NCAB Group Releases Interim Report Q1 2021

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NCAB Group presented their Interim report for the first quarter 2021. 

January-March 2021

• Net sales increased by 28% to SEK 617.1 million (483.1). Acquisitions continue to drive growth. In USD, net sales increased 47%. For comparable units, net sales increased by 2%, and in USD the increase was 18%.
• Order intake increased 74% to SEK 978.9 million (563.4). In USD, the increase was 100%. For comparable units, order intake increased by 41%, and in USD the increase was 62%. The strong order intake is a result of partly a robust recovery in NCAB’s markets and partly customers’ concerns about shortage of components, which prompted many customers to place orders of PCBs early. The estimated value of orders placed early is a not an insignificant share of the total order intake for the quarter.
• EBITA increased 54% to SEK 58.4 million (37.9), representing an EBITA margin of 9.5% (7.8).
• Operating profit was SEK 55.4 million (37.0). Operating margin was 9.0% (7.7).
• Profit after tax was SEK 40.7 million (40.4). Profit for the first quarter of 2020 was positively impacted by foreign exchange gains of SEK 15.0 million.
• Earnings per share was SEK 2.17 (2.40).

Significant events during and after the quarter

• On 22 February, an agreement was signed to acquire 100 per cent of the shares in PreventPCB in Vergiate, Italy.
• The Board of Directors proposes a dividend of SEK 5.00 per share to the 2021 Annual General Meeting.

Message from the CEO: Strong first quarter for NCAB in a turbulent market

The first quarter was intensive for NCAB. Sales grew by 28 per cent despite the weaker USD. In USD, which is the currency used for most of our transactions and best reflects the true development, net sales rose by a full 47 per cent. For comparable units, the increase in USD was 18 per cent. It is gratifying to see that so many of our segments and countries are now picking up at the same time, and that our new acquisitions are delivering according to plan.

Earnings also trended positively, with an EBITA margin for the quarter of 9.7 percent, compared with 7.8 per cent in 2020. Compared with 2020, costs for travel and customer activities were lower due to the remaining coronavirus restrictions in many countries, even if there are some signs of easing. We welcome greater interaction with our customers, in addition to virtual meetings, and we took part in the Electronica China trade fair in Shanghai in April.

Particularly positive during the quarter, and also promising for the future, was our highly robust order intake – which grew more than 70 per cent in SEK and 100 per cent in USD. There is an overall positive rise in customer requirements and trends that are driving growth in electronics production. We can also see that many customers appreciate NCAB’s close relationships with factories, with our on-site professional Factory Management team at factories to ensure quality and deliveries in this time of uncertainty. The strong order intake was also in part a result of the current situation with shortages and erratic deliveries for some components. This led to a tendency among our customers to at least ensure availability of other materials, such as PCBs, by ordering early. How large this effect on the order intake is, is hard to estimate but it is not an insignificant part of the total order intake for the quarter. The exceptionally strong order intake will therefore not result in a sales increase of the same magnitude but rather the backlog of orders from the first quarter will be converted into deliveries over several quarters in the future.

Our Nordic segment noted stable development when adjusted for currency effects. The Norwegian market has grown sharply and now accounts for an increasing share of the segment. As previously announced, growth was strong in charging unit projects for electric vehicles.

We achieved our highest growth in the Europe segment, with many positive signals. Germany is developing well with many new projects and growing market shares. Our investments over the past two years in sales and the organisation are beginning to pay off. The Netherlands has also performed well, led by our new acquisition Flatfield. Our main customers in the UK have begun returning, generating an increase in demand. In Italy, we are pleased to have completed the acquisition of PreventPCB. Together with our existing company in Italy, we have strengthened our position and have already received a positive response from our customers and noted rising order intake.

In North America, operations performed well, both in our earlier operations and Bare Board Group (BBG), which was acquired in 2020. The integration between the companies has been completed and synergy effects will gradually improve the margins.

In the East segment, Russia had a good quarter following a difficult period of lockdowns. We noted more interaction with customers and improved sales. Work in China has returned to full capacity and we have many new and interesting projects. Margins in the segment remained healthy.

Our latest acquisitions during 2020 and 2021 are all delivering in line with our plans, and are at different stages of integration with NCAB’s operations. Flatfield, which was acquired in March 2020, is well integrated in NCAB Europe and is making a strong contribution to the segment. The integration of BBG has also made great progress. Employees in our latest acquisition, PreventPCB in Italy, have shown very robust engagement and are working at full speed. Here, we have also been able to offer customers more good suppliers and better conditions. We see more opportunities for future acquisitions and are building a pipeline of interesting targets. 

Overall, this is a very exciting time for NCAB. It is clear that our unique business model, with high quality in local support for our customers and our Factory Management team in Asia, is helping us to gain market shares. As so many others, we have also learned to communicate digitally with customers and suppliers by using alternative and highly effective platforms. We will continue to use these, even if we are longing to return to physical customer meetings.