Good growth and strong results
Jörgen Zahlin, Managing Director and CEO
OEM International AB
Demand remained relatively healthy during the third quarter, which saw an increase in turnover of 2%. Organic growth was marginal, while acquisitions affected growth positively by just over 3% and currency movements affected negatively by approximately 1.5%, respectively.
Incoming orders were also at a good level, with an increase of 8% on the previous year’s quarter. However, incoming orders were 3% lower than turnover. This is normal for the third quarter and reflects the lull during the summer holiday season. Although the order book declined by SEK 37 million, it is bigger than in December 2023.
Operating profit (EBITA) was up 6% as a result of increased turnover and slightly lower costs. The EBITA margin grew to 16.7% (16.1%).
Growth across the regions
Significant variations continue to exist across the markets and industries. The lighting segment in both Sweden and Finland has performed particularly well this quarter.
Sales revenue for Region Sweden increased by 4%, boosted 1% by organic growth and just over 5% by acquisitions. Changes in currency exchange rates had a negative 2% impact on sales. Incoming orders were strong and rose 12%. ATC Tape Converting, Rydahls, Agolux and Elektro Elco experienced robust growth in the quarter.
Region Finland, the Baltic states and China has been contending with sluggish demand since autumn 2023, but the third quarter was on a par with the previous two quarters of the year, despite the summer holiday period. This shows an improvement in performance. Sales were down 6%, due to an organic decline of 4% and negative currency impacts of 2%. Rauheat, OEM Electronics and Hidealite reported good growth in the quarter.
Region Denmark, Norway, the British Isles and East Central Europe achieved a 4% increase in sales, resulting from 3% organic growth and 2% acquisition growth, and impacted by a negative currency effect of just over 1%. The operations in Denmark have delivered a positive performance all year and reported record quarter results for the third quarter.
Market situation
There are significant variations in economic performance across industries in different countries in Europe, where generally Sweden, Ireland and Czech Republic have had good demand. There are now indications that Sweden’s industrial sector is losing momentum, while we can see some recovery in the Finnish market. As I mentioned in my report one year ago, growth in a declining economic environment depends greatly on establishing and cultivating strong relationships with existing customers and successfully finding new customers. In addition to this, the group's strong financial position enables the possibility to carry out additional acquisitions when the opportunity arises. In the past, the organization has performed well in times of tougher market situations and has shown a creative approach and an ability to seize the initiative. I am not expecting a sudden turnaround in the economic situation, but I am confident that the market position of our Group will continue to improve.
Jörgen Zahlin
Managing Director and CEO
OEM International AB