AQ Group AB (publ): Year-end report 2022

Fourth quarter, October-December 2022 in brief

• Record turnover and record profit
• Net sales increased by 31.8% to SEK 1,974 million (1,498)
• Operating profit (EBIT) increased by 30.5%to SEK 148 million (113)
• Profit after financial items (EBT) increased by 23.7%to SEK 137 million (110)
• Profit margin before tax (EBT %) was 6.9% (7.4)
• Cash flow from operating activities amounted to SEK 140 million (-105)
• Earnings per share after dilution increased by 52.6%to SEK 7.27 (4.76)

Full year 2022 in brief

• Net sales increased by 28.9%to SEK 7,053 million (5,471)
• Operating profit (EBIT) increased by 9.9%to SEK 491 million (446)
• Profit after financial items (EBT) increased by 9.3%to SEK 482 million (441)
• Profit margin before tax (EBT %) was 6.8% (8.1)
• Cash flow from operating activities amounted to SEK 208 million (238)
• Earnings per share after dilution increased by 12.2%to SEK 22.43 (19.99)
• Equity ratio was 56% (56)
• The Board of Directors proposes a dividend of SEK 3.33/share (SEK 3.33/share)
   

A word from the CEO  

Record! Highest turnover and profit ever.

It's fun to break records. Our goal is to beat our record in terms of turnover and profit every year. And we have succeeded in doing so in 2022 as well. We see this as proof that we are doing something good for our customers.

Our net sales have increased by SEK 1.5 billion compared to the previous year. We are mainly growing in the electrification of commercial vehicles, components for the defense industry, power transmission and storage of renewable energy and in medical technology.

Our profit is also increasing, even if we do not reach our targets in terms of profit margin before tax. The profit margin before tax in the quarter amounted to 6.9%. It's not good enough. We shall earn 8%. Despite that, we are increasing our earnings per share by 12% for the full year. During the quarter, we implemented price adjustments for many of our customers to compensate for cost increases for energy, transport, and materials. We have a few companies where we have profitability problems. We have extra focus on these companies in order to improve the operations and thereby the results.

We continue to have material shortages and longer than normal lead times on certain components. It affects our delivery accuracy, which during the year was 90% compared to our target of 98%. To compensate for this, we work closely with customers and suppliers to minimize the problems that arise for our customers.

Investments in continued growth and acquisitions

During the fourth quarter, we completed the renovation of our property in Pernik, Bulgaria. During the first quarter, 2023, welding robots, equipment for blasting, painting and an assembly line to produce battery systems will be installed. We have orders and capacity to produce and deliver battery systems for SEK 400 million in 2023.

Our factory in Lithuania starts serial production of wiring systems for heavy vehicles during the first quarter. Our ambition is that this factory will deliver a turnover growth of SEK 400 million in 2023.

Our ambition to identify and implement interesting acquisitions remains, in 2023 as well.

Cash flow and balance sheet

During the fourth quarter, our work to increase our inventory turnover rate has begun to bear fruit. This has resulted in a higher cash flow from operating activities. In 2022, our investment rate has been high to meet high demand. Despite this, we continue to have low net debt, which enables continued investments in expanded production capacity and acquisitions.

To secure maximum financial freedom to act in these times of historical high growth the board suggest an unchanged dividend of SEK 3.33 per share for 2022.

AQ's competitive advantage

We don't have amazing products or patents. What makes AQ is our people. No other company can have the same people as us. That, combined with our core values, makes AQ unique. I am proud of our fantastic employees who this year managed to win new business, build new factories, and make our company stronger. We will continue to grow, make a profit, and have fun!

James Ahrgren

CEO

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This disclosure contains information that AQ Group is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014) and the Swedish Securities Markets Act (2007:528). The information was submitted for publication, through the agency of the contact person, on 16-02-2023 08:00 CET.

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For further information, please contact:
James Ahrgren, CEO, +46 76 052 58 88  or CFO, Christina Hegg, telephone +46 70-318 92 48

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AQ is a global manufacturer of components and systems to demanding industrial customers and is listed on Nasdaq Stockholm’s main market.

The Group consists mainly of operating companies each of which develop their special skills and in cooperation with other companies, striving to provide cost effective solutions in close cooperation with the customer.

The Group headquarter is in Västerås, Sweden. AQ has, on December 31, 2022, in total 7,200 employees in Bulgaria, Poland, Lithuania, Sweden, China, Estonia, Hungary, Mexico, Finland, India, Canada, USA, Germany, Italy, Brazil and Serbia.

In 2022 AQ had net sales of SEK 7 billion, and the Group has since its start in 1994 shown profit every quarter.