NCAB Group Posts 52% Net Sales Growth in 2021

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NCAB Group presented their Year-end report 2021.

October–December 2021

• Net sales increased by 90% to SEK 976.6 million (514.9). In USD, net sales increased 87%. For comparable units, net sales increased by 57%, and in USD the increase was 55%.
• Order intake increased 57% to SEK 1,067.1 million (681.4). In USD, the increase was 55%. For comparable units, order intake increased by 29%, and in USD the increase was 27%.
• EBITA increased 132% to SEK 121.0 million (52.2), representing an EBITA margin of 12.4% (10.1).
• EBITA was negatively impacted by transaction costs for the acquisition of Elmatica in an amount of SEK 3.1 million. EBITA, excluding the effect of transaction costs, was SEK 124.1 million, corresponding to a margin of 12.7% (10.1).
• Operating profit was SEK 113.7 million (50.1). Operating margin was 11.6% (9.7).
• Profit after tax was SEK 75.3 million (35.2).
• Earnings per share** before and after dilution was SEK 0.40 (0.19).

January–December 2021

• Net sales increased by 52% to SEK 3,219.5 million (2,115.2). In USD, net sales increased 63%. For comparable units, net sales increased by 30%, and in USD 39%.
• Order intake increased 80% to SEK 4,039.0 million (2,243.4). In USD, order intake increased 93%. For comparable units, the increase was 55% in SEK, and 66% in USD.
• EBITA increased 111% to SEK 406.1 million (190.7), representing an EBITA margin of 12.6% (9.0). SEK 7.4 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 402.5 million, corresponding to an EBITA margin of 12.5% (9.7).
• Operating profit was SEK 387.2 million (182.3). Operating margin was 12.0% (8.6).
• Profit after tax was SEK 284.9 million (127.5).
• Earnings per share** before and after dilution was SEK 1.52 (0.70).
• Significant events during and after the quarter
• On 19 October, 100 per cent of the shares of Elmatica in Norway were acquired.
• NCAB signed a new credit facility of SEK 1,265 million, which increased its credit line by approximately SEK 750 million with the aim of securing acquisition financing.
• The Extraordinary General Meeting on 15 December approved an extra dividend of SEK 10 per share and thereafter a 10:1 split of the NCAB share.
• On 2 January 2022, 100 per cent of the shares in META Leiterplatten in Germany were acquired.
• At year-end, Robert Balson was appointed new VP North America and President NCAB USA.
• The Board of Directors proposes a dividend of SEK 0.60 per share to be paid with 50% in May and 50% in October (2021: SEK 0.50** per share was distributed as an ordinary dividend and SEK 1.00** as an extra dividend). 

Message from Peter Kruk, CEO, NCAB Group

Continued strong organic growth boosted by acquisitions

We can look back on another strong quarter with substantial growth in sales and improved profitability compared with previous year. We are pleased with the high demand and organic growth and that order intake is clearly exceeding net sales, which will support continued growth. Our growth relative to the market shows that we are gaining market shares. Our local presence in the production chain through our Factory Management organisation makes a great difference by offering us a strong position to secure delivery times by enabling continuous improvements in technology, quality and sustainability.

In addition to our organic growth, which is derives from all different industries and regions, we also noted a robust performance from our acquisitions. PreventPCB, which was acquired in the first quarter, has been integrated into our existing Italian operations and developed favourably. The integration of sas-electronics and RedBoard Circuits has continued according to plan. Elmatica, based in Norway, joined us during the quarter and META Leiterplatten in Germany was acquired at year-end. Elmatica is a larger acquisition and has operations in several countries. With the acquisition of Elmatica, we also gained a team of senior leaders with extensive industry know-how. For example, we appointed a new Director of Technology for the Group from Elmatica.

The PCB market is highly fragmented with many local or regional players. Many of these are under increasing pressure from the growing demands for new technology, quality improvements and sustainability. We can see major opportunities to acquire these companies and help them to step up to the next level and further develop their customer relations. It is clear from analysis of our acquired companies and their performance that they have developed very well since being integrated into NCAB.

Among the segments Nordic has performed well and grown both organically and through the acquisition of Elmatica. It is also good to see how the margin has improved. The integration of Elmatica has begun and it is clear that it is a very good addition to NCAB, and we anticipate synergies in a number of areas.

We have invested heavily in growth in our Europe segment for several years. And we can now clearly see that our efforts have yielded results. We are gaining market shares and sales to new customers are now really bearing fruit. The strong order intake is particularly promising for 2022. Plenty of work remains to be done as it is a large market where we have a relatively small market share.

During the quarter, North America reported a sharp increase in sales and orders. The improvement in profitability was a result of the gradual shift to more high-tech products in both our own operations and in those of our acquired companies. 

For East, the quarter was positive in terms of earnings and sales, despite extensive COVID restrictions in parts of the region. Profitability is at a high level due to the high technology content and high level of service.

Supply chains remained under pressure during the fourth quarter, though the situation has stabilised and we can see signs of improvement. This has also led to a higher working capital. We now also see a more uncertain political situation globally and that the coronavirus pandemic may still affect supply chains.

All in all, we can look back on another very strong quarter in all areas. We are proud of our strong organic growth and with the successful completion of first-rate acquisitions. A continued strong order intake also paints a positive picture for 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.
** Calculated after 10:1 split