Interim report January - March 2022

Highlights of the first quarter of 2022
• Net sales amounted to MSEK 381.6 (290.6).
• Net sales increased 31% (17).
• EBIT amounted to MSEK 66.8 (45.9).
• EBIT margin amounted to 17.5% (15.8).
• Net income was MSEK 53.7 (38.3).
• Earnings per share amounted to SEK 1.07 (0.76).

Patrik Andersson, CEO at GARO about the first quarter:

GARO is performing positively. Net sales rose 31% and amounted to MSEK 382, driven by strong performances in both the GARO Emobility and GARO Electrification business areas.

In the first quarter of the year, we completed offensive investments in the form of recruitments, mainly in the sales function, and increased our marketing. EBIT for the quarter amounted to MSEK 67, with the earnings trend compared with the preceding year mainly consisting of volume growth.

The sales trend in all our product areas is confirmation of the strength of our customer offering. This creates an overall solution that sets us apart from other suppliers and generates flexible solutions for our customers. A clear example of this is the positive trend we are seeing in the UK, where the expansion of charging infrastructure is leading to increased sales in the Project business and Electrical distribution products product areas.

GARO E-MOBILITY

Growth in the GARO E-mobility business area amounted to 56% during the quarter with a strong sales trend mainly in home chargers and public chargers. The trend was positive in essentially all of our markets. Clear climate goals have accelerated the transition to hybrid and electric cars and vehicle manufacturers are continually launching new models, which is driving the expansion of charging infrastructure. Long lead times for hybrid and electric cars may have a short-term impact on the pace of installation and a minor impact on demand for chargers in homes, while the expansion of public charging remains at a high level. Armed with our broad product portfolio, we feel well-equipped for the expansion of charging infrastructure in Europe.

GARO ELECTRIFICATION

Growth in the GARO Electrification business area amounted to 20% during the quarter with a strong trend in the Electrical distribution products and Project business product areas. New construction and the renovation sectors remained favorable during the quarter, which has driven sales in all product groups in the Electrical distribution products product area. During the quarter, we also noted strong sales of engine heaters.

The Project business product area trended positively, mainly in Sweden and the UK. The Temporary Power product area remained on corresponding levels as the same quarter last year.

MATERIALS SUPPLY

During the quarter, the challenging situation concerning the supply of components and materials has continued. To date, we have managed the situation well, managing to also maintain a satisfactory delivery capacity.

The situation regarding material supply worsened toward the end of the quarter and we foresee short-term challenges in meeting demand in the GARO E-mobility business area. With the prevailing uncertainty regarding material supply, we believe that sales in GARO E-mobility for the second quarter will be on similar level as the corresponding quarter of 2021.

MARKET CONDITIONS

The market for charging infrastructure is growing structurally with rising numbers of rechargeable vehicles, and we see a continuing strong trend with further expansion of the charging infrastructure in the European market. Housing construction remains at a high production rate with increased energy efficiency and electrification in general. Demand for construction-related products combined with renovation requirements and energy efficiency is expected to remain favorable.

All in all, we have a positive view of long-term market conditions, mainly driven by growth in charging infrastructure.