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Interim report – Quarter 1

Strong order intake and higher net revenue than Q1 2021. Order intake amounted to SEK 215 million, which was 27.8 percent higher than in the first quarter of last year. Net revenue was SEK 181.3 million, a 13 percent increase in comparison with the corresponding quarter of 2021. However, EBITA was lower than last year of SEK 6.2 million (SEK 7.8 million), which was mainly caused by restructuring and recruitment costs. The strong order intake and net revenue were primarily due to high activity within Process Equipment, Technical plastics and Service.

First quarter in brief
(January-March 2022)
• Order intake amounted to SEK 215.0 (168.3) million, an increase of 27.8 percent. In comparative terms, this was an increase of 17.5 percent.
• Net revenue for the first quarter amounted to SEK 181.3 (160.4) million, an increase of 13.0 percent. In comparative terms, this was an increase of 4.5 percent.
• EBITA was SEK 6.2 (7.8) million. Total EBITA margin was 3.4 (4.8) percent.
• Earnings per share, before and after dilution, amounted to SEK 0.17 (0.26).
• Cash flow from operating activities was SEK 3.2 (-1.9) million. Total cash flow for the period was SEK -3.9 (-7.7) million.

Important events during the first quarter
• The company issued a profit warning on January 17, 2022 for the fourth quarter of 2021.
• Current CEO Bo Söderqvist will leave the company on 28 April, 2022, after the Annual General Meeting, and Caroline Reuterskiöld will become the new CEO on that date.

Important events after the first quarter
• In April, a payment of SEK 4.1 million was made, in connection with the acquisition of Empakk. The amount was not previously included in the acquisition calculations and has, therefore, been adjusted.
• Henrik Nordin will be appointed as the new CFO and member of group management, preliminary as of August 15, 2022. Current interim CFO Lars Westlund will remain until then.

Strong order intake for this quarter
Order intake was strong during the quarter, with a good gross margin, which was due to a favorable business and product mix. This offers hope for recovery in the second half of the year. Revenue was SEK 181.3 (160.4) million, an increase of 13.0 percent. In comparison with the first quarter of last year, this is an increase of 4.5 percent.

The Group’s EBITA margin was 3.4 (4.8) percent in the first quarter. We do not consider this satisfactory, even taking into account the lack of raw materials and components that negatively affect our profitability. These shortages lead to longer delivery times, especially for larger projects. We have not made final settlements on several major heating projects, which has affected comparisons with the first quarter of last year. Despite restructuring costs of SEK 1.3 million in Sweden, this segment continues to delivers good results. It was our performance in other markets that, unfortunately, reduced the overall results.

Market developments
In Sweden, the EBITA margin was 7.1 (7.4) percent. Order intake for the quarter was good and we are experiencing stable demand in the market. In the first quarter, we undertook several projects, including orders in Heating technology, primarily, in the Netherlands and Norway. G.F Swedenborg, which was acquired last year, continues to perform well, supplying offshore projects in Norway and the nuclear power industry in Sweden. Christian Berner AB had a stable quarter, despite the above-mentioned restructuring costs, with orders in Process facilities and positive development in Technical plastics.
Denmark made a loss of SEK 0.3 million, which gave an EBITA margin of -7.0 (3.8) percent. This was mainly due to the weak order intake we have seen in previous quarters. During the first quarter, however, performance improved and we did good business in the process and food industries.
In Norway, we achieved an EBITA margin of 1.8 (6.1) percent. Empakk AS had a strong quarter and made a positive contribution. Christian Berner AS performed poorly over the quarter, due to weak sales in Process equipment, which affected its results. Order intake, over the quarter, was good and we continued to experience positive development in vibrationdamping materials for the construction industry, as well as railway infrastructure.
Finland experienced a weak quarter, with an EBITA result of SEK -0.1 (-0.4) million. Sales of vibration-damping materials to the construction industry remain good, although a lack of major machine investments in the processing industry continues.

The Future
The longer lead and delivery times we’re experiencing continue to make an impact. From this perspective, Russia’s invasion of Ukraine should have no direct effect on us. However, we may experience some indirect effects, if shortages of steel products and energy affect our suppliers.
We expect underlying demand to remain stable and consider the strong order intake we experienced in the first quarter will guarantee positive development during the rest of the year.

Bo Söderqvist
CEO, Christian Berner Tech Trade AB

For the full details, please see attached pdf-file.