Year-end report 2023

Strong cash flow during an otherwise challenging quarter – new action package initiated.

Year-end report 2023


GARO posted overall soles of MSEK 311, which is o decline of MSEK 30 or 9% compored with the same quorter in 2022. Soles in the GARO E-mobility business oreo reported growth of 17% while soles in GARO Electrilicotion declined 17%. Soles were considerobly lower thon our expectotions ot the end of the quorter due to o coutious morket in both business oreos. EBIT omounted to MSEK-0.1 (8.9) including net non­ recurring items of MSEK +8.2 (-15). We ore now toking further action to strengthen prolitobility.

Despite o weok quorter in terms of prolitobility, we generoted strong cosh flow from operating octivities thot omounted to MSEK 34.9 ( 13.0). We olso divested o production focility in Polond for MSEK 45 ond o small industriol property in Gnosjö for MSEK 12. Total copitol goins omounted to MSEK 18 ond the divestments reduced interest-beoring net debt by MSEK 57.

During the outumn, we olso initioted o major project to updote ond improve our business system. The new system will enoble improved processes ond colloborotion between the Group's dillerent units. The project will toke ploce in 2024 ond 2025.

For the full-yeor, soles omounted to MSEK 1,370 compored with MSEK 1,390 for full-yeor 2022. EBIT for the full-yeor omounted to MSEK 51.1 ( 152.8) providing on EBIT morgin of 3.7% ( 11.0).

Net soles in the GARO E-mobility business oreo omounted to MSEK 94 during the quorter, compored with MSEK 81 in the yeor-eorlier quorter. Growth for the quorter wos lower thon expected in o coutious morket. The prevoiling morket situation with mocroeconomic uncertointy hos noticeobly impocted purchosing potterns ond investment decisions, primorily in the Swedish morket. As o result, morket development in the business oreo is currently dillicult to forecost with rapid chonges in demond. For the full-yeor 2023, net soles omounted to MSEK 462 (422) leoding to growth of 10%.

The lirst hall of 2024 is projected to continue to be coutious in the Swedish morket. Our octive morkets outside Sweden oppeor more positive. The preconditions ore in ploce for recovery in the second hall of the yeor. Forecosts oheod of 2025 ore more hopeful.

Net soles in the GARO Electrilicotion business oreo omounted to MSEK 217 (261) in the quorter, which is o yeor-on-yeor decline of MSEK 44. For the full-yeor 2023, net soles in the business oreo omounted to MSEK 908 (969) leoding to negative growth of 6%. A weoker economy with rising interest rotes hos resulted in o consideroble decline in the morket for the new construction of single-fomily homes ond oportments in Sweden ond the rest of the Nordic region. However, we believe thot there is still relotively heolthy demond for new builds in the public sector, commerciol properties ond for industry. The current morket situation with o divided construction morket is expected to continue for the entirety of 2024.

On Jonuory 30, GARO onnounced thot it wos to odopt ils orgonizotion in light of prevoiling morket conditions ond corry out on odditionol action ond elliciency program resulting in the reduction of obout 50 employees. The action program will primorily cancern the GARO E-mobility business oreo ond is expected to reduce personnel expenses by obout MSEK 25 on on onnuol basis. The program is expected to ochieve ils intended effect from the third quorter of 2024.

In 2023, we continued to integrote sustoinobility throughout every port of operations, which is o priority for both us ond for our customers. As port of this, we hove prepored meosures to meet the requirements from the EU Corbon Barder Adjustment Mechonism (CBAM) ond the forthcoming EU Due Diligence Directive. In 2024, we will continue our internol efforts for the coming reporting in occordonce with the EU Corporote Sustoinobility Reporting Directive (CSRD) in 2025.

The morket for chorging infrostructure is growing structurolly with rising numbers of rechorgeoble vehicles, ond we see o continuing strong, long­ term trend with further expansion of the chorging infrostructure in the Europeon morket. We see lower growth in the short term, primorily for mocroeconomic reosons, porticulorly in the Swedish morket.

In Sweden, but olso in the rest of the Nordic region, the construction of housing hos declined considerobly ond new production of single-fomily homes ond oportments is expected to be weok for severol quorters moving forward. On the other hand, demond for other commerciol ond public construction, combined with renovation requirements ond energy elliciency enhoncements, remoins

fovoroble. All in oll, we hove o positive view of long-term morket conditions, moinly driven by growth in chorging infrostructure ond ils requirements for power supply.

Patrik Andersson
President ond CEO

Read the full report here.