NOTE's year-end report 2023
Financial performance in Q4 (October-December)
- Sales increased by 4% to SEK 1,080 (1,038) million. Adjusted for acquisitions and currency effects, organic growth was -11 FTEs. The underlying organic growth amounted to 41,000,000 tonnes (adjusted for extraordinary sales in the fourth quarter of 2022).
- Operating profit totalled SEK 118 (129) million. Adjusted operating profit amounted to SEK 92 (111) million, adjusted for revaluations of operating assets and liabilities in foreign currencies and adjusted for items affecting comparability, the reversal of an additional purchase price from acquisitions and extraordinary anticipated bad debt losses during the quarter and for a reversal of a provision for an anticipated bad debt loss at the same time last year.
- The operating margin totalled EUR 10.91 million (EUR 12.31 million). The adjusted operating margin, adjusted for currency revaluations and items affecting comparability, amounted to 8.51% (10.61%).
- Profit after net financial items totalled SEK 110 (123) million.
- Profit after tax totalled SEK 91 (99) million, corresponding to SEK 3.15 (3.44) per share.
- Adjusted for acquisition-related payments during the period, operating cash flow after investments was SEK 154 (39) million. Total cash flow after investments, including acquisitions, amounted to SEK 108 (23) million, corresponding to SEK 3.73 (0.79) per share.
Financial performance in January-December
- Sales increased by SEK 151 thousand to SEK 4,243 million (3,687). Adjusted for acquisitions and currency effects, organic growth was TSEK 61 thousand. Underlying organic growth totalled TSEK 111 thousand (adjusted for extraordinary sales in 2022).
- Operating profit totalled SEK 430 (345) million. Adjusted operating profit totalled SEK 400m (372), adjusted for revaluations of operating assets and liabilities in foreign currencies and adjusted for items affecting comparability, the reversal of an additional purchase price from acquisitions and extraordinary anticipated bad debt losses this year and for a provision for an anticipated bad debt loss in the previous year.
- The operating margin was 10.11 CGT (9.31 CGT). The adjusted operating margin, adjusted for currency revaluations and items affecting comparability, amounted to 9.41% (10.11%).
- Profit after net financial items totalled SEK 390 (311) million.
- Profit after tax totalled SEK 320 (254) million, corresponding to SEK 11.04 (8.79) per share.
- Adjusted for acquisition-related payments during the period, operating cash flow after investments was SEK 289 (2) million. Total cash flow after investments, including acquisitions, amounted to SEK 98 (-31) million, corresponding to SEK 3.38 (-1.07) per share.
Dividends
To ensure maximum financial freedom of action, the Board of Directors intends to revert to the issue of a possible dividend, or share buy-back, for 2024 at the latest in the context of the invitation to the 2025 Annual General Meeting.
CEO comment - Market challenges at some of our customers pressurised sales in the quarter, which came in below our expectations. We believe in a gradual strengthening of demand in 2024
”Short-term shifts in customer orders affected growth for the quarter and sales came in below our expectations. In our broad customer portfolio, we have customers and customer projects that are developing extremely strongly. However, this could not sufficiently compensate for the short-term project delays and inventory adjustments we saw with some of our other customers linked to market challenges. NOTE's sales in the fourth quarter of the year reached SEK 1,080 million, corresponding to a growth rate of 4% for the quarter. For the full year, we achieved sales of SEK 4,243 million, corresponding to sales growth of SEK 151,000,000.
For the year, an underlying operating margin of 9.41% was achieved and for the quarter 8.51%. Our ambitions for our operating margin are higher than this. The lower operating margin is a result of unusually large shifts in customer orders, which has affected resource utilisation in our factories. The lower growth rate has also resulted in overcapacity in several of our factories. Adjustments to the workforce in particular have been made and are currently expected to correspond to the sales rate we expect in early 2024.
The previously challenging situation in the market for electronic components has challenged our cash flow for several quarters and it is therefore gratifying to see that we have succeeded in reversing the build-up of inventories in our factories and are now instead delivering positive cash flows from our operations. For the quarter, operating cash flow (after investments) amounted to SEK 154 million and for the full year to a total of SEK 289 million.
We expect demand to strengthen gradually during 2024 with a continuous strengthening of our margin. The previous guidance remains unchanged, implying full-year 2024 sales of SEK 4.5-4.8bn and a margin of 10%.”, says Johannes Lind-Widestam, President and CEO.
NOTE's year-end report for 2023 is available from today in pdf format on its website, www.note-ems.com, and is attached to this press release. Today at 10.00 CET NOTE will organise
a presentation for analysts, media and investors where President and CEO Johannes Lind-Widestam presents the report. The interim report for January-March will be presented on 18 April.