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CEO’s review

Scanfil Group’s Financial Statement 2022

At the start of the year 2022, we had a strong customer demand which strengthened during the year. The year was record-breaking.

Christophe Sut, CEO:

“After my first full quarter at Scanfil, I am happy to present the financial results for October–December 2023, the quarter that ended our record year. I am also pleased to give you some insight into the period where we have been active on many fronts, from internal to external stakeholders and from operational matters to strategy.

The year 2023 was a record year. The turnover growth, excluding spot-market purchases, was 15.6%. The total revenue was over EUR 900 million, and the organic growth was 6.9%. Strong figures demonstrate the quality of our customer portfolio and the solid performance of our factories. Operating profit also reached a record level of EUR 61.3 million and the operating margin reached the strong level of 6.8%. In 2023, our customer segments showed their growth potential and Scanfil grew to a new level.

In the fourth quarter, as expected, overall demand growth for the EMS market returned to historical levels. The turnover growth excluding spot-market purchases was 4.9%. The overall turnover decreased by 0.7% compared to the fourth quarter of 2022.

Despite a flattish market, our largest customer segment, Energy & Cleantech, grew by 26.8% in 2023 and kept a strong momentum during the fourth quarter with a growth of 21.9%. Energy transformation and sustainability drives the market. Growth figures showcase Scanfil’s good positioning in the customer segment with leading companies. I have met many customers with our teams and focused on deepening our partnership. We inaugurated a new electronics assembly line in Atlanta with many of our key customers present and showing strong interest in the site’s new capability. In 2023, our customer satisfaction improved significantly compared to the previous year.

In the fourth quarter, profitability improved compared to the fourth quarter of last year. Reported operating profit was EUR 13.4 million, with an operating margin of 6.1%, compared to 6.0% last year. During that quarter demand was flattening out and we focused on efficiency improvements. When fully implemented, the improvement plan will generate EUR 1.7 million in annual savings, and support Scanfil’s competitiveness.  Excluding one-off costs for the efficiency improvement, customer settlement, spot-market purchases and other material invoicing the operating margin was 6.7%.

Our financial position is strong, gearing was 19.4%, and equity ratio was 53.7%. Our solid balance sheet enables us to make the investments required to develop our business. Our net cash flow from operating activities was at an all-time high. In the fourth quarter, it was EUR 34.8 million, and EUR 68.9 million for the full year. Scanfil is well-positioned and very capable of financing the potential expansion of its operations. The company’s ability to pay dividends is at a good level and the Board proposes a dividend of 0.23 euro per share.

We continued our good development towards more sustainable manufacturing. In 2023, we got the honor of being recognized by two of our customers for our sustainability work. The share of fossil-free energy used by us compared to overall energy consumption achieved a 50% milestone and it was 52.4%. The 2030 target for the share of fossil-free energy consumption is 60%. To further drive this change, we are taking the next steps and investing in solar panels and geothermal energy in the Sieradz factory expansion.

Our solid performance in the fourth quarter reflects Scanfil’s robust operations and solid customer demand. We continue to rebalance our customer mix and seek growth from faster-growing segments. During the quarter, the Management Team and the Board of Directors have been very active. We are now finalizing our strategy update, and it will be presented at Capital Markets Day on the 5th of March in Stockholm with other topical and interesting subjects.

I would like to thank all our employees, customers, and other business partners for our successful collaboration. The company’s current situation emphasizes our strong position and gives us confidence to continue building our success.”