Systemair FY profit up, margins improve despite weak Q4 sales

Investing.com -- Systemair (ST:SYSR) on Thursday reported an increase in profitability for its financial year ending April 30, with its operating margin rising to 8.9% from 7.9% in the previous year. 

Full-year operating profit (EBIT) reached SEK 1.10 billion, up from SEK 963 million, while adjusted operating profit totaled SEK 1.13 billion, compared to SEK 1.09 billion, resulting in an adjusted operating margin of 9.1% (8.8% prior year). 

Net sales for the 12-month period edged up 0.4% to SEK 12.30 billion from SEK 12.26 billion, with organic growth at 2%. 

Currency effects, however, reduced sales by 2%. Profit after tax for the year was SEK 686 million, up from SEK 654 million, and basic earnings per share rose to SEK 3.27 from SEK 3.10. 

Cash flow from operating activities decreased to SEK 1.08 billion from SEK 1.33 billion. The board proposed a dividend of SEK 1.35 per share, an increase from SEK 1.20.

For the fiscal fourth quarter, Systemair reported organic growth of 0.5% and adjusted operating profit of SEK 260 million, up from SEK 209 million, yielding an adjusted operating margin of 8.7% from 6.8% in the prior year.

Net sales for the quarter decreased 2.2% to SEK 3 bllion from SEK 3.07 billion, which Jefferies noted was 4% below Factset consensus. 

Currency effects accounted for a 3.0% reduction in quarterly sales. Profit after tax for the quarter fell to SEK 105 million from SEK 190 million, and basic earnings per share declined to SEK 0.50 from SEK 0.88.

Regional performance in the fourth quarter was mixed, according to Jefferies. The Nordics saw sales increase 2.1% (4.5% organic growth), Western Europe sales rose 2.7% (5.5% organic growth), and Eastern Europe & CIS sales grew 8.2% (11.2% organic growth). 

Conversely, North America experienced a 13.9% decline (8.8% organic decline) due to a weaker U.S. market, while the Middle East, Asia, Australia, and Africa region posted a 17.2% decline (16.8% organic decline), mainly from lower shipments in India following a factory relocation.

Jefferies flagged that Systemair’s regionalized production strategy limits the direct impact of trade tariffs, with any potential disruptions from Canadian exports to the U.S. manageable by shifting production to U.S. facilities. 

Despite geopolitical uncertainty, Systemair reported strong order intake and activity levels across several key markets.

During the year, Systemair completed the acquisition of Malaysian ventilation product manufacturer PHEM Engineering SDN BHD and gained full ownership of Systemair HSK Turkey. 

The company also inaugurated a new 16,000 square meter factory in Lithuania and a 19,000 square meter leased production facility in Hyderabad, India. 

Major orders included €865,000 for a semiconductor plant in India and €960,000 for a car park project in Saudi Arabia, which will feature locally manufactured products under the "MADE IN SAUDI ARABIA" label.

Roland Kasper, CEO for 10 years, stepped down in April, with a successor search underway.