NCAB Net Sales Up 30% in 1H 2021

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NCAB Group has posted net sales of SEK762.2 million for the second quarter of 2021, up by 31% year-on-year (YoY). Order intake increased by 118% YoY to SEK1.058 billion; EBITA went up by 105% to SEK103.8 million; and operating profit was SEK99.7 million. NCAP posted a net profit of SEK77.9 million.

For the first half of the year, the company achieved net sales of SEK1.38 billion, up by 30% YoY. Order intake increased by 94% to SEK2.037 billion; operating profit was SEK155.1 million; and net profit was SEK118.7 million.

“The behavior we saw during the first quarter with order bookings being brought forward, due to uncertainty in the market in terms of component shortages and price increases, continued in the second quarter. Is this the new normal? It is still too hard to predict. However, it is satisfying, alongside this, to see strong underlying growth and that all segments and all of the new acquisitions are delivering in terms of orders, sales and earnings. The order intake for the quarter also includes a price increase effect from our suppliers that we have passed on to our customers,” said Peter Kruk, CEO of NCAB Group. “In general, we are seeing increased activity from both existing and new customers with new projects. This is an indication that we are capturing market share. It is clear that electronic applications are increasing strongly due to the transition to more climate-smart solutions. We are also seeing that many of our small competitors are having difficulty in gaining priority among the leading suppliers. It is difficult for those that do not have their own staff in China to maintain relationships with the suppliers. This is also impacting customers who, to an extent, make purchases directly from factories in Asia. This entails a clear advantage for NCAB.”

Strong Presence in Asia

EBITA increased to SEK104 million, more than double the preceding year. However, it should be pointed out that earnings included forgiveness of PPP loans for coronavirus support in the United States, which amounted to SEK11 million. Excluding this support, NCAB increased its EBITA margin to a full 12.3% during the quarter.

“Our expenses for travel, trade fairs and suchlike remain low and, although we have invested in continued growth, we have not managed to recruit staff at the same high pace as we have increased income. The margin increase is gratifying and clarifies the scale effects generated by the growth. New acquisitions are making a positive contribution, with higher sales and gross profit, but can be managed without major increases in central resources, which increases the EBITA margin,” said Kruk.

Nordic had a healthy second quarter, also in comparison with the strong second quarter of last year. Norway and Denmark shone brightest, but it is also positive to see good order intake in Sweden and Finland, which were formerly weaker. 

In Europe, several countries are displaying substantial growth. These are, in particular, the UK, Germany and Benelux.

“Our acquired companies PreventPCB in Italy and Flatfield in the Netherlands are performing well, with increased demand from their customers. The acquisition of sas – electronics in Germany will strengthen our position. It is also encouraging to see how customers in the UK are now showing increased confidence and willingness to invest,” he added.

In North America, both the earlier operations and the acquired BBG performed well. The margins in the acquired operations have improved.

“In the East, sales in China continued to develop well, with several new 5G projects. Even in Russia, we see a positive rebound in the economy,” Kruk said. “Overall, there is much that is going our way and we have strengthened our positions. We foresee underlying demand driven by several factors, such as increased electrification in many areas, the Internet of Things (IoT), to which increasing numbers of products are connected, and generally enhanced intelligence built into industrial products. Our business model – with strong local presence among customers and suppliers – benefits us particularly in these times.”