NOTE Reports Strong Margin Improvement in FY2025 Despite Flat Organic Growth

Estimated reading time: 3 minutes

NOTE published its year-end report for 2025, highlighting resilient profitability and improved operating margins in both the fourth quarter and full year, despite flat organic growth and continued investments to support long-term expansion.

Financial development October-December

• Sales amounted to SEK 1,001 (1,025) million. Organic growth was -1% adjusted for currency.
• Operating profit amounted to SEK 113 (98). Adjusted operating profit amounted to SEK 114 (108) million, adjusted for revaluations of operating assets and liabilities in foreign currencies and for acquisition costs.
• Operating margin amounted to 11.3% (9.5%). Adjusted operating margin amounted to 11.4% (10.5%).
• Profit after net financial items amounted to SEK 109 (91) million.
• Profit after tax amounted to SEK 86 (73) million, which corresponds to SEK 3.04 (2.55) per share.
• Adjusted for items affecting comparability, such as acquisition-related payments and investments in the property in Torsby, operating cash flow amounted to SEK 58 (140) million. Total cash flow after investments amounted to SEK -285 (124) million, which corresponds to SEK -9.98 (4.35)/share. Financial development January-December 
• Sales amounted to SEK 3,814 (3,901) million. Organic growth was +0% adjusted for currency.
• Operating profit amounted to SEK 381 (352) million. Adjusted operating profit amounted to SEK 385 (364) million, adjusted for revaluations of operating assets and liabilities in foreign currencies, provision for restructuring of the English operations in the first quarter of this year of SEK 18 million and acquisition costs.
• Operating margin amounted to 10.0% (9.0%). Adjusted operating margin amounted to 10.1% (9.3%).
• Profit after net financial items amounted to SEK 352 (310) million.
• Profit after tax amounted to SEK 281 (248) million, which corresponds to SEK 9.89 (8.61) per share.
• Adjusted for items affecting comparability, such as acquisition-related payments and investments in the property in Torsby, operating cash flow amounted to SEK 437 (539) million. Total cash flow after investments amounted to SEK 32 (465) million, which corresponds to SEK 1.12 (16.33) per share.

Dividend

To ensure maximum financial freedom of action during the ongoing structural transformation of the industry, the board proposes that no dividend be paid for 2025.

CEO comment – ​​We are delivering what we promised when sales exceed one billion. We are also proud to deliver our highest profitability ever with an operating margin of over 11% for the quarter.

"In Q4, we delivered what we promised when sales came in above 1 billion. The fact that it is in the lower range of our guidance is explained by defense-related products where the defense industry continues to have challenges in keeping up with the rapid ramp-up that the industry is undergoing, which also leads to delays for us as an EMS partner. Our industry is in an exciting phase where trends such as regionalization, electrification and security and defense are strong driving forces forward. With the strong customer relationships we have and an organization with a proven ability to deliver in all situations, we are ready to take a leading position. That is why we invest, expand and develop our business - even when the outside world is uncertain.

We made our single largest investment for NOTE when we received the go-ahead to complete the acquisition of the UK EMS provider Kasdon at the beginning of Q4. Kasdon has a turnover of approximately 12 MGBP and has a strong position in the defence sector. We are very pleased with what the company has delivered in its first months as part of NOTE.

Another important milestone was reached in December when the expansion of our largest factory in Sweden was completed. With doubled production space, our factory in Torsby has the potential to grow significantly and with the customers the Torsby factory has and their plans for the future, we are convinced that the expansion of the factory was urgent.

We are delivering very strong profitability. For the quarter, we reached a full 11.4% underlying operating margin, which is our highest level ever, and for the full year the corresponding figure is 10.1%. The fact that we are delivering record levels of our profitability even when sales are lower than we had hoped for shows what a fantastic organization we have.

Continued high profitability combined with an efficient development of working capital utilization meant continued strong cash flows. For the quarter, we delivered an operating cash flow of SEK 58 million and for the full year, SEK 437 million. With an equity ratio of 48% and sound financing, we have stability and room for maneuver, and are thus well positioned to seize the opportunities that exist in the market.

The continued challenges of the defense segment are expected to affect the beginning of 2026. Thereafter, we see a gradual strengthening from customers, which gives us a positive view of the full year 2026. This is reflected in the order backlog, which at the end of 2025 was 11% higher than at the same time last year for the corresponding units.

Given the positive drivers for the industry, our strong position as an EMS partner and an efficient organization, we are well positioned for the growth to come,” says Johannes Lind-Widestam, President and CEO.