The positive demand in the first quarter has been further consolidated and the second quarter once again achieved an all time high for both sales and earnings. The strong sales were influenced by the effects of recovery from the previous year, while at the same time the growth rate in industry is at record high levels.
Incoming orders increased by 43 per cent and net sales increased by 26 per cent. There was no impact on net sales from acquisitions and foreign exchange had a negative effect of 4 per cent. Overall this produced organic growth of 30 per cent for the second quarter.
Operating profit (EBITA) increased by 58 per cent in the quarter and the EBITA margin expanded to 16.2 per cent (13.0). The strong performance was due to increased sales and an improved gross margin. In that the second quarter of the previous year was seriously affected by the pandemic, the comparative figures are exceptionally vivid.
Overall sales increased by 13 per cent in the first half of the year and incoming orders increased by 19 per cent. Operating profit (EBITA) increased by 42 per cent and the operating margin reached 15.7 per cent (12.5).
Region Sweden reported strong demand, which resulted in an organic growth of 33 per cent. Elektro Elco, Internordic, ATC and Svenska Batteripoolen are the entities with the strongest development in the quarter. But Agolux, OEM Automatic, Telfa and OEM Motor have also had a positive sales growth. Region Finland, the Baltic States and China also reported good demand, which resulted in an organic growth of 24 per cent in the quarter. Rauheat, Hide-a-lite, OEM Electronics, the Baltic operations and operations in China are the entities that have had the best development. Region Denmark, Norway, the UK and East Central Europe have also experienced good recovery, which resulted in an organic growth of 28 per cent in the quarter. All operations have strong growth rates, where the UK operations stand out with 50 per cent growth in comparison with the corresponding quarter in the previous year. The strong growth, shortage of raw materials and components, together with transport problems primarily from Asia, have led to an increased risk of delivery problems. Respective organisations are working hard to guarantee delivery capacity and have so far mostly succeeded in keeping customers satisfied. Contagion has successively decreased during the spring as a result of the vaccinations, which has meant that business trips could be undertaken during the latter part of the second quarter. Nevertheless the health of the organisation has remained in focus and adjustments continue to remain in place to limit the spread of contagion as far as possible.
Strong demand, shortages of materials, price increases and increased costs for transport create challenges. The competence of the organisation has, however, strengthened our position with customers, while growth rates and profitability have both improved. The present market situation creates both opportunities and threats. Creativity, energy and the capacity to be close to customers and suppliers are of central importance, and with which the organisation continues to be successful even in these special times.
Managing Director and Chief Executive Officer