Continuted stable demand
”I am looking forward to 2025, when we will continue to create values for customers and suppliers.Jörgen Zahlin, Managing Director and CEO
OEM International AB
Order intake was strong and increased by 3 percent compared to the corresponding quarter last year, and was 2 percent higher than sales. Sales were also good and increased by 0.5 percent and organic growth amounted to 2 percent, despite fewer working days compared to the corresponding quarter last year.
Acquisitions had a positive impact on sales by 2 percent and currency had a negative impact on sales by 4 percent
Operating profit (EBITA) declined by 5 percent, primarily due to somewhat lower gross margin caused by the strengthened Swedish krona. Excluding the currency effects, of which a significant portion is considered temporary, underlying profitability was stronger than in the same quarter last year. The reported EBITA margin was 13.2 percent (13.9). Excluding the currency effect, the EBITA margin would have exceeded 14 percent.
Regional development
Generally speaking, demand has been good despite the negative currency effect that has affected both sales and gross margin. Just over half of the operations had growth in the quarter, and there is a wide spread in industries and geographies between the companies that have growth.
In the Sweden region, demand was variable, and sales decreased by almost 2 percent. The stronger Swedish krona had a negative impact on turnover of just over 3 percent, and organic growth was just under 2 per cent. Order intake increased by 5 percent and was 4 percent higher than sales. ATC Tape Converting, Telfa and Ingemar Liljenberg and the strongest growth rates in the quarter. The Group's largest company, OEM Automatic, had a decrease in sales of 4 percent in the quarter.
The regions Finland, the Baltics and China experienced improved demand and had organic growth for the second quarter in a row, which this quarter amounted to just under 5 percent. The currency had a negative impact of 4.5 percent, resulting in sales on a par with the previous year. Order intake was 4 percent stronger than turnover but fell by 3 percent compared with the previous year. OEM Electronics, Hide-a-lite Finland, the operations in the Baltics and OEM Automatic had the strongest growth in the quarter.
The regions Denmark, Norway, British Isles and Eastern Central Europe increased sales by 6 percent, with organic growth of 1 percent. Currency effects had a negative impact of 4 percent, while acquisitions had a positive impact of 9 percent. Order intake increased by 3 percent but was 3 percent lower than sales. The OEM Automatic companies in Norway, Poland and Hungary have had good development in the quarter.
Acquisitions
In April, Vierpool BV was acquired, which is located in the Netherlands and has an annual turnover of SEK 120 million. The company is a distributor of automation components and has many similarities with most OEM subsidiaries. The acquisition means establishing a new, interesting market with good growth opportunities.
Market conditions
The market remains turbulent, which is affecting the industrial economy generally throughout Europe. Demand has been stable in the Swedish market, although it is believed that the export industry in particular is negatively affected by lower global demand. After a prolonged decline, the Finnish market has shown improved demand. In other markets where OEMs have a presence, we see greater variations.
The organization's ability to capture market share and continue to streamline operations is crucial for continued growth and strong profitability. The group's strong financial position, together with creative and curious employees, will continue to create growth both organically and through acquisitions.
Jörgen Zahlin
Managing Director and Chief Executive Officer
OEM International AB