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Troax Group: Interim Report January- September 2023

Hillerstorp 24[th] of October 2023, 12:30 CET

JULY – SEPTEMBER

  • Order intake in the quarter was unchanged compared with the same period last year and amounted to 62,3 (62,0) MEUR. Adjusted for currency and acquisitions it increased by 2 percent.
  • Sales in the quarter decreased by 14 percent compared with the same period last year and amounted to 61,4 (71,3) MEUR. Adjusted for currency and acquisitions sales decreased by 12 percent.
  • Operating profit before amortizations (EBITA) decreased to 12,8 (13,2) MEUR.
  • Operating margin before amortizations (EBITA margin) increased to 20,8 (18,5) percent.
  • Financial net was -0,7 (-0,2) MEUR.
  • Profit after tax decreased to 8,9 (9,9) MEUR.
  • Earnings per share after dilution amounted to 0,15 (0,17) EUR.
     

JANUARY - SEPTEMBER

  • Order intake in the period decreased by 5 percent compared with the same period last year and amounted to 197,6 (209,1) MEUR. Adjusted for currency and acquisitions the decrease was 5 percent.
  • Sales in the period decreased by 10 percent compared with the same period last year and amounted to 197,7 (218,8) MEUR. Adjusted for currency and acquisitions the decrease was 9 percent.
  • Operating profit before amortizations (EBITA) decreased to 38,5 (40,0) MEUR.
  • Operating margin before amortizations (EBITA) increased to 19,5 (18,3) percent.
  • Financial net was -1,9 (-0,7) MEUR.
  • Profit after tax decreased to 26,9 (29,7) MEUR.
  • Earnings per share after dilution amounted to 0,45 (0,50) EUR.

CEO COMMENTS

Troax' order intake stabilized during the third quarter. We had a smaller increase this quarter, which is an improvement compared to earlier this year. This is the effect of the projects for automated warehouses no longer forming part of the comparison figures for 2022 and that our core business continues to develop positively. As we have previously disclosed, no major projects in automated warehouses are expected in the near term, but the customer base continues to increase, and the trend is positive for the smaller and medium-sized customers. Larger projects in this sector are expected to become relevant only sometime next year. Other customer segments continue to increase volumes during the third quarter as well, which is a good indication that our core business continues to develop positively. However, the order intake from automotive was weak during this quarter. No reduction due to a general decline in demand/activity has been noticeable, with the exception of new inquiries in the basement storage segment in the Nordics. Within this segment, it is noticeable that new construction has started to decrease.

In our various geographical regions, we note a stable order intake both in North America and Europe, compared to 2022. A smaller number of major projects means that order intake in the UK is lower than in 2022. The opposite is found in new markets, where order intake has increased this quarter. Overall for the third quarter, order intake is 2% higher than in 2022, when we exclude acquired companies and currency effects.

Invoicing is 12% lower than the previous year when, in the third quarter of 2022, we delivered a couple of larger projects within automated warehouses. Any impact on the margin due to price effects is minimal during this quarter.

The gross margin has gradually improved during 2023 and is now at the level of the group's internal target of 39–40%. Behind this is again the fact that purchasing costs of various kinds have been relatively stable and declining during the period (with the exception of energy costs) while the volumes continued at the planned level. Capacity reductions have continued mainly in North America and in Poland. The improved gross margin is achieved even though it is still negatively affected by lower volumes compared to 2022 and thus under-absorbed costs.

The improved gross margin has also resulted in an improved EBITA margin, where, despite volume reductions in our factories, we have exceed the margin for the same period last year. In absolute terms, EBITA is slightly lower than in 2022, but the operating margin (EBITA) has increased in the quarter from 18,5% to 20,8% in 2023 despite the volume reduction.

Cash flow has remained strong during the third quarter and positively affected by reductions in inventory levels. This means that Troax has a continued stable financial situation and sees good opportunities to continue looking for interesting complementary companies to acquire.

In Poland, we have continued to transfer production from the existing, rented factory, to our own owned facility in Sroda. This move will continue into 2024. Operations in Hillerstorp are being expanded further in 2023 and we expect the building to be completed by the turn of the year. In 2022 the company acquired the Spanish business, Claitec, and in Sweden, Svenska Cykelrum, have had a continued positive development in the period. After the end of the period, our dealer in Croatia has been acquired and is now part of the Troax group as a subsidiary.

Thomas Widstrand, President and CEO

TELEPHONE CONFERENCE

Invitation to presentation of the third quarter result:
Thomas Widstrand, CEO presents the result on a phone conference on the 24th of October 2023 at 16:00 CET. The conference will be held in English. For more information, please refer to  https://www.troax.com/global/en/press

For additional information, please contact:

Thomas Widstrand
President and CEO
Troax Group AB
Box 89
SE-335 04 Hillerstorp
Tel +46 (0)370-828 31

thomas.widstrand@troax.com

This information is information that Troax Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014). The information was submitted for publication, through the agency of the contact person set out above, at 12:30 CET on the 24th of October 2023.