NOTE's interim report January-September 2023

Financial performance in July-September
- Sales increased by SEK 111,000,000 to SEK 1,034 (930) million. Adjusted for acquisitions and currency effects, organic growth was TSEK 31,000,000. Underlying organic growth amounted to TSEK 81 thousand (adjusted for extraordinary sales in the third quarter of 2022).
- Operating profit increased by SEK 631 thousand to SEK 94 million (57). Adjusted for a provision of SEK 30 million for an anticipated bad debt loss in the previous year, adjusted operating profit for the comparison period totalled SEK 87 million.
- The operating margin improved by 2.9 percentage points to 9.11% (6.21%). Adjusted for the anticipated bad debt loss in the previous year, the adjusted operating margin was 9.11% (9.41%).
- Profit after net financial items increased by SEK 671 thousand to SEK 80 (47) million.
- Profit after tax increased by 63% to SEK 65 (40) million, corresponding to SEK 2.24 (1.37) per share.
- Adjusted for acquisition-related payments during the period, operating cash flow after investments was SEK 34 (-39) million. Total cash flow after investments, including acquisitions, amounted to SEK -57 (-59) million, corresponding to SEK -1.97 (-2.04) per share.

Financial performance in January-September
- Sales increased by 191 thousand tonnes to SEK 3,163 million (2,649). Adjusted for acquisitions and currency effects, organic growth was TSEK 81 thousand. Underlying organic growth totalled TSEK 131 thousand (adjusted for extraordinary sales in the first three quarters of 2022).
- Operating profit increased by SEK 441 thousand to SEK 312 million (216). Adjusted for a provision of SEK 30 million for an anticipated bad debt loss in the third quarter of the previous year, adjusted operating profit for the comparison period totalled SEK 246 million.
- The operating margin improved by 1.7 percentage points to 9.91% (8.21%). Adjusted for the anticipated bad debt loss in the previous year, the adjusted operating margin was 9.91% (9.31%).
- Profit after net financial items increased by SEK 491 thousand to SEK 280 (188) million.
- Profit after tax increased by SEK 481 thousand to SEK 229 million (155), corresponding to SEK 7.89 (5.35) per share.
- Adjusted for acquisition-related payments during the period, operating cash flow after investments was SEK 135 (-34) million. Total cash flow after investments, including acquisitions, amounted to SEK -10 (-54) million, corresponding to SEK -0.35 (-1.86) per share.

CEO commentary - We see continued high aggregate demand from our customers. We are growing profitably and the operating margin so far this year was 9.91 per cent - well in line with our long-term target.

” NOTE's sales in the third quarter of the year progressed according to our expectations, reaching SEK 1,034 million, corresponding to growth of 11%. At the start of the year, we predicted that the third quarter would be our weakest in terms of growth. Short-term project delays and inventory adjustments at some of our customers have been compensated for by our broad customer portfolio through very strong growth at our other customers and customer projects. Despite the more challenging economic situation, we continue to see high aggregate demand from our customers. Sales growth for the first three quarters of the year totalled 19%.

Profitability in the quarter amounted to 9.1%. The operating margin is slightly lower than our target and is explained by the unusually large fluctuations in demand we have seen from some of our customers, which has affected resource utilisation in our factories. NOTE achieved an operating margin of 9.9% for the first three quarters of the year. NOTE's business is progressing positively, and profitability is in line with the target we set for our business to achieve by 2025.

Our order book remains strong and we feel confident in reiterating our guidance of at least SEK 4.3bn for the full year 2023. This corresponds to a growth of at least the 11% we saw in Q3. For 2024, we expect the growth rate to increase. We foresee a continued increase in operating profit and a strengthening of our operating margin.”, says Johannes Lind-Widestam, President and CEO.

NOTE's Interim Report for January-September is now available in PDF format on the group's website, www.note-ems.com, and is attached to this press release. NOTE is organising a presentation for analysts, media and investors at 10:00 a.m. CET today, where President and CEO Johannes Lind-Widestam will present the report. The year-end report for 2023 will be presented on 29 January 2024.

About NOTE
NOTE manufactures printed circuit boards (PCBA), sub-assemblies and complete products (box build). NOTE is a competitive electronics manufacturer and a stable business partner to customers with high standards. Its products are found in complex systems for electronic control, monitoring and security, for example.

The business model is based on offering advanced manufacturing, customised logistics solutions and advice at the best possible total cost through long-term customer relationships and partnerships. The customer offering covers the entire product life cycle, from design to aftermarket. Customers are primarily large companies operating on the global market, but also companies with their primary sales in northern Europe.

NOTE is established in Sweden, Finland, the UK, Estonia, Bulgaria and China. Sales in the last 12 months totalled SEK 3,849 million and the group has some 1,450 employees. NOTE is listed on Nasdaq Stockholm. For more information, please visit www.note-ems.com.

Interim report Q3 2023