NCAB Group Releases Interim Report Q3 2021

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NCAB Group presented its Interim report for January – September. 

July – September 2021

  • Net sales increased by 61% to SEK 863.6 million (536.7). In USD, net sales increased 66%. For comparable units, net sales increased by 45%, and in USD the increase was 50%.
  • Order intake increased 83% to SEK 935.2 million (512.3). In USD, the increase was 86%. For comparable units, order intake increased by 65%, and in USD the increase was 68%.
  • EBITA increased 146% to SEK 123.2 million (50.1), representing an EBITA margin of 14.3% (9.3).
  • EBITA was negatively impacted by transaction costs for the acquisition of RedBoard Circuits in an amount of SEK 0.8 million. EBITA, excluding the effect of transaction costs, was SEK 124.0 million, corresponding to a margin of 14.8% (10.3).
  • Operating profit was SEK 118.6 million (47.2). Operating margin was 13.7% (8.8).
  • Profit after tax was SEK 91.2 million (31.5).
  • Earnings per share was SEK 4.86 (1.68), after dilution 4.85 kr (1.68).

January – September 2021

  • Net sales increased by 40% to SEK 2,242.9 million (1,600.3). In USD, net sales increased 55%. For comparable units, net sales increased by 21%, and in USD 34%
  • Order intake increased 90% to SEK 2,971.9 million (1,562.0). In USD, order intake increased 111%. For comparable units, the increase was 66% in SEK, and 84% in USD.
  • EBITA increased 106% to SEK 285.1 million (138.5), representing an EBITA margin of 12.7% (8.7). SEK 4.3 million was charged to EBITA relating to transaction costs for acquisitions, but was positively impacted by the forgiven PPP loans *). Excluding transaction costs and the PPP loans, EBITA amounted to SEK 278.4 million, corresponding to an EBITA margin of 12.4% (9.6).
  • Operating profit was SEK 273.5 million (132.2). Operating margin was 12.2% (8.3).
  • Profit after tax was SEK 209.6 million (92.3).
  • Earnings per share was SEK 11.20 (5.14), after dilution 11.19 (5.14)

Extra dividend and share split

The Board of Directors of NCAB Group AB has decided to propose an extra dividend of SEK 10 per share and thereafter a split of the NCAB share 10:1 and will therefore call the shareholders to an Extraordinary General Meeting on 15 December 2021. 

Significant events during and after the quarter

  • On 1 September, 100 per cent of the shares were acquired in RedBoard Circuits in the USA.
  • On 19 October, 100 per cent of the shares were acquired in Elmatica in Norway.
  • NCAB has entered into a new credit facility of totally SEK 1,265 million, which raises additional funding for acquisitions of about SEK 750 million.
  • NCAB will review its financial targets in 2022

Message from Peter Kruk, CEO NCAB Group

NCAB continues to grow from a new level

Following a very successful first half of the year, the third quarter continued to develop in a positive direction for us. Net sales increased by a full 61 per cent year-on-year to SEK 864 million and order intake rose by a further 83 per cent to SEK 935 million. In addition to strong organic growth in the quarter, we also acquired RedBoard Circuits in the USA, which further strengthened our position in the American market. After the end of the quarter, we followed up this acquisition in October with the acquisition of Elmatica in Norway. Elmatica is one of the oldest and most respected companies in the industry and is a welcome addition to the NCAB family. Market growth in our focus segment of High-Mix-Low-Volume (HMLV) for demanding customers remained strong in all regions and most industries. Customer problems involving access to semiconductor components are creating individual challenges, but the situation is not significantly impacting sales as a whole. We can see a rapid increase in PCB deliveries to many new green tech projects, including products for electrification. There is also strong growth and rapid technology development among traditional customers, partly driven by the Internet of Things (IoT).

We can see even more clearly that our rapid growth is also due to an increase in our market shares. Many of our competitors, in particular smaller traders, are not present in Asia close to factories and are not prioritised in the same way. Despite general material shortages and challenges to the logistics chain, we have retained our high level of quality and delivery precision. We have compensated in full for higher purchasing prices and increased costs. Our working capital increased during the quarter as a consequence of the growth and longer lead times. We expect long lead times to continue for some time until the supply chain has normalised and working capital decreases again. However, in this context it is important that all orders are fixed and customer specific. PCBs also have a ‘best before’ date before production begins, which eliminates the risk of extraordinary stock accumulation. The excellent growth in combination with healthy margin development has resulted in a highly positive earnings trend compared with the third quarter of 2020, which was in part negatively impacted by uncertainty during the initial period of the pandemic.

For our regional segments, Nordic is now gearing up with good growth in net sales following strong order intake in previous quarters. The acquisition of Elmatica in Norway will provide a major injection to the segment, with a revenue of SEK 370 million forecast in 2021. This is one of our larger acquisitions and will grow our market penetration in the Nordic region and the rest of Europe in complementary customer areas, such as aerospace. Elmatica is an ideal fit for the NCAB model, with a similar corporate culture, focus on quality and technology and a good reputation in the market. Moreover, NCAB can also help in a number of areas. Elmatica does not have its own Factory Management in Asia and NCAB can offer their customers access to an expanded product and factory portfolio, where we also anticipate better terms and conditions.

We have continued our very strong growth in the Europe segment. Demand is healthy and we are steadily strengthening our market position. It is particularly positive that this concerns both established NCAB activities and our new acquisitions, Flatfield in the Netherlands and PreventPCB in Italy.

Growth also continued in North America and margins strengthened quarter-on-quarter. The acquisition of RedBoard Circuits in September provided a positive addition to the segment.

For East, the quarter was favourable in terms of revenue and earnings, though the growth rate in order intake has slowed slightly. However, we see further growth opportunities as we move forward.

All in all, we can look back on a very strong quarter that forms a basis for future growth. We have further strengthened our financing, which together with our strong operating cash flow supports our continued robust agenda for growth, both organically and through acquisitions. We will in 2022 review our financial targets as we continue to grow from a new level with higher margins.


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