Strong revenue growth and continued solid order backlog
Q2 2023 highlights
-- Organic order intake growth for the rolling 12-month period was -4% and the backlog remains solid.
-- Order intake in the quarter decreased by -14% to
-- Revenues increased by 19% to
-- Adjusted operating profit (EBIT), increased to
-- Operating profit (EBIT) amounted to
-- Adjusted earnings per share, diluted, was
-- Cash flow from operating activities increased to
-- Free operating cash flow decreased to
-- To expand the offering in the
CEO's comment
In the quarter, our performance was solid, and we noted double-digit growth both for our revenues and earnings, despite a softening market environment. The strong organic revenue growth of 18% was driven by all three divisions. We are maintaining focus on executing our strategy to build an even stronger and more resilient company.
In the quarter, order intake declined -15% organically against high comparables in the corresponding period last year. However, at an absolute level our order intake remained high, with high book-to-bill and a maintained solid backlog. We saw high demand in the Oil and Gas segment, and received three major orders for umbilicals and OCTG (Oil Country Tubular Goods) tubes. Demand in our Industrial Heating, Transportation (mainly Aerospace) and Medical segments remained solid, and our view of the development in these segments in the near future is positive. In addition, the demand in
The subdued demand noted for the low-refined Industrial and Consumer related segments persisted. This could mainly be seen in
We delivered an adjusted EBIT margin of 11.4% compared with 11.5% last year, despite lower production volumes that follow from declining orders in some segments. We are focusing on continuous improvements for more cost-effective production, and we are continuing to drive price management to offset the significant cost inflation. We have a solid backlog to deliver from and we have an advantage from our diversified exposure to various customer segments. With this, we have good visibility ahead, and we are confident about our near-term deliveries.
It is gratifying to see our industrial heating solutions in targeted applications such as solar, lithium-ion battery manufacturing and steel production, continuing to grow through significant project orders. The Kanthal division posted another strong quarter, with an adjusted EBIT margin of 19.3% driven by broad-based revenue growth and a positive revenue mix across the division. The Medical business noted record high revenues, and the outlook is solid.
We have completed the acquisition of Söderfors Steel, and we are starting to integrate the company into our Group and value chain. Though this, we are expanding into several new product applications in the attractive niches of
Our industry is constantly evolving, and the need for carbon neutral energy solutions is increasing. During the quarter, we made an important break-through with the receipt of an order for 200 kilometers steam generator tubes for Small Modular Reactors (SMRs). I am pleased that this business is taking off and that we are playing an important role in enabling the sustainable energy solutions of the future. This order proves that we are a front-runner when it comes to advancing a more sustainable energy landscape.
We took action to reverse the negative trend in the total recordable injury frequency rate (TRIFR), and intensified focus on our safety principles and defined key activities in each division. The improved quarterly TRIFR outcome was a step in the right direction, and safety will remain at the top of our agenda.
Please save the date for our Capital Markets Day update on
Göran Björkman, President and CEO
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