(Interim report July - September 2019 is distributed as an appendix to this press release)
PATRIK ANDERSSON, PRESIDENT AND CEO:
CONTINUED SUCCESS AND INVESTMENTS IN E-MOBILITY
GARO continued to report healthy growth during the quarter. Net sales rose 11% to MSEK 235.2 (212.7). Growth continued to be driven by expansion in E-mobility and also to a significant extent in the product areas Electrical distribution products and Project, while Temporary electric installations remained weak. Growth was even between the Sweden business area and in Other markets of 11% and 10%, respectively. It is gratifying to see the performance of our base - Electrical distribution products - with growth of 10% for the quarter and 14% for the January - September period, which significantly exceeds the predicted market growth for the period.
EBIT for the quarter declined compared with the preceding year to MSEK 23.6 (28.4), corresponding to an EBIT margin of 10.1% (13.4). This was primarily a result of unfavorable product mix and currency effects, which squeezed the gross margin. Continued market investments and organizational reinforcements, mainly within the E-mobility product area, have also had a seasonally greater impact on costs in relation to sales in the third quarter.
EBIT for the January - September period amounted to MSEK 76.8 (76.4), corresponding to an EBIT margin of 10.6% (12.0). Adjusted for an item affecting comparability from the first quarter, EBIT was MSEK 78.8, corresponding to an EBIT margin of 10.8%.
MARKET ACTIVITY IN E-MOBILITY
The E-mobility product area continued to demonstrate high activity and grew 27% during the third quarter, driven primarily by Other markets where overall growth was 51%. In Sweden, "Klimatklivet" and "Ladda-hemma" subsidies were introduced in July to support the construction of charging infrastructure for electric and chargeable hybrid cars. The programmes this year are different than last year's program, and this year's registration periods were in August and October, which temporarily dampened the demand for mainly public charging stations.
During the quarter, we signed a contract with Vattenfall for supplying our smart wallbox, GLB+. The agreement includes Norway, the Netherlands, the UK and Sweden, which are all strategically important markets for us. The wallbox, which is an OCPP-compatible wallbox for multiple-family dwellings, workplaces and public environments, will be connected to Vattenfall's cloud charging service "InCharge," which supports payment, remote control and operational monitoring.
We see a strong trend for the E-mobility product area, with further expansion of the charging infrastructure in all markets. Demand for construction-related products in Sweden remains favorable but is expected to slow in 2020 in line with fewer construction starts. However, the important renovation sector has been deemed stable. The trend in other markets served by GARO is expected to remain favorable. All in all, GARO has a positive view of market conditions, mainly driven by the continued expansion of charging infrastructure.
For further information, please contact:
Patrik Andersson, President and CEO: +46 (0)76 148 44 44
Helena Claesson, CFO: +46 (0)70 676 07 50
This information is such information that GARO aktiebolag is obligated to publish in accordance with the EU Market Abuse Regulation. The information was published by the abovementioned contact persons on November 7, 2019, at 07.30 CEST.
GARO develops, manufactures and supplies innovative products and systems for the electrical installations industry under its own brand. The company has operations in Sweden, Norway, Finland, Ireland and Poland, and the Group is organized in two business segments: GARO Sweden and GARO Other markets. GARO has a broad product assortment and is a market leader within several product areas. The Group had sales of MSEK 902 in 2018 and has appr 400 employees. Its head office is located in Gnosjö.
The business concept is "with a focus on innovation, sustainability and design, GARO provides profitable complete solutions for the electrical industry."
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