Slide 1: Fourth Quarter 2023
FOURTH QUARTER 2023 Krister Blomgren, CEO 21 February, 2024
Slide 2: Change the World of Digging: Net Sales Split per Region
CHANGE THE WORLD OF DIGGING FY 2012 FY 2022 FY 2023 Asia-Oceania Asia-Oceania 6% Asia-Oceania Europe 2% Americas 8% 10% 8% Americas Nordics 15% Nordics Nordics 88% Europe 54% 43% 32% Europe 34% (Americas <0,5%) NET SALES SPLIT PER REGION Q4 2023 2
Slide 3: History of Organic Sales Growth and Margin Expansion
HISTORY OF ORGANIC SALES GROWTH AND MARGIN EXPANSION Net sales, MSEK EBIT margin1 (pre-IPO expenses) Note: Information is derived from the audited annual reports reported under K3 of engcon AB and Mähler International AB respectively and chart on this page should not be viewed as proforma financials
Slide 4: Q4 Business Highlights
Q4 BUSINESS HIGHLIGHTS • Continued stabilization of order intake. • Increased order intake in the European region. • Strategic distribution agreement and important orders received in Europe. • New logistic hub in North America. • Challenging development in the North American region. • Successful ERP
Slide 5: Q4 Figures in Brief
Q4 FIGURES IN BRIEF -43% -26% 40% 6% 49% Organic net Organic order Gross EBIT Return on capital sales intake margin margin employed Q4 2023 5
Slide 6: Order Intake Continue to Stabilize in Q4
ORDER INTAKE CONTINUE TO STABILIZE IN Q4 Order intake and net sales development per quarter, MSEK Key comments Order intake Net sales • Net sales decreased 43%, organic 43%, currency effect of 1 MSEK. 774 • Order intake decreased 25%, 691 organic 26%, currency effect of 6 MSEK. 582 553 519 534 541 5
Slide 7: Positive Signs in Europe
POSITIVE SIGNS IN EUROPE Q4 2023 - Organic order intake and net sales per geographic region, MSEK Nordics Europe Americas Asia-Oceania Chungcheongnam-do Mature Early Early Early market days days days Strömsund Tewkesbury Veenendaal Vasa Wertheim Oslo Paris Montréal Connecticut Odense Sydney 266 229
Slide 8: Less Dependence of the Nordic Region
LESS DEPENDENCE OF THE NORDIC REGION FY 2023 - Organic order intake and net sales per geographic region, MSEK Nordics Europe Americas Asia-Oceania Chungcheongnam-do Mature Early Early Early market days days days Strömsund Tewkesbury Veenendaal Vasa Wertheim Oslo Paris Montréal Connecticut Odense Syd
Slide 9: Financial Development
FINANCIAL DEVELOPMENT Q4 2023 9
Slide 10: Decreased EBIT from Weak Revenue
DECREASED EBIT FROM WEAK REVENUE EBIT and EBIT margin per quarter Key comments EBIT, MSEK EBIT margin, % • EBIT decreased 84% to 19 (121) MSEK. -84,3% • EBIT margin of 6.2% (22.4%). 198 • EBIT impacted by lower volumes and OPEX high in relation to the decreased revenue. 121 99 104 104 91 91 77 55 25
Slide 11: Overview of Costs and EBIT
OVERVIEW OF COSTS AND EBIT 2023 2022 2023 2022 MSEK Q4 Q4 FY FY Key comments Net sales 308 541 1,898 1,938 • Stable gross margin COGS -184 -303 -1,096 -1,105 • EBIT margin 6.2% (22.4%) and Gross margin 40.3% 44.0% 42.3% 43.0% • 19.8% (21.4%) in Price increases in FY23. January and Selling expenses -
Slide 12: Strong Cash Flow
STRONG CASH FLOW Cash flow and net working capital overview, MSEK Operating cash flow per quarter, MSEK 2023 2022 2023 2022 277 MSEK Q4 Q4 FY FY Cash flow before changes in 29 128 275 449 working capital Inventories 302 443 302 443 108 92 96 63 56 Accounts recievables 193 347 193 347 5 5 Other recei
Slide 13: Sound ROCE Level
SOUND ROCE LEVEL Return on capital employed overview Average capital employed and ROCE MSEK 2019 2020 2021 2022 2023 Average capital employed, MSEK ROCE, % EBT 192 218 341 415 365 900 100,0 Interest expense 3 2 2 8 16 773 800 750 717 80,0 Capital employed, 700 621 beginning 484 543 699 735 765 of pe
Slide 14: Financial Targets FY 2023
FINANCIAL TARGETS FY 2023 Capital Capital Dividend Growth Profitability efficiency structure policy Have an EBIT margin in Continue to achieve an Maintain a strong capital Pay approximately 50% Exceed the growth in industry-leading capital structure supporting further excess of 20%, measured of net
Slide 15: Summary and Outlook
SUMMARY AND OUTLOOK • Further signs of stabilization and important orders received in the European region. Ska bytas mot Bauma-bild! • Net sales slightly below our expectations in Q4, impact from ERP system change. • Strong achievements during challenging year. Incl. exceptional deliveries in Q1, ne
Slide 16: For more information visit www.engcongroup.com
For more information visit www.engcongroup.com