Welcome to NOTE AB (publ) – Q1 presentation 2020-04-23
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Q1, 2020
Q1 – Strong organic growth, increased profitability and solid cash flow
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Sales +17% to 475 (405) MSEK. Corona impact appr. -20 MSEK (-5%).
Order backlog up ~22% vs LY.
OP +24% to 33 (27) MSEK. Corona impact net, appr. -3 MSEK
OP-margin +0.4%-points to 7.0% (6.6%).
Profit after financial items +13% to 28 (25) MSEK.
Profit after tax 22 (20) MSEK, or SEK 0.80 (0.73) per share.
Cash flow after capex +63 (2) MSEK, or +2.26 (0.07) SEK/share.
Equity ratio 41% (37%), well above target of 30%
NOTE MANUFACTURING UNIT
Western Europe Operating Margin 9.6%, Rest-of-World 3.8%
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Western Europe – sites in Sweden, Finland, and UK Rest-of-World – sites in Estonia and China
SwedenFinland
EstoniaUK
China
YTD Q1 (MSEK) Western Europe Rest-of-World2020 2019 Delta 2020 2019 Delta
Net sales - external 323 262 23% 152 143 6%Net sales - internal 1 2 8 19Net Sales 324 264 23% 160 162 -1%
Operating profit 31 25 6 6OP% 9,6% 9,3% 0,3% 3,8% 3,4% 0,4%
Inventory 256 253 1% 164 182 -10%
No of employees 511 434 18% 561 594 -6%
Strong sales growth in Medtech, Industrial & High-end consumer
30364
64
3014
Industrial
Communication
Medtech
Defence
High-endconsumer
2020
64%
13%
14%
6%
3%
100%
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258
74
35
32 5
YTD 2019 YTD 2020
Industrial segment (growth +17%) still largest. Communication (-13%), Medtech (+83%), Defence (-6%) and High-end consumer (>100%)
Operational highlights Q1, 2020
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Quality and delivery performance, possibly “best-in-class” “Best Quality Award” received from large global customer in China
Continued strong organic growth (17%) Increased “share of wallet” existing customers, primarily within Industrial,
Medtech and High-end consumer Recent WINs now in serial production – DeLaval, Maven Wireless,
Micropower, Plejd, Charge Amps…
Record high wins of new customers in 2019 now in start-up phase >10% of Q1 sales from new customers
Continued strong order backlog (+22% vs LY) – good potential to stay on current positive growth curve despite global market uncertainties
Operational highlights in Q1, 2020 cont’d
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Continued Operating Margin strengthening to 7.0% Western Europe at record levels Efficiency projects in China and Estonia starting to pay off
Return on Operating Capital – ROOC >20%, in line with financial target
Capex plan ready to support further growth
Inventory levels in balance – continued strong cash flow in Q1 (+63 MSEK), or 2.26 SEK/share, however positive one-time effect from changed factoring
Strong balance sheet – Equity ratio ~41%, and very strong liquidity situation
Dividend proposal withdrawn, or rather postponed, awaiting future market development
Redemption of 1 million (~3%) treasury shares – suggestion for AGM approval
Q2 guidance
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China operations, one week prolonged production stop during Chinese New Year. Re-opened Feb 10 and fully up and running.
Windsor operations, about to re-open in late April. Expected Q2 sales drop ~20 MSEK.
High focus on maintaining current relatively good supply of electronic components.
Strong current order status, with a lot of new products in ramp-up. Good potential to achieve Q2 sales of ~500 MSEK, or growth >10%.
NOTE financially well-equipped to take advantage of growth opportunities likely to arise
Progress of the corona impact on NOTE, our customers and suppliers monitored closely with great humility.
Profitability improvement through sales growth and cost efficiency
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Sales 2013 – 2020 YTD (MSEK)
0,0%
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8,0%
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Operating Margin 2013 – 2020 YTD*
Sales growth since Q4, 2013. CAGR ~12% Sales 2019: 1 760 MSEK. Growth 28%, whereof
organic 17% Sales Q1, 2020: 475 MSEK. Organic growth 17%
Continued Margin strengthening since 2013. Operating Margin 2019: 7.1%, +0.5%-points Operating Margin Q1, 2020: 7.0%, +0.4%-points
* OP (EBIT) adjusted -16 MSEK for non recurring profitin Q1, 2017, and +7 MSEK for EO cost in Q3, 2018
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NOTE – Growing with increased profitability since 2014…
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Thank you!