Demand during the second quarter continued to remain strong, which together with a relatively good delivery capacity resulted in an increase in sales of 23%. The impact on net sales from acquisitions and exchange rate movements was 6% and 5% respectively, resulting in organic growth of 12%.
Incoming orders also remained strong and rose 23%. Incoming orders exceeded sales by 9% for the quarter, which continues to be a result of customers placing longer orders in order to secure future deliveries.
Operating profit (EBITA) rose 33% in the quarter and the EBITA margin expanded to 17.4% (16.2%). The strong performance was due to increased sales and an improved gross margin.
The strong demand has continued and higher price levels in combination with foreign exchange fluctuations have resulted in high rates of growth in the majority of operations.
Demand in Region Sweden was in line with the first quarter, which generated organic growth of 11%. Svenska Batteripoolen, Rydahls and ATC Tape Converting reported the strongest growth, followed by OEM Automatic and OEM Electronics.
Region Finland, the Baltic states and China continue to remain the regions with the strongest demand and the organic growth amounted to 17% in the quarter. The Baltic states operations, followed by OEM Electronics and OEM Automatic, were the entities that experienced the strongest growth.
Demand declined in Denmark, Norway, the British Isles and East Central Europe during the second quarter, and organic growth amounted to 8%. Hungary, the Czech Republic and the newly acquired company Demesne in Ireland, continue to report the highest rates of growth.
Demand has been strong during the first six months, which together with increased prices and a weaker Swedish krona resulted in historically strong rates of growth. Nevertheless, storm clouds are in sight from the geopolitical situation, like high inflation, shortage of raw materials and imbalance in production and the flow of goods. In the short-term perspective the order book value remains satisfactory and the capacity of the businesses to deliver and serve customers is relatively strong. A downturn is expected in a somewhat longer perspective. However, as I have previously said OEM’s role on the market is on the basis of current market conditions to give our customers the best possible service and to continuously work towards taking new market shares. Historically this has proved to work well both in booms and recessions, and I have great confidence in the capacity of the organisation to continue to develop the position of the group on the market.
Managing Director and Chief Executive Officer