Second quarter of 2024

• Consolidated sales increased 3.0% to SEK 1,494.3 M (1,450.2).
• Organic growth amounted to –0.6% (20.2), adjusted for acquired sales and currency effects between the years.
• Consolidated operating profit (EBITA) totaled SEK 216.9 M (212.2), with an operating margin (EBITA) of 14.5% (14.6).
• Profit after financial items amounted to SEK 211.6 M (181.2).
• Earnings per share amounted to SEK 6.71 (5.53) before and after dilution

First half of 2024

• Consolidated sales increased 6.3% to SEK 3,029.3 M (2,850.1).
• Organic growth amounted to 2.7% (17.3), adjusted for currency effects between the years.
• Operating profit (EBITA) increased to SEK 476.4 M (414.8), with an operating margin (EBITA) of 15.7% (14.6).
• Profit after financial items increased to SEK 461.9 M (361.6).
• Earnings per share amounted to SEK 14.54 (11.21).

Comments from VBG Group’s President & CEO Anders Erkén
In the second quarter of 2024, VBG Group’s net sales increased 3% to SEK 1,494.3 M (1,450.2).

EBITA increased to SEK 216.9 M (212.2), which is the third best single-quarter earnings in the Group’s history, and the margin on par with the previous year, 14.5% (14.6). Earnings per share increased 21% compared with the second quarter of 2023.

The Group’s growth was due primarily to demand in North America that remained high, price increases and currency effects, and to the effects that we are experiencing from the acquisition of Rathi Transpower in India. Organic growth, adjusted for currency fluctuations and acquired sales, totaled –0.6% during the quarter.

VBG Group is a balanced industrial group that – despite the geopolitical situation and a macroeconomic headwind, particularly in Europe – strengthened its earnings during the quarter.

A high level of capacity utilization at our facilities, the impact of price increases, and the acquisition of Rathi Transpower were the prime factors behind the increase in earnings.

Volumes in North America remained high
Sales in Mobile Thermal Solutions remained favorable during the quarter, primarily in North America. Net sales rose 3%, and sales for the quarter reached a respectable SEK 847.5 M (820.4).

In the US, the Inflation Reduction Act and the EPA’s Clean School Bus Program played a key role in stimulating the transition to fossil-free energy. These initiatives have contributed to an increased demand for electric vehicles, thereby making a positive contribution to our sales performance. Since
Mobile Thermal Solutions is on the leading edge of electrification, offering electric solutions for both the bus and offroad segments, this benefited the division’s operation.

The EBITA margin for the division has improved, totaling 14.3% (12.3) in the second quarter. High capacity utilization, an attractive product portfolio for new and existing customers, and the implemented price increases positively contributed to increased profitability.

Stable demand for truck equipment
Truck & Trailer Equipment continues to deliver at a stable level, reaching sales of SEK 390.5 M (437.9) during the quarter. The negative growth in sales was still attributable primarily to the weak levels of activity in the European semitrailer industry.

Demand for commercial vehicle solutions has changed in recent quarters. The need for truck equipment remained good, while demand from trailer manufacturers has decreased. However, we are seeing that this downturn is beginning to level off.

During the quarter, it was primarily the downturn in volume that negatively impacted the division, and the EBITA margin was 15.6% (20.2).

Strengthened profitability for industry solutions
Net sales for Ringfeder Power Transmission totaled SEK 255.8 M (191.9). The division’s growth of 33% was driven primarily by the acquisition of Rathi Transpower in India. The downturn in some segments such as machine construction and logistics was offset by improvements in the mining, aviation and defense segments.

Profitability was boosted by a positive product and customer mix, and the EBITA margin for the division was 15.5% (16.3).

Increased sustainability requirements
The Group’s sustainability commitments continued to develop during the quarter. We have now compiled the sustainability data for 2023, which will comprise the basis for future improvement and goals. In addition to the measurements of CO2 for Scope 1 and 2, we initiated several activities to begin measuring our impact in Scope 3, with a particular focus on transports, materials and waste. Our initiatives for compliance with new regulations and requirements such as the CSRD continued as planned

The future
I am pleased with VBG Group’s second quarter. In particular, I am proud of all our dedicated, capable employees who have really done a great job. Our planned activities and measures have been implemented, and have yielded results, above all in the North American bus operations. We are continuing to grow, profitability has strengthened over the first six months and we have gained new customers and a broader customer base concurrent with our expansion of our sustainability commitments. Despite signs of a negative business cycle, primarily in Europe, the Group reached its second-highest individual quarter to date for sales.

I feel positive about the future despite the numerous storm clouds ahead. Growth in order bookings leveled off during the second quarter, and order bookings in the firsthalf of 2024 are line with the year-earlier period.

The business environment is continually changing, but through our balanced business portfolio, our strong brands, our skilled employees and our strong financial earnings we have created the flexibility we need to meet future challenges and create profitable, sustainable growth.

I would like to thank all our employees and partners for their excellent work during the quarter.