First quarter, January-March 2025 in brief

• Net sales increased by 3% to SEK 2,290 m (2,225)
• Operating profit (EBIT) decreased by 4% to SEK 215 m (223)
• Profit before tax (EBT) decreased by 7% to SEK 205 m (221)
• Profit margin before tax (EBT %) was 8.9% (9.9)
• Profit after tax amounted to SEK 166 m (185)
• Cash flow from operating activities amounted to SEK 244 m (244)
• Earnings per share before dilution amounted to SEK 1.81 (2.01)
• Equity ratio was 65% (64)
• The Board of Directors proposes a dividend of SEK 1.60 /share (SEK 1.33 /share)

A word from the CEO     

We are reliable

AQ's factories keep going on despite the high economic turmoil in the world. AQ will survive even Trump's tariffs. When things are turbulent, it feels reassuring that AQ is debt-free. Our demanding industrial customers must be able to rely on us regardless of the trading climate in the outside world. Our factories focus on helping our customers by delivering locally in the countries where they are located.

Acquisition

Growth through acquisition was 8% during the quarter. Our acquired companies have the largest sales in the defense technology, electrification and railways segments. On January 31, we completed the acquisition of the companies mdexx magnetronics and Michael Riedel, which develop, manufacture and sell inductive components. These companies have the majority of their sales in Germany and have strong relationships with demanding German industrial customers. The integration into AQ has started and we are impressed by these companies' high level of technology and well-organized factories. We have just started to get to know each other, but our view is that our new employees and customers from mdexx and Michael Riedel will contribute strongly to AQ's development going forward. Right now, the companies are performing as expected and they have a negative impact on AQ's profit margin by 0.5 percentage points in the quarter. We expect a sequential improvement quarter by quarter until we reach AQ's average margin.

Market and investments

In the quarter, our sales decreased organically by 5% compared to the same quarter last year. This is worse than expected. Demand was low in January and then improved at the end of the quarter. Our sales to customers in trucks, buses and construction equipment were lower than in the same period last year, but also slightly better at the end of the quarter. Demand in our end markets electrification, defense and railway was good in the quarter. As always, we operate in a highly competitive market, and we must tirelessly ensure that we have the lowest costs combined with good delivery precision and quality of our products in order for us to continue to grow.

For as long as I can remember, our strategy has been to manufacture our products close to our customers. This is because neither we nor our customers appreciate long transports and tariffs. This means that we do not see any major direct impact with regard to the new tariffs that are now being introduced in the US. However, it has accelerated our decision to invest an additional USD 3.7 m in our factory in Whyteville, USA, where we manufacture larger transformers. This investment will be carried out in the second quarter. It is being done because we see great demand for transformers and inductors in the US for railways, electrification and data centers.

Demand for inductive components is strong for AQ globally. During the quarter, we signed a major agreement of at least SEK 100 m with deliveries over the next three years, with a world-leading customer in electrification that manufactures uninterrupted power supply for data centers. As a result, we will see increased sales from our factories in Hungary, China, the Czech Republic and the US.

Cash flow and balance sheet

Our cash flow from operating activities was SEK 244 m in the quarter. We have a net cash position of SEK 253 m, which means that we have plenty of capital to use for continued growth with our customers and to carry out value-creating acquisitions.

AQ we are reliable

We will stubbornly continue to work to increase our competitiveness. As always, we must deliver customer value in the form of world-class technical excellence, purchasing and productivity. The products that we deliver must be of good quality and arrive on time. This is achieved by our fantastic employees working closely with our customers and suppliers to solve the possible and impossible problems that arise. This, together with our strong financial position, makes me feel confident that AQ will continue to deliver customer value even in the current market climate, as we at AQ say: we are reliable.

James Ahrgren
CEO

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This disclosure contains information that AQ Group is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014) and the Swedish Securities Markets Act (2007:528). The information was released for publication by James Ahrgren on 23-04-2025 08:00 CEST.

For further information, please contact:

James Ahrgren, CEO and IR, telephone +46 76 052 58 88  or
CFO, Christina Hegg, telephone +46 70 318 92 48
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AQ is a global manufacturer of components and systems to demanding industrial customers and is listed on Nasdaq Stockholm's main market. The Group consists mainly of operating companies each of which develop their special skills and in cooperation with other companies, striving to provide cost effective solutions in close cooperation with the customer.

The Group headquarter is in Västerås, Sweden. AQ has 8,000 employees in Bulgaria, Poland, Lithuania, Sweden, China, Estonia, Hungary, Mexico, Finland, India, Canada, USA, Germany, Italy, Brazil, Great Britain and Czech Republic. In 2024 AQ had net sales of SEK 9 billion, and the Group has since its start in 1994 shown profit every quarter.

www.aqgroup.com