net sales, adjusted for currency, decreased by 1% in the first quarter. At the same time, our EBITA margin increased by as much as 1.3 percentage points to 11.0% in relation to the comparative quarter. Cash flow from operating activities amounted to SEK 135 million (136) and was in line with the previous year, despite an increased working capital requirement at the end of the quarter.

Business area performance

Medical Solutions sales amounted to SEK 1,397 million (1,355); adjusted for currency, this was an increase of 2%. Operating profit (EBITA) increased to SEK 171 million (140), and the EBITA margin rose by as much as 1.9 percentage points to 12.2% (10.3). Most market areas had stable volumes. Drug Delivery continued to grow with increasing volumes for insulin pumps, for example, and – after a protracted period of inventory adjustments for Surgery – volumes stabilized from low levels. However, in vitro diagnostics (IVD) exhibited lower volumes. During the quarter, an operating property was acquired in Poland in connection with existing operations, to create opportunities for future expansion in Europe.

Engineered Solutions sales amounted to SEK 1,058 million (1,087); adjusted for currency, this was a decrease of 3%. Operating profit (EBITA) was SEK 107 million (103) and the EBITA margin rose to 10.1% (9.5). As expected, volumes in the Automotive market area decreased. Production volumes in the area have generally been adjusted downwards and the quarter also contained closed delivery days in some cases. Other market areas had stable volumes.

Materials’ volumes increased strongly compared to the previous year, with sales growth of 12% adjusted for currency. New products and areas of technology within automotive, as well as new product areas, resulted in increased market share and strong growth. Volumes for network equipment in telecom increased during the quarter, which also made a positive contribution.

Comments from the CEO

Christer Wahlquist, President and CEO of Nolato AB, commented:

Fundamentally, we have a tried-and-tested business model and we are pleased to see that our strategic price adjustments, cost adjustments and focused efforts throughout the supply chain are bearing fruit.

After the end of the quarter, fears of a global trade war have increased significantly and it is currently difficult to predict how events will unfold, even though Nolato is not impacted by any significant direct effects. As we have production, and deliveries, at several locations both inside and outside new tariff areas, we can engage in a dialog with customers to achieve the best solutions over time.

In the Medical Solutions business area, we will continue our profitable growth journey with innovation and sustainability in focus – a strategy that is validated by us having won significant customer contracts; factors that contributed to an increase in the EBITA margin in the first quarter. In the Engineered Solutions business area, expected reduced volumes in the Automotive market area resulted in lower sales, while Materials’ favorable product mix and cost adjustments, especially in the Chinese operations, contributed to a strengthened EBITA margin.

In March, the Board of Directors set new financial targets: Annual organic growth is to exceed 8%, EBITA margin is to exceed 12% and return on capital employed is to exceed 15%. All over a business cycle.

Our flexibility, global production capacity and close customer relationships, together with a strong financial position, enable us to invest in both new customer projects and bolt-on acquisitions. The foundation has been laid for increasingly profitable growth over time.