Note continues to see growth in its sales and operating profit, according to the company's Interim Report for July-September 2022.  The company's sales increased by 36% for the third quarter of the year, and by 45% since the beginning of the year. Note's operating profit increased by 37% for the quarter and by 53% for the year. 

NOTE’s Interim Report January–September 2022:

Financial performance Q3 (July–September)

• Sales increased by 36% to SEK 930 (685) million. Adjusted for acquisitions and currency effects, organic growth was 18%. Approximately 6% of sales consisted of re-invoicing of extraordinary cost increases on electronic components.
• Operating profit was SEK 57 (64) million. Adjusted for doubtful debt of SEK 30 million and for currency revaluations of operating assets and liabilities in foreign currencies, underlying operating profit increased by 37% to SEK 92 (67) million.
• Operating margin was 6.2% (9.4%). Adjusted for the doubtful debt, currency revaluations of operating assets and liabilities in foreign currencies and adjusted for re-invoicing of extraordinary cost increases on electronic components, essentially without margin, the underlying operating margin increased by 0.4 percentage points to 10.2% (9.8%).
• Profit after financial items was SEK 47 (59) million.
• Profit after tax amounted to SEK 40 (48) million, corresponding to SEK 1.37 (1.68) per share.
• Cash flow after investments amounted to SEK -59 (-49) million, or SEK -2.04 (-1.71) per share. The quarter’s cash flow includes the SEK -20 million payment for the acquisition of NOTE Herrljunga.

Financial performance January–September

• Sales increased by 45% to SEK 2,649 (1,829) million. Adjusted for acquisitions and currency effects, organic growth was 25%. Approximately 5% of sales consisted of re-invoicing of extraordinary cost increases on electronic components.
• Operating profit was SEK 216 (164) million. Adjusted for the doubtful debt of SEK 30 million, and adjusted for currency revaluations of operating assets and liabilities in foreign currencies, the underlying operating profit increased by 53% to SEK 261 (170) million.
• Operating margin was 8.2% (9.0%). Adjusted for the doubtful debt, currency revaluations of operating assets and liabilities in foreign currencies and adjusted as well as re-invoicing of extraordinary cost increases on electronic components essentially without margin, the operating margin increased by 0.9 percentage points to 10.2% (9.3%).
• Profit after financial items was SEK 188 (155) million.
• Profit after tax amounted to SEK 155 (126) million, corresponding to SEK 5.35 (4.42) per share.
• Cash flow after investments was SEK -54 (-98) million, or SEK -1.86 (-3.43) per share. The year’s cash flow includes the SEK -20 million payment for the acquisition of NOTE Herrljunga. Cash flow in the previous year was impacted by the SEK -68 million payment for the acquisition of iPRO of the UK.

Earlier this week, the company announced it was taking charges of SEK 30 million ($2.7 million) due to a customer's bankruptcy, but Note CEO and President Johannes Lind-Widestam said the company continues to see strong growth despite the potential bad debt's effects on Q3's operating profits.

“During the period, NOTE was forced to make a provision for a potential bad debt, which affected NOTE's operating profit in Q3 by SEK 30 million. The incident does not affect NOTE's underlying operations, which continued to develop strongly. Our underlying operating profit for the first three quarters of the year increased by 53% to SEK 261 million, while the underlying operating margin strengthened by 0.9 percentage points to 10.2%. Then we have adjusted for the potential bad debt, currency conversion effects and re-invoicing of material costs without a margin. The underlying profitability was in line with our expectations and the long-term profitability target we have set for the operations.

"NOTE's sales during the first three quarters of the year developed at a record high. Despite continued and complicated challenges linked to the shortage situation on the component market, we managed to increase sales by 45% to SEK 2,649 million. Organic growth was 25%. In Q3, we saw our strongest sales figure to date of SEK 930 million, a growth of 36%. Organic growth was 18%.

NOTE is in a clearly expansive phase and the order situation remains strong. The total order backlog at the end of the third quarter was roughly 50% higher, for comparable units, than at the same time last year. Based on the current market situation, we see good opportunities to reach quarterly sales of SEK 1 billion for Q4 for the first time ever, corresponding to a growth of approximately 25%”, Lind-Widestam said.

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