STOCKHOLM – Note reported third quarter sales increased 58% year-over-year to SEK 685 million (US$79.5 million). Adjusted for acquisitions and currency effects, growth was 34%.
Profit after tax was SEK 48 million, up 72%, while operating profit was SEK 64 million, up 78% compared to the third quarter of 2020.
Cash flow after investments was negatively affected by a deliberate inventory buildup to support growth, amounting to SEK -49 million.
For the first nine months of 2021, sales grew 30% to SEK 1.8 billion. Adjusted for acquisitions and currency effects, growth was 23%. Profit after tax increased 50% year-over-year to SEK 126 million. Operating profit was up 48% to SEK 164 million.
Cash flow after investments and acquisitions amounted to SEK -98 million for the nine-month period.
“We are experiencing ever-increasing demand,” said Johannes Lind-Widestam, CEO and president, Note. “Our order backlog, for delivery in the next few quarters and for comparable units, was at a record high level and more than 70% above the previous year. Sales during the first three quarters increased by 30% to SEK 1,829 million. Adjusted for acquisitions and currency effects, organic growth was 23%. The positive development was further strengthened during the third quarter, with growth of 58%. In the third quarter, Note’s organic growth was 34%.
“Growth this year is taking place in a market for electronic components, including so-called semiconductors, that is under strong pressure in terms of availability and lead time. We estimate the challenges in the component market led to delivery delays in the third quarter of at least SEK 50 million, with increased capital tied up in inventories as a result, which temporarily limited cash flow.
“In terms of earnings, our positive trend continued, mainly due to strong growth, stable margins in ongoing customer assignments and good cost development as a result of implemented efficiency programs. During the first three quarters of the year, operating profit increased by 48% to SEK 164 million. In the third quarter, earnings growth was 78%, and the operating margin strengthened to 9.4%, our highest level ever.
“Note is enjoying a very strong operational momentum, and we are still in a clear expansion phase. Including iPRO, acquired in June, our pro forma sales over the past 12 months amounted to just over SEK 2.5 billion. Considering our strong order situation, and despite the difficult situation in the component market, we still see good opportunities to continue to achieve total growth of around 50% in the next quarters. The potential for continuing our strong earnings trend is really positive.”
Ed.: SEK 1 = US$0.12