Quarterly Report • Nov 12, 2021
Quarterly Report
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Net sales increased by 61% to SEK 863.6 million (536.7). In USD, net sales increased 66%. For comparable units, net sales increased by 45%, and in USD the increase was 50%.
Order intake increased 83% to SEK 935.2 million (512.3). In USD, the increase was 86%. For comparable units, order intake increased by 65%, and in USD the increase was 68%.
EBITA increased 146% to SEK 123.2 million (50.1), representing an EBITA margin of 14.3% (9.3).
EBITA was negatively impacted by transaction costs for the acquisition of RedBoard Circuits in an amount of SEK 0.8 million. EBITA, excluding the effect of transaction costs, was SEK 124.0 million, corresponding to a margin of 14.8% (10.3).
Operating profit was SEK 118.6 million (47.2). Operating margin was 13.7% (8.8).
Profit after tax was SEK 91.2 million (31.5).
Earnings per share was SEK 4.86 (1.68), after dilution 4.85 kr (1.68).
Net sales increased by 40% to SEK 2,242.9 million (1,600.3). In USD, net sales increased 55%. For comparable units, net sales increased by 21%, and in USD 34%.
Order intake increased 90% to SEK 2,971.9 million (1,562.0). In USD, order intake increased 111%. For comparable units, the increase was 66% in SEK, and 84% in USD.
EBITA increased 106% to SEK 285.1 million (138.5), representing an EBITA margin of 12.7% (8.7). SEK 4.3 million was charged to EBITA relating to transaction costs for acquisitions, but was positively impacted by the forgiven PPP loans *). Excluding transaction costs and the PPP loans, EBITA amounted to SEK 278.4 million, corresponding to an EBITA margin of 12.4% (9.6).
Operating profit was SEK 273.5 million (132.2). Operating margin was 12.2% (8.3).
Profit after tax was SEK 209.6 million (92.3).
Earnings per share was SEK 11.20 (5.14), after dilution 11.19 (5.14).
The Board of Directors of NCAB Group AB has decided to propose an extra dividend of SEK 10 per share and thereafter a split of the NCAB share 10:1 and will therefore call the shareholders to an Extraordinary General Meeting on 15 December 2021.
On 1 September, 100 per cent of the shares were acquired in RedBoard Circuits in the USA.
On 19 October, 100 per cent of the shares were acquired in Elmatica in Norway.
NCAB has entered into a new credit facility of totally SEK 1,265 million, which raises additional funding for acquisitions of about SEK 750 million.
NCAB will review its financial targets in 2022.
*) Loan value of SEK 11.0 million within the American Pay check Protection Program was forgiven during the second quarter. This is booked as other income and contributed positively to the gross margin and EBITA.
| Key performance indicators | Jul-Sep | Jan-Sep | Full-year | ||||||
|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | % | 2021 | 2020 | % | LTM | 2020 | ||
| Order intake, SEK million | 935.2 | 512.3 | 83 | 2,971.9 | 1,562.0 | 90 | 3,653.3 | 2,243.4 | |
| Order intake, USD million | 107.3 | 57.8 | 86 | 350.1 | 165.9 | 111 | 427.9 | 243.8 | |
| Net sales, SEK million | 863.6 | 536.7 | 61 | 2,242.9 | 1,600.3 | 40 | 2,757.8 | 2,115.2 | |
| Net sales, USD million | 99.8 | 60.3 | 66 | 264.2 | 170.3 | 55 | 323.7 | 229.8 | |
| Gross margin, % | 30.8 | 29.3 | 29.9 | 30.8 | 30.8 | 30.3 | |||
| EBITA, SEK million | 123.2 | 50.1 | 146 | 285.1 | 138.5 | 106 | 337.3 | 190.7 | |
| EBITA margin, % | 14.3 | 9.3 | 12.7 | 8.7 | 12.2 | 9.0 | |||
| Operating profit, SEK million | 118.6 | 47.2 | 151 | 273.5 | 132.2 | 107 | 323.6 | 182.3 | |
| Operating margin, % | 13.7 | 8.8 | 12.2 | 8.3 | 11.7 | 8.6 | |||
| Profit after tax, SEK million | 91.2 | 31.5 | 189 | 209.6 | 92.3 | 127 | 244.8 | 127.5 | |
| Earnings per share, SEK | 4.86 | 1.68 | 189 | 11.20 | 5.14 | 118 | 13.08 | 7.03 | |
| Earnings per share after dilution, SEK | 4.85 | 1.68 | 188 | 11.19 | 5.14 | 118 | 13.07 | 7.03 | |
| Cash flow from operating activities, SEK million | 0.2 | 67.9 | -100 | 28.5 | 147.3 | -81 | 75.5 | 194.3 | |
| Return on capital employed, % | 28.2 | 23.7 | |||||||
| Return on equity, % | 31.0 | 24.3 | |||||||
| USD/SEK - average | 8.65 | 8.87 | 8.49 | 9.40 | 8.52 | 9.20 | |||
| EUR/SEK - average | 10.19 | 10.36 | 10.15 | 10.56 | 10.18 | 10.49 |
Following a very successful first half of the year, the third quarter continued to develop in a positive direction for us. Net sales increased by a full 61 per cent year-on-year to SEK 864 million and order intake rose by a further 83 per cent to SEK 935 million. In addition to strong organic growth in the quarter, we also acquired RedBoard Circuits in the USA, which further strengthened our position in the American market. After the end of the quarter, we followed up this acquisition in October with the acquisition of Elmatica in Norway. Elmatica is one of the oldest and most respected companies in the industry and is a welcome addition to the NCAB family. Market growth in our focus segment of High-Mix-Low-Volume (HMLV) for demanding customers remained strong in all regions and most industries. Customer problems involving access to semiconductor components are creating individual challenges, but the situation is not significantly impacting sales as a whole. We can see a rapid increase in PCB deliveries to many new green tech projects, including products for electrification. There is also strong growth and rapid technology development among traditional customers, partly driven by the Internet of Things (IoT).
We can see even more clearly that our rapid growth is also due to an increase in our market shares. Many of our competitors, in particular smaller traders, are not present in Asia close to factories and are not prioritised in the same way. Despite general material shortages and challenges to the logistics chain, we have retained our high level of quality and delivery precision. We have compensated in full for higher purchasing prices and increased costs. Our working capital increased during the quarter as a consequence of the growth and longer lead times. We expect long lead times to continue for some time until the supply chain has normalised and working capital decreases again. However, in this context it is important that all orders are fixed and customer-specific. PCBs also have a 'best before' date before production begins, which eliminates the risk of extraordinary stock accumulation. The excellent growth in combination with healthy margin development has resulted in a highly positive earnings trend compared with the third quarter of 2020, which was in part negatively impacted by uncertainty during the initial period of the pandemic.
For our regional segments, Nordic is now gearing up with good growth in net sales following strong order intake in previous quarters. The acquisition of Elmatica in Norway will provide a major injection to the segment, with a revenue of SEK 370 million forecast in 2021. This is one of our larger acquisitions and will grow our market penetration in the Nordic region and the rest of Europe in complementary customer areas, such as aerospace. Elmatica is an ideal fit for the NCAB model, with a similar corporate culture, focus on quality and technology and a good reputation in the market. Moreover, NCAB can also help in a number of areas. Elmatica does not have its own Factory Management in Asia and NCAB can offer their customers access to an expanded product and factory portfolio, where we also anticipate better terms and conditions.
We have continued our very strong growth in the Europe segment. Demand is healthy and we are steadily strengthening our market position. It is particularly positive that this concerns both established NCAB activities and our new acquisitions, Flatfield in the Netherlands and PreventPCB in Italy.
Growth also continued in North America and margins strengthened quarter-on-quarter. The acquisition of RedBoard Circuits in September provided a positive addition to the segment.
For East, the quarter was favourable in terms of revenue and earnings, though the growth rate in order intake has slowed slightly. However, we see further growth opportunities as we move forward.
All in all, we can look back on a very strong quarter that forms a basis for future growth. We have further strengthened our financing, which together with our strong operating cash flow supports our continued robust agenda for growth, both organically and through acquisitions. We will in 2022 review our financial targets as we continue to grow from a new level with higher margins.
Peter Kruk President and CEO, NCAB Group AB
our growth journey from a new level
Q3 2021 S
"
863.6 Net sales, SEK million
A very exciting and positive quarter. We are continuing
123.2 EBITA, SEK million
"
Order intake continued to trend positively and rose sharply by 83 per cent during the quarter or 86 per cent in USD. For comparable units, order intake rose 65 per cent and in USD by 68 per cent. The increase derives from a continued clear recovery in all of NCAB's markets, while NCAB also estimate to have captured market shares. Order intake in the third quarter of 2020 was largely impacted by the coronavirus pandemic. The restricted travel possibilities have continued to give NCAB significant advantages compared to competitors through NCAB's Factory Management team in Asia, which allows NCAB to maintain daily contact on-site with its factory partners.
Net sales increased in the quarter by 61 per cent to SEK 863.6 million (536.7). In USD, the increase was 66 per cent. Net sales in comparable units increased 45 per cent and by 50 per cent in USD. All segments reported growth, but the Europe segment accounted for the strongest organic growth. Growth in Nordic also accelerated during the quarter. Growth was further strengthened by the acquisitions of PreventPCB in Italy, sas – electronics in Germany and RedBoard Circuits in the USA, all of which performed well.
EBITA was SEK 123.2 million (50.1) and EBITA margin rose to 14.3 per cent (9.3). SEK 0.8 million (0.0) was charged to EBITA relating to transaction costs for the acquisition of RedBoard Circuits. The stronger earnings comprise a combination of higher market prices where NCAB has passed on price increases, and also an improved gross margin through a better customer and product mix, while operating expenses have not increased in pace with sales. Recruitment is under way to address the expanded opportunities offered by the market. EBITA increased in all segments. Operating profit increased to SEK 118.6 million (47.2).
Net financial items amounted to SEK 0.9 million (-6.6), where the improvement was due to foreign exchange differences of SEK 4.4 million (-2.1). Tax amounted to SEK -28.3 million (-9.1). The average tax rate was 23.7 per cent (22.3). Profit after tax for the period totalled SEK 91.2 million (31.5). Earnings per share was 4.86 (1.68), after dilution 4.85 (1.68).
Order intake rose by 90 per cent during the first three quarters of the year to SEK 2,972 million (1,562), corresponding to an increase of 111 per cent in USD. Order intake for comparable units increased 66 per cent and 84 per cent in USD. All of the Group's companies reported strong and stable growth in 2021. Growth in order intake in the first two quarters was partly due to longer lead times. Lead times are no longer increasing and growth in order intake in the most recent quarter reflects underlying market growth. The Europe segment continued to demonstrate the highest growth, with particularly strong trends in Germany, the Netherlands and UK.
Net sales increased in the first three quarters of the year by 40 per cent to SEK 2,242.9 million (1,600.3), with growth in USD at about 55 per cent. Net sales in comparable units increased 21 per cent and by 34 per cent in USD, growth was strongest in the Europe segment, though all segments generated growth exceeding 15 per cent. The acquisitions of PreventPCB, sas – electronics and RedBoard Circuits contributed a total sales increase of SEK 178 million.
EBITA was SEK 285.1 million (138.5) and EBITA margin rose to 12.7 per cent (8.7). At the beginning of the pandemic in 2020, the US authorities issued loans (PPP-loan) for small companies to safeguard their cash flow. The companies were subsequently able to apply to have the loans forgiven, which NCAB was granted in the second quarter of 2021. EBITA was negatively impacted by charges of SEK 4.3 million relating to transaction costs for acquisitions and positively impacted by the forgiven PPP loans of SEK 11.0 million. Excluding transaction costs and the PPP loans, EBITA amounted to SEK 278.4 million, representing an EBITA margin of 12.4 per cent (9.6). The acquired companies performed well, without significantly contributing to higher central costs, which improved earnings. During the first three quarters of the year, all segments reported a sharp improvement in earnings. Operating profit increased to SEK 273.5 million (132.2).
Net financial items amounted to SEK -5.8 million (-14.0) with improved exchange rate differences of SEK 3.5 million (-4.4). Tax amounted to SEK -58.1 million (-25.9). The average tax rate was by and large unchanged at 21.7 per cent (21.9). Profit after tax for the period totalled SEK 209.6 million (92.3). Earnings per share was SEK 11.20 (5.14), after dilution SEK 11.19 (5.14).
Sweden, Norway, Denmark and Finland. The margin in this segment is high due to a high technology content and generally lower volumes per order. The segment was strengthened in October 2021 following the acquisition of Elmatica in Norway.
During the quarter, order intake strengthened in all markets, with the best performance noted in Norway. In Norway, growth is largely driven by increased demand for PCBs for the production of electric car chargers. Order intake in the third quarter increased 73 per cent to SEK 168 million (98). In USD, the increase was 76 per cent.
Net sales for the quarter amounted to SEK 170.5 million (110.5), an increase of 54 per cent. In USD, net sales grew 58 per cent. All
companies reported healthy growth but Norway continued to note the strongest growth. Net sales in 2020 were negatively impacted by the coronavirus pandemic.
The segment continued to display stable and, for the quarter, rising profitability, with EBITA increasing to SEK 31.7 million (15.9) and the EBITA margin increasing to 18.6 per cent. The improvement was due to higher sales without a significant increase in costs and a concurrent improvement in gross margin.
Order intake increased 54 per cent to SEK 570 million (369.0) in the first three quarters. Net sales grew 18 per cent to SEK 441.1 million (375.4). In USD, net sales increased 30 per cent. It was not until the third quarter of 2020 that the effects of the coronavirus pandemic impacted net sales in Nordics.
For the first three quarters of the year, EBITA was clearly up on the year-earlier period at SEK 73.2 million (57.9). The EBITA margin also improved to 16.6 per cent (15.4).
| NORDIC | Jul-Sep | Jan-Sep | Full-year | ||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK million | 2021 | 2020 | % | 2021 | 2020 | % | LTM | 2020 | |
| Net sales | 170.5 | 110.5 | 54.3 | 441.1 | 375.4 | 17.5 | 559.6 | 493.9 | |
| EBITA | 31.7 | 15.9 | 99.6 | 73.2 | 57.9 | 26.4 | 92.3 | 77.0 | |
| EBITA margin, % | 18.6 | 14.4 | 16.6 | 15.4 | 16.5 | 15.6 |
France, Germany, Spain, Poland, Italy, UK, Netherlands and North Macedonia. In the Europe segment, the strategic focus is on growth. All companies have a relatively low market share and high growth potential. The acquisition of Flatfield in the Netherlands in March 2020, PreventPCB in Italy in February 2021, and sas – electronics in Germany in June 2021, strengthened the Europe segment.
The Europe market reported another quarter with strong order intake. Order intake increased 126 per cent to SEK 505 million (223). In USD, the increase was 132 per cent. In USD, the increase in order intake for comparable units was 92 per cent, driven by strong growth in all companies. Markets in Germany, the Netherlands and UK again reported the highest growth. NCAB's new acquisition in Italy also performed very well. Growth is from both existing and new customers.
Net sales in the third quarter increased 91 per cent to SEK 421.9 million (220.8). In USD, the increase was 96 per cent. For comparable units, the increase in net sales was 54 per cent (58 per cent in USD). All companies in the segment increased net sales year-on-year in the third quarter. The integration between NCAB's two companies in Italy is proceeding to plan and synergies are beginning to materialise. sas – electronics in Germany was acquired in June and has performed well and its integration with NCAB Germany is progressing as planned.
Increased net sales and margin improvements, as well as synergies from the acquired companies, resulted in a strong earnings. EBITA increased to SEK 55.2 million (14.0), with an EBITA margin improvement to 13.1 per cent (7.7). The strong margin improvement was due to the successful management of price hikes, the increase in gross margin during the quarter and synergies from acquisitions. The rapid growth has also resulted in many economies of scale, which had a positive impact on EBITA.
2021 was characterised by strong market growth while NCAB has gained market share. Order intake increased 138 per cent to SEK 1,540 million (648) and by 164 per cent in USD.
Net sales continued to increase and grew 63 per cent to SEK 1,069.4 million (655.2) in the first three quarters of the year. Excluding net sales from acquired companies, the increase was 29 per cent and 60 per cent in USD. All companies displayed growth.
As net sales increased more than costs, and positive synergies were realised from the acquired companies, EBITA increased to SEK 117.0 million (44.1). The EBITA margin rose to 10.9 per cent (6.7). The pace of recruitment has increased in a number of the segment's companies in response to rising demand.
| EUROPE | Jul-Sep | Jan-Sep | Full-year | |||||
|---|---|---|---|---|---|---|---|---|
| SEK million | 2021 | 2020 | % | 2021 | 2020 | % | LTM | 2020 |
| Net sales | 421.9 | 220.8 | 91.0 | 1,069.4 | 655.2 | 63.2 | 1,273.8 | 859.5 |
| EBITA | 55.2 | 14.0 | 293.3 | 117.0 | 44.1 | 165.3 | 129.2 | 56.3 |
| EBITA margin, % | 13.1 | 6.4 | 10.9 | 6.7 | 10.1 | 6.6 |
NCAB has five offices in the USA that cover the country from east to west. Bare Board Group (BBG), with offices in Florida, was acquired in April 2020 and RedBoard Circuits in Arizona was acquired in September 2021.
Order intake increased 39 per cent to SEK 160 million (115). In USD, order intake increased 42 per cent. For comparable units the order income increased with 39 per cent in USD.
Net sales for the segment increased 23 per cent to SEK 150.5 million (121.9). In USD, the increase was 28 per cent. For comparable units net sales grew with 24 per cent in USD.
The gross margin continued to improve in the acquired company BBG and positive synergies were visible in earnings. EBITA increased to SEK 16.4 million (9.1) and EBITA margin grew to 10.9 per cent (7.4).
In September, RedBoard Circuits in Arizona was acquired, which offered NCAB new customers and more skilled employees. Synergies will arise in purchasing.
Order intake increased in the first three quarters by 62 per cent to SEK 481 million (296). In USD, the increase was 74 per cent. For comparable units, the increase in order intake in USD was 47 per cent.
In the first three quarters of the year, net sales increased 29 per cent to SEK 406.8 million (315.2). In USD, net sales increased 43 per cent. For comparable units, growth in USD was 24 per cent.
The profitability improvement and synergies from the merger with BBG led to higher EBITA. During the second quarter, PPP loans of SEK 11.0 million were forgiven. EBITA doubled during the first three quarters to SEK 52.1 million (25.7). Excluding the effects of the PPP loans, EBITA amounted to SEK 41.1 million (25.7), representing an EBITA margin of 10.1 per cent (8.2).
| NORTH AMERICA | Jul-Sep | Jan-Sep | Full-year | |||||
|---|---|---|---|---|---|---|---|---|
| SEK million | 2021 | 2020 | % | 2021 | 2020 | % | LTM | 2020 |
| Net sales | 150.5 | 121.9 | 23.5 | 406.8 | 315.2 | 29.1 | 519.8 | 428.2 |
| EBITA | 16.4 | 9.1 | 80.2 | 52.1 | 25.7 | 102.7 | 58.8 | 32.4 |
| EBITA margin, % | 10.9 | 7.4 | 12.8 | 8.2 | 11.3 | 7.6 | ||
| SEK million 600 |
Net sales | 80 | SEK million |
EBITA | 16% |
28% Sales growth in USD
China, Russia and Malaysia. The East segment has long-standing operations in Russia with sales offices in St. Petersburg, Moscow and Novosibirsk. In China, NCAB has sales offices in Shenzhen, Beijing, Suzhou and Wuhan.
Order intake in the East segment increased during the quarter by 31 per cent to SEK 102 million (78). In USD, the increase was 34 per cent. Growth was favourable in China while order intake in Russia was lower year-on-year. Customers in Russia have suffered more than other regions from problems with component shortages. Despite strict pandemic restrictions, we noted a positive trend in Malaysia.
Net sales in the third quarter increased 45 per cent to SEK 120.6 million (83.4). In USD, the increase was 48 per cent. Net sales rose sharply in China, while sales in Russia were unchanged year-on-year. Deliveries in China have a high technology content, which creates a high margin.
Profitability developed very well and EBITA rose to SEK 20.1 million (9.3) for the third quarter of 2021, corresponding to an EBITA margin of 16.7 per cent (11.2).
The segment had healthy growth. Compared with 2020, order intake rose 53 per cent to SEK 381 million (250) and 69 per cent in USD.
During the period, net sales increased 28 per cent to SEK 325.5 million (254.6) and growth was 41 per cent in USD.
The segment displayed continued improving profitability, with an EBITA margin of 15.1 per cent (11.5).
| EAST | Jul-Sep | Jan-Sep | Full-year | ||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK million | 2021 | 2020 | % | 2021 | 2020 | % | LTM | 2020 | |
| Net sales | 120.6 | 83.4 | 44.7 | 325.5 | 254.6 | 27.9 | 404.6 | 333.6 | |
| EBITA | 20.1 | 9.3 | 115.7 | 49.1 | 29.3 | 67.7 | 62.9 | 43.1 | |
| EBITA margin, % | 16.7 | 11.2 | 15.1 | 11.5 | 15.6 | 12.9 |
.
Cash flow from operating activities in the quarter was SEK 0.2 million (67.9). Cash flow was negatively impacted by growth which has led to an increase in working capital during the quarter, at the same time inventory grew what was deemed temporarily due to the many delays in ocean freight, longer lead times and supply disruptions. Cash flow from operating activities for the first three months of the year was SEK 28.5 million (147.3). Cash flow was abnormally strong in 2020 due to the reduced working capital as net sales fell. The working capital requirement of the Group has increased and on 30 September corresponded to 11.1 per cent (8.1) of net sales over the past 12 months. NCAB has credit insurance for most of the trade receivables outstanding. Cash flow from investing activities was SEK
-18.9 million (-0.0) during the quarter, driven by the acquisition of RedBoard Circuits. Non-acquisitionrelated investments amounted to SEK -2.2 million (-0.0) for the quarter. For the first three quarters of the year, cash flow from investing activities was SEK -237.1 million (-165.8). Non-acquisition-related investments amounted to SEK -4.2 million (-1.7).
Net debt at the end of the quarter was SEK 217.6 million (-41.8). At 30 September, the equity/assets ratio was 43.1 per cent (46.7) and equity was SEK 854.5 million (727.0). At the end of the period, the Group had available liquidity, including undrawn overdraft facilities, of SEK 320.0 million (632.8).
At 30 September 2021, NCAB had loans totalling SEK 292.8 million, split between four loans. Two of the loans are being repaid in quarterly installments of SEK 9.1 million and mature in 2023 and 2025 respectively. The two remaining loans – SEK 50.0 million and SEK 132.5 million – are free of installments, and mature in 2023 and 2025 respectively. In addition to the loans, there is an overdraft facility of SEK 212 million. At the balance sheet date of 30 September 2021, the company was in compliance with all covenants under the financing agreement.
Through its operations, the Group is exposed to risks of both a financial and operational nature, which the Group can influence to a greater or lesser extent. Continuous processes are in place in the Group to identify any risks and assess how they should be managed.
Operational risks include commercial risks arising from changes in economic activity and demand as well as customer preferences and relationships to the company. Other risks are related to the production capabilities, capacity and order books of the company's manufacturers, and to the availability and prices of raw materials. The company is also dependent on the continued trust of its employees and its ability to recruit skilled employees.
With regard to financial risks, the Group is exposed to currency risk, primarily the exchange rates between USD, EUR, SEK and to some extent RUB, through the translation exposure of sales and purchase ledgers, and reported assets, liabilities and net investments in the operations. The Group is also exposed to other risks, such as interest rate risk, credit risk and liquidity risk.
See NCAB's 2020 Annual Report for a more detailed description of the Group's risk exposure and risk management. The outbreak of COVID-19 has brought risks to the fore, such as demand when many markets introduced restrictions, capacity in connection with the closure of NCAB's suppliers in China and the dependence on China, as described in the Annual Report.
The coronavirus pandemic had an adverse impact on NCAB's order intake and net sales in 2020, though to a limited extent. NCAB's business model with low fixed costs and outsourced production creates great flexibility. Because of NCAB's strong presence in China, the company maintains close dialogue with all factory partners. After more than a year of travel restrictions, this offers a significant competitive advantage compared with smaller competitors and customers who lack a presence in China. During the first three quarters of 2021, NCAB was not burdened by any negative effects, aside from freight problems and increased prices for freight. However, NCAB has noted strong growth as economies have reopened.
In conjunction with the outbreak of the coronavirus pandemic, authorities in the USA provided support in the form of Paycheck Protection Program (PPP) loans, which were to be forgiven if used correctly. NCAB applied for and received loans totalling USD 1.3 million. During the second quarter, a decision on forgiveness was received and the amount was recognised as other income, totalling SEK 11.0 million.
On 2 September, 100 per cent of the shares were acquired in RedBoard Circuits, Arizona, in the USA.
On 19 October, 100 per cent of the shares were acquired in Elmatica in Norway.
After the end of the quarter NCAB has entered into a new 5 year credit facility of totally SEK 1,265 million, which raises additional funding for acquisitions of about SEK 750 million.
NCAB will review its financial targets in 2022.
The Board of Directors of NCAB Group AB has decided to propose an extra dividend of SEK 10 per share and thereafter a split of the NCAB share 10:1 and will therefore call the shareholders to an Extraordinary General Meeting on 15 December 2021.
Transactions with related parties have taken place to the same limited extent as previously and in accordance with the same principles as are described in the latest annual report.
At 30 September 2021, the number of employees was 512 (469), of whom 232 (212) were women and 280 (257) were men. The average number of employees in the organisation during the period was 506 (471), of whom 230 (213) were women and 276 (259) were men.
The Parent Company's net sales for the third quarter were SEK 17.4 million (14.1). Sales consist exclusively of internal billing. Loss after financial items was SEK -3.2 million (11.7) for the quarter.
The Board of Directors and Chief Executive Officer provide their assurance that the interim report gives a true and fair view of the Group's and the Parent Company's operations, position and results and describes the significant risks and uncertainties facing the Parent Company and the companies included in the Group.
Bromma, 11 November 2021
_____________________ _____________________ Christian Salamon Jan-Olof Dahlén Chairman of the Board Director
_____________________ _____________________
_____________________ _____________________
Director Director
Per Hesselmark Magdalena Persson
Director Director
_____________________ _____________________ Hans Ramel Gunilla Rudebjer
Hans Ståhl Peter Kruk
Director President and CEO
For further information, please contact: Anders Forsén, CFO +46 (0)8 4030 0051 Gunilla Öhman, IR Manager, +46 (0)70 763 81 25
This interim report has been reviewed by the company's auditor.
This is information that NCAB Group AB is obligated to disclose pursuant to the EU Market Abuse Regulation. The information was issued for publication through the agency of the contact persons set out above, on 12 November 2021 at 7:30 a.m. CET.
This is a translation of the original Swedish interim report. In the event of difference between the English translation and the Swedish original, the Swedish interim report shall prevail.
Tel: +46 (0)8 4030 0000 Mariehällsvägen 37 A, SE-168 65 Bromma, Sweden www.ncabgroup.com
NCAB Group is publishing the interim report for the third quarter of 2021, January–September, on Friday 12 November at 7:30 a.m. A web-cast telephone conference will be held at 10:00 a.m. on the same date, when President and CEO Peter Kruk and CFO Anders Forsén will present the report. The presentation will be followed by a Q&A session. The presentation will be held in English. To participate in the conference call, call the following numbers: from Sweden: +46 850558351, the UK: +443333009266 and the USA: +1 6467224904. The presentation and conference can also be followed from the following link: https://tv.streamfabriken.com/ncab-group-q3-2021
Year-end report 17 February 2022 Interim report first quarter 28 April 2022 Annual General Meeting 3 May 2022 Interim report second quarter 21 July 2022 Interim report third quarter 8 November 2022 Year-end report 17 February 2023
NCAB is a worldwide leading supplier of printed circuit boards (PCBs), listed on NASDAQ Stockholm. NCAB offers PCBs for demanding customers, on time with zero defects, produced sustainably at the lowest total cost. NCAB was founded in 1993. Since its foundation, the operations have been characterised by an entrepreneurial and cost-efficient culture and have showed strong growth and good profitability over time. Today, NCAB has a local presence in 16 countries in Europe, Asia and North America and customers in approximately 45 countries worldwide. Revenues in 2020 amounted to SEK 2,115 million. Organic growth and acquisitions are part of NCAB's strategy. For more information about NCAB Group, please visit us at www.ncabgroup.com.
NCAB Group AB (publ) org nr 556733-0161
We have reviewed the condensed interim financial information (interim report) of NCAB Group AB (publ) as of 30 September 2021 and the nine-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.
Stockholm, 11 November 2021
Öhrlings PricewaterhouseCoopers AB
Johan Engstam Authorized Public Accountant
| Jul-Sep | Jan-Sep | Jan-Dec | ||||
|---|---|---|---|---|---|---|
| SEK million | 2021 | 2020 | 2021 | 2020 | LTM | 2020 |
| Operating revenue | ||||||
| Net sales | 863.6 | 536.7 | 2,242.9 | 1,600.3 | 2,757.8 | 2,115.2 |
| Other operating income | 0.6 | 0.7 | 12.7 | 1.3 | 17.8 | 6.3 |
| Total | 864.1 | 537.4 | 2,255.6 | 1,601.6 | 2,775.5 | 2,121.5 |
| Raw materials and consumables | -598.1 | -380.1 | -1,567.4 | -1,123.3 | -1,925.4 | -1,481.3 |
| Other external expenses | -39.5 | -26.9 | -110.7 | -80.8 | -136.4 | -106.6 |
| Staff costs Depreciation of property, plant and equipment, and amortisation of intangible assets |
-95.7 -9.9 |
-71.6 -7.9 |
-272.5 -26.6 |
-224.7 -20.7 |
-348.8 -33.5 |
-301.0 -27.5 |
| Other operating expenses | -2.3 | -3.7 | -5.0 | -19.9 | -7.8 | -22.8 |
| Total operating expenses | -745.5 | -490.2 | -1,982.1 | -1,469.4 | -2,451.9 | -1,939.2 |
| Operating profit | 118.6 | 47.2 | 273.5 | 132.2 | 323.6 | 182.3 |
| Net financial income/expense | 0.9 | -6.6 | -5.8 | -14.0 | -11.2 | -19.4 |
| Profit before tax | 119.5 | 40.6 | 267.7 | 118.2 | 312.4 | 163.0 |
| Income tax | -28.3 | -9.1 | -58.1 | -25.9 | -67.7 | -35.4 |
| Profit for the period | 91.2 | 31.5 | 209.6 | 92.3 | 244.8 | 127.5 |
| Profit attributable to: | ||||||
| Shareholders of the Parent Company | 90.9 | 31.5 | 209.4 | 92.2 | 244.5 | 127.4 |
| Non-controlling interests | 0.1 | 0.0 | 0.2 | 0.2 | 0.2 | 0.1 |
| Average number of ordinary shares | 18,723,608 | 16,847,124 | 18,710,027 | 17,920,664 | 18,706,774 | 18,115,840 |
| Earnings per share | 4.86 | 1.68 | 11.20 | 5.14 | 13.08 | 7.03 |
| Earnings per share after dilution | 4.85 | 1.68 | 11.19 | 5.14 | 13.07 | 7.03 |
| Jul-Sep | Jan-Sep | Jan-Dec | ||||
|---|---|---|---|---|---|---|
| SEK million | 2021 | 2020 | 2021 | 2020 | LTM | 2020 |
| Profit for the period | 91.2 | 31.5 | 209.6 | 92.3 | 244.8 | 127.5 |
| Other comprehensive income, items that can subsequently be reclassified to profit or loss: |
||||||
| Foreign exchange differences | 17.4 | 23.2 | 39.7 | 10.0 | -22.5 | -52.3 |
| Total comprehensive income | 108.6 | 54.7 | 249.3 | 102.3 | 222.2 | 75.2 |
| Profit attributable to: | ||||||
| Shareholders of the Parent Company | 108.5 | 54.7 | 249.0 | 102.1 | 222.0 | 75.1 |
| Non-controlling interests | 0.1 | 0.0 | 0.2 | 0.2 | 0.2 | 0.1 |
| ASSETS | 30 Sep 2021 | 30 Sep 2020 | 31 Dec 2020 |
|---|---|---|---|
| Non-current assets | |||
| Goodwill | 607.1 | 413.7 | 382.3 |
| Other intangible assets | 77.5 | 49.9 | 43.2 |
| Leasehold improvement costs | 1.9 | 2.4 | 2.1 |
| Right-of-use Office and Cars | 28.0 | 34.8 | 30.0 |
| Plant and equipment | 6.6 | 4.9 | 4.5 |
| Financial assets | 6.8 | 21.4 | 4.9 |
| Deferred tax assets | 6.9 | 7.4 | 7.4 |
| Total non-current assets | 734.7 | 534.5 | 474.4 |
| Current assets | |||
| Inventories | 376.1 | 176.5 | 183.1 |
| Trade receivables | 709.3 | 376.1 | 342.9 |
| Other current receivables | 14.1 | 27.7 | 14.5 |
| Prepaid expenses and accrued income | 26.9 | 24.7 | 19.1 |
| Cash and cash equivalents | 120.6 | 418.8 | 449.0 |
| Total current assets | 1,247.1 | 1,023.8 | 1,008.6 |
| TOTAL ASSETS | 1,981.8 | 1,558.3 | 1,483.0 |
| EQUITY AND LIABILITIES | |||
| Equity attributable to shareholders of the Parent Company | |||
| Share capital | 1.9 | 1.9 | 1.9 |
| Additional paid-in capital | 478.1 | 478.1 | 478.1 |
| Reserves | -16.7 | 5.8 | -56.4 |
| Retained earnings | 390.8 | 240.9 | 276.1 |
| Non-controlling interests | 0.3 | 0.2 | 0.2 |
| Total equity | 854.5 | 727.0 | 699.9 |
| Non-current liabilities | |||
| Borrowings | 256.3 | 304.7 | 294.5 |
| Leased liabilites | 19.6 | 24.7 | 21.1 |
| Deferred tax | 30.0 | 16.6 | 22.8 |
| Total non-current liabilities | 305.8 | 346.0 | 338.4 |
| Current liabilities | |||
| Current liabilities | 51.8 | 36.5 | 38.2 |
| Current right-of-use liabilities | 10.6 | 11.2 | 10.0 |
| Trade payables | 534.3 | 282.4 | 270.3 |
| Current tax liabilities | 53.6 | 32.9 | 16.3 |
| Other current liabilities | 53.1 | 45.6 | 44.6 |
| Accrued expenses and deferred income | 118.1 | 76.7 | 65.3 |
| Total current liabilities | 821.4 | 485.3 | 444.7 |
| TOTAL EQUITY AND LIABILITIES | 1,981.8 | 1,558.3 | 1,483.0 |
| Additional | |||||||
|---|---|---|---|---|---|---|---|
| Share | paid-in | Retained | Non-controlling | Total | |||
| SEK million | capital | capital | Reserves | earning | Total | interests | equity |
| 1 Jan 2020 | 1.7 | 201.6 | -4.1 | 148.7 | 347.9 | 0.2 | 348.1 |
| Profit for the period | 92.2 | 92.2 | 0.2 | 92.3 | |||
| Other comprehensive income for | |||||||
| the period | - | - | 10.0 | - | 10.0 | - | 10.0 |
| Total comprehensive income | - | - | 10.0 | 92.2 | 102.1 | 0.2 | 102.3 |
| - | |||||||
| Issue of new ordinary shares | 0.2 | 286.6 | 286.8 | 286.8 | |||
| Transaction cost | -10.0 | -10.0 | -10.0 | ||||
| Total transactions with | |||||||
| shareholders, recognised | |||||||
| directly in equity | 0.2 | 276.5 | - | - | 276.7 | -0.1 | 276.6 |
| 30 Sep 2020 | 1.9 | 478.1 | 5.8 | 240.9 | 726.7 | 0.2 | 727.0 |
| Attributable to shareholders of the Parent Company | |||||||
|---|---|---|---|---|---|---|---|
| SEK million | Share capital |
Additional paid-in capital |
Reserves | Retained earning |
Total | Non-controlling interests |
Total equity |
| 1 Jan 2021 | 1.9 | 478.1 | -56.4 | 276.1 | 699.7 | 0.2 | 699.9 |
| Profit for the period | 209.4 | 209.4 | 0.2 | 209.6 | |||
| Other comprehensive income for the period |
- | - | 39.7 | - | 39.7 | - | 39.7 |
| Total comprehensive income | - | - | 39.7 | 209.4 | 249.0 | 0.2 | 249.3 |
| Dividend | - | - | - | -93.5 | -93.5 | -0.1 | -93.6 |
| Own shares | - | - | - | -2.4 | -2.4 | - | -2.4 |
| Cost for Warrants | - | - | - | 1.3 | 1.3 | - | 1.3 |
| Total transactions with shareholders, recognised |
|||||||
| directly in equity 30 Sep 2021 |
- | - | - | -94.6 | -94.6 | -0.1 | -94.7 |
| 1.9 | 478.1 | -16.7 | 390.8 | 854.2 | 0.3 | 854.5 |
| Jul-Sep | Jan-Sep | Jan-Dec | ||||
|---|---|---|---|---|---|---|
| SEK million | 2021 | 2020 | 2021 | 2020 | LTM | 2020 |
| Cash flow from operating activities | ||||||
| Profit before net financial income/expense | 118.3 | 47.2 | 273.5 | 132.2 | 323.6 | 182.3 |
| Adjustment for non-cash items | 25.2 | 1.3 | 22.6 | 18.9 | 28.7 | 25.0 |
| Interest received | 0.0 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
| Interest paid | -3.1 | -3.1 | -8.1 | -8.9 | -11.6 | -12.3 |
| Income taxes paid | -10.7 | 1.0 | -25.0 | -20.7 | -48.4 | -44.0 |
| Cash flow from operating activities before changes | ||||||
| in working capital | 129.7 | 46.4 | 263.0 | 121.7 | 292.4 | 151.1 |
| Change in inventories | -124.2 | 23.9 | -181.4 | 18.8 | -188.0 | 12.2 |
| Change in current receivables | -83.0 | 56.0 | -335.6 | 36.7 | -292.3 | 80.1 |
| Change in current operating liabilities | 77.7 | -58.5 | 282.6 | -29.9 | 263.4 | -49.0 |
| Total changes in working capital | -129.5 | 21.5 | -234.5 | 25.7 | -216.9 | 43.2 |
| Cash flow from operating activities | 0.2 | 67.9 | 28.5 | 147.3 | 75.5 | 194.3 |
| Cash flow from investing activities | ||||||
| Investments in property, plant and equipment | -0.9 | -0.0 | -1.9 | -0.8 | -1.9 | -0.8 |
| Investments in intangible assets | - | - | -0.4 | -0.7 | -1.0 | -1.3 |
| Investments in subsidiaries | -16.7 | - | -232.9 | -164.1 | -232.9 | -164.1 |
| Investments in financial assets | -1.4 | - | -1.9 | -0.2 | -3.3 | -1.7 |
| Cash flow from investing activities | -18.9 | -0.0 | -237.1 | -165.8 | -239.1 | -167.8 |
| Cash flow from financing activities | ||||||
| Issue of new shares | - | - | - | 286.8 | - | 286.8 |
| Costs for issue of shares | - | - | - | -10.0 | - | -10.0 |
| Change in overdraft facility | - | - | - | -7.9 | - | -7.9 |
| Borrowings | - | - | - | 265.0 | - | 265.0 |
| Transaction cost, loans | - | - | - | -1.5 | - | -1.5 |
| Repayment of loans | -9.1 | -9.1 | -27.4 | -163.6 | -36.5 | -172.7 |
| Repayment of leased liabilities | -3.8 | -3.4 | -10.7 | -10.4 | -14.2 | -14.0 |
| Dividend | - | - | -93.5 | - | -93.5 | - |
| Cash flow from financing activities | -13.0 | -12.5 | -131.5 | 358.3 | -144.2 | 345.6 |
| Decrease/increase in cash and cash equivalents | ||||||
| Cash flow for the period | -31.7 | 55.3 | -340.1 | 339.8 | -307.8 | 372.1 |
| Foreign exchange difference in cash and cash | ||||||
| equivalents | 6.1 | -0.3 | 11.6 | -3.2 | 9.6 | -5.3 |
| Cash and cash equivalents at beginning of period | 146.2 | 363.8 | 449.0 | 82.2 | 418.8 | 82.2 |
| Cash and cash equivalents at end of period | 120.6 | 418.8 | 120.6 | 418.8 | 120.6 | 449.0 |
| Jul-Sep | Jan-Sep | Jan-Dec | |||
|---|---|---|---|---|---|
| SEK million | 2021 | 2020 | 2021 | 2020 | 2020 |
| Operating revenue | |||||
| Net sales | 17.4 | 14.1 | 53.2 | 42.9 | 60.0 |
| Total | 17.4 | 14.1 | 53.2 | 42.9 | 60.0 |
| Other external expenses | -11.8 | -6.1 | -31.9 | -23.2 | -30.6 |
| Staff costs | -12.5 | -6.4 | -33.1 | -20.4 | -29.6 |
| Depreciation of property, plant and equipment, | |||||
| and amortisation of intangible assets | -0.1 | -0.1 | -0.4 | -0.4 | -0.5 |
| Other operating expenses | - | 5.8 | - | - | - |
| Total operating expenses | -24.4 | -6.9 | -65.5 | -44.0 | -60.8 |
| Operating loss | -7.0 | 7.2 | -12.3 | -1.0 | -0.9 |
| Income from investments in Group companies | - | 6.2 | 19.5 | 10.5 | 31.3 |
| Other interest income and similar income | 6.6 | 3.8 | 11.6 | 12.1 | 15.6 |
| Interest expense and similar charges | -2.7 | -5.5 | -7.4 | -22.9 | -36.4 |
| Net financial income/expense | 3.8 | 4.5 | 23.7 | -0.2 | 10.6 |
| Profit before tax | -3.2 | 11.7 | 11.4 | -1.2 | 9.7 |
| Appropriations | - | - | - | - | 31.0 |
| Tax on profit for the period | -0.1 | -0.1 | -0.5 | -0.1 | -0.1 |
| Profit for the period | -3.3 | 11.6 | 10.9 | -1.3 | 40.6 |
The Parent Company has no items which are accounted for as other comprehensive income. Total comprehensive income is therefore the same as profit for the period.
| ASSETS | 30 Sep 2021 | 30 Sep 2020 | 31 Dec 2020 |
|---|---|---|---|
| Non-current assets | |||
| Capitalised development costs | 0.7 | 1.2 | 1.0 |
| Plant and equipment | 0.0 | 0.0 | 0.0 |
| Non-current financial assets | 522.0 | 339.4 | 339.6 |
| Total non-current assets | 522.7 | 340.6 | 340.7 |
| Current assets | |||
| Trade receivables | - | 1.7 | - |
| Receivables from Group companies | 422.9 | 361.6 | 354.2 |
| Other current receivables | 0.8 | 1.1 | 1.4 |
| Prepaid expenses and accrued income | 3.5 | 4.1 | 4.7 |
| Cash and cash equivalents | - | 271.5 | 294.9 |
| Total current assets | 427.2 | 639.9 | 655.2 |
| TOTAL ASSETS | 949.8 | 980.5 | 995.9 |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Restricted equity | |||
| Share capital (18,697,124 shares) | 1.9 | 1.9 | 1.9 |
| Non-restricted equity | |||
| Share premium account | 478.1 | 478.1 | 478.1 |
| Retained earnings | -95.1 | -42.2 | -42.2 |
| Profit/ loss for the period | 10.9 | -1.3 | 40.6 |
| Total equity | 395.8 | 436.5 | 478.4 |
| Untaxed reserves | 8.8 | 8.8 | 8.8 |
| Non-current liabilities | |||
| Liabilities to credit institutions | 256.3 | 292.8 | 283.6 |
| Total non-current liabilities | 256.3 | 292.8 | 283.6 |
| Current liabilities | |||
| Liabilities to credit institutions | 50.9 | 36.5 | 36.5 |
| Trade payables | 2.5 | 1.9 | 3.1 |
| Liabilities to Group companies | 214.2 | 193.0 | 173.4 |
| Current tax liabilities | - | - | - |
| Other current liabilities | 4.4 | 2.5 | 2.7 |
| Accrued expenses and deferred income | 17.0 | 8.6 | 9.3 |
| Total current liabilities | 289.0 | 242.5 | 225.1 |
| TOTAL EQUITY AND LIABILITIES | 949.8 | 980.5 | 995.9 |
| Restricted equity | Non-restricted equity | |||
|---|---|---|---|---|
| SEK million | Share capital | Share premium account |
Retained earnings | Total |
| 1 January 2020 | 1.7 | 201.6 | -42.2 | 161.1 |
| Loss for the year | - | - | -1.3 | -1.3 |
| Total comprehensive income | - | - | -1.3 | -1.3 |
| Issue of new ordinary shares | 0.2 | 286.6 | - | 286.8 |
| Transaction cost | -10.0 | - | -10.0 | |
| Total transactions with shareholders, recognised directly in equity |
0.2 | 276.5 | - | 276.7 |
| 30 Sep 2020 | 1.9 | 478.1 | -43.5 | 436.4 |
| Restricted equity | Non-restricted equity | ||||
|---|---|---|---|---|---|
| SEK million | Share capital | Share premium account |
Retained earnings | Total | |
| 1 January 2021 | 1.9 | 478.1 | -1.6 | 478.4 | |
| Loss for the year | - | - | 10.9 | 10.9 | |
| Total comprehensive income | - | - | 10.9 | 10.9 | |
| Dividend, shares | -93.5 | -93.5 | |||
| Total transactions with shareholders, recognised directly in equity |
- | - | -93.5 | -93.5 | |
| 30 Sep 2021 | 1.9 | 478.1 | -84.2 | 395.8 |
This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The financial statements of the Parent Company have been prepared in accordance with the Swedish Annual Accounts Act and Recommendation RFR 2 Financial Reporting for Legal Entities of the Swedish Financial Reporting Board.
The applied accounting policies are consistent with the policies described in the annual report for the financial year ended 31 December 2020 and should be read in conjunction with these. With the exception of the accounting policies described below, the applied accounting policies are consistent with those described in the NCAB Group's annual report for 2020, which is available on NCAB Group's website.
None of the new IFRS standards, amended standards and interpretations that are applicable as of 1 January 2021 have had any material impact on the financial statements of the Group or the Parent Company. No new or amended standards have been applied prospectively.
Segments are accounted for in a way that is consistent with the internal reports submitted to the chief operating decision maker. The chief operating decision maker is the function that is responsible for allocating resources and assessing the results of segments. In the Group, this function has been identified as the Chief Executive Officer, who makes strategic decisions. The Group's operations are evaluated based on geography. The following four segments have been identified: Nordic, Europe, North America and East.
The interim financial information on pages 1–27 is an integral part of this financial report.
For information on significant estimates and judgements made by management in preparing the consolidated financial statements, see Note 2 of the 2020 Annual Report.
For more information on financial assets and liabilities, see the 2020 Annual Report, Note 2. All of the Group's financial assets and liabilities are measured at amortised cost. There are no financial assets and liabilities which are measured at fair value. The carrying amounts of the Group's financial assets and liabilities are deemed to approximate their fair values. All financial assets are recognised in the category "Financial assets measured at amortised cost". All financial liabilities are recognised in the category "Other financial liabilities".
The Group has provided shares in subsidiaries as collateral for liabilities to credit institutions. These are of the same extent as described in the latest annual report.
In NCAB Group, the CEO is the Group's chief operating decision maker. The segments are based on the information that is handled by the CEO and used as a basis for decisions on the allocation of resources and evaluation of results. NCAB Group has identified four segments, which also constitute reportable segments in the Group's operations:
Provides a broad range of PCBs from NCAB Group's companies in Sweden, Norway, Denmark and Finland. The PCBs are purchased from external suppliers, mainly in China. Most of the PCBs are of the high-mix-low-volume (HMLV) type, i.e. specialised products that are produced in small quantities. NCAB Group has a local presence through technicians and customer support staff to ensure that its customers receive support throughout the process.
NCAB Group AB (publ) | Interim Report January–September 2021 21
Provides a broad range of PCBs from NCAB Group's companies in the UK, Poland, France, Italy, Germany, Spain, the Netherlands and North Macedonia. The PCBs are purchased from external suppliers, mainly in China. Most of the PCBs are of the high-mix-low-volume (HMLV) type, i.e. specialised products that are produced in small quantities. NCAB Group has a local presence through technicians and customer support staff to ensure that its customers receive support throughout the process.
Provides a broad range of PCBs from NCAB Group's companies in the USA. The PCBs are purchased from external suppliers, mainly in China. Most of the PCBs are of the high-mix-low-volume (HMLV) type, i.e. specialised products that are produced in small quantities. NCAB Group has a local presence through technicians and customer support staff to ensure that its customers receive support throughout the process.
Provides a broad range of PCBs from NCAB Group's companies in China, Russia and Malaysia. The PCBs are purchased from external suppliers, mainly in China. Most of the PCBs are of the high-mixlow-volume (HMLV) type, i.e. specialised products that are produced in small quantities. NCAB Group has a local presence through technicians and customer support staff to ensure that its customers receive support throughout the process.
Revenue is generated from a large number of customers across all segments. There are no sales of goods between segments. However, minor amounts may be invoiced between the segments for freight and services, which are provided on market terms.
| North | Central | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter | Nordic | Europe | America | East | functions | Group | ||||||
| SEK million | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 |
| Net sales | 170.5 | 110.5 | 421.9 | 220.8 | 150.5 | 121.9 | 120.6 | 83.4 | - | 0.0 | 863.6 | 536.7 |
| EBITA | 31.7 | 15.9 | 55.2 | 14.0 | 16.4 | 9.1 | 20.1 | 9.3 | -0.2 | 1.8 | 123.2 | 50.1 |
| EBITA margin, % | 18.6 | 14.4 | 13.1 | 6.4 | 10.9 | 7.4 | 16.7 | 11.2 | 14.3 | 9.3 | ||
| Amortis. intangible assets |
-4.6 | -2.9 | ||||||||||
| Operating profit | 118.6 | 47.2 | ||||||||||
| Operating margin, % | 13.7 | 8.8 | ||||||||||
| Net financial expense | 0.9 | -6.6 | ||||||||||
| Profit before tax | 119.5 | 40.6 | ||||||||||
| Net working capital | 88.6 | 23.2 | 243.4 | 112.3 | 23.5 | 0.7 | 64.2 | 29.7 | -52.3 | 1.4 | 367.4 | 167.3 |
| North | Central | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Nordic | Europe | America | East | functions | Group | |||||||
| SEK million | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 |
| Net sales | 441.1 | 375.4 | 1,069.4 | 655.2 | 406.8 | 315.2 | 325.5 | 254.6 | - | - | 2,242.9 | 1,600.3 |
| EBITA | 73.2 | 57.9 | 117.0 | 44.1 | 52.1 | 25.7 | 49.1 | 29.3 | -6.4 | -18.5 | 285.1 | 138.5 |
| EBITA margin, % | 16.6 | 15.4 | 10.9 | 6.7 | 12.8 | 8.2 | 15.1 | 11.5 | 12.7 | 8.7 | ||
| Amortis. intangible assets |
-11.6 | -6.3 | ||||||||||
| Operating profit | 273.5 | 132.2 | ||||||||||
| Operating margin, % | 12.2 | 8.3 | ||||||||||
| Net financial expense | -5.8 | -14.0 | ||||||||||
| Profit before tax | 267.7 | 118.2 | ||||||||||
| Net working capital | 88.6 | 23.2 | 243.4 | 112.3 | 23.5 | 0.7 | 64.2 | 29.7 | -52.3 | 1.4 | 367.4 | 167.3 |
| North | Central | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| LTM | Nordic | Europe | America | East | functions | Group | ||||||
| SEK million | 2021 LTM |
2020 | 2021 LTM |
2020 | 2021 LTM |
2020 | 2021 LTM |
2020 | 2021 LTM |
2020 | 2021 LTM |
2020 |
| Net sales | 559.6 | 493.9 | 1,273.8 | 859.5 | 519.8 | 428.2 | 404.6 | 333.6 | 0.0 | 0.0 | 2,757.8 | 2,115.2 |
| EBITA | 92.3 | 77.0 | 129.2 | 56.3 | 58.8 | 32.4 | 62.9 | 43.1 | -6.0 | -18.1 | 337.3 | 190.7 |
| EBITA margin, % | 16.5 | 15.6 | 10.1 | 6.6 | 11.3 | 7.6 | 15.6 | 12.9 | 12.2 | 9.0 | ||
| Amortis. intangible assets |
-13.7 | -8.4 | ||||||||||
| Operating profit | 323.6 | 182.3 | ||||||||||
| Operating margin, % | 11.7 | 8.6 | ||||||||||
| Net financial expense | -11.2 | -19.4 | ||||||||||
| Profit before tax | 312.4 | 163.0 | ||||||||||
| Net working capital | 88.6 | 32.9 | 243.4 | 101.2 | 23.5 | 3.2 | 64.2 | 35.6 | -52.3 | -9.9 | 367.4 | 163.0 |
| Fixed assets | 5.7 | 4.9 | 11.8 | 13.1 | 8.6 | 8.3 | 1.1 | 0.8 | 9.2 | 9.7 | 36.4 | 36.6 |
| Intangible assets | 61.0 | 61.4 | 346.1 | 118.7 | 267.6 | 236.2 | 9.1 | 8.1 | 0.7 | 1.1 | 684.5 | 425.5 |
| Q3 21 | Q2 21 | Q1 21 | Q4 20 | Q3 20 | Q2 20 | Q1 2020 | Q4 2019 | |
|---|---|---|---|---|---|---|---|---|
| Order intake, SEK million | 935.2 | 1,057.8 | 978.9 | 681.4 | 512.3 | 486.2 | 563.4 | 479.7 |
| Order intake, USD million | 107.3 | 126.2 | 116.5 | 77.9 | 57.8 | 50.2 | 58.3 | 49.9 |
| Net sales, SEK million | 863.6 | 762.2 | 617.1 | 514.9 | 536.7 | 580.6 | 483.1 | 422.4 |
| SEK annual growth, % | 60.9 | 31.3 | 27.7 | 21.9 | 22.0 | 22.7 | 8.3 | 3.9 |
| Net sales, USD million | 99.8 | 90.9 | 73.5 | 59.5 | 60.3 | 60.0 | 50.0 | 45.1 |
| USD annual growth, % | 65.5 | 51.5 | 46.9 | 32.0 | 33.5 | 20.0 | 2.5 | 0.0 |
| Gross margin, % | 30.8 | 30.1 | 29.4 | 31.4 | 29.3 | 29.4 | 31.1 | 32.4 |
| EBITA, SEK million | 123.2 | 103.8 | 58.4 | 52.2 | 50.1 | 50.6 | 37.9 | 41.2 |
| EBITA margin, % | 14.3 | 13.6 | 9.5 | 10.1 | 9.3 | 8.7 | 7.8 | 9.7 |
| Operating profit/loss, SEK million |
118.6 | 99.7 | 55.4 | 50.1 | 47.2 | 48.1 | 37.0 | 40.7 |
| Total assets, SEK million | 1,981.8 | 1,765.0 | 1,663.4 | 1,483.0 | 1,558.3 | 1,551.5 | 1,125.7 | 873.1 |
| Cash flow from operating activities, SEK million |
0.2 | 30.3 | -2.0 | 47.0 | 67.9 | 76.9 | 2.6 | 44.9 |
| Equity/assets ratio, % | 43.1 | 42.3 | 46.7 | 47.2 | 46.7 | 43.3 | 34.6 | 39.9 |
| Number of employees | 512 | 500 | 488 | 474 | 469 | 473 | 452 | 395 |
| Average exchange rate, SEK/USD |
8.65 | 8.41 | 8.39 | 8.62 | 8.87 | 9.69 | 9.67 | 9.61 |
| Average exchange rate, SEK/EUR |
10.19 | 10.14 | 10.11 | 10.27 | 10.36 | 10.66 | 10.66 | 10.64 |
On 22 February 2021, an agreement was signed to acquire 100 per cent of the shares in PreventPCB, based in Vergiate, Italy. Operating profit together with assets and liabilities associated with the acquired company were consolidated from the transaction date. Goodwill of SEK 175.5 million arose in conjunction with the acquisition. The company had sales of approximately SEK 210 million in 2020. At the time of the acquisition, the company had 22 employees, 12 in Italy and 10 in China. PreventPCB's primary customer base is in Italy, and also in Switzerland. Transaction costs of SEK 2.9 million related to the acquisition of PreventPCB were expensed as central costs. In the total purchase price a presumed earn out of SEK 21.0 million is included which will be paid during the first quarter in 2022.
On 24 June 2021, 100 per cent of the shares were acquired in sas – electronics, based in Rohrbach, north of Munich, Germany. Operating profit together with assets and liabilities associated with the acquired company were consolidated from the transaction date. Goodwill of SEK 17.1 million arose in conjunction with the acquisition. In 2020, the company had sales of slightly more than SEK 30 million, with an EBITA margin on par with NCAB and the company had ten employees. Transaction costs related to the acquisition amounted to approximately SEK 0.6 million and were expensed as central costs. In the total purchase price a presumed earn out of SEK 2.0 million is included which will be paid during the first quarter in 2022.
On 1 September 2021, 100 per cent of the shares were acquired in RedBoard Circuits in Phoenix, Arizona, in the USA. Operating profit together with assets and liabilities associated with the acquired company were consolidated from the transaction date. Goodwill of SEK 10.7 million arose in conjunction with the acquisition. In 2020, the company had sales of slightly more than SEK 33 million, with an EBITA margin slightly lower than NCAB and the company had four employees. Transaction costs related to the acquisition amounted to approximately SEK 0.8 million and were expensed as central costs.
| Acquisitions | PreventPCB 22 February |
sas – electronics 24 June |
RedBoard Circuits 2 September |
|---|---|---|---|
| Total purchase consideration |
203.0 | 27.5 | 18.8 |
| Acquired assets and assumed liabilities |
|||
| Non-current assets | 0.4 | 0.6 | 0.0 |
| Customer relationships | 34.4 | 5.6 | 6.4 |
| Other current assets | 36.2 | 2.4 | 10.3 |
| Cash and cash equivalents | 0.1 | 4.9 | 2.0 |
| Other operating liabilities | –34.3 | –1.5 | –9.0 |
| Deferred tax | –9.3 | –1.6 | –1.6 |
| Total net assets | 27.5 | 10.5 | 8.1 |
| Goodwill | 175.5 | 17.1 | 10.7 |
Amounts reported in the table above are preliminary values.
If PreventPCB, sas – electronics and RedBoard Circuits had been consolidated on 1 January 2021, net sales for the January–September period 2021 would have increased by SEK 87 million to SEK 2,330 million and EBITA by SEK 7.3 million to SEK 292.4 million.
NCAB Group AB (publ) | Interim Report January–September 2021 25 On 19 October 2021, 100 per cent of the shares were acquired in Elmatica in Norway. Operating profit together with assets and liabilities associated with the acquired company will be consolidated from the transaction date. Elmatica is expected to report net sales of approximately SEK 370 million and EBITA of SEK 45 million in 2021. The purchase consideration for the shares amounted to SEK 315 million
with a possible additional purchase consideration based on earnings for 2021. The additional purchase consideration is currently approximately SEK 70 million. Elmatica has about 45 employees and operations in a number of countries in Europe. Most of net sales are from customers in Norway, Germany, Sweden, Poland and the Baltic region.
Some of the information contained in this report that is used by management and analysts to assess the Group's performance has not been prepared in accordance with IFRS. Management believes that this information helps investors to analyse the Group's financial performance and financial position. Investors should regard this information as complementary rather than as replacing financial reporting in accordance with IFRS.
| Jul-Sep | Jan-Sep | Jan-Dec | ||||
|---|---|---|---|---|---|---|
| SEK million | 2021 | 2020 | 2021 | 2020 | LTM | 2020 |
| Net sales | 863.6 | 536.7 | 2,242.9 | 1,600.3 | 2,757.8 | 2,115.2 |
| Other operating income | 0.9 | 0.7 | 12.7 | 1.3 | 17.8 | 6.3 |
| Cost of goods sold | -598.1 | -380.1 | -1,567.4 | -1,123.3 | -1,925.4 | -1,481.3 |
| Translation differences | -0.3 | - | - | - | - | - |
| Total gross profit | 266.0 | 157.3 | 688.2 | 478.3 | 850.1 | 640.2 |
| Gross margin, % | 30.8 | 29.3 | 30.7 | 29.9 | 30.8 | 30.3 |
| Gross margin excl PPP, % | 30.8 | 29.3 | 30.2 | 29.9 | 30.4 | 30.3 |
| Jul-Sep | Jan-Sep | Jan-Dec | |||||
|---|---|---|---|---|---|---|---|
| SEK million | 2021 | 2020 | 2021 | 2020 | LTM | 2020 | |
| Operating profit | 118.6 | 47.2 | 273.5 | 132.2 | 323.6 | 182.3 | |
| Amortisation and impairment of intangible assets | 4.6 | 2.9 | 11.6 | 6.3 | 13.7 | 8.4 | |
| EBITA | 123.2 | 50.1 | 285.1 | 138.5 | 337.3 | 190.7 | |
| EBITA margin, % | 14.3 | 9.3 | 12.7 | 8.7 | 12.2 | 9.0 | |
| EBITA margin excl PPP, % | 14.3 | 9.3 | 12.2 | 8.7 | 11.8 | 9.0 |
| Jul-Sep | Jan-Sep | Jan-Dec | ||||
|---|---|---|---|---|---|---|
| SEK million | 2021 | 2020 | 2021 | 2020 | LTM | 2020 |
| Operating profit | 118.6 | 47.2 | 273.5 | 132.2 | 323.6 | 182.3 |
| Depreciation, amortisation and impairment of property, plant and equipment, and intangible assets |
9.9 | 7.9 | 26.6 | 20.7 | 33.5 | 27.5 |
| EBITDA | 128.5 | 55.1 | 300.1 | 152.9 | 357.1 | 209.9 |
| EBITDA margin, % | 14.9 | 10.3 | 13.4 | 9.6 | 12.9 | 9.9 |
| EBITDA margin excl PPP, % | 14.9 | 10.3 | 12.9 | 9.6 | 12.5 | 9.9 |
| SEK million | Sep 2021 | Sep 2020 | Dec 2020 |
|---|---|---|---|
| Profit for the period — LTM | 244.8 | 124.0 | 127.5 |
| Equity (average) | 790.7 | 526.8 | 524.0 |
| Return on equity, % | 31.0 | 23.5 | 24.3 |
| SEK million | 30 Sep 2021 | 30 Sep 2020 | 31 Dec 2020 |
|---|---|---|---|
| Inventories | 376.1 | 176.5 | 183.1 |
| Trade receivables | 709.3 | 376.1 | 342.9 |
| Other current receivables | 14.1 | 27.7 | 14.5 |
| Prepaid expenses and accrued income | 26.9 | 24.7 | 19.1 |
| Trade payables | -534.3 | -282.4 | -270.3 |
| Current tax liabilities | -53.6 | -32.9 | -16.3 |
| Other current liabilities | -53.1 | -45.6 | -44.6 |
| Accrued expenses and deferred income | -118.1 | -76.7 | -65.3 |
| Net working capital | 367.4 | 167.3 | 163.0 |
| Non-current assets | 734.7 | 534.5 | 474.4 |
| Prepaid expenses and accrued income | 120.6 | 418.8 | 449.0 |
| Deferred tax | -30.0 | -16.6 | -22.8 |
| Capital employed | 1,192.7 | 1,104.0 | 1,063.7 |
| SEK million | Sep 2021 | Sep 2020 | Dec 2020 |
|---|---|---|---|
| Operating profit/loss — LTM | 323.6 | 173.0 | 182.3 |
| Capital employed (average) | 1,148.4 | 779.0 | 769.4 |
| Return on capital employed, % | 28.2 | 22.2 | 23.7 |
| SEK million | 30 Sep 2021 | 30 Sep 2020 | 31 Dec 2020 |
|---|---|---|---|
| Equity | 854.5 | 727.0 | 699.9 |
| Untaxed reserves | - | - | - |
| Total | 854.5 | 727.0 | 699.9 |
| Total assets | 1,981.8 | 1,558.3 | 1,483.0 |
| Equity/assets ratio, % | 43.1 | 46.7 | 47.2 |
| SEK million | 30 Sep 2021 | 30 Sep 2020 | 31 Dec 2020 |
|---|---|---|---|
| Interest-bearing liabilities | 338.2 | 377.1 | 363.7 |
| Cash and cash equivalents | -120.6 | -418.8 | -449.0 |
| Total net debt | 217.6 | -41.8 | -85.3 |
| EBITDA LTM | 357.1 | 202.0 | 209.9 |
| Net debt / EBITDA | 0.6 | -0.2 | -0.4 |
| SEK million | 30 Sep 2021 | 30 Sep 2020 | 31 Dec 2020 |
|---|---|---|---|
| Interest-bearing liabilities excl IFRS 16 | 308.0 | 341.2 | 332.7 |
| Cash and cash equivalents | -120.6 | -418.8 | -449.0 |
| Total net debt excl IFRS16 | 187.4 | -77.6 | -116.4 |
| EBITDA LTM excl IFRS 16 | 342.9 | 184.5 | 196.1 |
| Net debt excl IFRS 16/ EBITDA excl IFRS 16 | 0.5 | -0.4 | -0.6 |
| Alternative | Definition | Purpose |
|---|---|---|
| performance | ||
| measure | ||
| Gross profit | Net sales less raw materials and consumables and for other operating income, which includes translation differences on trade receivables and trade payables |
Gross profit provides an indication of the surplus that is needed to cover fixed and semi fixed costs in the NCAB Group |
| Gross margin | Gross profit divided by net sales | The gross margin provides an indication of the surplus as a percentage of net sales that is needed to cover fixed and semi-fixed costs in the NCAB Group |
| EBITDA | Operating profit before depreciation, amortisation and impairment of property, plant and equipment, and intangible assets |
EBITDA along with EBITA provide an overall picture of operating earnings |
| Adjusted EBITDA | Operating profit before depreciation, amortisation and impairment of property, plant and equipment, and intangible assets adjusted for non-recurring items |
Adjusted EBITDA is adjusted for extraordinary items. NCAB Group therefore considers that it is a useful performance measure for showing the company's operating earnings |
| EBITA | Operating profit before amortisation and impairment of goodwill and acquisition related intangible assets |
EBITA provides an overall picture of operating earnings |
| Adjusted EBITA | Operating profit before amortisation and impairment of goodwill and acquisition related intangible assets adjusted for non recurring items |
Adjusted EBITA is adjusted for non-recurring items. NCAB Group therefore considers that it is a useful performance measure for showing the company's operating earnings |
| Adjusted EBITA margin | Operating profit before amortisation and impairment of goodwill and acquisition related intangible assets adjusted for non recurring items, divided by net sales |
Adjusted EBITA margin is adjusted for non recurring items. NCAB Group therefore considers that it is a useful performance measure for comparing the company's margin with other companies regardless of whether the business is driven by acquisitions or organic growth |
| Return on equity | Profit/loss for the past 12 months divided by average equity |
Return on equity is used to analyse the company's profitability, based on how much equity is used |
| Net working capital | Current assets excluding cash and cash equivalents less non-interest-bearing current liabilities |
This measure shows how much working capital is tied up in the business |
| Capital employed | Equity and interest-bearing liabilities | Capital from external parties |
| Return on capital employed | Profit/loss for the past 12 months divided by average capital employed |
Return on capital employed is used to analyse the company's profitability, based on how much equity is used |
| Equity/assets ratio | Equity and untaxed reserves net of deferred tax, divided by total assets |
NCAB Group considers that this is a useful measure for showing what portion of total assets is financed by equity. It is used by management to monitor the Group's long-term financial position |
| Net debt | Interest-bearing liabilities less cash and cash equivalents |
Net debt is a measure which shows the company's total indebtedness |
| Net debt excl. IFRS 16 adjustment |
Interest-bearing liabilities excluding liabilities for right-of-use assets less cash and cash equivalents |
Net debt is a measure which shows the company's total indebtedness and has been adjusted for IFRS 16. Used in covenant calculations to the bank |
| EBITDA excl. IFRS | EBITDA adjusted for lease expenses pertaining to assets classified as right-of-use assets |
EBITDA along with EBITA provide an overall picture of operating earnings Used in covenant calculations to the bank |
NCAB is one of the world's leading suppliers of printed circuit boards (PCBs) with some 2,600 customers across 45 markets globally. It is important to achieve scale benefits, which is why NCAB has a strong focus on growth. NCAB is the leader in terms of expertise, service, sustainability and technology. Being the leading player also gives the strength to attract customers through important projects, skilled employees and the best factories.
NCAB works in deep relationships with its customers, where NCAB takes responsibility for the entire delivery so customers can focus on their manufacturing operations. NCAB does not own any factories, but
because of its Factory Management team NCAB does "own" the most important element – the relationship with the factories and the entire manufacturing process, which provides access to state-ofthe-art technology and limitless capacity without the need for investments.
PCBs for demanding customers, on time with zero defects, produced sustainably at the lowest total cost.
The Number 1 PCB producer – wherever we are.
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