STOCKHOLM – NCAB Group reported sales of SEK1.06 billion for the second quarter, a year-over-year decrease of 6%.

For the first half of the year, the company's sales of SEK2.2 billion marked a 2% decrease from the first half of 2022, and the company said both its net sales and order intake have negatively impacted by customers’ inventory adjustments and lower prices.

"During the second quarter, we experienced some deterioration in the industrial economy, which was reflected in the purchasing managers’ index (PMI) in the USA, Europe and China," said CEO Peter Kruk. "The service sector was strong in all regions despite interest rate hikes in the USA and Europe, while industrial production declined. In China, manufacturing did not have the upturn expected after opening up following the Covid lockdowns. For the printed circuit board industry, the effects of the weaker market were intensified due to inventory adjustments that were implemented at the same time, and generally weak capacity utilization among manufacturers also led to declining prices.

"NCAB is well equipped to address this new situation and we have continued to deliver strong operating profit and cash flow in all regions through our persistent purchasing efforts and effective cost control. The positive results we are seeing in the form of the number of projects and new customers won is also gratifying, and this bodes well for continued strong long-term organic growth. The lower prices during this year had a clearly negative impact on order intake and net sales apart from lower volumes in the market. The reason for the lower prices was low capacity utilization at the manufacturers. Although this had a negative effect on net sales, we were able to successfully retain or increase our gross profit. The fact that the utilization at our factory partners is so low, partly due to increased capacity, is a special situation. This is something that we have not seen lasting for any longer periods. Accordingly, we expect prices and gross margins to normalize over time."