Following a drop in the second and third quarters of last year, demand increased again and continued to do so in the first quarter of this year, resulting in an all-time-high in earnings.
Incoming orders rose 1% and net sales rose 2%. There was no impact on net sales from acquisitions. Exchange rate movements had a negative 5% on net sales. Overall, this resulted in 7% organic growth in the first quarter.
Operating profit (EBITA) rose 27% in the quarter and the EBITA margin expanded to 15.2% (12.2%). The strong performance was due to increased sales and an improved gross margin, along with reduced costs. The lower costs are primarily due to a reduction in marketing activities and travel costs brought about by the pandemic.
Region Sweden reported strong demand which resulted in 10% organic growth. The entities reporting strongest growth are Elektro Elco, Svenska Helag, ATC and Svenska Batteripoolen. OEM Motor, Internordic and Nexa have also posted positive sales growth for the quarter.
Region Finland, the Baltic states and China also had a strong quarterly performance, which led to organic growth of 4%. However, sales fell 2% due to the effects of currency movements. The Baltic operations, the operations in China and Akkupojat in Finland are the entities reporting strongest growth.
Region Denmark, Norway, UK and East Central Europe showed some recovery, which resulted in 2% organic growth. However, sales fell 5% due to the effects of currency movements. The operations in the UK, the Czech Republic and Slovakia have reported positive sales growth during the quarter.
The level of infections continued to increase throughout the first quarter. As a result, marketing activities remained at a low level and business travel has only been undertaken in exceptional cases. Each organisation has continued to operate with a high level of activity, where this has been possible, and has served our customers and developed our business in an efficient manner.
Generally favourable demand, price increases from our suppliers based on raw material price increases, and higher transport costs from Asia have posed challenges in many cases. So far, the increases in prices have been commercially manageable and delivery capacities have been acceptable on the whole. However, the market situation remains uncertain and we need to keep in close contact with both our customers and suppliers, and review our plans on an ongoing basis. Our companies have shown impressive creativity and drive to date, and I am convinced that the Group will continue to gain new market share
Managing Director and Chief Executive Officer