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KB Components reported its third-quarter 2025 earnings, revealing a stable revenue stream but a notable decline in earnings per share (EPS). The company faced challenges in organic growth and profitability, despite strategic acquisitions and a strong global presence.
Key Takeaways
- Q3 sales remained unchanged year-over-year at SEK 616 million.
- EPS fell to SEK 0.27 from SEK 0.60 in the previous year.
- Adjusted EBITDA decreased to SEK 85 million, with a margin drop from 16.6% to 13.8%.
- Acquisitions in Germany and India are part of the company’s growth strategy.
- North American market faced subdued demand, affecting overall performance.
Company Performance
KB Components maintained its sales figures at SEK 616 million for Q3 2025, showing no growth compared to the previous year. However, the company’s EPS saw a significant drop, reflecting challenges in maintaining profitability. The company’s strategic acquisitions in Germany and India are aimed at bolstering its global footprint and technological leadership. Despite a strong presence in Europe and Asia, the company struggled with subdued demand in North America, particularly in the automotive sector.
Financial Highlights
- Revenue: SEK 616 million (flat year-over-year)
- Earnings per share: SEK 0.27 (down from SEK 0.60)
- Adjusted EBITDA: SEK 85 million (down from SEK 102 million)
- EBITDA Margin: 13.8% (down from 16.6%)
Outlook & Guidance
Looking forward, KB Components expects volume development to remain stable at 2025 year-to-date levels. The company plans to continue focusing on acquisitions and maintaining its strategic goals of achieving 10% growth and 10% profitability. Preparations for the Rivian R2 model production in Q2 2026 highlight the company’s commitment to future growth.
Executive Commentary
CEO Magnus Andersson stated, "Our vision is to be a world leader in technically advanced and sustainable polymer products." He emphasized the company’s ability to manage uncertainty through its multiple production sites and highlighted the importance of volume and economies of scale for competitiveness and profitability.
Risks and Challenges
- Subdued Demand in North America: The automotive sector’s challenges could continue to impact sales.
- Currency Fluctuations: A negative currency effect of 3% in Q3 could persist, affecting international revenue.
- Organic Growth Decline: A 15% drop in organic growth signals potential underlying market or operational issues.
- Material Costs: While stable now, any future increases could pressure margins.
- Global Economic Conditions: Economic instability could affect demand across regions.
Q&A
During the earnings call, analysts focused on the impact of the Rivian R2 production and cost reduction measures in North America. The company’s ongoing acquisition strategy was also a point of interest, with discussions on how these moves align with KB Components’ long-term goals.
Full transcript - KBC Groep NV (KBC) Q3 2025:
Martin, Moderator/Host: Hello, everyone, and welcome to today’s webcast with KB Components. We are joined by CEO Magnus Andersson and CFO Mikkel Grindborg. If you’re calling in and would like to ask a question, please press star 9 to raise your hand and star 6 to unmute yourself when you get the word. You can also submit written questions using the form located to the right. With that said, please go ahead with your presentation.
Magnus Andersson, CEO, KB Components: Thank you very much, Martin. This here is Magnus Andersson, CEO of KB Components, and I’m sitting here with Mikkel Grindborg, our CFO. Before we go into the Q3 result as such, just a brief introduction of our company. KB Components is a Swedish-based but global supplier of high-tech and sustainable polymer components. We were founded in 1947 here in Örkelljunga, Sweden, and have since then developed into a global player in the injection molding field of plastic products. Our vision is to be a world leader in technically advanced and sustainable polymer products, and our overarching strategic goals are organic growth, growth of 10%, profitability 10% plus, and employee engagement. Main customer segments that we serve are in automotive, heavy vehicles, light vehicles, also different general industries, as well as the electronics field and medical segment.
We are selling our products to some of the most demanding customers in the markets. We have production facilities and offices around the world, meaning that we are close to our customers and also close in serving our customers, which will allow us to understand their needs and provide them with the best possible service. Some summary facts of the KB Components Group. We have today roughly 17 production sites around the world. Here you can see on the map where we are located. We are in Sweden, Finland, Estonia, Lithuania, Slovakia, Germany since the end of October 2025, USA, Mexico, Canada, India, and China, where we are present with local factories. Our strategy is based on three cornerstones: technological leadership, operational excellence, and global presence.
Our goals, as I briefly mentioned already, are to have an EBIT level of 10% plus, have 10% growth per year, and a job satisfaction and engagement at over 75%. Moving into the quarter three update, the third quarter was for KB Components characterized by a differentiated picture between the regions. We saw lower sales and a weaker result in North America, while Europe and Asia show increased sales and improved profitability. The new acquisitions that have taken place here in December 2024, with plants in Estonia and Finland and in January in India, have improved the sales result in Europe and Asia, and the profitability of these entities continued to develop positively. In North America, we are seeing some effects of uncertainty that prevails in the market around geopolitics and trade barriers.
We are seeing this in the way that our customers are holding off on making final decisions on investments, etc., affecting the realization of projects for us. The activity is still high in terms of RFQs and projects to offer, but there is delay in the materialization of the projects. In summary, we report the global sales for the group that is in par with last year, SEK 616 million, and the acquired growth in this was 18%. Currency effect was minus 3%, and organic growth adjusted for currency was negative 15% in the quarter. In October, we are also pleased to announce that we have made further acquisitions into the group. We have acquired three operating companies in Germany: Schliessmeyer, Spritzgusser, and Spectrum.
We closed that deal on October 29, and these acquisitions will give us a footprint in Germany and strengthen ourselves in our geographical presence in Europe and also expanding our customer portfolio in attractive market segments. A bit, some words about the market in the various regions. We continue to see, or we continue to see a positive development in Europe for KB Components. It is driven by the acquisition of Plastone with entities in Estonia and Finland. The demand is currently good in the medical segment and also the electronic segments, which these two entities operate in. In general, we see demand in the consumer and the construction-related segments a bit subdued, remaining in that way, and the demand in the automotive segment for KB Components remains stable at a high level. In North America, the Mexico business is mainly exposed to the automotive industry.
Here we see slightly lower sales than expected, partly related to the lower volumes of the Volvo EX90 model than what we expected at the start of this year. Canada is, as a unit in KB Components, also exposed primarily towards the automotive industry. We have seen a lower order intake in the quarter here, mainly caused by lower demand from our largest customer, Rivian, and this is due to an adaptation of the Rivian plant in Normal, Illinois, to set up their production for the R2 model that is being launched here during the Q2 of 2026. Our US plant in Dallas, Texas, works with customers in general industry, not so focused on automotive. Here we are working mainly with telecom, trade, and construction, and a part of this business is more project-oriented, and that part had a lower demand in the quarter three for us.
In the Asia region, we made an acquisition in January in India, and that continues to develop according to plan, with both increasing sales and improved profitability due to efficiency measures that we have put in place. China continues to perform very well in Q3 as well. Profitability is good and well above the group average. With that, I hand over to Mikkel.
Mikkel Grindborg, CFO, KB Components: Yes, and I will present some financial figures, and I’ll start with quarterly results. As Magnus mentioned, the sales were in line with last year, SEK 616 million compared to SEK 614 million last year. The acquired growth was 18%, currency effect was negative by 3%, and organic growth minus 15%. If we look at the year-to-date, our sales is SEK 2,076 million compared to SEK 1,903 million last year. Adjusted EBITDA in the quarter amounted to SEK 85 million compared to SEK 102 million last year, and it corresponds to an adjusted EBITDA margin of 13.8% compared to 16.6% last year. Year-to-date, the EBITDA amounts to SEK 294 million compared to SEK 315 million last year, corresponding to an adjusted EBITDA margin of 14.2% compared to 16.6% last year.
Our adjusted operating result, EBIT, amounted to SEK 39 million this quarter compared to SEK 64 million last year in the same quarter, and it corresponds to an operating margin of 6.3% compared to 10.4% last year. Year-to-date, the operating profit, EBIT, amounts to SEK 154 million compared to SEK 198 million last year, corresponding to an operating margin of 7.4% compared to 10.4% last year. Earnings per share amounted to SEK 0.27 compared to SEK 0.60 last year in this quarter, and year-to-date earnings per share amounted to SEK 1.83 compared to SEK 1.78 last year. Cash flow from operating activities in the quarter amounted to SEK 67 million compared to SEK 52 million last year, and year-to-date cash flow from operating activities has improved and is SEK 257 million compared to SEK 97 million last year. If we look at our three regions and start with Europe, net sales amounted to SEK 299 million compared to SEK 214 million last year.
Here we increase from the acquired companies, as you see, acquired group was 40%, currency effect minus 7%, and organic group 7%. We have acquired companies in Finland and Estonia that are helping sales, but their profitability has improved during the year but is still below average of both the group and the region. Net sales year-to-date is SEK 1,015 million for region Europe compared to SEK 747 million last year. Adjusted EBITDA in the quarter amounted to SEK 41 million compared to SEK 31 million last year and corresponding to an adjusted EBITDA margin of 13.7% compared to 14.5% last year. Year-to-date adjusted EBITDA is SEK 146 million compared to SEK 124 million last year and corresponding to an adjusted EBITDA margin of 14.4% compared to 16.7% last year.
Adjusted operating result, EBIT, amounted to SEK 19 million in the quarter compared to SEK 15 million last year, corresponding to an adjusted EBIT margin of 6.4% compared to 6.8% last year. Year-to-date, the operating profit is SEK 79 million compared to SEK 73 million last year, with an adjusted operating margin of 7.8% compared to 9.8% last year. Going to North America, net sales amounted to SEK 284 million compared to SEK 385 million last year. We have a negative currency effect of minus 15%, and also the organic group was negative by 11%. The reason behind this is, as Magnus mentioned, a decline in Canada with Rivian that had closed their factory for three weeks to adjust for this new model R2 that will be launched next year. We also saw a drop, as Magnus mentioned, in the U.S. in their more project-related sales.
Year-to-date, the sales in North America is SEK 950 million compared to SEK 1,111 million last year. Adjusted EBITDA in the quarter amounted to SEK 34 million compared to SEK 68 million last year, corresponding to an adjusted EBITDA margin of 11.9% compared to 17.7%. Year-to-date, the adjusted EBITDA is SEK 114 million compared to SEK 181 million, and it corresponds to an adjusted EBITDA margin of 12% compared to 16.3%. The reason of the decline is because of this quite rapid decline in sales, but we could not adjust fully with adjusting personnel and costs. That is why the profit level has gone down quite a bit in North America. Adjusted operating result, EBIT, amounted to SEK 15 million compared to SEK 48 million last year, corresponding to an adjusted EBIT margin of 5.5% compared to 12.5% last year.
Year-to-date, operating profit amounts to SEK 61 million compared to SEK 120 million last year, with an adjusted operating margin of 6.5% compared to 10.8% last year. The region Asia, net sales amounted to SEK 39 million compared to SEK 15 million last year, and the reason is from the acquired company in India, so the full increase is coming from the acquisition. We see a good improvement both in sales and also profitability in this Indian plant. Year-to-date, net sales amounted to SEK 129 million compared to SEK 45 million last year. Adjusted EBITDA amounted to SEK 10 million compared to SEK 3 million last year, corresponding to an adjusted EBITDA margin of 26.1% compared to 19.7% last year. Year-to-date, adjusted EBITDA amounted to SEK 33 million compared to SEK 9 million last year, with a corresponding adjusted EBITDA margin of 26% compared to 21% last year.
Adjusted operating result, EBIT, amounted to SEK 4 million compared to SEK 1 million last year, with an adjusted EBIT margin of 10.1% compared to 7.8%. Year-to-date, operating profit amounted to SEK 14 million compared to SEK 4 million last year, corresponding to an adjusted operating margin of 10.5% compared to 10.0% last year. I looked at our financial position. The group’s total assets as of end of September amounted to SEK 2,206 million compared to SEK 2,107 million last year. The main increase coming from the acquired companies in Finland, Estonia, and India. Equity amounted to SEK 570 million compared to SEK 603 million last year, and the equity-to-asset ratio amounted to 26% compared to 29% the same period last year. Our net debt amounted to SEK 875 million compared to SEK 600 million last year, mainly, of course, due to the acquired companies and then we also, of course, a dividend given to our shareholders.
Magnus Andersson, CEO, KB Components: Thank you, Mikkel. Some concluding remarks. Our view of KB Components’ market and prospect remains the same from previous quarters. There is currently a general uncertainty linked to various geopolitical conditions such as trade barriers, but as a group, we are well positioned to manage this uncertainty through the establishment of our multiple production sites, which are now 17 after the inclusion of the three entities in Germany here on October 29. That gives us the possibility to expand quickly when conditions are such and to quickly implement downsizing or relocating production to lower-cost countries, etc., when the circumstances so require. This is and will be normal for our business where volume and economies of scale are of utmost importance to be competitive and profitable.
This is also commented in the quarter three report that actions, for instance, in North America have been taken in the short term to improve the profitability. Our group is also developing with new acquisitions, as we announced, which then provides us further opportunities to optimize our production structure and utilization of our various units. Volume development in the short and medium term is expected to be stable and at the level of year-to-date 2025 in all of our markets. With that, I move over to Q&A.
Martin, Moderator/Host: Thank you very much, Magnus and Mikkel, for that presentation. Yes, let’s open up the Q&A section. If you’re calling in and would like to ask a question, you can press star nine to raise your hand and star six to unmute yourself when you get the word. We have a caller in with a question with a phone number ending with 3076. Please go ahead. You have the word.
Hampus Engel, Analyst, Handelsbanken: Yes, hello, can you hear me? This is Hampus Engel from Handelsbanken.
Martin, Moderator/Host: Hello.
Hampus Engel, Analyst, Handelsbanken: All right, three questions on my side. Would it be possible for you guys to dig in a bit on the North American business? Because if I look at the Rivian numbers for the R1, it was quite a big step up in production third quarter over second quarter. I think they produced around 11,000 R1s in Q3 and around 5,900 in Q2. It would be interesting to hear what other parts are affecting the underabsorption of fixed costs in terms of projects and also how the impact was from the R2 and how to think about that going into next year. I’ll take the question one-on-one to make it easy for you guys. That is my first question.
Magnus Andersson, CEO, KB Components: Yeah. As we mentioned, the Rivian plant had a three-week shutdown in this quarter, and that is what has impacted our volume and demand from Rivian during the period. We have seen this effect on our volumes in Canada, and that is the main effect. Due to this lower volume and lower sales, as Mikkel mentioned, we have also not been able to adjust the costs and the overhead in a similar way, and that has impacted our profitability in the quarter. That is the answer on R1. When it comes to R2, we have had project sales, as we call it, or tooling sales in the quarter that relates to the upcoming serial production of the R2 parts. That has been fairly high and a higher ratio versus the total sales in this quarter, which also impacts the EBITDA in the quarter.
Hampus Engel, Analyst, Handelsbanken: All right, fair enough. Maybe moving over to the European operations, just a question on the platform acquisition. Where are we in terms of diluting margin for the European operations in terms of where you are in price increases and how to think about that?
Magnus Andersson, CEO, KB Components: Sorry, Pontus, could you repeat that question?
Hampus Engel, Analyst, Handelsbanken: Now, it was related to how much Platform is diluting margins or are they diluting margins as we speak?
Magnus Andersson, CEO, KB Components: They have improving margins, and they have improved quite a lot compared to their run rate before they became a part of KB Components and compared to the start of the year with KB Components. They are not yet at the level of the KB Group in general, but they have improved margins quite substantially compared to the start of the year.
Hampus Engel, Analyst, Handelsbanken: Fair enough. Maybe on the growth side in Europe, if I remember correctly, I think the Volvo XC60 sales were up 13% in Q3. Also, if I look at the EX90, it’s actually starting to move a bit with the upgrade on the 800-volt technology. I think also Scania had quite good sales for you guys with the side skirts. If you remove those moving parts, what was the main thing in Europe on the organic side that drove sales during the quarter?
Magnus Andersson, CEO, KB Components: You are mentioning some key components to our sales in Q3 here. We have seen a high demand from the customers you mentioned, Volvo Cars, as well as Scania. EX90 model is actually something we serve out of our Mexico plant and not in Europe, but there is high demand based on the XC60 model, and that is selling well for our customers. That is main drivers to the growth or the positive sales number in the quarter.
Hampus Engel, Analyst, Handelsbanken: Okay, fair enough. Thank you.
Magnus Andersson, CEO, KB Components: Thank you.
Martin, Moderator/Host: Okay, we’ll take some more questions here. How should we think about Rivian-related volumes in the near term and for volumes 2026 given the ramp-up of R2?
Magnus Andersson, CEO, KB Components: As we mentioned in the report, we see the volumes for this year being fairly stable. There are no known closures of plant or anything like that planned for Q4. We are coming back to more normal volumes for the R1 and the EDV range or product in the Rivian portfolio. We are preparing our factory for ramp-up of volumes for the R2 coming from Q2 of next year. Yes, that is going per plan, and that will contribute substantial sales to KB Components, which we have communicated earlier.
Martin, Moderator/Host: Thank you for that answer. Next question here. How significant are the cost-saving measures in NA, and will you be able to offset the effects from lower volumes fully in the near term from a margin perspective?
Magnus Andersson, CEO, KB Components: As with all cost reduction exercises, there is some delay in seeing the effect from them, but the initiatives that have been taken will give a positive effect already in Q4, and we’re already starting to see that.
Martin, Moderator/Host: Thank you. How has the cost of materials developed? Has it been challenging for pricing or profitability?
Magnus Andersson, CEO, KB Components: Cost of materials has been fairly stable here in quarter three. That has not negatively affected our margins and also not very positively. They are stable in the quarter.
Martin, Moderator/Host: Understood. Thank you. What’s your assessment of the FX effects on profits?
Mikkel Grindborg, CFO, KB Components: Yeah, as we saw the details in the sales volume, of course, it also affects negatively on profit while we have good profits in North America and we have it in Asia. Swedish krona has, as a matter of fact, been one of the strongest in the world this year. As we have profits in all sites outside Sweden as well, it affects also profit more or less in the same % as it affects the sales volume.
Martin, Moderator/Host: Thank you, Mikkel, for that answer. How does the acquisition strategy look going forward when it comes to companies operating in a similar segment to those we have previously integrated? Are there identified target companies or markets where you see a strong potential for synergies and growth?
Magnus Andersson, CEO, KB Components: We are always evaluating some acquisitions as we have been doing over the latest many years. That is a part of our business model as well. We are looking at companies in all regions that we operate in and in all market segments that we operate in. We always make sure we have a clear plan of action and clear understanding of synergies before we decide to proceed or not.
Martin, Moderator/Host: Okay, that concludes the Q&A here. Thank you very much, Magnus and Mikkel, for presenting here with us today. Thank you to everyone who tuned in for this presentation with KB Components. I wish you all a great rest of the day. Thank you very much.
Magnus Andersson, CEO, KB Components: Thank you.
Hampus Engel, Analyst, Handelsbanken: Thank you.
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