Christian Berner Tech Trade

The earnings trend has been weighed down by a decline in Technology & Distribution, where measures were initiated in the previous quarter. The Energy & Environment business area continued its profitable growth, however with slight different business mix. Group improved the year’s EBITA margin during the quarter – a period with headwinds for order intake and sales.

Third quarter 2024
• Order intake totaled SEK 200.6 (241.1) million, down 16.8 percent.
• Net sales reached SEK 217.4 (223.7) million, down 2.8 percent.
• EBITA totaled SEK 14.9 (21.9) million, down 32 percent.
• EBITA margin was 6.8 percent (9.8).
• Earnings per share before and after dilution were SEK 0.51 (0.77).
• Cash flow from operating activities was SEK 6.8 (39.1) million. Total cash flow for the period was SEK 0.0 (27.2) million.

Significant events in the third quarter
• No significant events in the third quarter

Nine months 2024
• Order intake fell 12.0 percent, totaling SEK 672.3 (763.7) million, down 12,0 percent.
• Net sales for the first nine months totaled SEK 715.4 (707.9) million, i.e., 1.1 percent growth, whereof 1.6 percentage points organic growth and 0.5 percentage points negative effect from subsidiaries in foreign currency.
• EBITA totaled SEK 44.9 (53.8) million, down 16.6 percent.
• EBITA margin was 6.2 percent (7.6).
• Earnings per share before and after dilution were SEK 1.52 (1.84).
• Cash flow from operating activities was SEK 63.0 (57.1) million. Total cash flow for the period was SEK -10.7 (22.3) million.
• Voluntary repayments of SEK 32.0 (0.0) million on the bank loan were made during the first nine months, with thw purpose to keep unnecessary interest expenses down.

Significant events after the end of the reporting period
• Mattias Lysebring took over as the new Managing Director of the subsidiary Christian Berner AB on November 1.

MESSAGE FROM THE CEO
Soft start that took off
The year's streak of organic growth was broken in the quarter, with net sales falling by almost three percent. Order intake was the biggest disappointment but picked up towards the end of the quarter. The quarter was characterized by changes in Technology & Distribution, made with the aim of emerging even stronger.

Since as early as the fourth quarter of 2023, order intake has been challenging. That period came in at 17 percent below the same period in 2022, with a book-to-bill of 90 percent. The first half of 2024 looked better, but we had fewer really big orders, and this has continued into the third quarter. However, organic growth so far this year is +1 percent, with an accumulated book-to-bill of 94 percent over the same period, demonstrating the resilience of our business, despite the current market conditions. We have experienced a higher level of quotation activity in the third quarter, which is of course a prerequisite, but decision-making processes among our customers have still been slower. We are continuing to keep an eye on this.

Continued improvement work in the subsidiaries
We have now reached the goal of the changes made considering the decentralization work and can now focus more on the areas of improvement in our subsidiaries that are now more apparent thanks to our new way of organizing ourselves. Work on the companies in Technology & Distribution began as early as the second quarter, and in the third quarter, we worked particularly intensively with the largest company in the business area, Christian Berner AB. This has resulted in some changes within the organization, to unleash the power that exists internally. On November 1, Mattias Lysebring took over as CEO. With his experience in growing and developing entrepreneurial companies, he will be able to build on the momentum started in the third quarter. We have continuously adapted our organizations to our future needs, which has meant redundancies in some places, but also recruitment to accelerate the pace in priority areas. In sum, we have adapted operations to the current situation, but without harming our ability to continue growing with the existing organization. At the end of the quarter, we are three percent fewer employees compared to the same period last year.

Strong balance sheet
Our balance sheet remains strong. The Group's low investment needs beyond working capital, combined with the ongoing work on capital tied up and the optimization of the balance sheet as a whole, allow more and more of our earnings to be released as cash for future acquisition opportunities. Cash flow from operating activities is SEK 63 million so far this year, which is 10 percent higher than in the same period last year. This continues to give us good opportunities to act in the acquisition markets, and we are engaged in several exciting dialogues. We now have generally strong teams in place in our subsidiaries, freeing up capacity to focus more externally.

Caroline Reuterskiöld
President and CEO Berner Industrier AB